Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Gacic v John Fairfax Publications Pty Ltd [2011] NSWCA 362
• Hearing dates: 23 September 2010
• Decision date: 24 November 2011
• Before: Giles JA at [1], McColl JA at [8], Sackville AJA at [118]

Decision

1) Appeal allowed with costs.

2) Set aside the orders of Harrison J made on 18 December 2009.

3) Enter a verdict for the appellants.

4) Respondents to pay the costs of the proceedings before Harrison J.

5) Remit the matter to the Common Law Division for assessment of damages.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: DEFAMATION - imputations pleaded as false innuendos - dispute at trial of defences before judge alone as to meaning of imputations found by s 7A jury - whether permissible to determine dispute by reference to extrinsic evidence or only by reference to how the s 7A jury would have inferred the ordinary reasonable reader would have read the matter complained of -; DEFAMATION - Defences - Comment - restaurant review - where two restaurants trading under one name - where open to the jury to conclude that ordinary reasonable reader would have read the review to refer to each restaurant - where reviewer only ate at one - where primary judge found each imputation, in the context of the review as a whole, would have been understood by the reader to have been conveyed as a statement of opinion - whether proper material for comment when no facts expressly stated, referred to or notorious in review about one of the restaurants which could form the basis for any of the imputations in respect of it -; DEFAMATION - Defences - Comment - when reviewer did not hold opinion concerning one of two restaurants referred to in review -; DEFAMATION - Defences - Truth - whether defence of substantial truth established where no evidence as to facts concerning one of two restaurants referred to in review - s 15, Defamation Act 1974 -; DEFAMATION - Damages - adequacy
• Legislation Cited: Defamation Act 1974
• Cases Cited: Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158; Andrews v John Fairfax & Sons Ltd (1980) 2 NSWLR 225; Besser v Kermode [2011] NSWCA 174; Bob Kay Real Estate Pty Ltd v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 505; Cassell & Co Ltd v Broome [1972] AC 1027; Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245; Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346; Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716; Gacic v John Fairfax Publications Pty Ltd [2006] NSWCA 175; (2006) 66 NSWLR 675; Goldsborough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524; Gray v Motor Accident Commission [1998] HCA 70; (1998) 196 CLR 1; Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2001) 54 NSWLR 165; Hawke v Tamworth Newspapers Co Ltd [1983] 1 NSWLR 699; Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1; Howden v "Truth" and "Sportsman" Ltd [1937] HCA 74;(1937) 58 CLR 416; John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657; John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2007) 230 CLR 291; Joseph v Spiller (2010) UKSC 53; [2011] 1 AC 852; Kemsley v Foot [1951] 2 KB 34; Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1; Lewis v Daily Telegraph Ltd [1964] AC 234; Lloyd v David Syme & Co Ltd (1985) 3 NSWLR 728; Moran v McMahon (1985) 3 NSWLR 700; Pervan v North Queensland Newspaper Co Ltd [1993] HCA 64; (1993) 178 CLR 309; Petritsis v Hellenic Herald Pty Ltd [1978] 2 NSWLR 174; Pryke v Advertiser Newspapers Ltd (1983) 37 SASR 175; Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448; Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500; Sims v Wran [1984] 1 NSWLR 317; Singleton v Ffrench (1986) 5 NSWLR 425; Thompson v Truth & Sportsmen Ltd (No 4) (1932) 34 SR (NSW) 21; Toomey v John Fairfax & Sons Ltd [1985] 1 NSWLR 29; Trad v Harbour Radio Pty Ltd [2011] NSWCA 61; Wilkes v Wood [1763] EngR 103; (1763) Lofft 1; 98 ER 489
• Texts Cited: Odgers on Libel and Slander, 6th ed (1929) Stevens
• Category: Principal judgment
• Parties: Aleksandra Gacic - first appellant; Ljiljana Gacic - second appellant; Branislav Ciric - third appellant; John Fairfax Publications Pty Ltd - first respondent; Matthew Evans - second respondent
• Representation: C A Evatt with R Rasmussen - appellants; T Blackburn SC with D Sibtain - respondents; David Leamey - appellants; Freehills Solicitors - respondents
• File Number(s): 2004/176936
• Publication restriction: No

Decision under appeal

• Citation: Gacic v John Fairfax Publications Pty Ltd [2009] NSWSC 1403
• Date of Decision: 2009-12-18 00:00:00
• Before: Harrison J
• File Number(s): SC 20233/2004

Judgment

Background	[9]
Legislative framework	[15]
Factual background	[18]
The primary judgment
(a) Overview	[26]
(b) The preliminary point: one restaurant or two	[29]
(c) Comment	[34]
(d) Truth	[41]
(e) Damages	[47]
Issues on appeal	[52]
Consideration
(a) The preliminary point: submissions	[58]
(b) Preliminary point: resolution	[61]
(c) The meaning of the imputations	[70]
Comment
(a) Expressions of opinion or statements of fact?	[77]
(b) Proper material for comment	[87]
(c) Intention to convey the imputations	[96]
Truth	[103]
Damages	[110]
Orders	[116]
APPENDIX

1 GILES JA : I agree generally with the reasons of McColl JA, but seek to encapsulate the reasoning concerning the "preliminary point" in my own terms.

2 The preliminary point decided by the trial judge was dealt with as a question of fact, whether there was one restaurant or two. His Honour concluded that there was only the one restaurant Coco Roco, albeit with "flexible dining options". The conclusion was taken to resolve whether the imputations were protected by the defences of comment or substantial truth.

3 It is not clear to me that the trial judge decided the preliminary point as a matter of ascertaining the meaning of the imputations. As a question of fact, it was a false issue as a determinant of the defences. The facts were not in doubt - there was a bistro downstairs, Roco, and a more expensive restaurant upstairs, Coco. The review itself said that Coco Roco is "actually two restaurants", and that Mr Evans chose the more expensive option. Those facts are not done away with by characterising the two together as one restaurant.

4 The correct issue was whether the imputations, on their proper meaning having regard to (and only to) the review, were as to both the Roco bistro and the Coco restaurant. If they were, the defences of comment and substantial truth failed because Mr Evans had not eaten at Roco and there was no factual basis for the comment or for finding substantial truth. If that was the issue addressed by the trial judge, for the reasons given by McColl JA he was in error in his approach to it.

5 As to the meaning of the imputations, the review referred to Coco and its sibling Roco. It said that Coco Roco was two restaurants, identifying different hours, differing wheelchair access and difference in prices in the right hand side bar. It said that Mr Evans chose the more expensive option, meaning Coco. It said, after adverse reference to a number of dishes, that it could be argued that "Coco is still settling in", and showed a picture of poached beef "from Coco restaurant at Coco Roco". Against its recognition of two restaurants, the parts of the review which the jury must have found conveyed the imputations spoke of Coco Roco, from the review to be understood as the two restaurants, and the imputations as found were all as to Coco Roco.

6 The imputations were as to both the Roco bistro and the Coco restaurant. Thus the defences should have failed.

7 I agree with the orders proposed by McColl JA. It is to be hoped that the parties will be able to arrive at an agreed amount for damages, after a long time litigating and what must be considerable expense in the litigation.

8 McCOLL JA : Alexsandro Gacic, Ljiljana Gacic and Branislav Ciric, the first, second and third appellants respectively, appeal from a judgment of Harrison J in which his Honour found that the first respondent, John Fairfax Publications Pty Ltd, and Mr Matthew Evans, the second respondent, had a complete defence to defamation proceedings brought by the appellants: Gacic v John Fairfax Publications Pty Ltd [2009] NSWSC 1403.

Background

9 The appellants opened an establishment called "Coco Roco" at Sydney's King Street Wharf on 4 September 2003. On 30 September 2003 the first respondent published a restaurant review (the "matter complained of") written by the second respondent, in the Good Living section of The Sydney Morning Herald .

10 The appellants established in earlier proceedings under s 7A, Defamation Act 1974 (the "1974 Act") (see John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2007) 230 CLR 291 and Gacic v John Fairfax Publications Pty Ltd [2006] NSWCA 175; (2006) 66 NSWLR 675) that the matter complained of (Exhibit A at trial) conveyed the following three imputations which were defamatory of each of them:

(a) The appellant sells unpalatable food at Coco Roco (the "unpalatable food imputation").

(b) The appellant provides some bad service at Coco Roco (the "bad service imputation").

(c) The appellant is incompetent as a restaurant owner because s/he employs a chef at Coco Roco who makes poor quality food (the "incompetence imputation").

11 It then fell to Harrison J to consider the issues of the defences and damages: s 7A(4), 1974 Act.

12 In defence to publication in New South Wales the respondents pleaded comment of the second respondent in relation to each imputation. They also sought to establish that the bad service and incompetence imputations were substantially true and related to a matter or matters of public interest. They pleaded a defence of contextual truth by pleading each appellant's imputations back to each other, and relying on the substantial truth of the bad service and incompetence imputations. Similar defences (save as to contextual truth except in Tasmania) were pleaded to publication in other jurisdictions.

13 The primary judge held that the respondents had established a complete defence to the appellants' claims. In the event that decision was erroneous, his Honour concluded each appellant would have been entitled to general damages in the sum of $80,000.

14 The appellants appeal from his Honour's decision both as to the defences and as to the provisional assessment of damages.

Legislative framework

15 The matter complained of having been published in 2003, the proceedings insofar as publication in New South Wales was concerned were governed by the 1974 Act. The relevant provisions of the 1974 Act, all of which appear in Part 3 dealing with "Defence in Civil Proceedings", are as follows:

" Division 2 - Truth

...

15 Truth generally

(1) Notwithstanding section 11, the truth of any imputation complained of is not a defence as to that imputation except as mentioned in this section.

(2) It is a defence as to any imputation complained of that:

(a) the imputation is a matter of substantial truth, and

(b) the imputation ... relates to a matter of public interest ....

Division 7 - Comment

29 General

(1) The defence or exclusion of liability in cases of fair comment on a matter of public interest:

(a) is modified as appears in this Division, and

(b) is not available except in accordance with this Division.

(2) This Division has effect notwithstanding section 11.

30 Proper material

(1) For the purposes of this section, but subject to subsection (2), proper material for comment means material which, if this Division had not been enacted, would, by reason that it consists of statements of fact, or by reason that it is a protected report within the meaning of section 24, or for some other reason, be material on which comment might be based for the purposes of the defence or exclusion of liability in cases of fair comment on a matter of public interest.

(2) A statement of fact which is a matter of substantial truth is proper material for comment for the purposes of this section, whether or not the statement relates to a matter of public interest.

(3) The defences under this Division are available as to any comment if, but only if:

(a) the comment is based on proper material for comment, or

(b) the material on which the comment is based is to some extent proper material for comment and the comment represents an opinion which might reasonably be based on that material to the extent to which it is proper material for comment.

(4) There is no special rule governing the nature of the material which may be the basis of comment imputing a dishonourable motive or governing the degree of foundation or justification which comment imputing a dishonourable motive must have in the material on which the comment is based.

31 Public interest

The defences under this Division are not available to any comment unless the comment relates to a matter of public interest.

...

33 Comment of servant or agent of defendant

(1) Subject to sections 30 and 31, it is a defence as to comment that the comment is the comment of a servant or agent of the defendant.

(2) A defence under subsection (1) as to any comment is defeated if, but only if, it is shown that, at the time when the comment was made, any person whose comment it is, being a servant or agent of the defendant, did not have the opinion represented by the comment.

Part 4 Damages and costs

46 General

(1) In this Part relevant harm means, in relation to damages for defamation:

(a) harm suffered by the person defamed, or

...

(2) Damages for defamation shall be the damages recoverable in accordance with the common law, but limited to damages for relevant harm.

...

46A Factors relevant in damages assessment

(1) In determining the amount of damages to be awarded in any proceedings for defamation, the court is to ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded.

(2) In determining the amount of damages for non-economic loss to be awarded in any proceedings for defamation, the court is to take into consideration the general range of damages for non-economic loss in personal injury awards in the State (including awards made under, or in accordance with, any statute regulating the award of any such damages)."

16 Public interest was not ultimately in issue in respect of either comment (primary judgment (at [166])) or truth (primary judgment (at [196])).

17 Neither party suggested any aspect of the appeal turned on the provisions of defamation legislation in any other State or Territory.

Factual background

18 The primary judge found the following facts which are not relevantly in dispute.

19 Coco Roco was a harbourside establishment on two levels with two dining options: a bistro downstairs called "Roco" and a more expensive restaurant upstairs called "Coco". There was a kitchen on each level (at [27]). The third appellant, Branislav Ciric, conceived of the concept for Coco Roco during 2002 (at [40]).

20 The first and second appellants, Aleksandra and Ljiljana Gacic, are sisters. The third appellant, Mr Ciric, is married to Ljiljana Gacic. They established two companies, Coro Enterprises Pty Ltd t/as Coco Roco and Syd Mirror Pty Ltd which became, respectively, the owner of the restaurant business and the lessee of the premises from which the Coco and Roco restaurants were operated (at [40]). The appellants were directors and/or shareholders of those companies (at [7]).

21 In the three or so weeks preceding the official launch of Coco Roco, "soft openings" were held on some days for lunch and/or dinner (at [42], [147] - [148]). Coco Roco was officially launched with a function in aid of the National Breast Cancer Foundation on Friday, 4 September 2003 (at [3]). The publicity agent retained by the appellants invited Mr Evans, who had been The Sydney Morning Herald 's chief restaurant reviewer since early 2001, to the launch (at [110]). He did not attend (at [3], [5]).

22 The day following the opening, Mr Evans ate lunch at Coco with a companion. He subsequently ate dinner at Coco with another companion on Wednesday, 10 September 2003. The review, published on Tuesday, 30 September 2003, included his impression of both dining experiences. Mr Evans never ate at Roco (at [6]).

23 The review was published in Good Living. The glossy coloured front page contained a teaser at its foot, "Matthew Evans fails Coco Roco". The review appeared on page 6, and is reproduced in text form only as an appendix to this judgment.

24 The review came to the attention of the appellants on the day of its publication. They were "shocked and distressed" (at [7]). An apology was sought from the respondents in October 2003, but was not forthcoming (at [21]).

25 Coco Roco suffered a decline in patronage, and ultimately closed permanently in early 2004. An administrator was appointed to both Syd Mirror and Coro in March 2004. The primary judge accepted that each appellant had been "very badly affected" by the failure of Coco Roco, and that each appellant attributed its failure to the matter complained of (at [235] - [236]).

The primary judgment

(a) Overview

26 One of the appellants' principal contentions at trial was that because Mr Evans wrote the matter complained of based on two meals consumed at Coco, and never dined at Roco, he could not have genuinely held any opinion concerning Roco, nor could anything he wrote pertain to Roco, let alone be true. The primary judge determined this issue as a "preliminary point" (at [9]ff). He concluded that Coco Roco was "only one restaurant" and that, therefore, the defences of comment and truth did not fail at the threshold (at [34]).

27 The primary judge found that the defence of comment was established to all three imputations and in respect of all three appellants (at [193]). He held (at [213]) that the bad service imputation was substantially true in respect of all three appellants, but that the incompetence imputation was true only in respect of the third appellant.

28 His Honour rejected the defence of contextual truth as to the unpalatable food imputation in respect of each appellant (at [221] - [222]).

(b) The preliminary point: one restaurant or two

29 The respondents relied upon evidence extrinsic to the matter complained of to resist the appellants' contention that the reference to "Coco Roco" in the matter complained of was a reference to two restaurants, rather than one restaurant. That evidence included the terms of the apology sought in a letter sent by the appellants' solicitor, which referred to the matter complained of having reviewed "the Coco Roco restaurant" without distinguishing between the two restaurants, promotional material to like effect, an invitation to the opening of the venue referring to "the launch of Sydney's most glamorous new restaurant Coco Roco", an email in like terms and the fact that the wine list for each restaurant referred to "Coco Roco Wine".

30 The primary judge found, as a matter of fact, that there was only one restaurant, Coco Roco, not two separate restaurants, Coco and Roco. He said:

"27 Although the plaintiffs' argument is laudable for its ingenuity, I think it is wrong. This is because in my opinion the evidence establishes that there was relevantly only one restaurant. That restaurant was Coco Roco. It was certainly configured with upstairs and downstairs sections that each served food from different menus at different prices. There was a kitchen on each level as one might in such circumstances expect. However, the plaintiffs' own publicity and promotional material clearly suggests that they were actually promoting Coco Roco as a single restaurant with flexible dining options. The expression 'two restaurants in one' makes this plain. It had an executive chef, Adam Birtles, whose former experience at Coast restaurant was advanced as an asset of Coco Roco. There was never any indication that Coco and Roco had separate and individual executive chefs. Coco and Roco were no more individual, separate and distinct restaurants than the fifth and sixth floors of David Jones Market Street store are two individual, separate and distinct department stores. A hypothetical review based upon the quality of the service on the fifth floor of that David Jones store would not fail to qualify as an opinion about the service at that David Jones store in general simply because it was written by someone who had not shopped, and so could not speak about the service, on the sixth floor." (Emphasis added)

31 His Honour referred (at [28]) to aspects of the matter complained of from which he concluded that "the ordinary reasonable reader would be left in no doubt that on the first occasion Mr Evans had decided to eat at Coco". He reached the same conclusion (at [29]) in respect of the second meal.

32 The primary judge considered (at [31]) that his view drew inferential support from the terms of the apology letter, which he regarded the appellants as having effectively authored, which "makes no distinction between Coco and Roco in the way it lays out the complaints that the plaintiffs were making about the review". In his view, "[e]xpressions like 'the Coco Roco restaurant' or 'that restaurant' are wholly inconsistent with the existence of two restaurants understood in the way that the plaintiffs now seek to emphasise." He also relied (at [32]) on the fact that none of the imputations drew any distinction between Coco and Roco, but referred to "Coco Roco as a single entity".

33 His Honour concluded (at [34]) that Coco Roco was only one restaurant. Accordingly, there was no merit in the appellants' contention that "all the pleaded defences were defeated because they were predicated on there only having been one restaurant when in fact there were two."

(c) Comment

34 The primary judge found that each imputation, in the context of the matter complained of as a whole, would have been understood by the reader to have been conveyed as a statement of opinion.

35 His Honour had regard (at [158]), to the fact that the matter complained of was a "food review" and that the ordinary reasonable reader would understand that the second respondent "was giving his estimation or opinion of the food at the restaurant in question". He considered the format of the matter complained of was that of a review setting out details of the food eaten, the writer's opinion of it, his overall estimation, a scoresheet and a summary. His Honour also had regard (at [159]) to the fact that the article appeared in the Good Living section of The Sydney Morning Herald and that the ordinary reasonable reader would understand that to be the "food, drink and leisure section of the paper."

36 Next, the primary judge referred (at [160]) to the opening paragraphs of the matter complained of and their reference to the restaurant having served "good as well as bad food" and to the proposition that "more than half the dishes ... [were] simply unpalatable" and to the fact that the second respondent then explained how he reached that conclusion. His Honour also referred to the "numerical assessment, which could only be understood as the reviewer's subjective opinion of the establishment."

37 When he came to the defence of comment, the primary judge set out the parties' respective submissions. In reciting the respondents' submissions, his Honour referred to statements of principle concerning the determination of whether words were comment or fact. He then (at [161] - [165]) set out what in context appear to have been the respondents' submissions as to whether each imputation was conveyed as a statement of opinion or fact. He also set out the appellants' submissions, noting that they agreed with the respondents' analysis of the principles he was required to apply, then turned to consider the defence of comment.

38 The primary judge considered the nature of the matter complained of (at [171] - [175]). It is unnecessary to set out those passages in detail. It is sufficient to note his Honour's conclusion (to some degree repetitive of what had appeared at [158] - [160]) that the "structure and setting" of the matter complained of was "that of a restaurant review", that it appeared in the Good Living section of The Sydney Morning Herald which conventionally contained a restaurant review (at [171]), that the matter complained of was structured so as to set out "what the author did and [took] the form of his assessment of what he encountered when he did it" (at [172]), and that the material upon which the second respondent's views were based appeared in the body of the matter complained of so that the facts on which the matter complained of was based were "either clearly stated or indicated with sufficient clarity to make it clear that what [was] said was comment on those facts" (at [173]). His Honour gave examples it is also unnecessary to repeat. Finally, his Honour referred to one of "the key indicators" as being that the second respondent was assessing the restaurant by reference to what he personally experienced so that "this neither appears in its form nor its content to be a statement of fact" (at [174]).

39 Having undertaken this analysis, his Honour did not make an express finding that each of the imputations was comment or opinion. It is apparent in this respect (and the appellants accept for the purposes of the appeal) that his Honour accepted the submissions of the respondents which he had set out as follows:

"161 The first imputation is that 'the plaintiff sells unpalatable food at Coco Roco'. Applying the authorities set out above, and the test laid down by Clarke JA in Radio 2UE v Parker , the task of the Court is to have regard to the matter complained of, and the context as a whole, and determine whether the imputation would have been understood by the reader to be conveyed as a statement of opinion. In the context of the whole article, which was a restaurant review appearing in the Good Living section of the paper; the reader could only reasonably understand that meaning as having been conveyed as an expression of the author's opinion or estimation of the restaurant. In particular, the reader would note the judgmental conclusion that more than half the dishes were 'simply unpalatable', and understand that to be the writer's conclusion based on what follows, with the opinion reinforced by the low overall score and the other conclusions and remarks unflattering to the restaurant, such as that it was a bleak spot on the culinary landscape and deserving of a score of 9 out of 20.

162 The second imputation, that 'the plaintiff provides some bad service at Coco Roco', obviously arises principally from the side note that the service was 'good and bad' although it is said by the plaintiffs to be conveyed in combination with the 'crash and burn' comment and the suggestion that 'dining on the view is the only recommendation'. The plaintiffs are described as the owners. Again, because of the context, this imputation could not reasonably be understood as other than the second defendant's 'judgmental conclusion' ( Petritsis ) about the service provided at the restaurant.

163 It is not to the point that no explicit example of bad service is set out in the matter complained of. A review constitutes an exception to the general rule that the facts on which the comment is based must be set out in the matter complained of, or be otherwise notorious. It would be, in practical terms, impossible to critique a film, a play, or a restaurant if the law were otherwise. In the case of a review of something submitted to the public and thereby inviting comment, the subject matter upon which the criticism is made has been submitted to the public 'though by no means all those to whom the alleged libel has been published will have seen or are likely to see the various issues. Accordingly, its contents and conduct are open to comment on the ground that the public have at least the opportunity of ascertaining for themselves the subject matter upon which the comment is founded': Kemsley v Foot [1952] AC 345 at 355-356. That passage was approved by the High Court in Pervan v The North Queensland Newspaper Company Ltd [1993] HCA 64; (1993) 178 CLR 309 at 327 and applied by the majority in Channel Seven Adelaide v Manock at [72].

164 Here the reader would understand the imputation that the plaintiffs provided some bad service as a subjective judgment contained in a restaurant review and obviously based on the experiences of the reviewer on the occasions he visited it. It would be understood as his assessment of the standard of service at the restaurant.

165 The notion of 'incompetence' contained in the third imputation arises by implication or inference. Again, given the whole context of the matter complained of, the defendants contend that the ordinary reasonable reader would understand this inferential imputation as the second defendant's 'judgmental statement or conclusion which the material published implies, but does not state in terms': Petritsis at 195."

40 His Honour rejected the appellants' attacks on the genuineness of Mr Evans' opinions relating to his failure to distinguish between Coco and Roco, his credibility, the language of his review, his lack of impartiality and/or objectivity and motive (at [177] - [192]). He noted (at [177]) that he had already rejected, when dealing with the preliminary point, the submission that the second respondent could not have held the opinion reflected in the imputations because he only ate at Coco. He held (at [193]) that the defence of comment was established with respect to all three imputations and in respect of all three appellants.

(d) Truth

41 Although his conclusions on the defence of comment sufficiently disposed of the proceedings, the primary judge also considered the defence of truth, as I have said, to the bad service and incompetence imputations. He recognised (at [200]) that there was a tension in determining what was contemplated by the truth defence in the context of statements of opinion. He queried whether truth, in that context, had to be capable of objective assessment or whether one person's opinion was sufficient to establish it. It is not, with respect, readily apparent how his Honour resolved this tension.

42 In respect of the bad service imputation, the primary judge noted (at [201]) Mr Evans' evidence that he had to wait 15 minutes to attract the attention of a waiter at one point, and that a salad of mixed leaves was served at the table without the waiter evenly distributing the various kinds of leaves to both diners. His Honour concluded (at [209]) that as the imputation was that the appellants provided some bad service, and accepting Mr Evans' evidence, he was satisfied the imputation was substantially true.

43 As to the favourable evidence about the service at Coco Roco given by witnesses for the appellants, his Honour observed (at [210]) that such evidence represented those witnesses' "subjective, individual opinions of the service they encountered on...their visits to the restaurant". Such evidence was not capable of derogating sufficiently from Mr Evans' evidence about the examples of bad service he experienced.

44 The primary judge noted (at [196]) that the respondents accepted that to establish the defence of truth in respect of the incompetence imputation, they "had to prove the objective fact that the food, or at least some of it, was of poor quality...as well as the concept of incompetence as a restaurant owner."

45 The primary judge accepted (at [211]) Mr Evans' evidence that while some of the food he ate was of high quality, other food was of poor quality. However, his Honour also accepted that the first and second appellants were not chefs and did not claim to have relevant industry experience. He reasoned (at [212]) that they could not be incompetent restaurant owners merely by employing a chef who produced poor quality food, when they lacked the expertise to assess that chef's credentials. On the other hand, he found (at [212]) that the third respondent, with his more extensive culinary knowledge and experience (at [74]), was incompetent in his role as a restaurant owner. He had the capacity to determine whether a prospective chef would produce poor quality food.

46 Accordingly his Honour concluded (at [213]) that the respondents had established that the bad service imputation was substantially true for all appellants, but that the incompetence imputation was only true of the third appellant.

(e) Damages

47 The primary judge considered the issue of damages in case his conclusions on the defences were erroneous.

48 His Honour recorded (at [230]) that each appellant claimed general or compensatory damages, which included their claim with respect to the reappearance of the matter complained of on the internet following the High Court of Australia's decision, but that "no claim is made for damages in any other category, such as aggravated damages pursuant to s 44 of the 1974 [Act]". It is not clear, with respect, to what provision of the 1974 Act his Honour intended to refer. Section 44 of the 1974 Act did not deal with aggravated damages and, in any event, had been repealed before the matter complained of was published. Further, the factual premise was incorrect. The appellants each claimed aggravated damages in New South Wales and aggravated and exemplary damages for publications outside New South Wales. The second further amended statement of claim gave extensive particulars of falsity to support the aggravated damages claims and of malice to support the exemplary damages claims.

49 His Honour accepted (at [235]) that each appellant had been "very badly affected" by the failure of Coco Roco, and had attributed that failure to the matter complained of. However, his Honour also found (at [235]) that they were not entitled to recover damages calculated by reference to the substantial financial losses they had suffered since the restaurant failed, nor indeed by reference to their distress associated with the disastrous financial ramifications of that failure.

50 The primary judge found (at [236] - [237]) that the first and second appellants were injured as to their reputations and suffered hurt feelings as a consequence of the publication and also suffered hurt as a result of the respondents' failure to apologise. The third appellant also suffered hurt feelings, and suffered considerable harm to his reputation as a competent restaurateur (at [239]). His Honour found the third appellant was "somewhat [more] sanguine" than the first and second appellants about the respondents' failure to apologise.

51 His Honour concluded (at [240]) that although "each [appellant] ha[d] a different claim for damages, and even though the effect of the defamatory publication upon each of them is qualitatively and quantitatively different, the end result, albeit achieved by different routes, is largely to the same effect." His Honour sought to maintain "an appropriate and rational relationship between the relevant harm suffered and the amount of damages awarded" and concluded that but for his finding that the defences had been established, "each plaintiff would have been entitled to general damages in the sum of $80,000."

Issues on appeal

52 The central issue on appeal is whether his Honour erred in his approach to determining whether the imputations, and the defences pleaded in respect of them, should be understood as referring to one restaurant, Coco Roco, or to two separate restaurants, Coco and Roco. The appellants contend that his Honour's approach, of determining that issue as a preliminary factual inquiry, led him into error both in construing the imputations and in assessing the defences.

53 In their amended notice of appeal the appellants complained (Ground 1) that his Honour erred in finding there was only one restaurant, Coco Roco, when he should have found there were two, Coco and Roco (the "one restaurant ground"). As argued in written and oral submissions, this ground was put on the basis that, in the context of the matter complained of, each imputation was understood to relate to both restaurants, rather than one. The fact of a favourable finding on this ground was reflected in the bulk of the remaining grounds (Grounds 2 - 7) insofar as they complained that as the second respondent only "experienced" one of those two restaurants, Coco, he could not have held the opinion he expressed about Roco, there could have been no proper material for comment in respect of Roco and nor could any of the imputations be substantially true in relation to it.

54 Independently of the one restaurant ground, the appellants complain that the primary judge erred in finding the bad service and incompetence imputations were conveyed as expressions of opinion rather than as statements of fact (Grounds 7A - 7B). They also submitted his Honour erred in finding the bad service imputation was substantially true in respect of each of them and that his Honour erred in finding the incompetence imputation was substantially true in respect of the third appellant.

55 Next, the appellants complain that, not having found the incompetence imputation substantially true in respect of the first and second appellant, his Honour erred in finding there was proper material for the comment defence in relation to that imputation (Ground 4). They also complain that the comment defence could not be made out in respect of the incompetence imputation in relation to any of them, because it "made allegations against the Appellants personally and [was] not directed to the restaurant and its quality of food or quality of service" (Ground 7).

56 Finally, the appellants complain that the provisional damages awarded were inadequate (Ground 8).

57 The respondents filed a notice of contention asserting that his Honour's orders could also be sustained on the basis that the evidence supported the conclusion that the incompetence imputation was substantially true in relation to the first and second appellants. They advanced no written or oral submissions to support the notice of contention and I assume it has been abandoned.

Consideration

(a) The preliminary point: submissions

58 As I have said, the appellants' principal complaint is that the primary judge erred in finding (at [27]) that "there was relevantly only one restaurant". They submit that the primary judge should have found that insofar as each imputation referred to "Coco Roco", it (and the matter complained of) should be understood to have meant the two restaurants, Coco and Roco.

59 The appellants submit that the finding that "there was relevantly only one restaurant" contaminated his Honour's findings in respect of the defences of comment and substantial truth. They contend that his Honour erred in considering material extrinsic to the matter complained of when determining the meaning of the imputations.

60 The appellants submitted that the ordinary reasonable reader would have read the references to "Coco Roco" in the matter complained as conveying its defamatory stings about their conduct in relation to both restaurants. These included the statement on the front page of Good Living , "Matthew Evans fails Coco Roco", the left sidebar score of "9/20" for Coco Roco, the statements "more than half the dishes I've tried at Coco Roco are simply unpalatable" (paragraph 5), "Coco Roco is a bleak spot on the culinary landscape" (paragraph 23), the statement "Coco Roco is actually two restaurants..." [and the details], the caption "Poached beef (right) from Coco Restaurant at Coco Roco" against the photograph of poached beef and the right hand sidebar which refers to each restaurant and describes the value as "A shocker".

The respondents contend that his Honour did not err in determining the preliminary point. However, their central submission focuses upon the imputations, in line with the appellants' submissions, in arguing that, having regard to the matter complained of, the ordinary reasonable reader could not have understood the review (and hence the imputations) to refer to anything other than the Coco part of the one restaurant and not to that part called Roco. For this submission, it really did not matter whether Coco Roco was one restaurant or two.

(b) Preliminary point: resolution

61 The "preliminary point" the appellants raised at trial depended upon the proposition that each of the imputations constituted each appellant's cause of action against the respondents: s 9(2), 1974 Act. It was those imputations which "set the scene for the contest which follows [and to which] [t]he defendant's pleadings will respond": Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2001) 54 NSWLR 165 (at [19]) per Mason P (Wood CJ at CL agreeing). Accordingly if, as counsel for the appellants submitted, the imputations were understood to refer to the two restaurants at Coco Roco, the respondent's defences were substantially, if not entirely, compromised because the reviewer never ate at Roco. It is not, with respect, apparent that the primary judge appreciated that the preliminary point turned on the nature of the appellants' causes of action with the attendant implications concerning determining their meaning to which I now turn.

62 The imputations were pleaded as arising from the natural and ordinary meaning of the matter complained of. The s 7A jury had to determine whether the imputations were conveyed by considering whether ordinary reasonable readers would have understood the matter complained of, when read as a whole, in the defamatory sense pleaded: Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716; Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 (at 164 - 167) per Hunt CJ at CL (with whom Mason P and Handley JA agreed); Greek Herald Pty Ltd v Nikolopoulos (at [26] - [27]).

63 No evidence was admissible at the s 7A trial as to the meaning of the matter complained of: Toomey v John Fairfax & Sons Ltd [1985] 1 NSWLR 29 (at 243 - 294) per Hunt J. Such evidence would have only been admissible if the appellants had pleaded a true innuendo case: Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500 (at 505 - 507) per Brennan J (with whom Gibbs CJ, Stephen, Murphy and Wilson JJ agreed).

64 The function of determining the defences and damages fell to the primary judge because of the severance of responsibility for determining issues of fact in defamation proceedings effected by s 7A of the 1974 Act. The primary judge was in no different position in determining whether the defences were established from that in which the jury would have been had the task of determining those issues fallen to it. Each of the respondent's defences of comment, substantial truth and contextual truth was required to be responsive to the pleaded (and found) imputations: Greek Herald (at [19]); Trad v Harbour Radio Pty Ltd [2011] NSWCA 61 (at [51]).

65 Speaking of the defence of comment, the Privy Council said in Lloyd v David Syme & Co Ltd (1985) 3 NSWLR 728 (at 735 - 736) (an appeal from defamation proceedings conducted before a jury in New South Wales under the 1974 Act before s 7A was enacted):

"Comment must have a meaning, and ex hypothesi the jury are proceeding on the footing that its meaning is defamatory in the sense of the pleaded imputations which have been found established."

66 That statement was approved by the plurality (Gummow, Hayne and Heydon JJ) in Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245 (at [83]) as equally applicable to the common law. Their Honours held that:

"...by the time the trial judge comes to consider the fair comment defence the question of meaning will have been decided adversely to the defendant. The meaning found is the comment to be scrutinised for its fairness."

67 The consequence is, accordingly, that it was not open to the primary judge to determine the meaning of the imputations by reference to material the jury could not consider. He was bound by the meanings the jury found were conveyed by reference to the matter complained of.

68 In the ordinary course, there would be no controversy as to the meaning of the imputation the jury found was conveyed. If an ambiguity issue had arisen at the s 7A hearing, it would have been incumbent on the respondents to apply to have it struck out as embarrassing: Singleton v Ffrench (1986) 5 NSWLR 425 (at 433) per McHugh JA (Samuels JA agreeing). Had that occurred, the s 7A judge would have had to determine what meaning the imputation bore: ibid (at 428) per Mahoney JA. That task would have been undertaken by considering whether, applying the same principles the jury had to apply, the matter complained of conveyed the two restaurant meaning for which the appellants contended or the one restaurant meaning for which the respondents contended.

69 Where, as in this case, such a controversy arose at the s 7A(4) stage, it could only be resolved, in my view, by the primary judge considering that question by applying the same principles. The primary judge erred, accordingly, in having reference to a substantial body of extrinsic material to determine the meaning of the imputations.

(c) The meaning of the imputations

70 It falls to this Court, accordingly, to determine which of the parties' contentions as to the meaning of the imputations, taken in the context of the matter complained of, is correct.

71 When applying the ordinary reasonable reader principles to determine the meaning conveyed by the matter complained of, it should be borne in mind that although that reader considers the publication as a whole, this does not mean he or she does, or must, give equal weight to every part of the publication. The emphasis that the publisher supplies by inserting conspicuous headlines, headings and captions is a legitimate matter that readers do and are entitled to take into account. Contrary statements in an article do not automatically negate the effect of other defamatory statements in the article: John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657 (at [26]) per McHugh J; see also generally (at [187]) per Callinan J (Gleeson CJ agreeing).

72 In my view the appellants' contention should be accepted. The matter complained of was replete with references to Coco Roco which makes it apparent, in my view, that it was open to the s 7A jury to conclude that an ordinary reasonable reader would have read the matter complained of as referring to both restaurants.

73 The matters upon which the appellants rely point to this conclusion. The reader is guided to the review by the front page of Good Living and the statement that "Matthew Evans fails Coco Roco". The review (entitled "Crash and Burn") is identified to be about "Coco Roco" which is rated "9/20" (par 25). There is an explicit statement that there are two restaurants. The address of the establishment and all the particulars given in the right-hand sidebar identify each restaurant. The comments about the service, the value and the summary, however, do not distinguish between them.

74 The second respondent's opening salvo in the matter complained of described "more than half the dishes I've tried at Coco [as] simply unpalatable" (par 5), then embarked upon his review of "Coco Roco ... the swank new eatery at King Street Wharf" (par 6). The review concluded with the statement "Coco Roco is a bleak spot on the culinary landscape."

75 In my view, when considering the matter complained of as a whole, it was open to the jury to conclude that it referred to each restaurant at "Coco Roco", not merely to the restaurant "Coco". It would have been open to the respondents to seek to persuade the jury otherwise. Whether or not they did so is now irrelevant. Once the jury found that the imputations were conveyed concerning "Coco Roco", which expression could be understood as I have explained when regard is had to the matter complained of, the respondents had to establish that their defences ran to both restaurants. They could not do so, and did not seek to do so.

76 It is true, as the respondents submit (and as the primary judge found persuasive), that it is apparent from the matter complained of that the second respondent ate only at Coco on both occasions when he dined at the establishment. However that fact does not, in my view, detract from the conclusion that having regard to the matter complained of as a whole and attributing to the ordinary reasonable reader the characteristics (including a measure of loose-thinking) referred to in Lewis v Daily Telegraph Ltd [1964] AC 234 (at 260) and particularly having regard to the headlines, headings and captions, the imputations referred to both restaurants, not merely to Coco.

Comment

(a) Expressions of opinion or statements of fact?

77 The appellants submit that the bad service imputation and the incompetence imputation were statements of fact and not opinion.

78 The approach the court applies in determining whether defamatory matter constitutes fact or comment was explained in the judgment of the plurality in Channel Seven Adelaide Pty Ltd v Manock (at [35] - [36]) as follows (footnotes omitted):

"35 Distinguishing fact and comment . In Brent Walker Group Plc v Time Out Ltd Bingham LJ said:

'The law is not primarily concerned to provide redress for those who are the subject of disparaging expressions of opinion, and freedom of opinion is (subject to necessary restrictions) a basic democratic right. It is, however, plain that certain statements which might on their face appear to be expressions of opinion (as where, for example, a person is described as untrustworthy, unprincipled, lascivious or cruel) contain within themselves defamatory suggestions of a factual nature. Thus the law has developed the rule...that comment may only be defended as fair if it is comment on facts (meaning true facts) stated or sufficiently indicated .' (emphasis added)

In Goldsbrough v John Fairfax & Sons Ltd Jordan CJ said that for the defence of fair comment to succeed, 'it is essential that the whole of the words in respect of which it is relied on should be comment'. He continued:

'It must be indicated with reasonable clearness by the words themselves, taking them in the context and the circumstances in which they were published, that they purport to be comment and not statements of fact; because statements of fact, however fair, are not protected by this defence. In other words, it must appear that they are opinions stated by the writer or speaker about facts, which are at the same time presented to, or are in fact present to , the minds of the readers or listeners, as things distinct from the opinions, so that it can be seen whether the opinions are such that they can fairly be formed upon the facts.' (emphasis added)

A 'discussion or comment' is to be distinguished from 'the statement of a fact. It is not the mere form of words used that determines whether it is comment or not; a most explicit allegation of fact may be treated as comment if it would be understood by the readers or hearers, not as an independent imputation, but as an inference from other facts stated.' As the passages quoted from Bingham LJ and Jordan CJ above illustrate, the distinction between fact and comment is commonly expressed as equivalent to that between fact and opinion. Cussen J described the primary meaning of 'comment' as 'something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, judgment, remark, observation, etc'. It follows that a comment can be made by stating a value judgment, and can also be made by stating a fact if it is a deduction from other facts. Thus, in the words of Field J:

'[C]omment may sometimes consist in the statement of a fact, and may be held to be comment if the fact so stated appears to be a deduction or conclusion come to by the speaker from other facts stated or referred to by him, or in the common knowledge of the person speaking and those to whom the words are addressed and from which his conclusion may be reasonably inferred. If a statement in words of a fact stands by itself naked, without reference, either expressed or understood, to other antecedent or surrounding circumstances notorious to the speaker and to those to whom the words are addressed, there would be little, if any, room for the inference that it was understood otherwise than as a bare statement of fact.'

36 The question of construction or characterisation turns on whether the ordinary reasonable 'recipient of a communication would understand that a statement of fact was being made, or that an opinion was being offered' - not 'an exceptionally subtle' recipient, or one bringing to the task of 'interpretation a subtlety and perspicacity well beyond that reasonably to be expected of the ordinary reader whom the defendant was obviously aiming at.' " (Emphasis in original)

79 As the primary judge recognised (at [153]), in the context of the 1974 Act, the question whether the imputation the jury found was conveyed was conveyed as a comment turns, not merely on the form of the pleaded imputation, but upon a consideration of the matter complained of as a whole: Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448 (at 467 - 469) per Clarke JA (Handley and Cripps JJA agreeing).

80 The appellants complain that the incompetence imputation was in a different category to the unpalatable food and bad service imputations. This was because, while the latter related to the quality of the food and service which could be relevant to the review of a restaurant which was open to the public and could be deemed to submit, therefore, to public criticism, the allegation of incompetence was a personal attack on them.

81 In this context, the appellants relied upon Gleeson CJ's statement in Channel Seven Adelaide Pty Ltd v Manock (at [8]):

"Where conduct is 'submitted to public criticism', then, so long as statements about that conduct are presented as comment and not as facts, it is not necessary that a reader, viewer or hearer of the comment should be in a position to form his or her own opinion."

82 The appellants argued that they had not submitted themselves for public criticism and there were no facts or references to facts in the matter complained of referring to their competency and, accordingly, the incompetence imputation should be taken as a statement of fact.

83 Gleeson CJ's observation in Channel Seven Adelaide Pty Ltd v Manock , to which the appellants refer, was made in the context of his Honour's consideration of the question of the extent to which the facts upon which comment was said to be based must be stated in the matter complained of itself so as to enable the reader, viewer or hearer to be in a position to form his or her own opinion concerning statements in the matter complained of or, rather, whether it was sufficient that the facts on which a comment was based were "indicated with sufficient clarity to make it clear that it is comment on those facts": Pryke v Advertiser Newspapers Ltd (1983) 37 SASR 175 (at 192).

84 Viewed in that light, it is apparent that Gleeson CJ's statement in Channel Seven Adelaide Pty Ltd v Manock (at [8]) did not exhaustively state the circumstances in which statements about individuals might be characterised as comment or opinion.

85 However, in any event, in my view in this case the condition to which Gleeson CJ referred was satisfied. The appellants were identified in the right-hand sidebar to the review as the "owners" of the restaurants the second respondent reviewed. Although, as the appellants submit, there were no explicit facts or references to facts in the matter complained of which referred to their competency, it was open to the s 7A jury to conclude, as it manifestly did, that, applying the conventional test as to whether an imputation was conveyed, the incompetence imputation was conveyed of and concerning each appellant. They were, like the newspaper proprietor who was the plaintiff in Kemsley v Foot [1951] 2 KB 34, persons who had submitted their "work" in the form of the Coco and Roco restaurants to the public. They bore ultimate responsibility for the conduct of the establishment both, it might be inferred, in the selection of the staff and the menu.

86 In my view, the primary judge did not err in concluding that the imputations were statements of comment and/or opinion. They were conveyed in the context of a restaurant review and purported to be the second respondent's opinion about the restaurants referred to, Coco and Roco. It is unnecessary to do more than endorse his Honour's reasoning in this respect.

(b) Proper material for comment

87 In order to determine whether the defence of comment pursuant to the 1974 Act was established, it was necessary for the respondents to establish that it was based on proper material for comment or that the material on which the comment was based was to some extent proper material for comment and the comment represented an opinion which might reasonably be based on that material to the extent to which it was proper material for comment: s 30(3), 1974 Act; Hawke v Tamworth Newspapers Co Ltd [1983] 1 NSWLR 699. They had to establish that the facts were truly stated and that the comment related to a matter of public interest.

88 The requirement in s 30 of the 1974 Act that there be proper material for comment reflected the common law: Sims v Wran [1984] 1 NSWLR 317 (at 322); Bob Kay Real Estate Pty Ltd v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 505 (at 511). In order for the defence of fair comment to succeed at common law, the comment had to be based on facts truly stated. If they were not, the foundation of the defence failed: Thompson v Truth & Sportsmen Ltd (No 4) (1932) 34 SR (NSW) 21 (at 25); Goldsborough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524 (at 531 - 532), referred to with approval by the plurality in Channel Seven Adelaide Pty Ltd v Manock (at [35]); Pervan v North Queensland Newspaper Co Ltd [1993] HCA 64; (1993) 178 CLR 309 (at 327).

89 The facts on which a comment is based must be expressly stated, referred to or notorious. It is not sufficient that the subject matter or "substratum of fact" of the comment is indicated Channel Seven Adelaide Pty Ltd v Manock (at [47]). The purpose of this obligation is ensure that the reader, hearer or viewer of the matter complained of may judge for him or herself "how far [the author's] opinion is well-founded": Kemsley v Foot (at 356) per Lord Porter, citing Odgers on Libel and Slander , 6 th ed (1929) Stevens; Channel Seven Adelaide Pty Ltd v Manock (at [45]); cf Joseph v Spiller (2010) UKSC 53; [2011] 1 AC 852.

90 Hunt J described the extent of this requirement in Sims v Wran (at 317) as follows:

"Material is proper material for comment in accordance with the common law; this particular element of the defence is not codified: s 30(1). At common law, and thus under Div 7, a statement may be defended as comment only if the material upon which that comment is based was stated expressly or impliedly in the matter complained of or constituted a matter of contemporary history or general notoriety and thus, in one way or another, was made known to the person to whom the publication was made to enable those persons to judge for themselves whether they agree with the opinion published by the defendant and based upon that material: Myerson v Smith's Weekly Publishing Co Ltd (1923) 24 SR (NSW) 20 at 27; 41 WN 5 at 7; Goldsbrough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524 at 531, 532; 51 WN 178; Kemsley v Foot [1952] AC 345 at 356; Orr v Isles (1965) 83 WN (Pt 1) (NSW) 303 at 321, 329, 330."

91 It is not, with respect, readily apparent where the primary judge dealt with this issue. He did not do so explicitly. It appears, however, to be subsumed in his consideration of the preliminary point where (at [30], see also [34]) he rejected the appellants' submission that the fact the second respondent did not intend to express the opinions represented by the imputations about Roco, but only about Coco, was fatal to the comment defence. His Honour also (at [173]) concluded that the material on which the second respondent expressed his views was stated in the matter complained of, albeit that that was in the context of him determining whether the imputations were comment or fact.

92 The appellants' short point on this issue is that the defence of comment in New South Wales must fail because the comment is not based on proper material for comment insofar as the restaurant Roco is concerned. There are no facts expressly stated, referred to or notorious about Roco which could form the basis for any of the imputations in respect of it. The same consequence flows, they submit, in the other States and Territories in respect to which either the common law defence of fair comment or the statutory and/or code defences of comment are pleaded.

93 The respondents do not seek to submit that the primary judge's conclusion that the defence of comment was established could be sustained if the imputations are understood to refer to both restaurants. Rather, their contention is that his Honour's inferential conclusion that the imputations were based upon proper material for comment and a proper foundation of fact for the purposes of other jurisdictions, was well-founded having regard to his conclusion that Coco Roco was a single restaurant. That conclusion cannot, as I have held, be sustained.

94 In my view, the primary judge erred in concluding that the matter complained of was based on proper material for comment or had a sufficient foundation of fact for the purposes of the defence of comment in other jurisdictions. There were no facts stated in respect of food eaten at Roco or about the service at Roco. Accordingly, there was no factual basis for any of the imputations.

95 This finding is sufficient to conclude that the respondents did not establish the defence of comment, however I will deal briefly with the remaining issue.

(c) Intention to convey the imputations

96 If the respondents established both that the imputations were comment, and were based on proper material for comment, the appellants bore the onus of showing that the opinion was not honestly held by the second respondent; in other words, that the comment was subjectively not his real opinion: Hawke v Tamworth Newspaper Ltd (at 716) .

97 A person who states that he or she did not intend to convey a particular defamatory imputation cannot reasonably be taken to have held the opinion represented by that imputation: Lloyd v David Syme & Co Ltd (at 736).

98 At trial the second respondent gave the following evidence in chief:

"Q. In relation to the imputation the plaintiff sells unpalatable food at Coco Roco, what can you tell the court about whether you held that opinion or you didn't hold that opinion at the time you wrote the article?

A. I held the opinion that they sold some unpalatable food at the time I wrote the article.

Q. Do you understand that to mean some unpalatable food?

A. Yes, I do, yes.

Q. The plaintiff provides some bad service at Coco Roco?

A. Yes, I believe that to be true when I wrote the article.

Q. And the plaintiff is incompetent as a restaurant owner because he or she employs a chef at Coco Roco who makes poor quality food?

A. Yes, I believe that to be true.

Q. Do you believe that to be true about each of the plaintiffs?

A. Yes, I did."

99 In cross-examination the following exchange occurred:

"Q. I want you to listen to this question. When you wrote the article, the review, were you of the opinion that the plaintiffs sold unpalatable food at Coco restaurant?

A. Yes, I was.

Q. Were you of the opinion that they sold unpalatable food at Roco restaurant?

A. No I didn't have an opinion on that.

Q. When you wrote the review were you of the opinion that the plaintiffs provided some bad service at Coco restaurant?

A. Yes, I was of that view.

Q. Were you of the opinion that the plaintiffs provided some bad services at Roco restaurant?

A. No, I hadn't formed that at all.

Q. And finally, when you expressed the opinion that the plaintiffs were incompetent as restaurant owners because they employed a chef at Coco restaurant who made poor quality food, you were of that opinion?

A. Yes, I was.

Q. But not of the same opinion for Roco restaurant?

A. I hadn't formed that opinion of Roco restaurant ." (Emphasis added)

100 The appellants submit, in reliance upon the statement in Lloyd v David Syme (see above at [97]), that because the second respondent said he did not hold, in substance, any opinion about Roco, the defence of comment must fail. They submit that that defence could not be established if the second respondent intended to convey only that part of the imputation which relates to Coco, having regard to the obligation that the respondents must establish the defence in relation to the substance of the comment, relying analogically on Howden v "Truth" and "Sportsman" Ltd [1937] HCA 74;(1937) 58 CLR 416 (at 420 - 421) per Dixon J.

101 The respondents do not challenge the proposition expressed in Lloyd v David Syme & Co Ltd . They rely on the second respondent's evidence that he held the opinions he expressed in respect of Coco and the primary judge's conclusion that he held those opinions honestly.

102 In my view the appellants' submission should be accepted. The second respondent's answers I have emphasised in his cross-examination (see [99]) were fatal to the comment defence. They constituted an admission by him that he did not hold the opinion represented by the comment: cf Lloyd v David Syme & Co Ltd (at 735). There was no dispute that the first respondent was bound by the second respondent's answers in cross-examination.

Truth

103 The defence of justification only arises if a defence of comment fails or is inapplicable: Howden v "Truth" & "Sportsman" Ltd (at 429) per Evatt J.

104 The principles relating to the defence of substantial truth were set out in Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335 (at [138]) per McColl JA (Spigelman CJ, Beazley JA, McClellan CJ at CL and Bergin CJ in Eq agreeing):

"138 In order to establish imputation 12 was substantially true, the appellant had to establish that every material part of it was true: Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416 (at 419) per Starke J; (at 420) per Dixon J; (at 424 - 425) per Evatt J. However this does not mean the appellant had to prove the truth of every detail of the words established as defamatory ( Li v The Herald & Weekly Times Pty Ltd [2007] VSC 109 (at [85]) per Gillard J), rather the defence of substantial truth is concerned with meeting the sting of the defamation: Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1 (at [274]) per Gillard AJA (Winneke ACJ generally agreeing and Warren AJA agreeing). As Lord Shaw of Dunfermline explained in Sutherland v Stopes [1925] AC 47 (at 79):

'It remains to be considered what are the conditions and breadth of a plea of justification on the ground of truth. The plea must not be considered in a meticulous sense. It is that the words employed were true in substance and in fact . I view with great satisfaction the charge of the Lord Chief Justice when he made this point perfectly clear to the jury, that all that was required to affirm that plea was that the jury should be satisfied that the sting of the libel or, if there were more than one, the stings of the libel should be made out. To which I may add that there may be mistakes here and there in what has been said which would make no substantial difference to the quality of the alleged libel or in the justification pleaded for it.' " (Emphasis added)

105 As Gillard AJA (Winneke ACJ generally agreeing and Warren AJA agreeing) explained in Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1 (at [306], see also at [279]) at common law:

"(i) The whole libel that is all the defamatory imputations must be proved as true; it is no defence to prove that part of the defamatory libel is true. The publisher must prove the truth of the defamatory sting. The general rule is that the publisher must prove every injurious imputation which the jury may find in the words complained of..."

106 As explained in Herald & Weekly Times Ltd v Popovic (at [306](iii)) (applied in Besser v Kermode [2011] NSWCA 174 (at [47])), a publisher may justify only part of the words complained of provided the part sought to be justified contains a distinct and separate imputation. But this partial justification is not a defence to the cause of action, which is the publication of defamatory words although it is relevant to the question of damages, and if proven, results in a reduction in damages . The respondents did not seek to rely upon partial justification.

107 A question arose in the course of the hearing as to how the respondents could make out a defence of substantial truth if the imputations amounted to comment. As explained in Trad v Harbour Radio Pty Ltd (at [53] - [57]), by reference to cases decided at common law, a plea of justification means that the libel is true not only in its allegations of fact, but also in any comments made. Accordingly, the defendant has to prove not only that the facts are truly stated but also that any comments upon them are correct.

108 Hunt J expressed the view in Bob Kay (at 512) that the defence of truth under s 15 of the 1974 Act applied "equally to statements of fact and to expressions of opinion, so that the form in which the matter complained of is expressed is irrelevant so far as that defence is concerned." His Honour did so in a passage in which he was considering whether the defence of comment went to the imputation (as Glass JA had held in David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346 (at 356 - 358)) of the matter complained of as Samuels JA said in Petritsis v Hellenic Herald Pty Ltd [1978] 2 NSWLR 174 (at 192). His Honour (at 515) supported Samuels JA's view. That view has not prevailed (see Trad v Harbour Radio Ltd (at [51])). That would not, in my view, detract from the force of Hunt J's statement as to what a defendant had to prove under s 15 of the 1974 Act where an imputation contained both statements of fact and expressions of opinion. As under the common law, the defendant had to establish both are substantially true.

109 The respondents accepted that the defence of truth could not be made out if the imputation referred to both Coco and Roco. This was a proper concession. Once the imputations were understood to refer to both restaurants, neither the imputations (under the 1974 Act) nor the sting of the defamatory matter (at common law) could be substantially true.

Damages

110 The appellants' written and oral submissions said little more on this ground of appeal than that the primary judge's assessment of damages was grossly inadequate. In oral reply, Mr Evatt added that his Honour erred in overlooking their claim for aggravated damages. They urged this Court to re-assess damages.

111 The respondents emphasised appellate restraint in interfering with an assessment of general damages: Moran v McMahon (1985) 3 NSWLR 700. They submitted that if this Court did form the view that their defences had failed in respect of some but not all imputations, or some but not all appellants and that the damages were inadequate, the matter should be remitted for a further hearing on that issue.

112 The primary judge overlooked what could be a significant factor on the assessment of damages in the appellants' claims for aggravated and exemplary damages. Matters of aggravation may push an award of damages towards the higher end of the scale: Cassell & Co Ltd v Broome [1972] AC 1027 (at 1085), per Lord Reid; see also Andrews v John Fairfax & Sons Ltd (1980) 2 NSWLR 225 (at 240, 249). Moreover, although the appellants did not expressly refer to it, I assume their claim for exemplary damages has not been abandoned.

113 Aggravated damages are awarded for hurt to feelings. They necessarily depend upon observation of the claimant and his or her reaction to the matters particularised by way of aggravation. It is not possible for this Court to have the benefit of seeing the appellants give their evidence in this respect.

114 Further, exemplary damages are awarded "as a punishment to the guilty, to deter from any such proceeding for the future, and as a proof of the detestation of the jury to the action itself": Wilkes v Wood [1763] EngR 103; (1763) Lofft 1 (at 19) (98 ER 489, at 498-499) per Pratt LCJ cited with approval in the joint judgment in Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1 (at 8). While "it may be doubted whether a single formula adequately describes the boundaries of the field in which they may properly be awarded. ... the phrase ... of 'conscious wrongdoing in contumelious disregard of another's rights' describes at least the greater part of the relevant field": Gray v Motor Accident Commission [1998] HCA 70; (1998) 196 CLR 1 (at [14]) per Gleeson CJ, McHugh, Gummow and Hayne JJ. The question whether the respondents engaged in conduct warranting an award of exemplary damages is also a matter which should be considered at first instance.

115 The issue of damages should be remitted for further consideration.

Orders

116 I propose the following orders:

1) Appeal allowed with costs.

2) Set aside the orders of Harrison J made on 18 December 2009.

3) Enter a verdict for the appellants.

4) Respondents to pay the costs of the proceedings before Harrison J.

5) Remit the matter to the Common Law Division for assessment of damages.

117 SACKVILLE AJA: I agree generally with the judgment of McColl JA. I agree with the additional observations made by Giles JA.

**********

APPENDIX

[The matter complained of, including paragraph numbers as marked on the attachment to the Second Further Amended Statement of Claim.]

[Front page of G ood Living ]

Matthew Evans fails Coco Roco

[Page 6 of Good Living ]

1. Good eating

2. Eat Out Matthew Evans

3. Crash and burn

4 . When dining on the view is the only recommendation.

5. If a restaurant serves good as well as bad food, do you give it the benefit of the doubt? I wouldn't do that with a three-chefs-hat restaurant so why should I do it here? Especially when more than half the dishes I've tried at Coco Roco are simply unpalatable.

6. Coco Roco is the swank new eatery at King Street Wharf. The opening was touted as "Sydney's most glamorous restaurant". If glamour peaked at about 1985, then perhaps they're right. Something about the polished stainless steel around the open kitchen and the black reflector tiles in the bathroom make me feel I should be wearing a pink shirt and a thin leather tie. Maybe it's just me.

7. What isn't disputable is that this place has had a $3 million fitout, has views westwards over the water and scored Sarah O'Hare as its official guest at the opening. It has set itself up as a flash restaurant with big-end-of-town prices. Its business card even boasts that "A new level of dining comes to Sydney's King Street Wharf." I couldn't agree more.

8. Coco Roco is actually two restaurants: Coco, the posh place upstairs off Lime Street, and sibling Roco, also smartly fitted out on the foreshore. Forever in pursuit of excellence, we choose the more expensive option.

9. Expensive is right. Mains skid dizzily from a vegetarian dish at just under $30 and crash over the $50 mark. It's a brave restaurateur who tries that without the goods to back it up.

10. A degustation of oysters ($28 for six/$40 for 12) arrives as different flavoured bivalves, rather than oysters from various regions. There's a saffron-infused gin one. There's a seafood foam, which looks like it's been piped on top. The texture is scary and, let's be polite, not to my tastes. The limoncello, however, is worse - flavours jangle like a car crash; all at once it's sickly sweet, overtly alcoholic, slippery, salty and bitter.

11. Only the lone natural oyster is gloriously free from interference and there's an exquisite verjuice jelly on another.

12. Next up, the carpaccio of beef ($22) comes with a dreary roast almond paste underneath and far too many yellowing rocket leaves on top. The meat itself is fine, although the parmesan cheese strips taste tired.

13. Small Queensland scallops ($24) on jagged shells with cauliflower and vanilla nearly work but are uninteresting.

14. Why anyone would put apricots in a sherry-scented white sauce with a prime rib steak is beyond me. A generous chock of meat comes perfectly rested, medium as ordered. But the halves of apricot are rubbery and tasteless (which is probably a good thing). I scrape the whole wretched garnish to one side. The meat has a good length of flavour and is a damned fine steak, even if it is $52. I can't help but think at this price I could be dining at Rockpool.

15. On a side dish, three house-made mustards - milk, Guinness and lavender - prove that some things are better left alone.

16. The other main, roast chicken ($35) is outstandingly dull, which is odd considering it's a Glenloth bird that I usually love.

17. A few days later, in the interests of impartiality, I'm back. This time it's salad to start ($8), sweetly dressed with honey and balsamic vinegar and topped with fine cress. It's not great but passable, except for a few wilting leaves.

18. A poached beef fillet ($46) shows, like last visit, that they can cook steak. This time it's medium rare, although the meat is curiously dry on the edges. But the accompanying broth is well below average. It is sticky sweet with port and overcooked potatoes floating in it do it no favours. Oxtail and sweetbread dumplings are a delight, however.

19. I've never had pork belly that could almost be described as dry. Until tonight. A generous square of pig's paunch ($33) is snuggled into a mass of starchy lentils. The meat is unevenly spiced with Moorish flavours and the lentils are poor. Texturally, it brings to mind the porcine equal of a parched Weetbix.

20. For dessert, honeycomb cheesecake ($17) has little to recommend it, with its soggy pastry base. Compared with the raspberry and shiraz sorbet, however, it's heaven.

21. A dismal pyramid of sorbet ($15) jangles the mouth like a gamelan concert. Poached berries underneath are OK, except for what I guessed might have been soggy blackberries.

22. It could be argued that Coco is still settling in. But apricots in sherry-scented white sauce aren't meant to garnish a rib eye of beef. The menu isn't held back by minor glitches; it's flawed in concept and execution.

23. In a city where harbourside dining has improved out of sight in recent years, Coco Roco is a bleak spot on the culinary landscape.

24. The Sydney Morning Herald Good Food Guide 2004 is available at good bookstores or you can call 1300 656 022.

A sidebar to the left of the review read:

25. Coco Roco

city

9/20

[and set out under "Scoresheet" in a section numbered 26, the elements of the score]

[A photograph of a piece of steak inset into the first column of the review bore the caption (numbered 27):

" Glamour push: Poached beef (right) from Coco Restaurant at Coco Roco (above) ]

A sidebar to the right of the review (again numbered in the Statement of Claim) read:

29. The Address

17 LIME STREET,

KING STREET

WHARF, CITY.

TEL: [phone].

30. The Hours

Coco lunch

Tue-Fri noon-3pm,

dinner Tue-Sat from

6pm. (Roco lunch and

dinner daily.)

31. The Food

Contemporary

Mediterranean.

32. The Wine List

Good, solid list with plenty

of interest.

33. The Owners

Aleksandra and Liliana

Gacic, Branislav Ciric.

34. The Chef

Adam Birtles.

35. The Service

Good and bad.

36. The Noise

Could get loud.

37. The Vegetarians

Three dishes, plus

plenty of sides.

38. The Wheelchair Access

Yes to Roco, stairs to Coco.

39. The Cards

Major except Diners Club.

40. The Bill

Entrees $17-$24, mains $28-$52,

Desserts $15-$17.

Less at Roco.

41. The Value

A shocker.

42. The Summary

43. Unpalatable flavours on one hand

and pricey but good steak with flawed

garnishes on the other add up to a

restaurant where the view is the best bit.

And you can't eat that."

**********

Decision last updated: 24 November 2011