Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369
• Hearing dates: 22, 23 September 2014
• Decision date: 30 October 2014
• Before: Basten JA at [1]; Meagher JA at [116]; Tobias AJA at [117]

Decision

(1) Grant the applicants leave to appeal from the judgments, both interlocutory and final in the Common Law Division, excluding the grounds relating to damages (grounds 8-10); the admissibility of evidence of the second and third applicants as to the falsity of imputations (b), (c) and (d) and as to the design, composition and quality of the material used in Babywedge (grounds 12 and 13); the alleged amendment to the defence after the close of evidence (ground 14); the refusal to recuse on the ground of apprehended bias (ground 19).

(2) Direct that the applicants file the notice of appeal in the form of the draft contained in the White Folder.

(3) Dismiss the appeal.

(4) Order that the applicants pay the respondents' costs in this Court.

[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: APPEAL - grounds - apprehended bias - application to trial judge to recuse herself because ruling on admissibility suggested acceptance of the evidence - whether a reasonable fair-minded observer would apprehend bias; DEFAMATION - imputations - broadcast as to risks identified with infant sleep positioners overseas - infant sleep positioner manufactured and sold by applicants featured on broadcast without being named - alleged defamatory imputations that the applicants sold and offered for sale a product subject to recall and unsafe - whether defamatory imputations conveyed - whether imputations would diminish the applicants' standing in the eyes of the ordinary reasonable person; DEFAMATION - defences - substantial truth - whether defamatory imputations as to the safety of infant sleep positioners were substantially true - reliance on expert evidence on the risks associated with infant sleep positioners to establish substantial truth - Defamation Act 2005 (NSW), s 25; DEFAMATION - defences - justification - contextual truth - imputation not substantially true - whether broadcast carried contextual imputations that were substantially true - whether defamatory imputation could do no further harm to reputation because of contextual imputations - Defamation Act 2005 (NSW), s 26; DEFAMATION - cause of action - whether corporate plaintiff an excluded corporation - corporation is an "excluded corporation" if it employs fewer than 10 persons - whether persons confined to employees - Defamation Act 2005 (NSW), s 9(2)(b); EVIDENCE - relevance - admissibility - applicants sought to give evidence as to whether dangers in other sleep positioners applied to their products - whether non-expert opinion evidence admissible to prove falsity of a defamatory imputation; EVIDENCE - expert opinion - whether expert qualified to give opinion on the specific characteristics of the applicants' infant sleep positioner - whether expert had a preconceived opposition to infant sleep positioners - Evidence Act 1995 (NSW), s 79; TORT - injurious falsehood - malice - whether failure to obtain comment from supplier was so reckless as to warrant inference of malice; WORDS AND PHRASES - "employs" - "persons" - Defamation Act 2005 (NSW), s 9
• Legislation Cited: Supreme Court Act 1970 (NSW), s 101; Evidence Act 1995 (NSW), ss 78, 79; Defamation Act 2005 (NSW), ss 6, 9, 24, 25, 26; Defamation Act 1974 (NSW), s 8A
• Cases Cited: Ainsworth v Burden [2005] NSWCA 174; Australian Consolidated Press Ltd v Uren [1966] HCA 37; 117 CLR 185; Besser v Kermode [2011] NSWCA 174; 81 NSWLR 157 (reported as Fairfax Media Publications Pty Ltd v Kermode); Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No 5) [2013] NSWSC 1650; Chakravarti v Advertiser Newspapers Limited [1998] HCA 37; 193 CLR 519; Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; 79 ALJR 1716; John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; 53 NSWLR 541; John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; 230 CLR 291; Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520; McCormick v John Fairfax & Sons Ltd (1989) 16 NSWLR 485; McMahon v John Fairfax Publications Pty Ltd (No 6) [2012) NSWSC 224; Mizikovsky v Queensland Television Ltd [2013] QCA 68; [2014] 1 Qd R 197; Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388; Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460; Redeemer Baptist School Ltd v Glossop [2006] NSWSC 1201; Roberts v Bass [2002] HCA 57; 212 CLR 1; Spring v Guardian Assurance Plc [1993] 2 All ER 273
• Category: Principal judgment
• Parties: Born Brands Pty Ltd (First Appellant); Hayley Birtles-Eades (Second Appellant); Sally Birtles (Third Appellant); Nine Network Australia Pty Ltd (First Respondent); Gabriella Rogers (Second Respondent); Georgie Gardner (Third Respondent)
• Representation: Counsel: Mr CA Evatt, Mr RKM Rasmussen, Mr DJ Dibb (Appellants); Mr TD Blackburn SC, Mr ATS Dawson (Respondents); Solicitors: Beazley Singleton Lawyers (Appellants); Johnson Winter & Slattery (Respondents)
• File Number(s): 2013/360306

Decision under appeal

• Jurisdiction: 9111
• Citation: [2013] NSWSC 1649; [2013] NSWSC 1651
• Before: Adamson J
• File Number(s): SC 2011/115199

HEADNOTE

[This headnote is not to be read as part of the judgment]

The first applicant sells an infant sleep positioner, "Babywedge", which was created by the second and third applicants. A television news broadcast by the respondents suggested that infant sleep positioners increase the risk of sudden infant death syndrome and were being withdrawn from sale overseas. Pictures accompanying the news item showed (without naming) a Babywedge. The applicants alleged the broadcast conveyed four defamatory imputations that they had sold and offered to sell a product that: (a) had been subject to recall; (b) could harm or even kill babies; (c) had been linked to 12 deaths in the United States; and (d) was being pulled from shelves because it could cause a child to suffocate. The applicants also alleged injurious falsehood as the failure of the respondents to contact the applicants for comment was so reckless as to warrant an inference of malice.

The respondents defended imputations (b), (c) and (d) as substantially true if conveyed; they contended imputation (a) could do no further harm to the applicant's reputation because of contextual imputations in the broadcast which were substantially true. The respondents tendered a report by an expert on childhood deaths of the risks associated with infant sleep positioners. The report was admitted over objections that the expert was not qualified to give an opinion about Babywedge specifically and was predisposed against the use of infant sleep positioners generally. Evidence of the applicants to prove the falsity of imputations that Babywedge was unsafe were held to be inadmissible. An application was later made that the trial judge disqualify herself for apprehended bias because her ruling that the expert report was admissible suggested she had already accepted its conclusions.

The trial judge held that the first applicant (a corporation) could not claim in defamation because it "employs" more than 10 persons and was therefore not an excluded corporation under Defamation Act 2005 (NSW), s 9(2)(b). As for the claim of the two individual applicants, the trial judge held none of the imputations pleaded were either conveyed or were defamatory. If the imputations were conveyed and were defamatory, however, the trial judge held the defences pleaded by the respondent would have been successful. The claim of injurious falsehood was dismissed.

The applicants sought leave to appeal.

The Court (Basten JA, Meagher JA and Tobias AJA), granted leave from the findings on whether defamatory imputations were conveyed, the admissibility of the expert evidence, the defences of substantial truth and contextual truth, and the standing of the first applicant to sue in defamation. Leave was otherwise refused.

Imputations: whether conveyed and whether defamatory

1. The imputations (b), (c) and (d) were conveyed as the broadcast expressly linked the Babywedge with risks identified with respect to sleep positioners generally overseas. So long as imputation (a) referred to recall of the product in the United States and Britain (but not Australia) it was conveyed: [24]-[26].

2. The subject of the broadcast was the product, not the applicants. Nevertheless, the suggestion the applicants would have designed and sold a product that could harm or even kill babies would have diminished their standing amongst ordinary members of the community. The trial judge erred in finding the imputations (if conveyed) were not defamatory because they only concerned the product: [29]-[31], [34]-[37]

Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460 applied.

John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; 230 CLR 291 considered.

Expert evidence

3. The evidence of the expert was admissible and the trial judge was entitled to accept it as going to the dangerous qualities of infant sleep positioners: [47]-[49].

Defence of justification and contextual truth

4. Based on the expert evidence, imputations (b), (c) and (d) were substantially true insofar as they referred to the dangers of the type of product that included Babywedge: [57], [65], [67].

5. No error was disclosed in the trial judge's finding that the contextual implications pleaded by the respondent were substantially true. There was no basis for rejecting the defence of contextual truth to imputation (a) once the expert evidence was accepted: [72], [74], [89]

Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; 81 NSWLR 157; McMahon v John Fairfax Publications Pty Ltd (No 6) [2012] NSWSC 224; Mizikovsky v Queensland Television Ltd [2013] QCA 68; [2014] 1 Qd R 197 considered.

Injurious falsehood

6. The failure to obtain a comment from the applicants was not so reckless as to warrant an inference of malice on the part of the respondents. The claim for injurious falsehood was without merit: [90]-[94]

Spring v Guardian Assurance Plc [1993] 2 All ER 273; Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388; Roberts v Bass [2002] HCA 57; 212 CLR 1 applied.

Evidence of applicants as to falsity of imputations

7. The evidence of the individual applicants was not relevant to an issue at trial and could not be given by way of an exception to the Evidence Act 1995 (NSW). Evidence cannot be adduced simply to establish the falsity of an imputation said to be substantially true on the basis that a plaintiff may always "nail the matter complained of as a lie": [97]-[99]

Ainsworth v Burden [2005] NSWCA 174 considered

Standing for a corporate plaintiff to sue in defamation

8. The only relevant persons for the purposes of determining whether a corporation is an "excluded corporation" under s 9(2)(b) of the Defamation Act are "employees". The evidence indicated that the corporate applicant had standing to sue as it had fewer than 10 employees: [104]-[105]

Reedemer Baptist School Ltd v Glossop [2006] NSWSC 1201 not followed.

Disqualification for bias

9. The allegation of apprehended bias was without substance - no reasonable fair-minded observer would have concluded that admitting the expert's report constituted its acceptance by the trial judge: [110]-[112].

Judgment

1 BASTEN JA: The death of an otherwise healthy infant in a crib during the early months of life is an emotive issue. Uncertainty as to the causes of such events gave rise to the label "sudden infant death syndrome", or more commonly "SIDS". One obvious response is to limit the risks of suffocation.

2 On 29 September 2010 two United States government agencies - the Consumer Products Safety Commission and the Food and Drug Administration (the FDA) - issued a warning to consumers not to use infant sleep positioners because of risks of suffocation associated with the products. An information sheet issued by the FDA, referring to the warning, included the following highlighted box headed "Advice for consumers". Apart from requesting reports of any incident or injury from use of an infant sleep positioner, the advice raised three points:

"● STOP using infant sleep positioning products. Using this type of product to hold an infant on his or her side or back is dangerous and unnecessary.

● NEVER put pillows, infant sleep positioners, comforters, or quilts under a baby or in a crib.

● ALWAYS place an infant on his or her back at night and during nap time. To reduce the risk of SIDS, the American Academy of Paediatrics recommends placing infants to sleep on their backs and not their sides."

3 The text of the information sheet stated, in part:

"In the last 13 years, the federal government has received 12 reports of babies known to have died from suffocation associated with their sleep positioners. Most of the babies suffocated after rolling from the side to the stomach.

In addition to the deaths, the commission has received dozens of reports of babies who were placed on their back or side in the positioners only to be found later in hazardous positions within or next to the product."

4 The information sheet also referred to claims by some manufacturers that such products prevent SIDS, reflux and flat head syndrome. It noted that the FDA had approved a number of such products in the past but that "new information suggests the positioners pose a risk of suffocation." It said the FDA was asking the makers of sleep positioners to provide "data showing the products' benefits outweigh the risks" and "requesting that these manufacturers stop marketing their devices while FDA reviews the data."

The litigation

5 The first applicant, Born Brands Pty Ltd, is an Australian designer and distributor of one such product, using the brand name "Babywedge". (There was confusion even within the applicants' documents as to the precise form of the trade name.) It was created by two sisters, Hayley Birtles-Eades and Sally Birtles, who are the second and third applicants.

6 On 1 October 2010 the first respondent, Nine Network Australia, broadcast a short news item based on the warning published by the US government agencies and referring to the fact that such devices were available in Australia. The broadcast included pictures of a sleep positioner which was clearly recognisable to those who knew the product as a Babywedge. It involved a sloping foam base (mattress) approximately rectangular in shape with two small bolsters, also made of foam, the base and the bolsters being covered in a bright orange material. The bolsters were attached to the base by Velcro strips.

7 On 8 April 2011 the applicants commenced proceedings in the Common Law Division seeking damages in defamation and injurious falsehood. They were unsuccessful, Adamson J giving judgment for the defendants, (being the broadcaster and two presenters who appeared on the program): Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No 6) [2013] NSWSC 1651. The applicants appealed from each of a number of findings made by the trial judge adverse to their claims. They also sought to challenge the refusal of the trial judge to disqualify herself on the grounds of apprehended bias. Because the basis of that application was a judgment with respect to the admissibility of expert evidence, given late in the trial, it is convenient to defer consideration of that ground until the underlying interlocutory judgment has been addressed.

8 The matter came before the Court by way of an application for leave to appeal heard concurrently with the substance of the appeal. Although the trial judge dismissed each of the claims, she assessed damages against the possibility of error with respect to her findings on liability. The provisional assessments were in amounts of $15,000 for each of the individual applicants and $10,000 for the company. Although the applicants challenged the inadequacy of these amounts, they did not seek to demonstrate that their respective appeals involved amounts in excess of $100,000. Accordingly, each applicant required leave to appeal: Supreme Court Act 1970 (NSW), s 101(2)(r). As there were aspects of the reasoning and the findings of the trial judge which were reasonably open to challenge, and as, with respect to the corporate applicant, the judge followed a decision on a point of statutory construction which was not self-evidently correct, each applicant should have leave to appeal, although not with respect to all the grounds raised in the notice of appeal. However, for the reasons explained below, each appeal should be dismissed.

9 Counsel for the applicants argued the appeal on the basis that the primary focus of the appeal was a series of challenges to the findings at trial with respect to the imputations upon which the claims in defamation were based. It is convenient to deal with the issues broadly in the order in which they were addressed by counsel.

The publication and the imputations pleaded

(a) the publication

10 The subject of the proceedings was a broadcast on television news which ran for 96 seconds. The full text of the broadcast, together with a description of the visual imagery, was set out by the trial judge at [15]. The key passages, with numbered paragraphs, omitting comments by unidentified members of the public and identifying the presenters as GG and GR, are as follows:

"1. GG: A baby product said to reduce the threat of sudden infant death syndrome is being withdrawn from sale in the United States and Britain but is still available here in Australia. It's feared the sleeping aid may be doing more harm than good.

2. GR: This is the type of product [accompanied by picture of woman placing baby in a Babywedge] that's being used in Australia and raising alarm bells overseas. It's supposed to promote safe sleeping but in the US, it's been linked to 12 deaths since 1997.

...

6. GR: The sleep aid is commonly used for babies under six months to stop them rolling on to their stomach but US Government agencies say the product can cause a child to suffocate. Australia's consumer watchdog, the ACCC say it's not aware of any deaths from these devices locally, but discussions are underway with US authorities before any action is considered here. While the products are being pulled from shelves overseas, major Australian retailers say they haven't received any complaints.

...

8. GR: Ros Richardson [RR] from SIDS and KIDS says parents don't need gimmicks to promote safe sleeping, just keep it simple.

9. RR: There's no bumpers, there's no soft and puffy bedding and there is nothing other than the essential items that need to be in your cot. And that's the best way of reducing SIDS for your baby."

11 Each plaintiff pleaded that the publication conveyed four imputations which, with respect to the company, were as follows:

"(a) The First Plaintiff, sold and offered for sale a baby product known as "Baby Wedge" which had been subject to recall.

(b) The First Plaintiff, sold and offered for sale a potentially dangerous product, known as Baby Wedge which could harm or even kill babies.

(c) The First Plaintiff sold and offered for sale a baby product, known as Baby Wedge which is supposed to promote safe sleeping but has been linked to 12 deaths in the United States.

(d) The First Plaintiff sold and offered for sale a baby product, known as Baby Wedge which should be pulled from shelves because they could cause a child to suffocate."

12 The trial judge concluded that none of the imputations pleaded was conveyed by the news broadcast: at [61]. The trial judge also concluded that, if conveyed, the imputations were not defamatory: at [70]. The applicants challenged each of these findings: accordingly, it will be necessary to consider more closely the nature of the imputations. At this stage it is convenient to note that the imputations may loosely be grouped in two categories. Thus, imputations (a) and (d) stated that Babywedge "had been subject to recall" and "should be pulled from the shelves". Secondly, imputations (b), (c) and one aspect of (d) identified Babywedge as "a potentially dangerous product" which "could harm or even kill babies", which had been linked to the deaths of babies in the United States and could cause a child to suffocate.

13 The first limb of each imputation identified the applicants as persons who "sold and offered for sale" the product, Babywedge. This statement required identification by members of the public of the applicants in circumstances where none of them was identified by name in the program, nor was the brand name of the product used. However, identification was not an issue at trial: the bright orange product shown on screen was readily identifiable to someone who knew the Babywedge and there was evidence that some who saw the program identified the product and its association with the applicants.

14 In an important respect imputation (a) differed from each of the other imputations. The broadcast expressly stated that such products were available in Australia, were "raising alarm bells overseas" and were "being withdrawn from sale in the United States and Britain". There was no evidence that Babywedge was offered for sale in the United States or Britain; nor was it accurate to suggest that similar products had been withdrawn from sale in the United States and Britain. There was, thus, a real question as to whether imputation (a) was conveyed by the program, but if conveyed, the respondents did not seek to justify it as true.

15 The respondents did, however, seek to defend the other three imputations as substantially true, if conveyed, pursuant to s 25 of the Defamation Act 2005 (NSW). They also relied upon the defence of contextual truth, pursuant to s 26. To that end they pleaded (relevantly for present purposes) two contextual imputations, being imputations other than those relied on by the applicants, which the respondents said were substantially true, with the result that the applicants' imputations did not further harm their reputations. The contextual implications were in substantially similar terms with respect to each of the applicants. It is sufficient to note those relating to the first applicant which were as follows (as found in paragraph 8(a) of the defence):

"(i) The First Plaintiff sold and offered for sale a baby product known as 'Baby Wedge' which should be subject to recall because it was a type of product that could harm or even kill babies.

...

(iv) The First Plaintiff sold or offered for sale a baby product known as 'Baby Wedge' which falsely promoted safe sleeping for babies but in fact could harm or kill babies."

(b) were the imputations conveyed?

16 It was not in dispute that Babywedge, as offered for sale by the applicants, was aptly described as a sleep positioner and was a product of the kind which was the subject of the United States report. (There was a dispute as to whether Babywedge was relevantly indistinguishable from products marketed in the US, but that related to the truth of the imputations, rather than whether they were conveyed.) The approach to be adopted by the Court in considering whether an imputation is conveyed requires that the Court place itself in the shoes of the ordinary reasonable viewer of the program, giving the words used their natural and ordinary meaning, taking into account the visual context of a television broadcast: see generally Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; 79 ALJR 1716 at [9]-[12] (Gleeson CJ, McHugh, Gummow and Heydon JJ). The issue in the present case was the factual issue determined by the judge sitting without a jury, and not, as in many cases, the capacity of words to convey a specific imputation where the factual issue is to be decided by a jury.

17 The trial judge stated at [56]:

"The defendants accepted that [the] message carried by the Broadcast was that baby devices such as the ones depicted are potentially dangerous and US agencies have recommended that they be withdrawn because of the risk of suffocation. Those ordinary reasonable viewers who identified the Babywedge depicted in the programme would, accordingly, have at least received the message that Babywedge was potentially dangerous and that US agencies have recommended that similar devices have been withdrawn because of the risk of suffocation."

18 The last proposition in this statement should be noted, namely that an ordinary reasonable viewer would infer that such devices "have been withdrawn" because of the risk of suffocation. The first statement on the program said that the product "is being withdrawn from sale"; however, the statement at paragraph 6 of the broadcast said that the products "are being pulled from shelves overseas". There was a clear elision in the course of the broadcast between identification of a problem, a recommendation for action and action. If withdrawal of a product or "recall" of a product implies action by government agency or a manufacturer or retailer, then it was wrong to say that such action had been taken. Nevertheless, the loose wording in the program warranted a finding that the ordinary reasonable viewer might have inferred that action was already being taken.

19 The next steps in the reasoning of the trial judge diverted from the question of whether the imputations were conveyed to whether they reflected personally on the applicants: at [57]. Because identification had been accepted, that was to ask a different question, namely about the defamatory content of the imputations. The judge then stated that matters indicating "why the imputations are not defamatory also explain why the imputations linking the plaintiffs with the Babywedges are not carried": at [59].

20 Further, and with specific reference to imputation (a), the trial judge rejected the proposition that any such imputation was conveyed because "the recall of a product [is] fundamentally different from its withdrawal from sale": at [60].

21 The language of defamatory publications is often imprecise and capable of a range of meaning. One important purpose of pleading imputations is for the plaintiff to identify that meaning which is said to be conveyed and is defamatory. An imputation which is imprecise, unclear or ambiguous is an inadequate pleading. Imputation (a) suffers from this vice in two respects. The first is that identified by the trial judge, namely the use of the phrase "subject to recall." Some might associate "recall" with the direction of a regulatory authority; others might take it to refer to the action of a supplier or manufacturer, whether undertaken voluntarily or mandatorily. To describe a product as being "withdrawn from sale" would fit comfortably within the latter, broader understanding. Thus, because the broadcast used the language of withdrawal from sale, the use of the phrase "subject to recall" in the imputation is not a sound basis for concluding that imputation (a) was not conveyed. A second reason for rejecting imputation (a) might be the use of the past tense, "had been", but for reasons already given, the language used in the broadcast was imprecise as to what action had been recommended and what had been taken.

22 There is, however, a separate difficulty with imputation (a): the broadcast did not in terms suggest that the unidentified baby product shown on screen as one of those available in Australia had been the subject of any complaint or action in the US. On the other hand, there was nothing said on the program to distinguish products available in Australia from those the subject of complaint and concern overseas.

23 This awkwardness in the pleading of the imputation caused a difficulty for the applicants, both at trial and in this Court. If the imputation were to be read as referring to the specific device distributed by the applicants, the imputation was not conveyed; if the imputation were intended to refer to the class of product, of which Babywedge was one, imputation (a) added little if anything to the combined effect of imputations (c) and (d). The preferable conclusion in the present case is to treat the imputation as subject to a degree of imprecision and accept that it referred to Babywedge as an example of products which had been subject to recall. As such it was likely conveyed and had useful work to do in the claim.

24 There is another element of imprecision in imputation (a). It is not explicit as to where recalls had occurred. The thrust of the broadcast was that concerns had been raised and action was at least being recommended overseas, but not in Australia. Accordingly, if it were assumed that Babywedge was available only in Australia and was subject to recall here, that imputation was not conveyed. For present purposes it is sufficient to read the imputation as if it referred to recall in the United States and Britain, but not Australia.

25 Although this exercise requires some implicit redrafting of the pleading, the preferable conclusion is that, in light of the statement of the trial judge at [56] (set out at [17] above) it should be accepted that imputation (a) was conveyed.

26 The finding of the trial judge at [56] is almost sufficient in itself to lead to the conclusion that each of imputations (b), (c) and (d) were conveyed. Thus there was no doubt that the broadcast expressly linked the Babywedge with the risks identified with respect to sleep positioners generally in the United States. It was therefore a potentially dangerous product in the sense that it could lead to suffocation and death of babies. The clear inference was that the alarm bells which were ringing overseas should also ring in Australia. The brief comments of members of the public (not set out above because the language used is of little consequence) demonstrated that the Australian public assumed that if there were problems which had been demonstrated in the US, that fact should cause alarm bells to ring in Australia. Similarly, if such products were being "pulled from shelves overseas" then Babywedge should be pulled from shelves in Australia. That reasoning is sufficient to demonstrate that imputations (b) and (d) were conveyed.

27 There is an additional issue with respect to imputation (c). It is related to the geographical issue identified above in relation to imputation (a). If imputation (c) was designed to suggest that Babywedge itself had been "linked to 12 deaths in the United States", then it is difficult to conclude that such an imputation was conveyed. One reason for rejecting that approach is that the theme of the broadcast was that harm had been reported overseas, but not in Australia. It referred to the "product" and "type of product"; no specific product was named and the visual imagery was not limited to the Babywedge. A reading of imputation (c) as stating that Babywedge itself had caused deaths would not have been conveyed to the hypothetical viewer. However, if the imputation were read as stating that Babywedge was a member of a class of potentially dangerous products, namely sleep positioners, then the linkage is understood to exist between members of that class and the deaths. So understood, imputation (c) was also conveyed.

(c) were the imputations defamatory?

28 Speaking generally, the test of whether a publication is defamatory is "whether the published matter is likely to lead an ordinary reasonable person to think the less of a plaintiff": Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460 at [5] and [6] (French CJ, Gummow, Kiefel and Bell JJ).

29 In Chesterton the High Court also identified the correct approach to determining whether publications which reflect on individuals through their conduct of a business are defamatory and also identified the point of distinction between defamation and injurious falsehood, in the following passages:

"[10] It is not in dispute that persons may be defamed in their business reputation. The common law has for some time recognised that words may not only reflect adversely upon a person's private character, but may injure a person in his or her office, profession, business or trade. This may be so where the words reflect upon the person's fitness or ability to undertake what is necessary to that business, profession or trade. But in each case the injury spoken of is that to the person's reputation.

[11] The remedy which the law provides for injury to a person's business or professional reputation must be distinguished from that for malicious statements which result in damage not to the reputation but to the business or goods of a person. The former is provided by an action for defamation, the latter by that for injurious falsehood. Lord Esher MR explained the distinction in South Hetton Coal Co Ltd v North-Eastern News Association Ltd. A false statement that a wine merchant's wine is not good, which is intended to and does cause loss to the wine merchant's business, is an injurious (or 'malicious') falsehood. A statement reflecting upon that person's judgment about the selection of wine, and therefore upon the conduct of his business, may be defamatory of him. Gummow J observed in Palmer Bruyn & Parker Pty Ltd v Parsons that the action for injurious falsehood is more closely allied to an action for deceit." [Footnotes omitted.]

30 The different elements of defamation and injurious falsehood (both causes of action being raised in the present case) constitute a firm basis for distinguishing between injury to a person's business and injury to his or her reputation: Chesterton at [32]. Further, reputation is not to be viewed in this context as having separate aspects subject to distinct and differing standards: at [35]. Although clearly the consequences of defamatory statements will vary depending upon the nature of the disparagement, the Court is to approach the question as to whether a statement is defamatory simply by considering whether, in the eyes of the ordinary reasonable person, the plaintiffs' standing or reputation or character is diminished. For that purpose, it may not be necessary to impute fault. As Gleeson CJ and Crennan J said in John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; 230 CLR 291 at [6]:

"To say that a restaurant sells unpalatable food or provides bad service does not necessarily reflect badly on the owners personally. They might be worthy people who are themselves victims of circumstances, or incompetent staff. However, it has a tendency to damage their business reputation."

31 This passage, read in the light of the further elucidation in Chesterton, is not to be understood as creating a dichotomy between personal and business reputations; on the other hand, it makes clear that a person's reputation may be damaged if a business he or she runs is subject to criticism, even though he or she is personally without blame.

32 The approach of the trial judge to this question, which largely reflected the submissions of the respondents and was supported by them in this Court, was reflected in the following passage explaining that the imputations did not reflect personally on the applicants.

"[58] ... That several examples of the type of product that the research has revealed to be dangerous were displayed on the Broadcast is a powerful indication that the focus of the segment was on the danger of the type of products, and their common features, rather than their individual features or brands, of which there was no mention.

[59] In my view, the reason there was no mention of the makers and sellers of the sleeping devices in the context of the Broadcast was that no criticism was made of them, either individually or collectively. Their identity was effectively irrelevant to the message conveyed. In my view, the matters referred to below as to why the imputations are not defamatory also explain why the imputations linking the plaintiffs with the Babywedges are not carried."

33 The last reference appears to pick up the following further reasoning which the trial judge upheld:

"[65] The defendants relied on the substantial and important distinction between a statement about a person's business or goods on the one hand and a defamatory statement that reflected poorly on the person's reputation on the other: Radio 2UE v Chesterton at [11]. The law provides a remedy for the former in the tort of injurious falsehood and for the latter in an action for defamation. In order to be defamatory, the statement must reflect adversely on the plaintiffs' business reputation and not merely on the business: Radio 2UE v Chesterton at [32].

[66] The defendants submitted that the fundamental impression created by the programme was that the danger posed by the product had only recently been identified and that the issue of the warning that they not be used as sleeping devices amounted to 'news' because it represented new, that is, previously unknown, information. They relied on the use of the present tense in the Broadcast in such phrases as:

'raising alarm bells overseas'

'being withdrawn from sale in the United States and Britain'

'discussions are underway with the US authorities before any action is considered here' [Emphasis added]"

34 There are difficulties in knowing precisely where to place the emphasis in the different passages in Chesterton. The exegesis referred to by the trial judge related both to the facts of Chesterton itself and to those which arose in Gacic. Although expressed at a higher level of generality, context was important. The Court was seeking to identify and expunge a particular erroneous approach. The plaintiffs in Gacic were restaurateurs; the plaintiff in Chesterton was a journalist. Each involved a publication which was claimed to harm the plaintiff(s) through an attack on their or his business operations. The present case was different in three significant respects. First, one of the applicants is a corporation: assuming, correctly as will be explained below, that the corporation is entitled to sue in defamation, the point of distinction between business and reputation is less clear than with an individual unless harm to business is treated as a reference purely to economic loss. Secondly, in each of Gacic and Chesterton there was an individual business or person who was the subject of the publication. In the present case, that is not so. The subject matter of the broadcast was not Babywedge as a specific product, but rather the category of sleep positioners for babies. The fact that it was possible to identify the applicants' product as an example of the class did not mean that the focus of the broadcast was the individual product. Thirdly, the focus of the broadcast was not particular conduct or behaviour of the applicants, but information concerning the safety of products which they (amongst others) offered for sale.

35 An example at the other end of the spectrum from a challenge directed to specific individuals might be the release of new information as to the dangers of cigarettes, combined with a recommendation that they not be available through newsagencies. A television news item reporting on the new findings and the recommendation using as a backdrop shots taken of and inside a specific newsagency would be unlikely to be found to have defamed the proprietor of the newsagency in question. That is at least in part because the ordinary reasonable viewer would know that there were thousands of newsagencies in Australia and that no criticism was intended of the individuals who ran those newsagencies in a manner which was not only lawful but socially acceptable.

36 The last example is, however, not closely correlated with the present case for the following reasons. First, although the evidence does not reveal the numbers, one may assume that there are a relatively small number of sleep positioners available for sale in Australia. Secondly, although the Court was not taken to the identification material, given that it was accepted, it must have identified the particular involvement of the applicants with the product. That conclusion is also implicit in the imputations themselves, which do not identify the applicants with the retail sale of baby products (or any other generic category of goods) but with the sale and offering for sale of this particular product. The references to "sold or offered for sale" in the imputations was treated as including design, manufacture and distribution. It was common ground that the applicants were not the retailers of Babywedge, but rather that this was "the plaintiffs' product", to adopt the language of the respondents' outline of submissions at trial, par 41.

37 When the imputations are so understood, it is difficult to accept that an allegation that the plaintiffs were involved with a product designed for use with young babies, but which had the potential to harm or even kill babies would not diminish their standing amongst ordinary members of the community. Each of the imputations identified the same action or conduct of the applicants; with the exception of imputation (a), each identified the product as potentially dangerous in broadly the same ways. With respect to imputation (a), read in context, the inference was that the recall of the product was due to it being potentially dangerous. In these circumstances, each of the imputations was defamatory.

Justification

38 The respondents pleaded that the imputations (b), (c) and (d) were substantially true. In addition they pleaded the two contextual imputations noted above, which were also said to be substantially true. To the extent that the applicants' imputations were not found to be substantially true, they were said to do no further harm to the reputations of the applicants than was caused by the contextual implications. In relation to imputation (a), it was thus the relevant contextual implication alone which was relied upon by way of defence.

(a) expert evidence

39 In support of those defences, the respondents relied upon an expert report prepared by Professor Roger Byard, the holder of the Marks Chair of Pathology at the University of Adelaide. The applicants challenged the admissibility of the report and Professor Byard's oral evidence, but it was admitted, a ruling challenged on appeal.

40 Professor Byard was asked whether the Babywedge product was "a potentially dangerous product which could harm or even kill babies"; whether sleep positioners had been linked to deaths of 12 (or more) infants in the United States, and whether Babywedge was relevantly similar to the products linked to such deaths, so that it could be said that the Babywedge product is of a type that has been linked to such deaths. He answered those questions affirmatively in a report dated 5 January 2013.

41 There was (and could have been) no challenge to Professor Byard's qualifications as a forensic pathologist with a special expertise in sudden infant and childhood death. He stated in his report that he had "a particular interest in accidental infant/childhood suffocation and [had] conducted research in this area for over two decades". That research had "involved the assessment of many hundreds of infant death scenes and the identification of previously unrecognised hazards such as U-shaped pillows and mesh-sided cots": Report, p 3. By way of general comment, Professor Byard noted (p 4):

"The exact contribution of soft bedding to an increased risk of infant death from SIDS or from accidental asphyxia may never be precisely determined, however it is well recognized that soft material that can press against an infant's face and nose is potentially dangerous. Lethal effects may include simply smothering or blockage of the external air passages, accumulation and rebreathing of carbon dioxide, and overheating (by interfering with heat exchange by the face). ...

We have investigated many cases of SIDS and accidental asphyxia in infants in South Australia and have found that any sleeping arrangement that creates a trough that an infant can roll or slip into may present a problem, as this may predispose to death from possible suffocation."

42 With respect to the Babywedge being a potentially dangerous product, Professor Byard stated (p 5):

"The Babywedge device consists of a soft sloping mattress with a bolster on each side. Unfortunately this creates several problems. If an infant has rolled into a position where the faced was pressed into the trough between the bolster and the mattress it is possible that asphyxial episode could occur from external airway obstruction due to cover of the mouth and face (ie smothering). In addition there could be rebreathing of exhaled air, a problem that has been demonstrated in infants sleeping on polystyrene cushions. Another problem may occur if an infant has rolled into a face-down position (prone), as this has a well-established increased risk of death due to SIDS. It may be that once in a prone position in this device that an infant would not be able to self-extricate. Very young infants tire very quickly when they are trying to lift their heads free of soft surfaces. Fabric also becomes much less permeable to air if an infant has vomited or regurgitated fluid on to it."

43 This key passage in the report was criticised by the applicants on a number of grounds. First, it was pointed out that the Babywedge did not have a "soft" sloping mattress but rather a firm mattress. Secondly, it was said that the bolster being removable and attached by way of Velcro strips which were positioned perpendicularly to the bolsters, allowed a gap between the bolster and the mattress, rather than a "trough". Thirdly, unlike polystyrene, the Babywedge was manufactured from open textured foam which allowed for breathing. These elements, which were said to render the Babywedge different from other sleep positioners for babies, had not, the applicants noted, been tested by Professor Byard with respect to the applicants' product. On that basis they submitted that his report could not constitute an admissible expert opinion about the Babywedge; that is, although Professor Byard undoubtedly had specialised knowledge relevant to the general topic of SIDS and risks of suffocation, that knowledge did not qualify him in accordance with s 79 of the Evidence Act 1995 (NSW) to give an opinion on the risks associated specifically with the Babywedge.

44 Because virtually the whole of Professor Byard's evidence, other than his written report, was elicited on the voir dire, it is convenient to refer to that evidence before dealing with its admissibility and the inferences which were properly to be drawn from it.

45 So far as the first complaint noted above was concerned, Professor Byard accepted that the mat was firm not soft and was a suitable sleeping surface for a baby: Tcpt, p 239(38). With respect to the fact that the bolsters were detachable and that they did not create a continuous "trough" along the sides of the mattress, Professor Byard did not concede that the Babywedge was satisfactory. The cross-examination extended over several pages, particularly at Tcpt, pp 252-254:

"Q. ... I take it you didn't make any tests on Babywedge as to the likelihood or unlikelihood of a trough which could lead to suffocation?

A. The reason I didn't is it was an observation, I could see the trough and I know that troughs are dangerous.

Q. Yes, but surely an attached trough, sorry an attached bolster causing a trough would not be the same as an unattached bolster?

A. As I said I think we can't say that because when I look at the attachment, if a baby is in the trough and pushes this to one side because their face is there, it actually seals off on the other side, so I think that would need to be looked at.

Q. Need to be looked at, how do you mean?

A. I think if you were going to make an assertion that there is no - there is an airspace under it, you'll have to test it.

...

Q. ... [T]here are no measurements or detailed descriptions of the Babywedge in the report?

A. Well, the reason for that is I was really trying to go back to first principles because there are so many different devices. The first principles are that when you have bolsters and you have troughs and you have soft surfaces and you have cloth over foam these are all potential problems that can cause accidents and deaths. I didn't need the dimensions to actually make that statement.

...

Q. What I'm suggesting is that the bolsters on Babywedge do not cause a trough? ...

A. Well (indicated) yes, it does. It's in front of me; (indicated) there's a trough with the bolster.

Q. But a trough means, does it not, an unbroken U-shape or V-shape? If there's a gap that wouldn't be a trough. If there's a gap between the bolsters [and] the Babywedge mattress that would not be a tough?

A. I probably created this problem, your Honour, by using the term 'trough'. What I mean is somewhere a baby can be trapped where there can be [sic] an air accumulation, carbon dioxide accumulation, overheating, or pressure against the nose and mouth. And it doesn't take much pressure for some babies, for them to suffocate.

Q. There would no chance of suffocation if the baby could breathe between the bottom of the bolster and the top of the mattress?

A. Well, depends. I'm not convinced that that is actually a very good air passage. Also, the baby could easily be up against the bolster and bring up stomach contents because these kids do have reflux and that would make it really quite nasty, even if the baby's nose was stuck into this gap I still [think] it seals off because it presses down on the outside.

Q. But you've done no test to confirm that, have you?

A. Just purely observation of hundreds of death [scenes] and looking at this.

Q. The bolsters are to go under the arms, aren't they?

A. Yes they are. Well, that's my impression from the picture.

Q. Well then the head wouldn't be between the bolsters?

A. One of the interesting things about babies, your Honour, I've seen videos at meetings that paediatricians have taken and they move around in their beds more than I move around during the day. They're incredibly, particularly when they're five or six months, they are very able to actually move from one end of the cot to another. They're like possums going down small holes."

46 The thrust of the cross-examination was not to demonstrate that the Babywedge was not a product within the class of sleep positioners said to have caused problems in the United States. Rather, the classification was accepted, but specific characteristics of the Babywedge were suggested as a basis for not considering it to be a potentially dangerous product. To the extent that the foam used in the product was said to be different from other similar devices and was permeable for a baby seeking to breathe through the material and the foam with its nose and mouth against them, the assertion was unsupported by admissible evidence. (Evidence sought to be led from the individual applicants to this effect was rejected.) So far as the means of affixing the bolsters was a point of difference from other products, Professor Byard explicitly did not accept the proposition. He noted that if the baby's face pressed against one side of the cylindrical bolster, it would tend to press the other side against the mattress, thus sealing the space which might otherwise be found between bolster and mattress. In the end, it was specifically put to Professor Byard that there was some baby products, including Babywedge, "that would not be potentially dangerous or the potential danger would be so minimal that they could be used with expectancy of safety by babies": Tcpt, p 260(25). Professor Byard responded that he could not say that the risk was "minimal" as he did not have the data. "All I can do", he continued, "is look at the device and say that there are structural problems with this that could result in infant death."

(b) admissibility

47 The challenge to the admissibility of Professor Byard's report was dealt with by the trial judge in an interlocutory judgment, Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2013] NSWSC 1646. As the judge noted, the grounds of objection were formulated after counsel for the applicants had cross-examined Professor Byard on a voir dire.

48 Professor Byard's expertise to give such an opinion was unshaken in cross-examination. He did not concede that forms of testing were either available or necessary in order to express such an opinion. There was no other evidence to contradict that view. In the circumstances, it was open to the trial judge to accept Professor Byard's evidence as to the dangerous qualities of the product. The evidence was admissible for that purpose.

49 One other ground of objection, expressly put to Professor Byard and relied upon as a basis for rejection of the report, was that the witness was "not open minded, but had a preconceived opposition to the Babywedge product which tainted his report": Tcpt, p 264. This objection was correctly rejected by the trial judge. On the basis of vast experience with infant death scenes and with the literature, to which Professor Byard himself had contributed over 500 papers, he was able to identify characteristics of a product which correlated with a risk of death by suffocation. His opposition to the product was based on "preconceived" principles, but the principles were scientifically based. His "opposition" to the product arose because it fell within the risk categories which experience and scientific research had identified.

(c) inferences from expert evidence

50 With respect to the relevant characteristics of sleep positioners generally, the trial judge held at [84]:

"I accept Professor Byard's opinion that babies and infants are susceptible to suffocation when there is pressure against their noses or mouths. I also accept Professor Byard's opinion that fabrics and other materials that may be permeable when dry tend to become impermeable when wet. This is of particular significance for babies and infants who may be inclined to dribble or vomit or otherwise exude moisture through their mouths or noses and thereby moisten the fabric in the vicinity of these orifices, thereby rendering otherwise permeable fabric impermeable."

51 In considering whether Babywedge could be distinguished from other dangerous products, the trial judge noted at [85] the following points of distinction relied upon by the applicants, namely "first, that the mat and bolsters are made of open cell foam; secondly, that the bolsters on Babywedge are not fixed; thirdly, that the Velcro that attaches the bolster to the mat is perpendicular to the bolster; and fourthly, that there is a space between the bolster and the mat, at least at points where it is not attached to the Velcro which means that the 'trough' is not sealed."

52 As has been noted, there was no evidence as to the permeability to air of "open cell foam" when covered by fabric. The other points of distinction all related to the ability for air to pass between the bolster and the mattress when the infant was pressing against the bolster. As noted above, that matter was directly addressed by Professor Byard and rejected as a point of distinction. The trial judge was satisfied, "for the reasons given by Professor Byard, that Babywedge is relevantly indistinguishable from the sleeping devices the subject of the US warning." She rejected the "so-called points of distinction" as immaterial: at [103]. The judge therefore concluded that imputations (b), (c) and (d) had been proved to be substantially true: at [108].

53 The applicants' submissions on appeal reagitated each of the arguments put to the trial judge. In their terms, they were properly rejected, for the reasons noted above. As counsel for the applicants seemed to accept at trial, once Professor Byard's evidence was accepted, the general statements in the imputations (b), (c) and (d) were justified.

54 One further submission raised on appeal, though apparently given little attention at trial, was that in expressing a view that the Babywedge was a potentially dangerous product, Professor Byard did not carry out "calculations to assess the percentage of risk": written submissions, par 51. Professor Byard agreed that no calculation of risk had been undertaken, "because we have no idea of how these devices are being used, how many there are, whether they're used all night or part of the night": Tcpt, p 259(10). He suggested that would require "a very detailed epidemiological study." The proposition was put to him that "4,700 have been sold to date without any complaint of accident or injury let alone death": Tcpt, p 259(28).

55 There are two reasons for rejecting this basis of challenge to Professor Byard's opinion. The first is that, being provided with the sales figures for Babywedge did not cause him to vary his opinion: Professor Byard repeated his statement set out above that to carry out a useful study he would need further information. Secondly, the complaint had little traction in the context of the publication. The concept of a "potentially dangerous product" is not defined by reference to an actuarial calculation of risk. That was not the function carried out by the FDA in the United States. That was not the basis of the concern reported in the news item.

56 As little weight was placed on this contention in the course of the appeal, it need not be addressed further as a ground for rejecting Professor Byard's opinion. The challenge to the admissibility of his evidence should be dismissed. In these circumstances the trial judge was entitled to accept it as establishing the defence of substantial truth

(d) variation of imputation (c)

57 The applicants' written submissions stated (at par 53) that even if Professor Byard's opinions and report were accepted, "they only went to imputations (b) and (d)." The complaint was that Professor Byard's evidence did not establish that Babywedge itself was one of the devices that had been linked to deaths in the United States, and that the truth of imputation (c) could only be established on the basis that it was to be understood as "a device of the kind that had been linked" to such deaths.

58 The applicants had two complaints in respect of the manner in which the trial judge dealt with imputation (c) and its substantial truth. First, they objected to the effective amendment of their imputation in the course of the trial. They said the form of the imputation sought to be justified was different from that pleaded and one which should have been pleaded by the respondents, presumably as a contextual imputation. Secondly, they complained that there was a lack of support for the conclusion that Babywedge was a device of the same kind as those which had caused deaths in the United States. They noted that Professor Byard had not identified relevant US products.

59 The second (factual) objection was properly rejected by the trial judge. The evidence of Professor Byard discussed above did not permit distinctions to be drawn between kinds of sleep positioners, in the absence of expert evidence as to material differences in their construction or design. The first (procedural) objection requires separate consideration.

60 The passage in the broadcast which formed the basis of this imputation was paragraph 2, which may conveniently be repeated:

"This is the type of product that's being used in Australia and raising alarm bells overseas. It's supposed to promote safe sleeping but in the US, it's been linked to 12 deaths since 1997."

61 This passage was undoubtedly capable of more than one meaning. While that statement was being made, the visual imagery showed a mother placing a baby in a Babywedge. On the reading accepted above, what was linked to deaths in the US was not the Babywedge but the type of product. On that reading, the imputation was clearly conveyed but was substantially true. An alternative reading was that the reference to "it" being linked to 12 deaths was a reference to the specific product shown on screen, namely the Babywedge, which was untrue.

62 A third meaning was that "it" did refer to the Babywedge, but the link to the deaths in the US was because the Babywedge was the same type of product. On that reading, the imputation, on the evidence of Professor Byard, was substantially true.

63 The issue thus raised did not involve some variation or nuance arising from the imputation as pleaded, but from a patent ambiguity in the pleading which reflected an ambiguity in the publication. However, imputation (c) was accepted as being conveyed on the basis that it referred to the type of product, rather than Babywedge itself.

64 If the imputation were conveyed on the basis that it was specific to an allegation against Babywedge, two further points should be made. First, the unqualified statement that the product "has been linked to 12 deaths" is more emphatic and more damning than the statements in the other imputations that the product "could" harm or even kill babies. Secondly, and consequential upon the first point, the contextual imputations pleaded by the respondents, did not cover the additional adverse impact to be found in imputation (c).

65 Accepting that there was an additional sting in imputation (c), if the imputation were limited to sleep positioners as a type of product, the substantial truth of the statement was supported by Professor Byard's evidence which, in this respect, was unchallenged.

66 Against this background, it is necessary to return to the reasoning of the trial judge. Although the judge had held that imputation (c) was not conveyed, she nevertheless dealt with the additional issues. That meant, however, that she was not troubled by the alternative readings of imputation (c) discussed above. Nevertheless, accepting that imputation (c) referred to Babywedge itself as the device which was linked to 12 deaths in the US, the trial judge concluded there was no material difference between "imputation (c) as pleaded and an imputation that Babywedge is a device of the kind linked to such deaths": at [107]. That conclusion was reached in response to the respondents' submission at trial that they were "entitled to justify imputation (c) although the Babywedge itself is not one of the devices that has been linked to 12 deaths in the United States, on the basis that it is a device of the kind or kinds of devices that have been linked to such deaths." The respondents further contended at trial that there was "no difference in substance between those two statements since the pejorative nature of the sting was substantially the same": at [105].

67 That submission is unpersuasive. There is something far more immediate and visceral about a claim that a particular product has been linked to 12 deaths, as compared with the statement that the product is one of a class of products which have been linked to 12 deaths. If the imputation conveyed was that the Babywedge had been linked to 12 deaths, the substantial truth of the imputation was not made good. However, that was not the basis upon which the imputation was conveyed and accordingly it is not necessary to address the issue further. The defence succeeds because the imputation related to the type of product linked to deaths in the US and there is no factual basis for not treating Babywedge as a member of that class.

68 In addressing the justification of imputation (c), the submissions at trial appear to have diverted attention to what may best be described as a false issue. The trial judge noted that the "tribunal of fact" may find for the plaintiff "on a nuance or variation of the imputation, or an imputation not substantially different, or one of lesser seriousness" to that pleaded: at [104], referring to Chakravarti v Advertiser Newspapers Limited [1998] HCA 37; 193 CLR 519 at [22]-[24] (Brennan CJ and McHugh J); [51]-[60] (Gaudron and Gummow JJ); [139] (Kirby J). The trial judge continued:

"The same principle applies to defendants in that a defendant is entitled to justify a nuance or variation of the plaintiff's defamatory meaning, or one less serious than the plaintiff's meaning, subject to the requirements of fairness."

69 The reference to the "tribunal of fact" reflects the use of juries and the consequence that the court may not know precisely what imputation has been accepted by a jury, especially where an imputation is not itself a separate cause of action and is not separately particularised and pleaded to. In the present case it was for the judge to determine what imputation was conveyed and, if considering justification (on the hypothetical basis that some such imputation had been conveyed, having found that it had not) it became necessary to identify with sufficient particularity the imputation accepted for the purpose of considering the defence.

70 Further, the critical point of distinction between an acceptable variation on an imputation as pleaded and an imputation which should be separately pleaded in order to be relied upon is whether a plea of justification can be made out in relation to one but not the other: Chakravarti [52]. Where (as in this case) there is an ambiguous imputation and the respondents expressly undertook the task of justification on both meanings, there will be no unfairness to either party in allowing the matter to be determined on that basis and without further pleading. Whether the respondents were entitled (under s 26) to plead a contextual implication would have depended on a finding as to the meaning of the applicants' imputation, which was not resolved before the final judgment. As the defence succeeds in relation to the imputation conveyed, the issue falls away.

(e) allegation that Babywedge "falsely" promoted safe sleeping

71 The contextual implication in par 8(a)(iv) of the defence alleged that Babywedge "falsely promoted safe sleeping for babies". The trial judge recorded a submission by the applicants that the word "falsely" meant "knowingly falsely": at [114]. (That was not a factual proposition which the respondents could make good.) The judge noted a further submission, namely that "falsely" meant "wrongfully" and that that language was unacceptable because it invoked "an unspecified degree of culpability of an undefined character, ranging ... from mere carelessness to fraud or dishonesty": see McCormick v John Fairfax & Sons Ltd (1989) 16 NSWLR 485 at 494 (Hunt J). According to the applicants, the contextual imputation pleaded by the respondents should have been struck out. The trial judge rejected both these submissions, concluding that "falsely" was a synonym for "incorrectly"; it implied neither knowledge nor culpability: at [116].

72 This was an entirely arid debate. The judge was correct to say that "falsely" meant "incorrectly". Further, the contextual imputation adopted similar language to the applicants' imputation (c) which referred to Babywedge being a product "which is supposed to promote safe sleeping but has been linked to 12 deaths in the United States". The insertion of the word "falsely" by the respondents was both grammatically confusing and unnecessary. The imputation was that the product promoted safe sleeping: the term "supposed" cast doubt upon that, a doubt which was referrable to the link to deaths. The insertion of the word "falsely" suggested that the product was promoted by the applicants as helping a baby to sleep safely, when in fact it did not. In other words, the word "promoted" was being used in a different sense. Ultimately, the issue went nowhere.

(f) comparing facts and imputations

73 A further matter relied upon by the applicants was the proposition that, contrary to the approach required by John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; 53 NSWLR 541 at [5], the trial judge had declined to compare the "facts, matters and circumstances" relied upon to establish the truth of the contextual implications with the applicants' imputations, but rather had weighed contextual imputation against the applicants' imputations.

74 This, too, was a false issue. Although it is not entirely clear why the trial judge said at [123] that the statement of Spigelman CJ was "apposite only where the matter for determination ... is to be determined in advance of the evidence", the exercise she accepted was not that of comparing imputation with imputation. Rather, the judge accepted the submission of the respondents that the relevant comparison is to be made with "the evidence in support of the truth of the contextual imputations". Strictly speaking, even that submission was inaccurate. The comparison required was between the facts as found, based on the evidence at trial, and the imputations relied on by the applicants. Nothing turned on this point because the judge accepted the evidence of Professor Byard and made the necessary comparison on that basis.

(g) justification of imputation (a)

75 The trial judge found that the evidence that "proved the truth of the contextual imputations is the same as the evidence that I found proved the truth of plaintiffs' imputations (b), (c) and (d)": at [127]. That finding might have given rise to a question as to whether the imputations pleaded by the respondents were in fact materially different from those pleaded by the plaintiffs as imputations (b), (c) and (d). That would have been a matter of some importance: if they were not materially different, they would not have been "other imputations" for the purposes of s 26(a) and could not have been pleaded by the respondents. Accordingly, on the construction of the Act which appeared to be accepted by the trial judge, they could not have been relied upon in response to imputation (a). As that imputation was not itself substantially true, if conveyed and found to be defamatory, the cause of action would have been made out. On the other hand, if the contextual imputations were conveyed and were substantially true, the respondents could rely upon them as a full defence if, because of the truth of the contextual imputations, imputation (a) did not further harm the reputation of the applicants.

76 There is something curious about the proposition that the respondents could succeed only if the imputations they relied upon differed from those which the applicants relied upon. The issue arises from the meaning and structure of ss 25 and 26 of the Defamation Act, understood in their statutory context.

Division 2 Defences

24 Scope of defences under general law and other law not limited

(1) A defence under this Division is additional to any other defence or exclusion of liability available to the defendant apart from this Act (including under the general law) and does not of itself vitiate, limit or abrogate any other defence or exclusion of liability.

(2) If a defence under this Division to the publication of defamatory matter may be defeated by proof that the publication was actuated by malice, the general law applies in defamation proceedings in which the defence is raised to determine whether a particular publication of matter was actuated by malice.

25 Defence of justification

It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true.

26 Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that:

(a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and

(b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations

77 After accepting that what needed to be weighed against the defamatory imputations was the effect of the evidence in support of the truth of the contextual imputations, the trial judge proceeded at [124]:

"I was not, however, persuaded that, in the event that I had to carry out the comparative task required, the evidence in support of the contextual imputations ought be weighed against the plaintiffs' imputations taken individually, rather than taken collectively. I consider that what Hunt J said in Hepburn v TCN Channel Nine Pty Limited [1984] 1 NSWLR 386 at 397 was a necessary corollary of the 1974 Act which provided that each imputation was a separate cause of action. In these circumstances it would not be correct to collate all the separate causes of action and consider them together. However, under the present 2005 Act the cause of action is the matter complained of even if more than one defamatory imputation is carried by the matter: s 8. There does not, accordingly, seem to be any reason why the evidence of all of the contextual imputations ought be weighed separately against those of the imputations not proved to be true."

78 No doubt it is open to a court in New South Wales to refer to cases determined under the Defamation Act 1974 (NSW) (or even the Defamation Act 1958 (NSW)) in order to dismiss the case law as inapplicable. However, there are dangers in going further. Section 6 of the Defamation Act now provides:

6 Tort of defamation

(1) This Act relates to the tort of defamation at general law.

(2) This Act does not affect the operation of the general law in relation to the tort of defamation except to the extent that this Act provides otherwise (whether expressly or by necessary implication).

(3) Without limiting subsection (2), the general law as it is from time to time applies for the purposes of this Act as if the following legislation had never been enacted:

(a) the Defamation Act 1958,

(b) the Defamation Act 1974.

79 Two things may be said about s 6. First, the exercise required is not as difficult as it may appear: it is not necessary for this Court to reconstruct the general law by seeking to remove the effect of almost 50 years of legislative change and case-law: the general law has continued to apply in a number of Australian jurisdictions and has been considered from time to time by the High Court. Disregarding statute, the High Court has held that there is only one general law in Australia: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520 at 563. Secondly, although the earlier legislation in this State is to be ignored in identifying the general law, it is not necessarily to be ignored in construing the Defamation Act 2005. Nevertheless, it should be accepted that the construction of (largely) uniform national legislation will not generally be affected by earlier legislation operating only in one State. Were that not so, the construction of national uniform legislation would become significantly more complex than it already is.

80 There is also something curious about the approach adopted by the trial judge with respect to authority as to the operation of s 26, although there appears to be confusion within the cases. Thus, the trial judge preferred the construction of s 26 adopted by McCallum J in McMahon v John Fairfax Publications Pty Ltd (No 6) [2012) NSWSC 224 to that of the Queensland Court of Appeal in Mizikovsky v Queensland Television Ltd [2013] QCA 68; [2014] 1 Qd R 197: at [120]. That was not a course which would normally be available to a trial judge dealing with national uniform legislation. (McMahon was decided after Mizikovsky at first instance (by Dalton J), but before the appeal.)

81 In Besser v Kermode [2011] NSWCA 174; 81 NSWLR 157 (reported as Fairfax Media Publications Pty Ltd v Kermode) ("Kermode") this Court (McColl JA, Beazley and Giles JJA agreeing) addressed the following issue identified at [15]:

"The principal question raised by the strike-out application was whether the defence of contextual truth for which s 26 of the 2005 Act provides permits a defendant to 'plead-back' any or all of a plaintiff's imputations. The primary judge concluded it did not."

82 The Court upheld that conclusion and dismissed the appeal. On one view, the judgment was confined to a pleading point and did not need to answer the separate question as to whether a defendant could nevertheless rely upon imputations which it had proved to be substantially true as overwhelming the defamatory effect of an imputation to which it had not pleaded or established a defence of substantial truth. Nevertheless, the Court outlined at [86] a number of courses which were open to a defendant:

"In summary, a defendant seeking to justify the defamatory matter under the 2005 Act may take the following courses of action, some statutory, some based on the common law:

(a) prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true: s 25;

(b) prove that rather than the defamatory imputations pleaded by the plaintiff, the defamatory matter carries nuance imputations which are substantially true;

(c) to the extent that the defendant fails to establish all the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, rely on those proved to be true in mitigation of the plaintiff's damages: partial justification; and

(d) to the extent the defendant can not prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, prove that it carries contextual imputations that are substantially true, by reason of which the defamatory imputations do not further harm the reputation of the plaintiff: s 26."

83 There is some uncertainty about the precise inter-relationship of the courses of action identified at (c) and (d). It is clear, however, that the propositions set out in this paragraph were not intended to be an exhaustive statement of the courses available to a defendant. Other defences are available in appropriate cases.

84 In Mizikovsky the Queensland Court of Appeal (Fraser JA, Holmes JA and Fryberg J agreeing) identified the following issue at [11]:

"In addressing the jury, senior counsel for the appellant submitted that in answering question 6 the jury were to compare the contextual imputations with such of the defamatory imputations which were not proved to be substantially true. In ruling 3, the trial judge gave reasons for her Honour's directions to the jury that the submission to the jury was incorrect, and that the question for the jury's determination was whether, having regard to the substantial truth of all the contextual imputations, there was any further harm done to the appellant's reputation in publishing all the imputations alleged by the respondents which the jury found were conveyed and were defamatory, regardless of whether or not the jury found that some of them were true."

85 In Mizikovsky, the appellant was the plaintiff at trial and sought to exclude from the jury's consideration of the contextual imputations all of the defamatory imputations which he had pleaded but which had been proved to be substantially true. The trial judge did not accept that proposition, nor did the Court of Appeal. Fraser JA stated at [14]:

"The trial judge's construction adopts the literal meaning of s 26. Section 25 allows the defence of justification only 'if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true'. That reflects the fact that the cause of action under the Act is for publication of defamatory matter, rather than for publication of a severable defamatory imputation. It requires proof of the substantial truth of every defamatory imputation of which the plaintiff complains. In the absence of such proof, s 25 does not provide a defence. Section 26 then requires the defendant to prove that 'the defamatory imputations' - meaning all of the defamatory imputations of which the plaintiff complains - do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations."

86 The reasoning in Kermode and Mizikovsky (which may not be entirely consistent with each other) appears to assume that the defences in ss 25 and 26 are to be applied sequentially and (at least in the case of Besser) in the order in which they appear in the Act. However, there is an alternative reading of the legislation, namely that the tribunal of fact must consider holistically the effect of the defamatory matter on the reputation of the plaintiff, deciding at the end of the day whether, by reference to the imputations pleaded by both plaintiff and defendant, any imputations which have not been shown to be substantially true cause any further harm to the reputation of the plaintiff once the effect of the substantially accurate imputations has been assessed.

87 As noted by McCallum J in McMahon, in different cases the positions of the respective parties may differ: at [74]. The position adopted by each party is likely to depend upon the relative seriousness of the imputations pleaded by each. That is illustrated by the claims of absurd results which might flow from the adoption of one course or the other: McMahon at [67]; Mizikovsky at [16].

88 It is not appropriate to say more about these issues in the present case as neither party sought to expose any inconsistency in the authorities, although the issue was raised in written submissions before the trial judge. The trial judge stated at [126]:

"In my view, imputation (a) cannot further injure the plaintiffs' reputations. Whether a product has been subject to recall is inconsequential if the evidence establishes that it should be subject to recall because it represents a risk of harm or death to babies or infants and is incorrectly promoted as conducive to safe sleeping."

89 On the basis that Professor Byard's evidence was admissible and was accepted, the applicants did not present any significant basis for rejecting this conclusion. Accordingly, the appeal with respect to the claim in defamation must be dismissed.

Injurious falsehood

90 The applicants pleaded an alternative case claiming damages for the tort of injurious falsehood. It was necessary for them to establish that the respondents had maliciously published a false statement about them, their property or business and that actual damage resulted from such publication: Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388 at [1] (Gleeson CJ). The critical element in the present case was to establish malice. The English Court of Appeal has held that the same principles apply with respect to malice in defamation and in injurious falsehood: Spring v Guardian Assurance Plc [1993] 2 All ER 273 at 288. The concept of malice in relation to defamation has been explained by the High Court in Roberts v Bass [2002] HCA 57; 212 CLR 1, where the concept was discussed in reference to a defence of qualified privilege, which is destroyed by malice. In that context, the question is whether the publisher's state of mind was actuated by an improper purpose or motive: at [76] (Gaudron, McHugh and Gummow JJ).

91 In the present case, the applicants did not rely upon actual knowledge of the falsity of any statement made about the applicants' product, but rather relied upon a failure to make proper inquiries and reckless indifference as to the truth or falsity of the allegations, amounting to wilful blindness. The trial judge dealt with the question of malice in relation to injurious falsehood in the following passage:

"[189] ... I am not satisfied that the defendants were careless in failing to contact the plaintiffs before televising the Broadcast since I consider that the terms of the FDA warning were sufficient to apply [to] the Babywedge and the potentially fatal consequences of using such a product warranted the urgency with which the Broadcast followed the issue of the FDA warning. However, even had I considered the defendants' omission to contact the plaintiffs to request comment on the FDA warning before the Broadcast went to air to be careless, this would not have amounted to malice ...."

92 The applicants challenged the reference to "carelessness" as irrelevant, there being no pleading that the respondents had been merely careless. The complaint was meritless. If the respondents were not careless, they were not reckless and hence could not have been malicious. As the joint reasons in Roberts v Bass noted at [84]:

"In exceptional cases, the sheer recklessness of the defendant in making the defamatory statement, may justify a finding of malice. In other cases, recklessness in combination with other factors may persuade the court that the publication was actuated by malice. In the law of qualified privilege, as in other areas of the law, the defendant's recklessness may be so gross as to constitute wilful blindness, which the law will treat as equivalent to knowledge."

93 So far as urgency was concerned, the applicants noted that the respondents appeared to have time to obtain a Babywedge, visit a shop in which it was offered for sale and obtain comments from customers and from the representative of an organisation concerned with SIDS. That was not the degree of urgency, the applicants contended, which would warrant publishing the material without seeking a comment from the applicants.

94 As has been noted above, the publication was focused upon two matters. The first was the warning from the FDA in the US linking sleep positioners with baby deaths; the second was the fact that the same "type of product" was available in Australia. The circumstances of the news broadcast were not such as to demand a comment from the manufacturer or distributor of similar devices in Australia. Even if such a step had been desirable, failure to take that step did not constitute recklessness as to the truth or falsity of the statements made and certainly did not constitute recklessness of a kind warranting an inference of malice on the part of the respondents. There was no error in rejecting the claim in injurious falsehood.

Other grounds

95 Although extensive written submissions were made in this Court with respect to damages, little time was spent in the course of oral argument upon the assessment of provisional damages by the trial judge. As the applicants have failed to establish their challenge to the findings on liability, there is no need to consider whether it would have been appropriate to grant leave to appeal with respect to those assessments.

96 There are, however, three other matters which should be addressed because they raise questions relevant to liability.

(a) evidence of applicants as to falsity of imputations

97 The individual applicants, Ms Birtles-Eades and Ms Birtles, sought to give evidence as to whether the dangers identified in other sleep positioners applied to their product, and as to the design, composition and quality of the material used in Babywedges. The evidence was rejected on the basis that these were matters for expert opinion and the applicants did not have relevant expertise. The applicants did not claim such expertise, nor was there any suggestion that s 78 of the Evidence Act (relating to the admissibility of lay opinion) was engaged. Rather, the applicants relied upon a bald proposition, expressed in the conventionally colourful language of defamation law (with the usual risk of imprecision) that "[a] plaintiff is nevertheless always permitted to nail the matter complained of as a lie": Ainsworth v Burden [2005] NSWCA 174 at [89] (Hunt AJA, Handley and McColl JJA agreeing).

98 In this sentence, the word "nevertheless" indicated that the sentence was a qualification of an earlier statement, namely that "[t]he objective truth or falsity of the matter complained is irrelevant to its defamatory nature": at [88]. The authorities referred to in Ainsworth used such language, but did so in a particular context. In Australian Consolidated Press Ltd v Uren [1966] HCA 37; 117 CLR 185 Windeyer J had stated (at 205) that while the truth or falsity of the words was irrelevant as to whether they were actionable or not, they were relevant if the words were defamatory to the amount of damages recoverable.

99 Further, once one reads beyond the aphorism, it is clear that a plaintiff's evidence in that regard is not necessarily relevant to an issue in the trial and is not given by way of an exception to the Evidence Act. In other words, if there is an issue in the trial requiring proof or disproof, the evidence relevant to it must be admissible evidence. That was the approach adopted by the trial judge: she was clearly correct in that regard. The challenge to her ruling set out in Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No 4) [2013] NSWSC 1649 at [9] should be rejected.

(b) whether corporate applicant entitled to sue

100 Although it is a matter of no consequence in circumstances where the applicants have failed to establish a claim, it is desirable to deal with the question whether the corporate applicant was entitled to sue as it raises a point of law of potential relevance in other cases.

101 The Defamation Act 2005 now provides a general rule that corporations cannot sue in defamation, unless they fall within the terms of an exception. Section 9 relevantly states:

9 Certain corporations do not have cause of action for defamation

(1) A corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of the publication.

(2) A corporation is an excluded corporation if:

(a) the objects for which it is formed do not include obtaining financial gain for its members or corporators, or

(b) it employs fewer than 10 persons and is not related to another corporation,

and the corporation is not a public body.

(3) In counting employees for the purposes of subsection (2)(b), part-time employees are to be taken into account as an appropriate fraction of a full-time equivalent.

102 The application of this particular provision to the first applicant arose on the appeal as a challenge to the refusal of the trial judge to allow the first applicant to reopen its case to prove that it was an excluded corporation and therefore had standing to sue. However, the need for the first applicant to reopen its case depended upon a particular construction of s 9(2) which should not be accepted: see Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No 5) [2013] NSWSC 1650.

103 The trial judge accepted the approach adopted by Nicholas J in Redeemer Baptist School Ltd v Glossop [2006] NSWSC 1201 in relation to the predecessor to s 9(2)(b), namely s 8A of the 1974 Act. That statute also referred to a corporation which "employs fewer than 10 persons": s 8A(3)(a). Nicholas J concluded, giving the words in s 8A their natural and ordinary meaning:

"[21] ... Absent qualification, the meaning of the word 'persons' in sub-para (a) includes individuals who are employees and those who are not. There is no justification for confining its meaning to individuals under a contract of employment with the corporation. Had it been intended by the legislature that its meaning should be so construed it may be assumed that the word 'employee' would have been used instead.

[22] The construction of the verb 'employs' should be approached in the same way. The use of the word 'persons' indicates that it was not intended that 'employs' be understood in an industrial sense referable to a relationship of master and servant under a contract of service."

104 It is not necessary to consider whether this construction was correct with respect to s 8A of the 1974 Act. Further, it may be conceded that the verb "employs" has a range of meanings. It is sufficient for present purposes to note that, read in context, the language in s 9(2)(b) is not uncertain or ambiguous. That is because sub-s (3) explicitly refers to counting "employees for the purposes of subsection (2)(b)". It does not refer to counting "persons" for the purposes of s 9(2)(b); rather, it assumes that those persons are employees, an assumption which is consistent only with the use of the verb "employs" as referring to a person having contract of employment.

105 The evidence before the Court indicated that the second and third applicants were not merely directors of the first applicant, but employees. Given that part-time employees were to be taken into account as an appropriate fraction of a fulltime employee, the proper inference, on the balance of probabilities, is that, at the relevant time, there were no other employees. Thus, in the year ending June 2011, the total wages identified in the company accounts amounted to $2,311. Even the amount listed under "Consultants fees" was only $13,412. An amount of $208 was accounted for under the heading "Superannuation". These figures indicate, on the probabilities, that the company had fewer than 10 employees. The claim against it should not have been dismissed on the basis that it was not an excluded corporation. It had standing to sue.

106 In further submissions with respect to this issue (filed after the hearing) the respondent broadly accepted the construction set out above, but submitted that the term "employees" should not be limited to what were described as "employees at common law" (including executive directors or principals of a business engaged in its ongoing operations). Rather the section should extend to individuals engaged in the day-to-day operations of the corporation and subject to its direction and control. This category was intended to include persons supplied by labour hire firms. However, because no such issue arises in the present case, it is not necessary to resolve the limits of the section.

(c) apprehended bias

107 The application for disqualification was based on an allegation of apprehended bias, of which some five particulars were given. The draft notice of appeal was silent as to the basis on which the trial judge erred in dismissing the application. The written submissions in support of the leave application did not address the question of apprehended bias. The further written submissions filed for the applicants dealt with the ground in four paragraphs. The first two paragraphs identified the allegations, the submissions and the judgment. The second two paragraphs contained three sentences, of which the last was conclusory. The other two sentences indicated that the applicants relied upon the judgment allowing the report of Professor Byard and "the various rulings and findings as to the admissibility of evidence and other rulings referred to in their submissions including findings that the imputations were not defamatory and that there was no loss of custom after the broadcast."

108 These submissions were so perfunctory as to be dismissive of the application they sought to support. An allegation of apprehended bias against a superior court judge should not be made lightly. If upheld, it invalidates the whole of the proceedings at trial.

109 In oral argument, senior counsel submitted that the judgment "admitting the report [of Professor Byard] into evidence indicated that her Honour had made up her mind to uphold the report, which seems to be strongly upholding the report and that led to the application to probable bias, apprehended bias. If that does not disclose sufficient grounds to make such an application then the apprehended bias ground will be withdrawn." In some further clarification, counsel indicated that the judgment on admissibility "reads like a final judgment": CA Tcpt, 22/08/14, pp 42(45)-43(9).

110 It will be necessary to refer briefly to the terms of the judgment (which counsel did not do) but it is convenient to note first that immediately following delivery of the interlocutory judgment admitting the expert report the following exchange took place (Tcpt, pp 264-265):

"EVATT: Is that the end of the case, your Honour?

HER HONOUR: I think that will be for you to judge, it is not for me to judge Mr Evatt. Because I have not heard the rest of your evidence or the defendant's submissions .... I just dealt with your five objections to Professor Byard's report. As I understand it you still have a number of witnesses to call.

...

So in terms of where we are up to at the moment I am just allowing Professor Byard to be interposed which is why he has been called although the plaintiffs' case is not closed.

EVATT: [It's] not just a case of admitting the report, your Honour. Your Honour has just given a judgment upholding the report.

HER HONOUR: Not at all. I have dealt with your objections, Mr Evatt. That does not mean you can't persuade me that I won't accept what Professor Byard said in his report. I have just dealt with your five objections.

EVATT: So it is still open.

HER HONOUR: Of course it is open. You say he does not have the expertise to express conclusions and opinions. I say he does. That does not mean I say I accept his opinions, that is a matter for another day.

EVATT: I misunderstood."

111 To make sense of the discussion, it is necessary to impute to the reasonable fair-minded observer a degree of understanding as to the exercise which had been undertaken with respect to Professor Byard.

112 The bases of objection to Professor Byard's report have been discussed above. The trial judge rejected each of the objections and gave reasons for doing so. The fifth objection was that Professor Byard had made "assumptions, including about Babywedge and other products, without sufficient basis": Judgment on expert evidence, at [13]. In dealing with that objection, the trial judge noted the assumptions and said that she considered them to be "reasonable assumptions and reasonable inferences that could be drawn by an expert, such as Professor Byard, having regard to the information he had as to these products": at [14]. It is not necessary to set out the other objections and the judge's responses: they are publicly available.

113 Assuming that the reasonable bystander understood the distinction between a ruling on admissibility and acceptance of a witness' evidence, he or she would not have been left in any doubt that it was the former, not the latter, exercise which the judge was undertaking in delivering the judgment with respect to Professor Byard's evidence. Even if the judge had fallen into ambiguous language (which she did not) the exchange which followed the delivery of the judgment, which would also have been heard by the hypothetical bystander, would have cured any misapprehension. The ground is without substance and there is no basis for granting leave with respect to that ground.

Costs

114 The result of this judgment is that the applicants will be refused leave to appeal with respect to some grounds and otherwise there will be a grant of leave to appeal but the appeal will be dismissed. Nevertheless, the applicants have had a degree of success in respect of particular grounds. In short, contrary to the views of the trial judge, particular imputations were conveyed and were defamatory. Further, the claims of the first applicant in defamation should not have been dismissed on the ground that it did not establish it was an excluded corporation for the purposes of s 9 of the Defamation Act 2005. Nevertheless, none of these findings has translated into a judgment in favour of the applicants on liability. The respondents have maintained the judgment in the Court below and should have their costs in this Court. This is not a matter in which it is appropriate to reduce those costs because the applicants had a measure of success on specific issues.

Conclusions

115 The Court should make the following orders:

(1) Grant the applicants leave to appeal from the judgments, both interlocutory and final in the Common Law Division, excluding the grounds relating to damages (grounds 8-10); the admissibility of evidence of the second and third applicants as to the falsity of imputations (b), (c) and (d) and as to the design, composition and quality of the material used in Babywedge (grounds 12 and 13); the alleged amendment to the defence after the close of evidence (ground 14); the refusal to recuse on the ground of apprehended bias (ground 19).

(2) Direct that the applicants file the notice of appeal in the form of the draft contained in the White Folder.

(3) Dismiss the appeal.

(4) Order that the applicants pay the respondents' costs in this Court.

116 MEAGHER JA: I agree with Basten JA.

117 TOBIAS AJA: I agree with Basten JA.

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Amendments

01 December 2014 - Amending CA file number
Amended paragraphs: Coversheet

Decision last updated: 01 December 2014