Gianni Versace SpA, Santo Versace and Donatella Versace v Frank Monte aka Francois Ferdinand Monteneri and Arkitude Holdings Pty Limited
Sumarios:
1.-The conduct of the applicants or those involved in the Versace business could possibly be a matter of "interest" to the public. This does not mean that groundless allegations of reprehensible conduct attract comment on such non-existent conduct. There must first be some activity or conduct which has occurred or is considered on reasonable grounds to have occurred in respect of which comment can be made.
2.- It is not necessary to identify the precise feelings which the matter engenders in order to characterise the material as "defamatory". It is sufficient if the imputation tends to produce an unfavourable reaction in the reasonable reader.
8 March 2002
8 March 2002
REASONS FOR JUDGMENT
1 Gianni Versace ("Gianni") was a famous fashion designer who had a long and successful career. He began his career as a designer in Tuscany in 1972. Accompanied by his brother, Santo Versace, ("Santo"), he moved to Milan in 1976 and together they planned the creation of the Gianni Versace fashion label, which was founded the following year. Gianni presented his first signature collection in Milan in March 1978. In that year, Donatella Versace ("Donatella"), the sister of Gianni and Santo, also began to take an active role in the creative side of the business. Later, she was to manage the Versace brand.
2 The Versace business has been carried out through a network of companies, the parent of which, Gianni Versace Srl, was subsequently transformed into Gianni Versace SpA, a company owned by shareholders. The first applicant is now the holding company of the Gianni Versace group of companies ("the group"). This organisation has developed a network of independent franchisees which, during the 1980's, began to open exclusive points of sale under the Gianni Versace insignia. At the end of the 1980's, the group took steps to develop a network of directly owned stores. In February 1988, the group brought back licensing rights to market and manufacture perfumes and cosmetics under the insignia. These were subsequently sold to a newly incorporated joint venture between the group and an Italian fragrance company.
3 From the early 1980's, the group established operations in various fashion centres throughout the world, largely in the form of boutique stores in prestigious shopping areas. In 1993, the group diversified into the area of home accessories, including tableware and bedware. During 1996 and 1997, the group continued to expand and set up a new flagship boutique on Fifth Avenue, Manhattan. In 1997, the group set up a German company to regain control of its boutiques in Frankfurt and Hamburg, which had been previously managed by independent franchisees. Throughout these two decades, the group had relied on its recognition and repute in undertaking its expansion and achieving its success. Much of that was attributable to Gianni, who had won numerous fashion awards throughout his career. The collections presented by him both in men and women's high fashion achieved a high level of success and popularity. It was clear from the evidence that by 1997, the group had become one of the pre-eminent international fashion houses. In some circles, the Versace label is a household name.
4 Throughout 1996 and the first half of 1997, Gianni worked in Milan, New York and Miami and travelled frequently in Europe and the United States. On 15 July 1997, while staying at his Miami villa, he was murdered in front of his home. The authorities concluded that Gianni was murdered by a lone serial killer Andrew Cunanan, who killed himself as the police closed in on the house boat in which he was living. Cunanan died only eight days after the murder of Gianni.
5 Since Gianni's death, Donatella has been responsible for the creative aspects of the business. In 1996, the first applicant had started preparing for a public listing on the Milan stock market, originally scheduled to take place in Spring 1998. However, the operation was postponed after Gianni's murder.
6 Santo is currently the President and joint Chief Executive Officer of the first applicant. In his capacity as President, he manages the business and financial affairs of the group. He has done so since 1978. In particular, he is responsible for overseeing the manufacturing, licensing, franchising, sales, distribution, administration, finance, and legal affairs within the group. He was the first Chairman of the group and has been personally involved in the financial and operational side of the business since its inception in 1977.
7 Santo gave evidence that Gianni's focus in the business was almost exclusively on the creative and fashion side. He said that he had a close relationship with both Gianni and Donatella and that he talked to them on a daily basis about business, private and family matters. He said that he was never informed by his brother of any relationship or contact Gianni had with Mr Frank Monte ("Monte"). The first time Santo heard of Monte was when Monte was quoted in a number of newspapers after Gianni's death stating that Monte had been instructed by Gianni in connection with a blackmail attempt in relation to certain ledgers. Santo stated that he knew nothing of Gianni having received a blackmail demand.
8 Donatella worked with her brother Gianni, from 1978 until his death in 1997. In 1987 or thereabouts, she began managing the group's accessories collections as well as some of the group's licences. She gave evidence that she had a close relationship with both of her brothers and spoke with them regularly in relation to business, as well as family and private matters and that she worked extensively with Gianni in relation to the creation of collections and the preparation of fashion parades, catalogues and fashion shoots. Vacations were also spent together. According to Donatella, this pattern of contact continued during the period from 1996 until the murder of Gianni in 1997. This is the period during which Monte claimed to have developed a relationship with Gianni. Donatella said that while Gianni spent more time in Miami, he was always in contact with her and staff at the office. She had never heard of Monte until he was quoted in newspapers after Gianni's death in relation to suggestions of a blackmail attempt. She was unaware of any contact, engagement or payment from Gianni, the first applicant or any company in the group concerning Monte. She also denied an assertion by Monte that she had seen or recognised him at a commemoration function held for Gianni at the Metropolitan Museum of Art, on 4 December 1997.
9 According to the evidence of the first applicant's General Manager, Giovanni Galbiati ("Galbiati"), who is also a Director of Gianni Versace Spa, the group has grown to have an annual turnover worldwide of 865 billion Italian lire and, as at 31 December 2000, employed 1500 people globally on a full time basis. The group's strategy has been to globalise the Versace brand into one signifying quality and luxury. According to Galbiati, that image has been achieved.
10 The evidence, which I accept, is that the Versace brand is well known and established in Australia as a luxury, quality brand as a consequence of its widespread promotion on a global scale and by the extensive marketing of Versace brand products through exclusive distributors and dedicated stores and other outlets. In 1998, the Versace group entered into a business partnership in Australia with Sunland Group Limited ("Sunland"), which has resulted in the Palazzo Versace Gold Coast Hotel in Queensland.
PARTIES
11 The applicants have been described in the preceding pages.
12 The first respondent, Frank Monte, who is also known as Francois (Franco) Ferdinand Monteneri, was a member of the New South Wales Police Force for a number of years in the 1960's. In 1967, he joined a private investigation firm and has carried on business as a private investigator for over thirty years. Initially, his work mainly involved matrimonial cases. He said that his work as a private investigator has involved him working in various places throughout the world, including a period in the 1990's, where he worked in the United States. He claimed to have undertaken work for numerous international celebrities and prominent organisations and corporations, whose names were listed on the website of Monte Investigation Services at www.montespy.com. According to Monte's evidence, over the last ten years, he has eagerly sought and obtained extensive international exposure in the media. He claimed that in 1998, he became involved full time as an author and scriptwriter. He referred to three books, the titles of which are The Spying Game, Master Spy and Confessions of a Corporate Spy. Curiously, having regard to these titles and the name of his website in his evidence, Monte expressed a distaste for the expression "spying" because it denoted a "sinister approach".
13 During 1996 and 1997, Monte resided in New York. During this period, he was in a close personal and business relationship with Justine Wallace ("Wallace") who was called by the applicants in these proceedings. At the time of Gianni's murder, Monte was still recuperating in New York from a cosmetic operation.
14 On or shortly after the death of Gianni, Monte obtained international prominence by making statements and appearing in the Australian and international media, asserting claims that he had been retained by Gianni during 1996 to take care of his personal and corporate security and that he had numerous confidential conversations with Gianni as a result of which he obtained knowledge as to underlying suspicious circumstances that could have led to Gianni's murder. In the immediate aftermath of the murder and following, Monte claimed to have knowledge of involvement by the "Mafia" in the murder. These claims were widely reported in the international media, including, The Observer and The Independent newspapers in the United Kingdom and, in the United States, principally on television, but also in the New York Post and New York Observer newspapers. Defamation proceedings were instituted against those media outlets by the Versace family. In proceedings instituted in the United Kingdom, each case resulted in an apology and retraction of the allegations concerning the first applicant and as against Santo and Donatella. Throughout this period following Gianni's death, Monte claimed to have obtained telephone records from a former personal assistant to Gianni, Carlotta Corazza, to verify his association with the designer. However, these were not produced to the Court. By late 1997, Monte was claiming to journalists to have a number of "Versace files", which allegedly contained documents proving that he had a working contract with Gianni. He refused to provide any of these files to the Versace family or business and claimed that he had taken legal advice that he should not do so. Monte's allegations were provided to journalists employed by the New York Observer and the New York Post in early 1998 who subsequently published Monte's claims. However, the New York Post at least published a withdrawal and apology for its report shortly afterwards.
15 In May 2000, Monte signed an agreement with Pan Macmillan Australia Pty Limited ("Pan Macmillan") for an autobiography given the working title of Frank Monte Story. During the period stemming from 2000 to 2001, he worked with a number of ghost writers, including David Warner and Deborah Adelaide, to produce a book, ultimately entitled The Spying Game, ("the book") which is the subject of this action. The allegations in the book were identified in the pleadings as the "first matter complained of".
16 The applicants claimed that Monte caused the book containing the false allegations to be published in Australia. The Versace theme is central to the book. The book begins with Monte waiting near Central Park Children's Zoo in Manhattan for an alleged meeting with Gianni. A great deal of the book is concerned with assertions relating to alleged statements by Gianni to Monte as to unlawful and reprehensible conduct by Gianni, the Versace businesses and the Versace family. The applicants submitted that these assertions are defamatory and constituted false and deceptive conduct, based on fabrication and lies.
17 The precise number of copies of the book published was not clarified to the Court, but that is a matter which will no doubt be examined in greater detail on any later hearing as to damages. The applicants indicated that thousands of copies of the book were received by Pan Macmillan from the printery. A number of these were sent for review. A large proportion were said to have been distributed to retailers, most of which were subsequently recalled. Monte's evidence was that close to 800 copies were sold, in addition to the copies given out to the Press. I accept that at least the number of copies estimated by Monte were published.
18 Also the subject of this action is an article appearing in a publication in the 23-24 June 2001 edition of The Weekend Australian newspaper ("the article"), in the form of an interview with Monte. The article included some condensed material from the book and statements attributed to Monte relating to Gianni and the Versace family and businesses. This was referred to in the pleadings as the "second matter complained of". The article was the centrepiece of the colour supplement entitled The Australian Magazine which was circulated throughout Australia. The precise circulation was not in evidence but I am satisfied that it was published to a large section of the Australian public. The cover of the supplement shows a photograph of Monte in a large black hat with a cartoon figure of a somewhat vampish blonde with a long cigarette holder. There is a full page colour photograph of Monte lighting a large cigar. There are also photographs of Monte alongside celebrities, such as Donald Trump and Robert Kennedy Junior, and a photograph of Monte and Justine Wallace with the title "frank monte private investigator". This article alerted the applicants to the fact that Monte was continuing to make representations and allegations about his claimed involvement with Gianni. The book was referred to and quoted by the author of the article. The article stated:
"Then, out of the blue, came his ultimate client. Monte says Gianni Versace first contacted him in 1996. After several meetings he earned the designer's trust enough to be told about a major problem. According to Monte, Versace said that someone called `Johnny the Cat' from Milan had stolen five secret ledgers from the company and was asking $US5 million to return them. Versace could not go to the police because it would reveal that for years, he had been dealing with the Italian underworld.
`It is explosive,' writes Monte. `Versace tells me that what the ledgers reveal is that over the course of several years he has been laundering millions of `dirty' dollars for Calabrian organised crime.' The ledgers and the revelation about Gianni Versace were `a time bomb which could blow the House of Versace and all its occupants sky-high.'"
(I interpolate here that this reference to "the House of Versace" was a misquote. In fact, the book referred to "a time bomb [which could] blow Versace's business and all its occupants sky high". For reasons given below, this is a distinction without a difference).
"Monte says Versace was terrified that the Mob's links with his business might be revealed. At the same time, he says Versace fretted about the worsening relationship with his family back in Italy. In 1996, Monte claims that Versace told him that his family was trying to cut off his money in the belief that he had AIDS.
Versace asked Monte to oversee an AIDS test for him. `He hands me three phials of blood marked A, B and C and asks me to take these to a doctor, along with a payment of $20,000,' writes Monte. `Versace wants to know if he is HIV-positive.' It turns out that one phial contained the blood of a child, the other contained HIV-infected blood and the third was clear. Versace's blood was in the third sample; he was clear.
Eventually, says Monte, Versace decided that his best option was to go public and tell people that criminals had infiltrated his business. Monte advised Versace that if his intentions were to become known, his life would be in grave danger and that he needed to boost his personal security. However, Monte says, his advice was ignored. `The possibility that he might actually be killed outright doesn't seem to occur to him,' writes Monte. `He feels safe in Miami.' Months later, with Monte in New York recovering from a facelift, Versace was shot dead.
Even though he was not Versace's bodyguard, did Monte feel guilty about his inability to protect his client? On the contrary, he turned up on the Nine Network's A Current Affair and told Ray Martin that he felt `lucky', because he could easily have been killed alongside Versace - a comment that caused the Nine switchboards to light up. Monte did throw himself into investigating the death - a move that saw him appear on talk shows across the US.
As in the Rockefeller case, Monte has adopted a contrary view of Versace's death. He does not believe the FBI's claim that he was murdered by gay serial killer Andrew Cunanan - who committed suicide days later on a nearby houseboat. He believes Versace's family or the Italian Mob may be among the suspects, but for legal reasons he will go no further. `Do I know who killed Gianni Versace? No,' Monte writes. "I simply have my suspicions ... it was not Andrew Cunanan.'"
19 Set out below is a copy of the cover of The Weekend Australian supplement for 23-24 June 2001 as described above.
20 The publishers of The Weekend Australian have apologised in respect of the article and withdrawn the statements. Proceedings were instituted against Pan Macmillan by the present applicants in the Supreme Court of New South Wales. It also apologised. The applicants have accepted a formal Offer of Amends made by Pan Macmillan under Division 8 of the Defamation Act 1974 (NSW) ("the Defamation Act").
21 Since 1997, the respondents have maintained a website with the domain name www.montespy.com. This website contained material about Monte, including photographs, together with a large number of newspaper articles concerning Monte and the applicants, including the Versace business. It included the article in The Weekend Australian, which was reproduced in full on the website. As at 29 July 2001, the website domain name was registered in the name of "Monte Investigation Group". The contact person in relation to administration, technical and billing was Frank Monte of Monte Investigation Group, 630 Fifth Avenue, New York. The website remains accessible on a worldwide basis.
22 I am satisfied that Monte caused to be published both the book and the article.
NATURE OF THE CASE - DECEITFUL CONDUCT
23 These proceeding were brought by the applicants to restrain the further publication of material, claimed to constitute misleading and deceptive conduct contrary to the Trade Practices Act 1974 (Cth) ("TP Act") and the Fair Trading Act 1987 (NSW) ("the FT Act"). Claims were also made under other provisions of these two Acts. In addition, the applicants alleged that they have been defamed by the respondents. Further relief was sought in the nature of damages, both compensatory and exemplary, and costs. This part of the proceedings is not concerned with the amount of damages, but with questions of liability and remedies other than damages.
PLEADINGS
24 The proceedings commenced on 10 August 2001 and the amended statement of claim was filed in court on 29 October 2001.
25 The applicants contended that the book contained the following false and misleading representations.
AS AGAINST THE VERSACE COMPANY:
"14 (a) One or more of the Versace companies was criminally involved with the mafia.
(b) One or more of the Versace companies had been laundering millions of `dirty' dollars for Calabrian organised crime.
(c) One or more of the Versace companies maintained secret ledgers that recorded it had been dealing with the Italian underworld.
(d) One or more of the Versace companies was associated with a mobster from Milan called `Johnny the Cat'.
(e) One or more of the Versace companies was being blackmailed because of its criminal involvement with the Italian underworld.
(f) One or more of the Versace companies had been infiltrated by organised crime."
AS AGAINST SANTO:
"(g) Santo Versace was criminally involved with the Italian underworld.
(h) Santo Versace was criminally involved in laundering millions of `dirty' dollars for Calabrian organised crime.
(i) Santo Versace was reasonably suspected of murdering Gianni Versace.
(j) Santo Versace was involved in maintaining secret Versace company ledgers that recorded transactions with organised crime.
(k) Santo Versace was reasonably suspected of murdering Gianni Versace in order to conceal that the Second Applicant [Santo] was engaged in criminal activity.
(l) Santo Versace was being blackmailed by a mobster."
AS AGAINST DONATELLA:
"(m) Donatella Versace was criminally involved with the Italian underworld.
(n) Donatella Versace was criminally involved in laundering millions of `dirty' dollars for Calabrian organised crime.
(o) Donatella Versace was reasonably suspected of murdering Gianni Versace.
(p) Donatella Versace was involved in maintaining secret Versace company ledgers that recorded transactions with organised crime.
(q) Donatella Versace was reasonably suspected of murdering Gianni Versace in order to conceal that the Third Applicant [Donatella] was engaged in criminal activity.
(r) Donatella Versace was being blackmailed by a mobster."
26 In addition, the applicants contended that the book contained the following statements which are false and misleading:
"(s) Frank Monte or one or more of the Monte companies was employed or engaged by Gianni Versace.
(t) Frank Monte or one or more of the Monte companies had a personal relationship with Gianni Versace.
(u) Frank Monte or one or more of the Monte companies had a business relationship with Gianni Versace.
(v) Frank Monte knew the matters referred to in (a) to (r) by reason of one or more of the relationships described in (s), (t) and (u)."
27 The use of the expression "personal" relationship in subpar (t) is intended to allege, as I read it, that Monte made false and misleading representations that discussions took place between Monte and Gianni in a business context in the course of which Gianni confided in Monte.
28 In addition, the applicants pleaded that Monte and Arkitude Holdings Pty Limited ("Arkitude") made the above false representations through a website, www.montespy.com and continued to keep those allegations on the website whilst believing them to be false. It was also said that Monte organised the publication of excerpts from the book, including the excerpts in the article described above. The applicant also pleaded in par 15A of the amended statement of claim that, by reason of publishing the book, Monte falsely represented in trade and commerce that the book is a work of fact.
29 In relation to the false representations made by the respondents on the website, which is a publication available on a worldwide basis, the applicants relied on, among other matters, the publication of the representations and the continuation of publication of materials on the website, even after commencement of this proceeding, notwithstanding that some of the material was the subject of Orders by the High Court of the United Kingdom, restraining further publication in proceedings to which Monte was not a party but which the publishing newspapers had been a party.
30 The applicants contend that damage has been suffered by them and that Monte and Arkitude intended, threatened and were continuing to repeat their conduct.
31 The applicants' claim in defamation was made against Monte only in respect of material published in the book and the article. In particular, the claim relied on his giving of authorisation for the book to be made available to The Weekend Australian for publication of the article. The defamatory imputations alleged are essentially the same as the representations alleged in relation to the misleading and deceptive conduct claims set out in detail above, with the exception of subpars (s) to (v) inclusive, which were not included in the defamation action.
32 In the amended defence, Monte claimed that he submitted the manuscript of the book to Pan Macmillan and they revised, edited, and rewrote parts of it before printing the book. Arkitude contended that it had no connection or association with the book. There were denials by both respondents as to the allegations relating to breaches of the TP Act and FT Act. The defence also submitted that Monte is a "prescribed information provider" within the meaning of the TP Act and the FT Act, thus exempting Monte from the operation of the relevant provisions of those Acts. In addition, the respondents relied on a general right of freedom of speech pursuant to the Australian Constitution, although no other particulars were given in relation to this matter and the matter was not argued. As to the claim in defamation, there were denials, together with the non-admission of a number of the allegations and a range of statutory and common law defences.
STATEMENTS RELATING TO DECEASED PERSONS
33 Experience teaches that considerable caution should be exercised by a court before accepting an account of conversations attributed to a person since deceased, particularly where the conservations are central to the issues in question. In this respect the observations of Wilcox J in Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 at 253, are apposite to the present case:
"... it is trite to say that evidence of conversations between a living witness and a dead person should be scrutinised with particular care, especially where there was no occasion for the dead person to record his version of them before his death. Of course, that is not to say that such evidence cannot be true; it obviously may. But it does mean that any matter adversely affecting the credit of the witness has special importance; the witness cannot be refuted in the usual way."
34 In the case of Monte's book this observation is of particular significance because the book contained what are said to be extensive conversations with Gianni and Aristotle Onassis, both of whom are dead. In the case of Onassis, as counsel for the applicants pointed out, Monte felt that he could use his name freely and without any permission because he was dead. He had previously claimed categorically that he had obtained permission to list all clients named in his promotional brochure.
WITNESSES
FRANK MONTE
35 The oral evidence of Monte extended over four days of detailed testimony and extensive cross-examination. Having regard to the internal inconsistencies in his evidence, the inherent improbability of his claims in relation to his relationship with Gianni, the fabricated facsimiles and suspect documentary evidence relied on by him in relation to alleged appointments with Gianni, the evidence of Dr Strach and the unshaken evidence of other witnesses called in contradiction of his evidence, including the cumulative effect of documentary evidence furnished by travel documents and records kept in the ordinary course of the Versace business, I do not accept his evidence in relation to any matter where it was unsubstantiated by reliable documentary evidence and where it conflicted with the evidence of any other witness. In many instances, where Monte specified a date, reference to contradictory documentary evidence cast strong doubt on his assertions. Monte's approach to confidentiality obligations under the alleged "agreement" he provided to Gianni, which he described as "a worthless piece of paper", his reference to "poetic licence", his modus-operandi, his readiness to improvise evidence and speculate on an opportunistic basis to advance his case from the witness box, and his false assertion that he had approval to use the names of his clients in advertising material, reinforce the conclusion that no reliance can be placed on his evidence with respect to facts in issue.
36 In many instances some corroborative evidence from persons said to have been involved could have been called. None were called. The lack of any documentary record or independent testimony or evidence of any other kind to support his case, in circumstances where Monte claimed to have had a confidential working relationship with an internationally famous designer over a period of eighteen months, is a cogent indication that there in fact was no relationship between Gianni and Monte. This was especially so after it became evident to Monte that, following the death of Gianni on 15 July 1997, his assertions of a relationship with Gianni were immediately and vigorously challenged by the Versace business and family and one would therefore expect that any documentary evidence which corroborated his claims would be carefully preserved to verify his assertions. However, no evidence in the nature of banking documents, documents relevant to funds paid or received, telephone records or other credible objective material was provided to the Court to corroborate any of Monte's assertions relating to his relationship with Gianni. By way of example, one such assertion was that he organised for Gianni to undertake an AIDS test. However, no evidence was called in relation to the doctor said to have been in charge or the technician who had allegedly carried out the test after receiving a substantial payment. No other person who may have been privy to Monte's claimed contacts with Gianni was called, apart from his son, James, whose evidence I do not accept in relation to this aspect. Many of Monte's claimed communications with Gianni, according to Monte's own evidence, were not followed up with either decision or action. Many of the events recounted by Monte and, in particular, the story relating to Abu Akhtar in Egypt, travel well beyond the limits of credibility. The countervailing evidence, especially when considered cumulatively, points strongly away from the scenario advanced by him as to what transpired over the eighteen months of his alleged retainer by Gianni.
37 Monte tendered an invitation to a memorial celebration in memory of Gianni at the Metropolitan Museum of Art, New York held on 4 December 1997. However, Monte was not on the list of invitees. His evidence did not advance the substance of his case as to any relationship with Gianni. In fact, the invitation proved nothing except that Monte at some time was able to get hold of a printed invitation. He said that he was present at this memorial and was recognised by Donatella. She denied ever seeing him and I prefer her evidence on this question. Given the tone of the communications between solicitors for the Versace family and Monte during 1997, after the death of Gianni, it is highly unlikely that he would have been invited or knowingly admitted to the function. By that time, in the eyes of the Versace family, Monte was plainly persona non grata.
SANTO VERSACE
38 An attempt was made to attack Santo's credibility on the basis of a taxation investigation and conviction in relation to alleged bribery of public officials at first instance in Italy in 1997, which was later reversed on appeal. No mention was made in the book of the reversal of this decision which was in 1998, (prior to publication of the book and article), although there was a reference to the fact that the conviction was under appeal. Santo admitted to the initial conviction and the imposition of a substantial penalty, but sought to explain it as part of a concerted crackdown by fiscal authorities on the operations of Italian fashion houses. He pointed to the fact that the decision was reversed on appeal. When giving evidence, he answered questions honestly and directly and I am satisfied that his evidence as to his business relations with his family should be accepted. There was no successful attack in cross-examination on Santo's testimony, nor was there any credible countervailing evidence. Other evidence called for the applicants was consistent with Santo's evidence. Of course, Santo's evidence cannot be taken to be conclusive as to the activities of his brother, Gianni, at all times. Gianni undertook a large amount of travel and the two brothers were in different locations for a great deal of the relevant period in 1996 - 1997. Nevertheless, his evidence points to a continual and open communication between members of the Versace family, both commercially and personally. In particular, I accept his evidence as to the closeness of family relations with Gianni.
DONATELLA VERSACE
39 Donatella's evidence was not successfully challenged in cross-examination. Nor was any countervailing evidence adduced to warrant disbelief of her testimony. I accept her evidence particularly as to the close family and commercial relationship between her and her brothers and the open communication they shared. Her evidence as to the activities of her brother Gianni was limited because they were apart for much of the time. However, when taken into account with other evidence, it provided support to the absence of any relationship between Monte and Gianni and to the unlikelihood of Gianni having made allegations against her and Santo of the extreme serious nature, as claimed by Monte.
JAMES MONTE
40 James Monte ("James") furnished a brief affidavit as to an alleged encounter between his father, Frank Monte and Gianni in Miami on or about 2 January 1997. Gianni's documentary travel records, including airline tickets, indicated that Gianni was in New York at this time. For reasons given elsewhere, I do not accept that this meeting or any meeting between Monte and Gianni ever took place. The unusual circumstances of this "meeting", with James standing nearby, and the lack of any subsequent action following the meeting as contemplated by his evidence as to what he was told had transpired between his father and Gianni, served to reinforce the documentary evidence detailing Gianni's travel movements. I have reached the conclusion that James' evidence cannot be accepted. It was clear from the cross-examination that James acted at the direction of his father in relation to the activities of Arkitude and his relationship with his father appears to be a close one. His father is the sole shareholder of Arkitude, which employs James. In cross-examination his recollection was poor and select. I am satisfied on the evidence that his father has been a dominant influence on him in the conduct of the affairs of Monte Investigations Services in the relevant period from 1996 to the present time. I do not accept his evidence where it conflicted with other evidence in relation to the alleged Miami meeting.
41 Although it is common ground that James went to Egypt in July 1996, his version of events is significantly different from that of his father as recounted in the book. He claimed that he went to Cairo to meet a man called Abu whose other name he was not told. If Monte's evidence were to be accepted, there was an "agreement" between himself and Gianni dated 19 July 1996, which specified, in Monte's handwriting, "Meet or locate Mr Akhtar in Egypt or other place". In the book, Monte stated that Gianni wanted to talk to James about what happened in Cairo and that this discussion was to take place early in 1997. There was reference in the book to "the Arabs", to the fact that the Arabs had threatened Monte and James and it was apparently agreed that Monte, James and Gianni would "go through everything at length in a few days". Within this context, where Gianni allegedly wanted to meet James, it is, to say the least, highly improbable that James would have been left standing across a street in Miami on 2 January 1997 while his father had a conversation with Gianni in respect of which nothing further occurred. Moreover, even according to Monte's account, the conversation with Gianni on that occasion made no reference to any activities in Egypt involving James. James' evidence did not provide any relevant corroboration for the allegations of Monte which are complained of.
JUSTINE WALLACE
42 The evidence of Ms Wallace should be approached with considerable caution. She was featured prominently in the book. Both in chief and under cross-examination, it was evident that her recollection was not accurate in a number of respects and that she bore strong animosity towards Monte. Her evidence as to her relationship with Monte was, in part, quite inconsistent. However, notwithstanding these reservations, her evidence as to Monte stumbling across an original Versace facsimile in a New York street and filing it away for future reference on the basis that it may be useful at some future time has the ring of truth and was consistent with her statements that before Gianni's death, Monte had spoken of Gianni to others as a client. Her evidence was also consistent with a conclusion that Monte fabricated the facsimiles produced to the Court or was at least aware of their fabrication for the purpose of supporting his claims to an association with Gianni. I am satisfied on the evidence referred to below that Monte was responsible for their fabrication. Further, and independently of Wallace's evidence, I am satisfied that there is a high probability that Monte obtained at least one authentic Versace facsimile before Gianni's death and it was the existence of this document that contributed to Monte having the confidence to seek out and secure the extensive publicity he so successfully obtained after the murder.
OTHER WITNESSES
43 A number of other witnesses associated with the House of Versace in Milan and the United States were called for the applicants, by video-link, including Giovanni Galbiati, the first applicant's Group General Manager; Marta Colombo, his personal assistant; Carlotta Corazza, who for a short period was junior personal secretary to Gianni; Antonio Panizza, the auditor for the first applicant; Rebecca Sprizza, secretarial assistant for the applicants' United States counsel; and Daniele Ballestrazzi, the Chief Financial Officer of the group. Mr Ballestrazzi testified as to the travel records of Gianni. There was no basis in the evidence led by the applicants for rejecting the substance of their evidence. They were all available for cross-examination if required. This evidence was not successfully challenged in cross-examination in the instances where there was cross-examination. There was no counter evidence to contradict the evidence led by the applicants and I accept it. I have kept in mind the association of the witnesses with the Versace business by reason of their employment by the Versace companies but I see no reason on the evidence before me to doubt their testimony or the authenticity of documentary material furnished by them.
ANTONIO D'AMICO
44 The evidence was that during various parts of the period from early 1996 until the death of Gianni, his close and constant companion was Antonio D'Amico ("D'Amico"). The evidence of Juan Deleon ("Deleon"), Gianni's New York chauffeur, reinforced the existence of this close relationship. Deleon stated that it was not the practice of Gianni to walk unaccompanied in public and that he was always accompanied by D'Amico. D'Amico swore an affidavit, but it was not read in evidence. No explanation was given for not calling D'Amico apart from the submission that he was not a necessary witness. Reliance was placed by the respondents on the principle in Jones v Dunkel (1959) 101 CLR 298 at 321-2. It was argued that that principle touches on the present case because it is designed to strengthen the drawing of an inference available on other material before the Court. In the present case, I do not think that there is any inference available on the evidence, looked at as a whole, relating to the representations and conduct of Monte which could be strengthened by calling D'Amico. I therefore do not discount the force of the applicant's evidence by reason of the failure to call D'Amico.
REPRESENTATIONS - LEGAL ISSUES
45 This case does not call for a delineation of any boundary between the limits of consumer protection law and that body of law concerning defamation. Such a task would be fruitless because they are clearly capable of covering the same ground to come extent. The provisions of the TP Act and FT Act must be given their natural and ordinary meaning. If provisions of that legislation overlap to some extent with the traditional area of defamation law, it is not appropriate to read down the legislation by reference to any inferential or implied constraint that there should not be any such overlap. This approach has been established in the case of the common law principle of passing off in its relation to Trade Practices legislation. It is therefore no defence to a claim under the TP Act or the FT Act to argue that the field is already covered by the law of defamation. There is no reason why the Trade Practices or Fair Trading legislation should be read down to "accommodate" this body of law.
46 In particular, when deciding on the reach of the "information provider" exemptions in the legislation, it is necessary to read these provisions in each of the Acts as a whole, taking into account the circumstances in which these provisions came to be inserted in the legislation. The task for the Court is to consider the operation of those sections in the circumstances before it and not to limit the scope of the legislation by reference to the common law or legislation relating to defamation.
47 In these proceedings, the basic claims under ss 52 and 53 of the TP Act and ss 42 and 44 of the FT Act, for misleading and deceptive conduct and for the making of false representations in trade or commerce, were essentially that:
* the respondents made and threatened to make certain representations in trade and commerce;
* those representations are false;
* by reason of the respondents' conduct in making and threatening to make those false representations, the applicants have suffered damage.
Furthermore, it is said, the respondents have each engaged and are threatening to engage in conduct that is misleading and deceptive.
The applicants submitted that the respondents falsely represented an affiliation between Monte and/or the Monte group of companies and Gianni and/or the applicants in contravention of s 53 of the TP Act and s 44 of the FT Act. The claimed affiliation is that Monte or one of his companies had Gianni or companies of his as a client. It was further claimed that the respondents falsely represented that Gianni, or one or more of the Versace companies, agreed to acquire his, its or their services contrary to s 53(bb) of the TP Act and s 44(d) of the FT Act. The applicants also submitted that the respondents falsely represented that their services for private investigation have or had the sponsorship or approval of Gianni or any of the Versace companies contrary to s 53(c) of the TP Act and s 44(e) of the FT Act.
48 Section 52 of the TP Act provides:
"52 Misleading or deceptive conduct
(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1)."
49 Section 42 of the FT Act is in identical terms to s 52 of the TP Act, with the exception that s 42(1) refers to "[a] person" whereas s 52(1) refers to "[a] corporation".
50 Section 53 relevantly provides:
"53 False or misleading representations
A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:
...
(bb) falsely represent that a particular person has agreed to acquire goods or services;
(c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
(d) represent that the corporation has a sponsorship, approval or affiliation it does not have;
..."
51 Section 44 of the FT Act is in similar terms to s 53 of the TP Act.
52 At the heart of the applicants' case is the contention that there was never a relationship of any kind between Monte and Gianni. If there was a relationship, the basis for most of the allegations complained of is destroyed. It was submitted that the relationship which was said to have been evidenced by telephone conversations, meetings, facsimiles, agreements, diary notes, appointment books, and the direct observations of James in respect of one alleged encounter between Monte and Gianni, never in fact existed.
MONTE/GIANNI `RELATIONSHIP' - FACTUAL FINDINGS
53 The relationship was said to have begun after an appearance on 17 January 1996 by Monte on a television show aired by the American Broadcasting Corporation network, in which Monte talked about private investigation techniques. Monte said that after the television show was aired, he received a telephone call from a person whom he later knew to be Gianni. According to Monte, the caller said he was interested in talking about security and described himself as Gianni, an Italian businessman, in New York. Monte said that, to the best of his recollection, the telephone call was on Thursday 21 March 1996, and that he subsequently met with Gianni on that day.
54 The meeting was said to have taken place at 5 East Sixty-Fourth Street, Manhattan. Monte said that he had a conversation with Gianni at the Café Pierre. Gianni wanted to talk about security for his houses. He offered to send Monte some shirts but Monte declined.
55 Airline tickets were tendered by the applicants as evidence of the travel movements of Gianni. These support the inference that Gianni was not in New York on 21 March 1996. They record that he was booked to fly from New York to Miami on 9 March 1996 and return on 25 March. It is possible that Gianni made a detour to New York between those dates. However, such a conclusion would be pure speculation without any evidentiary basis. In addition, there was evidence from Gianni's personal chauffeur in New York, Deleon, which I accept, that it would be most unusual for Gianni to walk through New York on his own. He was usually accompanied by his close friend, D'Amico. Deleon was working for Gianni from June 1996 onwards but I accept his evidence as to Gianni's normal patterns of conduct as there is nothing to suggest that in early 1996 his behaviour differed to that in mid-1996. This evidence is not conclusive, but it again points to a finding against Monte having had a meeting with Gianni on 21 March 1996. Deleon said that he was closely aware of Gianni's movements in New York in 1996 and 1997 and that Gianni never mentioned a meeting with Monte. Nor did he recall Gianni ever going to the Café Pierre. Monte had a record in his appointment book for 21 March 1996 in which there is a reference to "Italian man". However, Monte was unsure whether this was a reference to Gianni. For reasons I will elaborate on later, I consider that the appointment book is a suspect document and I am not prepared to rely on the accuracy of anything recorded in it relating to Gianni.
56 There is no other appointment book entry or documentary record of any kind in relation to this first alleged meeting between Monte and Gianni. One would ordinarily expect some record, note or confirmation of this meeting. There were also no witnesses of any kind to this encounter.
57 Monte claimed that between April and July 1996, he received more telephone calls from Gianni and that the two met several times, always at the same place, which was a bench in Central Park near the Children's Zoo. He claimed Gianni asked him questions about bugging, security and kidnapping and that he gave Gianni his telephone numbers and Gianni always called him by the name "Franco" and never referred to him by the name of Monte. Monte claimed that he told Gianni that he could not give a firm estimate of the cost of guarding him and his stores against theft but if Gianni paid him a retainer of $US one million per year, Monte would see what he could do. This offer was not taken up by Gianni and there was no note or record of this alleged exchange and no other witnesses called to substantiate it. Monte said that in another of the meetings, Gianni brought a number of listening devices and Monte gave him some advice as to the range of the listening devices and their quality. Nothing seemed to have eventuated from this conversation. The suggestion in Monte's affidavit was that there were a number of meetings in that period at Central Park.
58 During the period from the end of April to the end of June 1996, Gianni's travel records, which I accept as genuine, indicated that Gianni was only in New York between 1-9 May 1996. Monte could not point to any entry in his appointment book to support any meeting with Gianni during this period. From Monte's appointment book, it appeared that he was in Los Angeles until 3 May. Therefore, it would appear that there were only six days in the two month period suggested by Monte in which the alleged meetings could have taken place. This does not sit easily with the suggestion that over the two months, there was a number of meetings and discussions.
59 On 29 May 1996, there was an appointment book entry, in the middle of which appeared the words "items for Versace". According to the handwriting and document expert, Dr Strach, whose evidence was accepted by Monte's expert and counsel, the words "items for Versace" were written in different ink to the rest of the entry, indicating that they were probably inserted at a different time. He could not say when they were entered. This was one of the features of the appointment book which, in my view, renders it unreliable as containing records of conversations or meetings between Monte and Gianni. In his affidavit, Monte made no reference to 29 May or any "items for Versace". I do not accept that any of these meetings, alleged to have taken place between April and the end of June 1996, took place.
60 On 3 June 1996, Monte stated that Gianni called him and Monte sent by way of facsimile, a contract for unspecified security operations and a retainer. This document was sent back unsigned. There was an appointment book entry for this date which stated "fax from Versace". I do not accept that the entry was made on that day or that it affords any evidence of any contact with Gianni. The entry was written in different ink to other surrounding entries. On the evidence, I do not accept it as a genuine record.
61 In relation to the facsimile referred to above, some copy facsimiles were produced by Monte and tendered but all these were shown by Dr Strach, whose evidence I accept, to have been fabricated in relation to both date and content. The subject of the facsimiles and evidence relating to them is dealt with below.
62 Monte claimed that Gianni called him in Miami on 8 June 1996. According to Monte, Gianni inquired as to how easy it would it be for someone to kidnap him in New York or Miami. Monte further claimed that there was another call from Gianni on 9 June 1996 relating to surveillance by the Federal Bureau of Investigation ("FBI"). However, the appointment book entry for that date made reference to "ringing back Versace at 2pm". This is inconsistent with Monte's claim of Gianni calling him. I find that these conversations did not take place.
63 In early July 1996, (Monte said later it was 2 July), Monte stated that Gianni telephoned him at home in New York and asked him to meet for coffee at Nelos restaurant coffee shop on Madison Avenue. He said that there was a discussion about money laundering and blackmail by someone Gianni allegedly called "Johnny the Cat", a Calabrian criminal, who took Gianni's handwritten records and was demanding $US five million for their return. There was discussion about Monte going to Milan. However, travel records and hotel vouchers, which were not challenged by the respondents, indicated that this meeting probably did not take place because Gianni was in Italy, on 2 and 3 July 1996 and a copy of the hotel receipt from the "Hotel Ritz" showed that he was in Paris between 4 and 10 July 1996. The travel records also indicated that Gianni was in New York from 10 to 13 July. Monte alleged that another conversation took place "a few days later", after 5 July, at Central Park near the Children's Zoo, in which Gianni referred to an Algerian man, named Abu, who was the flatmate of "Johnny the Cat", and who was said to have the ledger books. Monte was asked to go to Milan and "pay him off". A few days later, in a telephone conversation with Monte, Gianni was said to have promised to give James a dozen suits. However, there was no indication that these suits were ever sent or received and it was not mentioned by either Monte or James in their evidence.
64 There was an entry in the 1996 appointment book for Friday 5 July referring to Gianni and a problem with books. According to the evidence of Dr Strach, this entry was probably written out of sequence with entries in the surrounding pages. This conclusion was reached through an analysis of latent writing impressions on the pages surrounding the appointment book entry. Dr Strach identified the entry as suspect. I am satisfied that this reinforces the doubt on any meeting having been held in early July of 1996.
65 Monte alleged that a further meeting took place with Gianni on 6 August 1996 in which there was discussion about Santo and Donatella. There was no entry in the 1996 appointment book in relation to this. Monte claimed that he recalled the appointment because it was shortly after his son James came back from the Egyptian assignment with Abu and they needed to give a report to Gianni. A meeting was said to have taken place in a restaurant in Barney's Department Store on Madison Avenue. There was no reference in Monte's recollection of the meeting to any report as to James' activities. Monte however, recalled that a number of serious allegations were supposedly made by Gianni against Santo and Donatella in that conversation. According to Monte, he told Gianni that he could provide him with around the clock protection but Gianni declined this offer. There was no evidence provided to corroborate this meeting. I am satisfied that it did not take place.
66 There were more telephone conversations alleged to have taken place on various dates. In the 1996 appointment book, entries relating to Gianni appeared on the dates of 20, 25 and 26 October 1996. Dr Strach, found that these entries were made out of sequence with entries appearing on the surrounding pages. The corollary of Dr Strach's findings in relation to these particular entries is that it would be unsafe and unreliable to proceed on the basis that these entries were made on the date under which they were written. Thus, they could have been written at any time. On the basis of Dr Strach's evidence, which was not challenged, I conclude that it would be unsafe to treat these as genuine entries and accept them at face value. In relation to a number of other entries in the 1996 appointment book, Dr Strach noted that they were made in different ink from that used for most surrounding entries. These entries appeared beneath the following dates: 3 June, 5 July, 31 July, 29 November, 30 November and 31 December 1996. The entries for 29 and 30 November were also out of sequences with entries on surrounding pages. I do not consider any of these to be genuine entries.
67 Monte claimed that Gianni called him "a few times" on 30 November 1996 about possible meetings. They met at 5 East Sixty-fourth Street and walked to Central Park. Thereafter, they supposedly went to the lower level restaurant at Barney's Department Store where they discussed blood analysis. Monte claimed he was given money for his "past efforts". There was no record in relation to the receipt, payment or deposit of this money, nor any contemporaneous note made of the payment. Nor is the amount specified.
68 These purported entries in the 1996 appointment on 29 and 30 November referred to "Cat", which Monte said is a reference to Gianni. He said that this was the name used by him, in the interest of discretion, so as not to disclose the identity of his client. However, the expression "Cat" was also used in an entry of 26 October 1996, next to which there was an entry in the adjacent column using the name "Versace". There were also numerous other references to "Versace" in the appointment book, in addition to meetings with "Versace" and the like. This is quite inconsistent with the improvised explanation proffered in the witness box by Monte. Monte's claim that "Cat" was used as a code because there was an escalation in the seriousness of Gianni's affairs, is simply not credible given that the word "Versace" was used throughout the appointment books, including the records for 1997.
69 As mentioned earlier, there was a further alleged meeting between Monte and Gianni on 2 January 1997 in Miami. James was allegedly nearby but could not hear any of the conversation, although he stated that he recognised Gianni from shows on television. However, travel documents indicated that Gianni was not in Miami on 2 January 1997. He flew from Miami to New York on 30 December 1996. Again, these records were not challenged in cross-examination. There was also no indication of any evidence to support a possibility that Gianni made a trip back to Miami. Such a conclusion could not be reached on the material. Furthermore, the claim of James being left in waiting across the road while his father spoke with Gianni cannot be substantiated, especially when one considers that James stated that his father said to him after the alleged meeting:
"Well that went well, he wants us to meet again in a few days, so we will go to the Breakers Hotel and wait for his call. He wants us to do some more work."
70 There was no indication of any follow up on the suggestion of a further meeting "in a few days" in the affidavits of either James or Frank Monte. This only serves to reinforce the conclusion that it cannot be said that any meeting took place between Monte and Gianni where James was present.
71 There was an earlier appointment book entry for 6 December 1996 mentioning Gianni and a facsimile. This related to Monte allegedly receiving a facsimile regarding blood samples and then forwarding the original facsimile and documents to a private Milan address of Gianni. There was simply no corroboration of this suggestion. No records have been produced from a doctor regarding the blood samples, or of the charges for the test which Monte alleged he arranged to have carried out at the request of Gianni.
72 In addition to the above anomalies in the evidence relied on by the respondents, further discrepancy is found in the lack of resolution in relation to a number of agreements that arose from alleged conversations between Monte and Gianni. For example, Monte made reference to offering Gianni protection for $US20,000 per week, with Monte's son and a SAS commando to be with Gianni around the clock for six days continually. According to Monte, Gianni stated that he would call Monte the following day. There was no follow up on this conversation. There was also said to have been a discussion concerning Monte carrying out an urgent stocktake of some stores in New York because Gianni had suspected that jewellery was being stolen. The magnitude, nature and extent of such a stocktake make it highly unlikely that such an enormous task would have been given to Monte. In fact Monte agreed that the stocktake did not take place. In addition, there was also reference to a conversation on 30 May 1997, when Gianni allegedly referred to sending a gift to Monte's home. There was no record of any gift ever having been sent or received. There was also a supposed reference in that conversation to Monte and James and some "mercenaries" being available by the end of July and mid-August, but again, there was no indication of any arrangements having been made for the assembly of such persons.
73 Having regard to the evidence referred to above, the inherent likelihood as to what one would expect had Monte's assertions been true, and the absence of any record or corroboration of any kind that could be safely relied on, I have reached the firm conclusion that there was never any relationship, business, confidential or otherwise, between Monte and Gianni. Statements made to the contrary in the book, the article, on the website and on oath by Monte are false. I do not accept that Monte ever spoke or otherwise communicated with Gianni, either in person, or by facsimile or telephone as alleged in the book, the article, the website and in his sworn evidence to this Court.
FACSIMILES RELIED ON BY MONTE
74 In support of his claim of a relationship with Gianni, Monte relied on a series of facsimiles allegedly from Gianni, although purportedly signed in his name by his junior personal assistant, Carlotta Corazza, with her initials "CC". The reliance on these facsimiles was in addition to the reliance on the appointment books for 1996 and 1997 and a number of loose sheets of paper which he claimed to be diary pages.
75 The copy facsimiles referred to in the affidavit evidence, which were produced to the Court, were the subject of a detailed document and handwriting analysis by Dr Strach. I am satisfied that Dr Strach was well qualified to give expert evidence as to the authenticity of the documents and I accept that he offered his evidence with expertise, appropriate diligence and caution. No evidence to the contrary was called for the respondents. In fact, the evidence by Dr Strach relating to the analysis of handwriting in the appointment books and diary pages was accepted on behalf of the respondents. With respect to the material concerning the facsimiles, Monte conceded that after hearing Dr Strach's evidence, together with the evidence of other witnesses, he could not rely on the evidence of those facsimiles to support his claim of having had any relationship or contact with Gianni. A handwriting expert was consulted by the respondents and was present in Court during part of the cross-examination of Dr Strach. However, no evidence was brought by the respondents to challenge the evidence or conclusions of Dr Strach. Monte simply resorted to highlighting the limitations in the evidence given by Dr Strach.
76 In his first report Dr Strach, who holds a Doctor of Philosophy in Chemistry and continues to practise as a forensic handwriting and document examiner, concluded in relation to the facsimiles relied on by Monte as follows:
"A likely scenario for the appearance of the fax cover page details ... is that they originated in a genuine fax transmission from Gianni Versace. Original details have been removed and on copies of the `cleaned' fax transmission new messages have been typed, computer printed or photocopied. Parts of the fax TTI headers have been removed to avoid the presence of obvious duplication. Literal cut and paste or other image manipulation processes along with several reproduction steps would have been used to produce various versions of the documents examined." (Emphasis in original)
77 In carrying out his handwriting analysis, Dr Strach had regard to genuine signatures and documents furnished to him by the applicants. He compared those with the questioned documents produced by Monte.
78 After Dr Strach's first report, further documents produced to him by Monte were considered by him in a second report. In this second report, Dr Strach stated that he had received and examined "originals" (earlier generation copies) of some of the questioned documents referred to in his first report. He then proceeded to analyse these earlier generation copies, carrying out his analysis by reference to the presence of what he described as vertical, linear voids in the documents under examination. He concluded that it was highly probable that the facsimile cover pro forma sheet details reproduced on the documents examined by him originated in the one facsimile transmission. He went on to make further findings to the effect that the logical inference from his examination was that the genuine facsimile transmission used to create the questioned documents contained lines that had been cut off. The subsequent documents furnished to him were to some extent clearer documents than the earlier documents. This group of clearer documents was not tendered on behalf of Monte in evidence. Dr Strach considered that there was "very strong evidence" that all of the message texts on the questioned documents had been added to an existing facsimile transmission and this reinforced his conclusion as to the likely scenario referred to in the first report which he put as being a highly probable explanation for his observations.
79 On all the facsimile cover sheets there was the House of Versace medallion emblem. Above the name "Gianni Versace" at the bottom of each page there appeared the initials "CC" which Monte said were the initials of Carlotta Corazza. Her name was incorrectly spelt in the book and the affidavits sworn by Monte. The evidence indicated that she had been a junior personal assistant to Gianni between March 1996 to July 1997. Her evidence was that the initials on the documents produced by Monte were not in her handwriting and that she had never heard of Monte at the time the reported documents had been dated. She gave evidence that she had never signed or sent any facsimiles to Monte. Her evidence was not shaken in cross-examination and I accept it. At the request of counsel for Monte, she wrote her initials rapidly on a sheet of paper and these were made available to the respondents. No evidence was called by the respondents to the effect that the handwritten initials on that sheet were in any way similar to those on the facsimiles. One such facsimile relied on was dated 8 October 1996. This October facsimile contained a somewhat terse assignment to Monte that he was to meet Abu at the Beverley Hills Hotel, California on 19 October 1996 and that Abu would call him. It further stated there had been a funds transfer to "Amex". Above the italicised words "Gianni Versace" on the facsimile, there appeared the initials "CC".
80 In addition, the facsimiles in question were dated from 31 May 1996 through to 8 October 1996. Ms Corazza's evidence was that by September 1996 she was not working at the Via Gesù office of Gianni Versace SpA in Milan from which the facsimiles appear to have been sent according to the address on the cover page, but that she had moved to the administrative section of another office. This supported her evidence that it was highly unlikely that she did send any facsimiles to Monte. It was also apparent that it was highly unlikely that she would have had the authority to sign facsimiles or confidential material on behalf of Gianni.
81 Carlotta Corazza also denied Monte's assertion that she obtained or agreed to obtain any telephone records at any time from Monte which he wanted so as to verify his relationship with Gianni. She said that she never spoke with him in the period in question and that as at July 1997 she did not even know how to get such records because it was outside her field of responsibility.
82 Doubt is further cast upon the authenticity of the facsimiles when one examines documents claimed to have been attached to two facsimiles in particular. On two occasions, an agreement was said to have been entered into between Monte and Gianni for the provision of investigative services. The two agreements were substantially in the same form. These documented agreements were allegedly sent by way of facsimile, on which there appeared the initials "CC". The agreements themselves were purportedly signed by Carlotta Corazza by way of her initials "CC". One problem lay in the fact that there was an inherent improbability that Gianni or Carlotta Corazza would have signed any of the purported `Agreement for Service And Authority To Perform Assignment' Monte claimed to have sent to Gianni. The handwriting on both, with the exception of the initials "CC", is that of Monte. The agreements were purportedly binding as between Sobranie Pty Limited (the investigator) and Gianni, an individual of Via Gesù, Milan. According to Australian Securities and Investment Commission ("ASIC") records, Monte's two sons, James and Adam, were directors of Sobranie Pty Limited between 1992 and 1998, and 1994 and 2000 respectively, while Monte was a director from 24 September 1992 until 6 April 1994. The consideration for the 31 May 1996 agreement was $5,000 in what appeared to be US dollars. The work specified in the agreement was for the performance of confidential inquiries and the provision of advice. There was a confidentiality clause as to the client's affairs and an hourly rate specified at $US 100 per hour. The "instructions" for information obtained by the investigator were to be treated as confidential and not to be disclosed by the investigator to third parties, other than the client, without express written consent of the client or pursuant to a court order. It is to be noted in passing that Monte did not hesitate, after the death of Gianni, to seek out publicity and disclose his alleged commercial relationship with Gianni. His explanation when questioned about his attitude to the non-disclosure appeared to be that Gianni (like Onassis) had passed away and that therefore the obligation no longer applied.
83 The agreement of 19 July 1996, said to have been enclosed with the facsimile of 22 July, was almost identical to the May agreement, except for the retainer, which was shown to be as $20,000 (in unspecified currency). The assignment also differed in so far as it dictated for the investigator to "meet or locate Akhtar in Egypt or other place", a somewhat open ended and non-conclusive assignment. There was no detail as to what is to or what may happen when Akhtar is met or located, despite the fact that the client was to provide to the investigator all such information, documents and other cooperation as the investigator may require. This whole scenario smacks of unreality. I do not accept it. There was a reference in the facsimile message allegedly signed by Carlotta Corazza on behalf of Gianni to "Money as before" yet there was no evidence of any banking records, note, receipt or other documents as to the payment or expenditure of this money. Monte took the view that because the agreement was a New South Wales document it was not in any way binding upon the parties. He said that Gianni only wanted to have something in writing for his own comfort or satisfaction. It is difficult to see what comfort or satisfaction the agreement could give. Again, this seems highly improbable and undermines any attempt to assert the authenticity of the documents and the facsimiles in general.
84 When confronted with the evidence relating to the facsimiles, Monte's only explanation for the fabrication of the facsimiles relied on by him and in his possession was that somehow he was "duped" or "set up" either by his former companion, Ms Wallace or his agent, Mr Couri Hay. No explanation was given as to how, why, when or where such falsification was perpetrated, nor was any document, note or record furnished in relation to any such alleged consorted attempt to discredit him. Monte insisted that the original documents, which he did not keep, (as one might have expected had his explanation been true), were genuine. I do not accept this explanation. This explanation, in my view, was improvised on the spur of the moment in the witness box by Monte in a vain attempt to explain the anomalies in his facsimile material. Not only do the facsimiles and agreements not support Monte's case but they positively detract from his assertions. I find that the facsimiles were fabricated by Monte or with his knowledge in an attempt to provide some documentary basis to support his fabricated allegations of a relationship with Gianni and knowledge of the affairs of Gianni and the Versace family and companies direct from Gianni himself.
85 I am satisfied that by the time of Gianni's death on 15 July 1997, Monte had obtained an original and genuine facsimile from the House of Versace and either by himself or with his knowledge and on his behalf, the questioned facsimiles had been fabricated. This is consistent with the evidence of Ms Wallace as to the finding of the facsimile in a New York street and with her statement that prior to the death of Gianni, Monte had boasted extensively about having Gianni as a client. It is also consistent with Monte seeing an opportunity and having what she described as a "funny file" for later use. The timing of the murder of Gianni provided the opportunity to take advantage of this material. For reasons given in this judgment, I approach the evidence of Ms Wallace with caution having regard to her obvious animosity to Monte. In relation to the finding, use and approach of Monte in relation to the facsimile material, however, I accept her evidence, including the keeping of a "funny file". However, independently of her evidence I am prepared to also rely on the other evidence in these proceedings to infer that Monte had obtained the original facsimile or facsimiles prior to the death of Gianni and then fabricated the facsimiles or had been privy to their fabrication.
86 Accordingly, for the above reasons, I am satisfied that the facsimile material relied on by Monte provides no basis for inferring a relationship with Gianni. Indeed it strongly supports the contrary view that, if there was a genuine relationship it would not be necessary to fabricate support for the relationship. The perceived need for such fabrication in itself supports the conclusion that there was no relationship.
MONTE DIARIES AND APPOINTMENT BOOKS
87 The evidence of Dr Strach, with which the handwriting expert consulted by Monte was said to be in agreement, was to the effect that neither the appointment books nor the loose sheets of paper referred to as diary entries produced by Monte could be taken on face value. In the short time available for analysis, Dr Strach was able to analyse a number of the entries purportedly relating to Gianni in the material proffered by Monte. He concluded that in a number of instances they had not been entered in sequential order. He was unable to say at what particular time they were entered. In conducting his analysis, he used a sophisticated apparatus, known as an electrostatic detection apparatus ("ESDA") in relation to a number of entries, which led him to the conclusion that they were not made on the date under which they appear. In summary, he concluded that six of the 1996 appointment book entries allegedly relating to Gianni (referred to above in [66]) were made later than the date on which they are recorded in the appointment book. Ink analysis also showed that there were insertions of references to Gianni in earlier entries which were not made at the same time as the entry in which they appear.
88 The ESDA used by Dr Strach, which produces images of writing impressions left after a person had written on a sheet of paper, was sufficient to cast serious doubt on the reliability of the appointment book in relation to claimed Gianni entries. He also identified a number of instances where entries had been made in different ball point pens to those used for surrounding entries on those dates. These entries purportedly related to meetings or telephone conversations with Gianni.
89 The evidence of Dr Strach, which was not contested, although limited because of time constraints in its extent and precision, leads me to the conclusion that, when taken into account with other evidence as to Monte's lack of credibility in relation to the fabrication of the facsimiles, the entries in the appointment books and the loose sheets of paper had been inserted and written by Monte in order to support his contention of a relationship with Gianni. They cannot be relied on in any way in my view to support any of his claims. The only person with any substantial interest in fabricating such documents, including the facsimiles, was Monte. In my view, the so-called "documentary" evidence relied on by Monte to advance his case have the opposite effect and are a factor which tends to reinforce the conclusion I have reached as to his evidence lacking credibility.
CONCLUSIONS ON ALLEGED RELATIONSHIP
90 I am satisfied that the representations alleged in the amended statement of claim in relation to Frank Monte and his contact and communication with Gianni in subpars 14(s)-(u) inclusive have been made. In addition, I am satisfied that Monte has made false representations that he knew the matters complained of in relation to the Versace companies, Donatella and Santo by reason of his claimed close relationship with Gianni, forged through his alleged assignments and dealings. I am satisfied that Monte has falsely represented a personal relationship with Gianni in the nature of a confidante and adviser in the context of an alleged commercial relationship. I am also satisfied that false representations were made by the respondents that the book is a work of fact in so far as it related to Gianni.
91 Apart from the breadth of the reference to "personal relationship", those representations in subpars 14(s)-(u) which I have found to be made, were not substantially disputed as being "representations" by Monte. It is not necessary to discuss in detail the evidence which provided the basis for having found that the said representations were made. There were a number of specific references to parts of the book, the article, the website and other evidence detailed by the applicants in relation to each of these representations which essentially turn on the relationship between Monte and Gianni.
92 For the reasons given above in relation to these representations, I am satisfied that the conduct of Monte was deceptive and misleading within the meaning of the TP Act and the FT Act.
93 My finding of falsity as to the representations concerning the alleged relationship between Monte and Gianni also affects most of the other representations made by Monte in relation to the applicants. I am satisfied that in making the false allegations of a relationship with Gianni, the other representations made by Monte in relation to Santo, Donatella and the Versace company, as outlined in the amended statement of claim, conveyed a false sense of authenticity and "inside" information from a direct source, namely Gianni. Accordingly, in making those other representations, in the context of a claimed but non-existent relationship with Gianni, I am satisfied that the conduct of Monte and Arkitude, can properly be characterised as misleading and deceptive. The remaining allegations were made in light of the false suggestion of direct information arising in the relationship. By way of example, in the book at 35, Monte made it clear that he was purporting to have information which nobody else had, except for Gianni's "inner circle". In this example, he falsely represented himself as being in an inside position to know, over and above everyone else, the "true position" and that is why his statements as to his alleged discussions with Gianni are of central importance. This purported inside knowledge was, in effect, the "edge" that he claimed over others purporting to gossip or speculate about Gianni and his murder because on the basis of his recollection, the information had been obtained from Gianni himself.
WERE THE OTHER REPRESENTATIONS ALLEGED IN SUBPARS 14(a) to (r) MADE
94 For present purposes, the principles to be applied in deciding whether representations have been made on the available evidence are substantially similar to those which apply in deciding whether an imputation has been conveyed by statements. This question was considered by Foster J in FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd (1992) 108 ALR 479 at 495-496. After referring to Farquhar v Bottom [1980] 2 NSWLR 380 at 385-386 and to the decision of Wilcox J in Typing Centre of NSW Pty Ltd v Northern Business College Ltd (1989) ATPR 40-943 at 50, 286, his Honour adopted the approach that the statements of principle in relation to determining whether imputations relied on arise from the material, are applicable in relation to the question as to whether the representations which are the same in substance emerge from the material. I agree with this approach. His Honour's decision was upheld on appeal: see RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164. I will briefly summarise the representations with a short comment in relation to each of the applicants.
95 The applicants have furnished detailed references to those parts of the book, the article and the website, on the basis of which it is said that the alleged representations were made. I have dealt in detail with the making and falsity of these representations when discussing the identical defamatory imputations against the applicants at pars [147] to [166] below. In summary I have found that all representations alleged against the first applicant were made and that the representations alleged in relation to Santo and Donatella were made in the material relied on with the exception of those in subpars 14(k) and (l) in the case of Santo and in subpars 14(q) and (r) in relation to Donatella. I also find that the conduct of the respondents in relation to making such representations is misleading and deceptive for reasons given below.
REPRESENTATIONS CONCERNING THE VERSACE COMPANY
96 Representations concerning the Versace company related to claims of criminal involvement by one or more Versace companies with the Mafia, criminal money laundering, keeping secret ledgers evidencing illegitimate underworld dealing, associations with a mobster, blackmail and infiltration by organised crime. At the outset it should be noted that the respondents did not plead truth to any of the representations. No attempt has been made to substantiate any of them as objective fact, apart from the alleged statements of Gianni, which I have found not to have been made. There is simply, therefore, no evidence before me that there is any truth in any of these representations. They have been denied on oath by witnesses whose testimony was not shaken in cross-examination. In addition there was no documentary or other countervailing evidence.
97 In essence, with no credible evidence having been presented to the Court in respect of the accuracy or the correctness of these representations against the company and in the light of the affirmative evidence to the contrary before me I find that the conduct of Monte and Arkitude relating to the Versace company is misleading and deceptive. It is of course no defence to the claims under the TP Act and FT Act that the representations were believed to be true. In any event, for reasons stated elsewhere in this judgment in relation to the defamation claim, I have reached the conclusion that the respondents do not have any reasonable or honest belief in the truth of these assertions.
SANTO VERSACE
98 The substance of the representations made against Santo was that he was criminally involved with the Italian underworld and laundered money for Calabrian organised crime, that he was reasonably suspected of murdering Gianni and that he was involved in maintaining secret company ledgers that recorded transactions with organised crime. I am satisfied by reference to various parts of the evidence outlined by the applicants in relation to these representations that representations to the above effect were made by the respondents in the book, the article and on the website as alleged. Again, no evidence was furnished by Monte in an attempt to justify the truth of any of these representations. In fact he stated that he had never suggested or believed that any of the representations concerning Santo were true. The applicants' evidence, which was not weakened in any way under cross-examination or by evidence to the contrary, was that there was no substance in any of these allegations. Accordingly, I am satisfied that Monte's conduct in passing on and publishing these representations was false and misleading conduct.
DONATELLA VERSACE
99 I am satisfied that the representations alleged to have been made concerning Donatella were in fact made by the respondents, having regard to the evidence and statements in the book, the article and on the website. These are identical to those made against Santo. Donatella denied the allegations and this was supported by other witnesses called by her counsel. Her evidence was not shaken in cross-examination and I accept it. Monte claimed that the representations relating to Donatella being criminally involved with the Italian underworld and maintaining company ledgers that recorded transactions with organised crime, as well as Donatella being involved in laundering money for Calabrian organised crimes were objectively true. However, the other allegations he said were false. In relation to those representations claimed to be true, he said that he based those on what he was told by Gianni, newspaper clippings, what he was told by journalists and other hearsay information. I have found that he was never told anything by Gianni because he had no relationship with Gianni of any kind. There was no objective evidence that any of the representations were in fact true. Evidence from the witnesses called for by the applicants was to the effect that there is no substance in any of the representations and on the evidence I find that the respondents engaged in misleading and deceptive conduct in relation to these representations.
TRADE OR COMMERCE
100 Having found that Monte engaged in misleading or deceptive conduct the question in the application of ss 52 and 53 of the TP Act and ss 42 and 44 of the FT Act is whether the respondents' conduct was in trade or commerce and what, if so, was the nature of that trade and commerce? The definition of "trade or commerce" in s 4 of the TP Act is that it is "trade or commerce within Australia or between Australia and places outside Australia". In the FT Act, "trade or commerce" is defined in s 4 as including "any business or professional activity".
In the construction of these provisions, one should not adopt preconceptions about what conduct is or is not. This was emphasised by Fox J in Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 348, as follows:
"Section 52(1) is a comprehensive provision of wide impact, which does not adopt the language of any common law cause of action. It does not purport to create liability at all; rather does it establish a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under the general law. The possible width of its operation and the fact that it may overlap other sections ... is recognized by sub-s. (2). In my view effect should be given to the ordinary meaning of the words used. They should not be qualified or (if it be possible) expanded, by reference to established common law principles of liability."
The judgment of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 considered, at 602, that the words "trade" and "commerce", as used in s 52(1) of the TP Act, are "terms of common knowledge of the widest import". Their Honours pointed out, however, that the real difficulty with the construction of s 52(1) does not concern the use of the words "trade or commerce", but rather the requirement that the relevant conduct is "in trade or commerce". Their Honours preferred the narrower of two alternative constructions of this requirement (at 603-604):
"[I]n the context of Pt V of the Act with its heading `Consumer Protection', it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business... What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct `in trade or commerce' may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character." (Emphasis added)
101 Section 52 of the TP Act appears in Part V, which is headed "Consumer Protection"; s 42 of the FT Act appears in Part 5, which is headed "Fair trading". The FT Act also contains a broader definition of "trade or commerce" as compared to the TP Act. Nevertheless, it has been accepted that the principles laid down in Concrete Constructions apply to the equivalent provisions in the FT Act: Tobacco Institute of Australia Ltd v Woodward (1993) 32 NSWLR 559 at 572; Prestia v Aknar (1996) 40 NSWLR 165; Fasold v Roberts (1997) 70 FCR 489 at 528.
102 Applying the principles of Concrete Construction to this case, the question is whether the conduct by Monte in preparing and publishing the book for commercial gain, and disseminating information from the book and otherwise through the article and the website, constituted "conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character".
103 The whole of the conduct must be looked at in the context of the person concerned. In this case, the conduct included the writing and dissemination of the book by Monte. Activity by one person might amount to activity in trade or commerce while that same activity by another person would not: see Lindgren J (with whom Davies and Branson JJ agreed) in Plimer v Roberts (1997) 80 FCR 303 at 327D-F, 328A-D; at first instance (Fasold v Roberts (1997) 70 FCR 489 at 531); Dataflow Computer Services Pty Ltd v Goodman (1999) 46 IPR 393 at [18]. The intention of the person engaging in the activity is of assistance in this regard: Firewatch Australia Pty Ltd v Country Fire Authority (1999) 93 FCR 520.
104 There is no reason in principle that the making of representations by way of a book or even an autobiography cannot be in trade or commerce. In Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25, the Full Court found that s 52 applied to defamatory publication. Their Honours stated, at 29:
"There is no definable boundary between conduct which is misleading or deceptive or likely to mislead or deceive and material which is defamatory. Material which is defamatory does not fall outside the operation of s 52(1) of the Act merely for that reason any more than it is brought within the operation of s 52(1) by reason only that it is defamatory. If the operation of s 52(1) was limited to exclude material because it was defamatory, not only newspaper publishers, but all corporations would be exonerated. Such a proposition would severely restrict the broad generality of s 52(1) which has been emphasized by the High Court on more than one occasion..."
105 In Concrete Constructions, the High Court observed, at 604, that promotional activities in relation to the supply of goods and services constitute conduct that usually bears a trading or commercial character. Monte's conduct in writing and publishing the book was conduct in trade and commerce in the sense that the publishing of a book for sale is an activity of an author of a commercial character. The publication on the website and of the article can also be viewed as promotional activities designed to increase sales of the book. The cover of the book was posted on the website and the book was referred to and quoted in the article.
106 Further, I consider that Monte's activities in the preparation and publication of the book and in disseminating the book through the article and the website, was conduct that was promotional in character in that these activities were undertaken to advance the respondents' business, Monte Investigation Services, and to impress the image of Monte and his investigation services generally on public awareness. Monte referred repeatedly in the book to the importance of publicity to the private investigation business. He also emphasised, at 298, the forms his self-promotion may assume:
"Advertising takes many forms. I'm totally unashamed of the fact that I court the media: I issue press releases, I hire publicists, I cultivate contacts in both tabloid and glossy publications. Publicity is crucial to business. While to the outsider I might be partying and trying to attract the press, in reality I'm securing my next case."
107 In cross-examination, Monte agreed that his investigative work and the selling of his book depended upon publicity and "word of mouth". He agreed that he would "encourage" publicity in order to advance his interests, that he was "mindful" of marketing opportunities, and that he would seize any opportunity should it present itself as being "advantageous" in order to promote his investigatory work and his writing work. In fact, Monte conceded that "publicity is the oxygen" on which he feeds for his work as an author and as a private investigator.
108 I do not accept Monte's assertion that the various material posted on his website until at least the commencement of the hearing was not "promotional" and that the matters complained of served solely or partly an informative purpose. The website was used to facilitate the sale of the book worldwide and to indicate that Monte Investigation Services was carrying on business in the countries or cities advertised on that website and to promote the services offered by the business. As mentioned above, the website's domain name was registered at least until 29 July 2001, to Monte Investigation Group at its New York address. The administrative contact was Monte. On the website's "home page", as at 15 October 2001, there was a large photograph of Monte and a number of different links which led the visitor to the contact details of the four global offices of Monte Investigation Services and to information about the nature and extent of work that had been done by Monte. There were also a number of hyper-links designed to promote confidence in a business represented as endorsed by Monte and promotes itself on the basis of Monte's reputation. The representation is that what appeared on the website was the type and standard of service that could be obtained from the group and this representation turns on the personal services of Monte. The website, which is accessible worldwide, directed visitors to the Yellow Pages advertisement for Monte Investigation Services, which had a photograph of Monte and a telephone number which remains the telephone number of the business now conducted by Arkitude. Monte's image, juxtaposed alongside many celebrities, permeated the site. Monte agreed that one purpose of the website was to procure business for the Monte Investigation Group. The image of the book cover on the website was clearly designed, not only to promote book sales through the site, but also to promote Monte Investigation Services through the book. In my opinion, the material posted on the website can be viewed generally as worldwide promotional material designed to promote the respondents' commercial interests: see Glorie v WA Chip & Pulp Co Pty Ltd (1981) 55 FLR 310.
109 In summary, Monte's conduct in publishing the book and disseminating its contents through the article and the website, was designed to enhance and promote both Monte's commercial interests as an author and as a private investigator and Arkitude's interest in Monte Investigation Services. It was carried out in trade and commerce within the meanings of the TP Act and the FT Act.
DOES MONTE CARRY ON BUSINESS AS A PRIVATE INVESTIGATOR?
110 The respondents submitted that Monte was no longer in business as a private investigator, although he testified that he continued to hold a licence to work as a private inquiry agent in NSW. In cross-examination, Monte said that he had not worked as a private investigator since late 1998 and he described his occupation both in cross-examination and in his affidavits as an author and scriptwriter. The applicants claimed that Monte's evidence in relation to his occupation(s) and, in particular, his denials to being a private investigator after 1998 were false and "made up for the purpose of strapping up a claimed defence under s.65A of the TP Act and s.60 of the FT Act and of a claim that his conduct is not in `trade or commerce'".
111 The evidence indicated that, on or about 30 August 2001, after he was well aware of these proceedings, Monte caused his son, James, to execute and send in the appropriate form to effect his resignation as director of Arkitude (although Monte did not resign as secretary). The ASIC Historical Extract on Arkitude records that the document notifying ASIC of the change of office holders was received on 3 September 2001 but that the form was backdated to be effective as of 9 August 2001. It is noteworthy that the application initiating this matter in the Federal Court was filed on 10 August 2001. The backdating is no mere coincidence. Monte remained the sole shareholder of Arkitude, despite denying that he was aware that he was the beneficial owner of all shares in Arkitude and claiming that he was no longer a shareholder and had recently transferred that interest. There was no documentary evidence of any such transfer. Further, according to his son James, Monte assisted in paying the expenses of Arkitude and was responsible for instructing his solicitors on behalf of Arkitude for the purposes of these proceedings.
112 The applicants also pointed to additional representations made by Monte during 2000 and 2001 in which he held himself out to be a private investigator. These included Monte's participation in an interview with the ABC's World Today on 7 June 2000, and an excerpt from the book (at 300) in which Monte says he was "trying to find thirty or forty quality staff in Sydney to tide me over for the Olympics". Although Monte denied working as a private investigator at the time, and said that he was, rather, assisting James in the running of Monte Investigation Services, he agreed that he was, at the time, performing functions that were "part and parcel" of the conduct of Monte Investigation Services. This was quite inconsistent with his assertion that he retired as a private investigator in 1998. James denied that he assisted his father in trying to locate the "thirty or forty quality staff" referred to above. Both Monte and James said in cross-examination that Arkitude is willing and able to carry on business should a client so require. In October 2001, Monte gave an interview for an article published in Penthouse Magazine about himself and the book in which he held himself out to be practising as a private investigator. Even though Monte said that the interview was given in May 2001, this again was somewhat inconsistent with his supposed retirement or disengagement from the private investigation business in 1998. Further, despite his many denials that he no longer carries on business as a private investigator, as recently as 6 July 2001, the applicants' solicitors received correspondence from Monte written on Monte Investigation Services and Monte Investigation Group letterhead. In addition, the worldwide website, which promotes the services of Monte Investigation Group, also promotes Monte as a private investigator (and not as an author or scriptwriter).
113 In the book itself, Monte suggested his continued participation in the private investigation business, at least up until about 31 December 2000. He stated, at 303:
"And my suitcase is always at the ready. We have dozens of jobs to attend to around the world - there's any number of directions I could take tomorrow if I liked."
114 In cross-examination, Monte described these statements as "poetic licence". I do not accept this explanation.
115 The only document produced by the respondents as evidence of income earned by Monte as an author and scriptwriter was a cheque from Pan Macmillan to the value of $5,000. Although the applicants requested in a notice to produce dated 2 November 2001 that Monte produce evidence of all income derived during the period January 2001 to date, Monte only produced a bundle of Automatic Teller Machine ("ATM") receipts. These showed a number of withdrawals as well as the increases and decreases in funds and various account balances of Monte's bank accounts, but did not explain the source of over $130,000 worth of deposits between 15 March 2001 and November 2001. A possible inference that may be drawn from Monte's failure to produce documents evidencing the source of this income is that the income was derived from his activities in relation to Monte Investigation Services or as a private investigator.
116 Based on the cross-examination of James and Monte, ASIC records, the continued shareholding of Monte, the backdating of his belated "resignation" as a director (which I do not accept as reflecting the true, actual situation), and statements made by Monte in media interviews, I am satisfied that Monte remains in control of Arkitude and has been so for all material times. Arkitude is simply an avenue to give effect to Monte's decisions on matters relating to his work. Monte agreed in cross-examination that his image is a "trade mark". Monte's name, photograph and reputation were clearly used to promote Monte Investigation Services. He would benefit from any business brought to Arkitude because he was (and continued to be at the time of the hearing) the sole shareholder of that company. I am satisfied therefore that Arkitude was privy to, and aided and abetted Monte in relation to his engagement in the false and misleading conduct.
117 Further, taking all of the above material into account, I am satisfied that Monte's claims that he is and was during the relevant period, no longer carrying on business as a private investigator, are false.
INFORMATION PROVIDER
118 Having found that Monte engaged in misleading or deceptive conduct in trade or commerce and made false or misleading representations, the question arises as to the applicability of s 65A of the TP Act and s 60 of the FT Act, both of which give protection to a "prescribed information provider". The question is whether Monte and/or Arkitude could be so described.
119 Relevantly, s 65A provides as follows:
"65A Application of provisions of Division to prescribed information providers
(1) Nothing in section 52, 53 ... applies to a prescribed publication of matter by a prescribed information provider, other than:
(a) a publication of matter in connection with:
(i) the supply or possible supply of goods or services;
(ii) ...
(iii) the promotion by any means of the supply or use of goods or services; or
(iv) ...
where:
(v) the goods or services were relevant goods or services, or the interests in land were relevant interests in land, as the case may be, in relation to the prescribed information provider; or
(vi) ...
(b) a publication of an advertisement.
(2) For the purposes of this section, a publication by a prescribed information provider is a prescribed publication if:
(a) in any case - the publication was made by the prescribed information provider in the course of carrying on a business of providing information; or
(b) ...
(3) In this section:
prescribed information provider means a person who carries on a business of providing information and, without limiting the generality of the foregoing, includes:
(a) the holder of a licence granted under the Broadcasting Services Act 1992; and
(aa) a person who is the provider of a broadcasting service under a class licence under that Act; and
(ab) the holder of a licence continued in force by subsection 5(1) of the Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992; and
(b) the Australian Broadcasting Corporation; and
(c) the Special Broadcasting Service Corporation.
relevant goods or services, in relation to a prescribed information provider, means goods or services of a kind supplied by the prescribed information provider or, where the prescribed information provider is a body corporate, by a body corporate that is related to the prescribed information provider." (Emphasis added)
120 Section 60 of the FT Act is in identical terms, except for the numbers of the sections referred to in subs (1), which are, relevantly, ss 42 and 44 in s 60(1) of the FT Act.
121 Section 65A was introduced by the Federal Parliament (Statute Law (Miscellaneous Provisions) Act (No 2) 1984 (Cth)) following the decision in Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1983) 47 ALR 497 and (1985) 58 ALR 549 to the effect that newspaper reports were capable of breaching s 52 of the TP Act if they were misleading or deceptive: see also Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25. The Second Reading Speech provides some guidance as to the provision's interpretation, although no specific reference is made to authors or publishers of books (either fiction or non-fiction). It indicates that s 65A is intended to operate to exempt the media from actions brought under s 52, "which could inhibit activities relating to the provision of news and other information ...". It reads:
"Recent decisions of the Federal Court have suggested that a newspaper publisher may be taken to have engaged in conduct that is misleading or deceptive for the purposes of section 52 of the Trade Practices Act if the newspaper contains inaccurate information.
The Government recognises the need to maintain a vigorous, free Press, as well as an effective and enforceable Trade Practices Act. ... The Government also recognises that the difficulties in this area are experienced not only by the main newspaper, magazine and television publishers, but also be a wide range of other people who provide information.
New section 65A will operate to exempt the media and other persons who engage in businesses of providing information from the operation of those provisions of Division 1 of Part V of the Trade Practices Act which could inhibit activities relating to the provision of news and other information. The exemption is not available, however, in respect of publication of information relating to goods, services or land of a kind supplied by the information relating to goods, services or land where the publication is made pursuant to a contract, arrangement or understanding with a person who supplies goods, services or land of that kind or with a body corporate related to a body corporate that supplies such goods, services or land. These provisions ensure that information providers are not exempt from the consumer protection provisions of the Trade Practices Act in respect of the provision of information where they have what might be regarded as a commercial interest in the content of the information. In such cases, information providers must take the same responsibility for the accuracy of information as any other person who publishes information in trade or commerce. This can occur, for example, where a newspaper has agreed to publish a `news' item about a product in exchange for the product supplier taking out paid advertising in that publication." (Emphasis added)
122 Wilcox J considered the application of s 65A in Lovatt v Consolidated Magazines Pty Ltd (1988) 12 IPR 261 at 273: His Honour there observed:
"Put shortly, the intention of s 65A was to exclude the application of the specified provisions of the Act to ordinary items of news and comment but to continue to subject the information provider to those provisions in connection wth [sic] any items directly promoting the supply of its own goods or services or the disposal by it of interests in land. It was intended that, to the extent that an information provider uses its own publication to boost its own business, it should remain as amenable to s 52 as anyone else." (Emphasis added)
123 In that case, which concerned the name of a crossword puzzle, under the title of "Super Colossus", his Honour expressed the view that s 65A did not apply, because the use of the misleading title the "Super Colossus" in relation to a magazine crossword puzzle had no purpose other than to promote the present and future sales of the respondents' magazine. Therefore, any protection afforded by s 65A was excluded by the exceptions in s 65A(1)(a). See also Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) ATPR 40-764 at 48, 275 and Advanced Hair Studio Pty Ltd v TVW Enterprises Ltd (1988) 77 ALR 615 at 620-624. In the latter case, French J held that a television station broadcasting a segment during a current affairs program which was to include an interview with a dissatisfied customer of the applicant was protected under s 65A because the broadcasting was not in connection with the supply or possible supply of relevant services in relation to the broadcaster.
ARE MONTE OR ARKITUDE INFORMATION PROVIDERS?
124 The respondents submitted that for the purposes of s 65A, a private inquiry agent is an information provider within the meaning of the Act and relied on the following statement which appeared at page 10 of the book:
"Corporate intelligence gathering best describes most of the work my company does - uncovering all types of information that people can't find out for themselves."
125 It is arguable that a private investigator may, in some circumstances, be an information provider in that he or she will sometimes be employed by clients in order to obtain and provide certain information, which often is otherwise difficult to come by. In Sykes v Reserve Bank of Australia (1997) 151 ALR 579 at 593, I considered that the Reserve Bank of Australia could "accurately be described, in some respects, as a person carrying on a business of providing information". In that case I held that, in giving details of the introduction of a new series of polymer bank notes, the bank was providing information in the course of complying with its statutory obligation. However, as was noted in that case, many of the Reserve Bank's other activities, of course, did not involve the "provision of information". Accordingly, the provision of information in relation to one sector of a business does not mean that that the person or body corporate is an "information provider" for all purposes.
126 The fact, for instance, that a private investigator in the case of some publications, such as a report to a client, could literally be said to provide information to his or her client, does not mean that the activities and publications of that person or body are all "prescribed" publications within s 65A. Section 65A(2) states that a "prescribed publication" is a publication "made by the prescribed information provider in the course of carrying on a business of providing information". Primarily, the concept is directed to media outlets but the description is not limited to the media. Clearly, the publications complained of in this matter do not fall within this definition as they were not made in the course of any work by Monte in "providing information". Even if the book was considered to contain "information", which in itself is doubtful, at least in the case of Gianni, where it was pure fabrication, the material can hardly be considered to have been given in the course of Monte's business as a private investigator.
127 The respondents alternatively submitted that Monte is a prescribed information provider and the publications are prescribed publications on the basis that Monte is an author and scriptwriter and therefore in the business of providing information. It was argued that, by writing and publishing the book, which was said to be autobiographical, Monte was providing information in the course of his business as an author.
128 In support of this submission, the respondents emphasised Monte's contract with Pan Macmillan to write the book pursuant to which he was to receive advances and ten per cent of all sale proceeds, in addition to retaining the copyright. There was also evidence that Monte was in the process of writing two further books referred to earlier. In addition, Monte claimed that he had written "two major film scripts entitled, `The Skull of Rockefeller' and `The Private Eye' ... [which] have been offered to Hollywood producers for substantial fees".
129 The respondents relied on the remarks of Rogers CJ in Comm D. in Krahe v Freeman (1988) ATPR 40-871. In that case, his Honour noted that the fact that the publication in question was the defendant's first book did not in itself prevent him from being an information provider under the TPA. Krahe was concerned with an autobiography by a racing identity, Mr George Freeman, which was said to have made untrue, disparaging remarks about the plaintiff's father, a police sergeant. In dismissing the application for an interlocutory injunction, his Honour concluded that the evidence relating to misleading conduct was "somewhat slender" prima facie evidence. This is not the case here. Importantly, his Honour also found that the damage complained of in that case had already been done. Rogers CJ in Comm D. made no finding on the question as to whether the defence of "information provider" could be made out. The circumstances in that case were quite different to the circumstances before me.
130 "Information", of course, is a term of broad meaning: see Sykes at 592-594. It can embrace material which is essentially false and it may be that by one isolated act of publishing a person engages in carrying on a business of providing information. That will depend on the circumstances of the particular case. At one end of the spectrum, for example, is perhaps a journalist who is or has been a foreign correspondent and who writes a book recounting factual experiences over a long career. In publishing such a book the author may be an "information provider". On the other hand, an author of work entirely of fiction or fantasy might generally not be considered as providing "information". Monte's book, in relation to Gianni, is closer to the second classification than the first.
131 I do not consider that the representations complained of in this case can properly be characterised as "information". Neither Monte or Arkitude can be considered as providing information. Not all writers or publishers are in the business of providing "information", and Monte himself acknowledged that his book uses "poetic licence". Moreover, his reported description of the book as "a fast moving, fictionalised-type film" undermines any submission that the intent was for the provision of information, although he was reported as indicating that this description did not mean that the contents of the book were not true.
132 Mr Evatt, for the respondents, submitted that "[m]ost, if not all biographies, blow the author's trumpet". That much may be true, but taken as a whole, the book is, in this instance, at least as regards to Gianni, a fanciful, fictitious account of Monte's alleged encounters and activities as a private investigator with Gianni. In my opinion, "information provider" is not an accurate categorisation of the nature of the publication which, in relation to its account of the supposed relationship between Monte and Gianni and the Versace allegations, is to be properly characterised as fictional and an exercise in self-promotion. In the ordinary and natural understanding of the expression "providing information", the representations in this case which were complained of do not involve the provision of information.
PROVISO TO s 65A
133 Even were it accepted, which it is not, that Monte is a prescribed information provider, it is clear that the provisos to s 65A(1)(a) of the TP Act and s 60(1)(a) of the FT Act apply to the publications in question. Monte's publication of the book and the website, and his representations to The Weekend Australian, were in connection with the supply, or promotion of the supply, of private investigation services and, or, the services of Monte himself. As canvassed in the discussion above relating to s 52, the book, the article and the website were all publications in connection with the supply of services or the promotion of the supply of services by Monte Investigation Services and Monte personally. The publications were not advertisements as such; they incorporated more "subtle" methods to promote the services of the respondents. They were designed to depict Monte in the readers' eyes as a reputable and famous private investigator, known throughout the world. The book presented Monte as a private investigator to the stars, who undertakes extraordinary work for extraordinary clients. His claimed relationship with Gianni plays a central part in this self-promotion and was threaded prominently throughout the book. It is calculated to attract cachet to the image of Monte as a consequence of his claimed association with a celebrity. The fact that much of this material was presented under the guise of a book, which in turn was portrayed as an autobiography, did not change the essence of its inherent promotional nature or the fact that it was published in connection with the supply or possible supply of the services of Monte.
134 The respondents made the following written submission in support of their contention that the publication of the book was not connected to the supply of services by Monte and Arkitude:
"If the book was concerned with the supply of services or an advertisement (which it was not) it would be ineffectual to say the least. The book was to be published by Pan McMillan Australia Pty Limited in Australia and new [sic] Zealand. The only two references to Mr Monte's Australasian offices are on pages 160 and 163. Although Mr Monte mixes his tenses the reference on page 160 appears to say that he had an office. On 163 he refers to his Australia Square office as being `in these years'. In any event the address, floor level, phone number, fax number, e-mail address, rates and hours of business are not stated as would be expected for an advertisement for a business. There are some references to Mr Monte's office in the Rockefeller Centre. This would not be of interest to would be clients among Australasian readers. Again exact address, building number, floor level, phone number, fax number, e-mail number [sic], rates and hours of business are not stated."
135 These remarks do not persuade me that the appropriate characterisation of the book is other than a self-promotional exercise. In fact, Monte himself referred to the ways in which he promoted himself by subtle means, such as the sponsorship of a children's writing competition. In the book, Monte explained that television appearances, newspaper interviews and even attendances at social functions are important ways in which he attracted clients. I am satisfied that the publication complained of was in connection with the supply or possible supply and promotion of services of a kind supplied by Monte, to use the language under s 65A(1)(a) of the TP Act and s 60(1)(a) of the FT Act.
136 I am therefore satisfied that Monte or Arkitude are not within the protection afforded to an "information provider" under either of the Acts.
SUMMARY
137 On the evidence I am satisfied that except for those representations alleged in subpars 14 (k), (l), (q) and (r), in relation to each of the applicants, the representations alleged against them were made and conveyed. I am also satisfied that there was no basis in the evidence on which I can accept or believe any of the representations which I have found to be made. I am also satisfied that they were made and passed on by Monte and Arkitude in breach of the TP Act and the FT Act. They amounted to misleading and deceptive conduct and contravened the provisions of those Acts as referred to in the amended statement of claim.
INJUNCTIVE AND DECLARATORY RELIEF
138 The evidence before the Court was that Monte intends to publish the representations and imputations complained of in the event that he is not restrained by the Court from so doing. On a number of occasions outside the Court he indicated that he will repeat the allegations. This intention was also made clear in an article in the New York Post, during an interview on radio station 2GB, in an interview with a reporter from The Weekend Australian and in a report of an interview with the Independent News outlet on 7 August 2001.
139 In these circumstances I am satisfied that there is a real prospect that the allegations will be repeated by Monte and this is a case in which having regard to the damage suffered, injunctive relief ought be granted both against Monte and Arkitude. The precise terms in which the relief is to be framed is to be settled after hearing submissions from the parties as to the precise wording. I am also satisfied that the applicants are entitled to appropriate declaratory relief in respect of the false allegations made by Monte as outlined below. Again, the precise terms of such declarations should be the subject of Short Minutes and if necessary submissions by the parties.
DEFAMATION CLAIMS
140 I am satisfied that in approximately June 2001, Monte gave his permission for the book to be made available to a journalist with The Australian newspaper knowing that the newspaper would publish an article containing excerpts from the book in advance of its public release in New South Wales and other states and territories in Australia. The applicants' solicitors have confirmed that in so far as the defamation counts are concerned, the applicants will only rely on states and territories of the Commonwealth in relation to the issue of damages.
141 I am satisfied that Monte caused the book to be published. I am also satisfied that Monte procured and authorised the publication of the article in The Weekend Australian newspaper in New South Wales and other states and territories of Australia. I am also satisfied that the publication of the material in The Weekend Australian was the natural and ordinary consequence of Monte's conduct in making the book available to the newspaper.
142 Section 9 of the Defamation Act 1974 (NSW) provides:
"9 Causes of action
(1) Where a person publishes any report, article, letter, note, picture, ... or other thing, by means of which ... and its publication, the publisher makes an imputation defamatory of another person, whether by innuendo or otherwise, then for the purposes of this section:
(a) that report, article, letter, note, picture, oral utterance or thing is a matter, and
(b) the imputation is made by means of the publication of that matter.
(2) Where a person publishes any matter to any recipient and by means of that publication makes an imputation defamatory of another person, the person defamed has, in respect of that imputation, a cause of action against the publisher for the publication of that matter to that recipient:
(a) in addition to any cause of action which the person defamed may have against the publisher for the publication of that matter to that recipient in respect of any other defamatory imputation made by means of that publication, and
(b) in addition to any cause of action which the person defamed may have against that publisher for any publication of that matter to any other recipient.
..." (Emphasis in original)
IMPUTATIONS
143 The cause of action under s 9(2) is the imputation conveyed by the material complained of and not the material complained of itself. A person will establish a cause of action in defamation if the meaning of the words carry a defamatory imputation or meaning and the matter is capable of identifying the person in circumstances where the matter has been communicated to at least one other person.
144 For present purposes the principles which apply in relation to the question as to whether the matter complained of is capable of conveying the pleaded imputation and whether it carried that imputation were summarised recently in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 by Hunt CJ at CL (with whom Mason P and Handley JA agreed) at 165-167, where his Honour said:
"The ordinary reasonable meaning of the matter complained of may be either the literal meaning of the published matter, or what is implied by that matter, or what is inferred from it: ... In deciding whether any particular imputation is capable of being conveyed, the question is whether it is reasonably so capable (Defamation Act, s 7A, reflecting the common law: ...), and any strained or forced or utterly unreasonable interpretation must be rejected: ... The ordinary reasonable reader (or listener or viewer) is a person of fair average intelligence ..., who is neither perverse ..., nor morbid or suspicious of mind ..., nor avid for scandal: .... That person does not live in an ivory tower but can and does read between the lines in the light of that person's general knowledge and experience of worldly affairs: ...
The mode or manner of publication is a material matter in determining what imputation is capable of being conveyed: ... The reader of a book, for example, is assumed to read it with more care than he or she would read a newspaper. The more sensational the article in a newspaper, the less likely is it that the ordinary reasonable reader will have read it with the degree of analytical care which may otherwise have been given to a book ..., and the less the degree of accuracy which would be expected by the reader: ... The ordinary reasonable reader of such an article is understandably prone to engage in a certain amount of loose thinking:... There is a wide degree of latitude given to the capacity of the matter complained of to convey particular imputations where the words published are imprecise, ambiguous, loose, fanciful or unusual: ...
What must be emphasised is that it is the test of reasonableness which guides any court in its function of determining whether the matter complained of is capable of conveying any of the imputations pleaded by the plaintiff. In determining what is reasonable in any case, a distinction must be drawn between what the ordinary reasonable reader, listener or viewer (drawing on his or her own knowledge and experience of human affairs) could understand from what the defendant has said in the matter complained of and the conclusion which the reader, listener or viewer could reach by taking into account his or her own belief which has been excited by what was said. It is the former approach, not the latter, which must be taken: .... The publisher is not held responsible, for example, for an inference which the ordinary reasonable reader, listener or viewer draws from an inference already drawn from the matter complained of, because it is unreasonable for the publisher to be held so responsible:... That is an issue which has assumed some importance in this case.
It is necessary to emphasise the important distinction between an implication and an inference. An implication is included in and is part of that which is expressed by the publisher. It is something which the reader (or listener or viewer) understands the publisher as having intended to say. An inference is something which the reader (or listener or viewer) adds to what is stated by the publisher; it may reasonably or even irresistibly follow from what has been expressly or impliedly said, but it is nevertheless a conclusion drawn by the reader (or listener or viewer) from what has been expressly or impliedly said by the publisher: ... It is the reader's (or listener's or viewer's) own conclusion. ...
An inference is drawn from an inference when the reader, listener or viewer draws an inference which is available in the matter complained of and then uses that inference as a basis (at least in part) from which a further inference is drawn. The publisher is held responsible for the first of those inferences but not for the second because - as I have already said - it is unreasonable for the publisher to be held so responsible. In Mirror Newspapers Ltd v Harrison (at 300), the High Court illustrated the process which leads to an inference upon an inference in the case where the matter complained of states that the plaintiff had been charged with an offence. The first inference available from that statement (for which the publisher is held responsible) is that the police believed the plaintiff to be guilty or had a ground for charging him. ... The second inference, which is based at least in part upon that first inference (and thus is not one for which the publisher is held responsible because it is unreasonable to do so), is that the plaintiff is in fact guilty of the offence charged. ... That requirement of reasonableness must apply in every case. There can, however, be no unreasonableness involved in making the publisher responsible for an inference drawn by the reader (or listener or viewer) from a statement which the publisher is reasonably understood to have intended to imply in the matter complained of." (Emphasis in original)
145 In determining what will be conveyed to an ordinary reasonable reader, listener or viewer of fair average intelligence, one must not look at the statement or matters complained of in isolation. Rather, they must be considered in the whole context of the material in which they are published: John Fairfax & Sons Ltd v Hook (1983) 72 FLR 190 at 195. The reference to the "context" of the publication is a broad reference which embraces all the attendant circumstances, including both the surrounding matter and the mode of publication. In the context of the book in the present matter, the assertions in question are advanced as statements of reported fact and not as expressions of opinion or comment. When considering whether an imputation is raised in the present case it is necessary to consider the cumulative effect of the references in the evidence as opposed to relying on selected passages in isolation. The context in the present case in which it is alleged the imputations arise is in relation to specific pages and paragraphs of the book and the article.
146 Having regard to these principles I now turn to the question as to whether each of the allegations raised against the respondents was made.
IMPUTATIONS AGAINST VERSACE SpA
147 It is not necessary to canvass in detail each specific reference in the book or the article. However, in the case of the contested imputations, I will briefly set out the approach I have taken in considering whether they could be and are conveyed.
148 Counsel for the respondents did not dispute that the imputations alleged in subpar 27(a) of the amended statement of claim was capable of being conveyed and is conveyed by the book. The imputation conveyed is that the first applicant was criminally involved with the Mafia.
149 In subpar 27(b) the imputation pleaded is that the company "for years had been laundering millions of `dirty' dollars for Calabrian organised crime". The book referred to a statement, allegedly by Gianni, "that what the ledgers reveal is that over the course of several years he [Gianni] has been laundering millions of `dirty' dollars for Calabrian organised crime", (at 73). Later in the book, the author stated that, if what Gianni told him is true, "the missing ledgers, which show the real financial position and bribes of Gianni Versace, are a time bomb which can blow Versace's business and all its occupants sky high". This was also referred to in the article. The expression "Versace's business" in this context conveys the meaning that the fashion business of the parent company is likely to be destroyed or severely damaged as a result of the ledgers showing its dealings with Calabrian organised crime. There were a number of other pieces to the mosaic which together with these references satisfy me that this imputation is made out and is conveyed.
150 Subparagraph 27(c) referred to an imputation that the company "maintained secret ledgers that recorded it had been dealing with the Italian underworld". The reference to "Versace's business" above is a reference to the business of the first applicant. The ledgers also referred to above, are those that are said to record the true financial position of the business, which obviously points to the fashion business carried on by the company. Assertions in the book stated that these ledgers were "highly sensitive" (at 13), "top-secret" (at 72) and, with the exception of the first respondent, known to only Gianni's "inner circle" (at 35). There was also reference in the book to "[t]he Mob" pumping "cash into Gianni's accounts disguised as sales revenue" in order to "launder their black money through some legitimate vehicle" (at 98). The only vehicle that this could refer to is the company which is carrying on the fashion business. The article in The Weekend Australian also referred to the company and the secret ledgers in stating that "`Johnny the Cat' from Milan had stolen five secret ledgers from the company and was asking $US 5 million to return them". Clearly this imputation is made out as the statements convey that the first applicant had maintained secret ledgers that recorded its dealings with "the Mob", or Italian underworld.
151 In subpar 27(d) the imputation claimed by the applicants is that the company "was associated with a mobster from Milan called `Johnny the Cat'". The book alleged that "Johnny the Cat", whose real name is Guglliermo Gattorini, was a former Versace employee who "had stolen some highly sensitive ledgers from the business" and had been trying to extort $US one million per ledger from Gianni for their return (at 13 and 72). It is said that "Johnny the Cat" was "offered a huge sum for their [the ledgers'] return" (at 14). The suggestion is that the Versace business offered the money. These statements convey an alleged dealing or association between the company, whose ledgers they are, and "Johnny the Cat". The book referred to "Johnny the Cat" as an extortionist (at 13). Elsewhere in the book, Monte opines and thereby plants the suggestion that "Johnny the Cat" could be "a frontman for some organised crime rivals of Gianni's associates" (at 73). In my view, the imputation alleged in subpar 27(d) is made out and conveyed by the statements relied on.
152 The imputation alleged in subpar 27(e) is that the company "was being blackmailed because of its criminal involvement with the Italian underworld". As outlined above, the book referred to the ledgers being "highly sensitive" (at 13) and having been taken "from the business"(at 13). It stated that "Johnny the Cat" was attempting to extort $US five million for their return, "[a] million for each ledger" (at 72) and that he had been "offered a huge sum for their return" (at 14). The imputation is clearly made out and conveyed by the above references and also by references throughout the book to "the Mob" having a motive to murder Gianni due to the existence of the ledgers and their laundering of `dirty' money through Gianni's business. Similarly, as alluded to above, the article stated that "`Johnny the Cat' had stolen five secret ledgers from the company and was asking $US 5 million to return them. [Gianni] could not go to the police because it would reveal that for years, he had been dealing with the Italian underworld".
153 The imputation claimed in subpar 27(f) is that the `company' "had been infiltrated by organised crime". The reference to the first applicant, which is a corporation, is effectively a reference to the "company" or "business" of Gianni. In my view, reference to the word "company" in the materials complained of, including both the book and the article, is synonymous with reference to "the business" of Gianni, namely the company fashion business. The book made reference to "Mafia-style involvement in Gianni's affairs" (at 168), "a money-laundering operation inside his [Gianni's] business affairs" (at 157), and "over the course of several years [Gianni] ... laundering millions of `dirty' dollars for Calabrian organised crime" (at 73). These references convey an "infiltration" or close involvement by the Mafia in the affairs of Gianni's business, which was being used to serve the Mafia's own purposes. As Gianni was the symbol or figurehead of the Versace company or fashion house, references to Mafia involvement in "Gianni's affairs" and Gianni's "business affairs" clearly convey the imputation that the "company" has been infiltrated by organised crime. That much is exemplified by the book's reference to "black money" being laundered "through some legitimate vehicle" (at 98). Again, the reference to "vehicle" is to a business entity rather than to an individual.
154 Furthermore, the imputation is conveyed in the article which referred to "secret ledgers" being stolen from the "company" and to the ledgers revealing that, "over the course of several years", Gianni had "been laundering millions of `dirty' dollars for Calabrian organised crime". I am satisfied that the inference to be drawn from these references is that Gianni and the company were beholden to organised crime and were laundering money to serve the purposes of "Calabrian organised crime".
IMPUTATIONS AGAINST SANTO AND DONATELLA VERSACE -- IDENTIFICATION
155 In relation to Santo it was not contested that the imputation alleged in subpar 28(a) of the amended statement of claim was capable of being conveyed and was conveyed in the book. That was to the effect that Santo was criminally involved with the Mafia. The pleaded imputations relating to Santo and Donatella were in some cases identical to those made against the company. In particular, the same imputations were pleaded with respect to the applicants' alleged involvement with the Italian underworld, the "laundering of millions of `dirty' dollars for Calabrian organised crime", and the maintenance of secret "ledgers that recorded transactions with organised crime": subpars 28(a), (b), and (d) and 29 (a), (b) and (d). In relation to these imputations only, the material contained no direct statements against Santo and Donatella that actually name them. However, in this context, the book did refer to "Versace's business" (at 99), Gianni's "affairs" (at 157, 168 and 183), Gianni's "business affairs" (at 157), "his [Gianni's] business" (at 240), "the House of Versace" (at 157 and 182), and "others he [Gianni] was closely associated with" (at 157). The article did not name the second and third applicants at all, but it referred to "the company", "the House of Versace and all its occupants" and "his [Gianni's] business" in the context of its references to the secret ledgers and the laundering of money for the Italian underworld, and the speculation as to the family being suspected in the murder, a clear reference to Santo and Donatella.
156 In relation to Santo and Donatella, the respondents submitted that because the applicants were not named in the article, it is necessary to satisfy the Court that the imputations would be conveyed to the ordinary reasonable reader who had knowledge that the article referred to the applicants. The respondents referred to the statement by Isaacs J in David Syme & Co v Canavan (1918) 25 CLR 234 at 238, where his Honour formulated the test for identification as follows:
"The test of whether words that do not specifically name the plaintiff refer to him or not is this: Are they such as reasonably in the circumstances would lead persons acquainted with the plaintiff to believe that he was the person referred to? That does not assume that those persons who read the words know all the circumstances or all the relevant facts. But although the plaintiff is not named in words, he may, nevertheless, be described so as to be recognized; and whether that description takes the form of a word picture of an individual or the form of a reference to a class of persons of which he is or is believed to be a member, or any other form, if in the circumstances the description is such that a person hearing or reading the alleged libel would reasonably believe that the plaintiff was referred to, that is a sufficient reference to him."
157 Counsel for the respondents conceded that the references to Gianni's family would relate to his brother and sister. The article referred to the House of Versace but it was said that the class denoted by this description is too wide to sufficiently identify with precision Donatella and Santo as opposed to any other employee in the business. Counsel referred to the decision in Knupffer v London Express Newspaper Ltd [1944] AC 116 at 121, where Viscount Simon LC said that the task of the Court in the identification of persons claiming to be defamed, is as follows:
"There are two questions involved in the attempt to identify the [applicants] as the person[s] defamed. The first question is a question of law - can the article, having regard to its language, be regarded as capable of referring to the [applicants]? The second question is a question of fact - Does the article, in fact, lead reasonable people, who know the [applicants], to the conclusion that it does refer to [them]?"
158 Alternatively it was said that the reference to the "the House of Versace and all its occupants" in the article "would probably refer to all the senior staff and executives including Donatella and Santo" and this class is too large to sustain a defamation action for any individual member of the class. In my view, the decision in Knupffer is distinguishable because it was based on the generalised nature of the words complained of. Their Lordships found that in that case, the words contained nothing that would enable anyone to identify any person as being a member of the body referred to. In the present case, on the basis of ordinary English understanding and usage, the expression "house" particularly in the context of clothing and fashion, would include a fashion house or haute couture business.
159 The expression "fashion house" is a basic English expression: see the New Shorter Oxford Dictionary 1993, where the definition of "house" includes "[a] place of business; a business establishment, a firm; spec. a printing or publishing firm, a couture or fashion establishment" (emphasis added). Under the definition of "fashion", the dictionary refers to the usage of the expression "fashion" in the context of "fashion house", and refers to "a business establishment displaying and selling high-quality clothes". The Macquarie Dictionary, 2nd ed. 1995, defines the expression "fashion house" as an expression in its own right to mean "a firm which designs and manufactures fashionable clothing primarily for the very rich". The expression is frequently used in relation to prestigious enterprises.
160 In my opinion a reference to the House of Versace or to the Versace business and all its occupants is sufficient to impute that Santo and Donatella were involved in the activities alleged, particularly given their high personal profile and active, high level managerial and creative roles in relation to the Versace name and business and the fact that they alone, as distinct from other employees, bear the Versace name, as does the first applicant. In addition, there was evidence from Anne Jamieson, a senior manager of the "Palazzo Versace" on the Gold Coast that references to the House of Versace would be references to Donatella and Santo. In the circumstances I am not persuaded that there is any material distinction between a reference to the "Versace business" and the reference to the "House of Versace" and its occupants. I do not accept the submission that the reference to the House of Versace or to the Versace business is to such a large group of directors, managers, senior staff officers and general employees as to be too wide to support a submission that they have been sufficiently identified and defamed and that the group is too wide.
161 For these reasons I am satisfied that the imputations charged in subpars (a), (b) and (d) of pars 28 and 29 of the amended statement of claim have been made and conveyed in relation to Donatella and Santo.
162 I am also satisfied that the very grave imputations raised against Santo and Donatella in subpars 28(c) and 29(c), namely, that they were said to be reasonably suspected of murdering their brother, are capable of being and are in fact conveyed. At this point it should be borne in mind, that there was no basis in the evidence before me on which to claim the truth or accuracy of this imputation and that Monte has previously stated that he did not suggest that this imputation was true, nor did he express any honest belief in its truth.
163 The contentions of the respondents in relation to the imputations in subpars 28(c) and 29(c) was that they had not been made out on the material complained of because the material only suggested the murder of Gianni by his siblings as a "possibility" and not as something that could be suspected on reasonable grounds. The difficulty with the respondents argument on this aspect is that when speaking of Gianni's murder in the book, Monte stated (at 240):
"In whose interest is it to have Versace dead? The family, who are fighting with him and who, apart from anything else, stand to gain twenty million dollars in keyman insurance? The Italian criminals that have been laundering money through his business? Or Andrew Cunanan?"
164 A question can be capable of conveying an imputation, particularly as in the present case, when coupled with a suggested answer and alleged grounds: see Truth (NZ) Ltd v Bowles [1966] NZLR 303; Lewis v Daily Telegraph Ltd [1964] AC 234. The damage lies in the innuendo and the inference invited. On a fair and reasonable reading of the above quote from the book, there is an assertion that there were reasonable grounds based on motivation to "suspect" Santo and Donatella Versace were involved in the murder of their brother. The imputation is not that they were guilty but that they could be reasonably suspected of being guilty of Gianni's murder. The reference to "family" can only be a reference to them. The suggested motives are spelt out. It is apparent that an objective reasonable reader could fairly understand that the meaning conveyed is that there were reasonable grounds or motives for them to murder their brother and that this is an available conclusion. Accordingly, in my view, this imputation is made and is conveyed against the second and third applicants. There was no evidence before me as to the insurance money or of the laundering of money and the evidence indicated that the family members were not fighting among one another.
165 I do not think the alleged imputations against Santo and Donatella, in subpars 28(e) and (f) and 29(e) and (f) of the amended statement of claim, are made or conveyed by the material complained of. This is because subpars 28(e) and 29(e) alleged the imputation that Santo and Donatella, respectively, were reasonably suspected of murdering Gianni in order to conceal that they were engaged in criminal activity. It is this specific attribution of precise purpose which in my view is not conveyed by the material referred to. In relation to subpars 28(f) and 29(f) I do not consider that the imputation is made on the material, that Santo and/or Donatella were being blackmailed by a mobster. The material referred to by the applicants is not capable of conveying and does not convey those imputations when read fairly and in light of all the references relied on, although the specific imputation was made out as against the company.
166 My conclusions in relation to the imputations are that, with respect to the book, I am satisfied that all the imputations alleged in pars 27, 28 and 29 of the amended statement of claim are made and conveyed in relation to the applicants as alleged, with the exceptions of subpars 28(e) and (f) and 29(e) and (f). In my view, the article conveyed the imputations set out in subpars 27(a), (b) (c), (e), (f) and 28(a), (b) and (d) and 29(a), (b), and (d). In relation to subpars 28(c) and 29(c), although there is reference to the Versace family being among the suspects, the article did not itself refer to the grounds or basis for that charge.
THE IMPUTATIONS ARE DEFAMATORY
167 In considering earlier the representations made I concluded that they were false and misleading. For the same reasons I find that the imputations made out are false and misleading on the evidence before me. Having ascertained what imputations are conveyed by the matter in question, I am satisfied that those imputations found to be conveyed are defamatory.
168 The respondents denied that the imputations pleaded are capable of being defamatory or are defamatory of any of the applicants. An imputation is defamatory if it tends to produce an adverse reaction in a hypothetical audience of ordinary reasonable people. In Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171, Jordan CJ stated, at 172, that:
"In New South Wales as a general rule it is illegal, under the law of defamation, to publish about a person anything which is likely to cause ordinary decent folk in the community, taken in general, to think the less of him."
169 In Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632, Mason and Jacobs JJ noted, at 638, that in defamation proceedings:
"[T]he plaintiff had to prove at common law that the defendant published to a third party a statement about the plaintiff of a kind likely to lead the recipient as an ordinary person to think the less of him."
It can be seen from the above statements that it is not necessary to identify the precise feelings which the matter engenders in order to characterise the material as "defamatory". It is sufficient if the imputation tends to produce an unfavourable reaction in the reasonable reader.
170 It is evident that all the imputations conveyed in this case, including those to the effect that the first, second and third applicants were criminally involved with the Mafia and in the laundering of millions of `dirty' dollars for Calabrian organised crime, that the company was being blackmailed, and that Santo and Donatella were reasonably suspected of murdering Gianni, are highly defamatory in nature to the ordinary reasonable person, based on the test cited above. The imputations are clearly of the gravest and most damaging nature. Each of them is defamatory of the applicants.
DEFENCES
171 The respondents did not rely on the defence of truth available under ss 14-16 of the Defamation Act. In oral submissions, Mr Evatt for the respondents confirmed that his clients did not plead the defence of truth to either the defamatory imputations or the Trade Practices claim. The respondents' case was not that any of the imputations conveyed were true but rather that Monte had an honest and reasonable belief in respect of any imputations and representations found by the Court to have been made and to be defamatory, that they were true.
QUALIFIED PRIVILEGE
172 The respondents relied on a defence of qualified privilege both statutory and at common law.
173 Qualified privilege at common law requires that the communicator have an interest, or a duty, legal social or moral, to make the communication to the person to whom it was made and the person to whom it was made has a corresponding reciprocal interest or duty to receive it. It is ordinarily not a defence available to media defendants: Morosi v Mirror Newspapers Ltd (1977) 2 NSWLR 749 at 772 ff. In the present case Monte did not have any relevant duty or interest of this nature.
174 Statutory qualified privilege is provided for in s 22 of the Defamation Act. This is set out as follows:
"(1) Where, in respect of matter published to any person:
(a) the recipient has an interest or apparent interest in having information on some subject,
(b) the matter is published to the recipient in the course of giving to him information on that subject, and
(c) the conduct of the publisher in publishing that matter is reasonable in the circumstances,
there is a defence of qualified privilege for that publication.
(2) For the purposes of subsection (1), a person has an apparent interest in having information on some subject if, but only if, at the time of the publication in question, the publisher believes on reasonable grounds that that person has that interest.
(3) Where matter is published for reward in circumstances in which there would be a qualified privilege under subsection (1) for the publication if it were not for reward, there is a defence of qualified privilege for that publication notwithstanding that it is for reward."
175 The relevant approach for present purposes for a determination of this question is that prescribed by Hunt A-JA in Morgan v John Fairfax & Sons Ltd (No 2) (1991) 23 NSWLR 374 at 387-388:
"(1) The conduct must have been reasonable in the circumstances to publish each imputation found to have been in fact conveyed by the matter complained of. The more serious the imputation conveyed, the greater the obligation upon the defendant to ensure that his conduct in relation to it was reasonable. Of course, if any other defence (such as truth or comment) has already been established in relation to any particular imputation found to have been so conveyed, it is unnecessary to consider the reasonableness of the defendant's conduct in relation to the publication of that particular imputation.
(2) If the defendant intended to convey any imputation in fact conveyed, he must (subject to the exceptional case discussed in Barbaro's case, and perhaps also that discussed in Collins v Ryan) have believed in the truth of that imputation.
(3) ...
(4) The defendant must also establish:
(a) that, before publishing the matter complained of, he exercised reasonable care to ensure that he got his conclusions right, (where appropriate) by making proper inquiries and checking on the accuracy of his sources;
(b) that his conclusions (whether statements of fact or expressions of opinion) followed logically, fairly and reasonably from the information which he had obtained;
(c) that the manner and extent of the publication did not exceed what was reasonably required in the circumstances; and
(d) that each imputation intended to be conveyed was relevant to the subject about which he is giving information to his readers.
The extent to which the inquiries referred to in par (4)(a) should have been made will depend upon the circumstances of the case, in particular the nature and the source of the information which the defendant has obtained, and whether the position, standing, character and opportunities of knowledge of the informant (as perceived by the defendant himself) are such as to make his belief in the truth of that information a reasonable one:.... It is necessary to keep in mind that each of the matters referred to in par (4) are relevant to the reasonableness of the defendant's conduct; they do not raise questions independently of that issue...
Bearing in mind the precept of the Privy Council in Austin v Mirror Newspapers Ltd (at 360) that it would be impossible to give any comprehensive definition of what conduct will be held to be reasonable in the circumstances, and that it would be most unwise to attempt to do so, the above propositions do not purport to be exhaustive." (Emphasis added)
176 For reasons given earlier I have concluded that the conversations and meetings between Gianni and Monte never took place and that his claims to have any relationship with Gianni are mere fabrications. It was submitted that even on these findings it would be open to the Court to find that it was reasonable for Monte to publish the imputations found to have been conveyed and reliance was placed on the reasons of Lord Diplock in Horrocks v Lowe [1975] AC 135 at 150 as follows:
"... what is required on the part of the defamer to entitle him to the protection of the privilege is positive belief in the truth of what he published or, as it is generally though tautologously termed, `honest belief.' If he publishes untrue defamatory matter recklessly, without considering or caring whether it be true or not, he is in this, as in other branches of the law, treated as if he knew it to be false. But indifference to the truth of what he publishes is not to be equated with carelessness, impulsiveness or irrationality in arriving at a positive belief that it is true. The freedom of speech protected by the law of qualified privilege may be availed of by all sorts and conditions of men. In affording to them immunity from suit if they have acted in good faith in compliance with a legal or moral duty or in protection of a legitimate interest the law must take them as it finds them. In ordinary life it is rare indeed for people to form their beliefs by a process of logical deduction from facts ascertained by a rigorous search for all available evidence and a judicious assessment of its probative value. In greater or in less degree according to their temperaments, their training, their intelligence, they are swayed by prejudice, rely on intuition instead of reasoning, leap to conclusions on inadequate evidence and fail to recognise the cogency of material which might cast doubt on the validity of the conclusions they reach. But despite the imperfection of the mental process by which the belief is arrived at it may still be `honest,' that is, a positive belief that the conclusions they have reached are true. The law demands no more." (Emphasis added)
177 In my view, in the present case the publication by the respondent is properly characterised as untrue defamatory matter published recklessly without considering or caring whether it be true or not, such that the publication is not the truth of what is published.
178 In his affidavit Monte stated that he believed that the representations conveyed by the book and the imputations conveyed by the article were true. He also stated that the representations and imputations conveyed by the book and the article were honest comments which he believed he was entitled to make. Notwithstanding this, in cross-examination, Monte did not assert that any of the imputations allegedly conveyed against the company and Santo were true. His testimony was that, in relation to the imputations alleged in subpars 27(a), (b), (c), (d), (e), (f) and 28(a), (b), (c), (d), (e) and (f), he did not know one way or the other whether they were, as a matter of fact, true or false. He said that he had not investigated them and had not intended to convey them in his book. In respect of the imputations conveyed against Donatella, Monte did not assert the truth of subpars 29(c), (e) and (f). He did, however, submit that he had reasonable grounds to assert the truth of the imputations alleged in subpars 29(a), (b) and (d). In my view, he did not have any such grounds in the light of the rejection by the Court of any association with Gianni.
179 In the present case I do not consider that the action of Monte in publishing the material was reasonable. He made no inquiries as to the objective truth of any of the allegations and made not attempt to furnish any evidence in relation to it, either oral or documentary. The allegations were extremely grave and reasonable conduct would require some investigation before publication. He made some general inquiries with the police in Miami and collected gossip and rumours from a number of media sources which were not substantiated in any objective way and repeated them without verification. He fabricated a non-existent relationship with Gianni. He could not point to any credible documentary evidence to support any allegation and I have found that he fabricated some of the documentary material he relied on. He failed to refer to the reversal of the conviction of Santo Versace on appeal and he made a large number of grave, unsubstantiated, and sensational allegations against each of the applicants without any foundation. In the case of Donatella and Santo this was done with malice in publishing the material. Accordingly, the defence based on qualified privilege has not been made out.
COMMENT
180 Monte relied on the defence of comment under s 32 of the Defamation Act. To make out this defence it is necessary that the comment be based either on proper material for comment or to some extent on such material.
181 Monte submitted that such proper material is found in the alleged conversations which he had with Gianni. Inquiries made to knowledgeable and reputable journalists were also relied on together with various newspaper articles in evidence and some other general inquiries which were referred to in broad terms.
182 Because I have held that the conversations with Gianni did not take place, this basis for comment does not exist. The newspaper articles so far as relevant simply generate and recirculate rumours, speculation and gossip about the applicants, without providing any evidentiary factual basis. Inquiries made of so called reputable and knowledgeable journalists do not elevate the gossip, in the absence of any tangible, factual supporting material, to the level of proper material for comment. This material has not been shown to be a matter of any substantial truth or indeed of any truth.
183 It is also important to take into account, when considering the defence of comment, that most, if not all, of the allegations made by Monte, were provided as statements of fact, what Monte had been told by Gianni, not as matters of comment. There was some speculation as to what may have happened in the light of what Monte was told, but this speculation was itself based on the false premise that there was a relationship, contact or discussion with Gianni.
184 Furthermore, the defence is defeated by s 33(2). In so far as this case is concerned, this section provides that a defence of comment does not apply if it is shown that when the comment was made it did not represent the opinion of Monte. As mentioned above, the evidence in cross-examination was that Monte admitted that he never believed any of the imputations in par 27 against the company were true. When asked about the imputations concerning Santo he said that he did not believe the imputations in par 28 to be true. In relation to Donatella, he said that only subpars 29(a) and (b) and (d) were objectively true and that his belief was held as a result of what he was allegedly told by Gianni and from reading newspaper clippings and information from journalists and inquiries. He did not assert that he believed any other imputations against Donatella were true. In these circumstances the defeasance provision in s 33(2) in relation to comment is applicable to counter Monte's defence.
185 A further ground on which the defence of comment is defeated is that the so called comment was not related to a matter of public interest within s 31 of the Defamation Act.
186 Section 31 of the Defamation Act provides that the defence of comment is not available unless the comment relates to a matter of public interest. The notion of public interest was considered by Simpson J in Green v Schneller [2000] NSWSC 548, where her Honour applied the High Court decision in Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183. At [24] of her reasons, after referring to Bellino, her Honour stated:
"There the majority held that the concept of a subject of public interest entails the notion that the person or institution whose activities are involved has engaged in activities that either inherently, expressly or inferentially invite public criticism or discussion. ... A salacious interest by members of the public in a particular subject matter, of which they had no previous knowledge and which was introduced to them by the very publication in question, does not translate the subject matter of the publication into a matter of public interest ..."
187 Her Honour's remarks are especially apposite in the circumstances of the present case. Scandalous gossip and rumour giving rise to curiosity or interest cannot create a topic of public interest which can then be relied on to justify the repetition of that material, on the ground that it invites public criticism or discussion.
188 In Bellino, Dawson, McHugh and Gummow JJ at 219-221 said:
"... a `subject of public interest' was understood in the law of defamation to refer to the conduct of a person engaged in activities that either inherently, expressly or inferentially invited public criticism or discussion ...
For the purpose of s 377(8), the subject of the public interest need not be concerned with the conduct of the plaintiff." (Emphasis in Original)
189 In one sense the conduct of the applicants or those involved in the Versace business could possibly be a matter of "interest" to the public. This does not mean that groundless allegations of reprehensible conduct attract comment on such non-existent conduct. There must first be some activity or conduct which has occurred or is considered on reasonable grounds to have occurred in respect of which comment can be made. Under the guise of comment, groundless assertions cannot be fabricated and then "commented" upon by way of evaluative appraisal so as to make good a defence of comment. That, in substance, is what Monte's case in relation to comment amounts to once it is accepted (as I have found) that the matters referred to by him, namely the conversations with Gianni, never took place. I do not accept Monte's submission on this aspect.
MALICE
190 Although I have found that the respondents have failed to make good their defence of qualified privilege, the element of malice was alluded to during the hearing before me and in the submissions made by the parties.
191 If proven by the plaintiff or applicant, malice on part of a defendant or respondent serves to defeat a defence of qualified privilege. The law relating to malice seeks to protect the community from action occasioned by improper or malicious motive. The classic enunciation of the law is found in Lord Diplock's reasoning in Horrocks v Lowe [1975] AC 135, where his Lordship stated at 149:
" ...the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff becomes crucial......he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved. `Express malice' is the term of art descriptive of such a motive. Broadly speaking, it means malice in the popular sense of a desire to injure the person who is defamed and this is generally the motive which the plaintiff sets out to prove."
192 Thus, the improper motive that a plaintiff will usually seek to establish is an intention on the part of the defendant to cause injury to the plaintiff through the defamatory material. Normally, a failure on the part of the defendant to inquire into the truth, knowledge of the falsity of the defamatory material or recklessness as to whether the matter complained of was true or otherwise false, will serve to indicate the improper motives underlying a defendant's actions.
193 In the present case, the applicants submitted that Monte's actions were on occasion manifested by inherent malice towards members of the Versace family, and in particular, Santo and Donatella. Although these assertions have no impact on the outcome of these proceedings in so far as I have concluded that the respondents have failed in their defence of qualified privilege, I will nevertheless address the issues raised by the parties in relation to Malice.
194 In essence, I accept the submissions by the applicants. I am satisfied in the present case having regard to the nature and gravity of the allegations made and the absence of any basis presented for publicly making such imputations in relation to all the matters complained of, which I have found to be made, Monte was motivated by malice, particularly in relation to imputations relating to Donatella and Santo. The affidavit of Monte, which failed to mention the reversal on appeal of the conviction of Santo, coupled with the extremely grave allegations against Donatella and Santo in relation to the murder of their brother which were presented on an entirely false basis, are in my view, sufficient to establish malice as an operative factor in the making of the representations and imputations. The affidavit evidence of Monte, which goes to extreme lengths to attack Donatella with baseless assertions founded on non-existent conversations not in the book or the article, clearly emanates from a deep seated and bitter resentment towards her. There was no evidentiary basis in this case for such an attack. I am satisfied that Monte, in relation to the matters complained of, acted with reckless disregard to the accuracy of that material in failing to make any substantial inquiries. It is to be noted that malice was not the sole motivation. I am also satisfied that Monte acted to promote his reputation and his business as a private investigator, as an author, and generally to procure maximum publicity and work for his business and sales for the book.
ABUSE OF PROCESS
195 The respondents argued that there has been an abuse of process in this matter because two sets of proceedings have been instituted arising out of what is said to be the same material. On 26 July 2001, the applicants caused proceedings to be issued in the Supreme Court against Pan Macmillan. In the statement of claim in that proceeding, the applicants complained that Pan Macmillan published the book The Spying Game in about June 2001 and that it made the book available to a journalist for The Australian newspaper. The statement of claim then alleged that the newspaper published the article of 23-24 June 2001. In respect of both publications attributed to Pan Macmillan, that is to say the book and the article, the same defamatory imputations are pleaded in the present proceedings in defamation in the amended statement of claim. The present proceedings were commenced on 10 August 2001. The Supreme Court proceeding was settled on 23 October 2001 when the applicants in this proceeding accepted an Offer of Amends under Division 8 of the Defamation Act. Pan Macmillan agreed with a proposal by the solicitors for the applicants that the applicants would prefer for steps to be taken in the performance of the agreement to the Offer of Amends after the Federal Court proceedings in this matter had been completed.
196 The abuse of process alleged by the respondents was that the request by the solicitors of the present applicants to postpone performance of the agreement in relation to the Offer of Amends was in effect an agreement to delay judgment in the Supreme Court proceedings. It was further submitted that the intention was to avoid the effect of s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("LRMP Act") which provides as follows:
"5(1) Where damage is suffered by any person as a result of a tort ...:
(a) ...
(b) If more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered ... against tort-feasors liable in respect of the damage ... the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action" (Emphasis added)
197 In the present case there has been no judgment delivered in relation to the Supreme Court proceedings so that one cannot speak of "a" judgment first given. Accordingly, the above section does not apply to these proceedings.
198 The proposal in the Offer of Amends made by Pan Macmillan on 3 August 2001 did not provide for the entry of judgment against Pan Macmillan in relation to damages so that there can be no question of abuse of process to avoid or detract from the operation of s 5(1)(b) of the LRMP Act. The Offer of Amends involved the publication of corrections or apologies, letters of advice incorporating an apology, explanations to any person who might have expressed concern to the applicants about matters raised in relation the applicants in the book and an offer to pay all proper and reasonable legal costs. The letter purported to explain why Pan Macmillan claimed that it had innocently published the material, how it had been misled and the steps it had taken to remedy the situation. Pan Macmillan also provided a statutory declaration as to how it came to publish the book and the steps it took to withdraw it from circulation.
199 Reliance was placed by the respondents on the decision in Harris v Perkins [2001] NSWSC 258 where Newman AJ held that in circumstances where there had been a judgment given for $20,000, it was an abuse of process for the successful plaintiff to bring further proceedings in respect of the second and third reprints of the book against different defendants whom he alleged were also publishers and distributors of the book. His Honour considered that s 5(1)(b) would be contravened or circumvented. As I have found above, the circumstances of this case differ. There has not been a judgment entered in relation to the Supreme Court proceedings. The finding by Newman AJ is not in point in this case because judgment had previously been entered in that matter.
200 It was also contended that the commencement and continuance of the federal proceedings was an abuse of process, apparently on the basis that the principle enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, at 598 is applicable. This principle is sometimes referred to Anshun Estoppel. In substance that principle dictates that a court requires the parties to litigation to bring forward their whole case so that the courts will not (in the absence of special circumstances) permit the same parties to re-open the same subject for litigation in respect of a matter which might have been brought forward as part of the issues in contest in the first proceeding, but which has not been brought forward only because the parties have from negligence, inadvertence, or accident omitted part of their case. It was submitted that, based on the principles in Anshun, proceedings will be struck out in relation to an issue which could have and should have been litigated in earlier proceedings.
201 In my opinion, Anshun Estoppel is not relevant in the present case because the parties in the two cases are different. In addition, different causes of action are involved, namely, the action under the TP Act and FT Act, in addition to the action in defamation. Different defences apply and different remedies are sought. In addition to injunctive relief, the applicants in these proceedings seek Orders in the form of declarations. Accordingly, I do not consider that the respondents have made good any defence based on abuse of process, in the form of Anshun Estoppel or any continuation or circumvention of the provisions of the LRMP Act.
BROWNE v DUNN
202 Mr Evatt submitted that the evidence of James and Monte as to the alleged Miami meeting on 2 January 1997 should be accepted because there was no cross-examination directed to either witness to contradict the evidence relating to that meeting. It was said that it would be unfair to allow the applicants to submit to the contrary in the absence of an express challenge.
203 In my view there has not been any breach of procedural fairness or of the more narrowly defined principle in Browne v Dunn (1893) 6 R 67. Essentially, where it is intended to contradict a witness on a particular point, attention must be drawn to that fact or point in cross-examination. In the present case it has been clear at all times that the applicants' case was that there has never been any contact between Gianni and Monte. The evidence of Daniele Ballestrazzi in his affidavit of 26 October 2001 and the attached travel records were specifically directed to that issue. The evidence of Ballestrazzi contradicted evidence in relation to Monte allegedly meeting Gianni on 2 January 1997 in Miami. However, no evidence was adduced in response to it by the respondents. There was no indication, apart from pure speculation, that any significant material could have been put to either James or Monte to contradict Ballestrazzi's evidence other than by way of a bald assertion. The submission of Mr Evatt was simply that if the matter had been specifically raised, James or Monte "may have referred to objective evidence that Gianni attended a New Year's Eve party on 31 December 1996 in Miami". There was no documentary or other material or testimony offered to support such a suggestion. Accordingly, I do not accept this submission.
DAMAGES
204 The present part of the proceedings is concerned only with liability and relief other than damages. The question of the detailed nature and extent of damages occasioned by the breaches which I have found to be made out will be considered at a subsequent stage of these proceedings. It was suggested by the respondents in this case that the applicants have not suffered any damage. This submission is clearly untenable. For present purposes in order to determine what are appropriate Orders at this point of the case, it is only necessary to determine whether there is the probability that some damage has been made out and whether it is likely that the misleading and deceptive conduct and the defamatory imputations will cause future damage if allowed to be further published. In the case of defamation, on the findings I have made, some damage is presumed.
205 There is at this stage no precise evidence as to any specific amount of any damage which has been suffered. The evidence of Mr Beaton, a marketing consultant, as to the reputation of the Versace brand, and as to the susceptibility of the Versace brand names to damage as a consequence of the making of the representations and imputations, strongly support the applicants' case that they have suffered substantial damage to date and that more damage is anticipated. The evidence in relation to damages alluded to the adverse effect on confidence in terms of public perception, particularly among professionals. Mr Beaton considered that there would be substantial impact on morale of the employees in the business. He further considered that the Versace brand was particularly susceptible to damage because of the identification of the Versace brand with the Versace family. He did not consider that a judgment in favour of the applicants would necessarily counter the negative publicity from the publications and representations which have been made to date. He prepared charts which confirmed that the Versace brand continued as a highly valuable business following the death of Gianni, with worldwide revenues currently at around AUD $ one billion per year. In addition to the evidence of Mr Beaton, there was evidence from Giovanni Galbiati, the General Manager, of Gianni Versace SpA. He gave details as to the branding and promotional activities of the business and the extent of the Versace trade mark portfolio. He explained the "incalculable damage" to the Versace brands and to the morale of employees as a consequence of the representations and allegations complained of. In particular, he considered that the representations and imputations have been made at the critical time during the transition of the business, following the death of Gianni, which in turn maximised their adverse impact on the business.
206 The applicants' evidence as to damage was uncontradicted and not shaken in cross-examination. It accords with likely expectations. From the serious criminal nature of the allegations detailed earlier in these reasons, it would follow that the business of the applicant company and the reputations of Santo and Donatella are likely to have been damaged and that they will continue to be damaged if the representations are repeated. Accordingly, I am satisfied that present actual damage and likely future damage in the event of repetition has been established.
CONCLUSION
207 On the issue of liability I am satisfied that the representations and imputations have with minor exceptions, been made and were false and misleading. I am satisfied that the defamation claims have been established. I am also satisfied that damage has been and will continue to be suffered by the applicants as a consequence of the representations and imputations. The applicants are therefore entitled to appropriate injunctive relief and to declarations in respect of these matters. I direct the applicants to file and serve on the respondents a draft of the Orders which they seek in accordance with these reasons. I direct the applicants to file a timetable for the determination of damages in this matter. The matter is to be listed for resolution of these questions with my Associate, to be arranged within fourteen (14) days.
I certify that the preceding two hundred and seven (207) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.
Associate:
Dated: 8 March 2002
