SLEEMAN v. CROWLEY.

Defamation-Privileged occasion-Express malice-Evidence-Instructions from board of directors-Advice from solicitor.

1899.

February 15.

The C.J. Owen J. and

The manager of a company was sued by the plaintiff, who had been recently discharged from the company's service, for a libel charging the plaintiff with embezzlement and published upon the making of a claim by the defendant on behalf of his company for indemnity upon a fidelity guarantee bond, under which G. B. Simpson J. the plaintiff's honesty was insured. The occasion being privileged, the issue for the jury was whether there was express malice, and the plaintiff's case was that the defendant published the defamatory matter knowing it to be false. Held, that the defendant was not entitled to give evidence-(1) Of his report to his board of directors upon the question of the plaintiff's alleged dishonesty; (2) Of the board's instructions to him thereon; or (3) Of the advice received by him from the company's solicitor.

NEW TRIAL MOTION.

The action was for libei and slander. The plaintiff, who had been in the employ of the City Mutual Life Assurance Society for some years, was appointed in 1895 manager of the society's branch office in Brisbane. The defendant was the manager of the head office in Sydney. Before entering on his duties, the plaintiff insured with the Mercantile Mutual Insurance Company under a fidelity guarantee bond. In January, 1898, he was dismissed, and came to Sydney. At a meeting between plaintiff and defendant they quarrelled, and the defendant said: "If you pit yourself against me I will ruin you before I have done with you." Shortly afterwards the plaintiff received a letter from the defendant informing him that there was a shortage of 25l. on his books, and asking for an explanation. Several interviews took place between the plaintiff, defendant, and the society's accountant. The plaintiff's case was that only one item of 12l. was pointed out to him as wrong, and that he explained it satisfactorily in this way :-An application for insurance had been received by him, and a cheque for 127. on account of premium. The cheque he paid into the society's account in Brisbane, and in due course sent the proposal to Sydney with other new business,

1899. and included in his cheque the 121. The proposal was declined SLEEMAN by the head office, and plaintiff was directed to refund the

v.

CROWLEY.

premium. In the meantime the cheque paid to the plaintiff with the proposal had been dishonoured, and he accordingly refunded the premium by returning the dishonoured cheque to the proposer, and in his next return he credited himself with 127. to get the matter right as premium refunded. The defendant insisted that this was an einbezzlement, and that there was a further shortage up to 25l., but could not point out the other items. The defamatory matter complained of was-(1) A statutory declaration sent by defendant to the guarantee company stating that his society had been defrauded of 251. by the plaintiff. (2) Letters to the guarantee company by defendant containing assertions of plaintiff's guilt. (3) Letter to the society's solicitor, saying, "I am prepared to swear to the fact of this man's fraud”; and (4) A slander uttered by the defendant in the office, "If you dare to leave this office without giving the accountant an explanation I will issue a warrant for your arrest."

The defendant's case was that he had pointed out the discrepancy in his accounts to the plaintiff, who had always declined to make any explanation whatever. He said that he still believed in the plaintiff's guilt, but could not point to any item in his accounts which was irregular. Both he and the accountant admitted that plaintiff's explanation of the 121. was correct, and that all the deposits and cheques drawn were correct.

During the defendant's examination he stated that before giving certain instructions to his accountant he had made a report to his board upon the matter, and had received certain instructions from them on the subject. He was then asked what the communication was that he had made to his board. This evidence was objected to and rejected by The Chief Justice. He was then asked what instructions he received from his board. This was also objected to and rejected. He was also asked if he had stated the facts of the case to the society's solicitor, and what advice the solicitor had given him. This was also rejected. plaintiff for 1,000l., finding

The jury found a verdict for the specially that the defendant, when he made the defamatory statements, knew that they were false,

The defendant now moved for a rule nisi for a new trial on the ground that his Honour was in error in rejecting the evidence above-stated.

Pilcher, Q.C., and L. Armstrong, for the defendant. The evidence was admissible to rebut the evidence of express malice. In any case it might have affected the question of damages, and if it was admissible upon any ground the Court cannot speculate to what extent it might have had weight with the jury: Bray v. Ford (1). Suppose the evidence to have been that the defendant reported all the facts in his possession to the board, that they refused to take his advice, and gave him express instructions to consult their solicitor and act on his advice; that the solicitor advised him that the plaintiff was guilty, and that he had a just claim on the guarantee company; or that the defendant, in carrying out his directors' instructions, had very foolishly used language which shewed his personal animosity to the plaintiff. Such evidence must have had some weight with the jury. He referred to Odgers, 3rd Ed. 606; Cockayne v. Hodgkisson (2); Davis v. Goode (3); Walsh v. McDonough (4); Ravenga v. Mackintosh (5).

THE CHIEF JUSTICE. This was an action for libel and slander, in which the jury found that the statements complained of were made, and were known by the defendant to be false. It was admitted all through the case by the counsel for the plaintiff that the statements were made on a privileged occasion, but the plaintiff's case was that the defendant knew absolutely when he made the statements that they were false. The plaintiff said in effect, "You knew there were only two ways in which I could have got money of the society improperly into my hands, one by receiving an insurance premium and not issuing a voucher for it, the other by drawing money out of the bank and applying it to my own use. You knew that every voucher was correct and every payment properly accounted for, and that no defalcation

(1) [1896] A.C. 44. (2) 5 C. & P. 543.

(3) 10 N.S.W. L. R. at 236; 6 W.N. at 48.
(4) 1 Legge 800.

(5) 2 B. & C. 693.

1899.

SLEEMAN

v.

CROWLEY.

1899.

SLEEMAN

v.

CROWLEY.

The C.J.

existed, yet you made these statements." During the course of
the trial the defendant was asked what report he made to his
board upon the subject, and what instructions he received from
them; he was also asked as to what occurred between him and
the society's solicitor. I rejected the evidence.
I rejected the evidence. The issue then
being malice or no malice, the plaintiff sought to establish malice
by shewing that when the defendant made the statements he
knew them to be false, and made them wickedly and for the
purpose of ruining the plaintiff, as it was alleged that the defen-
dant had threatened to do. That was the issue that went to the
jury, and the jury found that the defendant knew the statements
to be false when he made them. That being so, I fail altogether
to see how the report made by the defendant to his directors,
which we may assume contained the same falsehoods as those
contained in the libels, or the instructions given to the defendant
by the directors upon that report, could have any bearing or
throw any light upon the question whether the defendant knew
the statements made by him to be false. I am of opinion that
the evidence was rightly rejected, and that the verdict was a
proper one.

OWEN, J. I am of the same opinion. I fully admit the prin-
ciple contended for by Mr. Pilcher, that if evidence is admissible
the Court cannot consider the precise effect it might have had on
the minds of the jury. We cannot reject evidence because we
are of opinion that it could only have had a very slight effect
with the jury. But in the present case I fail to see how the
evidence rejected bore in any way upon the issue which the jury
had to determine. The libel was undoubtedly published upon a
privileged occasion, but the plaintiff sought to get rid of the
privilege by proving express malice, and the evidence of express
malice was that the statements were false to the knowledge of
the defendant. The issue being, therefore, whether the state-
ments were false to the knowledge of the defendant, what
possible effect, under any circumstances whatsoever, could the
answers to the rejected questions have had upon the minds of the
jury? The questions were:-"What report did you make to
your board?
What instructions did you receive from them?

How could the answers to those questions afford the jury any information as to whether the defendant made the statements with knowledge whether they were true or false? The same reasoning applies to the question as to the advice received from the society's solicitor. The evidence, in my opinion, was therefore inadmissible, on the ground that the jury could not take it into consideration in any shape or form on the issue they had to decide.

G. B. SIMPSON, J. I regret that I am unable to concur with their Honours. I entertain a very strong opinion that the evidence was admissible and ought to have been received. The learned Judge having ruled that the occasion was privileged, it was the exclusive province of the jury to determine whether the privilege was got rid of and no longer available to the defendant, because, as Mr. Justice Innes once put it, he used it as a cloak for maliciousness. It is true that the jury have found that the defendant made charges of a very serious nature against the plaintiff, and that he knew those charges to be false, but we cannot determine the point in question by the light of what the jury found without this evidence before them. It may be that they would have given no effect to it, but, as is laid down in Bray v. Ford, we cannot take upon ourselves to speculate as to what its effect might have been. The question is if the evidence was admissible or inadmissible at the time it was tendered. I think it was, and I cannot take upon myself to say that the jury might not have been assisted by it in some way either for or against the plaintiff.

Attorney for the defendant: Sanders.

Rule refused.

1899.

SLEEMAN

v.

CROWLEY.

Owen J.