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Decisions of the Superior Courts of New South Wales, 1788-1899

Collins v. Elwin (1843) NSW Sel Cas (Dowling) 808; [1843] NSWSupC 4


Supreme Court of New South Wales

Dowling C.J., Burton and Stephen JJ, 1843

Source: Dowling, Select Cases, Vol. 6, S.R.N.S.W. 2/3464, p. 372.

Where a person volunteers information to a friend, from a sense of mere social duty, which injures the credit of another, and though honestly made was untrue; held the communication will not be excused on the score of privilege and an action in slander will lie.*

Dowling C.J. This case was stood over for judgment from last term. It is unnecessary now after the great length of time occupied in the discussion of it, to enter into a minute recapitulation of the facts or of the very able arguments then brought under consideration. For the present purpose it is sufficient to extract the main point for judgment arising out the transaction and upon which the Court took time to deliberate. That point I take to be this, whether in an action for slander affecting a man in the way of his trade, the slanderer is protected from the consequences of uttering it to a stranger, as a privileged communication, he having volunteered it from a sense of mere social duty towards a friend, to whom he has promised to interest himself and give his best advice to the party slandered in the management of affairs in which his friend and that party are jointly interested.

Stripping the case of elaborate details, the material facts on which the question arises are these: The plaintiff living in New South Wales, was jointly concerned in co-partnership with a gentleman named Hart residing in England in a saw mill which required funds to carry it on successfully in this Colony. Both partners had embarked a considerable amount of capital in the undertaking. The partner in England had here an agent, Mr Waugh, acting under a power of attorney. The plaintiff had drawn bills to the amount of £4,000 with the concurrence of the agent of his partner, which were purchased in Sydney by a Mr Irving by whom they were transmitted to England for payment. The concern being in distress for more funds the plaintiff drew other bills on his partner to the amount of £1,000 and entered into a treaty with Mr Irving for the purchase of them, also on certain terms. In the meantime the defendant, an intimate friend of the partner in England, arrived in the Colony and in a letter to the plaintiff his partner wrote as follows: - "I have made Mr Elwin acquainted with the transactions in which you have been engaged on our joint account and he has been so kind as to promise to interest himself in all of them and to give his best advice. I will therefore reckon that after his interference all your difficulties will cease and that your operations in connexion with the mills will hereafter progress in accordance with our last expectation".

In consequence of this letter both the plaintiff and the English partner's agent entered into communication with the defendant on the subject of the concern and solicited advances of money to carry it on. None would be advanced by the defendant. Before the meeting with the defendant on the subject of these advances, the defendant sent for Irving, who had discounted the previous bills for £4,000 and said to him "I have sent for you Mr Irving, understanding that you have discounted the bills drawn by Waugh in February: if it is any consolation to you, I can tell you none of them will be paid". Upon being told by Irving that he had agreed to discount the other bills for £1,000 the defendant replied "More fool you not one of them will be paid". At the time the bills for £4,000 were drawn, Waugh, the attorney of the English partner, wrote to the latter a full statement of the affairs of the joint concern, its prospects and adjoining lamentable account of the machinery being then in complete want of funds to carry it on as a profitable speculation. Those bills were in consequence honored in England at maturity. Mr Irving said he declined discounting the £1,000 bills in consequence of what the defendant said respecting the others and for the injury thus occasioned to the plaintiff in the way of his trade and credit the present action was brought. The learned Judge upon being pressed on the point, ruled as matter of law that the communication made by the defendant unsought for by Irving though on the verge of privilege was not privileged by reason of the defendant's position towards his friend in England, but left the question of damages to the jury under the circumstances in which the defendant was placed as the friend of Hart at the time the slander was uttered. The jury, which was special, found for the plaintiff, damages £1,000. The simple point on this part of the case for consideration is whether the learned Judge should have told the jury that the relation in which the defendant stood to his friend in England prima facie privileged him to make the voluntary (and as it turned out untrue) statement he did to Irving, however injurious it might be to the plaintiff in the way of his trade and that it was for them to determine whether it was made bona fide and without express malice.

It was acknowledged in argument that no case precisely alike was to be found reported, but it was contended on principle that the statement made by the defendant to Irving was fairly warranted by the circumstances in which he was placed as the guardian of his friend's interests and being honestly made, it was protected for the common convenience and welfare of society and that the law did not restrict the right to make such statements within the narrow limits prescribed in ordinary cases of privileged communications. We must now take it as a fact that the only character with which the defendant was clothed (for none other was proved) was that of a warm friend interested in the welfare of Mr Hart, who had made him acquainted with the transactions in which his friend and the plaintiff had been engaged in joint account. And that he (the defendant) had been kind enough to promise to interest himself in all of them and to give his best advice. With the limited authority, which imports only (according to the letter addressed by Hart to Collins) that of an adviser to the plaintiff himself in matters in which Mr Hart was interested, and as a mediator to remove all the plaintiff's difficulties of which he would seem to have complained, in carrying on his operations in connexion with the mills, is there any dictum to be found, or any principle to be extracted from, any of the cases of slander in the way of a man's trade, which could justify the defendant on the ground of privilege, in voluntarily sending for a person willing to help the plaintiff in his difficulties and uninvited giving untrue information, which has the direct effect of destroying the plaintiff's credit by searing the person from taking bills which but for such interposition would have been taken?

In vain I have looked for any authority or any recognized principle which could protect the defendant from the legal consequences of so voluntary an act, an act so out of the scope of his province as defined in the mere relation of a friend, an act so uncalled for by any duty either public or private which the law will recognize. The question is not whether other persons so situated may not have acted in like manner from an abstract notion of moral duty towards a friend getting involved in an unprofitable speculation but whether the defendant is to requite an injury produced to another by the indulgence of a feeling, perhaps honorable to himself, but which he had no right to indulge at the expense of the party injured. Malice or ill will in the popular sense is in this case out of the question. It is not affirmed that he had any personally towards the plaintiff or that he really intended any injury to the plaintiff's credit. The gist of the action is not malice towards the plaintiff's personal character or feelings, but the uttering voluntarily, uninvited and uncalled for, to a stranger, that which has a direct tendency to affect the plaintiff in the way of his trade. It may be that the defendant was on the verge of privilege, but having passed the line of demarcation he cannot be saved from the gulf into which he precipitate himself. The act per se is unlawful, as being uncalled for and unwarranted by any relation in which he stood towards the friend on whose behalf he made the statement and not ever in pursuance of any instructions received from that friend. The statement is not the mere expression of an opinion which might put Irving on inquiry, but the predication of a fact assumed to be true within his own knowledge which has the effect of working the injury complained of. His liability is the same in principle as that of one who of his own volition carelessly or recklessly uses a weapon without looking to the consequences and wounds a person against whom he not only has no ill will nor contemplates any injury. The tongue here is the weapon and is employed without lawful excuse in a way producing an injury for which the law will give reparation.

Here the defendant set himself in motion. He is a volunteer in sending for Irving, reckless of the manner in which Collin's credit may be affected by warning Irving of the peril in which he stood in taking the bills. What was there in the position of the defendant, as the mere friend of Hart, to excuse him of the score of privilege thus to seek out persons willing to trust Collins and take the risk of his bills being paid and blast his credit? Towards Irving it is not pretended that he had any duty to perform in warning him of the consequences of taking Collins' bills. As it respected him, it was an officious, unnecessary, uncalled for and gratuitous piece of information that the previous bills would not be honored. It is the spontaneity of the defendant in doing an act not warranted by his position towards either Hart or Irving which places him out of the protection of the doctrine of privilege. Conceding that from his friendly relation towards Hart he would have been warranted in asserting positively, if asked the question, that the previous bills would not be paid (contrary to the facts as it turned out) still the circumstance of no such question being asked puts him out of the pale of privilege. If indeed Irving had himself gone to the defendant with the knowledge that he was the friend of Hart recently arrived from England and acquainted with the views of Hart towards the partnership concerned, and asked him did he think the former bills would be paid and might safely take other bills for more, it could not perhaps be very effectively contended that bona fide and true information given under such circumstances, however injurious to Collins' credit, would not be privileged. But that aspect of the transaction the circumstances of the case do not present. It stands nakedly as the case of one who without authority steps out of his way to say untruly to a stranger that which works an injury to another in a critical moment of embarrassment, when a supply of money is essential to the success of an undertaking in which he is engaged.

Can it be said that such privilege is justifiable on the principle of any of the cases to which the doctrines of privilege extends? Granting the full strength of the argument that the defendant had a moral and social duty to perform towards his friend, still the question is, had he a right to perform that duty at the expense of his friend's partner, especially in the positive affirmation of a fact which he could not know to be true and could only speculate upon? The position in which he was placed might indeed have warranted him in endeavoring to restrain Collins by personal remonstrance in as strong language as he pleased from drawing more bills on his partner (which would have been within the scope of his province as an adviser in the difficulties in which the partnership concerned was involved) but his interference with the confidence which Irving or others might repose in the goodness of the bills was quite foreign from the scope of the office he had assumed. It may be that Collins treated and dealt with the defendant as the agent of Hart so as to recognize him as a person authorized to intermeddle with the partnership's affairs; but this was only a recognition inter se and could not be regarded as recognizing a right to deviate from the authority contained in the letter of Hart announcing to the plaintiff the province assigned to, or rather assumed by, the defendant.

In the very able and ingenious argument addressed to the Court on the part of the defendant, it was broadly admitted that the facts of this case differed from the numerous cases which had been cited, but it was contended that "the exigencies of society" contemplated a far wider expanse for the operations of privilege than could be determined by looking into the law books. And it was insisted that the fate of this action must depend not upon the concurrence of facts but on the identity of principles with those cases. In the consideration of this case the Court keeps strictly in view the principles of law upon which that duty necessarily, it is to be decided, involves a reference to the facts upon which the law arises. It cannot strain or invent facts to bring them within the operation of the law nor create a precedent which the principles of law will not sanction. It is upon the identity of the principles of law and those only that the case must be decided. If we are not to look into law books to collect those principles for the purpose of guiding our judgment, I know not where we are to look. The first duty is to extract the principle and then see whether the facts of the particular case come within its operation.

It is necessary to the legal determination of this case to bear in mind that this is not an action for personal slander of a man's character either written or verbal, but slander of a man in the way of his trade, which is governed by somewhat different principles. Almost every authority cited in argument from which the dicta of the Judge relied upon as illustrative of the principle on which it was urged that this case was to be decided, were cases of personal defamation and when these authorities talk of the "occasion" of speaking or writing the slanderous matter, they assumed and presuppose the party is prima facie privileged to speak or write at all events, by reason of some recognized position requiring him as a matter of duty to interpose and speak or write freely of another, it being for the jury to determine whether such occasion, on which a person so privileged fairly warranted the writing or speaking of the defamatory matter. All the cases of characters given by a master of a servant are of this class, where the relation of master and servant requires for the exigencies of society that the privilege of speaking freely may be used, but not abused. So in the cases where for the purposes of public justice slanderous words or writings may be excused in a person bona fide seeking to advance public justice where he is aggrieved or supposed to be aggrieved, then it becomes a question whether the occasion has been used bona fide for the purpose contemplated. Again in the cases where a duty is imposed either by the relation of a servant bound to look after his master's property or of societies either of consanguinity or marriages, the occasion of the speaking or writing has reference to the character in which the party wrote or spoke and the bona fides of the writing or speaking in such character are matters for the jury. These are, however, all cases of personal slander and are inapplicable to cases of slander of a man in the way of his trade. Malice is the gist of the cases cited, but not so in slander if a man injurious to him in his trade, for whether malicious or not the injury may be the same and the law implies malice from the unauthorized speaking of injurious matter. Express malice may aggravate the damages, but express malice need not be alleged or proved in order to support the action.

The case of Toogood v. Spyring (1834) [ Toogood v. Spyring (1834) 4 Tyr. 582, 1 Cr. M. & R. 181, 149 E.R. 1044] (so much dwelt upon in argument as favorable to the defendant) was a case of defamation in which two questions arose. First, whether communication made to the plaintiff's employer in the presence of a third person (which as to the employer were privileged) were privileged. And secondly, whether communications made to that third person, not in the presence of the employer, were so. Bosanquet J. at the trial held (although the communication to the employer was privileged) that neither the communication in the presence of a third person nor that in the absence of the employer were privileged. The Court agreed in the opinion of the Judge that the communication to the employee was protected and that the statement made to the third person in the plaintiff's absence was not, but that the statement made to the plaintiff, though in the presence of the third person, fell within the class of communications ordinarily privileged, that is, cases where the occasion of the publication affords a defence in the absence of express malice. [A passage from the judgment of Parke B. was then set out].

The doctrine laid down in this case, being the main spring of the argument for the defendant, it was necessary thus to quote the judgment of the Court, to shew to what circumstances and to what class of cases it applied. That was obviously a case of personal slander of a servant and does not touch the case of slander of a man in the way of his trade. But testing this case by the doctrine there laid down, what exigency of society, what duty public or private, could privilege this defendant in going out of his way from a principle of abstract moral duty towards a friend, to assert that which must injure the plaintiff's credit in the way of his trade? He had no authority from his friend to send for Mr Irving and warn him not to take the plaintiff's bills or to impeach the plaintiff's credit as a partner of Hart. There was no such privity with his friend or duty cast upon him to volunteer information (even if true) which would prejudice the plaintiff's credit in his business. If he could be justified in this instance he might upon the same principle give notice to all the world by printed advertisement (without authority) that Mr Hart would no longer honor any bills drawn by his partner. The main ingredient of privilege is wanting in this case, namely that he had no authority, express or implied, for what he did, he was not clothed with any character which entitled him to have his motives put to the jury to relieve him from the consequences of an act prima facie excusable on the score of privilege. There is in my opinion nothing in this case which can warrant us in carrying out the principle of the cases cited to the extent contended for. There is no principle to be found in any of the books identical with this case and I think the learned Judge correctly ruled in point of law that the occasion of the speaking was not privileged and that he was bound to leave it simply as a question of damages, with those favorable observations for the defendant, with which it is confessed he did leave the case for their consideration.

Having thus disposed of the main point in controversy, it must now be taken that as the words were prima facie inexcusable on the score of privilege they were in a legal sense spoken falsely and maliciously, and the question is whether they were actionable as being spoken of the plaintiff in the way of his trade? Taking the words declared upon and proved in connexion with the circumstances set out with reference to which they were spoken, there can be no doubt that they were calculated to assert the general credit and solvency of the plaintiff in the way of his trade. Could it be denied that to say of a man in business that his bills would be dishonored at maturity was not calculated to injure his credit? This was, however, a question for the jury and after verdict their conclusion cannot be disturbed.

Whether any special damage resulted from the speaking it is not necessary to consider. It is true that the declaration avers special damages but it also contains a general allegation that the plaintiff had been injured and defamed in his name, credit, solvency and reputation as a trader; but assuming that there was no proof of the special damage, still it was competent for the jury to give general damages, such as the law would imply or presume to arise from the speaking of words actionable in themselves and injurious to the plaintiff in his trade. Being of opinion that the words declared upon were actionable in themselves, a damage must be presumed to arise though not perhaps the special averred damage, but the failure in proving the special damages or that they were the legal and natural consequences resulting from the slander, would not preclude the jury from assessing general damages. There is nothing before us to shew that the verdict of the jury necessarily proceeded upon the ground of special unproved damage. The very amount of the verdict would import that they had not gone upon a mere calculation of figures as to the actual amount of injury sustained, inasmuch as there was no certain evidence to warrant such a calculation. As general damages then the question is whether we ought to grant a new trial on the ground of their being excessive.

In the recent case of Bryan v. Polack (1842), so much discussed, the Court had under grave consideration the principle on which an application for a new trial in cases of tort could be sustained on the ground of excessive damages. After full deliberation and a careful examination of the reported decisions in Westminster Hall in like cases, the Court was constrained to hold "that in determining such a question the Judges are not to be governed by what might be their verdict, were they the constitutional tribunal for assessing damages. The rule by which the Court was governed on such a question was not whether the damages were excessive, but whether they were so outrageous and so far beyond all reason as at once to startle the mind with their injustice".

The present case was tried by a special jury, selected by the parties themselves in the usual manner prescribed by law. The case was confessedly left to them with observations on the part of the learned Judge as favorable as possible to the motives and conduct of the defendant in the circumstances in which he was placed as the friend of Mr Hart, anxious only for his protection and to prevent the loss which might arise to him from what he considered a most improvident speculation involving further loss and perhaps ruin. No objection has been made to the manner in which the question of damages was left to the jury, nor has there been any imputation suggested as to the character, respectability and integrity of the jury. We are now called upon to set aside their verdict, to interfere in short with their constitutional province, and to say that they have taken an unrighteous view of a question peculiarly for their consideration.

It is impossible for us to dive into the grounds of their verdict or speculate with any certainty upon the reasons for assessing the damages at so large an amount. They may have had regard to the abuse of the trust committed by Mr Hart to the defendant (who was ostensibly introduced to the plaintiff as one who had kindly promised to interest himself in the transactions in which he had been engaged on joint account with Mr Hart and to give the plaintiff his best advice and to remove his difficulties). By not merely taking a hostile view of the plaintiff's conduct in directly opposing his efforts to obtain pecuniary supplies for bringing to completion a concern in the attainable success of which he was sanguine, but actually sending for a person who was willing to assist him in his difficulties and damning his credit at a critical moment of distress and embarrassment. The tone, the language, the manner, the want of authority and the matter of the assertion to a person expressly sent for to be the recipient of the slander may have entered into their consideration without reference to any special damages. They may have regarded the conduct of the defendant as savoring of a mischievous and spiteful desire to fetter Collins in his operations and not to benefit Irving by giving him piece of information communicated in a manner which they might think to be in some taunting and jeering tone.

The respectable situation in life of both parties and the serious injury which the slander was calculated to produce (emanating from such a quarter) to the plaintiff's general credit, might be topics fairly influencing their judgment. The Court is bound to give the jury credit for an honest and upright view of the conduct and actings of the defendant in the transaction and although the judges, if sitting as persons, might not have disposed to mete out so large a measure of damages, yet they have no grounds for saying that the amount is so flagrantly outrageous as to shock the mind with their injustice.

But then it was argued that as the action was for an injury to a joint trade, the plaintiff could be entitled only to half the damages given. No objection was made either by plea or otherwise as to the capacity of the plaintiff to sue alone for his damages. The gist of the action was for slander of him in the way of his trade; but if these can be regarded as damages divisible between the partner, the plaintiff can be considered as trustee for the partnership, that may be a matter of adjustment between him and his partner in the settlement of partnership accounts. But we are bound to presume that this was taken into consideration by the jury in assessing the plaintiff's damages. In this stage of the proceeding the objection thus taken in argument if intended to have been gravely argued is untenable. As to the motion in arrest of judgment, the Court during the argument intimated an opinion that it was not available. Since then they have seen no reason to change that opinion. The general objection to the declaration that no one count contained a sufficient cause of action is really not sustainable. The words are alleged to have been spoken of the plaintiff in his trade. The issuing or negociation of the bills in respect of which the words are alleged to have been spoken, were clearly connected with the business of the plaintiff's partnership with Hart in their joint mercantile speculation. They were connected with nothing else but the trade in which the plaintiff was concerned. To say that "none of those bills will be paid", was disparaging of the plaintiff's credit and clearly injurious of him in his trade without any averment or proof of special damages. They were actionable per se, as spoken "of and concerning" the plaintiff in the way of his trade. The allegation of special damage was not necessary to render them actionable, being defamatory in themselves.

Those counts therefore which are framed upon the slander concerning the bills are well enough and quite sufficient to support the verdict. As to the fifth count, that would most undoubtedly be open to objection on special demurrer, inasmuch as the office of an innuendo has been abused by putting a forced construction upon the words "he is no partner of Hart's", who will come in as his principal creditor innuendo "that the plaintiff was in insolvent circumstances and would be obliged to make an assignment for the benefit of his creditors". Assuming that the defendant had not justified those words and taken issue upon the question of partnership, which was found against him, and entitled the plaintiff to a verdict thereon, still this is an objection which we think is cured by the salutary operation of the 129th rule of our Court, which provides "that to prevent a failure of justice by reason of mere errors, or defects of pleading, no objection shall in any such action be allowed in respect of any such error or defect after verdict nor at any time, unless expressly assigned by special demurrer". To allow the objection now made would really render this rule nugatory. This is nothing but a defect of pleading in straining the office of an innuendo and after verdict the objection ought not to prevail against the substantial justice of the case.

This case was most ably and powerfully argued. It occupied two days in discussion, although in my mind the true point to be determined lay in a nutshell, namely whether the occasion of the speaking was prima facie privileged, so as to entitle the plaintiff to the opinion of the jury, whether he acted without express malice. For the reasons given I am of opinion first, that there was no misdirection. Second that the verdict was not against evidence. Third, that the amount of damages cannot by this Court be lawfully interfered with. And fourth that there is no ground for arresting the judgment or awarding a venire de novo.

Published by the Division of Law, Macquarie University