RCSA Reference Checking – Part 4 by RCSA

RCSA Reference Checking Manual PART FOUR Miscellaneous Laws - Defamation

Table of Contents Key Points......................................................................................................................................................................................................... 3 1.Introduction to Defamation 1.1 Development and reform.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.2 Some points to keep in mind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.3 Impact of Privacy Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2. What is Defamation? Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.1 Criminal defamation?.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2 “…You know sometimes words have two meanings”.. . . . . . . . . . . . . . . . . 6 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3 “But I was only passing on what the referee told me…”. . . . . . . . . . 6 3. Defences Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Illustration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Illustration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.1 But it was true…or leastwise mostly true….. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.2. Fair comment and honest opinion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.2.1 Fair Comment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Examples.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.2.2 “In my honest opinion…”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.3 Innocent dissemination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.4 Qualified Privilege.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.4.1“I don’t think I have to; but I’d just better tell you any way…”.. 10 3.4.2 Statutory Provisions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.5 Consent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Ponder Point.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4. Remedies

Key Points The terms, “publish” and “publication” in this branch of the law are not limited to publication by way of news or literary media. They extend to any form of dissemination or communication of information to another person – e.g. by phone, social network, direct conversation, e-mail, formal reference etc. The common law of defamation has been supplemented by statute in Australia and in New Zealand. Defamation is an unlawful act that consists of the publication of derogatory and (usually) false information about another person without lawful excuse. Liability for defamation arises wherever the defamatory comment is published.

The defence of qualified privilege often arises in the context of giving an employment reference by a former employer about a former employee to a prospective employer (or recruiter) - even if the information was untrue. At common law if a publication is made in good faith on the invitation or the challenge of the person defamed, the defence of consent may be available. The usual remedy in a defamation action is an award of damages (compensation). In the case of a continuing defamation, injunctions may also be sought. The need to act reasonably and to take care when preparing or passing on a reference remains an important component of the law of defamation.

Defamation cases will often tend to focus upon the availability of one or more of several available common law or statutory defences. The defences set out in the statutory defamation provisions are additional to any defences that may be available at common law. It is generally no defence to a defamation action merely to have passed on what someone else has said to you. In order to raise the defence of truth (justification) you would need to show that the defamatory comment was true in substance as well as in fact.

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

1. Introduction to Defamation In Part 1, we saw that legal liability for adverse comment could arise in a number of ways, including under the law of negligence if the adverse comment was made carelessly or without a reasonable factual basis. This was the basis upon which the UK House of Lords made a finding of liability in the celebrated case of Spring v Guardian Assurance. You will recall that that was the case where the referee (a former employer) said, unflatteringly, that the candidate was “a man of little or no integrity and could not be regarded as honest …” We also saw that Australian and New Zealand courts may be reluctant to impose legal liability under the law of negligence if it is more appropriate to do so under the law of defamation.1 One reason for this is that over many years the law of defamation has developed defences that take account of the variety of circumstances and interests, both public and private, that must be considered when deciding whether a person should be made legally liable for adverse words spoken or written about another. In this section, we will look briefly at the law of defamation as it has developed in Australia and New Zealand and we will see how it applies to recruiters when they are undertaking reference checks. We will spend some time on the defence of “qualified privilege” and see what is necessary in order to raise it as it a defence to which recruiters would usually have some recourse. When we look at this defence, think about whether your current practice is sufficient to ensure that you could raise the defence.

1.1 Development and reform In 2006, Australia moved to adopt a uniform defamation law. This was done legislatively. Each of the States and Territories co-operated in enacting similar defamation laws. It is not quite uniform; but it represents a major step towards streamlining this area of law and the initiative might be regarded by the courts as perhaps yet another reason why the common law duty of care under the law of negligence ought not be expanded much further.

• Example: A court might say, “why should we expand the law of negligence to impose legal liability for adverse comment made (e.g. about a candidate) when the Parliaments of each of the States and Territories have recently enacted uniform laws to cover the very same thing?” In New Zealand the common law of defamation has been supplemented by the Defamation Act.

1.2 Some points to keep in mind One point that should be noted is that liability for defamation arises wherever the defamatory comment is published. It is considered to be published in the place where it is read and comprehended. If a defamatory comment is made by Internet or e-mail this will usually be the place where it is downloaded. Given that an e-mail or Internet publication of defamatory material may be downloaded simultaneously in many different locations defamation over the Internet can expose the defendant to massive awards of damages and can attract the operation of foreign laws. Ponder Point Where are your communications about candidates likely to be downloaded? Do you know the defamation laws that might apply in those places and have you taken steps to ensure that you might be able to raise a relevant defence if, by chance, your communications have defamed a candidate in that jurisdiction? Also, employers can be liable for defamatory comment published about others by their employees. • Example: In 1997, a British medical insurer was ordered to pay €450,000 in damages to a rival firm after one of its employees spread rumours on the Internet in an internal e-mail that a rival was facing financial difficulties.

1. Bell-Booth Group Ltd v A-G [1989] 3 NZLR 148; Sattin v Nationwide News Pty Ltd (1996) 39 NSWLR 32.

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

1.3 Impact of Privacy Rights

2.1 Criminal defamation?

The expansion of privacy rights into the private sector has granted rights of access that, in some cases, allow candidates to discover the existence of defamatory comments made about them by referees or recruiters.2

In all Australian jurisdictions a criminal offence may be committed if the defamatory material is published with knowledge of its falsity (or recklessly as to its truth) and with an intent to serious harm the subject of it. The elements differ slightly in Victoria and the Northern Territory.

This is obviously an area where great care must be exercised. Let us see what is involved.

Consistently with the recognition of freedom of expression as a fundamental human right, criminal defamation has been abolished in New Zealand.

2. What is Defamation? Defamation is an unlawful act that consists of the publication of derogatory and (usually) false information about another person without lawful excuse. The communication can be by express words, innuendo, pictures, actions etc. In the context of reference checking, we are mainly concerned with words and innuendo, although actions may also be important. 3

• Example: In Anzam (Aust) Pty Ltd v. Antouny4, it was alleged that the withdrawal of a reference previously given was an action that amounted to defamation. During the course of a reference checking conversation conducted by telephone, it was alleged that the referee stated: “I have revoked the reference given to [the candidate] and have issued a statement of employment.” When asked to elaborate, it was alleged that the referee stated: “I am not prepared to go into the detail of it.” The court preferred the referee’s account of the conversation, according to which he said that he had withdrawn rather than revoked the reference. Nevertheless, it held that the conversation did give rise to imputations that were defamatory of the candidate; but excused them on the grounds of a defence of “qualified privilege” which will be discussed in more detail below.

2.2 “…You know sometimes words have two meanings” Information that is exchanged in the course of reference checking and reporting may convey a natural and ordinary meaning or a secondary meaning, known as a “true innuendo”, if the person to whom the information is communicated has knowledge of special, or ‘extrinsic’, facts which alter or colour the meaning conveyed. • Example: In Lewis v Daily Telegraph Ltd5, Lord Devlin said: “…to say of a man that he was seen to enter a named house would contain a derogatory implication for anyone who knew that that house was a [house of ill repute] but not for anyone who did not.”

2.3 “But I was only passing on what the referee told me…” It is generally no defence to a defamation action merely to have passed on what someone else has said to you. This is particularly important in a reference checking situation because liability for defamation usually extends to all who are involved in the publication6. Neither does it assist when repeating defamatory comment to attempt to qualify it by stating that it is merely the allegation or assertion or opinion of a third party, such as a referee, and that the consultant does not know or cannot be certain about its truth. We will look at this a little further when we come to consider the defence of innocent dissemination.

2. Granting access does not amount to “publication” for the purposes of the uniform defamation laws and, by itself, does not expose an agency to a claim for defamation. 3. This could include the withdrawal of a reference previously given.

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

4. [2001] Unreported, County Court of Victoria, White J 2nd August 2001. 5. [1964] AC 234. 6. Subject to a defence of “innocent dissemination”. For reasons discussed below this will rarely apply in a reference checking situation.

3. Defences Defamation cases will often tend to focus upon the availability of one or more of several available common law or statutory defences. This is especially so in an adverse reference case because there is usually little doubt about: • whether the statements were defamatory in character – the adverse nature of the comment often tends to disparage the subject in respect of their trade or calling; or may frequently be directed to character or personality in a way that causes a prospective employer to “shun” or avoid” the candidate; • Whether the statements have been communicated – the very act of giving a reference involves communication. • Example: Do you remember the written reference in Spring v. Guardian Assurance where the candidate, who was identified by name, was described as “a man of little or no integrity and could not be regarded as honest …”? There could not be much doubt that the giving of that reference amounted to defamation! And so the question often focuses upon whether the defamation can be justified or excused so as to deprive the subject of the right to sue for damages. This has been an important question because often there is a public interest in adverse comment being circulated – even where it may not be entirely true. • Example: Some adverse comment may stimulate or contribute to important public debate; other adverse comment may serve to caution or to warn against certain risks. Illustration: Communication by a professional registration body along the lines that a particular professional registrant had been found guilty of professional misconduct may serve to warn or protect the public against the risk of similar professional misconduct at the hands of that registrant in future. Likewise, communication by a professional registration body that a particular registrant is only entitled to practise subject to certain restrictions serves to warn or protect the public against the risk posed if those restrictions are not observed. Illustration: Communication by a former employer along the lines that a particular candidate was not able to operate certain plant or equipment safely may serve to warn or protect the public, co-workers and the candidate against the risk or dangers of human error in the operation by the candidate of that plant or equipment in future work settings. RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

It is important therefore for the recruiter to know where and how these defences might apply. This knowledge will allow the consultant: • to handle adverse information confidently; • to make better decisions with regard to the selection of suitable candidates; • to better serve the interests of the client; and • to discharge a duty of professionalism to the public.

3.1 But it was true…or leastwise mostly true… The Common Law has always recognised truth as a defence in a defamation action. That is because, in the eyes of the law, a person’s reputation should be no better than the truth. What is required in order to raise the defence is that the defamatory comment should be true in substance as well as in fact. This means that a failure to disclose material facts capable of altering the “sting” of the defamatory comment can often result in failure of the defence. • Example: To say that a person was convicted but to omit to say that the conviction was quashed on appeal.7 • Example: To say that a candidate had been dismissed from his former employment on suspicion of stealing (which may be true in fact); but to omit to add that the candidate successfully challenged the dismissal on the grounds that there was not a valid reason for the dismissal. At Common Law, the defendant did not have to prove that the publication was for the public benefit or in the public interest. Prior to the passing of the Uniform Defamation Acts, several Australian jurisdictions altered that position by adding a further requirement that the publication of the defamatory comment had to be in the public interest before the defence could be raised8. The other Australian jurisdictions and New Zealand9 followed the Common Law position allowing truth alone as the effective defence.

7. Howden v Truth and Sportsman Ltd (1937) 58 CLR 416. 8. NSW, Qld, TAS and ACT. 9. Defamation Act 1992 (NZ) s.8.

Upon the passing of the Uniform Defamation Acts, the public interest requirement was removed, so the position in all Australian jurisdictions and in New Zealand now is that truth alone will operate as a common law and statutory defence. The defamatory comment does not have to be true in every detail. Where the defamatory imputation is substantially true, the defence, sometimes known as “justification”, will be available. The defence of truth or justification applies to statements of fact and to comments of opinion, though it may be difficult to prove that an opinion is true, as distinct from being merely honestly or genuinely held. Ponder Point What steps could you take to confirm the truth of an opinion? If the defamatory publication includes both statements of fact and opinion, a more useful defence may be that of fair comment, because it only requires proof that the facts are true and that the comment is ‘fair’ and in the public interest, whereas justification requires proof of the truth of both the facts and the comment.

3.2 Fair comment and honest opinion 3.2.1 Fair Comment At common law, the defence of fair comment may be raised in respect of a defamatory publication provided that four conditions can be met: The publication must be a comment or opinion as distinct from a statement of fact • Example: To say that Jo/e Candidate does not deserve her/his position as a senior recruiter is a statement of opinion; to say that Jo/e Candidate does not have a particular qualification (e.g. FRSCA) is a statement of fact. The comment must be based on facts truly stated, or sufficiently identified; • Example: : If the comment is that Jo/e Candidate did not deserve her/his position as a senior recruiter, it would need to be based on stated or identified facts – e.g.

“…as was found by the Ethics Committee of RCSA when Jo/e was recently sanctioned for a breach of the Code obligation to take reasonable steps to preserve the confidentiality and privacy of candidate information obtained in the course of her/his professional practice.” The distinction between opinion and fact can sometimes be difficult to discern. • Example: In Hazeldean v Austal Ships Pty Ltd10 the candidate was subject to an allegedly defamatory reference, which stated that, he: ‘requires improvement in his safe work practices’; ‘requires improvement in his team work and communication’; ‘requires improvement in his overall performance’; ‘is capable of doing good work, however he needs to work on his safe work practices; ‘team work and communication’ (identified by ticking a box as an area requiring improvement); And further, in answer to a further question by the recruitment consultant, ‘Would you rehire him’, said ‘No’. Ponder Point Were these statements opinion or fact? The former employer who gave the reference tried to argue, unsuccessfully, that these were statements of opinion, that they were honestly held; and that therefore the defence of fair comment or honest opinion ought to be available. As to whether the statements were opinion of fact, the Court recorded the arguments of each side and, finding them to be statements of fact, said: “The plaintiff’s counsel argued that the words pleaded … respectively of the statement of claim made assertions of fact, not opinion. They are not capable of conveying a meaning that the defendant held such an opinion, but only a meaning that the matters stated were the fact.

“…because s/he did not have skills or experience for the position and had not done the RCSA on-line Code Training” or

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

10. [2004] WASC 67 (13 April 2004).

The defendant argued that, … in the context of the provision of a job reference check, the words alleged were plainly capable of conveying the meaning that the statements were statements of the defendant’s opinion, not of fact. I would not accept that submission. The words complained of convey assertions of fact, not expressions of opinion. Moreover, even in cases where a statement is said to be an expression of belief, it is not enough for the defendant to prove that he held the belief. ‘If I say of a man that I believe he committed murder, I cannot justify it by saying and proving that I did believe it. I can only justify it by proving the fact of the murder.’” Ponder Point You will often come across referees who say that a former employee’s employment was terminated for a particular “reason”. What if the reason is not “valid” – i.e. it is not “sound , defensible or well-founded rather than capricious, fanciful, spiteful or prejudiced”? The comment relates to a matter of public interest; Public interest should be distinguished from purely private interest. A question may arise as to whether the contents of a referee’s report could be considered a matter of public interest. This may depend upon the circumstances of the case and the position for which the candidate is being recruited. There have been a number of cases where the comment has been held not to relate to matters of public interest. A substantial number of them concern the performance of a person in their occupation or calling. Examples: • conduct of magistrate11 • comment on private character of a public figure;12 • communication to the Press by the medical board of a hospital of the reasons for terminating employment of a doctor;13 • competence of newspaper editor;14 • criticism of architect’s competence15 • matters of merely personal scandal.16

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

You will see that these cases cover much of the type of comment that you might obtain in the course of reference checking. It may be difficult to establish the defence if the only interested parties are the referee, the client, the candidate and you. That may not be enough to meet the public interest requirement. Remember, the defence of qualified privilege may still be available and we will consider that shortly. The comment is fair in the sense that it is the honest expression of the commentator’s genuine view. An opinion is fair, despite the fact that it may be wrong, prejudiced or obstinate, if is one that an honest person might have held on the facts as stated or indicated. The test as to honesty is subjective. However, the opinion must genuinely be held by the commentator. The requirements were discussed by Eady J in Branson v Bower17 who stated: “…for the defence traditionally known as “fair comment on a matter of public interest”, the touchstone is always honesty and that it should not be watered down by considering issues such as fairness or moderation”. … “It has long been clear that one may be prejudiced or biased and yet claim the protection of a fair comment defence for the expression of one’s views. Those views may themselves be exaggerated or obstinate and yet fall within the concept of honest opinion. If one is writing or speaking on a matter of public interest, there is no doubt that the law permits the language to be rude and offensive. It has been acknowledged, for example, that a critic is entitled to dip his pen in gall for the purposes of legitimate criticism: (citations omitted).”

11. R v Smith (1876) 10 SALR 213, SC(SA), Full Court (affirmed R v Smith (1876) 10 SALR 248, PC). 12. Ward v Derrington (1880) 14 SALR 35 13. Tisdall v Hutton [1944] Tas SR 1 14. Allsopp v Incorporated Newsagencies Co Pty Ltd (1975) 26 FLR 238

15 Cole v Operative Plasterers Federation of Australia (NSW Branch) (1927) 28 SR (NSW) 62; 45 WN (NSW) 33 16 Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 at 249; 124 ALR 80; 68 ALJR 765 per Brennan J 17 [2002] QB 737; see also Brett May v TCN Channel Nine Pty Ltd & Ors [2007] NSWSC 760

3.2.2 “In my honest opinion…” The Uniform Defamation Acts of the Australian jurisdictions and the Defamation Act 1992 in New Zealand provide for a defence of honest opinion modeled on the common law defence of fair comment. In Australia, the statutory defence of honest opinion requires that: • the matter was an expression of opinion of the defendant rather than a statement of fact; and • the opinion related to a matter of public interest; and • the opinion is based on proper material. We have already looked at the fact/opinion distinction and the public interest requirement. Other than where a form of privilege applies to protect the publication, the requirement for “proper material” means that the defendant will have to prove that the information on which the opinion is based is substantially true. This will mean, in most cases where the defence is relied upon in a reference checking context, that steps will need to be taken to ensure the accuracy of the information. Ponder Point You will have detected that this is emerging as a common theme regardless of whether we are talking about the tort of negligence, the contractual obligations, the law of defamation or, as we will see later, the law of privacy.18

3.3 Innocent dissemination The Uniform Defamation Acts of the Australian jurisdictions and the Defamation Act 1992 in New Zealand also provide for a defence of innocent dissemination. The defence may be available in a reference checking situation if certain conditions are satisfied and the recruiter was only passing on what he or she had been told. In order to make out the defence, the person who publishes the information needs to prove that:

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

The defendant published the matter merely in the capacity, or as an employee or agent, of a subordinate distributor19 or a processor or distributor20. This requirement can be satisfied where the publisher was not the originator of the information; but acted merely as that person’s agent or employee. This will rarely (if ever) be the case when you are passing on information obtained from a referee. In Australia, a person will be treated as a “subordinate distributor” if they were not the originator of the information AND they did not have the capacity to exercise “editorial control” over the content.21 The expression “editorial control” might not quite accurately describe the sort of control that a recruiter may have over information that is to be passed on to a client; but certainly the power to amend (where it exists) and the obligation to ensure that the information is current complete and accurate is something very much like it. In cases where actual editorial control is exercised – e.g. by the retention of administrator privileges over a website – the defence might not be available at all. The defendant neither knew, nor ought reasonably to have known, that the matter published was defamatory In New Zealand, there is a further requirement that the defendant did not know that the matter was of a type likely to contain material of a defamatory nature. Given the propensity of a reference to contain material of a defamatory nature this may prove to be a very difficult condition to meet. The defendant’s lack of knowledge was not due to any negligence on the part of the defendant. This requirement applies both in Australia and in New Zealand. It emphasises the need to take reasonable care in the dissemination of information in the course of reference checking and reinforces what we are now able to identify as a recurring theme - You must exercise care whenever you are passing on information about a candidate. Ponder Point What do you think might constitute “negligence” in this context? Would a simple failure to take reasonable care regarding the quality of the information you might be communicating amount to negligence? 18 Compare the privacy requirements that information that is used or disclosed should be accurate, current and complete (add also relevant and not misleading). 19 This is the expression used in the Australian Acts.

20 These are the expressions used in the NZ Act – see s. 21 and the definitions in section 2. 21 See e.g. (SA) Defamation Act 2005 s 30(2)(c).

3.4 Qualified Privilege The defence of qualified privilege was developed at Common Law to protect information exchanged in good faith (without malice) in pursuit of legitimate common interests. Common Law looked for a communication of information in discharge of some public or private duty, whether legal, social or moral, or for the purpose of pursuing or protecting some private interest and insisted that the communication was only protected if made to a person who had a corresponding interest in receiving the communication. On this basis, the defence of qualified privilege often arose in the context of giving an employment reference by a former employer about a former employee to a prospective employer 22 - even if the information was untrue.23 Evatt J. in Telegraph Newspaper Company Limited v Bedford (1934) 50 CLR said that in deciding whether or not the defence of qualified privilege is available, the cases emphasise the underlying principle of “the common convenience and welfare of society” and “the good of society in general”. The publication of references by previous employers and consultants to potential employers containing defamatory matters was generally considered to be for the public good provided that adverse comment was restricted to work related matters. This would enable employers to find suitable candidates, whilst the qualification of good faith protected potential employees from malicious former employers, who might be motivated by ill will for reasons not associated with the candidate’s performance at work. Ponder Point However, is the emphasis shifting? Given the constraints that now surround the disclosure of personal information, the availability of alternative and more sophisticated means of staff selection, the higher turn-over rates in employment and a general move towards the “try and see” paradigm (probationary employment, qualifying periods and temp-to-perm arrangements). In Bashford v Information Australia (Newsletters) Pty Ltd24 McHugh J stated: “At common law, a defamatory statement receives qualified protection when it is made in discharge of a duty or the furtherance or protection of an interest of the maker of the statement or some person with whom the publisher has a direct,

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

business or social connection, and the recipient of the statement has a corresponding duty to receive or interest in receiving it” (citations omitted). The task is not to consider whether the communication is for the common convenience and welfare of society, but rather to “consider all the circumstances and ask whether this publisher had a duty to publish or an interest in publishing this defamatory communication to this recipient”. 3.4.1 “I don’t think I have to; but I’d just better tell you any way…” What happens when the recruiter is not under a duty but simply decides to volunteer information (as frequently happens when adverse information comes to light after the placement). On that subject, McHugh J said in Bashford: “Different considerations apply when the defendant volunteers defamatory information. Ordinarily the occasion for making a volunteered statement will be privileged only where there is a pressing need to protect the interests of the defendant or a third party or where the defendant has a duty to make the statement to the recipient. The common law has generally perceived no advantage to society in giving qualified privilege to volunteered statements in the absence of a preexisting reciprocity of interest between the defendant and the recipient. It has taken the view that the reputation of the defamed should be preferred over the freedom to publish volunteered but defamatory statements that may or may not be true.” … “But where neither life is in immediate danger nor harm to the person or injury to property imminent, the fact that the defendant has volunteered defamatory matter is likely to be decisive against a finding of qualified privilege.” 3.4.2 Statutory Provisions The Uniform Defamation Acts of the Australian jurisdictions and the Defamation Act 1992 in New Zealand also provide for a defence of qualified privilege to a defamation action. The defence of qualified privilege is available in Australia if the defendant can show: • the recipient has an interest, or apparent interest, in having information on some subject; • the matter is published to the recipient in the course of giving to the recipient information on that subject; and 22 Coxhead v Richards [1846] EngR 379; Spring v Guardian Assurance plc [1995] 2 AC 296; Bashford (at [69]). 23 Neame v Yellow Cabs (SA) Ltd [1930] SASR 267 (former employee); Pullman v Walter Hill & Co Ltd [1891] 1 QB 524 at 528;

(1890) 60 LJQB 299; 64 LT 691 per Lord Esher MR. See also Sattin v Nationwide News Pty Ltd (1996) 39 NSWLR 32 at 34 per Levine J 24 (2004) 218 CLR 366.

• the conduct of the defendant in publishing that matter is reasonable in the circumstances. The first two requirements will usually be satisfied in a reference checking situation. Your client will most likely have an interest in receiving information about a candidate’s previous work performance. Your will most likely communicate that information in the course of providing an employment service to your client. The requirement of reasonableness is more likely to be contested. The Uniform Defamation Acts provide that in deciding whether the defendant acted reasonably, the Court will consider the following issues: • the extent to which the matter published is of public interest; • the extent to which the matter published concerns the performance of the public functions or activities of the person; • the seriousness of any defamatory imputation conveyed by the matter published; • the extent to which the matter published distinguishes between suspicions, allegations and proven facts; • whether it was in the public interest in the circumstances for the matter published to be published expeditiously; • the nature of the business environment in which the defendant operates; • the sources of the information in the matter published and the integrity of those sources; • whether the matter published contained the substance of the person’s side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and publish a response from the person; • any other steps taken to verify the information in the matter published; • any other matters the Court considers relevant.

Ponder Point Consider each of these factors. You could use them as a kind of checklist when thinking about the information that you communicate about your candidates. • What is the “public interest” in communicating information that is not relevant to the job, not necessary or not a genuine (inherent) occupational requirement? 25 • What measures do you take to distinguish between suspicions, allegations and proven facts? • How would you check the “source integrity” in a reference that commenced, “His former superior has stated in writing that he was seen by some of the sales staff as…”?26 • Do you always make sure that you cross check information provided by referees with the candidate and make sure that the candidate’s side of the story is communicated?

3.5 Consent At common law27, the defence of consent is available in defamation actions. At common law if a publication is made in good faith on the invitation or the challenge of the person defamed, there is a valid defence of consent. The phrase “on the invitation” extends to a situation where a plaintiff consented to the publication. The common law principles relating to the defence of consent are therefore relevant. To establish the defence of consent at common law, the plaintiff had to expressly or impliedly consent, assent or acquiesce or invite the defamation. • Example: If a written consent is obtained from a prospective employee, authorising publication to prospective employers of specified references already in the possession of the prospective employee or references obtained from specified previous employers, and the publication is made in good faith by the consultant, there will be a valid defence of consent. The terms of the consent might additionally make it clear that references were passed on in total and without editing, notwithstanding that they might contain defamatory material.

RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

25. Note the cross over with terms drawn from the law of privacy and discrimination. 26. This was how the source was stated in the Spring reference. 27. And in New Zealand under s 22 Defamation Act 1992.

Ponder Point There are two publications that you might need to secure by an effective consent – one is the communication by the referee to you; the other is your communication to your client. How would you go about obtaining and recording an effective consent? NOTE: Remember, it is difficult for a person to consent to what they do not know about. The effect of this is that when intending to pass on a reference to a client you might not be able to obtain an effective consent if, for reasons of confidentiality, you cannot tell the candidate what the referee has said.28

4. Remedies The usual remedy in a defamation action is an award of damages (compensation) necessary in order to vindicate of the plaintiff’s reputation, console for distress and hurt caused and repair the injury done by the wrongful publication. Defamation Cases are usually brought in the intermediate or superior courts – e.g. District and Supreme Courts in Australia; High Court in New Zealand. In New Zealand it has sometimes been questioned whether a personal grievance may be brought in the Employment Relations Authority. That matter was considered by the New Zealand Employment Court in Clark v The Board of Trustees of Dargaville High School29 where it was held that: “Claims in tort for defamation …are not justiciable in the Employment Relations Authority or the Employment Court: see BDM Grange Ltd v Parker [2005] ERNZ 343; [2006] 1 NZLR 353. … as I have already noted, Mr Clark cannot bring a proceeding in the tort of defamation in the Authority or this Court. He may, nevertheless, say that it is a personal grievance or an aspect of a personal grievance that the school’s sending of certain documents to the New Zealand Teachers Council disadvantaged him unjustifiably in his employment and, in particular, brought him into professional disrepute. …

CLARK’S personal file at DHS”. Again, this cannot be a claim in the tort of defamation brought in this Court but may indicate a justiciable employment relationship problem. As above, Mr Clark may allege that the placement by the Board of certain documents on his personal file at the school disadvantaged him unjustifiably in his employment in that what was done, and how it was done, was not what a fair and reasonable employer would have done in all the circumstances. Remedies, both declaratory and monetary, may flow from such a finding.” What this case suggests is that there may be some window of opportunity to bring claims that have many of the hallmarks of a defamation action before the ERA and Employment Court. It will be interesting to see whether there is any uptake of this opportunity and also whether, in Australia, there is any similar scope to take complaints bearing the hallmarks of defamation actions to Fair Work Australia under the General Protections and Adverse Action provisions of the Fair Work Act 2009 (C’th).

Conclusion As you will have seen, the law of defamation is a highly specialised area of law which overlaps with other legal principles and which tries to find a balance between the protection of reputation and the right and public interest in free speech. In earlier parts, we looked at the relationship between the law of negligence and the law of defamation and we saw that the Courts seemed to prefer to deal with derogatory words (as may be found in many references) under the law of defamation rather than under the law of negligence. Nevertheless, as we have seen in this chapter, the need to act reasonably and to take care when preparing or passing on a reference remains an important component of the law of defamation. Later, we will examine this same requirement as an element of data quality in privacy law. For the recruiter it means that you must always exercise care and you cannot expect to rely upon a defence – because, ultimately, its availability may depend upon the care you have taken (or not – as the case may be).

Likewise, [Mr Clark] … claims that the defendant placed “defamatory documents in RCSA Reference Checking: Part 4 – Miscellaneous Laws - Defamation

28. In these circumstances, you might need to add a release or forbearance to the consent. We do not recommend that you attempt to draft these documents yourself. You should obtain advice from a legally qualified person who is familiar with the laws in your jurisdiction – noting that some jurisdictions may have laws that would prevent you from obtaining such a release or forbearance from a work seeker. 29. AC3A/09 [2009] NZEmpC 30 (20 April 2009).