IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 468 of 1999

BETWEEN:	IAN NIXON FIRST APPLICANT GREGORY ELLIS SECOND APPLICANT
AND:	SLATER & GORDON RESPONDENT
JUDGE:	MERKEL J
DATE:	28 APRIL 2000
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

Introduction

5 The applicants, who are surgeons, are claiming damages in relation to their appearance in a photograph on the cover of a booklet published by the respondent, Slater & Gordon, a firm of solicitors. The booklet was published and distributed by Slater & Gordon to medical practitioners in an attempt to allay the practitioners' concerns "about the perceived growth of medical negligence litigation". The booklet explained the firm's approach and ethics in relation to medical malpractice claims.

6 The applicants claim that, in publishing and distributing the booklet, Slater & Gordon imputed or represented that the applicants were the subject of medical malpractice claims or that the applicants had agreed, for reward, to their professional repute being used by Slater & Gordon to promote litigation of such claims. It is common ground that any such imputations or representations were false, as there had not been any malpractice claims against the applicants and the publication of the photograph had not been directly, or indirectly, authorised by them.

Background

7 During May and June 1999 Slater & Gordon, which claims to "specialise in representing injured Victorians", sent a letter by pre-paid post to 8,531 medical practitioners in Victoria. The letter, which enclosed two booklets, was as follows:

"Dear Dr.........

At Slater and Gordon we specialise in representing injured Victorians. We recognise that in doing so we may cause a degree of disruption in your life by requesting medical reports or by asking you to give evidence in court. We are committed to minimising this disruption and thus have prepared a guide to report writing and court appearances. The booklet is designed to provide information about what may be asked of you when a patient is pursuing a claim for compensation arising out of an injury.

We also understand the medical profession's concern about the perceived growth of medical negligence litigation. It is for this reason that we have prepared a second booklet. We hope that the more controversial medical malpractice guide will both clarify some of the issues surrounding medical negligence actions and detail our approach to these claims.

We have taken care to make these publications relevant to you and have sought to provide a balanced view. In doing so we have incorporated amendments and comment offered by a senior official of a medical defence organisation If you wish to discuss any of the issues outlined in these booklets or would like more copies I would be pleased if you contacted me on (03) 9602 6888.

Yours faithfully,

[Signed]

Partner"

8 The front covers of the booklets featured colourful and striking photographs of surgeons in full surgical dress. The cover of the first booklet featured a photograph of a surgeon standing in a witness box holding the Bible in his right hand under the caption "What do they want from me now?". The booklet, which was stated to be published by "Slater & Gordon, Solicitors", provided "Information for treating doctors on report preparation and court appearances".

9 The second booklet ("the medical malpractice booklet") was in the same format, save that the photograph on the cover was of two surgeons conducting cardiothoracic surgery on a patient, with a fully robed barrister at the head of the operating bed scrutinising the surgery. The captions, in respect of the photograph, stated above the photograph, "Medical malpractice claims..." and below the photograph, "...A litigation explosion?".

10 The colourful and striking covers of the booklets were prepared in that format to capture the attention of the persons to whom the booklets were to be sent.

11 The author of the letter, a partner of Slater & Gordon, was responsible for the preparation of the booklets. He took considerable care to ensure that the text of the booklets, but not their covers, was approved by the Chairman and the Chief Executive of the Medical Indemnity Protection Society as he wanted to be satisfied that the material in the booklets was not offensive to doctors and was conveyed to them in an appropriate manner. The author was also aware that the photograph on the cover of the medical malpractice booklet, which had been acquired from The Age pictorial library without the applicants' knowledge or consent, was an actual photograph of cardiothoracic surgery conducted by two practising surgeons. The photograph of an actor, dressed in a barrister's wig and gown, was superimposed at the head of the operating bed.

12 Instructions had been given to a graphic artist to disguise the identity of the two surgeons "to avoid giving offence". As a result the following alterations were made to the photograph using digital technology:

"(a) Doctor on the left [Mr Nixon] -

(i) heart shaped red marks appearing on the doctor's head gear were removed; and

(ii) the doctor's beard was removed and replaced with 'skin'.

(b) Doctor on the right [Dr Ellis] -

(i) the line of the surgical cap was altered from behind the ear to cover the top of the ear;

(ii) the sideburns were removed;

(iii) the eyebrows were removed;

(iv) the eyelashes were altered;

(v) the texture and colour of the skin on the face was altered;

(vi) the hairline on the back of the neck was altered;

(vii) the earlobe was reshaped."

13 The endeavour to disguise the identity of the two surgeons did not succeed. Notwithstanding the digital alterations, and the fact that in the photograph the surgeons were in full surgical dress, including masks, a number of recipients of the booklets recognised them.

14 The first applicant, Mr Ian Nixon, became a fellow of the Royal Australasian College of Surgeons in 1981 and after that spent two years as a senior fellow at the John Hopkins Clinic in Baltimore. Since his return to Australia in 1985 he has conducted his practice as a consultant surgeon. He is an eminent cardiothoracic surgeon employed as a consultant at St Vincent's Hospital and is a staff member at the Epworth Hospital. He is also in private practice.

15 During 1997 Mr Nixon spent three weeks in Cleveland observing a procedure known as minimally invasive valve surgery. The surgery represented a new and advanced method of repairing or replacing heart valves on patients by making a small incision in their chest rather than the large incision customarily required for such a procedure. After his return to Australia Mr Nixon prepared and assembled equipment at St Vincent's Hospital to enable the same surgery to be conducted for the first time in Australia. He commenced performing the operation in about May 1997 with the second applicant, Dr Gregory Ellis, as his surgical assistant.

16 The surgery received substantial publicity, which included feature articles in the Herald Sun and The Age newspapers published on 9 May 1997. The articles described the operation as a major breakthrough in heart surgery and featured photographs of the applicants in surgical dress. Photographs of the applicants in surgical dress were also featured on the covers of the 1997 Annual Report of St Vincent's Hospital, the 1997 Financial Statement of St Vincent's Hospital and the 1997 Annual Review of St Vincent's Private Hospital.

17 The second applicant, Dr Gregory Ellis, is a skilled surgical assistant. He graduated with a Bachelor of Medicine and a Bachelor of Surgery from the University of Melbourne in 1987. Since completing his residency at the Royal Melbourne Hospital he has been in private practice, primarily as a surgical assistant. He has been assisting Mr Nixon in performing cardiothoracic surgery for about five years and has been his surgical assistant in respect of the minimally invasive valve surgery performed by Mr Nixon. Dr Ellis explained the role of an assistant surgeon as being like "a second pair of eyes, a second pair of hands and a second brain to supplement what the surgeon is doing" (T 29). He said that as the surgery becomes more complex, such as cardiothoracic surgery, an appropriately qualified assistant becomes a vital part of the surgical team.

18 Mr Nixon said that in the usual course of his ordinary work as a cardiothoracic surgeon he regularly came into contact with other cardiologists, physicians, general practitioners, anaesthetists, perfusionists, radiologists, haematologists, endocrinologists, medical students, junior and senior medical staff, nurses, hospital administrators and patients and their relatives. Dr Ellis gave similar evidence.

19 By the date of the publication the applicants had acquired a considerable repute in the medical community in relation to the minimally invasive valve surgery conducted by them. Neither doctor had consented to or was aware of the proposed use of the photograph of their conduct of that surgery on the cover of the medical malpractice booklet.

20 Mr Nixon was one of the addressees on the Slater & Gordon mailing list to whom the standard form letter and booklets were sent. It was not long before the medical malpractice booklet also came to the attention of Dr Ellis, who did not appear to be an addressee on the mailing list.

21 Both doctors reacted strongly to the use of the photograph of them on the cover of the medical malpractice booklet. Mr Nixon received a copy of the medical malpractice booklet in the mail at his surgery in Fitzroy. He shared the surgery with a number of other doctors, some of whom also received the booklet on the same day. He immediately recognised that the photograph was of the minimally invasive valve surgery conducted by himself and Dr Ellis. After an initial feeling of shock, Mr Nixon said he felt extremely angry, hurt, embarrassed and threatened. In explaining what he meant by feeling threatened, Mr Nixon said that he:

"felt threatened not only in a personal perspective but also professionally and that I felt immediately that this was a threat to my reputation." (T 19)

22 Mr Nixon also said that he felt that the photograph associated him with Slater & Gordon and "made inferences of medical malpractice that were not only personally hurtful, but potentially extremely professionally damaging" (T 21). Mr Nixon feared that referrals from other practitioners and his standing in the profession would be adversely affected by the publication of the medical malpractice booklet.

23 Mr Nixon said that he has seen the booklet in the possession of his colleagues and lying around the office which he shares with a number of other doctors. He said that "dozens" of people including medical staff, nursing staff and hospital administrators had mentioned the photograph to him. Although Mr Nixon was cross-examined by senior counsel for Slater & Gordon he was not really challenged in respect of his evidence.

24 Dr Ellis did not receive a copy of the booklet but it was quickly drawn to his attention by an anaesthetist, who was a friend and a colleague. He was asked whether he had seen the picture of himself and Mr Nixon on "the Slater and Gordon brochure". Dr Ellis was "absolutely furious" (T 31) when he saw the brochure. He said that other doctors, who were at the hospital at that time, queried him about his presence on the brochure. He said the doctors "were very negative about it" (T 31). Dr Ellis's concerns were similar to those elaborated by Mr Nixon. He said that his concerns stemmed from the fact that the booklet was "implying that what we were doing may have been subject to malpractice or litigation" (T 32).

25 Dr Ellis showed a copy of the brochure to his wife and said that she was as shocked as he was, but that she was also concerned about the long term effects of the booklet. Dr Ellis also said that "dozens" of his colleagues had mentioned the brochure to him. He said that he has seen the brochure scattered around operating theatre lounge rooms at the Epworth, St Vincent's and Knox Hospitals, as well as in the possession of several other doctors. Dr Ellis was also cross-examined by senior counsel for Slater & Gordon but was not really challenged in respect of his evidence.

26 Both applicants were offended by the cover of the booklet rather than by its text.

27 Mr Nixon immediately sought legal advice. On 25 June 1999 the solicitors for the applicants informed the respondent that the publication was a serious libel and required an undertaking that publication would cease. The respondent denied that the publication constituted a libel of the applicants and indicated that it was not prepared to accede to the request that there be no further publication. After further correspondence the respondent said it did not intend to further circulate the existing print run of the booklet and was prepared not to "ever circulate the brochure again" if that would resolve the matter.

28 Subsequently, the solicitors for the applicants requested that they be provided with a list of the names of the people to whom the booklet was sent, as the applicants wished to explain that they were not involved in the production of the booklet. Although the list of persons was made available during the course of discovery, the solicitors acting for the respondent stated that the respondent was not prepared to allow the applicants to communicate with the doctors to whom the booklet was sent.

29 The applicants claim that the publication of the medical malpractice booklet constituted misleading and deceptive conduct in trade or commerce in contravention of ss 52, 53(c) and 53(d) of the Trade Practices Act 1974 (Cth) ("the TPA"), ss 11, 12(d) and 12(e) of the Fair Trading Act 1985 (Vic) ("the FTA") and was defamatory. The applicants sought injunctions restraining the further publication of the medical malpractice booklet and damages under the TPA and the FTA, and at common law. During the trial the applicants also sought an order that a letter of retraction be sent by Slater & Gordon to all of the addressees to whom the letter, enclosing the booklets, was sent. A partner of Slater & Gordon stated that he thought the firm had no objection to sending the letter.

30 During the course of the trial, after it became clear that the booklets were sent by post, the respondent no longer pressed its contention that, as it was not a corporation, the Court did not have jurisdiction under the TPA: see s 6(3) of the TPA. However, the respondent maintained its contention that, as the publication was not "in trade or commerce", it could not found the allegations of breach of the TPA or the FTA. It is appropriate to deal with that contention at the outset.

"in trade or commerce"

31 Slater & Gordon did not contend that the provision of legal services was not "in trade or commerce". Rather, it contended that, as the booklets were provided for the general information of medical practitioners and were not directed to them as actual or potential consumers or in any other relevant commercial context, the conduct complained of was not "in trade or commerce". Reliance was placed on the fact that the medical practitioners to whom the booklets were sent were not persons with whom Slater & Gordon have, or may have, dealings in the course of any activities or transactions "which, of their nature, bear a trading or commercial character": see Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604 per Mason CJ, Deane, Dawson and Gaudron JJ.

32 There is no substance in the respondent's contention. Slater & Gordon have developed and are continuing to develop, inter alia, a substantial "No Win No Fee" practice in medical malpractice claims. The firm was of the view that the development of that practice required it to foster a better understanding by medical practitioners of the role of the firm, and of medical practitioners, in respect of such claims. In that context, the letter enclosing the two booklets was sent to 8,531 medical practitioners in the course of Slater & Gordon's promotional activities in relation to, or for the purposes of, its supply of legal services to actual or potential clients who bring or may wish to bring such claims. In Concrete Constructions Mason CJ, Deane, Dawson and Gaudron JJ (at 604) stated that promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers are a clear example of activities having a "trading or commercial character". The fact that a promotional activity is not directed at consumers, as such, does not result in it not having a "trading or commercial character".

33 Even if, contrary to my view, the activities in question are not fairly described as "promotional activities" they are so closely related to the quality and provision of legal services offered by Slater & Gordon that they, of themselves, "bear a trading or commercial character". It is relevant to note that the mail out to the medical practitioners cost approximately $24,000, which was debited by Slater & Gordon to "advertising, marketing or public relations".

Defamation

34 There are four factors to be considered in the present case: the imputation; whether it is defamatory and, if so, whether it relates to the applicants. The fourth issue relates to the quantum of damages.

(i) The imputation

35 An imputation has been described as an "act or condition asserted of or attributed to a person" (Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84 at 91 per Griffith CJ). The imputation should be pleaded in a manner that captures the meaning alleged to have been conveyed by the words complained of rather than the words themselves (Sungravure Pty Ltd v Middle East Airlines Airliban S.A.L. (1974) 134 CLR 1 at 14-15 per Stephen J).

36 The applicants claim that, in its ordinary and natural meaning, the medical malpractice booklet was defamatory of them. They allege that the booklet meant and was understood to mean that:

"(a) each of the applicants has engaged in medical malpractice;

(b) each of the applicants has so conducted himself as to be the subject of claims of medical malpractice:

Alternatively -

(c) each of the applicants has sold his professional skill and reputation to a firm of solicitors for use in an advertising campaign to promote the services of that firm in medical malpractice litigation;

(d) each of the applicants has allowed his professional skill and reputation to be used by a firm of solicitors in an advertising campaign to promote the services of that firm in medical malpractice litigation;

(e) each of the applicants has so lacked impartial professional judgment that he allowed his professional skill and reputation to be used in an advertising campaign for the promotion of services of a firm of solicitors engaged in medical malpractice litigation on behalf of aggrieved plaintiffs."

37 In the present case no true innuendo or special knowledge is pleaded or relied upon by the applicants. Accordingly, subject to it being established that the material complained of clearly related to the applicants, the approach to determining whether the material is defamatory was stated by Brennan J (with whom the other members of the Court agreed) in Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 505 at 506:

"Where no true innuendo is pleaded and the published words clearly related to the plaintiff, the issue of libel or no libel can be determined by asking whether hypothetical referees - Lord Selborne's reasonable men (Capital and Counties Bank v. Henty) or Lord Atkin's right-thinking members of society generally (Sim v. Stretch) or Lord Reid's ordinary men not avid for scandal (Lewis v. Daily Telegraph Ltd.) - would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation (Byrne v. Deane), being a standard common to society generally (Miller v. David; Myroft v. Sleight; Tolley v. J.S. Fry & Sons Ltd.)."

38 His Honour added (at 506) that it must follow that evidence is not admissible in a libel case to establish the meaning of the words "used" or that the pleaded imputations were defamatory.

39 Evidence that is not admissible in a defamation claim is admissible in respect of a claim that the publication in question constituted misleading or deceptive conduct. In Global Sportsman Pty Ltd v Mirror Newspaper Ltd (1984) 55 ALR 25 at 30 Bowen CJ, Lockhart and Fitzgerald JJ said:

"A contravention of s 52(1) is established by conduct which is misleading or deceptive or which is likely to mislead or deceive. Conduct is likely to mislead or deceive if that is a "real or not remote chance of possibility regardless of whether it is less or more than 50 per cent"; cf Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 27 ALR 367 at 380; 42 FLR 331, per Deane J at 346; Sheen v Fields Pty Ltd (1984) 51 ALR 345; 58 ALJR 93. Evidence that an erroneous conclusion has been formed by reference to conduct is admissible to establish that the conduct was misleading or deceptive or likely to mislead or deceive; such evidence may be persuasive but it is not essential. Evidence of acts or omissions resulting from the erroneous belief may also be admissible but again is not essential. Section 52(1) is concerned with the effect or likely effect of conduct upon the minds of those by reference to whom the question of whether the conduct is or is likely to be misleading or deceptive falls to be tested. The test is objective and the court must determine the question for itself: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202."

40 See also Hoad v Nationwide News Ltd (1997) 37 IPR 407 at 411 per Anderson J.

41 Further, as was pointed out by Mason J (with whom other members of the Court agreed) in Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 at 301, a court is only to conclude that a statement is capable of bearing an imputation defamatory of the applicants "because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result". His Honour added that a court should therefore not reach such a decision merely because the publication "excites in some readers the belief or prejudice from which they proceeded to arrive at a conclusion unfavourable to the plaintiff".

42 Mason J (at 302) was critical of the tendency to claim that comparatively clear and simple statements are capable of yielding imputations not suggested by a reasonable reading of the language used. In that context his Honour repeated the remarks of Holroyd Pearce LJ in Lewis v Daily Telegraph Ltd (1963) 1 QB 340 at 374:

"When persons publish words that are imprecise, ambiguous, loose, fanciful or unusual, there is room for a wide variation of reasonable opinion on what the words mean or connote. The publisher can hardly complain in such a case if he is reasonably understood as having said something that he did not mean. But when words with a precise and well-known meaning are used without the addition of any expressions which could impart some other flavour to them, it is not fair to twist them from their normal sense."

43 The present case is not one in which a clear and simple statement is in issue. Any imputation to be derived from the cover of the booklet, even after a careful reading of the text, is necessarily one that is based upon an "imprecise, ambiguous, loose...or unusual" collocation of suggestive words superimposed upon a photograph. Brennan J in Harrison (at 304) cited the following passage from the judgment of Lord Devlin in Lewis v Daily Telegraph Ltd (1964) AC 234 at 285:

"...it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that. They can convey a meaning of suspicion short of guilt: but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded."

44 In Chakravarti v Advertiser Newspapers (1998) 193 CLR 519 at 574 Kirby J said that where words are used that are imprecise, ambiguous or loose:

"...a very wide latitude will be ascribed to the ordinary person to draw imputations adverse to the subject. That is the price which publishers must pay for the use of loose language."

45 Further, although the photograph of the applicants may, of itself, not be suggestive of any defamatory imputation, its appearance on the cover of a Slater & Gordon booklet about medical malpractice was likely to give "rise to speculation as to how it got there" and provoke "in the mind of the public an inference as to how and why" a photograph of the applicants was used in association with the booklet (see Tolley v J.S. Fry & Sons Ltd [1931] AC 333 at 342 per Viscount Dunedin).

46 I propose to approach the question of whether any defamatory imputation is to be derived from the medical malpractice booklet objectively, in disregard of the evidence given by various witnesses, including the applicants, as to what they took the booklet to mean to them. For that purpose the hypothetical referees in the present case are not the public at large but, rather, are members of the medical profession in the State of Victoria, the membership of which is significantly constituted by the 8,531 members to whom the publication was addressed. While there is some evidence that the medical malpractice booklet was seen around hospital or medical practitioner waiting rooms and other analogous locations, it was specifically published and addressed to, and intended and expected to only be of interest to and read by, members of the medical profession. Thus, it is appropriate to treat the hypothetical referee for the purposes of the present case as the hypothetical member of the medical profession: see Drummond-Jackson v B.M.A. (1971) 1 WLR 688 at 694 and 700, Switzerland Australia Health Fund Pty Ltd v Shaw (1988) 81 ALR 111 at 119, FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd (1992) 108 ALR 476 at 496 and Morgan v Mallard (1997) 68 SASR 184 at 193-194.

47 The imputation that is reasonably capable of being conveyed, and I find is conveyed, to the hypothetical member of the medical profession by the medical malpractice booklet is that, for reasonable cause or upon reasonable grounds, Slater & Gordon is involved in a medical malpractice claim against the two surgeons shown in the photograph. I would arrive at the same conclusion if the hypothetical referee were a member of the public. In arriving at that conclusion I have primarily had regard to the broad impression created by a cursory, rather than a detailed, examination of the booklet by a medical practitioner. However, in my view, the same imputation arises on a detailed examination.

48 The imputation that flows from the looseness of the words used on the cover in conjunction with the photograph of the two surgeons performing a major operation is confirmed by the appearance of a barrister scrutinising the operation. The barrister's presence reinforces the impression of the existence of a legal claim against the doctors in the photograph.

49 Senior counsel for Slater & Gordon contended that the superimposition of the photograph of the barrister made it quite clear that the whole photograph was merely synthesised, or staged in order to introduce the object of the booklet, being to allay the concerns of the medical profession about the perceived growth in medical malpractice litigation. Accordingly, it was said that no clear imputation of any kind flowed from the cover when it is read in the context of the publication as a whole. Alternatively, if there was an imputation, it was said to be one which, in general terms, indicated that the topic of the booklet is the intersection between law and medicine in the area of litigation in relation to medical malpractice claims.

50 The problem with Slater & Gordon's contentions is that the notion of the booklet's cover being staged is inconsistent with the stark reality of the photograph of an actual operation by the two surgeons engaged in it. While it is plain that the photograph of the barrister is superimposed, I have concluded that his close "legal" examination of the surgeons' conduct of the operation reinforces the imputation I have found.

51 I accept Slater & Gordon's submission that the imputation is to be derived not just from reading the cover as one part of the publication but from viewing the cover complained of in the context of the whole of the publication: see Brabazon v Western Mail Ltd (1985) 58 ALR 712 at 717; cf Chakravarti at 574-575 per Kirby J. However, that does not assist the respondent. Neither a cursory nor a comprehensive reading of the text alters the impression derived from an examination of the cover. The subject of the text concerns a number of different aspects of litigation relating to medical malpractice claims, one instance of which was introduced by the cover. If, as the respondent contends, the cover was no more than a synthesised endeavour to raise the topic discussed in the text then the respondent has failed in that endeavour.

52 In any event, the text confirms the imputation that there is reasonable cause or reasonable grounds for the bringing of the malpractice claim. Under the heading "Ethical Approach to Litigation" Slater & Gordon stated that the only claims the firm takes on "are those which, on exhaustive investigation, disclose evidence of injuries caused by negligent medical treatment" where there is "substantial support for the claim from medical practitioners of good repute".

53 The respondent placed considerable reliance on decisions, such as Harrison, to the effect that a report that does no more than state that a person has been arrested and charged with a criminal offence is not capable of bearing the imputation that he or she is guilty or probably guilty of that offence. It was argued, by analogy, that even if, contrary to the respondent's contention, there was an imputation that there had been a medical malpractice claim against the two surgeons photographed, it did not follow that there was an imputation that they were guilty of medical malpractice or that there were reasonable grounds for such a claim.

54 There are several observations to be made in response to the submission. First, the imputations that flow from a statement in any particular case will depend upon the precise words used and the context in which they are used. As was recognised in Harrison and Lewis the range of imputations that may be derived from a particular publication can depend, critically, upon the clarity or looseness of the words used.

55 Secondly, Harrison and Lewis were concerned with whether imputations of guilt were reasonably capable of being conveyed by the language used. In Harrison all of the judges in the High Court accepted that a statement that a person has been arrested and charged with a criminal offence does not convey the imputation that the person is guilty of the offence. Mason J (with whom Wilson J concurred) expressed the view that the statement will result in that person being viewed with suspicion as a result of the ordinary reader concluding that "[the person] is a person suspected by the police of having committed the offence and that they have ground for laying a charge against [that person]" (at 301). Gibbs CJ (at 295) and Brennan J (at 303) reserved for future consideration the question of whether a report stating "merely" that the person had been arrested and charged with a particular offence was capable of bearing the imputation that the police had reasonable cause for suspecting that the person had committed the offence. However, as previously stated, Brennan J (at 304) cited Lord Devlin's caution in Lewis that a person should pick his or her words very carefully if the person "wants to exclude the suggestion that where there is smoke there is also fire".

56 For the reasons given in Harrison and Lewis I do not accept that the "claim" of medical malpractice in the present case carries with it an imputation that the two surgeons are guilty of malpractice. However, for the reasons set out above, I do accept it carries an imputation that there is reasonable cause, or there are reasonable grounds, for the malpractice claim against the two surgeons.

57 In arriving at that conclusion I have been assisted by the observations in Harrison but, more particularly, of those made by Lord Devlin in Lewis at 284-286. Lewis was concerned with a statement published on the front page of two national newspapers that the police were inquiring into the affairs of a company of which Mr Lewis was Chairman. Although it was clear from the articles that the inquiry related to whether there had been conduct amounting to fraud or dishonesty on the part of the company or its Chairman, the House of Lords (with Lord Morris dissenting) concluded that in the natural and ordinary meaning of the articles an "ordinary man", without special knowledge, would not have inferred that Lewis was guilty of fraud or dishonesty. However, Lord Devlin (at 284-286) pointed out that, where an imputation is made in a general way, a fine line may exist between a statement of suspicion that imputes guilt and one that does not. In substance, his Lordship (at 285) accepted that a statement that a police inquiry is on foot is capable of positively conveying "the impression that there are grounds for the inquiry, that is, that there is something to suspect".

58 Lord Devlin (at 285) pointed out that the impression that is conveyed will depend upon the words used "in their context and in the circumstances of publication". As explained earlier, in the present case the words used in their context and in the circumstances convey that there are "grounds" for the claim. See also Mapp v News Group Newspapers Ltd [1998] Q.B. 520 at 529 and Shah v Standard Chartered Bank [1999] QB 241 at 260-261.

59 The applicants also contended that the use by Slater & Gordon of their photograph also imputed that they had agreed, for reward, to permit that use. While it may be arguable that the use of the photograph might reasonably be capable of conveying that imputation, I do not find it was conveyed in the present case.

60 Whether the use of a person's photograph in a commercial publication carries the imputation that the use has been authorised or endorsed by the person photographed depends on the circumstances of the particular case: see Tolley at 339 per Viscount Hailsham cf. Honey v Australian Airlines (1989) ATPR 40-961. The medical malpractice booklet used the photograph of the surgeons in circumstances that do not suggest any endorsement by them of Slater & Gordon or, of any of that firm's legal services: cf. Tolley. As pointed out above, I accept that the use of the photograph of the two surgeons provokes the question of "how and why" it came to be used, but the answer I expect that the "ordinary and reasonable" medical practitioner would give to the question is because the two surgeons in the photograph are the subject of a malpractice claim brought by Slater & Gordon. The fact that the use of the photograph might excite in some readers a view that the two doctors have sold their repute will flow more from the beliefs or prejudices of those readers than from a reasonable reading of the booklet.

(ii) Defamatory

61 The imputation that, for reasonable cause or upon reasonable grounds, there is a medical practice claim against the two surgeons is defamatory. The existence of such a claim suggests that an operation conducted by the surgeons has not only been unsuccessful but has also resulted in harm or injury to the patient in circumstances which warrant the bringing of a malpractice claim against them. For a surgeon, an imputation that the harm or injury suffered as a consequence of an unsuccessful operation warrants the bringing of a malpractice claim is of the utmost gravity and is plainly injurious to a surgeon's repute.

62 Understandably, the contrary view was not contended for by the respondent. In that regard, the booklet acknowledged the harm to a doctor's reputation of such a claim.

"We acknowledge the effect that a claim may have upon a doctor's reputation, and when legal proceedings are started we endeavour to avoid publicity which may unfairly reflect upon the doctor."

63 Further, the Slater & Gordon partner responsible for the preparation of the booklet stated that he had no "doubt whatsoever" that the mere fact of a claim is itself sufficient to have an adverse effect on a doctor's reputation.

(iii) Identity

64 For a defamatory imputation to be actionable by the applicants they must establish that the imputations related to them. An inquiry as to identity, as with that carried out to determine the meaning of an imputation, is an objective one. The question is not whether anyone did identify the applicants, but rather, whether persons who are acquainted with them could identify them, from the publication.

65 The principles applicable to the issue of identification were considered in Morgan v Odhams Press Ltd (1971) 2 All ER 1156. As was observed by Lord Reid (at 1159-1160), in determining the question of whether the words alleged to be defamatory did refer to the plaintiff, the intent of the publisher, and whether the publisher knew of the plaintiff's existence, is of no relevance. The relevant principles were summarised by Lord Morris (at 1169-1170):

"The question for decision was whether a jury could come to the conclusion that the words referred to the plaintiff. As Lord Alverstone CJ said in Jones v E Hulton & Co.

'...if, in the opinion of a jury, a substantial number of persons who knew the plaintiff, reading the article, would believe that it refers to him, in my opinion an action, assuming the language to be defamatory, can be maintained...If upon the evidence the jury are of opinion that ordinary sensible readers, knowing the plaintiff, would be of opinion that the article referred to him, the plaintiff's case is made out.'

The principle was succinctly expressed by Viscount Simon LC in his speech in Knupffer v London Express Newspaper Ltd when he said:

'Where the plaintiff is not named, the test which decides whether the words used refer to him is the question whether the words are such as would reasonably lead persons acquainted with the plaintiff to believe that he was the person referred to.'

To the same effect were the words of Lord Loreburn LC in describing (in E Hulton & Co v Jones) the tort of libel:

'It consists in using language which others knowing the circumstances would reasonably think to be defamatory of the person complaining of and injured by it.'"

66 Lord Pearson (at 1184), although in dissent, said:

"...in order to be defamatory of the plaintiff, the article must contain something which, to the mind of a reader with knowledge of the relevant circumstances, contains defamatory imputations and points to the plaintiff as the person defamed."

67 See also David Syme & Co v Canavan (1918) 25 CLR 234 at 238 per Isaacs J.

68 In Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 Hutley JA (at 234) and Glass JA (at 248) acknowledged that it was well established that, where a plaintiff was not named in the publication in question, evidence could be given by the plaintiff, and others, that they identified the publication as referring to the plaintiffs and that other persons in spontaneous conversations with them had also identified the plaintiff as the person to whom the publication referred. See also Steele v Mirror Newspapers Ltd (1974) 2 NSWLR 348 at 369 and World Hosts Pty Ltd v Mirror Newspapers Ltd (1978) 1 NSWLR 189 at 207.

69 In addition to the evidence of Mr Nixon and Dr Ellis as to the medical colleagues who identified them in the photograph, a number of affidavits were sworn by other medical practitioners to the effect that they instantly recognised the applicants in the photograph on the cover of the medical malpractice booklet. While a number of the practitioners had seen both applicants in full surgical dress, that was not the case with all witnesses. The general tenor of the evidence given by witnesses was that they thought that there must have been some association between the applicants and Slater & Gordon, most probably arising because there was some legal problem or something wrong with the minimally invasive surgery that the two surgeons had been conducting.

70 Evidence was also given by a witness as to "the rumour mill which is very strong in the medical profession" (T 40). Another witness said that the persons performing cardiac surgery in Melbourne were reasonably well known to medical practitioners and, amongst those surgeons, Mr Nixon had a unique posture and physique (T 48).

71 Mr Anthony Wilson, a cardiothoracic surgeon, is the director of the cardiothoracic unit at St Vincent's Hospital. He said that the brochure had been shown to him by one of the doctors present at St Vincent's Private Hospital. He indicated that it had aroused a lot of interest at the hospital. Mr Wilson's immediate concern was that the new operation being conducted by Mr Nixon had caused some kind of legal problem. Any such problem was a matter of particular concern to him because of his directorship of the cardiothoracic unit of both the St Vincent's Public Hospital and at the St Vincent's Private Hospital, where the original operation had been performed. Mr Wilson said that about five or six people had spoken to him about the cover of the booklet on the basis that there was a general feeling expressed that the two doctors had done "something wrong" (T 55). He said concern was expressed not only by people who knew the applicants but by others who had recognised them from the photographs featured in the two newspapers.

72 An anaesthetist, who formed part of Mr Nixon's team, also expressed concern at the harm which he thought had resulted from the use of Mr Nixon's photograph on the cover of the booklet and said that, as a consequence, he took steps to ensure that his practice was not as reliant upon Mr Nixon (T 41).

73 It is plain from the evidence that a significant number of medical practitioners have identified the applicants as the surgeons appearing on the cover of the medical malpractice booklet. Furthermore, the evidence also establishes that their appearance on the cover was also the subject of comment in the "rumour mill" among medical practitioners who knew them or knew of them: cf Raul Amon International Pty Ltd v Telstra Corporation Ltd [1998] 4 VR 798 at 800 per Tadgell JA. While it is no answer to the defamation claim for Slater & Gordon to contend that the applicants were only recognised by close colleagues and friends, the evidence suggests that a wider range of persons have identified the applicants as the surgeons in the photograph. Accordingly, I am satisfied that the defamatory imputation clearly related to the applicants.

Damages

74 In Reader's Digest Services Brennan J (at 507) said that, when the libel is proved, some general damage is presumed. However, his Honour said there is no reason in principle why evidence should not be admitted to show the gravity of the damage done to an applicant's reputation by the making of a defamatory imputation independently established. Brennan J added (at 507).

"A jury is entitled to take into account in assessing general damages the effect of the libel on those who read it (Herald and Weekly Times Ltd. v. McGregor), bearing in mind that some readers will regard the defamation more seriously than others (Australian Consolidated Press Ltd. v. Uren). In making its assessment, a jury is properly assisted by evidence that the making of the defamatory imputation found by them had an especially adverse impact upon the plaintiff's reputation in the eyes of some group or class in the community. Of course, care must be taken to ensure that evidence of the attitude of particular groups or classes is not misused: it is neither material to, nor admissible upon, the issue of the defamatory nature of the imputation made. The defamatory nature of an imputation is ascertained by reference to general community standards, not by reference to sectional attitudes. But if the imputation is defamatory according to the standards of the community generally, a particular impact of the defamatory imputation may be proved."

75 In Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 (at 150) Windeyer J observed:

"It seems to me that, properly speaking, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public and as consolation to him for a wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money".

76 His Honour also observed (at 150-151) that in libel actions the jury, in assessing damages, is entitled to look at the defendant's conduct in order to determine not only what the plaintiff should receive but also what the defendant should pay. See also Praed v Graham (1890) 24 QB 53 at 55.

77 The damages to be awarded for defamation of a professional person, such as a doctor, were considered in Crampton v Nugawela (1996) 41 NSWLR 176. As was pointed out by Mahoney A-CJ (at 194-195) where the publication involves professional reputation the "grapevine effect" and "lurking place" observations of Lord Hailsham in Broome v Cassell & Co [1972] AC 1027 at 1071 may be applicable. Lord Hailsham said:

"In actions of defamation and in any other actions where damages for loss of reputation are involved, the principle of restitutio in integrum has necessarily an even more highly subjective element. Such actions involve a money award which may put the plaintiff in a purely financial sense in a much stronger position than he was before the wrong. Not merely can he recover the estimated sum of his past and future losses, but, in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge."

78 As Lord Diplock pointed out in Broome (at 1125):

"The harm caused to the plaintiff by the publication of a libel upon him often lies more in his own feelings, what he thinks other people are thinking of him, than in any actual change made manifest in their attitude towards him."

79 The "grapevine effect" and "lurking place" observations, which are particularly applicable in the present case, were said by Mahoney A-CJ (at 194-195) to require that:

"The award must be sufficient to ensure that, the defamation having spread along the 'grapevine'..., and being apt to emerge 'from its lurking place at some future date', it was 'sufficient to convince a bystander of the baselessness of the charge'."

80 In Rigby v Associated Newspapers (1969) 1 NSWLR 729 at 743 Jacobs JA said that one of the purposes of the award of damages is to "nail the defamatory statement as a lie". Senior counsel for the applicants contended that in the special circumstances of the present case a substantial award of damages is necessary to "nail the lurking lie".

81 There are a number of factors that, cumulatively, warrant a significant award of damages:

(a) The doctors have been seriously injured in relation to their professional repute, which for any surgeon, but particularly two surgeons at the cutting edge of cardiothoracic surgery, is particularly injurious and harmful. As Mahoney A-CJ pointed out in