Australia: The New Uniform Defamation Act Gets A Workout In New South Wales

Last Updated: 10 November 2008

Over the past few months, the New South Wales Supreme Court has become the battle ground for the first string of defamation claims to be heard under the uniform Defamation Act. Yet, in some ways, the cases have raised more questions about the new legislation than they have answered.

Uniform defamation legislation came into force across Australia in 2006 in the form of similar Defamation Acts passed in all States and Territories, except the Northern Territory. The new Acts sit side-by-side with the common law, allowing defendants to rely on statutory and common law defences. The previous framework for defamation in each State and Territory, whether codified (eg NSW) or common law (eg Victoria), continues to apply to any material published before 1 January 2006.

Defamation claims under the new Acts have only recently reached the courts, reigniting discussion over their controversial provisions. Mercedes Corby's widely reported action against Channel Seven disclosed a loophole in the statutory defence of contextual truth. Hot on the heels of Corby's case, another high profile claim filed by Judy Davis was decided in the same Court, resulting in an uncertain assessment of damages in the actress' favour. Yet it was Holmes v Fraser, a lesser known case concerning political donations, that snuck in as the Court's first damages decision under the new Act.

Brett Holmes v Andrew Fraser

On 12 June 2008, Justice Simpson ordered NSW National MP Andrew Fraser to pay NSW Nurses' Association General Secretary Brett Holmes damages of $70,000 for a malicious publication. The matter complained of was a letter written by Fraser Nine days before the 2007 NSW state election, claiming Holmes directed $1 million of the Association's funds towards the Australian Labour Party to secure a safe pre-selection seat for himself.

The parties agreed that all issues were to be heard by a judge alone, avoiding the confusion that arose in Davis' action over the respective roles of the judge and the jury (see below).

Justice Simpson found the two imputations pleaded by Holmes were conveyed and defamatory, and rejected the defences of honest opinion and qualified privilege pleaded by Fraser.

Justice Simpson noted the defence of honest opinion under the new Act has a wider scope of protection than the common law defence of fair comment. While the common law defence protects comments based on accurately stated or identified facts, the statutory defence provides additional protection to comments made on occasions of qualified privilege. Qualified privilege arises when there is a duty to publish, as well as a public interest in receiving information about the subject, and the publisher has acted reasonably.

Mercedes Corby v Channel Seven Sydney Pty Ltd

Corby's defamation action was the first to be heard by a NSW jury under the new Defamation Act (NSW), but it was not the prospect of new precedent that drew the crowds. Corby, the sister of convicted drug trafficker Schapelle Corby, sued Channel Seven Today Tonight presenter Anna Coren and reporter Bryan Seymour, over 31 imputations she claimed had arisen from three Today Tonight stories and a Seven News bulletin.

The stories and bulletin featured Jodie Power, a former friend of the Corbys, who claimed Corby had taken various illicit substances, sold and smuggled marijuana, and was knowingly involved in sister Schapelle Corby's importation of marijuana into Bali. Seven pleaded the defences of truth and contextual truth.

Resisting the NSW tradition of splitting the jury's deliberation between consideration of the imputations and the defences, Justice Simpson instructed the jury to consider the meanings conveyed by the broadcasts together with the truth of those meanings. Any defence of contextual truth, she ordered, should be considered only after the primary defence of truth.

Of the 31 imputations pleaded by Corby, the jury found 29 of them to be conveyed and defamatory. Following Justice Simpson's ruling that Seven could not possibly plead truth to five of the imputations (most of which concerned Corby's guilt or involvement in relation to criminal offences), the jury rejected the defence of truth for all but one of the remaining imputations (that Corby had possessed marijuana).

Following the failure of its truth defence, Seven cut short the trial, withdrawing its defence of contextual truth and reaching a confidential damages settlement with Corby. It was a disappointing move, not just for those who hoped the Power-Corby mud-slinging would go on a little longer, but for media lawyers, who were expecting the case to shed some light on how certain provisions of the new Act, two in particular, are to be applied.

The first fuzzy area relates to the defence of contextual truth, which requires the defendant to prove the publication contained one or more other substantially true imputations (contextual imputations), and the defamatory imputations complained of did no further harm to the plaintiff's reputation given the substantial truth of those contextual imputations. Under the new Act, this defence contains a potential loophole as the plaintiff may appropriate the defendant's contextual imputations in their amended statement of claim. Stuart Littlemore QC (acting for Corby) exploited this loophole, amending Corby's claim to adopt and plead Seven's contextual truth imputations against it, with the result that the contextual imputations no longer belonged to Seven. As Seven eventually withdrew its defence of contextual truth, the validity of the potential loophole was not put to the test.

Secondly, the confidential agreement reached by the parties over damages removed the need for the Court to assess damages, including aggravated damages. Littlemore QC had indicated his intention to seek aggravated damages exceeding the maximum amount established by the Act, on the grounds that the claims were broadcast seven times. He was expected to argue the normal payout should accordingly be multiplied by seven, later commenting extra-judicially that there was 'some room for creativity' with damages under the new Act. Unfortunatelyhe did not have the chance to test that speculation.

Judy Davis v Nationwide News Pty Ltd

After an ambivalent approach to damages, Justice Peter McClellan ordered Nationwide News to pay actress Judy Davis $140,000 for two similar articles that ran in the Daily Telegraph. The articles related to Davis' involvement in a council meeting held to discuss a proposal to erect floodlights at a local park where children often play sport in the evening.

Prompted by concerns expressed by Terry Tobin QC, acting for Davis, that it would be too 'complex' and 'convoluted' for the jury to return a general verdict, Justice McClellan reverted to the traditional 'section 7A' structure of defamation trials in NSW. He ordered the jury to consider the imputations separately before considering any applicable defences. He also reserved some elements of the defences for his own consideration.

Of the original ten imputations pleaded, including that Davis was a child-hater, a hypocrite, and had behaved in an angry and arrogant manner, the jury found only two to be conveyed and defamatory, that Davis had acted unreasonably and selfishly in opposing the developments, and was heartless and indifferent to the risk of injury to young children.

Nationwide News pleaded the defences of honest opinion and qualified privilege. In relation to the first defence, the jury found the matter complained of was presented as fact, and not as opinion honestly held.

On qualified privilege, Justice McClellan reserved the question of reasonableness for himself, but left it to the jury to decide on the factual circumstances. The jury's finding that the publications had been actuated by malice defeated any privilege attaching to the articles.

On the question of damages, Justice McClellan, conceded he had 'never quite understood' the section in the Act relating to aggravated damages. While the judge prepared his damages judgment, Tobin QC speculated, extra-judicially, that section 35(2) was a potential 'gateway' through which judges could exceed the cap to award unlimited aggravated damages.

When the rather conservative damages judgment was eventually handed down, the 'gateway' theory proved not to apply in the present case, in awarding Davis $140,000, Justice McClellan stressed the cap applies to limit damages even where there are multiple causes of action.

More questions than answers

Davis v Nationwide News marks what appears to be a deliberately conservative approach to the assessment of damages under the new Act. It remains to be seen whether the NSW Supreme Court, and the Supreme Courts of other states and territories, will follow suit. One does wonder whether the Court in Corby v Channel Seven, had it been required to assess damages, would have had less qualms about exceeding the cap, in light of the high ratings, national reach and multiple publications (in Seven News as well as Today Tonight) of the defamatory matter.

These two cases show that old habits die hard when it comes to the procedure governing defamation trials. The judges' approach to deliberation splitting, not to mention role splitting between the judge and jury, while mixing the new with the old, displayed a fond adherence to the structure of the traditional 'section 7A' NSW defamation trial.

Of concern to practitioners is the potential loophole to be found in the defence of contextual truth provided by the new Act. It is unfortunate that the Court in Corby v Channel Seven was deprived of the chance to consider the intended application of the defence. Yet it should only be a matter of time before the loophole is challenged in one of the country's Supreme Courts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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