Despite the introduction of uniform legislation, recent cases continue to highlight the uncertainty surrounding the award of damages in defamation actions.
On 1 January 2006 new uniform defamation legislation came into force around Australia. Prior to that time, each State had its own unique defamation laws. Defamation claims under the new legislation are only now reaching the courts and we are seeing a mix of decisions being delivered under the old and new legislation.
Davis v Nationwide News Pty Limited  NSWSC 693
The actor Judy Davis commenced proceedings against Nationwide News in relation to two newspaper articles published in The Daily Telegraph and The Sunday Mail. Davis had attended and participated in a meeting of Leichhardt Council during which a proposal to upgrade the lighting of Birchgrove Oval was discussed. Articles published in The Daily Telegraph on 23 February 2006 and The Sunday Mail on 26 February 2006 stated Davis was unreasonable and selfish as she opposed construction of lighting at Birchgrove Oval. The articles alleged Davis was heartless and indifferent to the risk of injury faced by children as a consequence of the oval's poor lighting.
Davis sought compensation on the basis the articles were a source of profound and significant hurt to her. She claimed that the interpretation of the contents of the articles would inevitably diminish her reputation in the eyes of the public. Davis also sought an award of aggravated damages based on the nature of the defence conducted during the trial by counsel for the defendant. Aggravated damages are awarded to a plaintiff that can show it suffered further damage caused by the circumstances surrounding the article's publication.
Nationwide News was unsuccessful in its defence. As a result, the Court was required to consider the damages to be awarded to Davis.
The Defamation Act 2005 (NSW) (2005 Act) introduced a cap on damages to be awarded in defamation proceedings. Prior to this, predicting awards for damages was often akin to tossing a coin.
Under section 35 of the 2005 Act, 'the maximum amount of damages for non-economic loss that may be awarded in defamation proceedings is $267,500' (now indexed at $285,000). In addition, damages may only exceed the maximum amount where the Court is satisfied that the circumstances surrounding the publication of the material, which form the subject of the proceedings, warrant an award of aggravated damages.
His Honour, Chief Justice McClelland stated in Davis that the consequence of the operation of sections 22(4), 34 and 35 of the 2005 Act was that the 'monetary maximum limits the damages which can be awarded in the proceedings even if those proceedings involve multiple causes of actions'. Further, 'section 23 has the purpose of generally confining the plaintiff to a single defamation proceeding'. Consequently, the defendant to any defamation proceedings would only be liable for an amount of damages equal to the current statutory maximum.
Justice McClelland clearly indicated that the operation of section 35(2) was 'only concerned with the circumstances in which an award of damages for non-economic loss may exceed the statutory cap for damages'. Further, his Honour was of the opinion that an award of aggravated damages was only available where an award of damages, including any component for aggravated damages, did not exceed the statutory maximum.
Davis was awarded $140,000 in damages.
Ali v Nationwide News Pty Limited  NSWSC 58
Mr Romzi Ali sought damages on the basis that the contents of material published in newspapers caused readers to doubt the veracity of allegations surrounding him. Ali alleged that this increased his distress and damaged his standing and reputation within the local Muslim and Australian communities.
Ali appealed the trial judge's refusal to award aggravated damages. The basis of his appeal was the newspaper's failure to apologise for its articles. Ali also claimed that the damages awarded to him by the trial judge were inadequate.
The date of the publication of the subject articles meant the proceedings were governed by the Defamation Act 1974 (NSW) (1974 Act) and not the 2005 Act. However, the decision is relevant to an assessment of damages under both Acts. Section 46 of the 1974 Act limited the damages available and precluded any award of exemplary damages.
Under section 37 of the 2005 Act a plaintiff cannot be awarded either exemplary or punitive damages (the exclusion of punitive damages is absent from the 1974 Act). Exemplary damages are awarded against a defendant if a Court is satisfied that the situation should be brought to the public's attention. Punitive damages are awarded to punish a defendant if its behaviour is particularly objectionable.
In Ali, the trial judge stated that aggravated damages may be awarded where the conduct of the defendant increases the damage suffered by the plaintiff or shows a lack of bona fides, or where the conduct is improper or unjustifiable. His Honour stated that the Court can give effect to a finding of aggravated damages by making an award towards the upper limit of the amount of damages. His Honour was not satisfied that the circumstances in Ali, specifically the failure of the defendant to apologise, satisfied the requisite standard that would warrant an award of aggravated damages.
The decision was overturned on appeal with the New South Wales Court of Appeal unanimously holding Ali was entitled to an award of aggravated damages for the failure of the newspaper to apologise, even though an apology had not been sought by Ali. In addition, the Court held that the gravity of the allegations and the importance of the injured feelings meant that the award of compensatory damages, in the sum of $125,000, awarded by the trial judge were manifestly inadequate. The Court of Appeal increased the award to the statutory maximum of $275,000.
Mercedes Corby v Channel Seven Sydney Pty Limited  NSWSC 245
This claim was the first defamation action under the 2005 Act to be heard by a jury and, unsurprisingly, attracted significant interest from both the public and the profession.
The plaintiff, Mercedes Corby, is the sister of Schapelle Corby, convicted drug smuggler. Mercedes sued Channel Seven over a story that appeared on its Today Tonight programme featuring an interview with Jodie Power, an acquaintance of the Corby family. Power claimed that Mercedes had taken various illicit substances, sold and smuggled marijuana, and was knowingly involved in Schapelle's importation of marijuana into Bali.
The jury had been instructed to consider the meanings conveyed by the broadcasts together with the truth of those meanings. Of the 31 imputations Mercedes claimed arose from the broadcasts, the jury found 29 were conveyed and defamatory. The jury also rejected the defence of truth for all but one of the imputations.
Disappointingly for those waiting to see the 2005 Act in operation, the claim was resolved in a confidential settlement between Mercedes and Channel Seven.
The trial had provided an opportunity to test the new provisions relating to the defence of contextual truth. This defence allows a defendant to come up with its own defamatory imputation and prove it true provided the 'alternate' meaning is as serious as that pleaded by the plaintiff. The trial provided an opportunity to explore a potential loophole in the 2005 Act allowing a plaintiff to also adopt the defendant's contextual imputations in the Statement of Claim.
Where to from here?
These are merely a handful of defamation cases delivered by the Courts in the last two years and there is little doubt there are many more to come. It is expected the uniform legislation will be tested for potential loopholes, particularly in relation to damages where it can be guaranteed plaintiffs will seek ways to circumvent the statutory cap.
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