UNIFORM NATIONAL DEFAMATION LAW by Tom Blackburn SC

UNIFORM NATIONAL DEFAMATION LAW by Tom Blackburn SC Tom Blackburn 2006 1. The law of defamation is not a subject with respect to which the Australian Federal Parliament is given express power to legislate. In colonial times and since federation, defamation law has been the preserve of State and Territory legislatures, with the result that, until the 1 st of January 2006, the law was different in every State and Territory of Australia. 2. This is a situation that is quite untenable in a modern federation. Mass media publishers are not constrained by State and Territory borders as they often were 100 years ago. The absurd, but inevitable, result of eight different substantive legal regimes is that what is defamatory in one State may be permissible in another. 3. Law reformers have been pressing for a uniform national law, to be enacted cooperatively by the States and Territories, ever since the seminal report of the Australian Law Reform Commission, Unfair Publication, in 1979. The issue has been on the agenda of the Standing Committee of Attorneys-General for many years. 4. What appears to have spurred the States and Territories into action on uniform legislation is the threat by the Federal Government in 2004 to enact legislation which would largely prevail over State and Territory law - in reliance upon a range of federal constitutional powers, for example the corporations power, the interstate trade and commerce power, the telecommunications power and so on. This legislation, had it passed into law, would have provided lawyers with a fabulous income stream for years and years, as they argued the constitutionality of such legislation. Perhaps happily for publishers and plaintiffs alike, the States and Territories were galvanised into action by this threat and in

2 2005 cooperated for the first time in agreeing on a uniform set of defamation laws. The result is that, a few procedural differences aside, Australia now has uniform defamation law for the first time. 5. This short paper examines some of more important features of the uniform legislation. The common law is preserved Section 6 6. The common law is preserved except as amended by the Act. The new uniform laws are not a codification. No distinction between libel and slander Section 7 7. This provision continues the position that already obtains by statute in a number of jurisdictions. Single cause of action Section 8 8. Section 8 provides that a person has a single cause of action for defamation in relation to the publication of defamatory matter, even if more than one defamatory imputation about the person is carried by the matter. It effectively continues the common law rule that the cause of action is provided by the making of a defamatory publication. To an outsider this section might seem to be of little significance. However, in New South Wales, Queensland and Tasmania it is revolutionary, since in consequence of the defamation statutes applying in those States, the cause of action is provided by the defamatory imputation, rather than by the defamatory matter itself. In New South Wales particularly, this has led to endless interlocutory disputes about whether the defamatory imputations relied on have been pleaded with sufficient precision. It is to be hoped that all of the learning on that subject can be peacefully laid to rest now that the position in those states is in line with the common law.

3 Certain corporations have no cause of action Section 9 9. This is a controversial change to the law and provides, in effect, that corporations whose objects include financial gain for its members, and which have 10 or more persons in its employ, have no right of action for defamation. In effect, corporations which exist for shareholders profit can only sue for defamation if they have less than 10 employees, with the contribution of part-time employees being pro-rated. This leads to the anomalous result that social, sporting and other trading corporations, possibly of some power and influence, maintain the right to sue for defamation if, for example, they are limited by guarantee and are not incorporated for the profit of their members. On the other hand, a small family company operating a business which is unlucky enough to have more than 10 employees has no entitlement to sue for defamation. 10. This is a splendid result for publishers. However, it is somewhat arbitrary for corporate plaintiffs. The justification for it has been stated by the Attorneys-General to be that corporations have other remedies, for example under the Trade Practices Act, or a remedy in malicious falsehood. This is to ignore the fact that information providers have immunity from such actions under the TPA by virtue s.65a of that Act. It also ignores the fact that the tort of malicious falsehood depends upon proof of actual malice, which is not constituted even by negligence of the sloppiest kind. It is also claimed that usually the individual proprietors the shareholders - will be defamed in addition to the company, and those individuals will therefore have a right of action. This rationale overlooks the elementary fact that in general a shareholder has no right of action for losses sustained by the company. The net effect is that powerful media corporations have the power to wipe out a small family business with complete impunity, whereas a powerful sporting, social or other not for profit organisations retain a right of action.

4 No cause of action for or against deceased persons Section 10 11. This section continues the old common law rule that personal actions die with the plaintiff. It also provides that proceedings cannot be commenced or continued in relation to the publication of matter about a dead person, whether published before or after the person s death. Choice of law Section 11 12. There are some complex, but largely unimportant, choice of law rules in s.11. In general, the law that applies is the law of the State or Territory concerned where the publication is wholly within that State or Territory, and where publication is in more than one State or Territory, the substantive law is the area with which the harm occasioned by the publication as a whole has its closest connection. There are several matters that the court may take into account. Since the substantive law is effectively the same across Australia, it matters little which substantive law applies. Note that the law of forum non conveniens and cross-vesting statutes continue to apply. The only forum shopping advantage left in the law of defamation is, possibly, the option to commence in jurisdictions such as South Australia, the Australian Capital Territory or the Northern Territory where it is either impossible (South Australia) to empanel a civil jury, or, in the latter two jurisdictions, very difficult. However, a defamation action inappropriately commenced in one of those jurisdictions would run the risk of being transferred to a more appropriate jurisdiction under the cross-vesting scheme. Offer of amends and apologies Part 3 of the Act 13. Part 3 of the Scheme provides for a greatly expanded mechanism for the making of offers of amends. The salient features of the Scheme are as follows:

5 (a) an offer may be in relation to the whole of the matter or limited to particular defamatory meanings that the publisher accepts that the matter in question carries; (b) it is made without prejudice; (c) it must be made before 28 days have elapsed since the publisher was notified in writing of the defamatory imputations that the aggrieved person considers are carried; (d) however, if the publisher believes that the defamatory meanings complained of are insufficiently particularised, the publisher may require by notice in writing reasonable further particulars about the imputations of concern, which must be provided within 14 days; (e) the offer must be in writing and be identifiable as an offer under Division 1 of Part 3 of the Act; (f) if the offer is limited to particular imputations, it must state which imputations; (g) it must offer to publish a reasonable correction (note: not necessarily an apology); (h) it must offer to take reasonable steps to inform any third party that the matter is or may be defamatory, if the matter has been given to a third party; (i) it must include an offer to pay reasonable expenses incurred including in considering the offer; (j) it may include an offer to apologise;

6 (k) it may include an offer to pay compensation in an amount stated in the offer, agreed between the parties or to be determined by an arbitrator or court; and (l) it may be withdrawn before it is accepted. 14. The acceptance of the offer and the execution of it is a bar to the continuation of the action. The making of a reasonable offer, if not accepted by the plaintiff, is a complete defence to the action. 15. There is more than an element of poker in this scheme. For a rejected offer to constitute a defence to the action, it must be reasonable, and must have been made as soon as practicable after the defendant became aware that the matter is or may be defamatory. 16. What is reasonable? There are a number of factors that the court must take into account, including any apology or correction that was published, its prominence in comparison with the prominence of the original matter, and the period of time between the publication and the apology. The court may take into account any other matter it considers relevant, including any failure to agree on what imputations were carried. The unspoken and hugely important matter that the court is likely to take into account is whether there was an apology (as opposed to a correction), and whether there was an offer to pay compensation. No publisher should think that, in the case of a grave defamatory imputation, the court is likely to find that an offer was reasonable if it makes no provision for an appropriate amount of compensation. This will be a matter for the publisher s judgment in every case. 17. One of the most important features of the new scheme is that the offer, and any apology made, are entirely without prejudice and cannot be used by the plaintiff in any way on any question of liability. Any

7 statement or admission made in connection with the making or acceptance of the offer is not admissible in evidence on any issue save as to costs, or on an issue arising in relation to the offer; and an apology made by or on behalf of a person in connection with any defamatory matter does not constitute any kind of admission of fault or liability. This means that, in theory, a fullsome and grovelling apology could be made by a publisher at an early stage of the proceedings in order to take advantage of the salutary effect it might have on damages if the publisher is unsuccessful. As a practical matter, however, the effect of such an apology should always be borne in mind in relation to any jury that is subsequently empanelled. The jury may be told to put it out of their minds, but it may still have some effect. Juries Sections 21 and 22 18. In most States and Territories, but not in South Australia, the ACT or the Northern Territory, provision is made for an election to have a jury empanelled. In South Australia, civil juries were abolished in 1928 and there is no provision for the empanelment of a jury. As before, the whole of the action is heard by a judge sitting alone. In the Northern Territory and the Australian Capital Territory, the existing provisions for the empanelment of civil juries apply. It is extremely difficult to persuade a court in those jurisdictions to empanel a civil jury. Justification Section 25 19. The defence of truth, or justification, is now in line with the common law. Truth alone is a complete defence, removing the statutory requirements in some jurisdictions of public benefit or public interest. Absolute privilege Section 27 20. Absolute privilege is maintained as a defence in the appropriate situations. The New South Wales legislation has made specific

8 provision for absolute privilege to be extended to a number of statutory tribunals. Fair copy or extract of a public document Section 28 21. This defence continues and extends the common law protection for reports of papers published by or under the authority of a parliamentary body, and includes documents published by a court or under the law of any country, and includes a document issued by a government, including local government for the information of the public. The defence is defeated if the plaintiff proves that the matter was not published honestly for the information of the public or the advancement of education. Fair report of proceedings of public concern Section 29 22. This defence protects the publication of defamatory matter that was or was contained in a fair report of proceedings of public concern. It also protects the publication of matter that was, or was contained in an earlier published report of such proceedings, where the matter is a fair copy or summary or extract from the earlier published report, and the defendant had no knowledge that would reasonably put it on notice that the earlier report was not fair. This defence is defeated on the same basis, namely that it was not published honestly for the information of the public or the advancement of education. Proceedings of public concern include proceedings of Parliament, any international organisation, the governments of any countries and proceedings in public of an international conference at which governments are represented. Also included are the proceedings of the International Court of Justice or any other tribunal for the decision of matters in dispute between nations; local government bodies, proceedings of learned societies in relation to adjudications about members; proceedings of sport or recreational associations in relation to adjudications about members, proceedings of public meetings of

9 shareholders of a public company and proceedings of any public meeting if the proceedings relate to a matter of public interest, including the advocacy or candidature of a person for public office. The same matter of defeasance applies to this defence. Statutory qualified privilege Section 30 23. This defence is in similar terms to s.22 of the 1974 New South Wales Act. The touchstone of the defendant s conduct is reasonableness. Because the courts have set a very high standard of reasonableness in relation to the earlier defence, it has only ever succeeded on a handful of occasions since the 1974. There is no reason to think that the new s.30 will make any change to this situation. The matters that the court may take into account in determining the question of reasonableness are set out at s.30(3) and include the extent to which the matter published was of public interest; steps taken to include the substance of the plaintiff s side of the story and any other steps taken to verify the information, and any other matters the Court thinks relevant. It is noteworthy that under subsection (e), the Court can take into account whether it was in the public interest that the material be published expeditiously; previously, what was required was that expeditious publication was necessary. Also, the Court can have regard under the new provisions to the nature of the business environment in which the defendant operates. Presumably, the Court can therefore take into account the competitive nature of commercial newsgathering. Lip service will no doubt be paid to this aspect. No one should hold their breath waiting for it to be decisive in any case. Honest opinion Section 31 24. This section rather oddly provides a kind of statutory accompaniment to the common law defence of fair comment, which is preserved. It is defeated where it is proved that the matter did not represent the honest opinion of the defendant at the time it was published; where the

10 defendant did not believe that the relevant opinion was honestly held by its employee or agent at the time the matter was published; or, where the matter was the opinion of a stranger, the defendant had reasonable grounds to believe that the opinion was not honestly held by the commentator. Damages Section 35 25. Punitive damages are abolished. There is a $250,000 cap on general damages, that is, for non-economic loss, with provision for that amount to be adjusted from time to time in accordance with a formula based on average weekly earnings. Presumably the amount is never going to be adjusted downwards. This cap does not include aggravated damages or special damages. There is one curious matter in connection with aggravated damages. Section 35(2) provides that the amount may be increased if the court is satisfied that the circumstances of the publication of the defamatory matter are such as to warrant an award of aggravated damages. Read literally, this would seem to suggest that the only matters the court can take into account on aggravation is the circumstances of the publication, whereas at common law the tribunal of fact in assessing aggravated damages is entitled to look at the whole of the defendant s conduct up until the verdict. Presumably this represents an error of drafting, but it is uncertain how the courts will interpret it. 26. Note that even where a jury is empanelled, the judge, not the jury, makes the award of damages and may make any necessary findings of fact in order to make such an award. It remains to be seen how this will work in practice. Costs Section 40 27. In awarding costs, the court may have regard to the way in which the parties conducted their case, including any misuse of a party s superior

11 financial position to hinder the early resolution of the proceedings, and any other matter that the court considers relevant. In addition, a court must (unless it is not in the interests of justice to do so) order indemnity costs if an unsuccessful defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or if an unsuccessful plaintiff unreasonably failed to accept a settlement offer made by the defendant. This provision places significant pressure on the parties to resolve their dispute prior to trial. Liability limited by a scheme approved under Professional Standards Legislation