REFORM TO DEFAMATION LAWS
Following a series of high-profile massive payouts for defamation (see Rush case note below), new laws have been introduced to address some of the problems with the uniform defamation laws that apply throughout the nation. In NSW, these laws are contained in the Defamation Amendment Bill 2020 which was passed on 6 August 2020 and implement the nationally agreed changes to the law of defamation.
From 1 July 2021, the serious harm test (section 10A) applies, which changes the elements of the cause of action. Specifically:
- by limiting the right to sue for defamation to cases where the publication of defamatory material has ’caused, or is likely to cause, serious harm to the reputation of the person’. (Section 10A(1))
- by providing a corporation that can sue (an excluded corporation) can only do so if the publication of defamatory material ‘has caused, or is likely to cause, the corporation serious financial loss’ (Section 10A(2))
The new ‘serious harm element’ of a cause of action for defamation is to be determined by a judicial officer (Section 10A(3). Even if neither party consents, judicial officers can by their own motion decide when to determine the question of serious harm. This includes at any time before a trial commences or during the trial. (Section 10A(4)).
NSW Attorney-General Mark Speakman said the changes would introduce a new public interest defence based on British law. They would also make changes to the provisions governing the way courts decide how much money they should award to successful plaintiffs and to “bring spiralling defamation payouts under control”.
There has been increasing national debate about the need for Australia wide reforms aimed at protecting free speech and concurrently stemming the tide of increasing damages payouts by putting an effective cap on damages for reputational harm.
“When all is stripped away from a person, what remains is their reputation. That is something worth defending. So too, is the ability of those who hold the powerful to account to do so without the chilling effects of having a defence that never works…”
-Mark Speakman, NSW Attorney General
To understand the debate, the underlying rule of law principles need to be examined. The law of defamation in Australia aims to balance the right of free speech (and freedom of the media) with protecting a person’s honour or reputation against harm.
International Covenant on Civil and Political Rights: Article 17
No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.
Everyone has the right to the protection of the law against such interference or attacks.
Freedom of the media is a core element of Australia’s democratic system which ensures that those in power are held responsible and accountable. It is a keystone of the rule of law. Additionally, the rule of law requires people to be treated fairly and justly under the law, to be presumed innocent and to be tried in accordance with the law through an independent and impartial court system. Consequently, there are a number of limitations or boundaries placed upon free speech. Defamation is one of those limits.
The recent amendments:
- Introduce a new statutory defence of publication of a matter of public interest. The defence requires a defendant to prove both that the statement was a matter of public interest and the defendant reasonably believed its publication was in the public interest.
- Clarify the cap on damages for non-economic loss; and
- Limit the period for bringing proceedings for online publications
Mr Speakman believes the new defence will restore “balance to ensure reputations are protected while responsible speech is as free as it needs to be to shine lights into the dark corners of our society.”
The success of these measures will ultimately depend on the way the changes are applied by judges. The effectiveness of the new public interest defence depends on whether a judge considers it reasonable for a journalist to believe it was in the public interest to publish certain material. That material must also concern an issue that is in the public interest.
So while a journalist might believe it was reasonable to publish the material in question, the defence will fail unless a judge also decides that the journalist’s belief was reasonable.
The history of defamation law provides few grounds for optimism about the application of this defence. Another defence that turns on the question of reasonableness, statutory qualified privilege, has never been used successfully by the media. That failed defence had been intended to protect the publication of material whenever journalists conduct themselves reasonably.
The attempt to bring defamation payouts under control gives rise to different considerations. The new scheme overturns judicial rulings that the cap on payouts for damage to a person’s reputation ceases to apply whenever aggravated damage is present.
But while reputational damage – known as non-economic loss – is now clearly capped, the provisions still make it possible for courts to award damages that exceed the cap. This is due to the fact that the cap applies only to non-economic losses. Aggravated damage has now been placed in a separate category and is therefore not subject to the cap.
The explanatory memorandum that accompanies the changes says the provisions require “awards of aggravated damages to be made separately to awards of damages for non-economic loss”.
When the cap on damages for defamation was introduced in 2005, it came soon after the nation’s governments had introduced caps on damages for personal injuries. The aim was to ensure there was a rational relationship between payouts for harm to a person’s reputation and payouts for physical harm.
When Rebel Wilson won her $600,000 payout for harm to her reputation it was at least $100,000 more than the $400,000 to $500,000 that a Melbourne factory worker could expect for the loss of a leg, according to a 2018 estimate by Slater + Gordon’s Barrie Woollacot that has been cited by The Australian.
The intention of the Attorneys-General who signed off on the latest changes was clear: they wanted to bring spiralling defamation payouts under control. Whether they have succeeded will become apparent once the courts have dealt with several cases under the new provisions. There is a risk that capping one category of damage, while leaving another category uncapped, could result in much the same sort of spiralling payouts that were being made when courts were able to disregard the cap.
GEOFFREY RUSH CASE NOTE
On 2 July 2020, Geoffrey Roy Rush was awarded a record $2.9m in damages by the Full Court of the Federal Court of Australia after Nationwide News Pty Limited (“Nationwide News”) lost its appeal against a significant defamation ruling. Mr Rush now stands as the record holder for the largest defamation payout to an individual in Australia.
What were some of the reasons behind this landmark decision, which has attracted such widespread public debate?
During a 2015-2016 production of Shakespeare’s King Lear by the Sydney Theatre Company (“STC”), actor Eryn Jean Norvill alleged fellow actor Geoffrey Rush engaged in a pattern of sexual harassment. On 30 November 2017 (over a year later), The Daily Telegraph newspaper published a “world exclusive” story concerning the alleged behaviour of Mr Rush during the STC production. The following day, further allegations containing defamatory imputations in connection with Mr Rush were published by the newspaper.
Mr Rush initiated court action against the Daily Telegraph’s publisher, Nationwide News Pty Ltd and the main author of the stories, Mr Jonathon Moran. Mr Rush claimed the newspaper poster and articles, including one with the headline “King Leer” underneath a picture of Mr Rush, were either defamatory or made defamatory imputations. Mr Rush strenuously denied the veracity of the allegations and his lawyers claimed general damages plus aggravated damages for lost income due to work denied in the present and in the future, because of the harm to his reputation. Furthermore, the actor claimed publication of the poster and the two articles were likely to cause him economic loss running into millions of dollars.
What is defamation?
Defamation is the area of law that is concerned with a person’s damaged reputation. Each state and territory have its own legislation that covers this area. In NSW, defamation law is covered by the Defamation Act 2005 (NSW). In recent years, defamation law has become relatively consistent across the States and Territories.
Decision at first instance:  FCA 496
On 11 April 2019, proceedings were initiated at first instance in the Federal Court of Australia and Justice Wigney held in favour of Mr Rush. The actor was awarded $850,000 in initial damages for non-economic loss including aggravated damages, with the prospect of being awarded a further amount. The calculation of that further amount (being in relation to special damages for economic loss, injunctive relief, costs and interest) was stood over to be determined at a later date. His Honour opined the publications were “a recklessly irresponsible piece of sensationalist journalism of the worst kind”, estimating that Mr Rush’s earnings as an actor would suffer for as long as two years following the “vindication of his reputation”.
Link to Justice Wigney’s lengthy judgment spans more than 900 pages.
See also the linked videos from the decision at first instance:
1. Justice Michael Wigney as he hands down parts of his judgment, and
2. Ms Norvill’s statement to the media outside the Federal Court of Australia.
One of the issues that arose during the proceedings at first instance were comments made by Wigney J in his written judgment, which led to Nationwide News Pty Limited (the First Respondent) and Jonathon Moran (the Second Respondent) initiating an appeal. In his written judgment, Justice Wigney remarked Ms Norvill was an unreliable witness who was “prone to exaggeration and embellishment”. As far as the two Respondents were concerned, His Honour’s assessment of the credit of the witness and the reliability of her evidence gave rise to a reasonable apprehension of bias. A party to proceedings can rely on this argument if at any stage during proceedings, they formed a reasonable apprehension that the judicial officer (either consciously or unconsciously) decided upon a matter unfairly.
Appeal against trial judge’s decision
On the background of the abovementioned concerns of the Respondents, Nationwide News Pty Limited (as First Respondent) and Jonathon Moran (as Second Respondent) filed an appeal in the Federal Court of Australia on 23 May 2019. The Respondents’ application was filed on the grounds that Wigney J’s conduct of the case “gave rise to an apprehension of bias” and that His Honour should recuse himself from the matter.
There were 15 grounds of appeal, however ultimately, none of the individual grounds relied upon by the Respondents provided any objective basis for concluding there was any apprehension of bias by the judge at first instance. For these reasons, His Honour Justice Wigney declined to recuse himself and continued to hear the injunction application.
Link to the Judgement relating to the Application for Recusal
On 28 August 2019, Mr Rush’s lawyers filed for an injunction, arguing there was a serious risk that Nationwide would continue to publish certain defamatory imputations. Nationwide denied there was any threat or risk of re–publication. After hearing the arguments from both sides, Justice Michael Wigney dismissed Mr Rush’s application for a permanent injunction seeking to restrain Nationwide from re–publishing the defamatory imputations.
Link to the Judgement relating to the Application for Permanent Injuction
Appeal – Full Court Decision
The Daily Telegraph through its parent company Nationwide News Pty Limited appealed against the decision at first instance to the Full Court of the Federal Court of Australia. The appeal was heard by Justices Jacqueline Gleeson, Richard White and Michael Wheelahan on 2 July 2020.
Nationwide News abandoned its previous grounds of appeal that the conduct of the Judge at first instance had created a reasonable apprehension of bias and that Nationwide News had therefore been denied procedural fairness. Twenty new grounds of appeal were pursued originally, which then decreased in number to eighteen. Ultimately, all of Nationwide News’ remaining grounds of appeal were dismissed.
The Full Federal Court decision comprising Justices Gleeson, White and Wheelahan resulted in the appeal being dismissed. Mr Rush was awarded almost $2.9m in damages. The record payout, which considered how Mr Rush’s tarnished reputation would limit future work, comprised $850,000 in general and aggravated damages, $1.9m for past and future economic loss and $42,000 in interest. The Full Court of Federal Court upheld the 2019 finding that the newspaper portrayed the actor in a defamatory way. Ben English, the editor of the Daily Telegraph, said after the outcome of the Full Federal Court decision that he was “very disappointed” by the decision, warning the outcome of the decision at first instance and the appeal “exposes the inadequacies of Australia’s defamation laws and heightens the need for urgent legislative reform to enable public debate and to encourage women to come forward with their concerns”. Although the newspaper had argued these estimations were “manifestly excessive” and disagreed that it would take two years after the original judgment of defamation before Mr Rush’s earning capacity could be restored, the Full Court disagreed.
Despite dismissing the appeal, Justices Gleeson, White and Wheelahan did agree with elements of the newspaper’s appeal submission, notably that the judge who oversaw the original defamation trial, His Honour Michael Wigney “attached significance to positive statements made” by Ms Norvill about Rush in promotional interviews for King Lear. Wigney J had said the positive statements Ms Norvill made about performing with Mr Rush undermined the evidence she gave as testimony of his inappropriate behaviour during the trial. The Justices wrote [at 141]: “In our view, Ms Norvill’s conduct in the interviews is equally consistent with the circumstance that the conduct she described had occurred but with her suppressing or subordinating her own personal feelings to the ‘corporate’ interest in promoting the performance of King Lear”.
For these reasons, the Justices did not think the erroneous significance which Wigney J attached to Ms Norvill’s comments made during the promotional interviews should be regarded as material. Additionally, the appeal judges agreed with Wigney J’s decision to reject the newspaper’s request to include evidence from the actor Yael Stone during the original trial.
Link to the Judgement from the Federal Court
Following the Full Court of the Federal Court decision, Nationwide News could theoretically appeal to the High Court, assuming there were grounds for appeal. The first step would be to apply for special leave to appeal. There are no indications at the time of writing that the newspaper will appeal.
OUR ANALYSIS OF THE CASE
The Rush decision at first instance analysed the defamatory imputations conveyed by the Daily Telegraph and concluded the newspaper was not able to show that the imputations were true. Justices Gleeson, White and Wheelahan agreed with the trial judge’s finding.
Although the newspaper’s appeal was ultimately dismissed by the Full Court of the Federal Court, the appeal judges did agree with one aspect of News Limited’s submissions, namely, that the trial judge placed too much significance on promotional press interviews in which Ms Norvill praised Mr Rush. Concerns were raised by the legal team representing News Limited about the trial judge’s assessment of the witness and whether there was any apprehension of bias.
In any court proceedings, it is essential that judicial officers presiding over that case remain impartial in the exercise of their duties, so that all parties can be satisfied they were treated fairly and equally. Judicial independence is one of the underpinning principles of the rule of law. It guarantees that there will be an absence of bias and that the presiding judge/s will decide on any matter honestly and fairly, in accordance with the law and with the rules of evidence, without concern or fear of interference and free from control or undue influence. The apprehension of bias could raise concerns that one or more parties were denied their fundamental constitutional right to due process. For further discussion and analysis about the rule of law, click here.
After an exhaustive analysis, the Full Court of the Federal Court concluded that Wigney J’s assessment of the witness at first instance should be accepted. It is important to bear in mind that the appeal judges did not have the trial judge’s advantage of being able to observe the witness as she gave her evidence. Consequently, the governing principle is that appeal judge/s should not interfere in a trial judge’s assessment of the credibility or reliability of a witness without good reason. To emphasise this point, the written judgement said [at 315]:
“This is a case in which particular regard should be had to the advantage which the judge had in seeing and hearing the evidence as it was given… In our view, the judge’s findings are not glaringly improbable, contrary to compelling inferences or inconsistent with incontrovertible facts or other uncontested testimony.”
Another point of academic interest that comes out of the appeal is the trial judge’s refusal to allow a last-minute amendment to News Limited‘s defence, which would have allowed material from another witness, Yael Stone, to be heard. Justice Wigney ruled it would be unfair to Mr Rush to allow the late change. This raises yet another important underpinning principle of the rule of law, which is that justice should not only be done, but be seen to be done. By maintaining the integrity of the judicial process and a person’s right to a fair trial, fairness, justice and equality before the law are maintained. The appeal judges did not interfere with the trial judge’s decision, indicating that they were satisfied there had been no miscarriage of justice.
In criminal trials, a fair hearing requires a balancing exercise between the interests of the accused, the victim and the community. In civil proceedings such as the Rush case, a fair hearing requires a judicial officer to balance the interests of all the parties to a dispute and ensure that each party is given a fair hearing. As was the situation in the Rush case, individuals who find themselves in dispute with either prominent, high profile and/or affluent individuals and/or organisations may find themselves in a situation where there is a significant power imbalance.
Beyond the particular circumstances of this case, the integral desire to achieve justice in some cases can lead to incalculable harm and distress to all those involved. Looking back at the Rush case, the process for all of those involved was no doubt traumatic. Chris Merritt of the Australian newspaper noted on 2 July 2020,
“Former Law Council president Fiona Mcleod QC…. Believes it would have been better if Eryn Jean Norvill had her complaint dealt with in proceedings that were not focused on the reputation and potential earnings of an international movie star.” In Norvill’s statement to the media following the outcome of the Full Federal Court decision, she said: “
There are no winners, only losers and I would have been content to receive a simple apology and a promise to do better, without any of this
This case as well as many others since the #MeToo movement, focuses our attention to the potential systemic power imbalance that can exist in workplaces, primarily in cases of sexual harassment perpetrated by individuals who find themselves in positions of power. Equally, the Rush verdict sends a strong message to publishers and others who comment on social media or mainstream media outlets, that they could face severe consequences for publishing material which contains derogatory imputations or allegations they are unable to substantiate. Finally, this case illustrates another important defining principle of the rule of law: the presumption of innocence, which must always be borne in mind.
The record amount of damages awarded to any individual in Australia is worthy of further discussion and analysis. The award of $2,872,753 that was given to Mr Rush considered how the actor’s tarnished reputation would limit his ability to secure future work. The award comprised:
- non-economic loss including aggravated damages of $850,000
- past economic loss including prejudgment interest of $1,060,773,
- future economic loss of $919,678; and
- prejudgment interest on the non-economic loss of $42,302.
The trial judge Wigney J was able to exceed the cap on reputational damage contained in section 35 of the Defamation Act 2005 (NSW) because in his view, Mr Rush had suffered aggravated damage.
The cap, which is indexed, has been exceeded in a series of recent high-profile cases, hence the current debate for reforms to be made to the legislation to put a tighter cap on damages where a judicial officer makes a finding about aggravated damages.
Examples of other recent cases include:
- The four Wagner brothers, who each won $750,000 from broadcaster Alan Jones and radio stations 2GB and 4BC over comments on Grantham flood deaths when the cap was $398,500. https://www.afr.com/politics/alan-jones-defamed-wagner-family-over-grantham-floods-20180911-h1592t
- Actress Rebel Wilson and barrister Lloyd Rayney, who each won $600,000 when the cap was $389,500. https://www.smh.com.au/national/barrister-s-bid-to-upgrade-record-2-6-million-defamation-payout-stalls-20190201-p50v0t.html