Carson v John Fairfax and Sons Ltd

178 CLR 44
1993 - 0616A - HCA; 113 ALR 577

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(Judgment by: Toohey J)

Between: Mr Nicholas Carson
And: John Fairfax and Sons Ltd

Court:

Judges: Mason CJ
Brennan J
Deane J
Dawson J

Toohey JGaudron J
McHugh J

Subject References:
Defamation

Hearing date: 25 August 1992, 26 August 1992
Judgment date: 16 June 1993

Canberra

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Judgment by:
Toohey J

The appellant in each of these appeals, Mr Nicholas Carson, was the plaintiff in two defamation actions which were tried together before Loveday J and a jury in the Supreme Court of New South Wales.

The respondent John Fairfax and Sons Limited ("Fairfax") was the defendant in one of those actions and, together with the respondent Mr John Slee, was a defendant in the other. The actions arose out of the publication of two articles in The Sydney Morning Herald of which Fairfax is the proprietor. It is a newspaper with a wide circulation, especially in New South Wales but also throughout Australia. Mr Slee, a journalist employed by Fairfax, was the author of both articles. By consent both appeals were heard together.

The jury awarded Mr Carson $200,000 damages in respect of publication of the first article and $400,000 in respect of publication of the second article. The Full Court of the Supreme Court of New South Wales (Kirby P and Priestley JA, with Mahoney JA dissenting) upheld appeals against both awards of damages and in each case ordered a retrial, limited to the assessment of damages. ^[F112] It is against those orders that Mr Carson now appeals. There is a notice of cross-appeal in each matter. The first seeks an order for a new trial as to liability and damages. The second seeks an order for dismissal of the proceedings, alternatively a new trial as to liability as well as damages. In addition there are identical notices of contention in each matter, in which the respondents seek to uphold the orders made by the Court of Appeal on additional grounds. To some extent these grounds reflect grounds in the notices of cross-appeal.

Mr Carson

Mr Carson is a solicitor with a high reputation in his profession. He was described by Kirby P in the following terms, about which there was no dispute. ^[F113]

"Mr Carson is a solicitor admitted to practice in 1964. In 1968, he became a partner in the large and long established firm then known as Dawson Waldron Edwards and Nichols. At the time of the trial in June 1989, he was forty-seven years of age. He specialised in litigation. He had taken active part in the Law Society of New South Wales and its various committees. He served as a member of the Council of the Society for three years between 1984 and 1987. In that time he served on the subcommittee which makes rulings on the ethical conduct of solicitors."

The first publication

The first article complained of was published on 21 April 1987 in the law column written by Mr Slee. It appeared on the page on which editorials and letters are featured, in a prominent part of the newspaper. It was, by newspaper standards, a reasonably long article. It carried Mr Slee's name in bold type and was headed: "Dr Rajski: a war on many fronts". The article can only be fully appreciated with an understanding of the litigation in which Dr Rajski was then involved. However, because of the way in which argument was presented to this Court on both sides, it is unnecessary to traverse the long and complex history of that litigation. The focus of argument was on the considerations that led the Court of Appeal to set aside the awards of damages.

But it is necessary to understand that Dr Rajski had brought action against what Mahoney JA described as "the Tectran interests" and that, again in his Honour's words, "the litigation was being bitterly fought by those parties". ^[F114] And, as Mahoney JA observed, Mr Slee had in a number of articles expressed the view that Dr Rajski was in the right and that the Tectran interests and those associated with them were deserving of censure. Mr Carson's firm acted for Tectran Corporation Pty. Limited although the first article wrongly stated that it was acting for another firm of solicitors, Allen Allen and Hemsley, whom Dr Rajski had joined in the litigation by alleging abuse of process on their part. Mention must also be made of two other persons: Mr Carney, a solicitor who at one time acted for Dr Rajski in the litigation and Dr Metcalf, a psychiatrist who had examined Dr Rajski as a condition of a stay of proceedings ordered by the Court of Appeal. It is not necessary to go to the body of the article (the relevant passages appear in the judgment of Mason CJ, Deane, Dawson and Gaudron JJ) because Mr Carson pleaded two imputations arising from it which went to the jury without objection. They were:

"(a)

The Plaintiff wrongly attempted to intimidate Dr Metcalf by threatening to sue him for defamation in respect of a medical report written by him.

(b)

The Plaintiff wrongly brought defamation proceedings in his own name against Mr Arthur Carney, a solicitor, for the sole purpose of causing Mr Carney to forthwith cease to act for his client, Mr Rajski."

Those imputations carried with them allegations of gross professional misconduct on the part of Mr Carson, the commission of civil wrongs and contempt of the Supreme Court of New South Wales. They were very serious allegations.

The second publication

The second article complained of was published on 6 May 1988; it was headed "The criminal phase of the Rajski case". The article was mainly concerned with what it described as the decision of the "State Director of Public Prosecutions to institute criminal proceedings against some of the main actors in the Tectran v. Raybos litigation". It spoke of a summons issued against Mr Moshe Yerushalmy, a director of a Tectran company and Scitec Communications System Ltd., and it referred to the preparation of a summons against Mr David Bruce Cowper, a former employee of Scitec. Again, the relevant passages of the article appear in the judgment of Mason CJ, Deane, Dawson and Gaudron JJ.

After a ruling by Hunt J in interlocutory proceedings and the refusal of leave to appeal, the imputations upheld in respect of this article as capable of going to the jury were as follows:

"(a)

The Plaintiff was wrongfully party to a conspiracy with Mr Moshe Yerushalmy to obstruct the course of justice by evading service of criminal process.

(b)

The Plaintiff so conducted himself as to give rise to a reasonable suspicion that he was wrongfully party to a conspiracy with Mr Moshe Yerushalmy to obstruct the course of justice by evading service of criminal process."

Once again, those imputations carried allegations of gross professional misconduct on the part of Mr Carson but in addition criminal conduct. The imputations were challenged in the relevant notice of cross-appeal.

Although there were detailed grounds of appeal before the Court of Appeal relating to Loveday J's directions and rulings on various matters, the thrust of the attack made on the awards was that they were so excessive as to be perverse and unsustainable. And, essentially, that is how the Court of Appeal approached the disposition of the appeals .

Why the awards were set aside

Kirby P wrote the principal judgment resulting in the appeals to the Court of Appeal being allowed. Priestley JA agreed generally with Kirby P though he added some comments of his own to which reference will be made. As already noted, Mahoney JA dissented and would have dismissed both appeals. In seeking to restore the awards in his favour Mr Carson contended that the majority in the Court of Appeal erred in holding that the awards were excessive and manifestly unreasonable and that they did so, in large part, by treating the verdicts in both actions as an aggregate amount; that the majority should have looked at each award separately; and that for other reasons, which must be dealt with, there was no justification for interfering with the jury's verdicts.

It is apparent that it was in the award of $400,000 in respect of the second publication that Kirby P and Priestley JA found the real justification for allowing the appeals. However, as just observed, one of Mr Carson's complaints is that the majority looked too much at the awards in aggregate and failed to concentrate on each award by reference to the publication in question. This might be said to have two consequences. The first is that it diverted the Court's attention unduly from the award made in respect of the first publication. The second consequence, which is in effect a corollary of the first, is that it led to a general retrial on the question of damages without sufficient reference to the appropriateness of a retrial only in relation to the award of $400,000.

General principles

Before turning to this and other aspects of the appeals it is necessary to say something of the general principles which should have guided the Court of Appeal in determining whether or not to disturb either or both of the verdicts. In view of the recent decision of this Court in Coyne v. Citizen Finance Ltd, ^[F115] there is no need to spend a great deal of time on those general principles, except in so far as it was contended by counsel for Mr Carson that the Court of Appeal had departed from them.

In each action Mr Carson pleaded in his statement of claim that, by reason of the publication in question, he

"has been held up to public odium, scandal and contempt and has been injured in his reputation and feelings".

In each case he claimed "Damages including aggravated damages". ^[F116]

In neither case did Mr Carson plead, in general or specific terms, that he had suffered financial loss by reason of the publication. But it is apparent that the publications were, by their very nature, likely to damage Mr Carson in his professional capacity. Therefore, as in Coyne: ^[F117]

"The central question is whether the award ... was so excessive, having regard to the undoubted blow to the plaintiff's personal and business reputation, as to warrant the Full Court setting it aside ."

I would repeat what I said in Coyne regarding the way in which an appellate court should approach its task when an award of damages for defamation is challenged: ^[F118]

"But that is not to say that an appellate court should begin with its instinctive reaction and test the award against that. Rather, the court should first look at the evidence, assume that the jury took a view of the evidence most consistent with the verdict it returned, and then ask whether, in the light of that evidence, the award is sustainable."

The reasons why the appellate court should proceed in that way are discussed in Coyne but it is necessary to stress how difficult it is for an appellate court to recreate the atmosphere of the trial of a defamation action. Recent decisions of this Court have emphasised the advantages a trial judge has in making factual decisions. ^[F119] Nevertheless, the reasons of the trial judge may themselves make it clear that the judge has fallen into error. In the case of a jury award there are no reasons available. While that does not render the award invulnerable, it does mean that an appellate court is able only to guess at some of the considerations that may have influenced the jury. They include forensic considerations such as the length and robustness of the cross-examination of the plaintiff. The jury might regard such a cross-examination as reflecting the attitude of the defendant to the plaintiff and in turn reflect in their award their view of that attitude. ^[F120]

There is a risk that the jury might cross the line between compensating the plaintiff and punishing the defendant. An important aspect of the trial judge's charge is to warn the jury against crossing that line. And Loveday J did that when he said:

"Remember when you are considering damages one very important point, that whether you are concerned with damages for the damage to the reputation, that is vindication, consolation or compensation for the injury to his reputation or whether you are concerned with damages for the hurt to his feelings, you must not include in your verdict any element by way of punishment of the defendant. That is, the paper or Mr Slee. Punishment is no part of any damages. They are intended to be compensatory in the sense that I have indicated, not by way of punishment. You don't, when you are considering, and if you allow an amount by way of aggravation, bring in a separate amount for aggravation of damages. It is included in the amount of damages which you award."

If, as here, the jury were properly instructed in that respect, an appellate court should be slow to conclude that the amounts awarded "smack of the punitive" as Kirby P concluded in the present case. ^[F121]

The very fact that for the most part legislatures in Australia have retained some access to juries in defamation proceedings in the Supreme Courts, while eliminating them in other civil actions, is testimony to the very special role traditionally given to the jury in defamation actions. ^[F122] Whether awards in defamation cases should be the province of judge or jury is much debated . But where juries are in general use in defamation proceedings, as they are in New South Wales, ^[F123] an attack on an award, whether by defendant or plaintiff, faces very considerable hurdles.

Kirby P recognised the special position of the jury and the need to show "in effect, that the verdict is not a true verdict". ^[F124] At the same time he emphasised that the appellate court must perform its function which includes a comparison of the award under attack with what is fair and reasonable compensation for the tort sued upon. In the end Kirby P held that, in the present case, the Court of Appeal was authorised to disturb the jury's verdicts. And his Honour's reasons for so concluding were essentially that this "was not the case for the largest verdict for general damages in defamation in the history of this State and of this country". ^[F125] He added: "I find it hard to accept that these are the most grave imputations ever yet to have come before an Australian court, despite the multitude of defamations, including many of persons holding even more public offices than Mr Carson does and better known than he". ^[F126]

To approach the matter in this way was, I respectfully suggest, to fall into the very trap against which Coyne warns. It necessarily coloured the rest of the judgment with what was clearly his Honour's instinctive reaction to the awards. On the other hand Mahoney JA analysed the seriousness of the imputations which the articles conveyed, pointing out that when a person has been defamed "damages are awarded in order to achieve at least three things: compensation for the hurt; reparation for the harm; and vindication". ^[F127] His Honour dealt with each article in this light and in the end concluded that the awards were not "excessive or beyond what was appropriate to achieve those objectives". ^[F128]

An aggregate verdict?

The error of approach to which reference has earlier been made is, I think, compounded by Kirby P's treatment of the two verdicts as an aggregate. That is not to say that his Honour failed to give any separate consideration to each award; this was clearly done in various places in his judgment. Nevertheless, passages of the judgment including those set out under the preceding heading in these reasons do bear out the complaint that his Honour's reaction was to look at the overall figure. I shall give but one more example: "But it may help to explain how such a very large, indeed uniquely large, verdict was returned." ^[F129]

The matter is of importance because the jury were entitled to take an even more serious view of the second article. To begin with, it imputed a criminal conspiracy to Mr Carson or, at the very least, conduct on his part giving rise to a suspicion of criminal conspiracy. In addition, the second article was published without any inquiry being made of Mr Carson , notwithstanding his offer to discuss the facts following publication of the first article. This is a matter discussed later in this judgment; I mention it now because it serves to point up differences between the two publications.

Comparisons with awards in personal injury actions

In the light of conflicting views as to the permissibility of comparisons with personal injury verdicts, Kirby P considered it "safer not to venture any precise comparisons with personal injury cases". ^[F130] The arguments against any precise comparison are obvious. But there are dangers in engaging in a more general comparison. Before a jury, reference to awards in personal injury cases must tend to suggest a yardstick when none truly exists. Or it may be taken as indicating some sort of ceiling on the amount that may properly be awarded and that is unlikely to be helpful to the jury. ^[F131]

Even before an appellate court there is considerable unreality in embarking on any sort of comparison. To begin with, any such comparison fastens on to the element of general damages in personal injury awards and isolates that from other elements that go to make up such awards. The practice of trial judges identifying the relevant elements of an award of damages has been sanctioned, indeed urged, by this Court on a number of occasions. ^[F132] And it is now standard practice. Nevertheless, on appeal it is the totality of the award with which in the end an appellate court is concerned. To extract from a large award of damages for serious personal injuries (an award of say $2 million) the amount assessed for general damages and offer that as a basis of comparison with a defamation award has elements of arbitrariness and unreality. In his judgment Kirby P instanced The Canterbury Hospital v. Cappelletto ^[F133] in which he, Mahoney JA and Clarke JA regarded a jury verdict of $250,000 for general damages for effective total blindness as outside "current general ideas of fairness and moderation". ^[F134] Why his Honour offered that decision as opposed to others is not clear. Indeed The Canterbury Hospital v. Cappelletto is a good illustration of the problems inherent in making such comparisons. The overall award of $471,000 in that case was in fact upheld because the Court of Appeal considered the allowance for economic loss to be inadequate. More importantly, Mahoney JA was prepared to assume that "standing alone, $250,000 is appealably excessive as an award of general damages". ^[F135] Yet his Honour was not persuaded that either $200,000 or $400,000 were excessive in the present case.

An appellate court may look to any criteria that are relevant in determining whether it should interfere with an award of damages for defamation. It seems to me that comparisons with awards in personal injury cases are rarely likely to be helpful. In the present case the notices of contention which allege that the Court of Appeal erred in failing to have regard to such awards are not persuasive.

Furthermore, in many defamation actions there is an element of pecuniary loss though such loss remains unquantified, thus rendering any comparison with non-pecuniary loss in a personal injury award even more suspect. Coyne was such a case. In the present case Loveday J directed the jury that:

"there is no claim for monetary loss. It would be wrong for you to include in your verdict some amount for past possible monetary loss or indeed for future possible monetary loss. Mr Hughes said something about the possibility of monetary loss, but he did not mean to imply by that that any amount should be included in damages in respect of that. If he did then I direct you to ignore any such suggestion that you might have thought he was conveying."

Nevertheless, injury to professional reputation does carry with it some element of financial loss, even though it may be impossible to quantify it or identify its components.

Guidance to the jury

On the other hand an admonition to the jury to have regard to the value of money, its buying power and the uses to which it may be put should assist a jury to consider what is an appropriate award in defamation proceedings. ^[F136] This will cause the jury to direct their attention to the real value of any amount they award. There is no doubt that Kirby P was much influenced by the amount $600,000 would return each year if invested, leaving the capital intact, even allowing for income tax on the return.

As I suggested in Coyne, ^[F137] "there is much to be said also for the judge indicating to the jury the range of damages he or she thinks appropriate in the particular case, so long as it is made clear that the decision is one for the jury". I would now go further and say that it is appropriate for the trial judge in a defamation action to indicate to the jury a range of figures which might be awarded. The range would have regard to the judge's experience in and knowledge of awards in other defamation actions. Again, such an indication would have to be accompanied by the usual caveat as to awarding damages in proportion to the harm suffered by the plaintiff, with an acknowledgment that it is for the jury to determine the amount.

Other matters for the consideration of the jury

Mahoney JA conducted a careful review of the evidence and of the relevant considerations before the Court of Appeal. His Honour stressed one particular matter, the significance of which is not truly reflected in the judgments of the other members of the Court of Appeal. It was this. While the jury must have concluded that what was said of Mr Carson was untrue (Fairfax and Mr Slee did not suggest otherwise), the jury were entitled to conclude not only that Mr Slee made no sufficient inquiry as to the truth of what he was about to print but also that he knew that "some of the matters suggested by what he wrote were false". ^[F138] In respect of the first article Mahoney JA rightly said that "(t)he jury could conclude that Mr Slee knew that (Mr Carson) had not brought defamation proceedings in his own name against Mr Carney" ^[F139] and that it was Mr Carson's firm, not Mr Carson, that was considering action against Dr Metcalf. If the jury so concluded, they might well have treated this as a significant consideration in the amount of damages they awarded. While it would have been impermissible for the jury to award punitive damages as the result of their view of the facts, it was open to them to find that the harm suffered by Mr Carson was aggravated by Mr Slee's state of knowledge. It may, at times, be difficult to distinguish between aggravation of the plaintiff's injury and punishment of the defendant ^[F140] but this is insufficient reason to assume that a jury, properly directed, has used the facts in an improper manner.

Mahoney JA identified what he described as "three main things which, it might be thought, were seen by the jury to add significantly to the hurt and the harm caused by what Mr Slee had done". ^[F141] The three matters are these:

1.

The treatment of Mr Carson's offer to discuss the facts;

2.

The treatment of Mr Carson's request for an apology;

3.

The conduct of the respondents at trial.

After publication of the first article on 21 April 1987 Mr Carson spoke to Adrian Deamer, an officer of Fairfax. At that time Mr Carson was not minded to sue in respect of the article. But three days later he wrote to Mr Deamer to say that a number of reports had reached him as to the effect of the publication upon his reputation and that, unless he received an immediate apology, he would have to reconsider his intentions. On the same day Mr Carson wrote to Mr Anderson, the editor-in-chief of Fairfax, asking for a balanced report of the litigation; that proper editorial control be exercised over Mr Slee's writings; and that he receive an appropriate apology. The letter amplified these matters in some detail. In the letter to Mr Anderson Mr Carson offered "to discuss the case with one of your senior reporters, at such length as may be necessary, and to make available to him such material as he may require".

On 30 April 1987 Mr Anderson replied to Mr Carson's letter, acknowledging two errors in the article and attaching a form of correction Fairfax was prepared to publish. As to the suggestion that Mr Carson was prepared to make material available, Mr Anderson simply wrote: "I will consider this and get back to you." He did not do so. In his letter Mr Anderson said that he did not believe that an apology was called for; nevertheless he was prepared to correct the errors in question.

Thereafter followed correspondence between Mr Carson and Fairfax until on 22 December 1987, about eight months after the first article , Fairfax published material under the heading "Apology to Mr N R Carson". It is unnecessary to set out the apology; it is enough to say that it did not deal with the more serious concerns Mr Carson had about the first article. As Kirby P commented: ^[F142]

"It must be inferred that the jury agreed with Mr Carson's opinion that the apology in respect of the first article was inadequate and too late."

On 6 May 1988 Fairfax published the second article. It did so without any inquiry being made of Mr Carson. As Mahoney JA observed: ^[F143] "The jury might have concluded that that constituted a public insult or contempt for Mr Carson and that the hurt and the harm caused by it were great." By contrast Kirby P treated Mr Carson's initial willingness to settle for an acceptable apology in respect of the first article as "especially relevant". ^[F144] If I understand his Honour correctly, he saw this initial willingness as going in mitigation of damages. But, with respect, I think he erred in doing so. In light of the subsequent history of the matter, it was at best, from the respondents' viewpoint, neutral.

At the trial there were two particular matters which Mr Carson's counsel relied upon as aggravating the hurt to his client. The first arose from questions in cross-examination suggesting that Mr Carson had brought the proceedings then before the Court in order to stop Mr Slee commenting on the Rajski-Tectran litigation. This was a serious allegation which Mr Carson denied. The second again arose out of cross-examination. It was put to Mr Carson that in his conduct of the Rajski litigation he had acted less than properly and reference was made to criticism made by Clarke J of Mr Carson's conduct in entering judgment against Mr Rajski in default of appearance. Mr Carson gave reasons for his conduct; no attempt was made by the respondents to support what Clarke J had said. As Mahoney JA observed: "(T)he fact that the questions were asked may well have been seen by the jury as a further and serious exacerbation of the hurt and the harm already done to (Mr Carson)". ^[F145]

Should the awards have been set aside?

For the reasons appearing in this judgment, which substantially are the reasons appearing in the judgment of Mahoney JA, I do not think that the awards should have been set aside. They were large awards, particularly that in respect of the second article. But they were not shown to have been perverse or out of all proportion to the hurt suffered by Mr Carson, particularly when the impact of each article is given the separate consideration it deserves. ^[F146]

It follows from what has been said so far that the appeals must be allowed. I now turn to consider briefly the matters raised in the notices of cross-appeal and contention in so far as they have not been considered already .

The imputations

As mentioned earlier, the respondents accepted before the Court of Appeal that the two imputations pleaded by Mr Carson in respect of the first article could be found by the jury. But they challenged the imputations upon which Mr Carson relied in respect of the second article. Those imputations appear earlier in this judgment; put broadly, they involve Mr Carson in a conspiracy to obstruct the course of justice.

The imputations pleaded in regard to the second article were the subject of interlocutory proceedings before Hunt J who substantially upheld the pleading. Leave to appeal from Hunt J's decision was, as already noted, refused. The Court of Appeal, in the hearing of the substantive appeals, endorsed Hunt J's actions. In the course of argument before this Court, the Court refused to grant the respondents special leave to challenge the imputations pleaded as arising from the second article. The question of special leave to challenge the order for retrials limited to the assessment of damages was reserved.

The comments by Mr Carson's counsel

In the course of his final address, counsel for Mr Carson said in relation to Fairfax: "It is about time this defendant was brought down to the ground". Counsel for Fairfax objected to this comment and Loveday J said that he would direct the jury not to award damages in order to punish Fairfax. In the course of charging the jury his Honour made the remarks set out earlier in this judgment . While Loveday J did not expressly connect his remarks with what had been said by counsel for Mr Carson, there is no reason to conclude that the jury did not heed his remarks and exclude any element of punishment in their awards.

The order for retrial

There is a somewhat curious feature of the Court of Appeal's order. Because there were two actions, there are two orders. Each directs that "the proceedings be returned ... for a retrial of the plaintiff's actions, limited to the assessment of his damages". Why each order speaks of "actions" is not clear. But, more importantly, so far as the action in respect of the first article is concerned Priestley JA, one of the majority, took the view that if that award were considered in isolation an appellate court should not interfere because the difference between his view and what the jury did was "not so great as to justify saying the jury figure had passed into the realm of the unsupportably unreasonable". ^[F147] But because of the size of the award in respect of the second article, Priestley JA thought that both verdicts should be set aside. On the other hand Mahoney JA said: ^[F148] "I do not think that the present awards were excessive or beyond what was appropriate to achieve those objectives." His Honour had been speaking of the objectives an award of damages in a defamation action was designed to meet. While the point is not crucial to the disposition of this appeal, it is of some importance that two members of the Court of Appeal would not have interfered with the award of $200,000 .

In so far as the restriction in the order for retrial is concerned, there is no reason why the Court of Appeal, seeing the matter as they did, should not have confined a retrial to the assessment of damages.

The matters raised in the notices of cross-appeal are not matters in which a grant of special leave to cross-appeal is warranted. There is no force in the matters raised by way of contention.

Conclusion

I would allow the appeals, set aside the orders of the Court of Appeal and affirm the judgments entered by Loveday J following the jury's verdict in each case .