John Fairfax Publications Pty Ltd v Gacic

• Jurisdiction: Australia Federal only
• Court: High Court (Australia)
• Judge: Gleeson CJ,Crennan J.,Gummow,Hayne JJ,Kirby J,Callinan,Heydon JJ.
• Judgment Date: 14 June 2007
• Neutral Citation: 2007-0614 HCA D,[2007] HCA 28,2006-0614 HCA D
• Docket Number: S480/2006
• Date: 14 June 2007

[2007] HCA 28

HIGH COURT OF AUSTRALIA

Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ

S480/2006

John Fairfax Publications Pty Ltd & Anor

Appellant

and

Aleksandra Gacic & Ors

Respondent

Supreme Court Act 1970 (NSW), ss 75A, 85, 86, 90, 102, 107, 108.

Defamation Act 1974 (NSW), ss 7A, 9, 46, 46A.

John Fairfax Publications Pty Ltd v Gacic

Defamation — Statutes — Interpretation of Supreme Court Act 1970 (NSW) (‘Supreme Court Act’) — Section 108(3) — Defamation action — Appeal challenging findings of a jury made under s 7A(3) of the Defamation Act 1974 (NSW) (‘Defamation Act’) on specific issues put to the jury — Powers of an appeal court to direct a verdict for the plaintiff on such issues in the event of a successful appeal.

Statutes — Interpretation — ‘May’ — Appeal challenging findings of a jury on specific issues in defamation proceedings — Whether Supreme Court Act, s 108(3) confers a power, with a duty to exercise that power once the relevant entitlement to a verdict on any issue in the proceedings is established as a matter of law.

Statutes — Interpretation — Supreme Court Act, s 108(3) — Defamation Act, s 7A — Defamation action — Jury found that there were imputations conveyed but that those imputations were not defamatory — Role of the jury in defamation proceedings — Whether the Court of Appeal must order a new trial where it holds that a jury's answers to issues put to the jury in defamation proceedings are unreasonable.

Defamation — Business defamation — Nature of the test for defamation where a plaintiff alleges damage to business reputation — Procedure in jury trials in New South Wales — Application of Defamation Act, s 108(3).

Words and phrases — ‘any cause of action, issue or claim for relief’, ‘may’, ‘direct a verdict and give judgment accordingly’, ‘as a matter of law’, ‘entitled to a verdict’, ‘business defamation’.

1 Gleeson CJ And Crennan J. The issue in this appeal concerns the power given to the New South Wales Court of Appeal by s 108(3) of the Supreme Court Act 1970 (NSW) (‘the Supreme Court Act’), and the exercise of that power at a certain stage of an action being heard pursuant to the Defamation Act 1974 (NSW) (‘the Defamation Act’)1.

Gleeson CJ

2 The facts are set out in the reasons for judgment of Callinan and Heydon JJ. The case concerns that form of defamation which involves injury to business reputation, that is, the publication of imputations that have a tendency to injure a person in his or her business, trade, or profession. That the law of defamation affords such protection is not surprising. Suppose someone says: ‘X is a thoroughly decent person, but he is showing signs of age; his eyesight is poor, and his hands tremble’. That would not be a reflection on X's character. It would be likely to evoke sympathy rather than hatred, ridicule or contempt. If, however, X were a surgeon, the statement could be damaging. To say that someone is a good person, but a dangerously incompetent surgeon, is clearly likely to injure the person's professional reputation. That is an established form of defamation, and it was not called in question by the parties to the present appeal.

3 Pursuant to s 7A of the Defamation Act, proceedings were held before Bell J and a jury, at which the jury was required to decide whether certain matter published by the first appellant about a business carried on by the respondents carried all or any of four specified imputations and, if so, whether the imputation or imputations was or were defamatory (s 7A(3)). The alleged imputations were said to have been contained in a critical review of a restaurant Coco Roco, which was owned by the respondents. Those with which the appeal to this Court is concerned were as follows :

• (a) The respondent sells unpalatable food at Coco Roco

• …

• (c) The respondent provides some bad service at Coco Roco.

4 Each respondent sued on those imputations, and on two others which are not the subject of this appeal. One of the other imputations, identified as (d), was the subject of consideration by the Court of Appeal, but we are not asked to decide the issue in respect of that imputation that was before the Court of Appeal, and we have not heard argument on the point.

5 In relation to each of (a) and (c), the jury found that the imputation was conveyed by the article published by the first appellant, but that the imputation was not defamatory.

6 The respondents appealed to the Court of Appeal on two presently relevant grounds, both of which were upheld. One ground was that the jury had been misled by the way in which counsel had addressed on the subject of defamatory meaning, and that the trial judge's directions were inadequate to correct what had been put in address. The other ground was that the jury's answers to the second of the questions posed in respect of (a) and (c) were unreasonable. It is not necessary to go into the detail of the first ground. In brief, the Court of Appeal held that the combined effect of counsel's address and the trial judge's directions was to mis-state the nature of business defamation, and to leave the jury with the impression that, if the matter published would not lower the respondents in the estimation of right thinking members of the community, then the respondents were not defamed. To relate the point to the example given above, it was not made clear to the jury that it could be defamatory to say that X, a surgeon, although a good man, had deteriorated physically, even though that would not reflect badly on his character or his personal conduct. To say that a restaurant sells unpalatable food or provides bad service does not necessarily reflect badly on the owners personally. They might be worthy people who are themselves victims of circumstances, or incompetent staff. However, it has a tendency to damage their business reputation. That point, the Court of Appeal held, was not conveyed, or not conveyed with sufficient clarity, to the jury. The Court of Appeal went further, and upheld the second ground as well. Beazley JA, with whom Handley and Ipp JJA agreed, held that, having found that imputations (a) and (c) were conveyed, no reasonable jury, properly directed, could have given any answer other than that the imputations were defamatory. In that respect, it was noted that the case for the respondents was confined to a case of business defamation.

7 The s 7A proceedings were being conducted in advance of any consideration of whatever defences the appellants would raise. No defence has yet been filed.

8 In this Court, the appellants challenged the Court of Appeal's conclusion that no reasonable jury, properly instructed, could find that imputations (a) and (c) were not defamatory. As to that, Beazley JA said:

‘The appellants had recently opened their restaurant at King Street Wharf. The appellants had promoted the restaurant in terms: “A new level of dining comes to Sydney's King Street Wharf”. The restaurant had been fitted out expensively and had extensive views of Darling Harbour. The style and price of the food was, as it appears from the article, intended to indicate that this was a high class restaurant. As I have indicated, the location at Darling Harbour was itself prestigious in a city which is sophisticated and cosmopolitan.

The food served in any restaurant is its essential business. If the food is “unpalatable” the restaurant fails on the very matter that is the essence of its existence. This is especially so of a purportedly high class restaurant. To say of a restaurateur of such an establishment that they sold “unpalatable” food injures that person in their business or calling and because of that, is defamatory. In my opinion, no reasonable jury properly directed could reach any other verdict.

Service is also an integral part of the experience of dining. Good service is expected at a high class restaurant. It is part of what the patron pays for. It is almost trite to say that poor service, even occasional poor service within the one dining experience, will not be tolerated by patrons of an expensive “swank” restaurant. To say, therefore, that the appellants provided “some bad service” at Coco Roco, even though the damnation was not total, would injure a person in their business or calling as a restaurateur and was likewise defamatory. No reasonable jury properly directed could reach any other verdict.’

9 This reasoning appears to us to be correct. It was argued for the appellants that an ordinary reasonable reader might take the article in question as a criticism of the chef, not the owners of the restaurant, and, further, that a condemnation of some food or some service would not necessarily reflect on the reputation of the restaurateurs as traders. These arguments are unpersuasive, and to some extent reflect the approach that led the Court of Appeal to uphold the first of the grounds of appeal to it.

10 The principal complaint of the appellant was directed to the course taken by the Court of Appeal after it had arrived at the conclusions stated above. The Court of Appeal gave effect to its conclusion that no reasonable jury, having found that imputations (a) and (c) were conveyed, could reasonably fail to conclude that they were defamatory, by exercising the power under s 108(3) of the Supreme Court Act to enter what were in effect special verdicts in favour of the respondents on the s 7A issues in relation to (a) and (c). As Gummow and Hayne JJ have pointed out, it was accepted in argument by counsel for the respondents that the precise orders made by the Court of Appeal in that respect require some amendment, but the substance of what was intended is clear. According to the appellants, the Court of Appeal did not have the power to do that, or, alternatively, if the power existed, it should not have been exercised.

11 The Court of...