Australian Broadcasting Corporation v Reading - [2004] NSWCA 411

No judgment structure available for this case.

CITATION: Australian Broadcasting Corporation v Reading [2004] NSWCA 411

HEARING DATE(S): 14 April 2004

JUDGMENT DATE:
15 November 2004

JUDGMENT OF: Santow JA at 1; Ipp JA at 109; McColl JA at 139

DECISION: Leave to appeal granted. Appeal allowed. Cross-appeal dismissed.

CATCHWORDS: DEFAMATION - whether the trial judge was bound to record the unanimous answers of the jury and enter judgment accordingly - whether the trial judge had power to discharge the jury and order a new trial - whether power to discharge jury was properly exercised - whether the jury's answer that imputation was not defamatory was perverse or unreasonable or a conclusion that no reasonable jury, properly instructed, could reach - scope of appellate review of determination of jury in defamation proceedings - scope of new trial.

LEGISLATION CITED: Defamation Act 1974 (NSW) s7A
Supreme Court Rules Pt 34 r 8A

CASES CITED: Australian Broadcasting Corporation v McBride (2001) 53 NSWLR 430
Australian Newspaper Company Limited v Bennett [1894] AC 284
Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107
Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449
Bradbury v NZ Loan and Mercantile Agency Co Ltd (1927) SR(NSW) 15
Bromley v Tonkin (1987) 11 NSWLR 211
Broome v Agar (1928) 138 LT 698
Cairns v John Fairfax and Sons Ltd (1983) 2 NSWLR 708
Capital & Counties Bank Ltd v George Henty & Sons (1882) 7 App Cas 741
Charlwood Industries Pty Limited v Brent [2002] NSWCA 201
Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68
Costains (Australia) Pty Limited v Atkinson (NSWCA 5 October 1995 unreported)
Cunningham v Ryan (1919) 27 CLR 294
Ex parte Burns (1893) 10 WN(NSW) 70
Field v Timber Industries Ltd (NSWCA, 17 June 1990, unreported)
Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171
Gorman v Barber & Ors [2004] NSWCA 402
Greek Herald Pty Ltd v Nikolopoulos (2001) 54 NSWLR 165
Hardy v Harris BC8601168 - an edited version appears at (1986) Aust Torts Reports 80-003
John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657
Lithgow District Hospital v Miller (NSWCA, 8 December 1994, unreported)
Lockhart v Harrison (1928) 139 LT 521
Morgan v John Fairfax & Sons Limited (1998) 13 NSWLR 208
Mourani v Jeldi Manufacturing Pty Ltd (1983) 57 ALJR 825
Mularczyk v John Fairfax Publications Pty Ltd [2001] NSWCA 467
Nationwide News Pty Ltd v Heggie [2001] NSWCA 257
Pavy v John Fairfax Publications Pty Limited [2002] NSWCA 46
Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500
Reading v Australian Broadcasting Corporation [2003] NSWSC 716
R v Meany (1862) 169 ER 1368;
Safeway Stores plc v Tate [2001] QB 1120
Saffron v John Fairfax Publications Pty Ltd [2004] NSWCA 254
Sarma v Federal Capital Press of Australia [2002] NSWCA 93

PARTIES :
AUSTRALIAN BROADCASTING CORPORATION (Claimant/Cross-Opponent)
Paul George READING (Opponent/Cross-Claimant)

FILE NUMBER(S): CA 40695/03

COUNSEL: B WALKER, SC/ R FRANCOIS (Claimant/ Cross-Opponent)
B McCLINTOCK, SC/ M RICHARDSON (Opponent/ Cross-Claimant)

SOLICITORS: Stephen Collins, Solicitor, Australian Broadcasting Corporation (Claimant/ Cross-Opponent)
Corrs Chambers Westgarth (Opponent/ Cross-Claimant)

LOWER COURTJURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 20206/02

LOWER COURT
JUDICIAL OFFICER : Shaw J

CA 40695/03
SC 20206/02

SANTOW JA
IPP JA
McCOLL JA
15 NOVEMBER 2004

AUSTRALIAN BROADCASTING CORPORATION v Paul George READING

FACTS

Mr Reading brought defamation proceedings against the Australian Broadcasting Corporation (‘the ABC’) arising out of a television broadcast on the “Four Corners” program. The program concerned among other things the business dealings and financial state of a corporation, ANI, of which Mr Reading was then the Finance Director. It was reported that ANI was involved in a transaction in which it took on the major liabilities of another corporation, ultimately resulting in crippling losses to ANI. Mr Reading pleaded that eight defamatory imputations were conveyed by the program, two of which, imputations (b) and (c), were framed as alternatives.

At the hearing pursuant to s 7A of the Defamation Act 1974, the jury answered that six imputations were not conveyed. Of the remaining two imputations, the jury answered that imputation (c) was conveyed but was not defamatory and made no answer in respect of imputation (d), which was said to be “not applicable because of wording.” The trial judge directed the jury to return to consider whether they had a unanimous answer with respect to imputation (d). After the jury had indicated that they had such an answer and apologised for “misreading the instructions”, but before the answers were recorded, the trial judge on the application of Mr Reading discharged the jury and ordered a new hearing on the basis of the Supreme Court Rules 1970 Pt 34 r 8A. Before discharging it, however, the trial judge recorded the jury’s answers, including the subsequent answer that imputation (d) was not made out.

The ABC sought leave to appeal contending that in the events that occurred the trial judge was bound to record the unanimous answers of the jury and enter a verdict for the defendant.

In the event that the application for leave to appeal and the appeal were successful, Mr Reading pressed a cross-appeal. This cross-appeal was on the basis that the conclusion reached by the jury was perverse in respect of imputation (c), namely that the imputation that “the plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer” although conveyed was not defamatory. This was in the sense that it was a conclusion no reasonable jury could have reached. In the event this Court reached that conclusion, Mr Reading submitted there should be a new trial on all issues as it would be open to the Court to conclude that a perverse verdict in relation to imputation (c) had influenced its considerations of the other imputations.

HELD

1. The Supreme Court Rules 1970 Part 34 r 8A cannot be the source of power to discharge a jury in the circumstances here; at [50]-[52].

(b) Although there was power for the trial judge to take the course he did, there was no sufficient basis to exercise that power by discharging the jury when the events showed that the jury’s initial misunderstanding was later dispelled so it could not properly be said that the jury had “seriously misapprehended” its task by the time its answers were recorded; at [52].

3. Seeking elucidation is not inconsistent with s 7A of the Defamation Act 1974, since a judge conducting a jury trial necessarily retains those ancillary procedural powers needed to accomplish that purpose, which includes re-directing a jury whose answers warrant such redirection; at [48].

Per Ipp JA (McColl JA agreeing)

1. It was an error to dismiss the jury and order a new trial in the circumstances:

(b) After the judge clarified the questions, the jury gave a clear answer to the questions asked of them showing they had resolved their confusion and understood their task; at [114].

2. The Supreme Court Rules Part 34 r 8A did not confer power on the judge to discharge the jury in the circumstances; at [115].

Dismissing the cross-appeal (by majority)

Per Ipp JA:

1. The approach to be applied in an appellate review of a jury verdict that an imputation was not defamatory was set out in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107; at [120]:

(b) The highest respect should be accorded to the jury’s determination;

(c) In determining whether a civil jury acted reasonably, an appellate court must approach the case on the basis most favourable to the respondent.

(b) In considering whether imputation (c) was defamatory, the jury cannot be taken to have given to it any meaning that they rejected when finding the other seven imputations were not conveyed, and must have taken into account that it did not carry any of the meanings contained in them; at [126]-[127].

(c) In this case, there is little left by way of context that could supplement the bare imputation itself; at [129]

4. It would not be unreasonable or irrational taking into account all those qualifications for a jury to conclude that the imputation was not defamatory; at [137].

Per McColl JA:

1. The scope of appellate review of the jury’s determination that imputation (c) was not defamatory is constrained by the significance accorded to the role of the jury in the law of defamation; at [142].

(b) The restraint upon the scope of appellate review ensures that the jury’s role as the “appropriate barometer of public opinion” is not usurped; at [150], [160]-[162].

(c) The Court may not reject the jury’s determination simply because it is of the view that it would not have come to the same conclusion; at [151]-[155], [162]-[163].

3. Since the matter complained of was a transient publication, the reasonable viewer is deemed to have viewed and listened to the whole of it but not with the same degree of concentration as would have been paid to a written document; at [168].

4. Having regard to the jury’s rejection of the imputations of dishonesty and corrupt conduct, the jury may have found imputation (c) was conveyed because the matter complained of said Mr Reading had breached his duties as director either because he had not been diligent or he had not been careful. The jury may also have rejected the proposition there was anything sinister about his bonus; [at [173].

5. The conclusion that ordinary decent members of the community would not think less of a person who had not acted diligently or carefully in receiving a bonus was not “glaringly improbable” or “starry-eyed”; at [176].

Per Santow JA (in dissent)

1. When an appellate court reviews a jury determination that an imputation is not defamatory, although the jury verdict will be accorded the highest respect it must still be set aside where it is a conclusion that no jury, properly instructed could reach; at [59]-[60].

(b) Then it considers the effect on reputation of the imputation so construed (at this stage greater appellate restraint is called for since general community standards are in play); at [63].

4. When a jury rejects an imputation but accepts another, that rejection has to be reconciled with that acceptance; at [80]

5. In this case, with respect to the jury’s conclusion on imputation (c), the analysis requires the following steps:

(b) No reasonable jury could conclude otherwise than that such a depiction bears adversely on Mr Reading’s business and professional reputation as a finance director in the commercial and wider community – even the most innocent possible construction is a plain and obvious defamation; at [68], [72], [86].

ORDERS

(1) Leave to appeal is granted;

(2) The appeal is allowed;

(3) Set aside the orders of Shaw J on 25 July 2003;

(4) In lieu thereof, direct that the answers of the jury be recorded in relation to paragraphs 3 and 5 of Mr Reading’s Further Amended Statement of Claim and that judgment be entered for the Australian Broadcasting Corporation.

(5) The cross-appeal is dismissed;

(6) Mr Reading is to pay the Australian Broadcasting Corporation’s costs of the appeal, the cross-appeal and the proceedings in the court below.

CA 40695/03
SC 20206/02

SANTOW JA
IPP JA
McCOLL JA
15 NOVEMBER 2004

AUSTRALIAN BROADCASTING CORPORATION v Paul George READING

Judgment

1 SANTOW JA:

OVERVIEW

2 In the course of that segment, reference was made not only to Mr Kerry Packer but also to the role in that acquisition of Mr Paul Reading, ANI’s then financial director, who was on the board of ANI at the time. Based on that segment, Mr Reading brought proceedings as plaintiff against the ABC pursuant to a Further Amended Statement of Claim. The proceedings commenced with a jury trial under s7A of the Defamation Act 1974 (NSW). This was to determine whether the matter complained of carried certain imputations and, if it did, whether they were defamatory. There were eight claimed imputations lettered (a) to (h), requiring the jury to answer, in each case, whether they were carried by the material and, if so, whether defamatory. Two of those imputations, (b) and (c) were put in the alternative for the jury to answer as to whether either imputation (but not both) was carried by the relevant material.

3 The trial judge discharged the jury after it had given its answers on the first occasion. The jury in the first instance answered that imputations (a), (b), (e), (f), (g) and (h) were not conveyed, that imputation (c) was conveyed, but answered “no” to whether it was defamatory. The jury failed to answer whether imputation (d) was made out, merely answering “not applicable because of wording”. It subsequently, on request by the trial judge did answer that question in the negative, having earlier apologised “for misreading the instructions”. The trial judge concluded that the jury “seem to have misunderstood their function”. Nonetheless at the request of the ABC’s counsel, he recorded the jury’s answers before discharging the jury.

4 The claimant contends that in the events that happened:

(b) the trial judge

(ii) that power was not capable of being exercised in the circumstances.

5 The opponent contends in response that the trial judge should have discharged the jury even without recording the jury’s answers. This was on the basis that the jury “had hopelessly misconceived what they were doing and a serious injustice had happened” to Mr Reading (AT, 14.50). This was on the basis that the jury, as shown by their first answers, had approached the questions on the basis, not that (b) and (c) were alternatives, but (c) and (d). That was said to have been shown by the fact that the jury had answered that imputation (c) was conveyed (but not defamatory) but had answered that imputation (b) was not conveyed. What the jury should have done was not answer question (b) at all, having answered the true alternative question (c).

6 The claimant replied that the jury’s subsequent answer regarding imputation (d), when coupled with the apology for misreading the instructions, showed that the jury now understood its task; it had now answered all the questions asked of it. On that basis, its earlier answer that imputation (b) was not conveyed amounted to an answer that was surplus, but was innocuous. It was surplus because (c) had earlier been answered to the effect that imputation (c) was conveyed whilst (d) had now been answered negativing that imputation. That demonstrated that the jury no longer could have thought (d) to be an alternative to (c).

7 There is a further cross-appeal dependent on the result of the leave to appeal. It is only pressed if leave to appeal and appeal are successful. The cross-claimant claims against his cross-opponent the ABC that a particular answer by the jury was “perverse and unreasonable”, so as to require a new trial. This arose after the jury first answered that imputation (c) was conveyed, but no other imputation. Imputation (c) was to the effect that “the plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer”. But the jury then answered that imputation (c) was not defamatory. It was the latter answer that is said to be perverse and unreasonable.

8 Should that cross-appeal succeed there is a final question. It concerns the scope of any new trial. It was made clear on the appeal that the relief claimed was limited to a new trial. No appeal was any longer sought to be brought pursuant to s108(3) of the Supreme Court Act (AT, 63-4). The issue would be whether any new trial should be limited to imputation (c) or, as the cross-claimant contends, extend to each other imputation as well on the basis that the whole of the jury’s verdict was vitiated by perversity on its part. The cross-claimant’s fall-back is to press for a re-trial on imputations (e) and (h).

9 It was accepted that the question in the cross-appeal was more accurately framed in the terms adopted by the High Court in John Fairfax Publications Pty Ltd v Rivkin (2003) 201 ALR 77. It was whether this was “a conclusion that no reasonable jury could reach”; Callinan J at [179] and [185]; see also Gleeson CJ at [6], McHugh J at [17] and [78], Kirby J at [118-119] and Heydon J at [223].

SALIENT FACTS

Background

10 These proceedings began as a jury trial under s7A of the Defamation Act 1974 (NSW). Section 7A(1) can operate as an initial judicial filter. As Kirby J put it in Rivkin “For an imputation even to be considered by the jury, it must have passed the first hurdle provided by s7A. A judge must already have determined on the papers, both that the matter is reasonably capable of bearing a defamatory meaning” and that “the imputation is reasonably capable of bearing a defamatory meaning”. It is then for the jury to determine whether the matter complained of carries the imputation and if so, whether that imputation is defamatory; s7A(3).

11 Here the matter complained of derives from a broadcast of the “Four Corners” program by the ABC on 7 and 8 April 1997. It referred to the respondent, Mr Reading. Mr Reading’s name was raised in the context of a piece of investigative journalism into the business dealings of Mr Kerry Packer, and in particular in relation to Mr Packer’s dealings with one of Australia’s oldest engineering companies, Australian National Industries Limited (ANI).

12 On the third day of the trial the trial judge discharged the jury ordering a complete new trial. He said he relied on Pt 34 r 8A of the Supreme Court Rules to do so. He concluded that the jury had misdirected their minds to the questions asked of them in such a fundamental way as to amount to no clear answer of the questions asked.

13 The claimant appealed against the decision of the trial judge to discharge the jury and not accept the answers given to the questions that were put before them. The claimant is the defendant to the original proceedings brought by the opponent.

The Four Corners Program

14 The trial judge summarised the facts of the transactions described in the programme in these terms:

“2 The Four Corners program reported that, in 1989, Mr Packer’s family company, Consolidated Press Holdings (CPH), bought a controlling stake in ANI which was then apparently sold two years later at a profit of $180 million.

3 It was suggested that there were subsequent losses for ANI since Mr Packer had ‘off loaded’ onto ANI an environmental engineering firm based in Europe, called, ABT.

4 The plaintiff was a financial director of ANI and was reportedly paid $1 million, in an agreement subject to the approval of Mr Packer, before and after ANI agreed to take control over ABT and the liabilities owed in relation to ABT by CPH.

15 The plaintiff at trial relied on the whole of the Four Corners program to establish his case. However, he did rely in particular on the following relevant sections of the programme transcript, and within that the emphasised portions:

“VOICE-OVER: “Australian National Industries was forged in 1911, and began operations as an automotive engineering business, based in Sydney. Eighty Three years later, ANI has become Australia’s largest publicly listed engineering company”.

NEIGHBOUR: In 1989, a controlling stake in ANI was bought by Kerry Packer’s family company, Consolidated Press Holdings or CPH. Packer sold it again two years later, at a profit of $180 million. ANI wasn’t so lucky . It’s since lost close to $400 million on the deal. The reason is that before Packer sold his stake, he off-loaded onto ANI a company he no longer wanted, an environmental engineering firm based in Europe, called ABT.

The deal in question came to light when Ross Palmer joined the board of ANI after it took over his family firm, Palmer Tube Mills. Palmer and his wife Sue became the biggest shareholders of ANI. It was Palmer who revealed the extent of ANI’s losses, and started investigating the transactions with Consolidated Press. Ross Palmer would not be interviewed by Four Corners, but Sue Palmer agreed.

SUE PALMER: There were a lot of "Do not disturb" signs put up. I’m on this program and people have said, "You would go on Four Corners, and talk about Kerry Packer?" with amazement. Intelligent people, Australians. I find that that kind of power, whether it is real or perceived, which causes fear, is very dangerous."

NEIGHBOUR: Internal company documents from ANI and Consolidated Press Holdings, obtained by Four Corners, shed new light on the history of the deal. In 1991, Kerry Packer set out to slash costs at Consolidated Press. An edict went out demanding an action plan on all problem investments and assets for Kerry .

The European waste treatment firm, ABT, was one such problem asset. Packer wanted to arrange for ANI to take over the management of the ailing company. It was the first step to Consolidated Press off-loading ABT.

SUE PALMER: ANI was used, I believe, just as a dumping ground for this company. Two weeks after the deal was completed, Kerry Packer sold all of his interests, 48%, in ANI. If ABT was a good company, why were they so keen to unload it, and leaving the other 52% shareholders with a company that was going to bring it down, a division that was going to bring ANI down?

NEIGHBOUR: Legal advice to the ANI board concludes that ANI appears to have a case for damages against Consolidated Press, and some of the ANI’s then Directors. The advice cites evidence of possible breaches of the requirements to act with honesty, care and diligence under the Corporations Law, and possible breaches of the Trade Practices Act over misleading and deceptive conduct .

TED ROFE: As a shareholder in ANI, I’d be concerned at an investment which had cost several hundreds of millions of dollars …

NEIGHBOUR: The Australian Shareholder Association, like the Palmers, says ANI investors have reason to be concerned .

ROFE: Shareholders are entitled to expect their directors act diligently in the interest of the shareholders, and I think this case, in particular, illustrates the importance of the role of independent directors of listed public companies .

NEIGHBOUR: ANI’s own assessment showed the prognosis for ABT was poor. Contracts signed by ABT in Europe were very adverse. There was the opportunity for a financial disaster. The situation had been allowed to run totally out of control .

While ABT was only worth $2 million, it carried liabilities worth tens of millions. The view of finance director, Paul Reading, was that taking on such a burden would be clearly incorrect. ANI as a public company could not take over liabilities entered into by one shareholder, Consolidated Press .

And yet in September 1991, the purchase of ABT was approved at a meeting of the ANI Board. Despite all the information that was available, the minutes showed the directors present voted unanimously for the deal. What’s more, they agreed to take over from Consolidated Press all liabilities, including for any further losses. Details of this indemnity, which has since crippled ANI, were not revealed to shareholders in either Australia or the United States .

BRUCE BABCOCK: Their failure to disclose to shareholders, and not to tell them that they had taken on this enormous risk, or open-ended risk, was unacceptable. That type of thing should be disclosed to shareholders so they can assess the true value of the company they’re owning .

NEIGHBOUR: The independence of the majority of ANI’s directors is a major issue. Of the seven directors at the meeting, three had been appointed by Consolidated Press. The records show that another two, Paul Reading and Evan Rees, were being paid bonuses agreed to by Kerry Packer, of $2 million each. The bonuses were meant to be rewards for helping to rationalise ANI, but it clearly wasn’t ANI that benefited from this deal. It was Packer and Consolidated Press .

SUE PALMER: It’s quite extraordinary. $2 million was promised to two directors, before and after this ABT acquisition. They received $1 million each, promised the other million at a later date. My personal opinion is that it sounds like to me that kind of money could buy co-operation. It’s too powerful .

NEIGHBOUR: ANI shareholders were kept in the dark about key aspects of the ABT deal. In the 1992 annual report, the purchase of the ABT doesn’t even rate a mention, and there’s no explanation for the huge bonuses paid to two directors. The full details of the indemnities adopted by ANI were not revealed in the accounts until five years later, when the auditors started asking questions. There was much at stake for ANI shareholders in this transaction, and yet the directors never sought shareholder approval for the deal .

Under the rules of the Stock Exchange, directors must obtain shareholders’ approval for any transaction worth more than 5% of the company’s value. When ANI’s finance director, Paul Reading, did the calculations, the value of the deal, including the indemnities, came to $33 million, enough to require shareholder approval .

The records show that a second calculation was then done, which re-valued the deal at $18.3 million, which was under the threshold for shareholder approval. The legal advice to the current board is that there must be genuine concerns over the validity of the lower calculation that was used .

The directors’ handling of the ABT deal has caused ANI’s American investors to back the Palmers in their call for a full investigation .

BRUCE BABCOCK: The fact that it was a related party transaction does indicate that the shareholders should have been told. It’s even more important for shareholders to get all the information, because Consolidated Press had just recently become a major shareholder in ANI. They carried out this transaction, and then immediately sold their position in ANI. That is somewhat questionable. Or for Consolidated Press, they made a profit from this transaction. It may have been a normal business decision but we don’t know because the details were not disclosed to shareholders .

NEIGHBOUR: Two separate legal opinions the ANI board obtained Four Corners conclude that there appears a basis for claims against Consolidated Press, and against four of ANI’s then directors .

VOICE OVER: “ANI offers shareholders strong returns from investment in one of Australia’s most responsible companies”.

NEIGHBOUR: But once again, shareholders have been kept in the dark. The legal advice revealed by Four Corners had not been disclosed. The current ANI board is waiting on yet another legal opinion.

ROSS PALMER: These are some of the new range. This particular one is the “All Australian Salad”.

NEIGHBOUR: Ross Palmer was recently thrown off the board for his campaign for a full investigation.

SUE PALMER: I think Ross was in for the shock of his life when he discovered that they turned their head away from it. My question is why did they turn their head from it”.

REPORTER: And why do you think they did?

16 The transcript of the entire programme was 486 lines long. The section extracted was 107 lines long. The amount particularly relied on by the plaintiff at trial was 78 lines. That represented some 16% of the transcript in terms of number of lines. The ABC emphasised this, contending as part of its case that the references to Mr Reading were merely incidental to the main concentration on Mr Packer. I do not agree. They were significant enough to warrant separate attention.

Section 7A of the

Defamation Act

17 The jury were directed under s7A of the Defamation Act 1974, quoted below, to determine whether certain specified imputations were conveyed by the broadcast and if they were whether they were defamatory or not.

DEFAMATION ACT 1974
7A Functions of judge and jury
(1) If proceedings for defamation are tried before a jury, the court and not the jury is to determine whether the matter complained of is reasonably capable of carrying the imputation pleaded by the plaintiff and, if it is, whether the imputation is reasonably capable of bearing a defamatory meaning.

(b) the imputation is not reasonably capable of bearing a defamatory meaning,

the court is to enter a verdict for the defendant in relation to the imputation pleaded.

(b) the imputation is reasonably capable of bearing a defamatory meaning,

the jury is to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory.”

18 Those imputations said to arise, and in relation to which the jury were required to reach answers, were:

(b) The plaintiff, in breach of his duties as a director of ANI, voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT, agreed to pay him $2 million;

or

(c) The plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer;

(d) The plaintiff, as a director of ANI, dishonestly voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT, agreed to pay him $2 million;

(e) The Plaintiff committed a serious breach of his duties as a director of ANI by agreeing that ANI take over substantial liabilities owed by Consolidated Press even though he knew taking on such a burden was clearly incorrect;

(f) The plaintiff, as a director of ANI, dishonestly changed calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders;

(g) The plaintiff breached his duties as a director of ANI by changing calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders;

(h) The plaintiff, as a director of ANI, acted contrary to shareholders’ interests by deliberately concealing from shareholders key aspects of the deal for ANI to purchase ABT.”

19 Question 3 of the questions put to the jury asked the same question in relation to the program broadcast on 8 April 1997 (a repeat of the program aired on 7 April 1997).

20 Imputations (b) and (c) were put in the alternative. That meant that if one question was answered in the affirmative then the next question need not be answered. The question sheet to the jury read:

“If you answer (b) “yes” go to (d). If you answer (b) “no” go to (c)”.

21 The trial judge commented on the jury’s findings:

“37 After some deliberation the jury indicated that they had answers to the questions asked of them and I reconvened the court to take those answers. The jury answered that imputations (a), (b), (e), (f), (g) and (h) were not conveyed.

38 The jury answered ‘yes’ to the question of whether imputation (c) was conveyed but ‘no’ to the question of whether it was defamatory.

39 The jury answered ‘not applicable because of the wording’ to imputation (d).

22 After the jury had indicated that they had reached an answer but before they returned, senior counsel for the opponent made an application that the jury be discharged. The application was initially made on the basis that the jury had misconducted themselves by failing to answer a question which had been their sworn duty to answer.

23 The trial judge continued:

‘We have reached agreement in respect of matters 1(d) and 3(d). The jury’s apologies for mis-reading the instructions’.

24 The submission of misconduct was withdrawn by the opponent. But the application to dismiss the jury was maintained on an argument to the effect that if the jury had misunderstood the questions which had been clearly explained to them, then their verdict was unfair, and in the context of their answers, perverse.

25 The trial judge then continued (I quote from the judgment at [44] verbatim, though there are some obvious typographical errors:

(b) unfairness to the defendant since the jury would not reach a fair decision on imputation (d);

(c) uncertainty as to whether the confusion over imputation (d) ‘infected’ the other answers and the lack of power in the court to question to [sic] jury to determine this controversy.

(d) an apparent perversity in relation to the jury answering ‘Yes’ to imputation (c) being carried but ‘no’ to it being defamatory.

43 This final ground in the application was on the basis that neither the plaintiff nor the defendant – nor myself in the summing up – had put to the jury that if any of the imputations were conveyed they would not be defamatory.

So that is questions 3 and 4 looked after. They will double up. What about question 2? Mr McClintock is not known for his timidity as an advocate. I would probably not say a lot if they are defamatory. If is not a bad profit [sic]. I am not going to waste your time suggesting that if any of these things were conveyed they would not have intended [sic – damaged] Mr Reading and [sic] in the estimation of the ordinary decent members of the community. There are some you might wonder about and discuss amongst yourselves. There is really nothing a barrister can add to that question.

Some of them are really obvious. Ones Mr McClintock emphasised correctly, from his point of view, accepting a bribe. I can’t think of any way that could be anything other than bad about anybody. You might think that all of them are pretty much in the same category. It is very difficult to see any worth spending time on. You might think H [imputation (h)] would be worth thinking about because you might think some things about company law that I will speak to you about later that shareholders aren’t entitled to know everything.”

26 It is apparent that the claimant’s counsel, Mr Walker, SC, was not then pressing upon the jury with any vigour, any argument that the imputations, if found to be carried, were not defamatory, with the exception of imputation (h). However, the ABC contends that it never formally conceded that the other imputations, if found, would be defamatory. The words “you might think that all of them [semble including imputation (c)] are pretty much in the same category” (as imputation (a) namely accepting a bribe) was explained as merely recognition that it was for the jury to decide that matter. With some hesitation, I would accept that the ABC did not formally concede that imputation (c) was defamatory, though it came pretty close.

27 The trial judge recognised that the question of whether an imputation is conveyed, or whether it is defamatory once conveyed, is a question solely for the jury. However His Honour found that:

“the apparent inconsistency in the answers, once these submissions had been put to the jury, did raise a concern over whether the jury had properly understood their function. This concern was compounded by their answer to questions relating to imputation (d).”

28 The trial judge acceded to the plaintiff’s application to discharge the jury and ordered a new hearing. However, he did first record the jury’s answers as I note below.

29 The trial judge made further comments on the conclusions of the jury said to illustrate their misunderstanding of the questions asked of them:

“48 This was not simply perversity but involved contradictory, inexplicable conclusions contrary to the common ground of the parties represented by experienced counsel. There seems to be an argument of common sense and efficiency that these controversies should be resolved at a trial level rather than requiring the parties to seek appellate relief with attendant costs and delay.

Jury Act

Where, at a trial with a jury, a verdict is given or a finding or assessment is made, the Court may, on the motion of any party or of its own motion, give judgment as it thinks fit notwithstanding the verdict.

30 The jury’s answer to imputation 1(d) and the corresponding 3(d) was received by the trial judge and given to the Court, despite the jury being discharged. The jury returned the answer ‘no’ to whether imputation (d) was conveyed.

Resolution of Leave to Appeal and Appeal

31 The issues are dealt with in the following order:

(b) Whether the trial judge had the power to discharge the jury and order a new trial and if so, whether in the circumstances it was properly capable of being so exercised.

32 If the answer to these questions is in the affirmative so that leave to appeal and appeal succeed, there remains the cross-appeal. It concerns whether

(b) the implications for the scope of a new trial as regards the other imputations which the jury decided were not conveyed.

33 It is convenient to consider together the first two questions, that of power and, if there is power, whether its exercise gave rise to appellable error.

34 I have earlier recorded the sequence of events that attended the jury’s apparent confusion in relation to imputation (d), where the jury first answered “not applicable because of the wording”. While it is impermissible to speculate about a jury’s process of reasoning one can here see what the jury actually did. Thus it is clear that the jury, when requested by the trial judge to return to the jury room for further deliberation of whether they had a unanimous answer to the questions asked in relation to imputation (d), did come back with an answer, as it was required to do. It was that imputation (d) was not conveyed. Moreover, after the jury had indicated that they had reached an answer but before they returned, senior counsel for the opponent made an application that the jury be discharged. He did so contending that the jury had misconducted themselves by failing to answer a question which had been their sworn duty to answer.

35 That submission of misconduct was withdrawn by the opponent. The application was then renewed on grounds which included unfairness to the defendant “since the jury would not reach a fair decision on imputation (d)” and because of “uncertainty as to whether the confusion over imputation (d) ‘infected’ the other answers and the lack of power in the court to question to [sic] jury to determine this controversy”.

36 The claimant opposed the discharge on a number of bases:

(b) It was not apparent that the court had the power to discharge the jury in these circumstances;

(c) Whether the answers were irregular or perverse was a matter for appeal not discharge.

37 The claimant had requested that as the trial judge was minded to discharge the jury, the further answers from the jury should first be obtained in order to preserve the utility of any appeal against such a decision by the claimant. That was in fact done.

38 Thus the trial judge did dismiss the jury and order a new trial, but he did so only after first obtaining the jury’s further answers. The jury had answered questions 1(d) and 3(d) “No”, meaning that the imputation was not conveyed.

39 The first point to make clear is that, contrary to the opponent’s submissions (written submission of 10 September 2003 at para 7) the trial judge did not decline to record the jury’s answers. What he did do was both record the jury’s answer concerning imputation (d) and discharge the jury. The question is therefore whether in those circumstances the trial judge had the power thus to discharge the jury and whether it was properly exercised.

40 I consider that the trial judge undoubtedly had an inherent power to discharge the jury. If appellable error lay, it lay only in the exercise of that power in the particular circumstances. As to power itself, a trial judge has an inherent power in relation to the proper conduct of proceedings to discharge a jury at any time up until the point where the trial judge has accepted and recorded the jury’s verdict. It is only at that point that each could be said to be functus officio: see Bromley v Tonkin (1987) 11 NSWLR 211, 236C; Cunningham v Ryan (1919) 27 CLR 294; R v Meany (1862) 169 ER 1368; Ex parte Burns (1893) 10 WN(NSW) 70. Accordingly, if the jury is not functus officio until after the verdict has been recorded, the judge has power to discharge the jury until that occurs.

41 While a judge may, in the exercise of his or her discretion, seek elucidation of answers given by a jury, he or she is not bound to do so. That discretion to seek elucidation should however be exercised sparingly and with care, given the dangers. As the High Court said in Mourani v Jeldi Manufacturing Pty Ltd (1983) 57 ALJR 825 at 826:

“When it appeared from the answer given to one of the questions that the jury may have, to adapt the learned trial judge’s words, misunderstood or misapprehended their precise task, His Honour was entitled, in the exercise of his discretion and subject to the ordinary supervision by an appellate court of the exercise of such a discretion, to seek elucidation of the answer which the jury had given to a particular question and, if the jury was prepared to provide such elucidation, to give the jury an opportunity of amending the answer to overcome the effect of manifest error or mistake. The course of seeking such elucidation is fraught with danger and the discretion to seek it should be exercised sparingly and with care.”

42 I agree with the claimant’s submission that it is implicit in this passage that the trial judge has a discretion not to seek such elucidation but rather to discharge that jury and order a new trial. However, the trial judge did seek elucidation. With appropriate care, the trial judge did seek an answer regarding imputation (d) in the manner I have described.

43 Granted that the trial judge had power to take the course he did, the question becomes one of whether the power was properly exercised. I remind myself of the limited scope for appellate intervention in a matter of practice and procedure where primacy is to be given to the decision of the trial judge: Morgan v John Fairfax & Sons Limited (1998) 13 NSWLR 208.

44 The discretionary reason given by the trial judge for discharging the jury was that it was clear that the jury had misapprehended the task of which it was charged and that there was a live possibility of prejudice to the opponent if the jury were directed to re-consider the matter. The opponent argued on appeal that there was nothing ambiguous at all about the jury questions and in particular as to the relevant instruction on the question sheet “if you answer (b) ‘yes’ go to (d). If you answer (b) ‘no’ go to (c)”. Consequently, it was said, the jury’s refusal in the first instance to answer questions 1(d) and 3(d) could be explicable only on the basis that it had seriously misapprehended its task, compounded by the answer which the jury did give, namely, “not applicable because of the wording”. Thus it was said that the jury had in fact been clearly directed that (b) and (c) were the only alternatives and therefore that questions 1(d) and 3(d), with the other questions, had still to be answered. It is said that if the explanation was as the claimant would have it, namely confusion as to whether (b) and (c) were alternatives or rather (c) and (d), the opponent contended that the jury would have found the answers to questions 1(e) to (h) “not applicable”.

45 But to my mind that latter proposition simply does not follow. It appears that when the jury looked at the question sheet, having answered imputation (b) ‘no’ the jury thought it had to go to (c) and therefore not (d). What the jury in fact did was to answer (b) ‘no’. The jury then did go to (c) but ignored (d).

46 The end result of all this was as follows:

(b) the question of whether imputation (b) was conveyed had earlier been answered in the negative, but as it was so answered it was not in contradiction to an affirmative answer to alternative (c).

47 Moreover, in the steps that followed, the trial judge followed an entirely conventional path in re-directing the jury after answers had been proffered (see Cunningham v Ryan (1919) 27 CLR 294 endorsing the decision in R v Meany (supra), a principle consistently applied by the Court of Appeal in New South Wales: Bradbury v NZ Loan and Mercantile Agency Co Ltd (1927) SR(NSW) 15 per Street CJ at 18; Bromley v Tonkin (1987) 11 NSWLR 211 and in particular Clark JA at 235-6; Lithgow District Hospital v Miller (NSWCA, 8 December 1994, unreported) per Sheller JA at page 9).

48 For the trial judge so to seek clarification is not inconsistent with the statutory strictures of s7A of the Defamation Act 1974. Even treating these strictures as constituting a code laying down the substantive role of judge and jury in identifying any imputation and whether defamatory, nonetheless a judge conducting such a jury trial must necessarily retain the ancillary procedural powers needed to accomplish that purpose. When s7A(3) requires the jury “to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory”, that pre-supposes the judge retains such ancillary powers as are needed, such as here to re-direct a jury whose answers warrant this.

49 A further complaint is that the trial judge discharged the jury and ordered a new trial, purporting to draw on a head of power not available for that purpose. I refer to Pt 34 r8A of the Supreme Court Rules, which on any view could not provide the source of power for discharging the jury. A related complaint is that the discharge was based, erroneously, on the jury’s initial non-responsive answer concerning imputation (d) without taking into account the later responsive answer which followed the judge’s redirection.

50 Part 34 r8A is in the following terms:

“8A Where, at a trial with a jury, a verdict is given or a finding or assessment is made, the court may on the motion of any party or of its own motion, give judgment as it thinks fit notwithstanding the verdict.”

51 The purpose of that rule is to permit a trial judge to take a jury’s verdict notwithstanding an objection of law. This is so that the jury verdict is available if the judgment is reversed on appeal. But the purpose of the rule is not to enable the court to give a judgment contrary to verdict: Field v Timber Industries Ltd (NSWCA, 7 June 1990, unreported). Self-evidently the rule says nothing about discharging a jury. But the power for this is to be found, as I have earlier stated, in the judge’s inherent power to control the proper conduct of proceedings. That power need not be specifically invoked, to remain available to a court in these circumstances.

52 However, I would conclude, leaving aside the question raised by the cross-appeal, that while there was power in a jurisdictional sense to do as he did, the trial judge with respect, had no sufficient basis to exercise that power by discharging the jury in these circumstances, when this was based simply upon the jury’s initially non-responsive answer concerning imputation (d). The sequence of events, culminating in the jury’s ultimate answer to whether imputation (c) was conveyed as well as the jury’s indication that it had (earlier) misunderstood the instructions, indicates that any confusion on the jury’s part was dispelled. Therefore, leaving aside the matter raised by the cross-appeal, it could not properly be said that on that basis the jury had “seriously misapprehended” its task by the time its remaining answers were recorded.

The cross-appeal

53 That leads finally to the cross-appeal. The opponent, as cross-claimant, contends that when the jury found that the imputation “the plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer” was conveyed but not defamatory, the latter conclusion was one that no reasonable jury, properly directed, could reach; John Fairfax Publications Pty Ltd v Rivkin (supra). I shall use the shorthand “the irrationality test” for that formulation by the High Court of the proper test to be applied. The judgments in Rivkin serve also to illustrate the application of that test in appellate review of a jury determination of this kind. Callinan J at [184] emphasises that

“the jury has an especially significant constitutional role to play in those cases in which it participates. Both as a practical and legal matter, a jury’s decision on a factual question, although by no means impregnable, does have authority over and above that of a decision of a judge sitting alone to determine a factual question. The jury is representative of the community. Its members are better placed than judges to give meaning to, and evaluate, the spoken and written word and its impact upon the community. Nor should it be assumed that juries approach their task with heightened or lowered suspicion and prejudice. History shows that not all lawyers and judges are strangers to suspicion. It may accordingly be accepted that the occasions for judicial correction of jury verdicts will be extremely rare. But such occasions do arise. That they may, and then will require appellate intervention, follows from the right of appeal which the legislature confers in respect of them…”

54 It is important to place Rivkin in context. Rivkin was a decision solely about whether the printed material carried certain imputations; there was no further issue about whether they were defamatory.

55 All of the judges save McHugh J concluded that no reasonable jury could reach any other conclusion than that a number of the imputations were conveyed, thus disturbing the jury verdict to the contrary. Thus Callinan J recognised that this was one of those rare occasions requiring judicial correction of the jury verdicts though “the occasion for judicial correction of jury verdicts will be extremely rare” at [184].

56 At [19-20] McHugh J, though by way of obiter, observed:

“[19] Occasions for invading the jury’s function occur even less frequently when the jury has found that a publication is not defamatory. Rarely have appellate courts set aside a jury’s finding that a publication was not defamatory. So rarely has it been done that in 1928 in Lockhart v Harrison,9 Lord Buckmaster could say “such cases occur so rarely that within the last century there are only two to which our attention has been drawn in which this power has been exercised.” There have not been many since.

Lockhart v Harrison

Geach v Hall

Blashki v Smith

Rofe v Smith’s Newspapers Ltd

Thompson v Truth & Sportsman Ltd (No 1)

Doyle v McIntosh

Broome v Agar

Cairns v John Fairfax & Sons Ltd

57 He cited Cairns v John Fairfax and Sons Ltd (1983) 2 NSWLR 708 where (at 720) Mahoney JA observed that it would be more difficult to persuade a court to set aside a jury’s verdict that words were capable of a non-defamatory meaning than a jury verdict that an imputation was not conveyed. This was because, in his Honour’s view, “there is … more difficulty in the court holding that a jury could not form a particular view as to general community standards than in deciding whether a word is capable of a non-defamatory meaning.”

58 Of the majority in Rivkin Kirby J alone dealt with the defamatory question. He however drew no distinction between the two questions when it came to disturbing a jury verdict; that is, on the first question of whether to find an imputation and the second question of whether to find it defamatory. At [140] he related harm to reputation from a homosexual imputation to the “time, personality and circumstances”. He did so without suggesting that the jury’s determination of whether or not such imputation was defamatory foreclosed judicial disturbance of that verdict, or rendered it even less likely to be disturbed than a verdict on whether that imputation was conveyed. Indeed at [151] he concludes that the test is whether the jury verdict was “reasonably open”, drawing no distinction between the two questions. Thus at [151] he says:

“I agree with the view of the late Mr Blake Odgers (Odgers on Libel, pp 110 & 111): ‘The proper course is for the Judge to define what is a libel in point of law and to leave it to the jury to say whether the publication in question falls within that definition. And this is a question pre-eminently for the jury; whichever way they find, the Court will rarely, if ever, disturb the verdict, if the question was properly left to them.’ I hesitate to say that a case may never arise for interference, but I cannot think that the present case is one. There are very few cases where a jury having found “no libel” the Court has interfered with their verdict.”

154 Lord Sankey in Broome v Agar (at 702) reminded himself that “the question is not whether one would have come to the same conclusion one’s self.”

155 In Lockhart v Harrison (1928) 139 LT 521, to which McHugh J referred in Rivkin (at [19]), Lord Dunedin emphasised that it is not for appellate judges to consider whether they themselves would have reached the jury’s verdict, saying (at 524):

“That it was a libel has been the opinion of every judge who has had the case before him; but, of course, that is not the question. The question is whether it is a verdict at which twelve reasonable men could possibly have arrived.”

156 In Cairns v John Fairfax & Sons Limited (1983) 2 NSWLR 708 (“Cairns”) the Court of Appeal, by majority (Hutley and Mahoney JJA, Samuels JA dissenting) dismissed an appeal from a jury finding that the imputation:

“The plaintiff was improperly involved with his assistant, Junie Morosi, in a romantic or sexual association contrary to the obligations of his marriage and to that of Miss Morosi?”

157 Samuels JA accepted (at 716 – 717) that in determining the defamatory nature of imputations, juries were to be given the widest latitude or discretion and that the test of whether their verdict was unreasonable, “requires a case against the verdict which is ‘clear and beyond argument’: Broome v Agar (1928) 138 LT 698 at 702, per Sankey LJ”.

158 Mahoney JA drew a distinction between cases where the issue was whether the imputations were conveyed and those which depended upon community standards. He said (at 720):

“In cases such as the present, the defamatory quality of imputation [sic, as in original] depends upon the general community attitude to conduct of a particular kind. There is, I think, more difficulty in the court holding that a jury could not form a particular view as to general community standards than in deciding whether a word is capable of a non-defamatory meaning. In this sense, it will, in my opinion, be more difficult to persuade the court to set aside a jury's verdict in a case of the former than of the latter kind.”

159 In Hardy v Harris (Court of Appeal, 21 March 1986, BC8601168 – an edited version appears at (1986) Aust Torts Reports ¶80-003) the Court dismissed an appeal from a jury finding that an imputation that the plaintiff was a hypocrite was not defamatory. Kirby P (as his Honour then was) said:

“(BC8601168 at 1) But the gateway through which the appellant must pass to discharge what Glass, JA has rightly called the "very heavy burden" involved in disturbing the jury's verdict, is a narrow one. He must show that the jury's verdict was perverse - one which no reasonable jury could have reached, acting rationally. Because in trials of this kind the jury is taken to provide a microcosm of community opinion, it is natural and justifiable for the law to uphold the jury's decision, unless it is vitiated by such considerations as an erroneous direction on a point of law by the trial judge, misconduct on the part of the parties or their counsel or internal contradictions in the jury's verdict disclosed by answers given to particular questions requiring special verdicts…”

160 Glass JA (with whom Priestley JA agreed on this aspect of the appeal) said (BC8601168 at 5):

in Readers' Digest Services Pty Limited v Lamb

Legal theory treats the jurors as the custodians of those standards since no evidence of community attitudes can be adduced. It was the task of the twelve jurors to ascertain by discussion among themselves what were the relevant community standards and whether in the light of those standards the conduct imputed to the plaintiff redounded to his discredit

161 The injunction against usurping the jury’s function in the course of appellate review has been repeated in recent decisions of this Court. In Mularczyk v John Fairfax Publications Pty Ltd [2001] NSWCA 467 at [14] Beazley JA (with whom Sheller and Heydon JJA agreed) accepted that “[a]n appellate Court must always be on guard against the tendency to set aside a verdict because the Court feels it would have come to a different conclusion”. Stein JA accepted this was the correct approach in Sarma v Federal Capital Press of Australia [2002] NSWCA 93 at [10]. His Honour also referred (at [21]) to the “great latitude” the jury must be given in exercising its function and to the fact that “the jury's answer to libel or no libel involve[s] the application of general community attitudes. It is for a jury to form a particular view as to prevailing community standards.” Santow JA agreed (at [24]) with Stein JA, saying (at [27]) that “it is essential to remember that the question is not whether in the Court’s view the jury’s conclusion was right or wrong”, referring to the importance of the fact that “the jury are the judge of those community standards which bear on the matter, not the Court.” Both Stein JA (at [8]) and Santow JA (at [32]-[33]) cited Mahoney JA’s view in Cairns that in cases where the defamatory quality of the imputation depends on general community attitudes to conduct, there is more difficulty in a court finding that a jury could not form a particular view as to community standards.

162 I drew attention to the constraints upon appellate review of a jury’s decision that an imputation was not defamatory in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107 at [166] ff. Ipp JA has extracted the essence of my judgment. I will not repeat what he has said.

163 In Rivkin, in referring to the circumstances in which it might be determined on appeal that a decision was one no reasonable jury could reach, Gleeson CJ said (at [6]) “restraint on the part of an appellate court is likely to wane when … an appellate court … reviewing a trial judge's findings of fact … conclude[s] that a particular finding is … glaringly improbable”. McHugh J, as I noted earlier, said (at [17]) “an appellate court is not entitled to set aside a jury’s verdict because the court regards the verdict ‘as illogical, unsatisfactory or different from that which it would itself have reached’.” Kirby J said (at [112]) “… the proper approach to an appeal to the Court of Appeal against jury decisions is one that permits disturbance of such decisions ‘in an extreme case ... [where they are] unreasonable’ ”. Callinan J said (at [185]) “[I]t may … be accepted that the occasions for judicial correction of jury verdicts will be extremely rare”.

164 In Cairns, above, at 710, Hutley JA said that to overturn a jury verdict of not defamatory the appellants must show that the verdict was perverse even upon “the most favourable meaning of the imputation, to the upholding of the judgment”. This statement was approved in Pavy v John Fairfax Publications Pty Limited [2002] NSWCA 46 at [7] (by Mason P, Wood CJ at CL and Young CJ in Eq) and in Charlwood Industries Pty Limited v Brent [2002] NSWCA 201 at [23] by Ipp JA (with whom Sheller and Hodgson JJA agreed).

165 Exercising appellate restraint in this context does not involve abdicating the appellate function. Appellate restraint is exercised because of the jury’s unique role as the arbiter of community standards. That restraint may not be observed if the content of the test “that the verdict was one no reasonable jury could reach” is not understood. It is essential to rein in a judicial inclination to trespass into the domain of reasonableness which so frequently arises in other appellate contexts, untrammelled by the constraints present in the current context.

Consideration

166 This jury’s role as arbiters of community standards was referred to in the summing up when the trial judge directed the jury that:

you should ask yourselves whether ordinary decent members of the community would think less of Mr Reading because of what was said about him.

167 Thus the members of the jury were asked, properly, to undertake the impressionistic exercise referred to in Rivkin, above, at [18].

168 The impressionistic nature of the exercise the jury was asked to undertake is reinforced in this case by the fact that the matter complained of was published per medium of television – it was a transient publication: Gorton v ABC (1973) 1 ACTR 6 at 8 per Fox J. In that context, although the reasonable viewer is deemed to have viewed and listened to the whole broadcast, it may also be assumed that that person may not have devoted the same degree of concentration to it as would have been paid to a written document: Gordon v Amalgamated Television Services Pty Ltd [1980] 2 NSWLR 410 at 413.

169 Having regard to the necessity when considering the jury’s answer to approach the case on the basis most favourable to the respondent to the appeal (Rivkin, above, at [17]), it is significant to note how counsel for the ABC addressed the jury on the question of directors’ duties.

170 The broadcast included the following:

NEIGHBOUR

ROFE

…

BRUCE BABCOCK: Their failure to disclose it to shareholders, and not to tell them that they had taken on this enormous risk …was unacceptable. That type of thing should be disclosed to shareholders so they can truly assess the value of the company that they’re owning …
NEIGHBOUR: The independence of the majority of ANI’s directors is a major issue. Of the seven directors at the meeting, three had been appointed by Consolidated Press … another two, Paul Reading and … were being paid bonuses agreed to by Kerry Packer, of $2 million each. The bonuses were meant to be rewards for helping to rationalise ANI, but it clearly wasn’t ANI that benefited from this deal. It was Packer and Consolidated Press.

SUE PALMER: It’s quite extraordinary. $2 million was promised to two directors, before and after this ABT acquisition… My personal opinion is that it sounds like to me that kind of money could buy co-operation. It’s too powerful.”

171 When he addressed the jury, counsel for the ABC drew their attention to the various permutations of the concepts of honesty, care and diligence under the Corporations Law. He pointed out that:

“… to say someone is not honest is a whole lot more serious than saying they are not careful and it is a whole lot more serious than saying they are not diligent.” (T63.47)

172 He also referred to bonuses as:

“… something that many employees get at Christmas time or after a good financial year’s result – being paid a bonus could not in itself, without a whole lot more being said, set up some sinister suggestion that there is a wickedness involved here ….” (T68.05)

173 The jury found that the imputations that the plaintiff had acted either corruptly or dishonestly because “Kerry Packer, whose company owned ABT, agreed to pay him $2 million” were not conveyed. That means, in my view, that in finding that imputation (c) was conveyed the jury concluded that the matter complained of was saying that he had breached his duties as director either because he had not been diligent or he had not been careful. It is also open to the conclusion that the jury rejected the proposition that there was anything sinister about Mr Reading’s bonus. That was consistent with counsel for the ABC’s address.

174 Equally, in my view, it was consistent with counsel for the ABC’s address to the jury to conclude that Mr Reading may not have acted diligently or carefully in receiving the bonus but that, applying their view of community standards, the ordinary decent members of the community would not think less of a person who acted in that manner.

175 I accept that counsel for the ABC’s remarks were made in the context of trying to persuade the jury that the imputations were not conveyed, but the jury was entitled to take them into account when considering the question whether imputation (c) was defamatory. They are also available for this Court’s consideration in assessing the cross appeal on the basis most favourable to the ABC.

176 In my view a jury which concluded that ordinary decent members of the community would not think less of a person who had not acted diligently or carefully in receiving a bonus could not be said to have reached a conclusion which was “glaringly improbable” or “starry-eyed”. Rather the jury could well have taken the view that the community would assess Mr Reading’s carelessness or lack of diligence in light of the maxim, “to err is human”.

177 I agree with Ipp JA that “the jury cannot be taken to have given to imputation (c) any meaning [it] rejected when finding that the other seven imputations were not conveyed” and with his Honour’s analysis of the effect of the jury’s rejection of all other imputations upon its interpretation of imputation (c).

178 In my opinion the analysis Santow JA has undertaken of imputation (c) and the context in which it appears fails to pay due regard to the exercise the jury was required to undertake. His Honour has subjected the matter complained of to the close forensic analysis the trial judge expressly instructed the jury to eschew – an analysis with which he was assisted by having access to the transcript of the matter complained of – a privilege the jury was denied when the trial judge rejected its tender: see Reading v Australian Broadcasting Corporation [2003] NSWSC 716 at [26]ff. His Honour’s analysis fails, with respect, to give appropriate deference to the jury’s assessment of community standards.

179 Since writing the foregoing, Santow JA has revised his draft judgment both to take account of my judgment as well as this Court’s decision in Gorman v Barber & Ors [2004] NSWCA 402 which was published after I prepared my reasons.

180 In my view Gorman v Barber & Ors has no “precedential force” (cf Santow JA at [76]). It was a decision which turned entirely upon its own facts.

181 There are, however, two matters referred to in the judgment which deserve comment. The first concerns Mason P’s statement (at [31]) that he doubted whether:

“…[I]t was open to the jury or that it is open to this Court to discern the defamatory impact of one imputation by reference to others that were considered and rejected by the jury. No authority was cited in support of such an approach. Each imputation put to the jury differed in substance from the others (cf Supreme Court Rules, Pt 67 r 11(3)).”

182 While his Honour’s statement was obiter, and it is not clear precisely how counsel for the respondent put the argument he rejected, I should record my disagreement with the statement as a general proposition. When it is recalled that the pleaded imputations are to be understood in the context of the whole of the matter complained of (Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165 at 172 - 173) it is relevant, at least on appeal when considering whether the jury’s verdict was one no reasonable jury could reach, to take into account its conclusion in relation to other imputations. Such consideration can, as here, cast light on the sense in which the jury understood the matter complained of and assist in the exercise of seeking to discern the logic of its decision.

183 I do not understand why Mason P referred to the question whether a jury could have regard to “the defamatory impact of one imputation by reference to others that were considered and rejected by the jury”. The point does not appear to have arisen on the Gorman appeal nor, of course, was it argued in the present case. I have already set out the trial judge’s direction. I would not want to be seen to be encouraging a direction reflecting Mason P’s statement. Such a direction in my view would distract the jury from the impressionistic nature of the exercise it is required to undertake.

184 The second matter about which I comment is Mason P’s statements (at [34]) that “[t]he article could not fail to have affected the appellant’s reputation…The article must also have embarrassed the appellant in front of friends and colleagues…”. I have assumed that his Honour’s references to “the article” were intended to be a reference to the relevant imputation. However the question whether an imputation is defamatory does not turn upon whether it embarrassed the plaintiff, but upon whether it was such as to lead “ordinary decent folk in the community, taken in general, to think the less of him”: Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171 at 172 per Jordan CJ; applied Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449 at 452.

185 I agree with the orders Ipp JA proposes to dispose of the cross appeal.

**********

Last Modified: 11/18/2004

Citations

Australian Broadcasting Corporation v Reading [2004] NSWCA 411

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CITATION:	Australian Broadcasting Corporation v Reading [2004] NSWCA 411
HEARING DATE(S):	14 April 2004
JUDGMENT DATE:	15 November 2004
JUDGMENT OF:	Santow JA at 1; Ipp JA at 109; McColl JA at 139
DECISION:	Leave to appeal granted. Appeal allowed. Cross-appeal dismissed.
CATCHWORDS:	DEFAMATION - whether the trial judge was bound to record the unanimous answers of the jury and enter judgment accordingly - whether the trial judge had power to discharge the jury and order a new trial - whether power to discharge jury was properly exercised - whether the jury's answer that imputation was not defamatory was perverse or unreasonable or a conclusion that no reasonable jury, properly instructed, could reach - scope of appellate review of determination of jury in defamation proceedings - scope of new trial.
LEGISLATION CITED:	Defamation Act 1974 (NSW) s7A Supreme Court Rules Pt 34 r 8A
CASES CITED:	Australian Broadcasting Corporation v McBride (2001) 53 NSWLR 430 Australian Newspaper Company Limited v Bennett [1894] AC 284 Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107 Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449 Bradbury v NZ Loan and Mercantile Agency Co Ltd (1927) SR(NSW) 15 Bromley v Tonkin (1987) 11 NSWLR 211 Broome v Agar (1928) 138 LT 698 Cairns v John Fairfax and Sons Ltd (1983) 2 NSWLR 708 Capital & Counties Bank Ltd v George Henty & Sons (1882) 7 App Cas 741 Charlwood Industries Pty Limited v Brent [2002] NSWCA 201 Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68 Costains (Australia) Pty Limited v Atkinson (NSWCA 5 October 1995 unreported) Cunningham v Ryan (1919) 27 CLR 294 Ex parte Burns (1893) 10 WN(NSW) 70 Field v Timber Industries Ltd (NSWCA, 17 June 1990, unreported) Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171 Gorman v Barber & Ors [2004] NSWCA 402 Greek Herald Pty Ltd v Nikolopoulos (2001) 54 NSWLR 165 Hardy v Harris BC8601168 - an edited version appears at (1986) Aust Torts Reports 80-003 John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657 Lithgow District Hospital v Miller (NSWCA, 8 December 1994, unreported) Lockhart v Harrison (1928) 139 LT 521 Morgan v John Fairfax & Sons Limited (1998) 13 NSWLR 208 Mourani v Jeldi Manufacturing Pty Ltd (1983) 57 ALJR 825 Mularczyk v John Fairfax Publications Pty Ltd [2001] NSWCA 467 Nationwide News Pty Ltd v Heggie [2001] NSWCA 257 Pavy v John Fairfax Publications Pty Limited [2002] NSWCA 46 Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500 Reading v Australian Broadcasting Corporation [2003] NSWSC 716 R v Meany (1862) 169 ER 1368; Safeway Stores plc v Tate [2001] QB 1120 Saffron v John Fairfax Publications Pty Ltd [2004] NSWCA 254 Sarma v Federal Capital Press of Australia [2002] NSWCA 93
PARTIES :	AUSTRALIAN BROADCASTING CORPORATION (Claimant/Cross-Opponent) Paul George READING (Opponent/Cross-Claimant)
FILE NUMBER(S):	CA 40695/03
COUNSEL:	B WALKER, SC/ R FRANCOIS (Claimant/ Cross-Opponent) B McCLINTOCK, SC/ M RICHARDSON (Opponent/ Cross-Claimant)
SOLICITORS:	Stephen Collins, Solicitor, Australian Broadcasting Corporation (Claimant/ Cross-Opponent) Corrs Chambers Westgarth (Opponent/ Cross-Claimant)

LOWER COURTJURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	SC 20206/02
LOWER COURT JUDICIAL OFFICER :	Shaw J