Chinese Media Group (Aust) Pty Limited & Anor v Universal Communication Network Inc trading as New Tang Dynasty

[2008] HCATrans 269

[2008] HCATrans 269

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S48 of 2008

B e t w e e n -

CHINESE MEDIA GROUP (AUST) PTY LIMITED

First Applicant

KAM CHUNG CHAN

Second Applicant

and

UNIVERSAL COMMUNICATION NETWORK INC TRADING AS NEW TANG DYNASTY

Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 1 AUGUST 2008, AT 10.49 AM

Copyright in the High Court of Australia

MR R.G. McHUGH, SC:   May it please the Court, I appear with my learned friend, MS J. CHAMBERS, for the applicant.  (instructed by Banki Haddock Fiora)

MR C.J. DIBB:   If it please the Court, I appear for the respondent.  (instructed by Darryl Barlow & Company)

GUMMOW J:   Yes, Mr McHugh.

MR McHUGH:   Your Honours, the plaintiff – that is, the present respondent, the second plaintiff at trial – succeeded in the Court of Appeal on a theory which was ‑ ‑ ‑

GUMMOW J:   Wait a minute.  We do not think on a daily basis about the shifting legislative situation in New South Wales.  Was this litigation under the Defamation Act 1974?

MR McHUGH:   Yes, but there was no relevant difference with the 2005 regime for this reason, your Honour.  The provisions that concerned the limitation on actions by corporations had already been put into the 1974 regime and that was carried over in the present regime so that the case would be decided in exactly the same fashion all around the country today.  In fact, it is more relevant now than it was under the 1974 Act.

Your Honours, the case was decided in the Court of Appeal on a theory that only emerged halfway through the trial and that gives rise to two issues.  The first one is whether that theory of identification is good as a matter of law, and that is the first special leave point.  In my submission, it goes beyond what principle allows.  The first point is the question of principle about identification.

The second one is, Justice Studdert, as the trial judge in a jury case, declined in the exercise of his discretion to permit the change of case halfway through the trial.  The Court of Appeal has interfered with that exercise of discretion and what I intend to persuade your Honours of is that he did so on a basis which cannot be reconciled with principle.

KIRBY J:   Yes, but if there is sufficient identification, then you do not get to the second point.

MR McHUGH:   It is the other way around.  If the theory of identification is bad, then we do not have to worry about the second point, but they were both independent bases on which ‑ ‑ ‑

KIRBY J:   No, but it is the theory of identification in this arcane area of legal practice that we should try to clarify and simplify and stop all of these interlocutory proceedings that can be so misused and it is that you use your common sense.  If the party that says it has been defamed is sufficiently identified for common sense purposes, that is open to the jury, end of issue.  This notion that you have to go in there and say, “I specifically identified”, that must have been some particular case where some judge took that view and it is just so unreal in the context of jury trials.  They are there for common sense.

MR McHUGH:   Your Honour, that is not my case.  My proposition is ultimately this on the crucial question of identification.  It is necessary to establish that the article was published to somebody who knew the plaintiff.

KIRBY J:   Knew the plaintiff, not necessarily by the exact business name and their ACN number.

MR McHUGH:   I accept that.

GUMMOW J:   Was it not all explained by Sir Frederick Jordan in Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86?

MR McHUGH:   Yes, your Honour.

GUMMOW J:   And the latter cases just go round and round.

MR McHUGH:   Your Honour, what is missing from the analysis is the extra dimension that was introduced in this case.  Your Honours, let me explain it in these terms.  If one accepts that the basic principle is that it has to be published to somebody who knew the plaintiff, the question which this case squarely raises and which has never been determined in this Court is, what is the minium content of that and whether it is sufficient to do what Justice Mason in the earlier case, Parras, and again Justice Mason and Justice McColl in this case did, which to say it is sufficient to identify the business as opposed to the plaintiff itself.

KIRBY J:   Why is that not so?  The law of defamation has moved on.  It is no longer about the butcher down the road.  It is often about corporations.  Corporations have all sorts of strange names.  Why is not the rule that Justice Mason has suggested a very sensible rule in the real world of the damage to people’s reputation?

MR McHUGH:   Because it is not the reputation of the person.  It is the goodwill of the business and that is an interest which is protected at common law by the tort of injurious falsehood.  That is the very point that was made in this Court in World Hosts.  Might I take your Honours to that now?

GUMMOW J:   No, do not take us to there.  Take us to the bottom of page 18 of the application book.  You need to get down to some practical realities.  This is the matter complained of as translated of course:

The spokesperson for the Sydney Chinese Consulate General said yesterday regarding the issue of New Tang Dynasty TV Station that the “New Tang Dynasty TV Station”, with its head office in America, is planning to hold –

et cetera.  What is the earth‑shattering question of identification of the complainant that is thrown up by that?

MR McHUGH:   No one in the case knew who that was.

GUMMOW J:   Who that was?

MR McHUGH:   Who it – whatever it is that is New Tang Dynasty TV Station, no one in the case knew who it was.  That was the problem.  The most anyone could say is, whoever it is who owns that station I understand it to be referring to them, without knowing who they are.  Your Honour, that is the thing that makes ‑ ‑ ‑

GUMMOW J:   Who they are?

MR McHUGH:   What they are, who they are, without any sense ‑ ‑ ‑

GUMMOW J:   We are talking about an artificial person.  That is part of the problem in this rather absurd field of jurisprudence.

MR McHUGH:   Your Honour, that is exactly at the heart of the problem.  Your Honours, the Parliament has seen fit, around the country, to provide that there is a cause of action for defamation in accordance with the common law.  Your Honours, the problem is simply this.  If one takes a natural person, they have an identity which is wrapped up both in their name, their physical appearance, their personality, the things which make them unique.  If one takes a corporation, its identity as a matter of corporate law, under the Corporations Act, is very heavily wrapped up with its name.  There are some 20 or so sections directed to that issue under the Corporations Act.  It does not have a physical person, it does not have a personality, but there is a distinction that is well accepted in the law of damages that a corporation cannot get aggravated damages because it does not have feelings, so it is in a different category to begin with.

GUMMOW J:   That is an earth‑shattering idea.

MR McHUGH:   Your Honour, the point is, the fact that it is incorporeal goes to the difficulty in identifying it.  One has to understand, in my submission, what it is before a person to whom it was published has identified the corporation.  Your Honour, it would be possible, in theory, for evidence to be led that a person, although not knowing the name, was able to say, “I know that there is a corporation, I know that it has these directors, it has a chief executive, it conducts business out of a particular premises, it has existed for 20 or 30 years”, and in a real sense that person would know the corporation.  But what is different in this case is that it has been held that it is sufficient to say, in effect, “I don’t know anything about the corporation other than that there is someone who conducts this business and therefore I say that it has been sufficiently identified”.

If I might take your Honours to World Hosts to show the way in which Justice Aickin, Justice Mason and Justice Jacobs accepted this very distinction.  Your Honours will find that at tab 5, Mirror Newspapers Ltd v World Hosts Pty Ltd 141 CLR 632. If I can take your Honours to page 644. This was a case that was decided under the 1958 New South Wales Act but their Honours contrasted the position at common law. In the decision of Justice Aickin at page 644, your Honours will find at the top ‑ ‑ ‑

GUMMOW J:   What was the actual decision in Mirror Newspapers?  Are  you going to take us to it?

MR McHUGH:   The decision in the case concerned whether or not ‑ ‑ ‑

GUMMOW J:   It was about the Caprice Restaurant, was it not?

MR McHUGH:   Yes, and it was about the difference between the business and the owner and whether it was necessary to prove that anyone knew who the owner was.  Your Honours will find the matter complained of, the article, on page 635.  It was said to be about the Caprice owner.  The plaintiff, as your Honours will see at the middle of 635, was the owner and conducted the restaurant business.  If your Honours come through to 644, section 5 of the ‑ ‑ ‑

GUMMOW J:   Despite the best efforts of counsel for the appellant, it went nowhere.

MR McHUGH:   If Your Honours turn to the paragraph at the top, the definition of what was defamatory under the 1958 Act is set out there and it was that:

Any imputation concerning any person, or any member of his family, whether living or dead, by which the reputation of that person is likely to be injured, or –

and this is the crucial passage –

by which he is likely to be injured in his profession or trade –

and so on, was defamatory.  So it distinguished reputation, but at common law reputation is the heart of the cause of action.  If your Honours come down, in Justice Aickin’s decision, to the paragraph that begins “The decision in the Middle East Airlines Case”, at the middle of the page:

applied this reasoning to the New South Wales Act.  It shows that to be defamatory a statement must be about the plaintiff, though it need not necessarily be a disparaging statement affecting his personal or business reputation.  It must, however, be more than a statement which merely injures the plaintiff.  At common law the position had been that statements which injured a man’s business, but did not reflect on his reputation might in appropriate cases be actionable as “injurious falsehood”, but were not defamatory.

GUMMOW J:   That is not about identification, is it?

MR McHUGH:   No, your Honour.  It is the point about the difference between the business and the person and the reputation, because the cause of action in defamation is concerned with the reputation.

KIRBY J:   That is a very different factual situation; defamation of the Caprice Restaurant and identification of a particular man named as the restaurateur, who was in fact just the manager, and then suing the company that owned it, whereas here the defamation is of New Tang Dynasty TV Station.

MR McHUGH:   Your Honour, whatever that is, whatever it is.

KIRBY J:   It is the business name of the company that owns New Tang Dynasty TV Station.

MR McHUGH:   It was not established that this matter was published to anybody who knew ‑ ‑ ‑

KIRBY J:   The name of that company, which would be World Hosts or some body of an entirely different character, potentially.

MR McHUGH:   Your Honour, that was not the point I was making.  The point was it was not proved in this case that the matter was published to anybody who knew what that corporation was in any sense at all.

KIRBY J:   Most people do not go round crowding their brain with the details of the company registration.

GUMMOW J:   Take the next case, take the applicant in the next case.  It is Channel Seven Sydney Pty Ltd.  For all I know, there are a number of Channel Seven companies throughout the country.  It is quite a complex corporate structure, I imagine, but it happens that in this case the relevant defendant is Channel Seven Sydney Pty Ltd, but to the ordinary member of the public it was just Channel Seven.

MR McHUGH:   And, your Honour, if someone was unable to say that it was Channel Seven, one could in theory call a witness to say, “Well, it’s well known, it’s a substantial Australian company.  Mr Stokes is the chief executive of the parent.  It’s involved in all sorts of activities.  I know what that company is”.

GUMMOW J:   No, “I know there is a group”.

MR McHUGH:   “I know there’s a group”.

GUMMOW J:   What happens then on your theory?

MR McHUGH:   Well, on my theory, it would be whichever one the jury reasonably concluded was the correct plaintiff.  It may well be that one would be able to show, in the ordinary case, that the company which produced the program was one of the companies in the group and it was published to somebody who knew it.  But, your Honour, because it goes to reputation, one has to show that a person knew who it was published about and in this case the highest the evidence got was, there is somebody somewhere who is broadcasting the station, we know nothing about it, except that it comes from the United States, and that the station traded under this name.  That was the highest the evidence got.

Your Honour, that is the point of principle.  The difficulty that arises out of Justice Mason’s decision in Parras, that it would be sufficient, contrary to what was held in World Hosts, at common law, if one did not identify the business.  Your Honour Justice Gummow took up with me, I think, that that was not an identification point.  Justice Mason and Justice Jacobs, giving the decision of the other four members of that Court, pointed out what the difference was, at 640, and said in the middle of the page at 640:

when a report defamed the owner of a named business, without naming him, and the imputation was likely to injure that business, it was enough in our opinion for the plaintiff to prove that he was the owner . . . without proving that persons who read the report knew that the plaintiff was the owner of the business.  Whatever may be the true limits of the doctrine enunciated by Jordan C.J. in Consolidated Trust Co Ltd v Browne –

it did not apply under the section 5 Act, which is different.  So that was the very sort of point that I am raising now, that at common law it was not sufficient to show that it was published about the business or that it injured the business.  You had to make the connection to the owner.  Your Honours, in my submission, that is a pure question of principle.  It is a narrow one in the sense that it does not involve a huge amount of argument ‑ ‑ ‑

KIRBY J:   Why is the decision of the Court of Appeal not a sensible resolution of the issue in the circumstances of a world in which people do not know of the specific identity but know groups and companies by business descriptions?

MR McHUGH:   Because it goes to reputation.  The cause of action is concerned with the reputation of the plaintiff, not the goodwill of the business.  If it is the goodwill of the business, since Ratcliffe v Evans more than 100 years ago, you have got to go on injurious falsehood, and that is a well‑established ‑ ‑ ‑

GUMMOW J:   Say that again.

MR McHUGH:   If what is injured is the goodwill of the business, as opposed to the reputation of the owner, one has to proceed on injurious falsehood or, more recently, probably under section 52 of the Trade Practices Act.  It is not as though there is no remedy in those situations.  But defamation is concerned with reputation and that attaches to the person and it must be established, in my submission, that the publication is made to at least one person who knows who on earth the plaintiff is, and they did not get there in this case.  They did not come close to it.  That, in my submission, is the question of principle and it is sharply raised.  This, in my submission, is a perfectly suitable vehicle through which to answer the question.  Your Honours, that is the first special leave point.  It is only a legal entity which can sue, it is not a business.

The second issue, your Honours, concerns whether it was appropriate for the Court of Appeal and whether it was in accordance with principle for the Court of Appeal to interfere with Justice Studdert’s discretionary decision not to allow this to occur at all.  What happened in the case was that halfway through the trial, after a number of witnesses had been cross‑examined and who had failed to give evidence in accordance with the particulars of identification, my friend ‑ ‑ ‑

GUMMOW J:   What do you say about paragraph 67 on page 38, that there were some forensic decisions made?

MR McHUGH:   Your Honours, that is, with the greatest respect, an entirely inaccurate way of summarising what happened.  Your Honour sees in the middle of the paragraph, in the third line:

Mr McHugh informed his Honour at the stage –

this was at the time that the jury questions arose for argument –

the primary judge reserved on Mr Dibb’s argument that the appellant was identified by being “New Tang Dynasty based in the United States” that he –

that is, that I –

had cross-examined . . . on the basis there was no evidence in chief.

That is, your Honour, the case was conducted on the basis that there had been no evidence in accordance with the particulars.  Her Honour says that this is a forensic decision to continue to cross‑examine on the basis of the existing case, but the problem was that the complaint that was made to Justice Studdert at that point was it is up to them to change their case.  It was made expressly clear to our friends that what was proposed at that stage in changing their case was going outside the particulars and that they would be held to their case at the end and if they wanted to run a different case, what they should have done at that stage was required or asked his Honour to rule on it, to rule on the alternative case, but at that stage the alternative case was not an issue in the proceeding, and Justice Studdert in his judgement accepted that that was the case.  It was a different case, it had not been brought before.  The issue that was raised ‑ ‑ ‑

KIRBY J:   Let me get it clear.  The second point does not arise if you win on the first point?

MR McHUGH:   That is so.

KIRBY J:   But if you lose on the first point, the second point does not arise?

MR McHUGH:   No, if I lose on the first point, the second point still arises.

KIRBY J:   How?

MR McHUGH:   Because it was not open, as a matter of – his Honour Justice Studdert held ‑ ‑ ‑

KIRBY J:   You do not need the extension or the expansion of the case if the plaintiff is sufficiently identified for the purpose of the law of defamation.

MR McHUGH:   No, your Honour, what I am saying is, if I fail on the first point, which is that it is not open as a matter of law at all to pursue an identification case of the kind ‑ ‑ ‑

KIRBY J:   That is if you succeed on the first point, if you ‑ ‑ ‑

MR McHUGH:   No.  If I lose on that point, my backup point, and the way in which the case was conducted was Justice Studdert held, irrespective of whether it was good or bad at law ‑ ‑ ‑

KIRBY J:   There would be no miscarriage, would there, in that event?  If you fail on the first point, then the plaintiff does not need to change his case?

MR McHUGH:   No, your Honour, that is the whole problem.  The first point was the change of case.  The first point, the alternative theory in the Court of Appeal, was the thing which only emerged halfway through the trial.  That was the change of case.  The two answers ‑ ‑ ‑

GUMMOW J:   Why would we get involved in this sort of dispute about which I understand you can feel strongly because to some extent you are in the position of counsel defending what counsel has done, which is not an attractive position you have to take ‑ ‑ ‑

MR McHUGH:   Your Honour, the answer to why your Honours would get involved is that the way in which her Honour dealt with the question of principle on discretion was contrary to House v The King because what her Honour held was the case could have been conducted differently if a whole lot of other things which had not occurred had occurred in a different fashion, and, in my submission, that is not a correct approach to House v The King.  It is not possible for the Court of Appeal to say, if a whole lot of things had gone differently, there would have been no prejudice.  But, your Honour, that is as far as I can put it as a question of principle.  May it please the Court.

GUMMOW J:   We do not need to call on you, Mr Gibb.

The Court of Appeal of the Supreme Court of New South Wales unanimously found that there was sufficient evidence before the jury upon which they could conclude for the purposes of a defamation action that the respondent had been identified by reference to the business name under which it trades.  In doing so, the Court upheld an appeal from the primary judge, Justice Studdert.  His Honour had held that there was no case to go to the jury on identification because no person had deposed to the fact that they made the necessary identification.

We find no error in the Court of Appeal’s conclusion on either of the two issues propounded for special leave and in the reasons which the Court of Appeal gave.  Accordingly, special leave is refused with costs.

AT 11.11 AM THE MATTER WAS CONCLUDED