John Fairfax Publications Pty Ltd & Anor v Gacic & Ors

[2006] HCATrans 676

[2006] HCATrans 676

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S250 of 2006

B e t w e e n -

JOHN FAIRFAX PUBLICATIONS PTY LTD

First Applicant

MATTHEW EVANS

Second Applicant

and

ALEKSANDRA GACIC

First Respondent

LJILJANA GACIC

Second Respondent

BRANISLAV CIRIC

Third Respondent

Application for special leave to appeal

GLEESON CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 8 DECEMBER 2006, AT 11.13 AM

Copyright in the High Court of Australia

__________________

MR T.D. BLACKBURN, SC:   May it please the Court, I appear with my learned friend, MR D.R. SIBTAIN, for the applicant.  (instructed by Freehills)

MR C.A. EVATT:   I appear with MR M.K. ROLLINSON for the respondent.  (instructed by Beazley Singleton)

GLEESON CJ:   Yes, Mr Blackburn.

MR BLACKBURN:   May it please the Court, the principal issue in this case, in our submission, really comes down to a straightforward question of statutory construction. The question is this: where the Court of Appeal sets aside jury answers as being, in the court’s view, unreasonable or so unreasonable that no reasonable jury could have given the answer, does that entitle the unsuccessful party to a contrary verdict or the direction of contrary answers as a matter of law within the meaning of section 108(3) of the Supreme Court Act? 

Now, the Court of Appeal in a number of decisions over the last few years, culminating in the decision in this case, has answered that question yes.  In our submission, the error has become entrenched and there is no reason to think that the Court of Appeal will stop doing that.  Now, a particular reason why it is important and why it is a matter ‑ ‑ ‑

GLEESON CJ:   Is it a question of power or discretion or both?

MR BLACKBURN:   It is a question of power, your Honour. 

GLEESON CJ:   Only?

MR BLACKBURN:   Only.  My learned friend in his submission says this is not really an important question because the old regime under section 7A of the now repealed Defamation Act is out the window and this question will not arise.  On the contrary, special verdicts will continue to be given.  The new defamation regime provides for juries to be empanelled and answer all factual questions except damages.  So one can be assured that the first question that juries are going to be asked in future defamation actions is (1) were the imputations conveyed to the ordinary reasonable reader and (2) if so, were they defamatory. 

So the problem remains and the problem is constant but it is worse because, of course, in future juries will be asked to answer all the factual questions except for the quantum of damages.  So the problem is going to be compounded and it may be expected that the problem will present itself much more frequently.  My friend’s submission, as we understand it, is that because of the repeal of section 7A the problem is no longer a problem in New South Wales.  In fact, the correct position is it is completely the reverse. 

Section 108(3) of the Supreme Court Act applies where it appears to the court that a party is entitled to a verdict on the evidence by operation of law, as a matter of law.  It is, in our respectful submission, a fundamental misconception to think that because the Court of Appeal makes a determination that a factual finding by the jury was unreasonable that entitles a party to a verdict as a matter of law.  The reason for that is that on the authorities the question whether a party bearing the legal onus, on whom the burden lies, has discharged it or, specifically, whether the plaintiff has so completely discharged its burden as to make a contrary finding unreasonable is on all the authorities a question of fact, not law. 

The authorities for that proposition are numerous – and they include cases on our list, Azzopardi’s Case, a decision of the Court of Appeal, and also the judgment of Sir Frederick Jordan in McPhee v Bennett.  In Azzopardi’s Case, Justice Glass extracts a passage from the judgment of Sir Owen Dixon in Clark v Flanagan (1934) 52 CLR 416 at 428, which is not on our list.

GLEESON CJ:   What is an example of a case where a plaintiff is as a matter of law entitled to a verdict?

MR BLACKBURN:   An example of a case would be – and this is fundamental to our submissions, if the Court pleases – where all the facts are undisputed.  I do not mean the evidence because, of course, this case is a paradigm case of the evidence being undisputed, but the facts that the jury has to find being a live contention.  The case, to answer your Honour’s question, where a plaintiff or any party might be entitled to a verdict on an issue on which they have the onus is where there is no dispute about the facts and there are no more facts to be found.  In other words, in a case where the jury has no more work to do.  There is no question for the tribunal of fact.  That would be a case where, in the appropriate case, as a matter of the operation of law on those undisputed facts one or other party is entitled to a verdict. 

GLEESON CJ:   Yes, I am not concerned about the position of the defendant at the moment.  I am just interested in the concept of a trial judge directing a verdict for the plaintiff.

MR BLACKBURN:   Can I give your Honour an example of that, not quite Shepherd v Felt & Textiles, but something perhaps a little bit similar.  Where a plaintiff seeks a declaration from a court that the defendant is in breach of his or her agency, a number of documents are tendered into evidence showing it is contended for by the plaintiff a clear breach of the agreement.  The defendant does not, as in Sheperd v Felt & Textiles, in effect, contest any facts of any significance but says that the legal effect of that evidence, of those documents is not that the contract has been breached.  There is no dispute in such a case as to the facts.  There is not only no dispute about the evidence but there is no dispute as to the facts to be found from the evidence. 

In such a case – and it might be a rare case – in our submission, the court would be entitled to enter a verdict by operation of law by the operation of the law of contract or the law of agency.  May I add this, your Honour, the question your Honour poses draws attention to this question:  by the operation of what law is the plaintiff entitled to the direction of a verdict in this case?

GLEESON CJ:   What I was intending to get at, Mr Blackburn, was this. Does section 108(3) assume – and I am confining attention to plaintiffs – a case in which the Court of Appeal concludes that the plaintiff was entitled to have the judge direct a verdict for the plaintiff?

MR BLACKBURN:   Yes, your Honour, that is exactly right, and that draws attention to the flaw of what has happened here.  When the Court of Appeal expresses the opinion that the verdict was unreasonable, it is emphatically not making a factual finding that the imputation was conveyed.  It is not doing that because it is not empowered to do that. 

GLEESON CJ:   What would be an example in a defamation case in which a plaintiff might be entitled to a verdict by direction from a trial judge?

MR BLACKBURN:   There is only one example, your Honour, and that is, as sometimes happens, where the defendant concedes that the imputations are conveyed.  The defendant does not wish to have a separate trial or any part of the trial devoted to that issue and the defendant says, “Yes, we agree that the imputations are conveyed, let us proceed”.  In those circumstances, the trial judge is entitled, effectively, to find that the imputations were conveyed and dispense with the jury because there is no factual issue for the jury to determine. 

GLEESON CJ:   That is not directing jury verdict, is it?

MR BLACKBURN:   No, that is one of the problems and our second point in this application, that section 108(3) speaks of verdicts leading to judgments, verdicts in the proper sense of that term, a verdict entitling the entry of judgment, which this was not. I hope I have answered your Honour’s question.

GLEESON CJ:   Yes.

MR BLACKBURN: That is the only circumstance and it must be so because – and we make this point very strongly – where the Court of Appeal opines that jury answers were unreasonable, it is not making a factual finding that the imputation was conveyed because it has no power to do so. If the Court of Appeal had power, as it has power with a judge’s decision, from a jury verdict to make a finding of fact that the imputation was conveyed, then of course pursuant to section 108(3) the Court of Appeal could enter a verdict because the verdict would follow as a matter of law. The fallacy, with respect, in what the Court of Appeal has held is to treat its opinion that the jury’s verdict was unreasonable as a finding of fact that the imputation was conveyed which it is not ‑ ‑ ‑

GLEESON CJ:   Or to treat it as enlivening a power in the Court of Appeal. 

MR BLACKBURN:   Yes, whereas, in our submission, the finding – and it is a factual finding – that the jury’s verdict was unreasonable is simply a precondition of the exercise of the discretion to remit the matter for a new trial. 

GLEESON CJ:   All right.  We will hear what Mr Evatt has to say.

MR BLACKBURN:   If it please the Court.  I have not, of course, addressed the other points but ‑ ‑ ‑

GLEESON CJ:   We have read your written submissions on those.

MR BLACKBURN:   Thank you, your Honour.

GLEESON CJ:   Yes, Mr Evatt.

MR EVATT:   It does concern the administration of the Supreme Court Act and the Court of Appeal has consistently made these orders in Charlwood, Harvey, Gorman, Bennette and Gacic or , rather, Charlwood, Harvey, and Gacic, the present case and ‑ ‑ ‑

GLEESON CJ:   It does seem like an important question, Mr Evatt.

MR EVATT:   Except this, that 11 judges of the Court of Appeal have all found this way or ruled this way.  That includes the President and two acting judges.

GLEESON CJ:   Yes, you have a strong following breeze.  You might ultimately succeed.

MR EVATT:   It is a cricket team.  They would all have to be bowled out.  There are other matters.  My friend was talking about conveyance of imputations.  I do not believe any court can rule in favour of plaintiffs that an imputation should be conveyed.  This case is not concerned with the conveyance of imputations.  It is concerned only whether an imputation found by the jury to have been conveyed was defamatory ‑ ‑ ‑

GLEESON CJ:   Mr Evatt, leave aside the rather different role that the jury has played in recent years in defamation actions which is about to change or may have changed.  Before then, in what circumstances could a trial judge direct a jury in a defamation case to enter a verdict for the plaintiff?

MR EVATT:   Well, if the jury found in favour of the plaintiff for liability but awarded no damages, the judge could direct a jury to award damages because there is a presumption that if defamatory matter is published then some injury is occurred, but that follows a presumption of law, but that is a circumstance that could arise.  Here, my friend said this problem can still come up, the 7A having been abolished, but that is not so because what has caused the problem is not so much the 7A trial but the last address given to the defendant. 

In this particular case, the jury found the imputations that the restaurant served unpalatable food and provided some bad service conveyed but found it was not defamatory because, and only because, we say, as the Court of Appeal found, that my friend’s submissions on that issue were misleading, incorrect, erroneous and totally irrelevant, according to Mr Justice Handley. 

You see, it was the plaintiff’s case that defamation here was injury to trade a new business, injury to reputation as a restaurateur in this case, and that is what I addressed on, but when my friend came to address he only addressed on lowering the estimation of the plaintiffs in the eyes of the community, which is another test altogether, which we could not meet.  That is the only reason that the jury who were said to have been confused by my friend’s submissions found that the two imputations were not defamatory and did not consider or could not have considered whether they would have hurt our trade reputation as restaurateurs.  Moreover, my friend has never ever suggested one reason as to why those imputations are not defamatory. 

So what is going to happen?  We go down to Canberra.  We consider this in this particular case and my friend ultimately succeeds and we go back to the jury to ask them to decide whether those two imputations found to have been conveyed, which must cause damage to their trade as restaurateurs, are defamatory.

GLEESON CJ:   Yes, the problem is these words “as a matter of law”.  It is one thing to say, on the way the case was conducted and having regard to the nature of the defamatory matter and its likely effect on business, it is very difficult to see as a matter of fact how you could fail, but it is a different thing to say, is it not, that as a matter of law you are entitled to a verdict?

MR EVATT: Looking at section 108(3), what the Court of Appeal must have meant that the facts were so strong then, as a matter of law, the plaintiff was entitled to a verdict. Obviously, whether an imputation is conveyed or whether it is defamatory would not be a matter of law.

GLEESON CJ:   Their process of reasoning, which may be right or may be wrong, seems to be, “We can’t think of a basis that is not unreasonable on which the plaintiff could lose, therefore, as a matter of law, the plaintiff is entitled to a verdict”.

MR EVATT:   That is the only way I can figure out how they arrived at those orders because it clearly says a matter of law, but when we look at the application of this section – and it has been applied many times over the years, in all sorts of cases, including cases where the party that has the onus – and we have listed them all in our authorities, going back to 1907 in the High Court – but that must be the basis of the reading or they say that the finding is perverse or that a jury must find this way on the evidence or on the facts. 

The evidence can never change.  It will still be the same question for the jury.  My friend’s submissions are basically that it will have to keep on

going back to the – if the jury keep on answering this in the way that they did, then eventually that will prevail, but it is unthinkable that a jury properly instructed would come to any other conclusion.  There is nothing really I can add to this point, your Honour.

GLEESON CJ:   All right.  Thank you, Mr Evatt.

MR EVATT:   Thank you.

GLEESON CJ:   Yes, Mr Blackburn.

MR BLACKBURN:   Just a couple of points, if the Court pleases.  First of all, we do not concede for a minute, and especially in relation to imputation (c), that the Court of Appeal was correct in saying it is unarguable that that imputation is defamatory.  The plaintiff provides some bad food.  In any event, I will not subject my jury submissions on the Court.

GLEESON CJ:   No, we understand that.

MR BLACKBURN:   The other point is this.  I think I misunderstood what your Honour the Chief Justice was asking me.  If the question your Honour was putting to me which I have misunderstood is, in what circumstance could a jury be directed to return a verdict or answers for the plaintiff in these circumstances, section 7A makes that impossible, in our submission.  There are no circumstances in which the jury could be ordered under the old or present legislation to return favourable answers to the plaintiff.

GLEESON CJ:   That is what I was asking because ‑ ‑ ‑

MR BLACKBURN:   I am sorry, your Honour.

GLEESON CJ:   ‑ ‑ ‑ at least on one reading of section 108(3), what you are asking is whether the plaintiff is entitled to a verdict in the proceedings. Does that mean in a jury action a verdict by direction?

MR BLACKBURN:   In our submission, no.  It is a power given to the Court of Appeal to direct a verdict and enter judgment.

GLEESON CJ:   So the test is not whether in the circumstances as a matter of law the plaintiff is entitled to ask a trial judge to direct a jury to find for the plaintiff?

MR BLACKBURN:   No, your Honour. 

GLEESON CJ:   But even though that is not the test, the test for the Court of Appeal is whether the entitlement to a verdict is an entitlement as a

matter of law as distinct from, in its opinion, an entitlement as a matter of fact?

MR BLACKBURN:   Yes, your Honour. 

GLEESON CJ:   What if the Court of Appeal says, “We can’t think of any factual basis on which one could justify a conclusion in favour of the defendant that was not unreasonable”? 

MR BLACKBURN:   All the court is doing, and this is what Sir Owen Dixon said in Hocking v Bell at page 488, is expressing an opinion that the verdict was unreasonable.  It is not making a factual finding.  In other words, it is not substituting its own finding of fact for that of the jury below which probably would entitle it, as a matter of law, to direct a verdict and enter judgment.  It is only expressing an opinion preparatory to exercising its discretion of whether or not to remit the matter for a new trial.  That is the only power that the Court of Appeal has in New South Wales where the jury has determined the facts in the matter, in our submission. 

GLEESON CJ:   Yes, thank you, Mr Blackburn.  In this matter there will be a grant of special leave to appeal.

AT 11.35 AM THE MATTER WAS CONCLUDED