Milne v Ell

The Court of Appeal of New South Wales considered an appeal and cross-appeal concerning a defamation proceeding between Ms Milne and Mr Ell. The core of the dispute revolved around whether the reputation of a third party could be relied upon as an extrinsic fact to establish an innuendo in a defamation claim, particularly when the basis of that reputation was not proven to be factual. The proceedings also involved a question regarding the appropriate costs orders in a defamation case, specifically whether a successful plaintiff could be deprived of costs and whether a defendant, who offered a timely apology, should have received costs.

The legal issues before the court were twofold. Firstly, it had to determine the legal requirements for establishing an innuendo in defamation, focusing on whether the reputation of a third party, without proof of its factual basis, could serve as the necessary extrinsic fact to support such an innuendo. Secondly, the court was required to consider the principles governing costs orders in defamation proceedings, including the circumstances under which a successful party might be denied costs and the impact of a rejected apology on a defendant's entitlement to costs.

The court's reasoning addressed the nature of innuendo in defamation law, which requires the plaintiff to plead and prove extrinsic facts that give the defamatory words a secondary or innuendo meaning. It was held that while the reputation of a third party can be an extrinsic fact, its efficacy in supporting an innuendo is contingent on that reputation being demonstrably based on fact. Without such proof, the reputation alone is insufficient to establish the innuendo. Regarding costs, the court considered the discretion afforded to trial judges in defamation matters and the factors that inform such discretion, including the conduct of the parties and the success of the claim.

Ultimately, the Court of Appeal dismissed Ms Milne's application for leave to appeal and Mr Ell's application for leave to cross-appeal. In both instances, no order was made as to the costs of the applications.