Nationwide News Pty Ltd v Vass

McCOLL JA: Nationwide News Pty Ltd (Nationwide) seeks leave to appeal from a decision of McCallum J in which her Honour declared, in substance, that defamation proceedings brought against Nationwide by the respondent, Mr Damien Vass, had been settled on 21 March 2018 when he accepted an offer of amends made by Nationwide on 9 May 2017. [1]

The summons seeking leave to appeal was heard concurrently with the appeal, so that in the event leave to appeal were granted, the argument on the leave application would also be argument on the appeal.

The central issue Nationwide identifies as warranting leave to appeal is whether common law principles of contract concerning offer and acceptance operate within the framework of the provisions in Pt 3, Div 1 of the Defamation Act 2005 (NSW) (2005 Act) dealing with offers to make amends (amends provisions) so that an offer of compromise made by Mr Vass had the effect of a counteroffer such that Nationwide’s offer of amends was no longer open for acceptance.

For the reasons that follow, I am of the view that leave to appeal should be granted, but that the appeal should be dismissed with costs.

Mr Vass is an art collector. On 3 May 2015, Nationwide published an article in The Sunday Telegraph (matter complained of) which conveyed imputations, in substance, to the effect that Mr Vass had “dealt inappropriately” with a pentaptych, the heart land, painted by Ms Del Kathryn Barton. Mr Vass had bought the heart land from the Roslyn Oxley9 gallery in August 2014. The matter complained of stated that Ms Barton’s lawyers had written to Mr Vass accusing him of selling one of the five panels of the pentaptych separately, contrary to a term of his contract for sale with the Roslyn Oxley9 gallery that the pentaptych must not be broken up.

On 8 May 2015, Mr Vass served Nationwide with a concerns notice (s 14(2), 2005 Act) setting out four imputations he alleged were carried by the matter complained of, each of which he contended was “highly defamatory and completely false”.

On 5 June 2015, Nationwide sent Mr Vass an offer to make amends (first offer of amends) pursuant to s 14(1) of the 2005 Act and the equivalent legislation in each Australian State and Territory. [2] As summarised by the primary judge: [3]

The first offer of amends was headed “without prejudice save as to costs and a s 18 defence.” The body of the offer specified that it was relied upon “both as a defence under s 18 of the [2005] Act (and equivalent sections in legislation of other States and Territories) and in support of an application that [Mr Vass] pay [Nationwide]’s costs on an indemnity basis pursuant to s 40 of the [2005] Act and the principles in Calderbank v Calderbank.” It further specified, “This offer remains open to be accepted until commencement of the trial, unless withdrawn in writing” and that Nationwide remained ready and willing to perform the offer of acceptance. [4]

By letter dated 10 June 2015, in response to the first offer of amends, Mr Vass complained among other matters that an offer of amends which did not include a “significant amount by way of compensation” was not reasonable (cf s 18(1)(c), 2005 Act).

On 29 April 2016, Mr Vass filed and served a statement of claim commencing defamation proceedings against Nationwide in respect of the matter complained of. He filed a second further amended statement of claim on 7 April 2017 (SFASOC).

On 28 April 2017, Mr Vass sent Nationwide a “without prejudice” letter enclosing an offer of compromise for judgment in the sum of $149,001 pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 20.26 (first offer of compromise). It was said to be open for acceptance for 28 days.

By letter dated 9 May 2017, Nationwide withdrew the first offer of amends and made a “renewed offer” (second offer of amends) (s 16(2), 2005 Act). It was in substantially the same terms as the first offer, except that it included an offer to pay $50,000 by way of damages. Once again, the penultimate paragraph stated:

On 1 June 2017, Nationwide served its defence to the SFASOC. In paragraph 13, Nationwide pleaded the making of the two offers of amends in the following terms:

The particulars of the s 18 defence asserted that the second offer of amends represented a genuine attempt to address Mr Vass’s “Matters of Concern” (s 16, 2005 Act) and was a “renewed offer” within the meaning of s 16 of the 2005 Act.

This plea did not plead in terms of s 18(1)(c) that “in all the circumstances the offer was reasonable.” [5] It can be taken, however, that it was intended, as its heading indicated, to invoke s 18.

On 30 January 2018, Mr Vass sent Nationwide a second offer of compromise pursuant to UCPR r 20.26. He sought judgment in the sum of $449,001. The offer of compromise was again expressed to be open for acceptance for 28 days.

On 21 March 2018, Mr Vass wrote to Nationwide accepting the second offer of amends, which he described as “your Calderbank Offer”. Nationwide responded the same day contending that his letter proceeded upon the erroneous assumption that the second offer of amends remained open for acceptance. Rather, after referring to the second offer of compromise, which Nationwide described as a “counter offer” which it did not accept, the letter continued:

At the time Mr Vass purported to accept the second offer of amends, the trial of the proceedings had been listed for hearing to commence on 30 April 2018.

The matter was then re-listed before McCallum J to resolve as a matter of urgency whether Mr Vass had validly accepted the second offer of amends. Before her Honour, acceptance of the second offer of amends, if valid, was treated as bringing to an end any question of the costs of the proceedings.

The relevant provisions of the 2005 Act are set out below. They are to be understood, not least, in the context of s 3(d) of the 2005 Act which provides that one of the objects of the 2005 Act is “to promote speedy and non-litigious methods of resolving disputes about the publication of defamatory matter.”

Part 3 (Resolution of civil disputes without litigation), Div 1 (Offers to make amends) relevantly provides:

Section 40 of the 2005 Act found in Pt 4 (Litigation of civil disputes), Div 4 (Costs) provides:

UCPR r 20.26 appears in Pt 20 (Resolution of proceedings without hearing), Div 4 (Compromise) (compromise provisions). It relevantly provides:

Pursuant to UCPR r 20.27, a party may accept an offer by serving written notice of acceptance on the offeror at any time during the period of acceptance for the offer. An offer may be accepted even if a further offer is made during the period of acceptance for the first offer and if an offer is accepted in accordance with UCPR r 20.27, any party to the compromise may apply for judgment to be entered accordingly.

UCPR r 20.28 deals with the circumstances in which acceptance of an offer of compromise may be withdrawn by serving a written notice of withdrawal on the offeror. They are the offeror’s failure to do an act for which the offer of compromise provides, or, with the court’s leave (UCPR r 20.28(1)). If acceptance of an offer of compromise is withdrawn, pursuant to UCPR r 20.28(2), either all steps in the proceedings that have been taken as a consequence of the offer having been accepted cease to have effect (UCPR r 20.28(2)(a)), or in the circumstances referred to in UCPR r 20.28(2)(b), the court may give directions to provide for the further conduct of the proceedings.

UCPR r 20.29 deals with either party’s failure to comply with an accepted offer. If the plaintiff or defendant is the defaulter, the other party is entitled to such judgment or order as is appropriate to give effect to the terms of the accepted offer, or to an order that the proceedings be dismissed or the defence be struck out as the case may be, and to judgment accordingly, as the non-defaulting party elects, unless the court orders otherwise.

UCPR r 20.30(1) and (2) prevent, save in the circumstances set out in UCPR r 20.30(3) either party from disclosing that an offer has been made in any pleading or affidavit, or, if not accepted, from making any communication with respect to the offer to the court at the trial or, as the case may require, to the arbitrator.

UCPR r 42.14 deals with the costs consequences where an offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer. UCPR r 42.15 deals with the costs consequences where an offer is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim no more favourable to the plaintiff than the terms of the offer. UCPR r 42.15A deals with the circumstances in which the defendant’s offer is not accepted by the plaintiff and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.

In proceedings on a liquidated claim, a party has a defence of tender before commencement of the proceedings if the amount has been paid into court: UCPR r 14.25. If a party has paid money into court, the court may, in exercising its discretion as to costs, take into consideration both that fact and the amount of the payment: UCPR r 42.22. It is difficult to see how these provisions could apply in defamation cases which are claims for unliquidated damages.

Before the primary judge (and in this court), Nationwide contended, as it had in its correspondence of 21 March 2018, that the second offer of amends was not open for acceptance on 21 March 2018, having been implicitly rejected by the second offer of compromise which it argued was a counteroffer.

Mr Vass accepted that under normal principles of contract a counteroffer rejected an offer. However, he submitted that the plain terms of the second offer of amends meant that the only way in which it would not be open for acceptance before trial was if it was withdrawn in writing by Nationwide, and it had not been. Accordingly, he argued, it was open to him to accept it before the trial commenced. [7]

In her ex tempore judgment, the primary judge held that, “on the proper construction of the offer of amends provisions, the term during which an offer of amends remains open for acceptance remains at all times within the control of the party making the offer (who always retains the power to bring an offer to an end by withdrawing it in writing) and cannot be truncated by the making of a counteroffer by the aggrieved party.” [8] Her Honour held:

Accordingly, her Honour declared that, “as at 21 March 2018, the defendant’s renewed offer of amends dated 9 May 2017 remained open to be accepted by the plaintiff and that the letter dated 21 March 2018 from the plaintiff to the defendant constituted valid acceptance of that offer.” She vacated the hearing date and ordered Nationwide to pay Mr Vass’s costs of the application.

The issues raised in Nationwide’s notice of appeal are whether the primary judge erred in:

Nationwide’s primary contention is that the second offer of amends was not open for acceptance because Mr Vass had rejected it when he served the second offer of compromise. A second contention advanced in its written submissions, that the primary judge’s declaration was tainted by misrepresentations made by Mr Vass prior to the making of the second offer of amends, was not pressed in oral argument.

Nationwide’s essential submission is that, while the amends provisions introduce a novel defence to the publication of otherwise indefensible matter, they do not alter the law governing the formation of contracts. It submits that s 12(3) makes it clear that the amends provisions are not exhaustive or exclusive in relation to offer and acceptance. Nationwide contends that just as under the general law an offer terminates upon its rejection by the offeree, and that a counteroffer is an implied rejection of the offer, so, too, the second offer of compromise should be treated as an implied rejection of the second offer of amends.

Nationwide accepts that a rejected offer can remain operative if it is repeated, or otherwise revived, or if in the circumstances it should be treated as remaining on foot and available for acceptance notwithstanding its rejection. [9] However, Nationwide submits that there was no statement in the second offer of amends that it would be revived or repeated, if rejected, and words to that effect should not be implied. Nor, Nationwide argued, could it be said that its conduct gave rise to any reasonable belief on Mr Vass’s part (or on the part of a person in his position) that the second offer of amends remained open for acceptance after its rejection by service of the second offer of compromise.

Secondly, Nationwide submits that nothing in the 2005 Act mandates that a rejected offer of amends must be treated as remaining open notwithstanding its rejection.

Thirdly, Nationwide submits that the primary judge failed to give reasons for her apparent conclusion that the only way to bring an offer of amends to an end is by the offeror withdrawing it. It contends that such a conclusion is inconsistent with Applegarth J’s reasons in Pingel v Toowoomba Newspapers Pty Ltd, [10] where his Honour said that negotiations triggered by an offer to make amends may be brought to an end by, relevantly, “the commencement of proceedings (which may be interpreted as a rejection of the offer).”

Fourthly, Nationwide argues that in contrast to UCPR r 20.26, which it contends expressly modifies the general law relating to offer and acceptance, the 2005 Act does not purport to do likewise. Rather, Nationwide contends the 2005 Act regulates the circumstances in which the “novel” defence will be available. Nationwide accepts that offers of compromise are used to protect a party’s costs exposure should a matter proceed to trial. However, it contends that the second offer of compromise was a “clear repudiation of the acceptability” to Mr Vass of the second offer of amends, and that the second offer of compromise did not constitute a bona fide attempt to compromise the dispute between the parties but, rather, was a clear indication that Mr Vass intended to have his case heard and determined by the court.

Mr Vass submits that the primary judge’s reasoning is sound and essentially holds Nationwide to the terms of its own offer: that it remained to be accepted unless withdrawn in writing. Accordingly, it remained open to be accepted, by his letter of 21 March 2018.

Secondly, Mr Vass submits that traditional theories of offer and acceptance are not applicable to every contract, and are not applicable in this case particularly having regard to the terms of the second offer of amends, and the amends provisions. [11]

Mr Vass submits that Nationwide chose the terms in which it expressed the second offer of amends. It could have made it clear that it would be treated as rejected if Mr Vass made an offer of compromise. He argued that it was improbable Nationwide would have taken that step, however, as it would risk losing its s 18 defence.

Thirdly, Mr Vass argued that the 2005 Act does not contemplate the “rejection” of an offer of amends. Rather, it deals with the making of an offer, the withdrawal of an offer, the making of a “renewed offer” and the consequence of accepting an offer or renewed offer. Mr Vass submits those elements are consistent with the concept of an offer of amends being the making of the offer by the publisher, which if reasonable, provides a complete defence if the offer is “not accepted”.

Fourthly, Mr Vass submits that the second offer of compromise did not amount to a “counteroffer”. He says it was made under UCPR r 20.26 and the 2005 Act makes it clear that its provisions stand apart from, and do not prevent, parties from using other settlement or negotiation mechanisms.

Fifthly, Mr Vass submits an offer of amends under the 2005 Act can only be withdrawn by notice in writing: s 16(1). Notwithstanding this, Mr Vass conceded that while it may not necessarily follow that no other means of withdrawal can ever be available, the 2005 Act contains nothing which would indicate that any other means would suffice, or that an offer of amends could be rendered inoperative, a step necessary to make good Nationwide’s argument. Mr Vass pointed out that a “renewed” offer may only replace a “withdrawn” offer (s 16(2)) and there is no provision for a “renewed” offer replacing an earlier offer which had somehow become inoperative because an earlier offer had lapsed or been rejected.

Sixthly, Mr Vass submits that the second offer of compromise was not, nor was it treated by Nationwide as being, a rejection of the second offer of amends or of causing that offer to lapse. Rather, he argues Nationwide delivered its second offer of amends “in response” to his first offer of compromise. He contends that Nationwide made it clear that it regarded the withdrawal of an offer of amends under the 2005 Act as a step which was within its power, rather than being a step which he could bring, or had brought, about.

Finally, Mr Vass submits that even if the second offer of compromise had the effect of constituting a “rejection” of the second offer of amends, the “rejected” offer “remained operative” because it should be treated as remaining available for acceptance “as the basis of mutual assent manifested by conduct”. [12]

The starting point for the ascertainment of the meaning of the amends provisions is their text, having regard to their context and purpose, [13] using “context” in its widest sense to include such things as the existing state of the law. [14] Considerations of context and purpose recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected. [15]

Nationwide’s submissions invoke the principle that a statute should not be construed as departing from the general system of law unless it does so with “irresistible clearness”. [16]

However, “the reach of the regulatory state [is such] that it is now difficult to assume that the legislature would not infringe rights or interfere with the general system of law”. [17] Accordingly, “a much surer guide to the legislative intention in areas of legislation dealing with ordinary rights or the general system of law is to construe the language of the enactment in its natural and ordinary meaning, having regard to its context – which will include other provisions of the enactment, its history and the state of the law – as well as the purpose which the enactment seeks to achieve.” [18] In the final analysis, “[t]he assistance to be gained from a presumption will vary with the context in which it is applied.” [19]

Carter and Harland state that at common law (footnotes included with additions): [20]

According to Seddon and Ellinghaus, anything other than unreserved assent to an offer in the exact terms proposed by the offeror, attracts the “mirror principle”, that is to say “in the eyes of the law is to destroy the original offer”, and make a counteroffer. [24] However, courts are prepared to show a more flexible approach to the matching of offer and acceptance where the mirror approach would be inappropriate. Thus, the mere adding of some detail in the acceptance that does not affect the terms of the offer does not amount to a counteroffer. [25]

In Brambles, Heydon JA stated that, “[w]hile the process by which many contracts are arrived at is reducible to an analysis turning on the making of an offer, the rejection of the offer by a counteroffer and so on until the last counteroffer is accepted, that analysis is neither sufficient to explain all cases nor necessary to explain all cases”. [26] Thus, his Honour observed:

As originally enacted, Pt 3 (Defence in Civil Proceedings), Div 8 of the Defamation Act 1974 (NSW) (1974 Act) provided an offer of amends procedure in relation to what was termed an “innocent” publication. By virtue of s 36, to be “innocent” in substance required all persons concerned with the matter in question or its publication to demonstrate they had exercised reasonable care in relation to the matter in question and its publication, did not intend the matter to be defamatory of the putative plaintiff and did not know of circumstances by reason of which the matter in question was or might be defamatory of that person. Where the publisher published defamatory matter, the publisher could make an offer of amends. Section 37(2)(a) – (c) set out matters which “must” be contained in an offer.

Pursuant to s 40, where an offer made pursuant to Div 8 was accepted and the agreement arising by its acceptance performed, the offeree was prohibited from commencing or continuing any proceedings against the offeror for damages for defamation in respect of the matter in question. Where an offeree did not accept a Div 8 offer, pursuant to s 43 the publisher had, in substance, a defence of innocent publication in proceedings by the offeree against the offeror for damages for defamation in respect of the matter in question. Pursuant to s 45, an agreement arising by acceptance of a Div 8 offer did not have any effect in law except as specified in Div 8, and except so far as a contrary intention appeared in the agreement.

Division 8 was based on s 4 of the Defamation Act 1952 (UK) (1952 Act). As explained by the authors of the Report of the Law Reform Commission on Defamation which recommended the adoption of Div 8, [27] it proceeded “on the view that in the case of defamation which is unintentional and not careless, the defamed person is sufficiently vindicated by the publication of a correction or apology and that, if steps are taken to stop further dissemination of the defamatory matter and the costs and expenses of the defamed person are paid, he ought not to be entitled to damages.” The authors commented that the test of “innocence” for which Div 8 provided was “a severe one”. This was necessary in their view “because the Division makes a major inroad upon the general strict liability for defamation at common law.” [28]

The only case in which a defence under Div 8 of the 1974 Act was substantively in issue was Mirror Newspapers Limited v Fitzpatrick. [29] In that case the defendant published an article that the plaintiff, an actress, had appeared on a television show at a time when she was scheduled to take part in the shooting of a film. In fact, on the day in question, the plaintiff advised those shooting the film she was unable to attend because she was unwell. She had not appeared on the television show. The plaintiff complained successfully, among other imputations, that the article conveyed imputations that she had lied about her health. The defendant had made an offer of amends pursuant to s 36 of the 1974 Act which complied with s 37(2)(a) and (b), but not s 37(2)(c). The plaintiff did not accept the offer of amends. Accordingly, the defendant pleaded a defence pursuant to s 43 of the 1974 Act. The trial judge rejected it on the basis that the offer of amends did not comply with s 37(2)(c).

On appeal, the defendant challenged his Honour’s ruling. It contended that s 37(2)(c) was not mandatory and, in any event, that there had been substantial, and therefore sufficient, compliance with its terms. [30] The Court rejected that submission, holding that the effect of s 37(2)(c) meant the defendant could not avail itself of the s 43 defence. [31] Samuels JA also held that the inclusion in an offer of amends of the three matters for which s 37(2) provided was mandatory “in the sense that the stipulated elements must be covered in the offer of amends”, however “it might be enough if the offer fairly covered all ingredients, although departing in some respects from the words of the subsection.” [32]

Division 8 was barely used. There has been no case other than Fitzpatrick until the repeal of Div 8 in 2002 which has contributed to the jurisprudence concerning its application. [33]

Like Div 8, s 4 of the 1952 Act was little used. [34] According to May LJ, the lack of recourse to s 4 was because it placed such a heavy burden on defendants. Indeed according to his Lordship it was never used. [35] Almost four decades after its enactment, the authors of the Report on Practice and Procedure in Defamation, observed that “from the combined practical experience of the legal members of this Committee (over 100 years) none of us is able to think of a single instance where the defence has been successfully advanced.” [36]

The Neill Report expressed the view that it was “desirable to have some more streamlined defence [than s 4 of the 1952 Act] available (rather than merely the opportunity of mitigating damages) in circumstances where a defendant has behaved fairly and reasonably after the tort has been committed.” [37] It recommended that the offer of amends defence not be limited to innocent publications. [38] Rather, the defence should address “the situation where a plaintiff has admittedly been wronged and the defendant is willing to do whatever is reasonable to restore his damaged reputation.” [39]

Section 4 of the 1952 Act was repealed from February 2000 and replaced by Ch 31 of the Defamation Act 1996 (UK) (1996 Act), ss 2 – 4 of which dealt with offers of amends (English provisions) with effect on and from 28 February 2000. Although conceptually the English provisions originated in the Neill Report, the Neill Report recommendations had been the subject of “detailed amendment” prior to enactment. [40]

The objective of the English provisions was “to enable media defendants who had made a mistake to avoid prolonged and expensive litigation in circumstances where they were prepared to acknowledge the wrong and were willing to make reasonable amends.” [41] It was also to provide a mechanism for the claimant’s reputation to be restored in respect of the allegations complained of by “a relatively speedy and relatively inexpensive disposal of a complaint of injury to reputation, where the defendant was prepared to acknowledge that it had published defamatory allegations which were essentially inaccurate.” [42]

The English provisions were the genesis of the offer of amends provisions introduced in New South Wales in 2002 by amendment to the 1974 Act (2002 amendments) to which I refer below. [43] The 2002 amendments, in turn, were substantially the basis for Pt 3 of the 2005 Act.

A brief account of the English provisions is necessary because similarities with the amends provisions make English jurisprudence relevant. While there are similarities, there are also differences. However the fundamental structure of the amends provisions, insofar as offer, acceptance and failure to accept an offer of amends are concerned, reflects the English provisions.

Section 2 of the 1996 Act deals with making an offer to make amends. Section 2(3) specifies the matters which must be included in an offer. Unlike the amends provisions, an offer of amends under the 1996 Act is an offer to pay to the aggrieved party such compensation (if any), and such costs, as may be agreed or determined to be payable: s 2(4)(c). An offer to make amends may not be made after a defence has been served: s 2(5). It may be withdrawn before it is accepted. A renewal of an offer which has been withdrawn is treated as a new offer: s 2(6).

Section 3 deals with the consequences of the aggrieved party accepting an offer. As with the amends provisions, in such circumstances the aggrieved party may not bring or continue defamation proceedings in respect of the publication concerned against the person making the offer, but is entitled to enforce the offer as specified in the section.

Section 4(1) deals with the circumstances in which an offer to make amends under s 2 has been “duly made and not withdrawn” and “is not accepted by the aggrieved party”. In those circumstances, pursuant to s 4(2), the fact that the offer was made is a defence (subject to s 4(3), which appears in substance to preclude a defence if the plaintiff proves the publication was not innocent in the original s 4(1) sense) to defamation proceedings in respect of the publication in question by that person against the person making the offer. Pursuant to s 4(4), while the person who made the offer need not rely on it by way of defence, if that person does no other defence may be advanced. [44] No such limitation applied under the 2002 amendments, nor does it apply under Pt 3 of the 2005 Act.

Section 4(5) of the English provisions also expressly provides that the offer to make amends may be relied on in mitigation of damages, whether or not it was relied on as a defence. Once again, no similar express provision appears in Pt 3 of the 2005 Act. However, at common law, and pursuant to s 38(a) of the 2005 Act, a defendant may rely in mitigation of damages both on the fact that the defendant has apologised to the plaintiff about the publication of the defamatory matter, or that the defendant published a correction of the defamatory matter, both of which are matters which may or must be included in an offer of amends.

The 1974 Act was amended by the Defamation Amendment Act 2002 (NSW) (2002 Amendment Act) to introduce a new Part 2A, “Resolution of disputes without litigation” (2002 amendments), which came into effect on 25 August 2003. [45] The 2002 amendments were based on the report of an Attorney General’s Task Force. [46] The object of Pt 2A, as set out in s 9A, was “to encourage the early settlement of disputes involving the publication of defamatory matter.” In the 2002 Second Reading Speech to the Defamation Amendment Bill which became the 2002 Amendment Act, the Parliamentary Secretary, Mr Stewart, described “a clear priority” of the proposed amendments as being “to divert those cases that can be dealt with by other means away from extended litigation”. [47]

It is unnecessary to delve into the details of the 2002 amendments. It is sufficient in my view to note that they used the language of “offer”, “accept” and “failure to accept”, but not “reject”.

In the Second Reading Speech to the Defamation Bill which became the 2005 Act the Attorney General, the Hon Bob Debus, confirmed that Pt 3 re-enacted, with some drafting and other minor modifications, Pt 2A of the 1974 Act. He emphasised that the amends procedure may be used instead of rules of court or other laws that relate to payment into court or offers of compromise as being “important because these types of provisions tend to be available only once litigation has started”. He also pointed out the significance of the fact that the amends procedure did not preclude the making or acceptance of other settlement offers as “ensur[ing] that parties have every conceivable opportunity to settle their differences before proceeding to trial”. [48]

As explained by the Attorney General, and, in any event, as is manifest from the text of Pt 3, Div 1 of the 2005 Act, the amends provisions were perceived by the legislature as but one of the options available to the parties (or potential parties) to a defamation action to seek either to resolve their differences without litigation, or to seek to ameliorate the outcome in the event litigation was commenced.

Like Div 8 of the 1974 Act, [49] the amends provisions create a statutory scheme which may be used “instead” of the provisions of any rules of court or any other law in relation to payment into court or offers of compromise (s 12(2)). Nothing prevents a publisher or aggrieved person from making or accepting a settlement offer in relation to the publication of the matter in question “otherwise” than in accordance with the amends provisions (s 12(3)). In awarding costs in defamation proceedings, s 40 permits the court to have regard to the respective parties conduct in relation to any settlement offer made before the proceedings are determined, which includes an offer to make amends.

In this case, for example, Nationwide sought to characterise its offers of amends as being both a defence pursuant to s 18 of the 2005 Act and, too, as being “without prejudice save as to costs” coupled with a statement in the body of the offer of its intention also to rely upon the offer to attract an award of indemnity costs pursuant to either s 40 of the 2005 Act or the principles in Calderbank v Calderbank [50] and Cutts v Head. [51]

Although the provisions of any rules of court or any other law in relation to payment into court or offers of compromise may be used instead of the amends provisions, there is a temporal difference, albeit with a degree of overlap insofar as the amends provisions are concerned, between the statutory and common law regimes’ operation.

The clear intent of the introduction of the amends provisions being to promote speedy and non-litigious methods of resolving disputes about the publication of defamatory matter (s 3(d), 2005 Act), the amends provisions operate primarily prior to the commencement of defamation litigation. Where the publisher carries out the terms of an offer to make amends (including payment of any compensation under the offer) that is accepted, an aggrieved person is precluded from asserting, continuing or enforcing an action for defamation against the publisher in relation to the matter in question even if the offer was limited to any particular defamatory imputations (s 17(1)).

In contrast, statutory provisions dealing with offers of compromise or payment into court are only available to parties to litigation. [52]

Under the amends provisions, the plaintiff bears, or potentially bears, almost the entire “burden” of the amends procedure, whether or not he or she accepts such an offer. Loss of the cause of action is one illustration. The plaintiff also faces the risk if an offer of amends is not accepted, that the defendant has a further defence to the proceedings if the circumstances for which s 18 provides are established.

As the primary judge observed, the amends provisions “are to be construed as deliberately imposing a very draconian consequence on a plaintiff who does not accept a reasonable offer to make amends, namely, the loss of the cause of action.” [53] Fryberg J spoke to like effect in Pingel, [54] observing that Pt 3, Div 1 “confers substantial tactical advantages upon publishers with corresponding disadvantages to aggrieved persons”.

One qualification to the proposition that the plaintiff bears almost the entire burden of the amends provisions, is that there is a limit on the publisher’s ability to make repeated offers of amends. An offer to make amends may be withdrawn simpliciter: s 16(1). However, while a renewed offer whether or not in the same terms as the withdrawn offer may be made (s 16(3)), it appears that must be done within the time limit specified in s 14 for the making of offers to make amends. Further while it appears repeated renewed offers may be made if they represent a genuine attempt by the publisher to address matters of concern raised by the aggrieved person about the withdrawn offer (s 16(5)(a)), they must be made within 14 days after the withdrawal of the withdrawn offer or any other period agreed by the publisher and the aggrieved person: s 16(5)(b).

This stands in stark contrast to the common law where the parties are unlimited as to the rounds of offers and counteroffers which may be made and, of course, either party may make a new offer or counteroffer whether or not the previous offer or counteroffer as the case may be has been expressly or impliedly rejected, and the other party’s agreement to making another offer need not be sought.

As Fryberg J concluded in Pingel, “[p]resumably the intention of the legislation is to increase the pressure on aggrieved persons to accept a negotiated settlement and by that mechanism indirectly promote dispute resolution by negotiation rather than litigation.” [55]

The strictures the amends provisions impose support the proposition that they establish a discrete scheme, compliance with which depends upon taking the steps for which it provides and with which the alternative means of resolving litigation referred to in s 12(2) and s 12(3) do not intersect, save to the extent that all attempts to settle may be brought to bear pursuant to s 40.

Nationwide’s principal contention turns on the proposition that by serving the second offer of compromise, Mr Vass “rejected” the second offer of amends in the sense in which that word is used in common law offer and acceptance analysis. Like the 2002 amendments, the amends provisions do use words conceptually common to the common law of contract such as “offer”, “accept” and “not accept[ed]”, but do not use the word “reject”. That alone is not an insuperable obstacle to Nationwide’s contention.

In Tesco Stores, [56] Eady J, writing in relation to the English provisions, referred to the fact that “the statute refers only to an offer being accepted or not being accepted”. They do not use the term “rejected”, but his Honour expressed the view, “that is plainly what Parliament had in mind.” When considering, in the absence of time limits in the English provisions, when a claimant could be taken to have “rejected” an offer of amends, his Honour held that “[b]y analogy with the law of contract, it is reasonable to suppose that the decision to accept or reject must be taken within a reasonable period. What is ‘reasonable’ is likely to depend on the particular circumstances of the case.” [57]

Applegarth J applied a similar approach in Pingel, when he observed that “if [an] offer is not accepted within the specified time then it will have been ‘not accepted’ or ‘refused’, potentially engaging a s 18 defence.” [58] In his Honour’s view, negotiations concerning an offer to make amends might be brought to an end by formal acceptance or rejection of the offer, the commencement of proceedings (which may be interpreted as a rejection of the offer) or the withdrawal of the offer. [59]

I agree with Eady J and Applegarth J. A plaintiff’s failure to accept an offer of amends within the specified time or otherwise than in accordance with its terms is tantamount to its rejection. However that does not necessarily lead to the consequence for which Nationwide contends concerning the application of general law contractual principles in determining the effect of the second offer of compromise.

I consider the scant authority on this point later in these reasons.

The compromise provisions also create a statutory scheme. That scheme bears some similarity to the amends provisions. The compromise provisions prescribe the contents of the offer (UCPR r 20.26(2)), the period during which it may be accepted (UCPR r 20.26(5)) and the circumstances in which it may be withdrawn (UCPR r 20.26(11)), and in which acceptance of an offer may be withdrawn, and the consequences of withdrawal of an acceptance (UCPR r 20.27). They also enable judgement to be entered against the defaulting party in the event of failure to comply with an accepted offer (UCPR r 20.29). The complementary provisions in UCPR Pt 42 dealing with the costs consequences of non-acceptance of an offer and the obtaining of a judgment no more or less favourable to the offeror or the offeree cannot be excluded (UCPR r 20.26(12)).

In Berowra Holdings Pty Ltd v Gordon, Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ stated that an offer of compromise made pursuant to a “regime” established by rules of court, acquired a significance which a settlement offer made under ordinary contractual principles would not have attracted. [60] Accordingly, a party which had made an offer of compromise pursuant to the rules had no entitlement as of right to withdraw it but, rather, required the favourable exercise of a judicial discretion pursuant to the relevant rule to that effect. [61] In addition, in their Honours’ view, it was incorrect to analyse an offer of compromise made and accepted pursuant to such rules in purely contractual terms. [62]

Strict compliance with the compromise provisions is required. As first made, UCPR r 20.26(2) provided that “[a]n offer must be exclusive of costs, except where it states that it is a verdict for the defendant and that the parties are to bear their own costs.” Offers of compromise which included costs offers were held not to comply with the rule because they were inconsistent with the scheme for the making of offers of compromise and could have the effect of depriving the offeree of a right which was part of the scheme. [63] Accordingly, the correct course for an offeree receiving such an offer of compromise was “to regard the purported offer as having no force at all”. [64]

However, an offer that did not comply with Pt 52, r 17 of the Supreme Court Rules 1970 (NSW) (the precursors of the compromise provisions in the UCPR) was not invalid. Rather it did not take effect under the Rules. [65] If appropriately worded, it could operate as a Calderbank offer. [66] Such an offer was made “outside the scheme” for which the compromise provisions provided. [67]

The only Australian case in which consideration has been given to the question whether the common law principles relating to offer and acceptance should be applied in the interpretation of the amends provisions is Barrow v Ackland & Gibson, [68] a decision of Judicial Registrar Matthews in the Supreme Court of Victoria.

In Barrow, the critical issue was whether an offer to make amends in defamation proceedings was not validly accepted because it was no longer open for acceptance. [69] Resolution of the issue turned, relevantly, on whether the plaintiff had made a counteroffer to the offer of amends, either expressly by suggesting an amended form of letter, or because his conduct was such that, applying ordinary contractual principles, it should be held he had rejected the offer. All the conduct said to constitute rejection of the offer was made in the context of the plaintiff, in essence, debating the adequacy of, or commenting upon, the offer of amends. [70]

The Judicial Registrar did not expressly consider the submission concerning the application of contractual principles. She accepted that an offer of amends can be rejected or not accepted by words or conduct. However, she did not accept the plaintiff’s submission that statements such as “I reject the offer” or “I do not accept the offer” must be used in order for there to be a rejection or non-acceptance. [71] While she noted that s 18 does not use the term “rejected”, she applied Applegarth J’s reasoning in Pingel, [72] that any negotiations in respect of an offer may be brought to an end by withdrawal, formal acceptance or rejection of the offer. [73] Accordingly she held the plaintiff had rejected the offer of amends by making “clear statements of non-acceptance that are tantamount to a rejection.” [74] The Judicial Registrar would also have held the sending of a draft writ and statement of claim as a rejection of the offer of amends. [75]

The question whether common law principles of the law of contract relating to offer and acceptance should be applied in relation to offers of amends has arisen in several cases dealing with the English provisions. [76] It cannot be said the question has been settled. [77]

In Loughton Contracts, the defendant made an offer of amends pursuant to the English provisions stating it was intended to cover the claimant’s claim as pleaded in its claim form and particulars of claim. The claimant wrote to the defendant on 9 March 2006 stating it accepted the offer of amends, but reserved its right to do a number of things, including making a claim for special damages. The defendant treated that letter as a rejection of the offer of amends. During the course of an application for summary judgment by the plaintiff, an issue arose as to whether the offer of amends had been accepted by the plaintiff. The plaintiff submitted that it would be wrong to approach that question by adopting principles applicable in a contract case. Alternatively, it argued, even if a contractual analysis were appropriate, it would be wrong to treat the 9 March 2006 letter as a counteroffer. Counsel for the defendant appears to have submitted contractual principles should be applied, relying on the fact that the English provisions were couched in language of offer and acceptance. [78]

Gray J held that the 9 March 2006 letter did not constitute acceptance of the offer of amends. In his Honour’s view, the reservation of the plaintiff’s rights meant that rather than being “an acceptance of the offer of amends, it … runs counter to the basis on which the offer was expressly made, namely that the offer covered the Claimant’s claim as pleaded.” It was, “to adopt the language of the law of contracts, a counter-offer.” [79] Notwithstanding this conclusion, his Honour held that in circumstances where the claimant had made it clear throughout its wish in principle to accept the offer but wanted to make an informed decision and where, absent acceptance of the offer, the claimant would face an irresistible s 4 defence and recover no damages, it should be held that the claimant was entitled to belatedly accept the offer of amends. [80]

In Moore, [81] Lady Paton sitting in the Scottish Court of Session, held that on the proper construction of the English provisions, it was not appropriate to apply the common law rule that rejection of an offer causes that offer “to fall or to cease to exist”. In her Ladyship’s opinion, the English provisions were an example of “one part of the law of defamation where Parliament had made special provision” such that it should be held that Parliament had decided not to follow the common law. [82] Eady J referred briefly to Moore in Tesco Stores, observing that he was not bound by it and did not find its reasoning persuasive. [83]

In Warren, the question arose whether a defendant whose offer of amends, made in respect of one of three passages which were the subject of a defamation claim, had been accepted and performed could nevertheless amend its defence to plead justification in relation to that third passage. Gray J rejected the application on the basis that on acceptance of the offer of amends a “binding and legally enforceable contract” had come into existence. [84] On appeal, the defendant complained, in part, that Gray J had erred in treating the English provisions as creating a contract between the parties preventing it from subsequently raising a plea of justification once the offer of amends had been accepted.

The Court of Appeal (Sir Anthony Clarke MR, May and Wilson LJJ) dismissed the appeal. Their Lordships appeared to doubt Gray J’s conclusion concerning a binding and legally enforceable contract coming into existence on acceptance of an offer of amends. They observed that, “[w]hile the statutory scheme has many of the attributes of a contract, and is certainly consensual, we are inclined to think that it is not a contract in the sense of creating contractual rights and obligations, because it contains express provisions as to what should or should not happen next and the court retains a role.” [85] Although the Court of Appeal also concluded that “whether or not a contract properly so called comes into operation, the court would permit either party to resile from it on one of the traditional contract grounds”, it determined that it was not necessary to reach a final conclusion on the point because the defendant did not suggest it could rely on any such ground. [86]

The amends provisions are a creature of statute. While they use expressions common to the general law of contract such as “offer” and “accept”, that is not a necessary indication that the legislature intended that the general law of contract to apply to their interpretation.

Nor is Nationwide’s submission assisted by the fact that the amends provisions, to an extent, require the parties to proceed in a manner which bears a resemblance to the process of contract formation and general law. That process is strictly regulated by the terms of the amends provisions. Such regulation is inconsistent with the application of ordinary contractual principles. [87] It does not sit comfortably with the law of contract which normally upholds the freedom of parties to agree upon the terms of their future relationships. [88]

Thus, the amends provisions prescribe in what circumstances offers of amends may be made, when they can be made, what they must, or may, contain and how they may be withdrawn and/or renewed. Terms of the offer, such as any compensation to be paid, may be left uncertain, and for determination by a court (s 15(2)(d)). The court may also determine “any other question that arises about what must be done to carry out the terms of the offer” (s 15(3)).

Further, the consequences of accepting, or failing to accept an offer of amends operates within the defamation framework, either as a statutory bar to the aggrieved person further pursuing against the offeror any cause of action in defamation to which the offer of amends related, or by affording the offeror a substantive defence to the aggrieved person’s cause of action the subject of the offer.

As the Court of Appeal said in Warren CA, such provisions indicate that an agreement formed in accordance with the amends provisions “is not a contract in the sense of creating contractual rights and obligations, because it contains express provisions as to what should or should not happen next and the Court retains a role.” [89]

That does not mean that an analysis of conduct undertaken during the amends provisions process may not engage, by analogy, with the law of contract. That was the approach taken in Tesco Stores, Loughton Contracts, Pingel and Barrow. But it does not, in my view, mean that conduct undertaken by a party or potential party within an entirely separate statutory scheme as contemplated by s 12(2) can be brought to bear in considering whether an offer of amends has been rejected.

In my view, it is apparent from the text of the amends provisions, their legislative history and the purpose they seek to achieve that the legislature did not intend the amends provisions to be construed by reference to ordinary contractual principles. [90]

Both Mr Vass’s offers of compromise were made pursuant to the provisions of the UCPR “instead of” under the amends provisions as was expressly contemplated by s 12(2) of the 2005 Act.

The consequence is that Mr Vass’s second offer of compromise made pursuant to a separate statutory scheme did not operate as a counteroffer to the second offer of amends.

The operation of the offer of amends stood to be determined by its terms. They provided that the offer of amends remained “open to be accepted until commencement of the trial, unless withdrawn in writing.” The trial had not commenced, and the offer of amends had not been withdrawn in writing (or otherwise). Nor had Mr Vass engaged in conduct within the amends provisions process which could be said to have constituted rejection of the second offer of amends.

Accordingly, as the primary judge held, it was open to Mr Vass to accept the offer of amends. It would have equally been open to Nationwide to withdraw the offer of amends and rely, had a trial ensued, on a submission that notwithstanding that withdrawal, “in all the circumstances, the offer was reasonable.”

Even if Nationwide is correct to submit that common law contractual principles apply, that would not, in my view, assist Nationwide. The second offer of comprise did not address the same issue as did the second offer of amends. While it was concerned to secure an amount of damages for Mr Vass, its primary object was to secure his position as to the costs outcome of the proceedings. Further, Nationwide never indicated to Mr Vass following receipt of the second offer of compromise that it regarded that offer as having constituted a rejection of the second offer of amends. In my view, the case was one in which the circumstances indicated that Nationwide kept the second offer of amends on foot available for acceptance. [91]

Nationwide also submitted the primary judge erred in apparently holding the only way an offer of amends could be brought to an end was by its withdrawal. Nationwide contended such a finding would be inconsistent with Applegarth J’s statement in Pingel, [92] that that the commencement of the proceedings may be interpreted as a rejection of the offer of amends.

Applegarth J’s statement finds support in Clerk & Lindsell on Torts, [93] which notes that under the English provisions “[t]here is no concept ... of ‘rejection’ of an offer of amends by the claimant and no time limit within which to accept it.” The learned authors suggest that, “[e]ven where an offeree does not specifically reject the offer, his conduct may be held to amount to a rejection. Pursuing the claim following an offer of amends may therefore be held to amount to rejection.”

It is not necessary finally to decide this point, however, in my view it is contrary to the text of the amends provisions, in particular the fact that the ability to make an offer of amends before a defence has been served (s 14(1)(b)) indicates the procedure may be utilised even after proceedings were commenced. That is a clear indication in my view that the legislature intended the amends provisions should continue to operate even after litigation had commenced. Such a construction is also consistent with the object of continuing to encourage settlement. In Pingel, [94] Fraser JA was also of the view that the effect of ss 14(1)(b), 15(4)(a), 17(1), and 17(3) was that the amends provisions process might continue after the commencement of litigation.

I propose the following orders:

BASTEN JA: In May 2015 the applicant, Nationwide News Pty Ltd, published an article claiming that the respondent art collector, Damien Vass, had bought a large five-panelled painting by a well known artist and, contrary to the contract of sale, had sold one of the panels as a separate item. Mr Vass claimed he had been defamed and sued the applicant.

On 9 May 2017 the applicant served an offer to make amends in accordance with the procedure in Pt 3, Div 1 of the Defamation Act 2005 (NSW). On 21 March 2018 the respondent sent a letter to the applicant accepting the offer of amends. On 20 April 2018 the trial judge, McCallum J, held that as at 21 March 2018 the offer remained open to be accepted by the respondent and that the letter of 21 March constituted a valid acceptance of the offer. She made a declaration to that effect and vacated the hearing date.

The applicant sought leave to appeal in order to challenge the declaration on the basis that, on 30 January 2018, well after the offer of amends had been made, the respondent had served on the applicant an offer of compromise pursuant to the Uniform Civil Procedure Rules 2005 (NSW), r 20.26 (“UCPR”). The applicant contended that the offer of compromise constituted a rejection of the offer of amends which thereafter was not open to be accepted by the respondent.

Because the payment under the offer of amends was $50,000, and the applicant did not suggest any greater sum was at stake, it acknowledged that it required leave to appeal pursuant to the Supreme Court Act 1970 (NSW), s 101(2)(r).

The scope and operation of the offer of amends provisions in the Defamation Act is a matter of some public importance. The legislation is, in a number of respects, less than pellucid and has given rise to differing approaches as a matter of statutory construction. While, on one view, this case may be resolved by reference to the terms of the offer, in my view the effect of those terms must be assessed against the statutory scheme in order to understand how they should be construed. Accordingly the case is an appropriate one for a grant of leave to appeal. Nevertheless, for the reasons set out below, the appeal must be dismissed.

On 5 June 2015 the applicant made an offer to make amends in terms which involved (i) an agreement not to republish the article, (ii) an undertaking to remove the article from any websites or publications within its control and (iii) to publish an apology in terms which acknowledged that the allegations were false, that the respondent had done nothing improper and that the applicant unreservedly apologised. On 10 June solicitors for the respondent wrote to the solicitors for the applicant noting recent awards of damages for defamation and stating that “an offer to make amends that does not include the payment of a significant amount by way of compensation to our client is not reasonable in the circumstances.” On 28 April 2017 solicitors for the respondent served an offer of compromise under UCPR r 20.26 offering to settle for payment of $149,001.

On 9 May 2017 the applicant wrote to the solicitors for the respondent noting the letter of 28 April 2017, withdrawing the offer to make amends dated 5 June 2015 and making a “renewed offer to make amends”. The renewed offer repeated the proposed apology and other terms of the first offer and, in addition, offered to pay $50,000 by way of damages. The letter continued:

There is no question raised by the terms of the letter of 21 March 2018 accepting the offer.

Part 3 of the Defamation Act is headed “Resolution of civil disputes without litigation”. Part 4 is headed “Litigation of civil disputes”. As will be apparent from its terms, Pt 3 does not cease to apply when litigation has been commenced.

Part 3 has two divisions: Div 1 is entitled “Offers to make amends”, Div 2 is entitled “Apologies”. Division 2 allows a person to make an apology with respect to an alleged defamation without the apology constituting an express or implied admission of fault or liability. However, the defendant who has made an apology can rely upon it in mitigation of damages, if later found to be liable. [95] No further reference need be made in this case to Div 2.

Part 3, Div 1 is central to the present proceedings. That which will constitute an offer to make amends is effectively determined by the mandatory requirements in s 15(1):

There was no dispute that the applicant’s letter of 9 May 2017 constituted an offer to make amends within the terms of s 15. However, technically, it also constituted a “renewed offer” in circumstances provided for in s 16:

Relevantly for the purposes of s 16(4), s 14(1) imposed a time limit in the following terms:

The next issue is the effect of making an offer. The Act addresses four possible circumstances. First, it makes provision for the acceptance of an offer in the following terms:

Putting to one side the precise effect of accepting an offer which was limited to particular defamatory imputations, it is clear that the effect of s 17(1) is to terminate the liability of the publisher for proceedings in defamation. Section 15(3) envisages that there may be consequential issues to be determined in order to carry out the terms of the offer.

Secondly, an offer may be withdrawn, but only by a notice in writing and only if it has not been accepted, in accordance with s 16(1). Thirdly, the Act provides for the consequences of non-acceptance.

While the chapeau in s 18(1) refers to an offer which is “not accepted”, subs (2)(b) refers to a refusal to accept an offer. That should be understood as one form of non-acceptance; alternatively, a plaintiff may fail to accept an offer simply by making no decision about it one way or the other. Nothing turns on that distinction for present purposes. Relevantly, however, s 18(2) envisages a dispute as to whether the offer was reasonable, requiring determination by a court.

The language of the two conditions set out in pars (a) and (b) of subs 18(1) is by no means clear. Thus, it is not clear whether par (a) imposes an additional condition which would not be satisfied merely by compliance with s 14(1). The matter might be of some importance where “the offer” is a renewed offer made in compliance with s 16(5) to which the time limit specified in s 14(1) does not apply.

The terms of s 18(1)(b) are also uncertain. The opening phrase “at any time before the trial” should be read to mean at any time before the trial while the offer was on foot. It has been held that that language does not exclude an offer to make amends being subject to a temporal limitation, so long as the temporal limitation was reasonable within the terms of par (c). It is not in doubt that the publisher does not have to prove it was ready and willing to carry out the terms of the offer at any point prior to making the offer; there is, however, a real question as to whether the publisher could rely upon an offer made for a limited period, ceasing well before the date of the trial, if it were ready and willing to carry out the terms of the offer only during that period. That would, at the very least, involve some variation of the actual language of par (b). The phrase “on acceptance of the offer” embraces the counterfactual contingency, namely that, although the offer has not been accepted, the fact of being ready and willing must be established. It is by no means clear that that conditional counterfactual limits the phrase “at any time before the trial”, to mean “at such time before the trial as the offer was on foot”.

This point of construction is not entirely irrelevant for present purposes. The applicant’s contention was that its offer ceased to be on foot once the respondent made a counter-offer under the UCPR. At that point, it was submitted, the offer had been refused and thereafter ceased to have effect. Thereafter, not only could the offer no longer be accepted, but it would presumably provide a defence upon which the publisher could rely, however short the period had been during which it was open, so long as the terms of the offer were themselves “reasonable” and it could demonstrate that it had been ready and willing to perform the terms of the offer if the offer had been accepted during the brief period during which it was open.

That would be a surprising reading of s 18(1).

It is also unclear what one should make of s 18(2)(a). The question of the reasonableness of the offer will surely arise, or at least could arise, before the trial because the publisher will seek to rely upon making the offer as a defence. The offer must, in accordance with s 15(1), include an offer to publish a reasonable correction and may include an offer to publish an apology. Of course, those steps can be taken independently of the offer, but will form part of the offer. If the offer provides a reasonable correction or apology, it is difficult to understand why the offer would not be reasonable, because the correction or apology has not been published before “any trial” which, curiously, is assumed to have occurred. It is, however, not necessary to address these difficulties for the purposes of this case.

The critical issue, namely termination of the offer before the time fixed for trial, is not expressly dealt with anywhere in Pt 3, other than in s 16(1) permitting an offer to be withdrawn before it is accepted by notice given in writing. Nor is there any express (or implied) reference to the rejection of an offer. Subject to one qualification noted below, the express rejection of an offer might be considered a good reason to allow the offer to be withdrawn by notice in writing, without rendering the terms of the offer unreasonable because the offer was withdrawn before the expiry of a reasonable period.

The qualification, which is important in the present case, concerns an offer which in its terms states that it will run until the trial and that it can only be withdrawn by notice in writing. There is at least an argument that even a clear rejection of the offer could not be relied upon as a ground for withdrawal if the offer itself did not permit such a course.

On one view, terms relating to the period within which the offer is said to be open and with respect to how it can be withdrawn are ineffective. To proffer such terms is to adopt the scheme of offers of compromise under the UCPR. The Defamation Act expressly provides that the provisions of the Division “may be used instead of the provisions of any rules of court or any other law in relation to payment into court or offers of compromise.” [96] As s 12 further provides, nothing in the Division “prevents a publisher or aggrieved person from making or accepting a settlement offer … otherwise than in accordance with the provisions of this Division.” The statutory scheme under Pt 3 Div 1 of the Defamation Act should therefore be seen to operate independently of the general provisions relating to offers of compromise and it is neither necessary nor appropriate to introduce into the Defamation Act concepts found within the UCPR.

Further, it would appear to be consistent with the scheme of Pt 3 Div 1 that the offer will be open to be accepted at any time before the trial, as envisaged by s 18(1)(b). On that approach, s 16(1) provides the only basis upon which an offer will cease to operate, namely by the offer being withdrawn by notice in writing. Whether a publisher can unilaterally exclude its offer from the operation of s 16(1) need not be determined.

The alternative approach, permitting offers which are temporally limited, turns on reading s 16(1) merely as a precondition to the right to make a “renewed offer.” However, the fact that the renewed offer will be subject to the constraints imposed by s 14, unless the conditions in s 16(5) are satisfied, suggests that the power to withdraw should not be read down in that way. The limitations reflect an assumption that offers may be withdrawn in circumstances where they cannot be renewed. That is permitted, so long as the aggrieved person is given notice in writing. (The term “aggrieved person” will refer to the plaintiff in circumstances where proceedings have been commenced, but is clearly intended to operate prior to the commencement of proceedings.)

On the basis of this analysis of the terms of the Defamation Act, it is necessary to ask whether there is authority which precludes its adoption. The applicant contended that a contrary view to that outlined above was taken by Applegarth J in Pingel v Toowoomba Newspapers Pty Ltd. [97]

The claimant in Pingel believed she had been defamed by an article published by the respondent. The Limitations of Actions Act 1974 (Qld) provided a one year limitation period from the date of publication. Two months outside that period, the claimant applied for an extension of time within which to commence the action. The period could be extended (and was to be extended) only if the court were satisfied that it was not reasonable for the plaintiff to have commenced the action within time. Fraser JA and Fryberg J concluded that the trial judge had erred in giving an extension of time. Applegarth J dissented.

The basis for the claimed extension was that, well within time, the claimant’s lawyers had sought to negotiate an outcome with the publisher, including seeking an offer to make amends. On one view, accepted by Fraser JA and Applegarth J, such an offer was made on 16 April 2009. Negotiations continued until 7 July 2009 (after the limitation period had expired), when the publisher gave notice in writing withdrawing the offer. The issue for the Court was whether it was not reasonable for the claimant to commence proceedings while the negotiations continued. In the course of considering the weight to be given to that factor, Applegarth J made various statements about the operation of Pt 3 Div 1 of the common legislative scheme in the Defamation Act. Contrary to the view expressed above, Applegarth J concluded that Division did not prescribe times within which an offer must remain open for acceptance. [98] He did not read s 18(1)(b) as mandating that an offer remain open for acceptance until trial. He continued: [99]

These views were tentatively expressed; the judge agreed with the construction adopted above that the offer could in any event be withdrawn pursuant to the power conferred by s 19(1).

Applegarth J then noted that the Division “does not envisage a process of negotiation.” [101] His consideration of Division 1 concluded with the following passage, which was relied upon by the applicant:

Taking the last passage in its own terms, the analysis does not expressly support the applicant’s position that an offer will cease to have effect if expressly or implicitly rejected. What Applegarth J stated was that the “negotiations may be brought to an end by formal acceptance or rejection of the offer …”. That is a different proposition.

If the applicant be correct, then the authority is based on a proposition which is not expressed, but is said to be implicit, in observations made by a dissenting judge on a question of construction which was not necessary for disposal of the case. It does not, in my view, provide sound reason for rejecting the construction of the legislation set out above.

In Bushara v Nobananbas Pty Ltd [102] Nicholas J upheld the proposition that an offer need not be open for acceptance until the trial and the publisher need not be ready and willing at any time before the trial to carry out the terms of the offer. Accordingly, the publisher was entitled to rely upon, by way of defence, an offer which was open to be accepted within 21 days. (The reasonableness of the period was not in issue. [103] )

It is true that Nicholas J adopted the reasoning of Applegarth J in Pingel at [101], [102] and [104]. I accept that the reasoning in the first two of those paragraphs supported the approach taken by Nicholas J, which is not in issue in the present case. I do not see that anything said in [104] in Pingel addressed that issue.

The reasoning in Pingel has been followed by a Judicial Registrar in the Victorian Supreme Court. In Barrow v Ackland [104] Judicial Registrar Matthews sought to apply the reasoning of Applegarth J in Pingel. She stated: [105]

Having identified the issue as whether conduct or words of the plaintiff amounted to “a rejection of the offer,” [106] the Judicial Registrar then reasoned: [107]

Having correctly noted the statement by Applegarth J in Pingel with respect to negotiations being at an end, the Judicial Registrar took the additional step of holding that, although the Act did not refer to rejection, rejection of an offer would prevent subsequent acceptance. There was no reasoning to support that elision, and therefore no basis for doubting the different analysis of the statute set out above.

It is sufficient for the determination of this case to conclude that an offer expressed to be open until trial, and only to be capable of withdrawal by notice in writing, was capable of acceptance. The fact that a letter of acceptance was provided before any notice in writing was given withdrawing the offer meant that the acceptance was valid under the Defamation Act.

No other issue need be determined because the terms of the offer were in accordance with the construction of the Act set out above. If they had not been in accordance with that construction, other issues would have arisen.

The contention that parallel negotiations by way of an offer of compromise under UCPR, r 20.26 could amount to an implied or express rejection of the offer to make amends, with the consequence that the offer to make amends was no longer open for acceptance, must be rejected.

The appeal should be dismissed with costs. Orders should be made in the terms proposed by McColl JA.

LEEMING JA: I agree with the orders proposed by McColl JA. The judgments of the other members of the Court have reproduced the factual background and the legislative provisions; what follows is an abbreviated summary which presupposes familiarity with, and does not unnecessarily repeat, those matters.

The essential sequence of events following the alleged defamation was a “concerns notice” from Mr Vass dated 8 May 2015, a document described as an “Offer to Make Amends” from Nationwide dated 5 June 2015, followed by a response from Mr Vass on 10 June 2015 that the offer was not reasonable. Mr Vass filed a statement of claim almost a year later, in April 2016. More than a year later still, by letter dated 9 May 2017, Nationwide purported to withdraw its offer to make amends dated 5 June 2015 and made a “renewed offer to make amends”. This offer was to publish a correction and an apology and to pay $50,000 by way of damages. Both the 5 June 2015 and the 9 May 2017 offers concluded with a paragraph in identical terms:

In January 2018, Mr Vass made an offer of compromise based on judgment in his favour for $449,001. That was not accepted. Then, in March 2018, some five weeks before the matter was listed for trial, Mr Vass purported to accept the 9 May 2017 offer.

The question arising on appeal is whether the primary judge erred in regarding Mr Vass’ acceptance of the 9 May 2017 offer as effective to engage the provisions under Part 3 of the Defamation Act 2005 (NSW).

That question has two aspects. First, Nationwide submitted that the offer in the letter dated 9 May 2017 no longer remained open for acceptance by Mr Vass after January 2018, when he made an offer of compromise in a much larger amount. The service of the offer of compromise amounted to a counter-offer which was, so it was submitted, effective to bring Nationwide’s offer to an end.

Secondly, Nationwide denied that its own letter of 9 May 2017 was a renewed offer. It was submitted that the first offer was not available to be withdrawn because it had already been rejected by the service of a statement of claim, and therefore fell outside s 16. This second submission does not appear to have been advanced before the primary judge, and was only made tentatively in the written submissions in this Court, although it was put squarely in oral submissions. The second submission recognised that it was the logical consequence of acceptance of the first submission.

My reasons for rejecting both submissions may be stated concisely. First, s 14(1) imposes strict time limits upon the making of an offer to make amends. If a “concerns notice” has been served, it may only be made within 28 days thereafter, and it cannot be made if the publisher has served a defence. On one view, the disjunctive paragraphs within s 14(1) constitute two time limits after which an offer to make amends cannot be made; on another view, s 14(1) imposes a time limitation with two disjunctive branches. However, on any view, s 14 is to be read harmoniously with s 16, which addresses both the withdrawal of an offer to make amends and the making of a renewed offer. A renewed offer pursuant to s 16(2) may be made after the s 14 time limits have expired, in the circumstances stated in s 16(5). On the proper construction of s 16(5), and despite its reference to “the [singular] time limit” in that subsection, none of the restrictions in s 14 apply to the making of a renewed offer if s 16(5)(a) and (b) are satisfied. That must be so, otherwise there could never be a renewed offer after a defence had been served, which would be contrary to the purpose in s 3 that the Act has as one of its objects the purpose of facilitating the resolution of disputes without going to trial. That result may be reached either by treating s 14(1) as imposing a singular time limit, or else by treating the reference to “the [singular] time limit” in s 16(5) as referring to the plural time limits imposed by each of s 14(1)(a) and (b) in accordance with s 8(b) of the Interpretation Act 1987 (NSW). I mention all this only for completeness; I did not understand this to be relied on by Nationwide in support of its proposition that the 9 May 2017 offer was not in fact a “renewed offer”.

Secondly, Nationwide conceded that by sufficiently clearly expressed language, an offeror could provide that its offer remained open for acceptance even after a counter-offer or a rejection had been made. The example debated during argument was the inclusion of an additional sentence to the offer, “To be clear, this offer remains in force even if you reject it or make a counter-offer.” The concession was rightly made. It is for the offeror to determine the manner of acceptance and also the circumstances in which an offer will come to an end. There is nothing in the Act which detracts from a publisher’s ability to prescribe the manner of the acceptance or rejection of its offer. As Heydon JA said in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [80], there is no universal principle that a rejection of an offer brings it to an end. It is also true that, where an offer is silent on the point, it may be that it is only open for acceptance within a reasonable time: Ballas v Theophilos (No 2) (1957) 98 CLR 193 at 197; [1957] HCA 90. But Nationwide’s offer made express provision as to the time during which it was open for acceptance: “until commencement of the trial, unless withdrawn in writing.”

Thirdly, there is no reason to displace the natural meaning of the words included in both of Nationwide’s offers. In each case, Nationwide wrote in terms that its offers were open to be accepted until the commencement of the trial. In each case, Nationwide imposed a single qualification upon its offer remaining open, namely, that it reserved the right to withdraw its offer in writing. Nationwide in fact exercised the power which it had reserved to itself to withdraw its first offer when it made its renewed offer. It did so in the self-same letter by which the renewed offer was made. Nationwide was thereby unequivocally proceeding on the basis that its original offer to make amends had remained open for acceptance for almost two years, notwithstanding the service of the statement of claim (not to mention the response from Mr Vass that its offer was not reasonable). That is consistent only with Nationwide’s original offer not lapsing upon its rejection. Nationwide’s renewed offer was couched in materially identical language and ought to be given the same construction.

Fourthly, both of Nationwide’s offers purported to engage the Defamation Act and their language falls to be construed against the backdrop of the Act. The offers purported to be without prejudice save as to costs and a s 18 defence. An element of a s 18 defence is that “at any time before the trial” the publisher was ready and willing, on acceptance of the offer by the aggrieved person, to carry out its terms. This strengthens the conclusion that the offers mean what they say, namely, that subject only to one condition (withdrawal in writing) they remained open for acceptance until the trial. As Basten JA points out, if the offer were to lapse upon the making of a counter-offer, it would be odd if the publisher could no longer avail itself of the defence under s 18 which it had, in terms, purported to invoke.

Fifthly, I do not understand any of the foregoing to be contrary to authority on the construction of the Act or its counterparts in other States. I respectfully agree with what Basten JA has said concerning Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175.

It follows that Nationwide’s first offer did not lapse when a statement of claim was served. The service of a statement of claim by Mr Vass could not amount to the offer’s withdrawal in writing. The first offer was validly withdrawn on 9 May 2017 when that occurred by Nationwide making its second offer. The second offer did not lapse when Mr Vass made an offer of compromise, because, once again, the second offer was expressed to be open until the commencement of the trial unless withdrawn in writing.

Nationwide submitted that the “true construction of the Renewed Offer is that it remained open to be accepted until the commencement of the trial, unless it was withdrawn or rejected”. If the closing paragraph of the offer had included the words “or rejected” I would have accepted that submission. But Nationwide’s offers contained but a single qualification upon the period during which they were open for acceptance, namely, “unless withdrawn in writing”. On their proper construction, they were not subject to a second and additional qualification of being withdrawn by a rejection or the making of a counter-offer. Of course, that would not have prevented Nationwide from withdrawing its offer in those circumstances had it sought to do so.

Nationwide was correct to appreciate in this Court that success on its primary submission entailed that it had misconceived its ability to make a renewed offer in May 2017. However, it was not in May 2017 labouring under a misconception. It remained open to Nationwide at that time to withdraw its first offer made in June 2015, just as it remained open to Nationwide to withdraw its renewed offer prior to the trial, so long as it did so in writing and prior to its acceptance by Mr Vass.

Nationwide also complained in writing about a failure to provide full reasons. As is often the case on an appeal by way of rehearing, such a ground adds nothing, because if the order from which the appeal is brought is found to be correct, the appeal will be dismissed even if the reasons are inadequate. But in any event, I would not accept that there was any absence of reasons, which is consistent with no oral submissions being made in support of that ground of appeal.