Gacic v John Fairfax Publications Pty Ltd

1. [1]

   McCOLL JA: Aleksandra Gacic, Ljiljana Gacic and Branislav Ciric, the appellants, appeal against a decision of Hall J in the Common Law Division of the Supreme Court, in which his Honour awarded each appellant $207, 842.19 ($160,000 plus interest) in damages for a defamatory restaurant review concerning the establishment, Coco Roco, published by the respondents, John Fairfax Publications Pty Ltd and Matthew Evans. [1]

Background

1. [2]

   The review was written by the second respondent, Matthew Evans, and published by the first respondent, John Fairfax Publications Pty Ltd on 30 September 2003. [2] After a trial before a jury pursuant to s 7A of the Defamation Act 1974 (NSW) (the “1974 Act”) and two appeals, [3] the appellants established that the review conveyed the following defamatory imputations :

2. [3]

   The matter then proceeded to trial before Harrison J who entered a verdict for the respondents on 18 December 2009. [4]

3. [4]

   The Court of Appeal upheld the appellants’ appeal from Harrison J’s judgment. [5] It entered a verdict for the appellants and remitted the matter to the Common Law Division for assessment of damages. The respondents were unsuccessful in their application for special leave to appeal against the Court of Appeal decision. [6]

4. [5]

   The primary judge conducted the damages hearing pursuant to the Court of Appeal’s remitter order. His Honour delivered judgment on 19 December 2013 entering judgment in favour of each of the three appellants for the amounts to which I have referred. On 6 June 2014 his Honour delivered a judgment dealing with costs and interest. [7]

5. [6]

   The appellants complain that the primary judge’s award of damages was inadequate. They also claim his Honour erred by not backdating his judgment to 18 December 2009, the date of Harrison J’s judgment. The respondents complain the primary judge’s award was excessive because, they contend, his Honour erred in his consideration of a plea in mitigation of damages he gave them leave to advance in the course of the damages hearing.

6. [7]

   For the reasons that follow, I am of the view that both parties have had a measure of success in their contentions and that the appellants’ damages should be re-assessed. Neither party objected to this Court undertaking that exercise should it reach the conclusion that re-assessment was required.

Legislative framework

1. [8]

   The action was governed by the 1974 Act which relevantly provided insofar as the assessment of damages was concerned:

2. [9]

   Two of the appellants’ grounds of appeal concern their application for the backdating of the judgment. In that respect, s 101 of the Civil Procedure Act 2005 (NSW) relevantly provides:

3. [10]

   Uniform Civil Procedure Rules 2005 (“UCPR”) 36.4 provides:

Primary Judgment

1. [11]

   The background was set out in the Court of Appeal judgment (in turn cross-referenced to Harrison J’s findings) as follows:

2. [12]

   The damages hearing proceeded upon the basis that the transcript of the evidence in the liability hearing formed part of the proceedings remitted by the Court of Appeal. [8] Each appellant also gave evidence which supplemented the evidence they had given. They called three other witnesses. The respondents relied on the evidence they had called at the liability hearing.

A The mitigation defence

1. [13]

   On the third day of the damages hearing, the respondents obtained leave to amend the defence to plead, in mitigation of damages, that any damage that the appellants had suffered should be reduced because of the truth of matters pleaded in support of their defences of truth and comment.

2. [14]

   In support of that plea, the respondents relied upon facts concerning the second respondent’s experiences when he dined at “Coco” they contended they established at the liability hearing in succeeding in their defence of truth with respect to the second imputation in relation to each appellant and the third imputation with respect to the third appellant. They also relied upon facts they contended Harrison J had expressly or implicitly found to be established in holding that they had established the defence of comment with respect to all three imputations in the case of each appellant. They contended his Honour should be found to have implicitly made the findings of fact on which they had relied to support their defence of comment to which their plea in mitigation was cross-referenced.

3. [15]

   Although Harrison J’s verdict was overturned on appeal, the respondents submitted at the damages hearing that the Court of Appeal had not interfered with his factual findings. Accordingly, they contended the primary judge should have regard to the facts found by Harrison J to conclude that the appellants’ reputations as restaurateurs had been justifiably tarnished at the time the review was published in such a manner as would substantially mitigate any damages to which they were entitled.

4. [16]

   The primary judge described the defence of mitigation as the centrepiece of the respondents’ case on damages. [9] They relied upon a number of propositions to support it which the primary judge summarised [10] as including:

5. [17]

   The primary judge explained the respondents’ argument as follows:

6. [18]

   The primary judge described the mitigation defence as an “unusual line of argument” [11] whereby the “review of the Coco restaurant, notwithstanding its defamatory nature, was relied upon by the defendants as having had a significant and public impact upon the plaintiffs’ reputation as restaurateurs to the extent that its effect upon them was to ‘devastate’ their reputation. Such a devastating effect, the defendants contended, in effect, operated or worked in their favour in the assessment of damages”. [12]

7. [19]

   His Honour then said:

8. [20]

   The appellants disputed the validity of the respondents’ submission, contending [13] that:

9. [21]

   The primary judge [14] identified the following issues as relevant for determination of the issue:

   1. (1)

      “Whether any ‘findings’ of Harrison J may be considered as post-judgment findings of a court that relate to reputation.

   2. (2)

      Whether the statements of [the second respondent] in the review, on the quality of the food served at Coco and as to the service, were statements of fact or of opinion about those matters;

   3. (3)

      Whether the ‘findings’ made by Harrison J, however, characterised, may be regarded as constituting post-publication findings that diminish the plaintiffs’ reputations.

A1 Whether “findings” operate as post-judgment findings

1. [22]

   The primary judge noted at the outset of his consideration of this issue that the “‘findings’ of Harrison J as to the quality of the food and the service at the Coco restaurant, if they be as such, were made on 18 December 2009, the date of his Honour's judgment, that is a little over six years after the date of publication of the review.” [15]

2. [23]

   His Honour applied Amalgamated Television Services Pty Ltd v Marsden [16] to hold that adverse findings “made in the very proceedings in which damages were to be assessed could not be used for purposes in which the plaintiff claims damages.” [17]

3. [24]

   The primary judge concluded that the post-publication “findings” did not fall within the category of cases involving evidence of events going to diminish reputation occurring after the publication of defamatory matters. They were not “evidence of bad reputation of the plaintiffs”. Accordingly they could not be used to diminish the plaintiffs’ reputation as they were made after publication of the defamatory matter and in a judgment in the present proceedings.” [18] In any event, his Honour found Harrison J’s findings were not “factual”. [19]

A2 Facts v Opinion

1. [25]

   The primary judge then considered the respondents’ submissions that Harrison J’s findings should be characterised as findings of fact rather than, as the appellants contended, only matters of opinion. [20]

2. [26]

   The primary judge accepted the appellants’ submission, applying Convery v The Irish News Limited, [21] that the post-publication findings could only be matters of opinion, not fact. [22]

3. [27]

   Although that conclusion was a sufficient answer to the respondents’ submissions on mitigation, his Honour considered two cases on which they relied, Pamplin v Express Newspaper Ltd [23] and Burstein v Times Newspapers Ltd [24] in order to examine “the juridical basis for the mitigation of damages principle in defamation proceedings and the circumstances that determined its scope and application.” [25] His Honour concluded that it “is clear from the analysis that evidence of factual matters (not matters in the nature of evaluation or opinion) adverse to a claimant’s own past ‘conduct’ and hence his or her past reputation, is admissible, albeit in limited extent, having regard to the facts proved in reduction of damages.” [26]

4. [28]

   His Honour determined:

5. [29]

   The primary judge also concluded, [27] referring to Harrison J’s judgment, [28] that he did not consider his Honour “intended to make, findings of fact as to the quality of the food and the quality of the service at the Coco restaurant”. Accordingly:

6. [30]

   In relation to the defence of mitigation his Honour therefore held: [29]

7. [31]

   Nevertheless, his Honour said “those conclusions did not mean that I would have no regard in assessing damages to the matters of opinion expressed by Mr Evans in the review, or the evidence and opinions of other witnesses called in the plaintiffs’ case who dined at Coco.” [30] In his Honour’s view the opinions expressed all provide context for the purposes of the assessment of damages. His Honour observed that “[t]he opinion of a food reviewer may, of course, not be an opinion that is shared at all by members of the public” and contrasted the different opinions as between the second respondent and the appellants’ witnesses, “who spoke of their enjoyment of their experience at Coco”. [31]

8. [32]

   His Honour added that:

B Assessment of Damages

1. [33]

   The primary judge then turned to the assessment of damages. He noted that the provisions of Part 4, Division 8 of the 1974 Act governed the approach to be applied. [33] His Honour set out the relevant parts of s 46 and s 46A. [34]

2. [34]

   His Honour then discussed the purposes served by an award of damages for defamation, referring to Carson v John Fairfax & Sons Limited [35] (“Carson”) and the observations of Hayne J in Rogers v Nationwide News Pty Ltd [36] (“Rogers”). In particular, his Honour referred to Hayne J’s observations in Rogers that “it is of the first importance to recall the fundamental principle that the damages to be awarded for defamation must compensate for the effect of defamation on the particular plaintiff” [37] and that “the relationship which s 46A(2) identifies is not … some precise or mathematical relationship between the particular cases of defamation and personal injury or between classes of such cases [for] [t]o do that would compare the incomparable”. [38]

3. [35]

   His Honour contrasted the injury done by defamation which “even if serious, is often evanescent, whereas some personal injuries are permanent and devastatingly disabling.” [39]

4. [36]

   He added:

5. [37]

   His Honour then set out the statutory caps that applied to the award of damages for non-economic loss as at the date of publication (30 September 2003) in ss 16 and 17 of the Civil Liability Act 2002 (NSW) and the Civil Liability (Non-economic Loss) Order 2010 ($365,000) and ss 134 and 146 Motor Accidents Compensation Act 1999 (NSW) and the Motor Accidents Compensation (Determination of Loss) Order No 3 ($309,000).

6. [38]

   The primary judge considered the evidence both before Harrison J and the supplementary evidence given before him. [40]

C Compensatory Damages

1. [39]

   The primary judge stated that “it should be accepted that each of the [appellants] had, prior to the reviews’ publication, been decent and hardworking people”. [41] He also noted that the review was published in the “Good Living section of the Sydney Morning Herald, a prominent daily newspaper with a wide circulation and wide readership”. [42] His Honour concluded that, as part of the contextual background to the feelings the appellants said they experienced and the impact upon them having read the matter complained of, he could take into account the fact that the evidence established that “the plaintiffs had a substantial personal investment and potential liability associated with Coco Roco enterprise”. [43] In this context his Honour said:

2. [40]

   His Honour also emphasised that it was necessary to ensure compensatory damages related to the injury and harm each appellant suffered, and did not include injury and harm “otherwise related to the collapse” of their business and the consequent financial and other repercussions. [44]

3. [41]

   The primary judge found:

4. [42]

   The primary judge also accepted that the unreasonable failure of the respondents to apologise to the appellants should be taken into account in the determination of normal compensatory damages in that it had contributed to their hurt by keeping alive the effect of the publication. [45]

5. [43]

   The primary judge rejected the respondents’ submission that damages should be reduced on the basis that the appellants had “brought the bad review upon themselves” by serving unpalatable food to a food critic. [46] Referring to his earlier findings in relation to mitigation, his Honour noted that this submission depended on the assumption that the food being “unpalatable” had been objectively determined by the second respondent, rather than being his “subjective opinion”. Nor, his Honour added had the respondents established “that the review was ‘directly provoked’ by the plaintiff’s conduct in the sense discussed in Burstein at 590 or in any true causal sense arose due to any such conduct.” [47]

D Aggravated Damages

1. [44]

   In relation to aggravated damages, his Honour considered the continued presence of the review on the internet (it was removed from the website following the judgment of the Court of Appeal, but was later restored and remained there at the time of hearing). His Honour “concluded that the conduct of the first respondent in placing the defamatory article on the internet constitutes unjustifiable conduct” and that it had increased the damage caused to each plaintiff by the original publication” [48] and “caused each of the plaintiffs significant upset and distress.” [49]

E Exemplary Damages

1. [45]

   The appellants claimed exemplary damages in respect of the publication of the defamatory material in states of Australia other than New South Wales and in Commonwealth Territories. The primary judge noted [50] that counsel for the appellants acknowledged that the claim for exemplary damages could only be founded on the fact of the continued publication of the review on the internet.

2. [46]

   The appellants contended [51] that “the amount of exemplary damages awarded should serve as a warning to the first defendant that it will be punished financially … if they won’t take down [the] matter which the Court of Appeal and the High Court have established [was] wrong”. The respondents contended there was no evidence to support such an award. [52]

3. [47]

   The primary judge noted [53] that “it is now well established that the award of exemplary damages is an exceptional remedy in cases of conscious wrongdoing in contumelious disregard of a plaintiff’s rights”.

4. [48]

   The primary judge considered [54] that the first respondent’s actions in “reinstating the article on its internet website [after having been taken down following the Court of Appeal reversal of Harrison J’s decision] and its failure, and on some evidence its refusal, to remove it is conduct that could be said to warrant disapproval and even censure”. Nonetheless, it was “necessary to take into account as a modifying factor that the review on the first [respondent’s] website is not the equivalent of widespread publication by a print media as it requires specific search terms to be employed to activate publication of it”. [55]

5. [49]

   His Honour concluded:

6. [50]

   Judgment was entered in favour of each of the three appellants in the amount of $160,000 each, such amount, including a component of aggravated damages. [56]

The Costs Judgment

1. [51]

   The only aspect of the Costs Judgment the subject of appeal concerns the “backdating” issue. The appellants submitted below that the date of his Honour’s judgment should be backdated to the date of Harrison J’s judgment because it “in effect replaced the award made by Harrison J.” [57] They relied upon UCPR 36.4(3) as the basis upon which his Honour could accede to that application.

2. [52]

   The primary judge accepted (and the respondents conceded) that he had power under UCPR 36.4(3) to order that his judgment take effect as of a date earlier (or later) than the date fixed by UCPR 36.4(1). The issue was “whether the discretion to make such an order should be exercised”. [58]

3. [53]

   His Honour said:

4. [54]

   The primary judge distinguished on two bases Nicol v Allyacht Spars Pty Ltd (No 2) [59] and Nicholson v Nicholson [60] on which the appellants relied, each being a case in which judgment on appeal was awarded with interest from the date of the first instance judgment.

5. [55]

   First, the Court of Appeal had not made “‘variation’ orders which had the effect of increasing an established right to damages previously determined under an earlier judgment at first instance”. [61] Secondly, the case “was not analogous to one involving a variation of an earlier judgment awarding damages and increasing damages previously awarded” as Harrison J made no actual award of damages “but merely a notional assessment having determined liability against the plaintiffs.” [62]

6. [56]

   Accordingly, as the first time the appellants “had an established right to damages was on 19 December 2013 the date upon which final judgment was delivered in their favour”, it would not “represent a proper exercise of the power … to backdate the judgment simply so as to enable the plaintiffs to claim a post-judgment interest rate for a period in lieu of the ‘conventional’ rate for defamation damages that would otherwise apply”. [63]

Issues on appeal

1. [57]

   As I have said, generally the appellants submit the award of damages of $160,000 each was manifestly inadequate and warrants being set aside by the Court of Appeal. They contend there are “extraordinary circumstances” which warrant the original award being increased. They contend they should each have been awarded verdicts in the vicinity of $400,000.

2. [58]

   In their amended notice of appeal, the appellants complain that:

   1. (1)

      The amount of damages awarded to each of them was inadequate.

   2. (2)

      His Honour erred in not awarding exemplary damages.

   3. (3)

      His Honour erred in taking into account s 46A of the 1974 Act in his assessment of damages without giving the parties the opportunity of making submissions as to its application and the effect on quantum.

   4. (4)

      His Honour erred by misapplying s 46A in his award of damages.

   5. (5)

      His Honour erred in confining his award of aggravated damages to the continued publication of the review on the first respondent’s website and not taking into account other categories of aggravated damages.

   6. (6)

      His Honour erred in not giving sufficient weight in his award of compensated damages to the stress and worry the appellants suffered due to factors including bankruptcy and the long period of time between the date of publication (30 September 2003) and the date of judgment (19 December 2013) during which period there had been two appeals to the High Court, two appeals to the Court of Appeal, two s7A jury trials and two non-jury trials.

   7. (7)

      His Honour erred in not back dating interest on the amount of damages awarded at court rates from 19 December 2013 [sic, “18 December 2009” (the date of judgment of Harrison J)].

   8. (8)

      His Honour erred in not back dating interest on the award of damages.

   9. (9)

      His Honour erred in not back dating interest on his award of damages pursuant to Uniform Civil Procedure Rule 36.4(3).

3. [59]

   The appellants seek orders allowing the appeal, increasing the damages to be awarded to each to such sum as this Court may find appropriate and interest on those damages at Court rate to be back dated to a date decided by the Court.

4. [60]

   In their amended notice of cross-appeal, the respondents contend that the primary judge erred on the issue of mitigation of damages:

   1. (1)

      In holding that the findings of Harrison J in [2009] NSWSC 1403 did not establish facts relevant to the cross-respondents’ reputations as at the date of publication;

   2. (2)

      In holding that the findings of Harrison J in [2009] NSWSC 1403 did not establish facts directly relevant to the contextual background in which the review was published.

   3. (3)

      In holding that the findings made by Harrison J in [2009] NSWSC 1403 were “post-publication” findings not relevant to the assessment of damages; and

   4. (4)

      In holding that the statements of the second cross-appellant in the review and in evidence in the proceedings before Harrison J as to the quality of the food and service at Coco were statements of opinion, and evidence of the second appellant’s opinion, and that there were no statements of fact and evidence of facts relevant to the assessment of damages.

5. [61]

   The cross-appellants seek orders that the damages be reassessed by the Court, that the cross-respondents repay to them any sums previously paid to them as damages (and interest thereon) in excess of the award of damages (and interest thereon) by this Court together with interest on those sums, alternatively, an order that any sums payable by the cross-respondents should be set off against any sums payable by the cross-appellants to the cross-respondents for costs in the proceedings in the Courts below.

The appeal

1. [62]

   Before turning to the appellants’ discrete complaints about the damages awarded, the nature of an award of damages for defamation should be outlined.

2. [63]

   In Rogers [64] Hayne J (Gleeson CJ and Gummow J agreeing) said (footnotes omitted):

3. [64]

   As the harm caused to a plaintiff by the publication of the defamation often lies more in the plaintiff’s own feelings, that is to say in what the plaintiff thinks other people are thinking of him or her, than in any actual change made manifest in their attitude towards him, [65] “[a] solatium for injured feelings, however innocent the publication by the defendant may have been, forms a large element in the [general compensatory] damages”. [66]

4. [65]

   The emphasis placed on each purpose of an award of defamation damages will vary depending upon the facts of each case. Sometimes, for example, there may be relatively little demonstrable damage to reputation, but serious emotional distress; on other occasions, the need for public vindication will predominate; in yet other cases the financial consequences of damage to the reputation of the individual may represent the most serious feature. [67]

Section 46A (Grounds 3 and 4)

1. [66]

   In his written submissions, Mr Evatt, who appeared for the appellants at trial and on appeal with Mr R Rasmussen and Mr C Dibb, complained that the primary judge erred in taking into s 46A(2) of the 1974 Act without giving the parties the opportunity of making submissions as to its application and its effect on quantum. First, they contended, his Honour should have raised the s 46A(2) with counsel during submissions. Secondly, they submitted that, uninstructed by parties’ submissions, his Honour erred in referring [68] only to the statutory caps for non-economic loss in the Civil Liability Act and the Motor Accidents Compensation Act without also considering the general range of damages for non-economic loss in personal injury awards. Had he raised the issue with the parties, the appellants submitted they would have directed his Honour’s attention to case law dealing with the application of the section.

2. [67]

   Thirdly, the appellants argued that his Honour did not explain how he applied the statutory caps and what effect they had on his award. Nevertheless they contended the damages awarded suggested he was unduly influenced by the statutory maxima which were, they argued, at most a guide. Had they been able to refer his Honour to case law, they would have demonstrated that s 46A(2) did not impose a cap on damages, may be of limited utility, and was not invariably taken into account. Fourthly, the appellants submitted that the enquiry dictated by s 46A(2) was of secondary importance to the s 46(A)(1) requirement that there be an appropriate and rational relationship between the harm and the amount of damages.

3. [68]

   In oral submissions Mr Evatt only faintly pursued his procedural fairness point, recognising that s 46A was a mandatory consideration. Nevertheless he submitted that the primary judge misapplied s 46A (at [143]) in failing to refer to awards other than those the subject of statutory caps. Mr Evatt submitted that had the primary judge raised his intention to refer to s 46A(2), the parties could have assisted him by referring to a range of cases in which larger amounts than $160,000 had been awarded to plaintiffs in defamation actions.

4. [69]

   Mr Evatt referred to Re Media Entertainment & Arts Alliance; ex parte Hoyts Corporation Pty Ltd (No 2) [69] where the Court held that one aspect of the rule against bias “is that the decision should be made on the basis of the evidence and the argument in the case, and not on the basis of information or knowledge which is independently acquired”, an aspect of the rule the Court said was “similar to but not identical with the rule of procedural fairness which requires that a person be given an opportunity to meet the case against him or her”.

5. [70]

   The respondents pointed out that s 46A(2) was a mandatory consideration and that the appellants must have appreciated this at the hearing. They contended the appellants had shown no reason why they should be permitted to raise its application on appeal. Secondly, the respondents contended the appellants had not demonstrated any error in his Honour’s application of s 46A(2), in the identification of statutory maxima relevant to the assessment of damages or why regard to some other criteria might have produced a different result.

Section 46A – determination

1. [71]

   Although the appellants address two grounds of appeal to s 46A their submissions did not distinguish between the grounds and may be dealt with as one complaint.

2. [72]

   The appellants’ written submissions at trial referred to general principles governing the award of compensatory, aggravated and exemplary damages in defamation cases. In oral submissions at trial Mr Evatt addressed the issues of exemplary and aggravated damages and, to a lesser extent, compensatory damages. In the latter respect, as the primary judge said, [70] Mr Evatt informed his Honour he had specific instructions to put a figure. That figure was, “that each client should be awarded, $2 million each”.

3. [73]

   As the primary judge said, the amount Mr Evatt submitted on behalf of his clients should be awarded by way of compensatory damages demonstrated “a complete misunderstanding” by them of the process of assessment of damages. His Honour was also entitled to infer, in my view, that Mr Evatt did not refer to the statutory framework within which damages were required to be assessed because that would detract from the damages he was instructed to seek and that his Honour was not afforded any assistance on the matters referred to in s 46A(2) for that reason.

4. [74]

   A section 46A(2) was a mandatory consideration, his Honour was also entitled to infer that the parties assumed he would have sufficient familiarity with the matters s 46A(2) required him to take into consideration not to require submissions from them.

5. [75]

   I do not read his Honour’s reasons as suggesting that he was unduly influenced by the statutory maxima. Contrary to Mr Evatt’s submissions, nothing in his Honour’s reasons suggests that he understood the statutory caps to which he referred as limiting or capping the amount he could award the appellants for compensatory damages.

6. [76]

   The appellants do not criticise the primary judge’s recitation [71] of the principles concerning an award of damages for defamation. One of those principles to which his Honour referred was Hayne J’s statement in Rogers [72] that a “fundamental principle” [is] that the damages to be awarded for defamation must compensate for the effect of the defamation on the particular plaintiff …” (emphasis in original). His Honour also noted that “damages awarded for defamation … must stand in a proper relationship with awards for the non-economic consequences of personal injury”, but (again referring to Rogers), “the relationship which s 46A(2) identifies is not … some precise or mathematical relationship between the particular cases of defamation and personal injury or between classes of such cases. To do that would compare the incomparable”. [73]

7. [77]

   Thus, his Honour was required to focus on the effect of the defamation on each appellant, as well as to at least “consider” the amounts referred to in s 46A(2). But to do so did not require the “recitation of a string of awards of damages in personal injury cases and a demonstration of precisely how they were taken into consideration in assessing the damages in the instant case.” [74] In such circumstances references to other cases would be of limited utility. His Honour was required to take the matters set out in s 46A(1) and (2) into consideration, but they were not to be determinative in his assessment of compensatory damages.

8. [78]

   There is no indication in the primary judge’s reasons that he regarded the caps in the legislation to which he referred as providing some precise reference for the damages he was to award.

9. [79]

   In my view the primary judge did not deny the appellants any procedural fairness. Rather, their counsel did not, undoubtedly in the light of his instructions as to the quantum of damages the appellants had instructed him to seek, afford his Honour any assistance on s 46A.

10. [80]

    I would reject these grounds of appeal.

Exemplary damages (Ground 2)

1. [81]

   This aspect of the appellants’ claim as outlined in their written submissions was based on the fact that the review, as well as an article published on the SMH Good Living website on 18 December 2009 with the headlines “Coco Roco loses action over ‘stay home review’” (the “Court case article”) describing the appellants’ failure to make out their defamation claim before Harrison J, had remained on the Sydney Morning Herald website despite the finding that the review was defamatory and what was said to be a request from the appellants that it be removed. In oral submissions, Mr Evatt confined the exemplary damages claim to the continued publication of the review.

2. [82]

   The appellants do not challenge the primary judge’s statements of principle concerning the basis of an award of exemplary damages. However they do criticise his Honour’s statement that:

3. [83]

   Mr Evatt submitted that widespread publication is not the test for determining whether exemplary damages should be awarded. In any event, he contended that the number of readers in other States and Territories was large. However, he submitted that the appellants were entitled to exemplary damages because the first respondent’s conduct in persevering for nine years with untrue, defamatory and misleading material on its websites deserved the censure of the Court, no matter how many persons downloaded or read it. By doing so he argued the first respondent engaged in “conscious wrongdoing in contumelious disregard” for their rights.

4. [84]

   Mr Blackburn noted in his written submissions that the appellants did not submit that the first publication of the review occurred with knowledge of its falsity but, rather, contended they were entitled to exemplary damages because of the first respondent’s failure to remove it from its website following judicial determination of its defamatory nature. He submitted that the underlying premise of the appellants’ claim was that a failure to purge historical acts subsequently found to be wrong constituted “conscious wrong-doing in contumelious disregard of another’s rights”. This was notwithstanding the fact that the appellants would otherwise obtain vindication for the defamatory publication through an award of compensatory and, possibly, aggravated damages. He argued that that there must be a distinction between a publication first made with knowledge of its falsity and in contumelious disregard of a plaintiff’s rights, and the continuing publication of the review, notwithstanding a judicial determination that it was defamatory.

5. [85]

   Mr Blackburn also submitted that the question of whether the first respondent’s conduct was such as would warrant an award of exemplary damages involved an exercise of discretion on the part of the primary judge requiring the appellants to demonstrate that his Honour took irrelevant matters into account, failed to take relevant matters into account or that his decision was so unreasonable as to warrant intervention or otherwise vitiated by error. [75]

6. [86]

   In oral submissions, Mr Blackburn emphasised that although it might be accepted the continued publication of the defamatory review on the first respondent’s website was a disregard for their rights, that fact had to be balanced against the first respondent’s freedom to continue to make available the historical record of what it had published. He also emphasised that that record would only be accessed by people who took the trouble to go to the Herald’s website and search in a manner which produced the review.

7. [87]

   Next, Mr Blackburn emphasised that the appellants had not taken any step, such as to seek by way of an injunction, to restrain the first respondent from keeping the review on its website nor had they sought to pursue further defamation actions based on the continuing publication having regard to the fact that each time a person read the review on the Herald’s website, it constituted a new cause of action. [76]

Exemplary damages – determination

1. [88]

   The prohibition in s 46(3)(a) against awarding exemplary damages only applied to New South Wales and not to the other States and Territories. Accordingly, even when the 1974 Act was in force, a court in New South Wales could award exemplary damages to a plaintiff in respect of defamatory matter published in a State or Territory in which such damages were available: Marsden v Amalgamated Television Services Pty Ltd. [77]

2. [89]

   The evidence established that the review was on the Sydney Morning Herald’s website from 30 September 2003 until the first Court of Appeal judgment on 30 June 2006. It was then taken off the website but was restored on the date of the High Court’s judgment on 14 June 2007 and has remained there. [78]

3. [90]

   When dealing with aggravated damages, the primary judge concluded that the first respondent’s conduct in placing the review on its website constituted unjustifiable conduct attracting an award of aggravated damages. [79]

4. [91]

   It was in the context of that finding that the primary judge came to consider the issue of exemplary damages. The primary judge set out the legal principles concerning awards of exemplary damages in the following manner:

5. [92]

   In Marsden CA the Court (Beazley, Giles and Santow JJA) held [80] that the question whether exemplary damages should be awarded (as opposed to the amount of such an award) was not of a discretionary nature. The respondents’ submission to the contrary cannot be accepted.

6. [93]

   There is “no exhaustive list of the kind of behaviour courts consider reprehensible or egregious enough to warrant a remedy of exemplary damages”. [81] Further, it is not necessary that “the defendant have a conscious feeling of spite or ill will towards the plaintiff in order to be in contumelious disregard of his rights … a contemptuous high handed carelessness is sufficient.” [82]

7. [94]

   In this case, the first respondent did not suggest it had acted carelessly in leaving the review on its website. Rather, its contention was, in effect, that it did so deliberately (as can be inferred from it restoring the review to its site following the High Court judgment) in order to preserve the historical record. It contended that, had they wanted to, the appellants could have taken steps to enforce whatever rights they may have to have the review removed or to take further proceedings in respect of the continuing defamations constituted when persons accessed the review on the first respondent’s website.

8. [95]

   The appellants asserted they had made some attempt to have the review removed after its defamatory nature had been proven. The evidence in this respect was weak. It amounted merely to an assertion by the first appellant that she called the first respondent’s “readers’ line” and left her name, number and asked for the review to be taken down from the internet, had never received a response and the review was still there. [83]

9. [96]

   Had they wished, the appellants could have taken more positive steps to have the review removed from continued internet publication. They could have sought an injunction for it to be removed and to prohibit its further publication. The usual limitation which applies on the grant of such an injunction in an interlocutory context would, prima facie, not apply, as they had established there was no defence of justification. [84]

10. [97]

    Further, it was open to the appellants to seek leave to bring further proceedings for defamation against the first respondent in respect of the continued publication of the review. [85]

11. [98]

    In my view it was relevant for the primary judge to take into consideration (at [287]) the fact that the publication of the review on the first respondent’s website was “not the equivalent of widespread publication by a printed media as it requires specific search terms to be employed to activate publication of it”. In other words, it can be assumed once the review was not published as part of the daily internet “edition” of the Sydney Morning Herald, it required positive conduct on the part of a person for it to be located. Secondly, even if it might be found that its conduct in keeping (and at one stage restoring) the review to its website warranted “a finding of fault”, the question is whether “something more” than mere fault could be found. [86] The “something more is not readily to be found”. [87]

12. [99]

    My mind has wavered as to whether the circumstances warrant an award of exemplary damages. My original thought was that they should not. However, I have been persuaded by Barrett JA’s pellucid analysis of the issue to the contrary view. It is not to point, on reflection, that the appellants may have the right to take further action to restrain the first respondent from continuing to publish the review (and, of course, the defamatory imputations) on its website. Rather, the first respondent’s conduct in keeping the review on its website after the Court of Appeal judgment and the failure of its special leave application confirmed it had published an indefensibly defamatory review of and concerning the appellants manifested the “conscious wrongdoing in contumelious disregard” of their rights of which Windeyer J wrote in Uren v John Fairfax & Sons Pty Ltd. [88] That conduct can properly be characterised as more than “mere fault”.

13. [100]

    Further, it should not be forgotten that an element of, or at least an effect of, an award of exemplary damages is “deterrence which … extends beyond the actual wrongdoer and the exact nature of his wrongdoing”. [89] They also “serve to assuage any urge for revenge felt by victims and to discourage any temptation to engage in self-help likely to endanger the peace” and serve as an “element of appeasement”. [90] The appellants should not have to resort to further litigation to be appeased in respect of the first respondent’s flagrant disregard of the rights they had already established through litigation.

14. [101]

    Accordingly, I agree with Barrett JA’s reasons on this issue.

Aggravated Damages (Ground 5)

1. [102]

   The appellants submit that the primary judge erred in failing to award them aggravated damages in respect of the respondents’ unreasonable failure to apologise and, too, because of their knowledge that the imputations were false.

2. [103]

   Each appellant gave evidence at the trial before Harrison J and the primary judge that they knew the imputations were false and were upset (to varying degrees of severity) by reason of that knowledge. [91] Mr Evatt submitted that that evidence entitled them to aggravated damages and that the primary judge’s failure to refer to their knowledge in this respect when considering aggravated damages indicated his Honour did not take those matters into consideration in that respect.

3. [104]

   The appellants also claimed aggravated damages on the basis of the respondents’ wrongful, improper or unreasonable failure to apologise. Their previous solicitor had sought such an apology in a letter to the editor of the Sydney Morning Herald. They had never received an apology even after their successful appeal in this Court. Each appellant gave evidence that they were upset that the respondents had not apologised. [92] Mr Evatt accepted that the primary judge referred to failure to apologise, but complained that his Honour took it into account only as a matter to be considered in the award of general compensatory damages. [93] In so doing, the primary judge accepted that the respondents’ failure to apologise was unreasonable. Mr Evatt submitted that finding should have entitled the appellants to aggravated damages by reason of the respondents’ failure to apologise.

4. [105]

   The respondents accepted that there was no explicit reference in the primary judgment to any appellant being hurt by the falsity of the imputations in the context of aggravated damages. However, Mr Blackburn submitted that the primary judge had extracted in relation to each appellant the evidence each gave whereby they said the falsity of the imputations had caused them hurt. He submitted that the only reason for his Honour specifically to refer to those passages of the transcript was to take them into consideration on the issue of aggravated damages. Accordingly, he contended that, although the primary judge did not explicitly refer to those matters as having relevance to an award of aggravated damages, it might be inferred that his Honour had taken them into account in that respect.

5. [106]

   In their written submissions, the respondents contended that their failure to apologise could not be said to be unreasonable for two reasons. First because they had no reason to apologise until the decision of the Court of Appeal. Secondly, because, even following the Court of Appeal judgment, they were justified in maintaining their refusal to apologise in respect of the review insofar as it criticised the food and service at Coco.

Aggravated Damages – determination

1. [107]

   Aggravated damages which are compensatory in nature are “awarded to reflect conduct by the defendant which aggravates the injury and increases the harm done to the appellant”. [94] Such conduct of the defendant is that which “improperly aggravate[s] the injury done to the plaintiff, if there is a lack of bona fides in the defendant’s conduct or it is improper or unjustifiable.” [95]

A. Failure to apologise

1. [108]

   Failure to apologise was relevant to the assessment of the appellants’ ordinary compensatory damages as it constituted “relevant harm” for the purposes of s 46 of the 1974 Act. [96] In assessing the effect of a failure to apologise in this respect, “the Court need not be concerned with questions of aggravation, but only with the question of whether in the ordinary course, a failure to apologise [for the imputations] would not tend to increase the extent to which [the appellants’] reputation would be damaged”. [97]

2. [109]

   Aggravated compensatory damages serve a different function. As I have said, in order that such damages may be awarded, the conduct of the defendant relied upon must be capable of being regarded as unjustifiable, improper or lacking in bona fides. [98] Accordingly, as Hunt J said in Waterhouse v Broadcasting Station 2GB Pty Ltd. [99]

3. [110]

   The appellants submitted at trial that the respondents’ failure to apologise was relevant both to their claims for ordinary compensatory damages and aggravated compensatory damages. In the latter respect, they relied on the respondents’ conduct in failing to apologise after their successful appeal to this Court. [100]

4. [111]

   Error will not be found in a judgment if, despite an explicit omission, it can be seen, read as a whole, that the relevant matter was taken into consideration. The primary judge only referred to the failure to apologise expressly in the context of determining normal compensatory damages. [101] Although when his Honour did so he referred to that failure contributing to the appellants’ hurt, as is apparent, that issue was relevant to the task of determining ordinary compensatory damages. His Honour also concluded that the respondents’ failure to apologise was unreasonable. [102] That might be seen as a reference to the first step in establishing a claim for aggravated damages. However, as his Honour was explicitly dealing with the issue in the context of ordinary compensatory damages, it should in my view be concluded that his Honour did not also consider the appellants’ claim in this respect in the context of assessing aggravated damages. Accordingly, it is apparent, with respect, that notwithstanding his comprehensive reasons, his Honour overlooked that aspect of the appellants’ claim.

5. [112]

   In my view the primary judge was correct in concluding the respondents’ failure to apologise was unreasonable. The conduct of the defendant which will increase the harm caused by the publication of the libel includes conduct of the defendant right up to the verdict. [103] As the primary judge found, the conduct which was unreasonable kept “alive the effect of the publication”. [104]

6. [113]

   Another way of expressing his Honour’s finding which brings home the true import of the respondents’ conduct on the appellants, is that the formers’ refusal to apologise meant they were “continuing to assert or not fully to withdraw the imputations found to have existed” in the review”. [105] Thus the respondents’ submission that their conduct in failing to apologise was not unreasonable to the extent that the review related to Coco cannot be sustained. The effect of the Court of Appeal judgment was that none of the imputations was defensible, not that they were defensible to the extent they referred to Coco. The appellants were entitled to say their damages were aggravated by the hurt to their feelings consequent upon the failure to apologise from at least the date of the Court of Appeal judgment to the primary judge’s verdict.

B. Falsity of the imputations

1. [114]

   The appellants claimed aggravated damages based on their knowledge of the falsity of the imputations. [106] There was no presumption of falsity of imputations under the 1974 Act. [107] Falsity of the imputations was not an element the appellants had to prove on liability. It was relevant, however, on the issue of damages because the falsity or truth of the defamation may increase or decrease the hurt to the plaintiff and thus go to aggravated compensatory damages. [108]

2. [115]

   The appellants gave evidence that the imputations were false and about their upset by reason of that falsity. The primary judge referred to the second and third appellants’ evidence to that effect. [109] It was uncontroversial that the first appellant had given evidence to like effect before Harrison J.

3. [116]

   It was unnecessary for the appellants to establish knowledge of the imputations’ falsity on the part of the respondents to recover aggravated damages. [110] Mr Blackburn did not contest the proposition that the imputations were false, no doubt because of the failed plea of justification. Rather, he submitted, the primary judge’s references to the appellants’ hurt in relation to the falsity of the imputations might be seen to be a reference to the issue of aggravated damages, as each appellant’s hurt to feelings was relevant to their claim for ordinary compensatory damages. The primary judge referred to their subjective responses in that context. [111]

4. [117]

   However his Honour did not refer to this claim when dealing with aggravated damages. In my view, with respect, it should not be inferred that his Honour took that matter into account as going to aggravated damages.

5. [118]

   Accordingly, in my view, the appellants are entitled to have their compensatory damages increased by an amount referrable to these two claims for aggravated damages.

Compensatory Damages (Grounds 1 and 6)

1. [119]

   Mr Evatt submitted that the amount of compensatory damages awarded was inadequate. He accepted that the primary judge summarised the appellants evidence relevant to compensatory damages, both as given before Harrison J and as supplemented at the second trial. [112]

2. [120]

   However Mr Evatt referred to the appellants’ respective evidence concerning their stress and worry due to the collapse of Coco Roco following publication of the review and the fact that each had been made bankrupt as a result, to which they contend the primary judge failed to give sufficient weight in assessing compensatory damages.

3. [121]

   Mr Evatt also complained about two matters not expressly referred to in the Amended Notice of Appeal.

4. [122]

   The first was that the primary judge failed to consider the grapevine effect. Had his Honour done so, he submitted his Honour should have concluded that the extent of the review’s publication would have been spread by readers passing on its contents in conversation.

5. [123]

   The second was an elliptical submission that the primary judge failed to award sufficient compensatory damages to protect the appellants’ reputation.

6. [124]

   Mr Blackburn contended that the appellants identified no error on the part of the trial judge, but rather, appeared to advance, by way of a side wind, matters of pecuniary loss which were specifically abandoned, namely the closure of the restaurants. He submitted that it was tolerably apparent that the primary judge took the matters of which the appellants complained into account. [113]

Compensatory damages: determination

1. [125]

   I have already set out the purposes of an award of damages for defamation. Those purposes “overlap considerably in reality and ensure that ‘the amount of a verdict is the product of a mixture of inextricable considerations’”. [114]

2. [126]

   A complaint that damages awarded were excessive or inadequate invites appellate review of the exercise of a discretion. [115] An appellate Court should not intervene unless convinced “that the amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case. [116] The court must determine whether “the result at which the trial judge arrived bespeaks error”. [117]

3. [127]

   When considering, in accordance with s 46A of the 1974 Act, the rational relationship between the relevant harm and the amount of damages, the Court must bear in mind that a “person’s reputation is accorded high value” and, in some cases, is that person’s “whole life”. [118]

4. [128]

   As the discussion of grounds 3 and 4 makes plain, the primary judge was conscious of the dictates of s 46A. He took into account the distress the appellants suffered as a result of the failure of the restaurants and the economic consequences to which they were exposed, while also ensuring he did not include in the compensatory damages amounts which was “related to the collapse of the Coco Roco business and the resulting financial and other repercussions for the plaintiffs”. [119] As is apparent, his Honour was at pains not to include in the award an amount which might be seen to represent a special damages component. I do not accept the appellants’ submission that his Honour gave insufficient weight to their distress in this respect.

5. [129]

   It is true his Honour did not refer to the grapevine effect, but the utility of its express application in the context of a publication with a readership in this State of 836,000 and extensive circulation elsewhere in Australia [120] must be doubted. It is more apt for application when the spreading of the “poison” [121] starts from a small base from which it can be inferred the natural propensity of humankind to purveying salacious gossip would cause it to spread. Here the starting point was publication to an audience of almost one million. It is difficult to see that express reference to the grapevine effect would have led to a greater figure than that awarded.

6. [130]

   Finally, assuming the elliptical submission to which I referred is a complaint that the award insufficiently vindicated the appellants’ reputations, I can see no failure on the primary judge’s part in this respect. His Honour was acutely conscious of that purpose of an award of damages for defamation. [122] There is no reason to doubt that that component was reflected in his assessment of compensatory damages.

7. [131]

   Accordingly, subject to the matters of aggravated and exemplary damages to which I have referred, the appellants’ challenge to the damages awards fails.

Backdating of interest (Grounds 7 – 9)

1. [132]

   On 25 July 2014 the appellants filed further submissions in this Court contending that the primary judge erred in refusing to backdate interest at Court rates to the date of Harrison J’s judgment (18 December 2009).

2. [133]

   The appellants submitted that “had Harrison J provisionally awarded the correct amount of damages then there would have been pre-judgment interest from the date of publication to the date of judgment of Harrison J and thereafter interest at Court rates”. They contended that the UCPR 36.4(3) power was normally exercised where there has been a delay between the adjudication of the claims in the proceedings and the formal pronouncement of judgment and that such an order would not alter the substantive rights of the parties, referring to Hartley Poynton Ltd v Ali. [123]

3. [134]

   The appellants also contended that had the Court of Appeal been able to determine the appellants’ damages, they could have sought such an order at that stage and that the “usual rule” would have meant they would have been successful, referring to Kardos v Sarbutt (No 2). [124]

4. [135]

   On 15 August 2014 the respondents filed submissions in response to the appellants’ argument regarding the backdating of interest.

5. [136]

   The respondents submitted that the power to backdate interest is an exceptional one to be invoked only in cases where the general (UCPR 36.4(1)) rule would produce unfairness, referring to Government Insurance Office (NSW) v Healy (No 2). [125] Secondly, they contended that the primary judge’s judgment on this issue involved an exercise of discretion which was not tainted by House v R [126] error.

6. [137]

   Thirdly, the respondents argued that the appellants’ arguments failed on its own terms. There had been no delay in entry of judgment because until the Court of Appeal overturned Harrison J’s judgment, having been successful at the liability hearing, they did not have any obligation to pay the appellants. They contended that it would be contrary to principle to backdate the judgment to a time when no liability on their part had arisen. They submitted, referring to Nicol, [127] that the judgment of an appellate court does not operate to produce a judgment in favour of the plaintiff as at the date of the first instance judgment.

7. [138]

   Fourthly, in response to the appellants’ contention that there is a practice that where the Court of Appeal has varied a judgment, interest is backdated to the date of the first instance judgment, the respondents argued that the Court of Appeal did not vary the decision of Harrison J but, rather, allowed the appeal and set aside his Honour’s orders. They contended that had the Court of Appeal varied Harrison J’s judgment, the appellants should have sought an order backdating the judgment at that stage.

8. [139]

   Fifthly, the respondents submitted that the appellants had cited no authority for the proposition that where judgment is given for a defendant at first instance, and that judgment is overturned by an appellate court and remitted for the assessment of damages, any award should be backdated to the unsuccessful first instance judgment. They contended such an approach would be contrary to principle.

9. [140]

   Finally, the respondents contended that the practice in Nicholson v Nicholson was one applicable to damages appeals where the Court of Appeal substitutes an award of damages for that given by the trial judge and had no application in the present circumstances.

10. [141]

    On 26 September 2014, the appellants provided supplementary written submissions (the “Supplementary Submissions”) on grounds 7 – 9, in part in reply to the respondents’ submissions. They suggested that grounds 7 – 9 need only be considered in the event the award of damages was not varied on appeal. In the event that it was, they asked the Court to make orders pursuant to UCPR 36.4(3) that the verdict and judgment take effect either from 18 December 2009 (the date of Harrison J’s judgment) or 24 November 2011 (the date of the Court of Appeal judgment). They submitted that the Court could backdate the verdict and judgment in the manner for which they contended in reliance on Nicol and L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2). [128]

11. [142]

    The appellants further contended that the backdating power should be exercised as during the period Harrison J’s judgment was in effect, they had been deprived of the damages to which they were entitled and, accordingly, also of the post-judgment interest on those damages. They submitted that they could not have sought a backdating order at the hearing before this Court in 2010 because although this Court determined an entitlement to an award of damages, damages could not be assessed.

12. [143]

    In the event that grounds 7 – 9 were considered by this Court, the appellants submitted the following additional matters demonstrated error on the primary judge’s part:

Backdating of interest – determination

1. [144]

   In my view, notwithstanding the fact that the effect of the conclusions on aggravated and exemplary damages will be to vary the damages the appellants are awarded, it is appropriate to consider grounds 7 – 9. The correctness, or otherwise, of the primary judge’s reasons for declining that relief may inform the Court of Appeal’s exercise of the UCPR 36.4(3) discretion as sought in the Supplementary Submissions.

2. [145]

   In Government Insurance Office (NSW) v Healy (No 2), [129] Kirby P held that the power to order that a judgment take effect earlier than the date on which it would ordinarily take effect provided “an important degree of flexibility to the Court,” allowed it “to do what is just in the particular case where the usual position, provided by the Act, would produce unfairness” and allowed “the Court to avoid rigidity and to accommodate the general rule to the necessity of the case”.

3. [146]

   In Harmer v Hare (No 2), [130] the Court (Beazley and Whealy JJA and Sackville AJA) in considering an application to backdate a judgment pursuant to UCPR 36.4(3) said of that rule:

4. [147]

   In my view, with respect, this was a case where it could be said that there had been delay of the nature to which their Honours referred. As their Honours also recognised, Government Insurance Office (NSW) v Healy (No 2) provided guidance as to the exercise of the power.

5. [148]

   The primary judge’s decision not to backdate the judgment was a discretionary one, with which an appellate court would not interfere absent demonstration of a House v R error. However in this case, such error has been demonstrated. The primary judge concluded the backdating power should not be exercised because the case did not involve a variation of an earlier judgment by increasing the damages previously awarded. For the reasons I have stated as Harrison J had not made an actual award of damages, but merely a notional assessment, his Honour having determined liability against the plaintiffs. [131]

6. [149]

   In my view his Honour misconceived the effect of the Court of Appeal judgment. That judgment held that Harrison J erred in failing to enter a verdict for the appellants. It gave that verdict on 24 November 2011, and the judgment took effect on that date. [132] However, its effect was that the appellants had established that they had a right to damages as at 18 December 2009. What was outstanding was the determination of the quantum of the damages. The task of the primary judge on the remitter was to determine the quantum of damages Harrison J ought to have awarded on 18 December 2009 when, on the Court of Appeal judgment, he ought to have entered judgment both on liability and damages for the appellants.

7. [150]

   The formal pronouncement of the damages award was delayed by reason of the appellants’ appeal to this Court to have Harrison J’s judgment in the respondents’ favour set aside and then by reason of there having to be a second hearing on damages.

8. [151]

   Further, I do not understand the appellants’ submissions concerning backdating to have been properly characterised as “simply” in effect to increase the interest rate to apply to their judgment. [133] If their submission that they had been held out of their money by the intervening appellate and retrial processes was correct, as in my view it was, the fact that the consequence was a higher interest rate was merely the result of a correct identification of the date the judgment ought take effect.

9. [152]

   On a re-exercise of his Honour’s discretion, I would order that the primary judgment take effect from 18 December 2009.

10. [153]

    As is manifest, I would reach the same decision if the question was only an exercise of this Court’s discretion pursuant to UCPR 36.4(3). Had this Court been able to determine damages when it delivered its reasons on 24 November 2011, it could have ordered pursuant to that power that the judgment take effect from the date of Harrison J’s judgment, even though that judgment had been adverse to the appellants. [134] The power is exercisable in this Court because it is empowered, relevantly, to make any order which ought to have been given or made or which the nature of the case requires. [135] However, as the award of exemplary damages relates to the period which post-dates the High Court’s refusal to grant special leave [136] , the order awarding those damages should take effect from that date.

The cross-appeal: submissions

1. [154]

   The crux of the respondents’ submissions on the cross-appeal was that the reputations of the appellants, as restaurateurs, must have been damaged by the publication of a review which justifiably criticised the food and service at the restaurant “Coco”. That justifiable criticism went to the heart of their reputations as restaurateurs. In assessing damages, the trial judge failed to take into account that damage as mitigating the appellants’ loss and, accordingly, his Honour’s assessment was excessive.

2. [155]

   The respondents submitted that the primary judge erred in two respects. First in holding that Harrison J did not make factual findings concerning the quality of the food served to the second respondent or the quality of the service that the latter experienced. Secondly, in holding that even if Harrison J did make such findings, those findings constituted “post–publication” findings which were not relevant to the assessment of damages as opposed to findings as to facts in existence as at the date of the publication of the review.

3. [156]

   As to the first matter, Mr Blackburn submitted that Harrison J summarised the second respondent’s evidence concerning his observations when dining at “Coco”, [137] accepted him as a witness of truth, [138] and must have made findings of fact about that evidence as, absent such findings, his Honour could not have upheld the defence of comment.

4. [157]

   Mr Blackburn pointed to what he contended were explicit findings of fact made by Harrison J as follows:

5. [158]

   As to the second matter, Mr Blackburn submitted that, in a literal sense, any finding of a judge in a defamation trial could be described as “post–publication” in nature. However he contended that, consistently with Pamplin and Burstein, Harrison J’s findings were as to facts in existence at the time the review was published. Accordingly, he argued the facts upon which the respondents relied in mitigation of damages were true at the time of its publication, were published at that time and, accordingly, were directly relevant to the factual matrix in which the review was published and directly relevant to the appellants’ reputation at that time.

6. [159]

   Mr Blackburn sought to distinguish Marsden CA in which the Court held [139] that adverse findings made in proceedings could not be taken into account in mitigation in the same proceedings because they were not known until judgment was given and such findings were not evidence in themselves, on the basis that the appellants knew at the time of the hearing before the primary judge the facts upon which the respondents relied in mitigation – namely those found by Harrison J at the first damages hearing.

7. [160]

   Further, Mr Blackburn submitted that the existence of the facts upon which the respondents relied in mitigation of damages and, public knowledge of those facts, was independent of Harrison J’s judgments. Rather, he contended that the facts which Harrison J’s findings later “sanctioned as true” were made publicly known in the review. Thus, while “those findings” had no existence or notoriety prior to the publication of Harrison J’s judgment, the facts themselves did. Accordingly, Mr Blackburn submitted that the facts concerning the poor quality of food and service the second respondent encountered when he ate at “Coco” were directly relevant to the appellants’ reputations at the time of the review and to the context in which the review concerning both “Coco” and “Roco” was published.

8. [161]

   Mr Blackburn also submitted that the respondents relied upon evidence properly before the Court (being the second respondent’s evidence led in support of the defences of truth and comment), as squarely within the principles in Pamplin and Burstein. Accordingly, he contended, the primary judge ought to have found that that evidence was relevant to the assessment of damages and to the factual context of the publication of the review consistent with those principles.

9. [162]

   Thirdly, Mr Blackburn criticised the primary judge’s characterisation of their submission [140] as mistaken. He contended that the respondents’ submissions on mitigation rested squarely on the principles established in Pamplin and Burstein.

10. [163]

    Fourthly, Mr Blackburn submitted that the primary judge erred in concluding that Harrison J’s judgment did not prove any facts capable of being taken into account. He contended that the defence of comment was only available if the comment was based upon “proper material for comment”. [141] In order to have found the respondents had established that defence, Harrison J must have concluded that the factual basis existed. Accordingly, the primary judge erred in accepting Mr Evatt’s submission that none of Harrison J’s “findings” were “findings of fact” but, rather, concerned matters of opinion. [142]

11. [164]

    Fifthly, Mr Blackburn submitted that the primary judge’s reliance on Convery v The Irish News Limited was misplaced. He contended that that case did not, and could not, stand for the proposition that all of the observations of a food reviewer were, as a matter of an inflexible rule, matters of opinion not fact and that the only true fact was that the reviewer dined at the relevant establishment and ate the food. Accordingly, Convery had no precedential value other than to establish that comment must rely on facts truly stated.

12. [165]

    Mr Evatt’s written submissions contended that the appellants had not identified Harrison J’s factual findings they contended the primary judge ought to have taken into consideration by way of mitigation.

13. [166]

    Secondly, Mr Evatt submitted that the factual matters the respondents pleaded at trial as going to mitigation differed from the matters they had complained in their amended notice of cross-appeal the primary judge ought to have taken into consideration on this issue. He contended that the respondents were in effect changing their case on appeal. He submitted that the appellants did not know what facts, if any, Harrison J found.

14. [167]

    Thirdly, Mr Evatt contended it was unnecessary to make submissions about the “dubious proposition” that whatever findings of fact Harrison J may be found to have made still stood and were binding on the parties, because Harrison J made no such findings.

15. [168]

    Fourthly, Mr Evatt relied upon his written submissions at trial on the mitigation issue. In those submissions, Mr Evatt argued that the respondents had failed to adduce any evidence of any injury to the appellants’ reputations by reasons of the matters pleaded in mitigation. He also submitted that the primary judge should not take into consideration adverse findings made in the course of the trial before Harrison J. [143] They should be considered as trial findings because the primary judge’s task was to assess damages as they would have been assessed had Harrison J, as the Court of Appeal’s held he should have, determined the issue of liability in the appellants’ favour.

16. [169]

    In his oral submissions Mr Evatt submitted that the primary judge was correct in his analysis of this issue. Insofar as the respondents relied upon findings of fact in relation to the first imputation, Mr Evatt submitted that as Harrison J had not upheld the defence of justification to that imputation, the respondents could only rely in their mitigation argument on any facts found to support the defence of comment. He submitted again that Harrison J had not found any facts which supported the first imputation.

17. [170]

    Insofar as Harrison J said the facts on which the review was based were “clearly stated or indicated with sufficient clarity to make it clear that what was said was comment on those facts”, [144] Mr Evatt submitted that the matters to which Harrison J referred were matters of opinion. He contended that the only facts were that the second respondent dined at the restaurant and ordered and ate the food there, whereas statements in the respondents’ Schedule of Evidence [145] about the quality of the food and the service were not facts, but the second respondent’s opinion based on his dining experience.

18. [171]

    Mr Evatt sought to distinguish Pamplin and Burstein on the basis that each concerned pre-publication facts, whereas the respondents sought to rely upon facts allegedly found by Harrison J.

19. [172]

    Further, Mr Evatt submitted that the respondents could not contend that they had partially justified the review in circumstances where, although they had published the review about two restaurants, it was only correct for one. He argued that in a case where all the imputations had been set aside and found to be defamatory, no question of partial justification arose.

The cross-appeal: determination

1. [173]

   Some attention was paid at the hearing of the appeal (and apparently before the primary judge) to the question whether, assuming Harrison J made any relevant findings of fact, they “survived” his judgment being overturned on appeal. Mr Blackburn submitted, without contradiction, that the appellants conducted the case below on the basis that the primary judge could take any such findings into account.

2. [174]

   That was an appropriate approach in my opinion. While the Court of Appeal held that Harrison J erred in finding that the imputations referred only to the “Coco” restaurant, rather than to both, it did not interfere with his Honour’s findings of fact. When the Court of Appeal remitted the matter to the Common Law Division for assessment of damages, accordingly, it was merely on the basis that Harrison J should have held that the defences of comment and justification had failed. As much, it seems, must have been accepted by the primary judge when he granted the respondents leave to amend their defence to raise their plea in mitigation which, in turn, as I have said, was cross-referenced to the particulars which had been relied upon to support the defences of justification and comment.

3. [175]

   What should be emphasised is that the Court of Appeal judgment held that the respondents’ defence failed entirely. In other words, the matter was remitted for the damages hearing on the basis that none of the imputations was either justified or a matter of comment. It is necessary to emphasise this because, at times, there was a suggestion in the respondents’ submissions that their mitigation plea effectively defeated the finding that the review defamed the appellants by conveying the three imputations found by the jury. If the mitigation plea has any force, it has to be considered in that context.

4. [176]

   The respondents’ cross-appeal is directed to persuading the Court that the appellants’ measure of damages mitigation may be affected by their “conduct, character and circumstances”. This meaning of “‘mitigation’ simply deals with particular items which go to show that the injury is not as great as would prima facie appear”. [146] The “injury” in question is the injury to the plaintiff’s reputation by reason of the defamation, that being the focus of an award of defamation damages. [147]

5. [177]

   To be admissible, evidence adduced in mitigation in defamation must be confined to “the ‘relevant sector’ of the plaintiff’s reputation” [148] , meaning, as Ipp JA explained in Australian Broadcasting Corp (ABC) v McBride, “that part of the plaintiff’s reputation capable of being harmed by the defamatory material”. [149] Fitzgerald JA wrote separately in McBride, albeit not in dissent. One aspect of his Honour’s reasoning which bears repetition is his emphasis that matters on which a defendant seeks to rely in mitigation as affecting a plaintiff's reputation must be capable of “rationally diminish[ing] the harm to the plaintiff's reputation from the defamatory imputation”. [150]

6. [178]

   While expressed as a test of admissibility, his Honour’s statement provides content, in my view, to the assessment of the extent to which mitigation “facts” diminish the injury the plaintiff suffers by the publication of the defamatory imputations. While each case must turn on its own facts, the task of the court, in my view, is to determine how, and to what extent, the mitigation facts rationally diminish the harm to the plaintiff’s reputation from the defamatory imputation.

7. [179]

   Little attention appears to have been paid to the issue of the relevant sector of the appellants’ reputations at trial. That is most probably because, although there may be difficulties in identifying the relevant sector [151] , in this case it was clear the relevant sector of their reputations was as restaurateurs.

Mitigation: Facts or opinion

1. [180]

   The first point is to determine whether Harrison J made findings of fact. As I have said, the respondents contended his Honour had done so either expressly [152] or implicitly. They argued this Court could determine the “implicitly found” facts by reference to the Schedule of Evidence and the particulars of their defence to which their plea in mitigation referred. In my view the latter submission should be considered only to the extent that it is consistent with the way the respondents advanced this issue at trial. There they submitted in Further Submissions pursuant to leave granted on 7 March 2013 that the primary judge implicitly accepted evidence as to the matters I have italicised in the Schedule of Evidence attached to these reasons. [153]

2. [181]

   In his reasons Harrison J dealt with the second respondent’s evidence in detail. [154] His Honour observed that the second respondent “more or less reiterated the descriptions he had used in formulating his original critique of [his] meal”. [155] His Honour’s qualification was advised. As is apparent from the Schedule of Evidence, some of the matters of which the second respondent gave evidence, and which it is contended constitute mitigation facts, did not appear in the review.

3. [182]

   The question whether a statement is one of fact or opinion is a matter about which opinions may vary and the distinction between the two may be “blurred … in many communications”. [156] Whether or not a statement is viewed as one of fact or opinion will also be judged by the context and the circumstances in which it was published. [157]

4. [183]

   In State of New South Wales v IG Index plc & Ors, [158] Nettle JA (as his Honour then was) observed that:

5. [184]

   Applying that test, I would be prepared to accept that when Harrison J accepted [159] the second respondent’s “description” of various items of food as “some examples of poor quality food”, his Honour found as a fact that was the nature of the food referred to. The comment extracted was the opinion the second respondent said he held about the food served at “Coco”. [160]

6. [185]

   Although those “facts” are referred to in the Schedule of Evidence, they are embedded in what are also statements of opinion. Taking guidance from Harrison J, [161] I would conclude his Honour found, as a fact in respect of the two meals the second respondent ate at Coco that one oyster was served with a curdled foam, the sorbet was hard, the pork was dry, the apricots were rubbery and hard, some salad leaves were wilting and yellow, the scallop shells were jagged, the lentils were starchy, the cheesecake base was soggy and the potatoes were overcooked.

7. [186]

   The primary judge reasoned to the contrary by reference to the decision in Convery. However, with respect, that case contained no statement of principle but, rather illustrated the position as to the differing conclusions different minds may reach about similar issues. In this case the question was whether the respondents had proved before Harrison J the factual substratum of the second respondent’s opinion. That turned on the terms of Harrison J’s reasons.

8. [187]

   Accordingly, in my view, the primary judge erred in finding that Harrison J’s findings only concerned matters of opinion.

Nature of Harrison J’s findings

1. [188]

   I am also of the view that the primary judge erred in concluding that, if Harrison J’s findings were properly characterised as ones of fact, they were post-publication findings of the nature of those considered in Marsden CA. The findings discussed in that judgment were to the effect that Mr Marsden had given false evidence before his Honour. [162] It was in those circumstances that the court said, in observations not essential to its reasons, that:

2. [189]

   The findings of fact for which the respondents contended did not fall into that category. They related to matters pleaded in support of the defences of justification and truth as the factual foundation for the review. Although the respondents had to establish those facts at the liability hearing, the appellants had the opportunity to contest them. Accordingly, there could be no suggestion that a finding the respondents had established any of those facts was a matter the appellants had not had an opportunity to address.

Mitigation: evidence properly before the court on some other issue

1. [190]

   The respondents rely upon two lines of authority to support the use in mitigation of damages before the primary judge of the facts they contend were established to support their defences of justification and comment before Harrison J.

2. [191]

   The first is Pamplin in which the Court of Appeal (Neill LJ, Purchas LJ agreeing) held that in a defamation case, even though a defence of justification or fair comment had failed, nevertheless a defendant was entitled to rely in mitigation of damages on any evidence which was properly before the court and jury, such as evidence which had been primarily directed to the failed defences. [164]

3. [192]

   As Handley JA explained in John Fairfax Publications Pty Ltd v Zunter, [165] at common law evidence adduced in justification of a libel which only succeeded partially in that respect could be relied upon to reduce the plaintiff’s damages as long as the part justified was severable from the rest. [166] Although his Honour did not discuss Pamplin, he referred to it (and other English authorities) as consistent with the principles to which he was referring. [167] His Honour held that “there was no reason to limit this principle to evidence adduced in support of a plea of justification” and, accordingly, “[e]vidence of truth or partial truth may also be before the tribunal of fact where a defence of contextual truth fails and such evidence is also relevant when assessing damages for the relevant harm”. [168]

4. [193]

   The second authority on which the respondents relied is Burstein. In that case May LJ (Slade and Aldous LLJ agreeing) held, after an extensive review of authorities, that a defendant in a defamation suit who has not pleaded justification should be permitted to adduce evidence of “particular facts directly relevant to the context in which a defamatory publication came to be made” (“relevant background context”) and which might be “capable of reducing the plaintiff’s damages”. [169] In May LJ’s view, such evidence was admissible because it was “directly relevant to the damage [to reputation] which [the plaintiff] claims has been caused by the defamatory publication”. [170]

5. [194]

   May LJ rejected a submission that to permit this course allowed “‘back door’ justification”. [171] Rather, in his Lordship’s view, to deny a defendant the opportunity to adduce such evidence would mean the tribunal determining defamation damages “would be required to assess damages in blinkers”, which would be “unfair”. [172]

6. [195]

   In Mahommed, [173] I referred briefly to the uncertainty concerning the application of Burstein which has been described by the leading defamation text as “a new category of admissible evidence”. [174] One of the difficulties lies in determining what constitutes directly relevant background context. May LJ was of the view that evidence should not be admitted which would allow “a roving inquiry into aspects of [the plaintiff’s] life unconnected with the subject matter of the defamatory publication”. [175] Consistently with this limitation, the English Court of Appeal has recognised “the need for the courts to proceed … with some caution in applying Burstein, given that it represents a modification of the long-standing rule in Scott v Sampson [176] [and that] … one should guard against extending too creatively the concept of ‘directly relevant background’”. [177]

7. [196]

   In Turner, [178] Moses LJ acknowledged the difficulty mere reference to the phrase “directly relevant background context” may pose if regarded, in itself, as creating a test for admissibility. Rather, when considering that issue:

8. [197]

   It should be noted that it is not necessary that the mitigation facts should have been known to the publisher at the time of publication. [179] One limitation, reflecting that applied in dealing with a plea of general bad reputation, is that it is necessary that “relevant background context evidence” relates to the relevant sector of the plaintiff’s reputation. [180] Another is that the evidence be “so clearly relevant to the subject-matter of the libel or to the Claimant’s reputation or sensitivity in that part of his life that there would be a real risk of the jury assessing damages on a false basis if they were kept in ignorance of the facts to which the evidence relates.” [181] These pronouncements echo Fitzgerald JA’s observation to which I earlier referred concerning the necessity that mitigation facts must be capable of “rationally diminish[ing] the harm to the plaintiff's reputation from the defamatory imputation.” [182]

9. [198]

   It should also be noted that once a defendant is permitted to adduce contextual evidence of the sort Burstein permits, it is clearly open to the plaintiff to do likewise. Burstein was an appeal from a trial in which the defendant had not been permitted to lead what it contended was relevant background context evidence to an imputation that the plaintiff “used to organise bands of hecklers to go about wrecking performances of modern atonal music”. [183] That evidence, in short, was to the effect that the plaintiff “had co-founded a group of militant campaigners against modernist atonal music which styled itself ‘The Hecklers’” through which he “actively and publicly sought to vilify the music which was their target and those who composed it” and that the group had published a manifesto calling upon the public to attend a particular concert to join The Hecklers in so acting. [184] Had the defendant been permitted to lead evidence to this effect, the plaintiff would have sought to rely upon evidence in effect giving his side of the story to the effect that he had not supported the activities of The Hecklers in publishing the manifesto and although he had attended the concert, had not associated with The Hecklers in doing so. [185]

10. [199]

    Once Pamplin or Burstein evidence has been admitted in mitigation of damages, it is necessary to determine how to accord it appropriate weight. One approach suggests that the tribunal of fact compare the effect of the mitigating evidence with the defamatory effect of the matter complained of to determine the extent to which the former mitigates the plaintiff’s damages. [186]

11. [200]

    It follows that, applying Pamplin and Burstein, the respondents could rely upon the evidence they had adduced in support of their failed defence of justification and comment, to the extent it had been found to be evidence of facts in support of their plea in mitigation. There could be no doubt that the factual findings about what the second respondent ate at Coco was “directly relevant background context”. They were clearly relevant to the subject-matter of the review.

12. [201]

    Having found that Harrison J made the findings of fact to which I have referred, the difficulty is in determining how they operate to mitigate the appellants’ damages. As Harrison J accepted (at [176]), “views about food and service can differ and legitimately so, often with a small frame of reference”. The appellants called witnesses all of whom ate at Coco who held entirely different opinions to the second respondent. [187] The second respondent also wrote in a highly complimentary fashion about some of the food he ate at Coco. [188]

13. [202]

    The mitigation facts also have to be considered in the context that the respondents’ defences failed entirely. In other words, the plea in mitigation should not be allowed to reintroduce, by a back door method, the imputations upon which the respondents failed in the Court of Appeal. The only basis on which the facts that Harrison J found may be deployed is, as explained in Burstein, as directly relevant background context to ensure that the Tribunal determining defamation damages does not do so “wearing blinkers”. [189]

14. [203]

    The question which then arises is the extent to which the mitigation facts were rationally capable of affecting the appellants’ reputations in the context of the publication of the imputations in relation to the two restaurants the appellants operated.

15. [204]

    This case is not, in my view, similar to Holt. In that case a jury found that a television broadcast carried highly defamatory imputations concerning the plaintiff, none of which the respondents had established to be true. [190] Holt was determined pursuant to the Defamation Act 2005 (NSW). The task then fell to the trial judge, Adamson J, to assess damages. Her Honour concluded that “‘far from vindicating the plaintiff’s reputation’, the proceedings ‘brought to light weighty evidence in mitigation in … the relevant sector’ and that although Mr Holt had suffered some harm by reason of the publication, the harm was relatively slight.” [191]

16. [205]

    Mr Holt sought, unsuccessfully, to challenge the primary judge’s findings of fact which her Honour took into account by way of mitigation. He also failed in his complaint that her Honour’s award of damages of $4,500.00 was manifestly inadequate. In this respect, Macfarlan JA found that her Honour’s conclusion that “the harm suffered by Mr Holt should be regarded as ‘relatively slight’” reflected the possible outcome contemplated in Pamplin “where Neill LJ spoke of a defendant’s ability to rely on acts in mitigation to reduce damages ‘perhaps almost to vanishing point’”. [192]

17. [206]

    Macfarlan JA considered: [193]

18. [207]

    In my view the same cannot be said of the mitigatory facts upon which the respondents rely. First, it must be taken into account that the defamatory imputations were found to be published in respect of the appellants’ conduct not only of the “Coco” restaurant but also of the “Roco” restaurant. None of the mitigatory facts referred to Roco. To the extent that they referred to Coco, they reflected the experience of one man. Others had different experiences and, indeed, as I have said, the second respondent himself found favour with what some might regard as the main component of various courses, the carpaccio of beef, the prime rib steak, the poached beef fillet, the oxtail and sweet bread dumplings to name a few.

19. [208]

    Accordingly, I do not accept Mr Blackburn’s submission that the mitigatory facts would have had a “devastating” effect as “directly relevant background context” when taken in the light of the matter complained of as a whole. I accept they would have had an effect, but not to the extent of that for which he contended. Rather, in my view, the mitigatory facts should be seen to represent the experience the second respondent encountered on 2 occasions when he dined at one restaurant in the context that the imputations were found to have referred to two restaurants with a seating capacity of 90 (Coco) and 300 (Roco) [194] respectively.

20. [209]

    Accordingly, in my view, the respondents have established that the appellants’ damages should be reduced to take into account mitigatory facts. The extent to which that should be reflected, however, in my view, is in a modest reduction.

Re-assessing damages

1. [210]

   Accordingly it is appropriate to re-assess damages. It is necessary first to determine the amount which should have been awarded, and then determine the effect the matters of mitigation have on that award.

2. [211]

   In my view the amount the primary judge awarded should be increased to $180,000 to take into account his Honour’s omission in respect of aggravated damages. I would, however, reduce those amounts to $175,000 to take into account the mitigation facts.

Orders

1. [212]

   The appellants have had a measure of success in their appeal, while the cross-appeal has succeeded in its entirety but only resulted in a modest reduction in the damages awards. The parties’ are entitled to cost orders reflecting their success.

2. [213]

   I propose the following orders:

   1. (1)

      Appeal allowed.

   2. (2)

      Cross-appeal allowed.

   3. (3)

      Set aside the judgments at first instance.

   4. (4)

      Judgment to be entered in favour of each appellant in an amount to be determined in accordance with the Court’s reasons.

   5. (5)

      Note that that component of each judgment calculated in respect of the sum of $175,000 takes effect as of 18 December 2009.

   6. (6)

      Note that that component of each judgment calculated in respect of the sum of $20,000 takes effect as of 22 June 2012.

   7. (7)

      If the parties are able to agree as to the amount of the judgments (inclusive of interest) to be entered in accordance with these reasons for judgment, direct that within 7 days they file a form of consent order in the Court of Appeal Registry.

   8. (8)

      If the parties are unable to so agree, direct that they file proposed forms of orders and submissions in support as follows:

   9. (9)

      Respondents to pay the appellants’ costs of the appeal.

   10. (10)

       Appellants to pay the respondents’ costs of the cross-appeal.

Appendix 2 – Schedule of Evidence

1. [214]

   MACFARLAN JA: Subject to what follows, I agree with the judgment of McColl JA which I have had the advantage of reading in draft.

The cross-appeal – mitigation of damages

1. [215]

   The respondents contended before the primary judge and on appeal that the evidence before the primary judge established facts that indicated that the harm to the appellants’ reputations suffered as a result of the defamatory imputations was considerably less than would otherwise be the case.

2. [216]

   This contention was, at least at a conceptual level, soundly based because the decision in Pamplin v Express Newspapers Ltd [195] established that a defendant in a defamation action is entitled to rely in mitigation of damages on any evidence which is properly before the court, for example, evidence adduced in support of an unsuccessful defence of justification or fair comment (see particularly at 120B). The decision was accepted as correct in John Fairfax Publications Pty Ltd v Zunter [196] and in Holt v TCN Channel Nine Pty Ltd [197] .

3. [217]

   The respondents submitted that the facts properly to be taken into account in the present case comprised those italicised in Appendix 2 to McColl JA’s judgment. I agree with McColl JA’s conclusion that certain of those italicised matters constituted matters of fact rather than matters of opinion (see [184]). The respondents did not contend that statements of Mr Evans’ opinion concerning his experience in dining at the restaurant Coco constituted fair comments that could be taken into account in mitigation of damages. I do not therefore express any view on that point other than to note that it is arguable that the principles in Pamplin and related cases extend to published, fair comments that impact upon a plaintiff’s reputation in the relevant sector.

4. [218]

   I agree with McColl JA’s rejection of the appellants’ submission that the matters of fact to which she referred may not be taken into account because the respondents relied upon findings of Harrison J to prove them and those findings were made long after publication of the defamatory matter, and in a judgment in the defamation proceedings themselves. The submission fails because the facts relied upon occurred prior to the publications of the defamatory matter and (at least so far as I find them relevant – as to which see [226] below) were made known in those publications. The evidence upon which Harrison J relied to find that those facts were established was, at least in a formal sense, before Hall J and his Honour could have been, but was not, asked to make (or not make) the same findings. Instead, the parties proceeded upon the basis that, subject to particular arguments such as that to which I have referred in the previous paragraph, Harrison J’s findings should be accepted as correct. The respondents’ submission on appeal that this was the position before the judge (transcript p 47) was not sought to be contradicted by the appellants.

5. [219]

   The next question is what mitigatory effect on the appellants’ damages should be attributed to the facts identified by McColl JA in [184] above.

6. [220]

   In Zunter, the defendant published an article about the plaintiff’s conduct in relation to major bushfires burning in the Shoalhaven area. The article was found to convey imputations defamatory of the plaintiff that he lost control of his own backburn and that he wrecked the main strategy of the Shoalhaven Fire Control Officer. The article was also found to convey contextual imputations pleaded by the defendant that the plaintiff carried out an illegal backburn and that he did so in circumstances of extreme fire danger.

7. [221]

   The contextual imputations, but not the plaintiff’s imputations, were found to be true. The defence under s 16 of the Defamation Act 1974 (NSW) however failed because the plaintiff’s imputations, at least to some extent, were considered to have injured the plaintiff’s reputation notwithstanding the making of the true contextual imputations. The contextual imputations were nevertheless relevant to the assessment of damages in the manner described by Handley JA (with the concurrence of Spigelman CJ and McColl JA) as follows:

8. [222]

   As is evident from the previous paragraph of Handley JA’s judgment, the impact of facts proved in support of a failed defence of truth is assessed in a similar fashion. The same may be said of facts proved in support of a failed defence of fair comment, as the Pamplin principle is equally applicable to them (Pamplin at 120B and [217] above). As a result, the mitigating effect of the facts referred to in [184] above should be assessed by comparing the impact of the imputations sued on with and without those facts, and awarding damages to reflect the difference.

9. [223]

   I turn then to that assessment. The following of those facts were stated in the defamatory publications themselves:

10. [224]

    The other facts referred to in paragraph [184] (that he was served an oyster with a curdled foam and sorbet and apricots that were hard) should in my view be disregarded as they did not appear in the article and there was no evidence to suggest that they were otherwise generally known and might therefore have affected the appellants’ reputations. In the absence of argument to the contrary, the well-established principle that defamation law is concerned with a person’s reputation, not his or her character, should be applied. [198]

11. [225]

    In considering the impact of the relevant facts some assumption needs to be made about who knows of them. If they were known only to an individual or to a small group of people, the impact on the appellants’ reputations may only have been slight, leaving open the opportunity for the defamatory publications to have a large impact on those reputations. However, because the facts are stated in the widely disseminated defamatory publications, it must be assumed that all readers became aware of them. Moreover, the unpalatable food items were not asserted to be served to, and assessed by, an ordinary member of the public but rather served to, and assessed by, a restaurant reviewer in the apparently reputable Good Living section of a major newspaper. In my view, an ordinary reasonable reader of the article appreciating that, in the course of two meals eaten at the Coco restaurant, the reviewer was served the poor quality food items listed above would form an adverse opinion of the restaurant and probably of its associated and proximate bistro, Roco. That would leave only limited room for the defamatory imputations to cause further diminution in the appellants’ reputation.

12. [226]

    With respect to McColl JA’s view in [209], I do not consider that ordinary reasonable readers of the article would in general be so dispassionately analytical as to ignore or at least heavily discount the impact of the mitigatory facts because those facts related only to Coco, reflected the experiences of one man only and did not affect the reviewer’s enjoyment of some important aspects of the meals that he was served. Accordingly, I respectfully disagree with her Honour’s view that the reduction in damages should be modest.

Conclusions

1. [227]

   On the cross appeal I have concluded that a substantial, and not merely modest, reduction should be made to the appellants’ damages. My view is that the damages awarded to each appellant against each respondent should be reduced by $70,000 by reason of the matters of mitigation relied upon on the cross-appeal.

2. [228]

   As the appellants have been successful on their appeal and the respondents successful on their cross-appeal, there should be no order as to the costs of the appeal and cross-appeal. There is no reason to vary costs orders made at first instance.

3. [229]

   In these circumstances, I propose the following orders:

   1. (1)

      Appeal allowed.

   2. (2)

      Cross-appeal allowed.

   3. (3)

      Set aside the judgments entered at first instance on damages and interest.

   4. (4)

      Judgment to be entered in favour of each appellant in an amount to be determined.

   5. (5)

      Note that these judgments will be ordered to take effect as at 18 December 2009.

   6. (6)

      If the parties are able to agree as to the amount of the judgments (inclusive of interest) to be entered in accordance with these reasons for judgment, direct that within 7 days they file a form of consent order in the Court of Appeal Registry.

   7. (7)

      If the parties are unable to so agree, direct that they file proposed forms of orders and submissions in support as follows:

   8. (8)

      Note that the Court makes no order as to the costs of the appeal and cross-appeal.

4. [230]

   BARRETT JA: I have had the advantage of reading in draft the reasons to be published by McColl JA and Macfarlan JA. As their Honours agree with the conclusion I have reached on exemplary damages, it is appropriate that I deal with that subject first.

5. [231]

   As McColl JA explains at [88], exemplary damages can be awarded in proceedings governed by the Defamation Act 1974 (NSW) (the “1974 Act”), but only in respect of defamatory matter published in a State or Territory in which such damages are available. It is not disputed that publication of the restaurant review occurred in relevant States and Territories outside New South Wales not only because of limited circulation of the newspaper there but also (and more particularly) through posting of the review on the SMH Good Living website (“the website”). Nor is it disputed that the first respondent maintained and controlled that website and determined what was posted on it.

6. [232]

   I have concluded that exemplary damages should be awarded against the first respondent in respect of publication of the restaurant review on the website in so far as that publication occurred in States and Territories outside New South Wales.

7. [233]

   The principles relevant to exemplary damages are not in dispute. Such damages punish the defendant by way of “a penalty for a wrong committed in such circumstances or in such manner as to warrant the court’s signal disapproval of the defendant’s conduct”. These are words used in Uren v John Fairfax & Sons Pty Ltd [199] by Taylor J who approved statements that exemplary damages are awarded only for “conscious wrongdoing in contumelious disregard of another’s rights” or for “reprehensible conduct and as a deterrent”. The first of these formulations is that of Knox CJ in Whitfield v De Lauret & Co Ltd [200] and was said by members of the High Court in Gray v Motor Accident Commission [201] to describe “at least the greater part of the relevant field”.

8. [234]

   The restaurant review was first posted on the website on 30 September 2003. It was removed on 30 June 2006 and reinstated on 14 June 2007. After the latter date, it continued to be available to anyone accessing the website. The significance of the dates 30 June 2006 and 14 June 2007 emerges from an examination of the course that the proceedings took.

9. [235]

   The defamation action was commenced by statement of claim filed on 23 June 2004. Before the trial of any issue by a jury, a judge of the Common Law Division (Nicholas J) ruled that four imputations were reasonably capable of being carried by the restaurant review and of bearing a defamatory meaning. A trial of some of the issues was then conducted pursuant to s 7A(3)(b) of the 1974 Act before a judge (Bell J) and a jury. The jury found that two of the imputations were conveyed but were not defamatory and that the other two imputations were not conveyed. Judgment was therefore entered for the respondents. The appellants appealed to this Court. They challenged the jury’s finding in respect of three of the four imputations. On 30 June 2006, the Court upheld the appeal, finding for the present appellants on two imputations and remitting a third imputation for determination by a jury. [202]

10. [236]

    The present respondents appealed to the High Court which, on 14 June 2007, ordered that verdicts be entered that the matter complained of by the appellants carried each of two of the imputations and that those imputations were defamatory; and that the question whether the third imputation was carried (and whether it was defamatory) should be remitted for determination by a jury. [203]

11. [237]

    In consequence of the High Court decision and a further jury trial on 19 September 2007 (before Adams J), it was established that the restaurant review conveyed the following imputations, each of which was defamatory of each of the present appellants:

12. [238]

    In due course, the matter came before another judge of the Common Law Division (Harrison J) for the assessment of damages and determination of defences raised by the present respondents. His Honour’s decision of 18 December 2009 [204] was that the appropriate quantum of damages was $80,000 for each of the appellants but that each imputation, in the context of the matter complained of as a whole, would have been understood by the reader to have been conveyed as a statement of opinion, so that a defence of comment applied (there were also certain findings that a defence of truth applied). Harrison J therefore ordered verdict and judgment for the present respondents as defendants.

13. [239]

    The appellants again appealed to this Court which, on 24 November 2011, held that Harrison J had erred on both the matter of defences and the assessment of damages, ordered a verdict for the appellants and remitted the matter to the Common Law Division for assessment of damages. [205] An application for special leave to appeal to the High Court was dismissed on 22 June 2012. [206] It was as a consequence of the remitter by this Court that Hall J came to address the question of damages and to make the decision from which this present appeal is brought. His Honour’s substantive decision was delivered on 19 December 2013. [207]

14. [240]

    It is against that background that the appellants contend that the first respondent engaged in “conscious wrongdoing in contumelious disregard of” the plaintiff’s rights by continuing to make the defamatory material available after 14 June 2007 to anyone who resorted to the internet and keyed in certain search terms. The first respondent’s response is, first, that the fact that special effort (in the form of entry of search terms) was needed in order to locate the material mitigates the effects of the material’s continuing availability; second, that purging of historical acts found subsequently to be wrong cannot be compelled by threat of exemplary damages; and, third, that there is a distinction between a publication first made with knowledge of its falsity and in contumelious disregard of the plaintiff’s rights and a publication which later turns out to be wrongful.

15. [241]

    There was, in the course of submissions, debate about a hypothetical situation where a book containing defamatory material is published and sold and copies come to rest indefinitely on library shelves; or a magazine with defamatory content is available in doctors’ and dentists’ waiting rooms for an extended period. The first respondent says that the publisher cannot be expected to extirpate such copies. The appellants’ response is that these circumstances are distinguishable from those of the present case because the person responsible for the defamatory content of the book or magazine has no control over the physical items once they reach the hands of strangers, whereas the first respondent at all times controlled what was put on to the website and remained on it.

16. [242]

    The first respondent pointed out that the offending material and references to its substantive message are available on the internet otherwise than in what I might term the primary form of the restaurant review posted on the SMH Good Living website. There are, for example, references to it in articles on websites containing other media organisations’ reports of court proceedings and judgments and, indeed, on court and other legal websites containing the full text of judgments.

17. [243]

    It is not contended, of course, that the first respondent can in any way control the content of court and legal publishers’ websites or those of other newspapers. To the extent that the relevant material, as contained or referred to in other publications, continues to be accessible on those websites, that is not something for which responsibility can be sheeted home to the first respondent.

18. [244]

    But the first respondent is directly and obviously responsible for the content of the SMH Good Living website. It has direct and obvious control over that content. It exercised that control on three occasions of relevance for present purposes: first, when it caused the material in question to be put on to the website on 30 September 2003; second, when it caused the material to be removed from the website on 30 June 2006; and, third, when it caused the material to be put back on to the website on 14 June 2007, after the High Court had determined that certain of the content was defamatory of the appellants.

19. [245]

    It was said in Dow Jones & Co Inc v Gutnick [208] that defamation occurs where the relevant material is available in comprehensible form and that, in the case of material on the internet, it is available in comprehensible form when it is downloaded by a person who “has used a web browser to pull the material from the web server”. It follows that a new cause of action arises on each occasion of such downloading, even though rules about multiplicity of proceedings may preclude suing upon each and every such cause of action. In that connection, it is pertinent to quote from the judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ in Dow Jones & Co Inc v Gutnik: [209]

20. [246]

    A plaintiff theoretically entitled to commence multiple defamation actions is thus compelled to exercise restraint. The policy of the law to which the High Court referred does not favour the commencement of 100,000 actions by a person defamed in a newspaper of which 100,000 copies were sold, to quote the example given by Asprey JA in McLean v David Syme & Co Ltd. [210] A single proceeding should be the vehicle for full vindication.

21. [247]

    A like expectation of restraint affects a defendant. Once it has been determined that particular matter is defamatory of a plaintiff and that no defence is available, the defendant who has been found to have engaged in tortious conduct by publication of that matter cannot, with impunity, commit the same wrong again. Damages for defamation are not a form of licence fee according to some “efficient breach” theory of tort. The judicial determination establishes that further publication of the same matter in the same way will also be unlawful and that new causes of action will accrue on each occasion of such further publication. A defendant who does not heed and act upon the message conveyed by the original judicial determination but instead makes a deliberate choice to continue with the commission of the same wrong and thereby to continue to infringe the plaintiff’s rights acts in contumelious disregard of those rights. That defendant’s conduct is highhanded conduct of a grave kind that merits punishment or deterrence. In addition and as Spigelman CJ observed in TCN Channel Nine Pty Ltd v Anning, [211] the power of the mass media is a material consideration when determining whether conduct should be punished or deterred.

22. [248]

    The defamatory quality of the content of the restaurant review was authoritatively determined on 14 June 2007, the date of the High Court’s decision. The jury’s determination of 19 September 2007 was that the defamation was even more extensive. Questions of possible defences remained. The decision of Harrison J on 18 December 2009 favoured the respondents in that respect but that decision was reversed by this Court on 24 November 2011. From that point (or, I suppose, from the point at which the High Court refused special leave on 22 June 2012), the status of the restaurant review as an unjustified and indefensible libel of the appellants was established and indisputable.

23. [249]

    Whatever may be said to have been the position at earlier stages while the possibility of defences was alive, the conduct of the first respondent after 22 June 2012 was highhanded conduct by an organ of the mass media. By keeping the restaurant review on the website, the first respondent continued to publish the defamatory content at times when it well knew that to do so was to invade the legal rights of the appellants. It is not to the point that the restaurant review could be accessed on the website only by persons who keyed in certain search terms. The most obvious such terms are the names of the appellants and the name of the restaurant. The continuing presence of the material on the website produced a result that was the equivalent of the first respondent’s simply handing a printed copy of the restaurant review to every person who asked for such information as the first respondent was able to give about one of the appellants or the restaurant. Disregard of persons’ rights does not cease to be contumelious just because it occurs in response to an inquiry or question.

24. [250]

    In any event, the argument that only those who actively search will find the material on the website overlooks what Lyrissa Barnett Lidsky, in her article, "Silencing John Doe: Defamation and Discourse in Cyberspace", [212] has called the “extraordinary capacity of the Internet to replicate almost endlessly any defamatory message.”

25. [251]

    Also, it is beside the point that the same content could be accessed on websites maintained by other persons in, for example, news items about the proceedings or reports of judgments. In those cases, context is added – often, no doubt, context indicating that publication of the content by the respondents had been found to be tortious.

26. [252]

    Nor, in my opinion, is it relevant that the appellants had not taken strenuous steps (by application for an injunction or otherwise) in an attempt to persuade the first respondent that it should remove the material from the website. The action of a wrongdoer in continuing his or her wrongdoing after it has been conclusively determined to be of that quality does not vary in complexion according to whether the wronged party is or is not vociferous in demanding that the wrongdoer desist.

27. [253]

    It remains to refer to the two other matters put forward by the first respondent, namely, that purging of historical acts found subsequently to be wrong cannot be compelled by threat of exemplary damages; and that there is a distinction between a publication first made with knowledge of its falsity and in contumelious disregard of the plaintiff’s rights and a publication which later turns out to be wrongful. In relation to those matters, it is necessary to refer again to the unusual nature of the proceedings which, in their various phases, extended over some ten years. Damages came to be assessed in December 2013 in circumstances where there had existed for some eighteen months a definitive determination making it plain that not only the original publication but also the further publications made after that definitive determination constituted disregard of the appellants’ rights. In that particular context, the disregard of those rights by means of the further publications is properly viewed as contumelious.

28. [254]

    The case was one in which exemplary damages should have been awarded. Bearing in mind that, for the reasons mentioned, only publication outside New South Wales is relevant to this part of the case, I am of the opinion that the damages payable to each appellant by the first respondent should have included an additional $20,000 by way of exemplary damages, with the judgment for the additional sum having retroactive operation as described by McColl JA.

29. [255]

    I next refer to the cross-appeal and the matter of mitigation on which McColl JA and Macfarlan JA take different views. On that, I prefer the outcome favoured by McColl JA because, although the matters relied on are properly regarded as facts, they are facts having substantial evaluative content based on the assessment of one person only – and facts, moreover, the impact of which is blunted by evidence that persons other than the second respondent enjoyed favourable dining experiences at the restaurant and that the second respondent himself was complimentary about some of the food. In those circumstances, there are mitigatory facts but their effect is not great.

30. [256]

    In relation to the balance of the issues before the Court, I agree with McColl JA.

31. [257]

    Orders should be made as McColl JA proposes.