Capping Libel Damages in Australia: a closer look – Matthew Lewis

29 05 2011

The cap on libel damages in Australia under the uniform Defamation Act of 2005 remains controversial. In this article barrister Matthew Lewis reviews the quantum of damages awarded since the Act came into effect

Since the 2005 Defamation Act came into effect, there have been 23 cases where damages have been awarded for non-economic loss. Click here for a table detailing cases where damages have been awarded or where s.35 of the 2005 Act has been discussed.

The quantum breakdown is:

$200,000 plus. Haertsch v Channel Nine, Greig v WIN Television NSW – both NSW Supreme Court.

$150,000 – $200,000. Manefield v Child Care NSW – NSW Supreme Court.

$100,000 – $150,000. Sinclair v Higgins, Davis v Nationwide News, Attrill v Christie – all NSW Supreme Court.

$50,000 – $100,000. Shandil v Sharma, Mundine v Brown, Holmes v Fraser, Ryan v Premachandran, PK v BV, Moumoutzakis v Carpino, Pak v The Korean Times, Woolcott v Seeger, – four NSW Supreme Court, three NSW District Court, one WA Supreme Court.

$20,000 – $50,000. Restifa v Pallotta, Papaconstuntinos v Holmes a Court, Larach v Urriola, Martin v Bruce, Osuamadi v Okoroafor, Giller v Procopets – two NSW Supreme Court, three NSW District Court, one Victoria Supreme Court.

$0 – $20,000. Ahmadi v Fairfax, Bechara v Bonacorso, Trkulja v Trajkovska – one NSW Supreme Court, one NSW District Court, one Victoria County Court.

Two cases – Papaconstuntinos v Holmes a Court and Holmes v Fraser – were overturned on appeal.

The majority of awards – 14 – fell within the wide bracket of $20,000 to $100,000.

It is noteworthy however that “serious defamation” has been held to amount to $60,000 in Mundine v Brown & Ors and $140,00 in Davis v Nationwide News.

Both cases involved mass media publication.

In fact, the seven cases brought against the mass media resulted in awards ranging from $7500 in Ahmadi v Fairfax Media to $240,000 in Haertsch v Channel 9 and $200,000 in Greig v WIN Television NSW.

It is unsurprising that the two largest awards were made in circumstances where the defamatory matter was widely published.

However, over half of the awards made against the mass media range between the relatively modest amounts of $20,000 and $140,000 – the amount awarded in Davis v Nationwide News for “serious defamation”.

The statutory cap in practice

Unless the plaintiff has obtained leave under section 23 of the Act to commence further defamation proceedings, he or she is restricted to the statutory cap.

Following Davis v Nationwide News, it is clear that the statutory cap is the maximum amount that may be awarded to each plaintiff in respect of all claims in the proceedings, even though they involve multiple causes of action.

This is open to abuse in that the plaintiff may bring another set of defamation proceedings and therefore double the statutory cap.

The alternative is said to cause the plaintiff severe prejudice.

As Bruce McClintock SC noted in the Gazette this issue was raised before the Victorian Court of Appeal in Buckley v The Herald & Weekly Times Pty ltd & Anor in 2009.

The defendants sought a stay of proceedings or, in the alternative, a consolidation order in circumstances where the plaintiff had commenced further defamation proceedings without first obtaining leave under s.23 of the Act.

The stay application was unsuccessful but, the first instance judge made the consolidation order.

The amount the plaintiff could have recovered therefore fell from $500,000 to $250,000.

This was reversed on appeal, with Justice Geoffrey Nettle observing:

“The way in which ss 23 and 35 are intended to operate, under the substantive law which now governs the rights and obligations of parties in respect of defamation publications, the applicant had a substantive right to seek to recover up to $500,000 in damages, and the respondent had a substantive correlative contingent liability in the same amount.

In those circumstances, to make a mere procedural consolidation order which halved the potential value of the applicant’s substantive rights and halved the respondents correlative contingent liabilities worked a radical re-ordering of the parties substantive rights and obligations, with the risk of substantial prejudice to the applicant.”

Conclusion

The intention of the statutory cap was to reduce the awards made in defamation cases following large awards in cases such as Ettinghausen in Australia and Lord Aldington (pic) in the UK.

It would seem that the Act has achieved this aim.

In contrast to the position in the UK, the “deterrence effect” of a large award of damages on the media is not recognised in Australia.

Yet, media law academic Dr David Rolph has pointed out that the cap may encourage media outlets to make a commercial assessment of the risks associated with publication and, rather than modify their conduct, they may elect to absorb the costs of defamation litigation as part of their business costs.

The table of damages might add some credence to this view.

However, it should be noted that the cost involved in defending litigation can be substantial and can act as a deterrence itself.

Australia is the only jurisdiction in the common law world where a statutory cap exists.

Damages are not capped in the US, Canada, New Zealand or South Africa.

As Inforrm’s Hugh Tomlinson QC recently observed in the context of the impending UK reform:

The arguments in favour of a statutory cap on damages are not convincing and, taking account of developments in the law of defamation over the past two decades, it must be doubtful whether a statutory cap is needed at all.

This is not a proposal taken by Lord Lester’s Defamation Bill”.

Perhaps the NSW Attorney General might consider these issues in his current review of the 2005 Act.

Alternatively, it will take the right case to test them.

*Matthew Lewis is a barrister specialising in media law. He was one of eight practitioners on the NSW Bar Association’s Defamation Review Committee.


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