Acp v John Fairfax Publications Pty Ltd & Hilmer [2002] ACTSC 63

Supreme Court of the ACT|2002-07-15|Before: Higgins J

2. The parties be heard as to costs and any other ancillary matters.

1. On 12 February 2002, I heard an appeal from an interlocutory decision of the Master given ex tempore on 13 December 2001. The decision related to three actions, each of them against the above two defendants, John Fairfax Publications Pty Limited and Fred Hilmer. In the substantive proceedings, the plaintiffs claim to have been defamed by articles published in the Sydney Morning Herald on 9 November 1999, 16 December 1999 and 17 December 1999 respectively. The first defendant is the proprietor of that newspaper. The second defendant is the Chief Executive Officer of John Fairfax Holdings Ltd.

2. By notices of motion dated 17 September 2001 the plaintiffs in each of the three matters applied to amend their Statements of Claim, in particular the description of the first and second defendants, and to standardise the relief claimed (so that all claimed exemplary damages, costs and interest pursuant to Section 69 of the Australian Capital Territory ). In the second and third matters the plaintiffs also sought leave to administer further interrogatories on the defendants. In each of the matters, the Master dismissed the notice of motion with costs. This is the decision from which the plaintiffs appealed, by notice of appeal dated 20 December 2001.

3. Prior to this, the plaintiff in the second matter (ACP Publishing Pty Limited), had, by notice of motion dated 23 April 2001 and heard on 27 July 2001, sought to compel the defendants to answer interrogatories directed towards an issue as to whether the second defendant, Mr Hilmer, "published" the matter complained of.

4. That issue was the subject of argument before the Master on 27 July 2001.

5. The plaintiffs' counsel, Mr McClintock SC, had contended that the Chief Executive of a publishing company was in an analogous position to a proprietor of a newspaper, quoting Gatley on Libel and Slander, 9th edition, par 6.15 and Gaudron J in Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 186 CLR 574, 595:

"... a newspaper proprietor is liable in defamation even though the defamatory matter was published without his knowledge. As is pointed out in Gatley_, "the editor is his servant and it is within the scope of his employment to send to the printers whatever matter he thinks ought to be published" [Gatley on Libel and Slander, 8th edition (1981), par 237]. Given that knowledge is irrelevant to the liability of one who authorises another to act on his or her behalf, the rule with respect to innocent dissemination, which is postulated on the want of knowledge, can have no application to one who published by authorising the publication in question."_

6. Civil liability will attach to a proprietor without knowledge or participation in the actual publication (cf R v Holbrook (1878) 4 QBD 42, in the case of criminal responsibility). The reason is that the proprietor, on the basis of the doctrine of respondeat superior, has responsibility for the acts of his or her servants or agents. If the proprietor is a corporation, then it is the corporation which is liable by virtue of that doctrine.

7. The plaintiffs' submission would require a finding that, by virtue of his position of power and authority over the servants and agents of the proprietor of the Sydney Morning Herald, Mr Hilmer should, in effect, be deemed to be a publisher of the matter complained of.

8. Levien v Fox (1890) 11 NSWR 414 was referred to in support of that proposition. However, that case concerned s 6 of the Defamation Act 1847 (NSW), a plea of amends (see also s 8 Defamation Act 1901 (NSW)). The issue in that case was whether the plea, there being no issue but that the newspaper proprietor had apologised and offered amends by way of payment into court, had permitted the publication, which had been made without his knowledge while he was away from the newspaper's premises "without gross negligence".

9. The ratio decidendi of the case was that the newspaper proprietor, to avail himself of the defence, had to negative, not only gross negligence personally, but also "on the part of those in whose hands he elects to leave the conduct of his newspaper" (421, per Darley CJ, Innes and Foster JJ). The decision is, therefore, of no assistance in determining the responsibility of a servant or agent of a media proprietor for a publication authorised by yet another servant or agent of the proprietor, even if the latter is generally subject to the authority of that first servant or agent.

10. On 17 August 2001, the Master rejected the plaintiffs' submission. He said:

"12. ...The plaintiff[s] ha[ve] chosen to plead [their] case on the basis of deemed publication, not on the basis that Mr Hilmer did in fact have so close a role in the publication of the Sydney Morning Herald that he can be held liable in defamation for an article that appeared in that newspaper on 16 December 1999. If this had been pleaded, it seems to me that interrogatories going to the extent to which the second defendant was involved in the process of editorial decision making at the Sydney Morning Herald, at least in the period around the date of publication, would be relevant to an issue between the parties, and I would have ordered the interrogatories to have been answered.

13. The plaintiff has chosen, however, to plead the case, not on the basis of what may be termed actual publication, but on the basis of deemed publication. In their answer to the request for further and better particulars they stated that Mr Hilmer "is deemed to have participated in the publication of the matter complained of even though he may not have known of its defamatory content." By pleading that the second defendant is a deemed rather than an actual publisher, it seems to me that the plaintiff has chosen to put in issue between the parties only the question of Mr Hilmer's position as Chief Executive Officer in the holding company, and that interrogatories going to any actual control that he may have exercised in what may be described as the editorial decision making process at the Sydney Morning Herald are beyond the scope of the present proceedings, as pleaded."

11. The plaintiffs submit that the Master had not, by that decision, against which they had filed no appeal, ruled out the possibility that a chief executive officer could be deemed to have published material, not by virtue of the principle of respondeat superior, but by virtue of his or her position of control and authority.

12. Apparently accepting that their statements of claim did not address that issue in respect of Mr Hilmer, the plaintiffs in each matter filed and served a further notice of motion, dated 17 September 2001, seeking, among other things, to amend their statement of claim to read as follows:

"The Second Defendant is [omitting "the Chief Executive Officer of the First Defendant" and inserting the following] and at all material times was a director of John Fairfax Holdings Limited and Chief Executive Officer of that company and its subsidiaries including the First Defendant. As such the Second Defendant has day to day managerial control of the First Defendant and its business and thereby participated in the publication by the First Defendant of The Sydney Morning Herald newspaper."

13. That application was heard by the Master on 13 December 2001. The Master considered that the proposed amendment did not cure the defect in the pleading as originally drawn. It seemed to him that it still relied on a proposition that a chief executive officer, by reason of his or her position, was responsible for the publication of defamatory matter by the editor and journalists employed by a subsidiary company even absent actual knowledge of or participation in it. That is, that he was, like the newspaper proprietor, a deemed publisher.

14. The plaintiffs submitted that, like an editor of a newspaper or an executive producer of a television program, the liability of the chief executive officer derives from his overall position of authority and his general supervisory role rather than the doctrine of respondeat superior. As Tobin & Sexton (1999) Australian Defamation Law and Practice, par 5210, comment:

"... the liability of the editor or executive producer extends beyond that involving matter published with his express authority, or at his instigation or request. It extends to all matters published in circumstances where he had the authority and responsibility to supervise their content."

15. The plaintiffs did not, however, refer to the final sentence of that paragraph:

"There does not seem to be any reason in principle why an editor should be liable for publications made while he [or she] is formally absent from the chair. In those circumstances, he does not have, nor dies [sic] he purport to have, the opportunity to exercise general authority over the content of the paper or program in question. On the same basis, it might be doubted that the chief executive officer of the publishing company or its directors would be liable in the absence of any particular involvement in the publication in question." (Emphasis added)

16. The substantive issue before the Master was whether, given Mr Hilmer's overall authority and responsibility, the defendants should be required to answer interrogatories going to the question as to whether the second defendant (Mr Hilmer) had such control or authority over the Sydney Morning Herald as to have "published" the matter complained of.

17. It was submitted to the Master on behalf of the defendants that this was not a "matter in question" between the parties (see O 34 r 1(1) Supreme Court Rules 1937). They submitted that the second defendant was not, by reason only of his position, responsible for the content of a newspaper published by a subsidiary company, even if he had the power to appoint or dismiss editors and journalists employed by the first defendant or to give policy directions to them. The allegation as framed in the statement of claim did not, properly construed, assert that Mr Hilmer was a "publisher" of the matter complained of.

18. The plaintiffs relied on an assertion that the second defendant was in the overall position of authority and general supervision of the publishing activities of the first defendant. Thus, it was asserted, Mr Hilmer was, by reason of his position, responsible in law for the defamatory content of the matter complained of, even if he did not know of it or participate in or authorise its publication with knowledge of its contents.

19. The plaintiffs contended that the second defendant's actual knowledge of the content of the publication in question was irrelevant. Indeed, none of the interrogatories directly address that issue.

20. Before the Master, the defendants relied on PLG Research Ltd v Ardon International Ltd [1993] FSR 197 and C Evans & Sons Ltd v Spritebrand Ltd [1985] FSR 267; [1985] 2 All ER 415 in support of a proposition that, whilst a proprietor is vicariously liable for the acts of an editor, whether or not he, she or it knew of and approved those acts, a director of the proprietor company would not be liable unless he or she actively participated in the wrongful act. That, it was submitted, was the position of a chief executive officer of the proprietor and the position of a chief executive officer of a holding company of which the proprietor company was a subsidiary.

21. The Master noted in his decision of 13 December 2001:

"I rather expected that my ruling may have been subject to review by a judge or indeed taken further, given the general importance of the proposition in Australian Defamation Law and Practice. That hasn't happened, and as we're back today, the question of whether it was futile - I can't say it would be futile on the basis that any high authority of the High Court, the Federal Court, the New South Wales Court of Appeal or otherwise. I'm satisfied that it was futile on Mr Tobin's argument, because it goes back over the ground of my earlier decision...

...I ought not to grant leave because it contains the same fault as I identified in the earlier proceedings, and it seems to me that the fault was not cured."

22. Thus, it was objected by the defendants, there was no relevant purpose to be served by the interrogatories in question. The Master accepted that submission. The plaintiffs' applications for an order that the relevant interrogatories be answered were, therefore, dismissed with costs.

23. On the hearing of this appeal, the plaintiffs relied on the indisputable proposition that a proprietor of a publication is liable for defamation, even in the absence of any personal knowledge of or express authority to publish the libellous matter (see Levien v Fox (supra)).

24. They relied on their submission, which had been put to the Master but rejected, that the chief executive officer of a holding company of which the publisher is a subsidiary is in an "analogous" position to a proprietor. Alternatively, they submitted that the chief executive officer is in an analogous position to an editor or executive producer.

25. Further, they submitted, even if that analogy failed, the amendments to the pleadings, if allowed, would raise the issue of actual control and authority. The Master's reasons for refusing the amendments were in error in assuming, so it was submitted, that the plaintiffs still relied on "deemed publication".

26. Rather, it was submitted, the allegation should be construed as one of constructive participation which raised an issue fit to be tried and to which the interrogatories in question were relevant. "Constructive" is my term. The plaintiffs did not assert any actual participation in or knowledge of the actual publication in question on the part of Mr Hilmer. They pleaded only his position of authority and control.

27. The defendants, in response, adopted the Master's view that the amendments, if made, would be futile. The amendments sought raised no issue different in substance from the original allegation of "deemed publication".

28. There was no authority cited which supported the view that, in the absence of active participation in the wrong complained of, any director, governing director or managing director of a media or other publisher of a libel is liable for that publication.

29. Indeed, C Evans & Sons Ltd v Spritebrand Ltd (supra) is authority directly to the contrary.

30. An editor of a defamatory work is plainly in a different situation. So also is the executive producer of a defamatory program. They each hold themselves out as the persons responsible for the content of the work or program. They have a duty of direct supervision. If they leave it to others to do so, they do not, by reason of that dereliction or delegation of duty, escape liability. It may, as Tobin & Sexton (supra) postulate, be different if the editor or producer was not on duty at the relevant time.

31. It seems to me that the Master's first decision was plainly correct. It is in accordance with authority.

32. I agree with the defendants' submission that an allegation of "day to day managerial control" is not sufficient to enliven such a personal responsibility. At least it would need to be proved (and hence, alleged in the pleadings) that the second defendant knew of the matter, allegedly defamatory, that the first defendant proposed to publish and being empowered to prevent its publication, failed or refused to do so.

33. Whether or not the second defendant did participate in the decision to publish the matter complained of is a question of fact. Interrogatories could be administered in an attempt to obtain admissions as to the nature and extent of that participation. On the other hand, it may be that there will, in the end, be no evidence of personal participation so that such a claim would fail. However, that issue can arise only if the allegation as made (or proposed) is to that effect. It is not in this case.

34. It is unnecessary to consider the precise scope of permissible interrogatories had the plaintiffs simply pleaded that the second defendant had participated in the publication of the matter complained of. As it happens, the pleading is framed so as to define participation as being a consequence of "day to day managerial control" rather than in terms of Mr Hilmer having had any actual responsibility for, or participation in, the publication in question. I reject the contention that the proposed amendments raise the issue of direct publication.

35. I agree with the Master that the proposed amendments, although more explanatory of the plaintiffs' case than the original, suffers from the same defect. Accordingly, I would not permit the amendments sought. I note that there were also amendments proposed as to the relief claimed. There was no argument addressed to those proposed amendments. I express no view as to whether they would be allowed if they stood alone.

36. The plaintiffs did assert that some discovered documents related to Mr Hilmer's position and authority. They relied on that as some kind of admission that the general power of control and authority of Mr Hilmer was "a matter in question". Even so, the "Charter of Editorial Independence" and other documents discovered and particularised do not support the view that the second defendant could, or would, exercise such editorial control as to be responsible for any particular matter published as if he was its editor. Indeed, they would tend to the opposite conclusion. No doubt that is why the defendants raised no objection to their production. It cannot constitute an admission by the defendants that the interrogatories related to a "matter in question".

37. The Master's second decision is, therefore, also plainly correct.

38. The appeal is dismissed. I will hear the parties as to costs and any other ancillary matters.

I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Higgins.

Counsel for the Plaintiffs: Mr B R McClintock SC with Mr M Richardson

Solicitor for the Plaintiffs: Phillips Fox as agents for Gilbert & Tobin Lawyers

Counsel for the Defendants: Mr T K Tobin QC with Mr R D Glasson

Supreme Court Rules 1937

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