Are imputations (a) and (c) defamatory?
52 The appellants contend that the imputations (a), that they sell unpalatable food at Coco Roco and (c), that they provide some bad service at Coco Roco, were defamatory and that a verdict in their favour should be entered in respect of these two imputations.
53 Under the provisions of s 7A, if the court determines that an imputation is reasonably capable of carrying the imputation and is reasonably capable of bearing a defamatory meaning, it is the function of the jury to determine whether the imputation is conveyed and if conveyed whether it is defamatory. In this case, the jury found that imputations (a) and (c) were conveyed but were not defamatory. An appellate court will only interfere with a jury verdict "if it is one that no reasonable jury could reach": John Fairfax Publications Pty Ltd v Rivkin (2003) 77 ALJR 1657 per Callinan J at [185]. Gleeson CJ agreed with Callinan J: see [1]. In doing so, he stated, at [2], that the issue before the Court of Appeal was fairly stated as being whether the jury's verdict was one "that no reasonable jury, properly directed, could have given". See also McHugh J at [20]; Heydon J at [220]. Thus, an appellate court will only interfere with a jury verdict if it is one that no reasonable jury, properly directed, could have given.
54 The question to be asked in this matter therefore is whether, having found that the jury were wrongly and/or inadequately directed, imputations (a) and (c) are defamatory in the sense that no reasonable jury, properly directed, could have come to any other determination.
55 The appellants had recently opened their restaurant at King Street Wharf. The appellants had promoted the restaurant in terms: "A new level of dining comes to Sydney's King Street Wharf". The restaurant had been fitted out expensively and had extensive views of Darling Harbour. The style and price of the food was, as it appears from the article, intended to indicate that this was a high class restaurant. As I have indicated, the location at Darling Harbour was itself prestigious in a city which is sophisticated and cosmopolitan.
56 The food served in any restaurant is its essential business. If the food is "unpalatable" the restaurant fails on the very matter that is the essence of its existence. This is especially so of a purportedly high class restaurant. To say of a restaurateur of such an establishment that they sold "unpalatable" food injures that person in their business or calling and because of that, is defamatory. In my opinion, no reasonable jury properly directed could reach any other verdict.
57 Service is also an integral part of the experience of dining. Good service is expected at a high class restaurant. It is part of what the patron pays for. It is almost trite to say that poor service, even occasional poor service within the one dining experience, will not be tolerated by patrons of an expensive "swank" restaurant. To say, therefore, that the appellants provided "some bad service" at Coco Roco, even though the damnation was not total, would injure a person in their business or calling as a restaurateur and was likewise defamatory. No reasonable jury properly directed could reach any other verdict.
Should this Court enter a verdict in respect of imputations (a) and (c)?
58 Having reached this conclusion the next question is whether this Court should itself enter verdicts for the appellants in respect of imputations (a) and (c).
59 It had been conventional for some years for this Court, in determining that a jury had perversely found that an imputation was not defamatory, to remit the matter to the trial court for rehearing: see Cinevest Ltd v Yirandi Productions Ltd [2001] Aust Torts Reports 81-610; [2001] NSWSC 68; Mularczyk v John Fairfax Publications Pty Limited [2001] NSWCA 467. However, commencing with the decision in Charlwood Industries Pty Limited v Brent [2002] NSWCA 201, there is now a line of authority in this Court that a verdict may be entered where an imputation is plainly defamatory.
60 In Charlwood Industries, Ipp AJA (as his Honour then was), (Sheller and Hodgson JJA agreeing) explained that the power contained in s 108(3) of the Supreme Court Act 1970 (NSW) (the Supreme Court Act) applies in circumstances where the Court has found that a jury verdict under s 7A of the Defamation Act was perverse. Section 108(3) provides:
"Where it appears to the Court of Appeal that upon the evidence the plaintiff or the defendant is, as a matter of law, entitled to a verdict in the proceedings or on any cause of action, issue or claim for relief in the proceedings, the Court of Appeal may direct a verdict and give judgment accordingly."
61 Ipp AJA considered that the availability of a verdict being entered by the Court of Appeal was supported by the terms of s 102 of the Supreme Court Act which, as his Honour observed, was based upon the premise that a jury might, in a particular case, give a verdict on "any issue in the proceedings" and that an appeal from such a verdict was to be made to the Court of Appeal. It followed that an answer given by a jury to a question posed under s 7A, which, relevantly in this case, included the question whether imputations (a) and (c) were defamatory, were jury verdicts from which an appeal lay and upon which s 108(3) operated.
62 Ipp AJA further observed that the power of the Court under s 108(3) to direct a verdict was supported by Hocking v Bell (1945) 71 CLR 430, which involved a consideration of s 7 of the Supreme Court Procedure Act 1900 (NSW), the predecessor to s 108(3). In that case, Latham CJ said, at 441, that the Full Court could properly enter a verdict if the relevant party was, "as a matter of law entitled to a verdict". Latham CJ pointed out that the section was based upon the principle that all questions of fact were jury questions but, if upon analysis, there was no jury question to be determined, for example, if the evidence was all one way, there was no function left for the jury to perform, so that the Court could properly, as a matter of law, direct a verdict in accordance with the evidence presented. See also Hocking v Bell (1947) 75 CLR 125 at 131 where the above remarks were approved by the Privy Council; and Edmond Weil Inc v Russell (1936) 56 CLR 34 at 47.
63 The Court thus concluded in Charlwood Industries that if the imputation was plainly defamatory and if any other decision would be perverse (although, as I have already indicated, the test is that of unreasonableness), it followed as a matter of law that the Court of Appeal was entitled to direct a verdict on the issue. The Court pointed out that any other result would be incongruous, involving the matter being remitted to the Court for a retrial when the only possible verdict was that the imputation was defamatory.
64 Mr Blackburn SC submitted to the Court that this line of authority was wrong and ought to be reconsidered. The respondent had not foreshadowed that any such application would be made and the application was rejected by the Court: see appeal transcript 51. That, however, is not the end of the matter. The application of s 108(3) to a s7A jury verdict was considered again by the Court in Harvey v John Fairfax Publications Pty Limited [2005] NSWCA 255.
65 In that case, Hunt AJA (Santow and Basten JJA agreeing) observed, at [102] that it was not appropriate in every case to exercise the power given to the Court under s 108(3). In particular, it was not appropriate to do so where the case on one issue and the case on another issue were not in distinct compartments. His Honour considered that the regime under s 7A of the Defamation Act was a classic example, where the jury was asked to separately determine whether or not the imputation was conveyed and, if conveyed, whether it was defamatory. In such a case, Hunt AJA expressed the view that those questions ought ordinarily be determined by the same tribunal because the issues are usually interdependent. His Honour stated at [104]:
"Where, for example, there is a real dispute that a particular imputation was conveyed, and the jury accepted that it was conveyed but then unreasonably found that that imputation was not defamatory, it would usually be unjust to the defendant to exercise the power given by s 108(3) to enter a verdict or judgment for the plaintiff on the issue of defamation."
66 His Honour noted that that was the approach of the Court in Charlwood Industries itself.
67 In Charlwood Industries, the Court considered that the jury's verdict, that the imputation was not defamatory, was most probably the result of a compromise verdict. The relevant imputation was that the plaintiffs lied to their customers. The Court considered that it was not self-evident that the imputation was conveyed, so that there must have been serious debate within the jury on that question. The Court considered that, the jury having found that it was, any finding other than that it was defamatory was unreasonable. The Court concluded therefore that both questions, whether the imputation was conveyed and, if so, whether it was defamatory, should be retried; as it was arguable, on the Court's view, that the imputation was not in fact conveyed. The appropriate course, in accordance with the policy of s 7A was for those questions to be retried by a jury.
68 A different course was followed in Gorman v Barber (2004) 61 NSWLR 543 where the jury had also found that the imputation had been conveyed but unreasonably found it not to be defamatory of the plaintiff. In that case, there was no suggestion that the imputation was not conveyed, nor was there any suggestion that the verdict was a compromise verdict. In those circumstances, this Court entered a verdict for the appellant.
69 Harvey v John Fairfax raised a different consideration. In that case, the jury found that the relevant imputation was not conveyed. In accordance with the usual directions from the trial judge, it did not then determine whether the imputation was defamatory. Hunt AJA, after again commenting on the interdependence of the two jury questions, namely, was the imputation conveyed and if so, was it defamatory, said at [105]:
"This Court should rarely, if ever, proceed to decide the issue of whether an imputation is defamatory of the plaintiff before a jury has first determined that issue. That is because the jury has an especially significant constitutional role … in evaluating the impact of the matter complained of on the community …"