Carson v John Fairfax & Sons Ltd

As mentioned earlier, the respondents accepted before the Court of Appeal that the two imputations pleaded by Mr. Carson in respect of the first article could be found by the jury. But they challenged the imputations upon which Mr. Carson relied in respect of the second article. Those imputations appear earlier in this judgment; put broadly, they involve Mr. Carson in a conspiracy to obstruct the course of justice.

The imputations pleaded in regard to the second article were the subject of interlocutory proceedings before Hunt J. who substantially upheld the pleading. Leave to appeal from Hunt J.'s decision was, as already noted, refused. The Court of Appeal, in the hearing of the substantive appeals, endorsed Hunt J.'s actions. In the course of argument before this Court, the Court refused to grant the respondents special leave to challenge the imputations pleaded as arising from the second article. The question of special leave to challenge the order for retrials limited to the assessment of damages was reserved.

In the course of his final address, counsel for Mr. Carson said in relation to Fairfax: "It is about time this defendant was brought down to the ground." Counsel for Fairfax objected to this comment and Loveday J. said that he would direct the jury not to award damages in order to punish Fairfax. In the course of charging the jury his Honour made the remarks set out earlier in this judgment. While Loveday J. did not expressly connect his remarks with what had been said by counsel for Mr. Carson, there is no reason to conclude that the jury did not heed his remarks and exclude any element of punishment in their awards.

There is a somewhat curious feature of the Court of Appeal's order. Because there were two actions, there are two orders. Each directs that "the proceedings be returned for a retrial of the plaintiff's actions, limited to the assessment of his damages". Why each order speaks of "actions" is not clear. But, more importantly, so far as the action in respect of the first article is concerned Priestley J.A., one of the majority, took the view that if that award were considered in isolation an appellate court should not interfere because the difference between his view and what the jury did was "not so great as to justify saying the jury figure had passed into the realm of the unsupportably unreasonable" [36] . But because of the size of the award in respect of the second article, Priestley J.A. thought that both verdicts should be set aside. On the other hand Mahoney J.A. said [37] : "I do not think that the present awards were excessive or beyond what was appropriate to achieve those objectives." His Honour had been speaking of the objectives an award of damages in a defamation action was designed to meet. While the point is not crucial to the disposition of this appeal, it is of some importance that two members of the Court of Appeal would not have interfered with the award of $200,000.

1. (1991) 24 N.S.W.L.R., at p. 303. 2. ibid., at p. 300.

In so far as the restriction in the order for retrial is concerned, there is no reason why the Court of Appeal, seeing the matter as they did, should not have confined a retrial to the assessment of damages.

The matters raised in the notices of cross-appeal are not matters in which a grant of special leave to cross-appeal is warranted. There is no force in the matters raised by way of contention.

I would allow the appeals, set aside the orders of the Court of Appeal and affirm the judgments entered by Loveday J. following the jury's verdict in each case.

The facts and issues in this matter are set out in other judgments. In my opinion, the appeals should be allowed, the orders of the Court of Appeal set aside, and the verdicts of the jury restored. Two reasons lead me to this conclusion. First, the judgments of Kirby P. and Priestley J.A. contain passages which indicate that they allowed the appeals on grounds which in my view are erroneous. Second, the damages awarded in respect of each article were not so high that a jury performing its functions properly could not reasonably have awarded those damages.

The judgment of the learned President indicates that his Honour set aside the verdicts because he thought that the totality of the amounts awarded could not be justified [38] . Although his Honour's judgment refers to factors relevant to one or other or both articles, nothing in the judgment indicates that the learned President determined whether either verdict could be upheld. To the contrary, the key passages in the judgment indicate that his Honour tested the reasonableness of the verdicts by reference to their combined effect. Thus, his Honour said [39] that "it was not the case for the largest verdict for general damages in defamation in the history of this State and of this country. I find it hard to accept that these are the most grave imputations ever yet to have come before an Australian court". His Honour also said [40] that "[i]nvested at a moderate rate of interest the two verdicts comprising the judgment would return (at 11 per cent) an annual income to Mr. Carson of $74,300 or (at 15 per cent) an income of $111,540." [41]

1. John Fairfax & Sons Ltd. v Carson (1991), 24 N.S.W.L.R. 259, at pp. 274-275. 2. ibid., at p. 274. 3. ibid., at p. 275. 4. Invested at call at the interest rates presently prevailing, however, the combined verdicts would provide an annual income (before tax) of less than $36,000.

However, neither the common law of defamation nor the Defamation Act 1974 NSW ("the Act") entitles a court to evaluate the reasonableness of separate awards of damages in defamation cases by reference to the total sum awarded. It does not follow as a matter of either logic or law that, because the total amount of a number of verdicts is excessive, each individual award of damages is also excessive. In New South Wales, each defamatory imputation contained in a publication constitutes a cause of action. [42] To that cause of action various defences may be pleaded. Of course, a publication may contain several imputations. In that case, the plaintiff will have more than one cause of action in respect of the publication. However, s. 9(5) of the Act directs that, where the proceedings for defamation in respect of the publication of any matter are tried before a jury, the jury must give a single verdict in respect of all causes of action arising from that publication and assess damages in a single sum unless the court otherwise directs.

Damages are awarded for the harm caused by a publication (s. 46). The reasonableness of the verdict in respect of that publication can only be determined by reference to the harm which it has caused the plaintiff. In assessing damages in respect of a defamatory publication, a New South Wales jury is required to consider the effect of another defamatory publication only when the other publication is of "the same purport or effect" as the first publication (s. 48).

The common law is clear, rightly or wrongly, that the defendant cannot mitigate damages by tendering evidence of other defamatory publications concerning the plaintiff [43] . A fortiori, at common law evidence is not admissible that the plaintiff has recovered damages in respect of other defamatory publications. A defendant must answer for the effect of its own circulation without regard to what others have published [44] . If a defendant wishes to contend that the plaintiff's reputation was already damaged at the time of publication, it can do so by calling witnesses to prove the nature of the plaintiff's reputation at that time [45] . But it cannot tender other publications for that purpose. They may or may not have damaged the plaintiff's reputation.

1. Creevy v Carr (1835), 7 Car. & P. 64 [173 E.R. 29]; Dingle v Associated Newspapers Ltd. [1964] AC. 371. 2. ibid., at p. 411. 3. ibid., at p. 412.

In New South Wales, as in some other jurisdictions, however, the rigour of this common law rule has been qualified. Section 48 of the Act provides that evidence is admissible in mitigation of damages if the plaintiff has already recovered or brought proceedings for damages or has received or agreed to receive compensation "for defamation in respect of any other publication of matter to the same purport or effect as the matter complained of". So, if a plaintiff is defamed on fifty-two successive weeks and brings a defamation action against any person, evidence is admissible in mitigation of damages that the plaintiff has already recovered or seeks to recover damages or compensation in respect of any of the other fifty-two articles "to the same purport or effect as the matter complained of". Consequently, the reasonableness of a verdict in respect of a defamatory publication must be assessed in the light of the evidence concerning that publication including any evidence which was admitted in mitigation of damages in respect of that publication. It is erroneous to consider the reasonableness of a verdict by determining whether the total sum awarded for a number of verdicts is reasonable. Each verdict must be considered separately. Except as provided for in s. 48, absent evidence of a generally bad reputation at the time of the defamatory publication, damages are to be assessed in accordance with the common law rule that the plaintiff was a person of good reputation whose damages are not to be reduced by reason of any other publication [46] .

1. In Harrison v Pearce (1858), 1 F. & F. 567, at p. 569 [175 E.R. 855, at p. 856], Martin B. said that the rationale of the rule was that "[o]ne wrongdoer cannot avail himself of the wrong of another". Whatever the historical justification of the rule may have been, it seems unlikely that it would now command unqualified support. However, the rule is too firmly entrenched to be removed by judicial decision, particularly as the terms of s. 48 of the Act indicate that Parliament has been prepared to make only limited inroads to the rule. The provisions of s. 9(5) of the Act also indicate that Parliament has given consideration to the effect of multiple causes of action. Yet it has not abolished the common law rule.

In the present case, the defamatory imputations were not to the same purport or effect. Nor was any evidence led that the plaintiff was a person of generally bad reputation at the time when the relevant article was published [47] . That means that the reasonableness of the award of damages in respect of each article has to be considered without regard to the damages which the plaintiff was entitled to in respect of the other article. That is not to say that the jury could not use the circumstances surrounding the publication of one article as evidence in respect of the other article. Thus, the jury were entitled to use the second article and the circumstances of its publication as evidence of the motive and conduct of the defendant in publishing the first article. But they were not entitled to reduce the damages payable in respect of that article because twelve months later the plaintiff was again defamed. Similarly, the jury were entitled to use the publication of the first article, the circumstances concerning its publication, and the conduct of John Fairfax & Sons Ltd. after its publication as increasing the hurt and harm occasioned by the second article. But they were not entitled to reduce the damages otherwise payable in respect of the second article because the plaintiff had obtained a substantial award in respect of the first article or because of any assumption that the first article had already harmed the plaintiff's reputation.

1. To the contrary, the then president of the Law Society gave evidence that the plaintiff had a reputation as "an exemplary member of the profession and a man of high standards". There was other evidence to like effect.

Damages for both articles had to be assessed on the basis that the plaintiff was a person of undamaged reputation at the time of each publication. If that meant that the damages in respect of the second article had to be assessed on the basis that the plaintiff was of high repute when, in fact, the jury thought that it was likely that the first article had done him substantial harm, the responsibility for that state of affairs lies with the defendants in the second action. They failed to call evidence to prove that the plaintiff's reputation was still or already damaged at the time when the second article was published [48] . For that situation, they cannot complain if the assessments contain an overlap or an element of double counting in respect of the second article.

1. In a defamation trial, unpalatable alternatives sometimes confront a defendant who has defamed a plaintiff in successive publications dealing with a particular sector of the plaintiff's life when the publications are not to the same purport or effect. Should the defendant seek to reduce the damages payable in respect of the later publications by proving that the plaintiff's reputation was already damaged as the result of an earlier publication or publications? Or should it be content to accept that the plaintiff was a person of good reputation at the time of each publication and contend that the effect of each defamation was quickly spent? Each alternative has its risks. The very able and experienced counsel who appeared for the defendants at the trial of these actions elected to follow the second course. But the jury's verdicts show that they considered that, despite or perhaps because of, the plaintiff's high reputation, it was likely that he would suffer great harm as the result of each publication.

It follows in my opinion that the learned President was in error when he examined the totality of the verdicts instead of the reasonableness of each verdict. The publications were not to the same purport or effect. Moreover, it should be noted that the articles were the subjects of two separate actions and that the parties to each action were different. Mr. Slee was not a party to the first action. It would be a curious result if a defendant could set aside a verdict which was reasonable on the ground that the amount of the verdict, when added to the amount of a verdict obtained in another action against the defendant and another person, was unreasonable.

Certain parts of the judgment of the learned President indicate that he thought that, because an award of exemplary damages in a defamation action is not permissible in New South Wales (s. 46(3)(a)), the awards in the present case must be set aside because they include a sum by way of punishment [49] . As will appear, I think the verdicts can be sustained as reasonable without any need to assume that they contain damages by way of punishment. But the question whether an award of aggravated damages in New South Wales can include an amount by way of punishment is too important to pass without discussion.

In my opinion, the element of punishment is often a legitimate factor in an award of aggravated damages even in New South Wales where s. 46(2) of the Act provides that damages are to be "recoverable in accordance with the common law, but limited to damages for relevant harm". A jury which increases its award of damages in a defamation action commits no error if it thinks that the plaintiff cannot be properly compensated for the harm done to him or her unless the damages contain an amount to punish the defendant for the hurt which he or she has inflicted on the plaintiff or to deter the defendant from further defaming the plaintiff. Nor does the jury commit any error if it increases the damages because the conduct of the defendant towards the plaintiff arouses its anger or indignation.

Before turning to the effect of the Act, it is convenient to begin by examining the concept of aggravated damages at common law. Damages in a defamation action are "the product of a mixture of inextricable considerations" [50] . It can also be said that they are a mixture of conflicting considerations which are the result of defamation being both a tort and a crime. One consideration is the state of mind and the conduct of the defendant which the common law has always regarded as being of great importance on the question of damages even though damage to reputation is the gist of a defamation action.

1. Uren v John Fairfax & Sons Pty. Ltd. (1966), 117 C.L.R. 118, at p. 150; see also Broome v Cassell & Co. [1972] AC. 1027, at p. 1072.

The common law courts developed the action of defamation through the action on the case. Because it was damage which distinguished the action on the case from the writ of trespass, the common law courts originally perceived damage to reputation as the essence of the action for defamation [51] . If the common law of defamation had always been true to its historical beginnings, the conduct and motivation of the defendant would not have become an issue in a defamation action. Damage to reputation would be the central issue. But, at the same time as the common law courts were developing the civil action for defamation, other developments in the law were taking place which were to have a profound effect on that action and bring the conduct and motivation of the defendant to centre stage.

1. Sir Frederick Pollock always thought that this was a mistake. He said (Pollock, Law of Torts, 12th ed. (1923), p. 243) that "the law went wrong from the beginning in making the damage and not the insult the cause of action".

Criminal libels were not prosecuted in the common law courts. They were prosecuted in the Star Chamber on the ground that they threatened the security and peace of the State [52] . When the Star Chamber was abolished, its criminal jurisdiction over defamatory statements went to the courts of common law. At that time the practice was to allege in the indictment that the defendant had published a false, wicked, malicious etc. libel. Whether this was necessary may be doubted [53] . But it was natural, if not inevitable, that in the courts of common law pleaders would also allege malice in a civil action for damages as well as in a criminal prosecution for libel. Indeed, prior to the abolition of the Star Chamber, it had already been said that, in a civil action for slander, malice or intention to slander was the gist of the action [54] . In Smith v Richardson [55] , the judges of the Court of Common Pleas "agreed that malice is the gist of this action, and that therefore evidence proving the manner and occasion of speaking the words to shew that they were not spoken with malice has always been admitted". Once it became accepted that malice was the gist of the action, it followed that the jury were bound to consider the nature of the malice of the defendant in assessing damages. And this inevitably meant that the damages were "at large" in the sense that they might award the plaintiff such damages as they thought the presence of the element of malice required.

1. Holdsworth, A History of English Law, vol. 5, 3rd ed. (1945), pp. 208-210. 2. Stephen, A History of the Criminal Law of England, vol. 2 (1883), pp. 352-356. 3. Brook v Montague (1605), Cro. Jac. 90 [79 E.R. 77]. 4. (1737) Willes 20, at p. 24 [125 E.R. 1034, at p. 1036]; see also Blackstone, Commentaries on the Law of England, vol. 3 (1768), pp. 123-126.

The idea that malice is an essential element in an action for tort including defamation was exploded more than 150 years ago [56] . But the importance of malice or lack of malice on the question of damages in a defamation action remains to this day. As has so often occurred with a common law rule or principle, the disappearance of its original rationale has not affected its existence or importance. Malice is no longer the gist of the action, but in all cases of defamation the damages otherwise payable may be increased because of the defendant's malicious or improper conduct [57] . Conversely, the damages may be decreased because of the plaintiff's provocative conduct or the defendant's innocence or lack of malice. Thus, in Saunders v Mills [58] , evidence that the defamatory publication was based on material published in newspapers was admitted in mitigation of damages. In Bennett v Bennett [59] , it was held that the damages might be reduced because the defendant had revealed the name of the person who had provided the defamatory information. It is not surprising, therefore, that in Forsdike v Stone [60] , Willes J. regarded it as beyond question that "in a case of slander a jury considers not only what the plaintiff should receive, but what the defendant should pay".

1. Bromage v Prosser (1825), 4 B. & C. 247 [107 E.R. 1051]. 2. Triggell v Pheeney (1951), 82 C.L.R. 497, at p. 514. 3. (1829) 6 Bing. 213 [130 E.R. 1262]. See also Mullet v Hulton (1803), 4 Esp. 248 [170 E.R. 708]; Duncombe v Daniell (1837), 8 Car. & P. 222 [173 E.R. 470]. 4. (1834) 6 Car. & P. 588 [172 E.R. 1377]. 5. (1868) L.R. 3 C.P. 607, at p. 611.

A defendant who behaves badly will almost invariably be dealt with more harshly than a defendant who has not behaved so badly even though the plaintiff has suffered no more harm in the first case than in the second. Similarly, a plaintiff who had an undeserved reputation for being a person of good fame and character is likely to receive a contemptuous verdict even though the libel did him or her great harm and the defendant had no lawful defence or excuse for its publication. In the eyes of the good citizen, what is fair and just compensation for a tortious act depends on questions of right and wrong as much as it does on harm to the person injured.

In Uren v John Fairfax & Sons Pty. Ltd. , Windeyer J. explained the purpose of an award of damages in a defamation action. His Honour said [61] :

It seems to me that, properly speaking, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public and as consolation to him for a wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money. 1. (1966) 117 C.L.R., at p. 150.

The damage which a defamation produces is ordinarily psychological rather than material. It affects the feelings, sense of security, sense of esteem and self perceptions of the person defamed. As a natural consequence, a defamation excites the anger and resentment of the victim and often enough generates a desire for retribution. Judge Posner has pointed out [62] that:

Part of our biological inheritance is the sense of indignation, and its complement the desire for retribution (by violent means if necessary), that is aroused when someone invades an interest that we value highly The courts provide a substitute for the costly self-help methods that people would otherwise resort to. 1. The Federal Courts: Crisis and Reform (1985), pp. 5-6.

If an award of damages in a defamation action is to fulfil its social purpose, it must be high enough to assuage the hurt, indignation and desire for retribution which the plaintiff feels. Moreover, in many cases, the feelings of a person who has been maliciously defamed will only be assuaged if he or she is satisfied that the award of damages hurts the defendant as much as the defendant has hurt the plaintiff. "What the plaintiff is really demanding by way of solace to himself" Professor Julius Stone has said [63] "is that there be inflicted on the defendant pain and humiliation comparable to that which the defendant has inflicted on the plaintiff." Thus, the anger of the plaintiff is placated only when he or she knows that the defendant has been punished for the wrong. As Mr. L. F. Robinson has pointed out [64] : "The injured man would not be satisfied unless his defamer was made to pay a punitive sum." An award of compensatory damages in such a case will not achieve its restorative effect unless the defendant is made to suffer for the wrong. Furthermore, an award of damages may not properly console the plaintiff who has been the victim of a malicious defamation unless the anguish that that person has suffered is placated by an award which is large enough to deter the defendant from again defaming him or her. Thus, an amount sufficient to deter the defendant from again defaming the plaintiff is in many cases a proper element of aggravated compensatory damages [65] .

1. "Double Count and Double Talk: The End of Exemplary Damages?" Australian Law Journal, vol. 46 (1972) 311, at p. 319. 2. "Exemplary Damages for Defamation", Australian Law Journal, vol. 3 (1930) 292, at p. 292. 3. See Broome v Cassell & Co. [1972] AC., at pp. 1077, 1082-1083.

Logically, the state of mind or conduct of the defendant cannot be any criterion or measure of the harm which the plaintiff has suffered. While it may be true that the improper state of mind or unjustifiable conduct of the defendant is often the cause of the plaintiff suffering harm, there is no correspondence between the quantum or quality of that harm and the quantum or quality of the defendant's state of mind or conduct. Furthermore, if punishment of the defendant was not an element in an award of aggravated compensatory damages, the existence, extent or nature of the defendant's malice would be irrelevant. On that hypothesis, all that would be relevant would be whether conduct of the defendant relevant to the defamation (whether or not malicious or improper) had caused harm to the plaintiff.

To say that no element of punishment enters into the assessment of (aggravated) compensatory damages and that the effect of such an award is merely to compensate the plaintiff for the increased harm which that person suffers is to resort to fiction in many cases. In many, perhaps the majority of cases, for example, the plaintiff only becomes aware of the defendant's malice long after publication, perhaps at the trial of the action. Discovery of the malice at that stage may have only a slight effect on the plaintiff's feelings. But in practice the same damages will be awarded because of that malicious conduct as will be awarded if the malice was known to the plaintiff at or about the time of publication. The truth is that, in many cases calling for an award of aggravated damages, the real reason that the defendant is called upon to pay additional damages is that that person has been guilty of malice or some other improper state of mind or conduct. It is not simply because of the effect of the defendant's conduct on the plaintiff. However much judges and jurists may seek to rationalise the right of the jury to increase damages by reason of the conduct of the defendant as being purely compensatory, compensation to the plaintiff is only achieved in many cases of awards of aggravated damages by punishing or deterring the defendant. Eminent judges have accepted that this is so.

In Broome v Cassell & Co. , Lord Hailsham of St Marylebone L.C. said [66] :

The true explanation of Rookes v Barnard is to be found in the fact that, where damages for loss of reputation are concerned, or where a simple outrage to the individual or to property is concerned, aggravated damages in the sense I have explained can, and should in every case lying outside the categories, take care of the exemplary element, and the jury should neither be encouraged nor allowed to look beyond as generous a solatium as is required for the injuria simply in order to give effect to feelings of indignation. It is not that the exemplary element is excluded in such cases. It is precisely because in the nature of things it is, and should be, included in every such case that the jury should neither be encouraged nor allowed to look for it outside the solatium and then to add to the sum awarded another sum by way of penalty additional to the solatium. To do so would be to inflict a double penalty for the same offence. (My emphasis.) Speaking of a case where the defendant has been guilty of contumelious disregard for the plaintiff's rights, Lord Hailsham said [67] that "so far as regards the law of England, I would say that an adequate award of compensatory damages in such a case must of necessity include, and perhaps more than include, any punitive or exemplary element". Later the Lord Chancellor said [68] that, when a case was outside the three categories for awarding exemplary damages, laid down in Rookes v Barnard [69] , "the jury must be told to confine the punitive or deterrent element in their thinking within the limits of a fair solatium". 1. [1972] A.C., at p. 1076. 2. [1972] A.C., at p. 1080. 3. ibid., at pp. 1082-1083. 4. [1964] A.C. 1129.

Frequently in cases before Rookes v Barnard , when damages were increased in that way but were still within the limit of what could properly be regarded as compensation to the plaintiff, it was said that punitive, vindictive or exemplary damages were being awarded. As a mere matter of language that was true enough. The defendant was being punished or an example was being made of him by making him pay more than he would have had to pay if his conduct had not been outrageous. But the damages though called punitive were still truly compensatory: the plaintiff was not being given more than his due. 1. [1972] A.C., at pp. 1085-1086.

In Uren v John Fairfax Ltd. & Sons [71] , Windeyer J. pointed out that "in truth a punitive or vindictive element does lurk in many cases in which the damages were aggravated by the defendant's conduct". In the same case, Taylor J. said [72] "that the same set of circumstances might well justify either an award of exemplary or aggravated damages". This was in accord with the statement of Lord Devlin in Rookes v Barnard [73] that aggravated damages can do most if not all the work which can be done by exemplary damages.

1. (1966) 117 C.L.R., at pp. 151-152. 2. ibid., at p. 130. 3. [1964] A.C., at p. 1230.

Prior to the decision in Rookes v Barnard , no clear line had been drawn between aggravated compensatory damages which could include an amount of damages by way of punishment and exemplary, punitive or vindictive damages which were damages awarded for the sole purpose of punishing the defendant or deterring him or her and others. Thus, in Smith's Newspapers Ltd. v Becker [74] , without mentioning aggravated, punitive, vindictive or exemplary damages, Dixon J. said [75] that the "question what amount awarded to the victim of a public outrage is enough to serve at once as a solatium, vindication and compensation to him and a requital to the wrongdoer can only be solved by an exercise of a discretionary judgment". What Rookes v Barnard and the subsequent cases of Uren v John Fairfax & Sons Pty. Ltd. and Broome v Cassell & Co. have made clear is that punishment of the defendant can be a factor in an award of aggravated compensatory damages if it is necessary to provide a fair solatium to the plaintiff but that no sum additional to the compensatory damages can be added as a penalty to punish or deter the defendant unless the case is one calling for an award of exemplary damages.

Hence, it should now be regarded as established at common law that, in awarding aggravated damages, the jury can "inflict an added burden on the defendant proportionate to his conduct" [76] by way of punishment when such an award is necessary to provide a proper consolation for the plaintiff. Moreover, in awarding aggravated damages, the anger or indignation which the jury feels at the way the defendant has treated the plaintiff is a proper reason for making a large rather than a small award to compensate the plaintiff. Lord Hailsham said that the reason a jury could increase compensatory damages because of its indignation at the defendant's conduct was that [77] "the injury to the plaintiff is actually greater and, as the result of the conduct exciting the indignation, demands a more generous solatium".

1. Broome v Cassell & Co. [1972] AC., at p. 1071, per Lord Hailsham L.C. 2. ibid., at p. 1073.

In New South Wales, exemplary damages cannot be awarded in an action for defamation [78] . But this does not mean that punishment or deterrence is no longer a legitimate element in an award of aggravated damages in that State. In Uren , Taylor and Windeyer JJ. recognized that the element of punishment was inherent in an element of aggravated damages even when the publication was not made in contumelious disregard of the plaintiff's rights and, consequently, did not justify an award of exemplary damages. Similarly, in Broome , Lord Hailsham and Lord Reid recognized that the element of punishment or deterrence was inherent in an award of aggravated damages even if the case could not be brought within the three categories for the award of exemplary damages which the House of Lords formulated in Rookes v Barnard . That being so, the abolition of exemplary damages does not automatically preclude a New South Wales jury from increasing the damages to punish or make an example of the defendant; nor does it automatically preclude a jury from increasing the damages because of its anger or indignation at the defendant's conduct towards the plaintiff or from taking into account what the defendant should pay as well as what the plaintiff should receive. It does, however, preclude the jury from further punishing the defendant by awarding greater damages than can be justified as a fair solatium to the plaintiff for the wrong done to him or her.

Nothing in s. 46 affects the common law rule that in assessing aggravated damages the award may include an amount for punishment or deterrence in a proper case. Section 46 provides:

(1) In this section "relevant harm" means, in relation to damages for defamation:

(b) where the person defamed dies before damages are assessed, harm suffered by the person defamed by way of injury to property or financial loss.

(2) Damages for defamation shall be the damages recoverable in accordance with the common law, but limited to damages for relevant harm.

(b) shall not be affected by the malice or other state of mind of the publisher at the time of the publication complained of or at any other time, except so far as that malice or other state of mind affects the relevant harm.

The use of the term "harm" in s. 46 is curious. It is not a term of art in the law of defamation or the law of torts. But in the context of a section which provides that damages are recoverable in accordance with the common law, it must include such matters as effect on reputation, hurt to feelings, distress, worry, humiliation, fear, anger and resentment as the result of defamation. The purpose of the section is to prevent the plaintiff from receiving damages which do not have a restorative effect. Thus, damages to vindicate the plaintiff's reputation are damages for relevant harm, and so are damages for the failure to apologise. And, in some cases, aggravated compensatory damages which include an amount for punishment or deterrence are "damages recoverable in accordance with the common law for relevant harm" (s. 46(2)).

If the aggravating conduct of the defendant has caused the plaintiff to fear or worry that the defamation may be repeated, an award which is calculated to deter the defendant from repeating the defamation and thus alleviating the plaintiff's fears or worries is properly within the concept of damages recoverable at common law for relevant harm. No doubt in such a case the defendant is being punished for his or her conduct because the damages are being increased to deter that person from again defaming the plaintiff. But the damages are compensatory. They seek to ensure that the monetary payment will restore the plaintiff to the position which he or she was in before the defamation. Similarly, if the jury thinks that the plaintiff's pain, hurt or humiliation can only be alleviated by an award which hurts or punishes the defendant, it is making an award of aggravated compensatory damages. No doubt such cases are exceptional. But they are within the common law concept of compensation for the harm done by a defamatory publication. Nothing in s. 46 abolishes them.

Section 46(3)(b) provides that the malice or other state of mind of the defendant can only aggravate the harm done to the plaintiff when it "affects" that harm. In practice that prohibition appears to have made little difference to the assessment of aggravated compensatory damages. The chief field of operation for s. 46(3)(b) has been the prevention of an additional award of damages because of the way that the defendant has conducted the trial when that conduct has not affected the plaintiff. In theory, proven malice or other improper state of mind of the defendant may exist without affecting the harm done to a plaintiff, but in practice such cases are likely to be rare. More often than not, once malice is established, the inference is irresistible that the conduct which caused the harm was actuated by the proven malice or other state of mind of the defendant. If it was, the malice or other state of mind of the defendant has affected the harm which the plaintiff suffered and may be taken into account by the jury.

It follows from the foregoing account of the law of aggravated compensatory damages that the learned President of the Court of Appeal was in error in holding that an award of aggravated damages in New South Wales could not include an amount which represented punishment of the defendant. However, in this case the point is academic. The jury were told that they were not to award damages by way of punishment and, as I have already said, the verdicts can be sustained as reasonable without any need to assume that they contain damages by way of punishment.

Counsel for the plaintiff contended that the learned President had erroneously taken awards in personal injury cases into account as a criterion for determining whether the awards in this case were excessive. Although his Honour said that it was "safer not to venture any precise comparisons with personal injury cases" [79] , it seems that nevertheless his Honour thought that a comparison could be made. Thus, after referring to a personal injury award to a Mrs. Cappelletto, his Honour said that "in so far as one may compare that verdict to this, it seems difficult to say that the damages to Mr. Carson was greater than to Mrs. Cappelletto, in aggregate, and by a magnitude of 2.4" [80] .

1. (1991) 24 N.S.W.L.R., at p. 273. 2. ibid., at p. 274.

Hitherto, the law of this country and of England has refused to permit awards in personal injury cases to be used as a benchmark to determine the reasonableness of awards by juries in defamation cases. On two occasions in the last three years, the English Court of Appeal has rejected the use of personal injury awards as a benchmark [81] . In Coyne v Citizen Finance Ltd. [82] , a majority of this Court denied that the adequacy of awards in defamation cases could be tested by reference to awards in personal injury cases. Moreover, in Planet Fisheries Pty. Ltd. v La Rosa [83] , this Court held that the adequacy of awards in personal injury cases is not to be determined by reference to any norm supposed to be derived from awards in other personal injury cases. If awards in personal injury cases cannot be tested by reference to other awards in that class of case, it must follow that awards in defamation actions cannot be tested by reference to awards in personal injury cases.

1. Sutcliffe v Pressdram Ltd. [1991] 1 QB. 153; Rantzen v Mirror Group Newspapers (1993), 143 N.L.J. 507. 2. (1991) 172 C.L.R. 211. 3. (1968) 119 C.L.R. 118.

I have had the advantage of reading the reasons which the majority give for using personal injury awards as a benchmark for determining the reasonableness of defamation awards. But I am unable to regard the considerations to which they refer as justifying any change in the law as it has long been understood in this country and in England. Awards in personal injury cases and defamation actions serve different purposes, have different elements and different histories. They are not comparable. I think that it is a mistake to believe that the pain and suffering component of a personal injury award can be isolated from the other components of that award and then compared to an award of compensatory damages in a defamation action. As the discussion on aggravated damages has shown, the purposes of an award of aggravated compensatory damages in a defamation action are different from the purpose of an award of general damages in a personal injury action.

In a personal injury action general damages, inter alia, seek to compensate the plaintiff for the pain and suffering which that person has suffered or will suffer in the future. No element of punishment or deterrence enters into an award in a personal injury action. Nor is the tribunal of fact in such an action entitled to increase or reduce its award by reasons of the conduct or state of mind of the parties or allow its indignation at the defendant's conduct to be reflected in the verdict. Furthermore, as Lord Hailsham pointed out in Broome [84] the fact that an award of damages in a defamation action must also serve the purpose of vindicating the plaintiff in the eyes of the community, now and for the future, makes comparisons between personal injury and defamation awards inappropriate. If any comparison could be made, it would surely be between the verdict which the plaintiff in a personal injury action gets for all the consequences of the defendant's wrong and the verdict which the plaintiff in a defamation action gets for all the consequences of the defendant's wrong. Accordingly, I am unable to accept the view that awards for pain and suffering in personal injury actions provide any guidance as to what is a reasonable award of damages in a defamation action.

Moreover, even if, contrary to my view, appellate courts ought to make comparisons between personal injury and defamation verdicts, I venture to suggest that the efficiency of defamation trials will not be advanced by judges or counsel in those trials referring the jury to sums awarded as damages for pain and suffering in personal injury cases. An award of damages for pain and suffering in a given case can only have meaning for the jury if the jury are able to understood the full facts and circumstances of the particular award. What was the nature of the injury or injuries? How long did their effects persist? Are only awards for the most serious forms of permanent injury such as blindness or quadriplegia to be considered? Whatever be the answer to these questions, the jury will need to know many details about the extent and effect of the injuries and the age and background of the injured person before the award can have any real meaning to the jury.

Once it is accepted that reference to personal injury awards also means reference to detail, any possible advantage to be served by referring to them is outweighed by the cost and inconvenience of that course. Ought the judge refer to more than one award? Should counsel be invited to make submissions as to which awards are relevant? Is a verdict in a defamation case to be set aside because the trial judge referred to the wrong amounts or to the wrong awards? The answer to these questions seems to me to be - yes. If that is so, counsel for the parties will need to be heard. The length of time in trying what is already a notoriously lengthy class of action will be further lengthened while rival counsel engage in a profitless debate before judge and jury as to why awards in another class of action are or are not of assistance in determining what is a reasonable award for the defamation of this particular plaintiff.

Although Priestley J.A. was in general agreement with the reasons of the learned President, it is clear that his Honour did consider whether each verdict could be upheld. Priestley J.A. expressed the view that the verdict in respect of the first article could be upheld if it "were being considered in isolation" [1] . However, his Honour thought that that verdict should be set aside because he concluded that the second verdict contained a "punitive element" and that the "possibility must be very real that the jury, when fixing the figure for the earlier article, were influenced by the same factor that made them go wrong in their award in the later one" [1] . I have already given reasons for holding that the inclusion of a punitive element is not itself a ground for setting aside either verdict. Furthermore, as I have already said, both verdicts can be sustained as reasonable without any need to assume that they contain damages by way of punishment. It follows that his Honour erred in setting aside the first verdict. Moreover, with great respect to his Honour, even if it were demonstrated that in assessing the second award the jury had wrongly taken into account some factor that they ought not to have considered, that is no reason for setting aside a verdict which cannot otherwise be classed as unreasonable.

1. (1991) 24 N.S.W.L.R., at p. 303. 2. (1991) 24 N.S.W.L.R., at p. 303.

Counsel for the defendants sought to uphold the approach of Priestley J.A. by reference to a number of cases, particularly the judgment of this Court in King v Ivanhoe Gold Corporation Ltd. [2] where the Court upheld the decision of the Full Court of the Supreme Court of Western Australia that there should be a general new trial of an action because the jury had erroneously assessed the damages. Griffith C.J. said that "when a jury has gone quite wrong on one part of the case, although technically severable from another, it is sometimes difficult to say that the mistake made on one point does not affect their views on another point" [3] . However, that statement was made in a case where the issue was whether there should be a general new trial of the action or a new trial limited to damages. In such a case, the prima facie rule is that, if a mistake has been made on one part of the case, there should be a general new trial unless there is some special reason for confining the new trial to the issue of damages [4] . Neither the statement of Griffith C.J. nor any of the other statements relied upon have any relevance to the issue whether the verdict in one action should be set aside because the jury, which heard that action, erred in another action which it heard with the first action.

1. (1908) 7 C.L.R. 617. 2. (1908) 7 C.L.R., at p. 622. 3. Pateman v Higgin (1957), 97 C.L.R. 521, at p. 527.

Before an appellant can have a verdict set aside, that person must show that the verdict was the result of error. If the appellant does so, the Court then has a general discretion to order a new trial generally or to limit it to damages. But a defendant does not show that the verdict in one action is erroneous because it can show that the verdict in another action was erroneous. Moreover, in the present case, the parties to each action were different.

Since the reasons which led the majority of the Court of Appeal to set aside the verdict were erroneous in my opinion, it follows that the appeal must be allowed unless the amount of each verdict was so high as to indicate that the jury failed to perform its duty or that the defendants' notices of contention succeed. However, for the reasons given by Brennan J. and Toohey J., I am of the opinion that the defendants' notices of contention and applications for special leave to appeal against the limiting of the retrial ordered by the Court of Appeal should be dismissed. Furthermore, I am of the opinion that the size of neither verdict was so high that it demonstrates that the jury failed to perform its duty.

An appellate court should be extremely reluctant to interfere with the award of damages by a jury in a defamation action. It is unnecessary to repeat once again the many statements by judges of eminence to that effect. Some of them were referred to by Toohey J. in Coyne v Citizen Finance Ltd. [5] in a judgment with which Dawson J. and I agreed. The elements of an award of damages in a defamation action are so intangible and the criterion of value so vague that no two persons are likely to agree, even approximately, on what is a proper award for a defamation. This is so even in a case where exemplary damages cannot be awarded. In Watson, Laidlaw & Co Ltd. v Pott, Cassels and Williamson [6] , Lord Shaw pointed out:

[R]estoration being in point of fact difficult, as in the case of loss of reputation the task of restoration under the name of compensation calls into play inference, conjecture, and the like. This is necessarily accompanied by those deficiencies which attach to the conversion into money of certain elements which are very real, which go to make up the happiness and usefulness of life, but which were never so converted or measured. The restoration by way of compensation is therefore accomplished to a large extent by the exercise of a sound imagination and the practice of the broad axe. 1. (1991) 172 C.L.R., at pp. 238-239. 2. (1914) 31 R.P.C. 104, at p. 118.

No doubt the rough-and-ready process by which juries assess damages in a defamation action is not one which appeals to the many sophisticated minds of the spreadsheet generation. It does not, as the speech of Lord Shaw makes plain, purport to be a scientific, or even a pseudo-scientific, process. There are no columns and rows into which the components of the verdict can be conveniently placed, no relationships which can be made the subject of mathematical formulas. The assessment depends upon nothing more than the good sense and sound instincts of jurors as to what is a fair and reasonable award, having regard to all the circumstances of the case. That is why the damages are said to be "at large".

In these circumstances, the case needs to be an extraordinarily strong one to persuade an appellate court that the verdict of the jury is so high or so low that it is unreasonable. An appellate court should not set aside a defamation verdict on the ground of unreasonableness unless it is satisfied that, if the relevant facts were known, public opinion would be almost unanimous in its condemnation of the verdict. Only by the application of such a canon of restraint can the jury's right to assess the damages be protected from judicial interference.

In Coyne [7] Mason C.J. and Deane J. were critical of statements concerning the need for appellate courts to be reluctant to interfere with the defamation verdict of a jury. They said that [8] : "in this country where judges commonly assess defamation damages there is no compelling reason why the assessment of damages for defamation should be seen as falling with the exclusive or special competence of a jury." However, for over a hundred years, the appellate courts of this country have acted, not occasionally, but regularly and uniformly, on the basis that an appellate court should be slow to interfere with the verdict of a jury in a defamation action. We should not readily assume that "knowledge and wisdom reside in us which was denied to our predecessors" [9] . Trial by jury in defamation cases has not been automatic in this country for many years. Nevertheless, Dixon, Williams, Webb and Kitto JJ. applied the traditional approach in Triggell v Pheeney [10] when they restored the plaintiff's verdict in that action. A majority of this Court also applied the traditional approach in Coyne , notwithstanding the dissent of Mason C.J. and Deane J. who espoused the very argument which is now relied upon to challenge the continued use of the traditional approach. Furthermore, there are numerous decisions in the Full Courts of the Supreme Courts of the States and the Court of Appeal of New South Wales which have applied the traditional approach [11] .

1. (1991) 172 C.L.R., at pp. 214-216. 2. ibid., at p. 215. 3. Smith v Allwright (1944), 321 U.S. 649, at p. 666. 4. (1951) 82 C.L.R., at pp. 516-517. 5. Justin v Associated Newspapers Ltd. (1966), 86 W.N. (Pt 1) NSW 17; Mutch v Sleeman (1928), 29 S.R. NSW 125; Kornhauser v John Fairfax & Sons Pty. Ltd. , [1964-5] N.S.W.R. 199; Andrews v John Fairfax & Sons Ltd. [1980] 2 NS.W.L.R. 225; John Fairfax & Sons v Kelly (1987), 8 N.S.W.L.R. 131; Brown v Syme (1890), 16 V.L.R. 392; McKenzie v Hocking [No. 2] (1912), 14 W.A.L.R. 98.

Moreover, it is not easy to see why this Court should reject the traditional approach to jury verdicts in defamation actions simply because judges in most States can try those actions unless an order or election to the contrary is made. Notwithstanding the legislative framework, all but a small percentage of verdicts in defamation actions in this country are given by juries, most of them in New South Wales where jury trial is a matter of right. Furthermore, an appeal against a judge's verdict is a rehearing in which the appellate court has the advantage of a judgment which sets out, or ought to set out, all relevant findings. That is not the case with a jury verdict. Given the very great difference between the two classes of appeal, I am not persuaded that any basis exists for departing from the approach to jury verdicts which has prevailed for so long in this country and in England.

The award of damages in respect of each article is extremely high. But I am unable to accept that each award was so high that its size demonstrates that the jury failed to perform its functions. On the uncontradicted evidence, the plaintiff was a person of the highest reputation and character who was a partner in a large firm of solicitors with important commercial clients for whom he had acted. He was prominent in the legal profession and had served as a councillor of the Law Society of New South Wales and as a member of a sub-committee of the Council responsible for making rulings upon the ethical conduct of solicitors. Against this man, whom the jury were entitled to find was of impeccable reputation and professional standing, were published grave and defamatory imputations on two separate occasions in a newspaper with a circulation of over 200,000 copies and an estimated readership of 800,000 persons. They were published on the editorial page of a newspaper "of record" and written by a distinguished journalist on whose statements readers could be expected to rely. Moreover, the jury were entitled to conclude that the conduct of the defendants had aggravated the damage done by the publications. Although it would be absurd to think that the articles were read by every reader or even a majority of readers, the point is worth making that the damages awarded to the plaintiff in respect of the first article represented twenty-five cents for every reader of the paper containing that article and in respect of the second article fifty cents for every reader of the paper containing that article.

Throughout the history [12] of the common law of defamation, juries have consistently awarded large sums for libels and slanders, and courts of appeal have consistently upheld the awards. In Triggell v Pheeney , for example, this Court in 1951 upheld a jury's award of £1,955 [13] for the false and malicious publication to a single person of an imputation that the plaintiff had stolen a sow and litter belonging to the defendant. Absent proof of legal error or miscarriage of justice, the cases where a jury's verdict has been set aside on the ground of unreasonableness have been comparatively rare. High though the awards in the present case undoubtedly are, I do not think that they demonstrate that the jury failed to carry out its duty.

1. Three hundred years ago in Lord Townsend v Dr. Hughes (1676), 2 Mod. 150 [86 E.R. 994], the jury awarded the enormous sum of £4,000 for the statement that the plaintiff was "an unworthy man, and acts against law and reason". No special damage was proved. Yet North C.J., Wyndham and Scroggs JJ. refused to hold that the verdict was excessive. 2. Equivalent to more than $45, 000 in today's currency.

The first article contained the defamatory imputations that the plaintiff had wrongly attempted to intimidate a doctor by threatening to sue him for defamation and that he had wrongly brought defamation proceedings against a solicitor for the sole purpose of causing the solicitor to cease to act for a client. These were grave imputations to make against a solicitor. If true, they called for disciplinary action against the plaintiff and, many may have thought, for striking him off the Roll of Solicitors. But the imputations were not true. Moreover, it was conceded in the Court of Appeal [14] that the jury could find that the author of the article knew that it was false that the plaintiff had attempted to intimidate the doctor or force the solicitor from acting for his client.

There were other aggravating features. The first article was published without any inquiry of the plaintiff. After publication, the defendant company did not take up the plaintiff's offer to discuss the facts of the Tectran litigation with one of its senior journalists. The jury were entitled to regard the belated apology of the defendant as inadequate and indeed insulting. They were also entitled, as Kirby P. said [15] , "to take a very serious view of the way the trial was conducted, particularly of the suggestion that the real motive for the action was the improper one "to shut Slee up" ".

Much was made in the Court of Appeal of the fact that the plaintiff "would have been willing to refrain from any proceedings at all in respect of the first article if only two additional matters had been added to the apology which was published" [1] . But the jury were entitled to treat this point as of little moment. To sue a great metropolitan newspaper is not a thing to be done lightly. The emotional and financial costs of embarking on a defamation action against such a defendant are very high. The result can never be certain. Failure can mean financial ruin.

Much also was made of the fact that the plaintiff claimed no monetary loss in respect of either publication. But this does not mean that financial damage was a matter which the jury could not consider. For a partner in a large and important commercial firm of solicitors to prove actual loss in the period between publication and trial is no easy matter. Any loss by the solicitor is likely to be masked by the pool of earnings to which all the partners contribute. The difficulty of proof is exacerbated when incomes are rising, as they probably were in the legal profession at the relevant time [2] . Indeed, the case where actual loss can be proved in the case of a partner in a large firm is likely to be exceptional, confined to the case where established clients refuse to have further dealings with the solicitor. Actual, but unprovable loss, is more likely to arise from the potential clients who turn to other firms. However, even when no actual loss is proved, it is still open to the jury to take into account the prospect of financial damage. This is because the jury is entitled to hold that the defamatory imputations will have damaged the financial goodwill attached to the name and reputation of the solicitor.

1. The golden age of commercial litigation and advising in Australia was not yet ended.

When regard is had to all the circumstances of the first publication, including the harm and hurt to the plaintiff and the conduct of the defendant, I am unable to conclude that the award was so high that it goes beyond the purpose of a defamation action - vindication of the plaintiff and the provision of a proper solatium for the wrong done to him.

One year after the first publication, without any inquiry of or warning to the plaintiff, the defendants published an even graver defamation which, so the jury found, imputed to the plaintiff the commission of an indictable, criminal offence. The imputation which the jury found was that the plaintiff "was wrongfully party to a conspiracy with Mr. Moshe Yerushalmy to obstruct the course of justice by evading service of criminal process". The jury were entitled to conclude that the imputation was untrue. The imputation was made in a context of a statement that the Director of Public Prosecutions had "begun to move against two people and is actively considering prosecuting two more". No apology was ever offered for this grave defamation. The defendants called no evidence. The jury were entitled to conclude, therefore, that nothing the defendants could say would assist their case or cut down any adverse inferences which could be drawn from the evidence on which the plaintiff relied [3] . Furthermore, the trial was so conducted that Kirby P. declared that "the jury was entitled to take a very serious view of the way the trial was conducted, particularly of the suggestion that the real motive for the action was the improper one "to shut Slee up" ".

1. Jones v Dunkel (1959), 101 C.L.R. 298, at pp. 320-322.

Against this background, it was open to the jury to conclude that an award of compensatory damages for the second article would not satisfy the damage, hurt, humiliation and worry suffered by the plaintiff unless they awarded a very large sum. As Mahoney J.A. pointed out [4] :

The second charge, related to the crime of perversion of justice, could be thought to be much more serious than the first: for myself, I would regard it so. But in addition the circumstances of the publication of the second article greatly increased the hurt and the harm, and the need for vindication. Following the first article, Mr. Carson had, legitimately it might be thought by the jury, complained about Mr. Slee's failure to inquire as to the facts and about the errors he had made in what he wrote. Mr. Carson offered to disclose and discuss the facts. And he asked for corrections. The jury could categorise as insulting or contemptuous the way in which these were dealt with by the defendants. And then the second article was published, without inquiry, inaccurately, and without warning. The need for vindication alone would, I think, have warranted a greatly increased award for the second article. The jury might conclude that if, following what Mr. Carson had done in respect of the first article, the defendants saw fit to publish the second article, and in the manner they did, a very large sum was required to vindicate him to those whose opinion he valued. 1. (1991) 24 N.S.W.L.R., at p. 300.

Extremely high though the award undoubtedly is, its size does not demonstrate to me that the jury failed to perform or misunderstood its function. Even without the inclusion of any sum reflecting elements of punishment or deterrence, the verdict can be supported as reasonable in the sense that that term is used in the cases.

Because the awards are so much higher than any judge is likely to have awarded, there is a great temptation to think that the amounts are too high to be reasonable. But an appellate court must bear in mind that the Parliament of New South Wales has left it to juries to assess the damages for defamation in an action tried in that State. Parliament has done so knowing that jurors are required to assess those damages with no more guidance than their own good sense and sound instincts as to what is a fair and reasonable award having regard to all the circumstances of the case including the conduct of the defendants. The position and standing of the plaintiff; the gravity of the defamatory imputations; the widespread circulation of the newspaper and the conduct of the defendants, as it appears from the record of the trial, clearly required very large verdicts once the defendants lost the issue of liability. Add to those matters the failure of the defendants to call any evidence to justify or explain their conduct or the circumstances of the publications, and the verdicts, if not inevitable, were "on the cards". If these cases were tried again on the same facts, accompanied by the same tactics, it is quite possible that the jury would return similar verdicts. That being so, I do not think that the awards can be condemned as unreasonable.

I would allow the appeals and restore the jury's verdicts.