22 June 2009The High Court has clarified the law of defamation, writes Tessa Meyrick in High Court Watch, the first in a new series of monthly reports on significant policy-related cases

LIKE THE NOTION of “free speech," which it is often pitched against, defamation is an elusive concept, and one that the High Court has recently made small, but helpful, steps to clarify.

In Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16, the Court departed from its earlier decision in John Fairfax Publications v Gacic [2007] HCA 28 regarding the distinction between personal defamation and business defamation. Gacic had been widely criticised for broadening and, in doing so, complicating the law dealing with claims of damage to a person’s business, trade or professional reputation.

At common law, statements will generally be held to be defamatory if the jury believes that the words expressed tend to lower the plaintiff in the estimation of the public. In practice, this test asks the jury to assess whether the hypothetical referee, whose standards are taken to reflect those of the general community, would conclude that the statements tended to injure the plaintiff’s reputation.

The plaintiffs in both Radio 2UE and Gacic argued that they had been defamed in a professional, rather than (or, as well as) a personal, capacity. The distinction between these two species of defamation was neatly illustrated by Chief Justice Gleeson and Justice Crennan in Gacic. Their Honours provided the example of someone saying: “X is a thoroughly decent person, but he is showing signs of age; his eyesight is poor, and his hands tremble.” When tested against “general community standards,” such a statement is unlikely to reflect badly on X’s character, nor is it likely to invoke hatred, ridicule or contempt. If X were a surgeon, however, the assessment is quite different. To say that X is an incompetent surgeon, even if he is a very nice one, is clearly likely to damage his professional reputation.

Because injuries to a person’s professional reputation may have little, if any, bearing on their moral character, the question arises as to whether it is appropriate that the jury assess a claim of business defamation in accordance with “general community standards” and, if it is not, what standard they ought to apply. In this most recent decision, the High Court reinstated the position (briefly abandoned in the earlier case of Gacic) that the general community standards test should apply regardless of the type of defamation alleged.

The Gacic decision

The plaintiffs in Gacic were owners of Coco Roco, a restaurant in Sydney that was the subject of a particularly negative review published in the Sydney Morning Herald. The Gacics brought proceedings against both the newspaper and the restaurant reviewer, arguing specifically that the imputations conveyed in the review constituted business (and not personal or character) defamation.

At the first trial, the jury returned a verdict that two of the four imputations alleged had not been made out and that the other two, while made out, were not defamatory anyway.  The Gacics appealed this decision to the Court of Appeal and won. And they won again when the same court rejected a subsequent appeal by the newspaper, finding that no reasonable jury, properly directed, could reach any verdict other than that the imputations were both made out and defamatory. In effect, the Court of Appeal substituted its own verdict for that of the original jury.

When the newspaper appealed again, the High Court upheld the Court of Appeal’s ruling, finding it to be an appropriate exercise of its power to correct unreasonable jury verdicts.

In reaching this decision the Court was called upon to consider whether the jury had in fact been misdirected as to the appropriate test to be applied in cases of business defamation. Somewhat controversially, and without a great deal of clarity, the majority of the court tended towards the view that the application of “general community standards” may be inappropriate in cases of business defamation. In some cases, for example, it may be more suitable to apply the standard of persons having particular knowledge of the business in question. There may even be occasions where the mere tendency to injure the plaintiff in his business, trade or profession would be sufficient.

The reaction to Gacic, particularly amongst journalists and publishers, was remarkably hostile. There was concern that, by broadening the test for business defamation (in combination with the power of the judiciary to overturn jury decisions) the High Court had created uncertainty with respect to future business defamation actions and demonstrated a complete disregard for the general community standards embodied by the jury.

While it is easy to overstate the capacity of Gacic to open the gates for vexatious claims of business defamation - just as it is easy to scaremonger publishers into believing that the Court will overturn without hesitation any jury decision it does not like - it is fair to say that the decision left most people confused as to whether business defamation constituted a separate species of defamation and what, if any, standards need to be applied. The decision in Radio 2UE, handed down by the High Court in April, provides well-timed relief in this regard.

Background to Radio 2UE

Radio 2UE Sydney Pty Ltd v Chesterton was borne out of comments made by John Laws on his Radio 2UE morning program concerning the Ray Chesterton, a journalist with The Telegraph at the time. In a not uncharacteristic outburst, Laws made a number of personal and professional stabs at Chesterton, claiming that he was, amongst other things, a “bombastic, beer-bellied buffoon” and that he had been fired from Radio 2UE and had wrongly blamed Laws for his dismissal. Chesterton argued that a number of defamatory imputations had been conveyed during the broadcast. Namely, that Chesterton:

(a)    is a creep in that he is an unpleasant and repellent person;
(b)    is a bombastic, beer-bellied buffoon;
(c)    as a journalist, is not to be taken seriously;
(d)    was fired from radio 2UE;
(e)    falsely accuses Laws of being responsible for his dismissal from Radio 2UE;
(f)    is an ungrateful person in that he accepted the hospitality of Laws and then attacked him.
   
Proceedings were brought against Radio 2UE alleging that these comments were defamatory in that they conveyed imputations that injured his reputation, either with respect to his character generally or, in the cases of imputations (b), (c) and (d), in his capacity as a journalist.

At the trial, the jury found in his favour with respect to all imputations, but Radio 2UE appealed to the Court of Appeal, and then again to the High Court. In argument, Radio 2UE contended that the trial judge, who relied on the test for business defamation laid out in Gacic, misdirected the jury as to how they were to assess whether the imputations were defamatory. This provided the High Court with a much-needed opportunity to revisit and clarify the legal significance of the distinction between personal and business defamation.

The decision

Ultimately, the High Court departed from Gacic on the ground that the earlier judgment “assumed, incorrectly, that the relevant injury was that to the plantiffs’ business, not to their reputation,” an assumption that puts undue emphasis on mere economic loss and essentially renders the application of general community standards redundant. In other words, the general test for defamation of community standards should be applied to all imputations which are said to injured a person’s reputation in some respect, irrespective of whether these imputations speak to a person’s moral character or to their competency in their chosen profession.

The Radio 2UE case is not just significant because it largely rejects the reasoning in Gacic, but because it adds considerably to our understanding of the underpinnings of defamation law more generally. The reasoning of Chief Justice French, and Justices Gummow, Kiefel and Bell in particular makes clear how central the concept of reputation is to both instances of defamation.

Their Honours point out that “the common law recognises that people have an interest in their reputation and that their reputation may be damaged by the publication of defamatory matter about them to others’. As such, a successful claim of defamation “operates as a vindication of the plaintiff to the public, as well as a consolation.”

This relationship between the plaintiff and the public or, specifically, the esteem in which the public holds the plaintiff, necessarily feeds into the test that is to be applied. With the concept of reputation as the central focus, it is clear that the application of “general community standards” does not in all cases imply an exercise of moral judgment or an assessment of a person’s personal character. As the majority in this case argued, the concept of reputation “comprehends all aspects of a person’s standing in the community” including, as with Chesterton, one’s standing in their capacity as a journalist. •

Tessa Meyrick is researcher with the Gilbert + Tobin Centre of Public Law at the University of New South Wales

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