FEDERAL COURT OF AUSTRALIA

Gregg v Fairfax Media Publications Pty Limited [2016] FCA 1470

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ interlocutory application dated 5 October 2016 be dismissed.

2.    The respondents pay the applicant’s costs of the interlocutory hearing.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

RARES J:

1    On 5 October 2016, the respondents, Fairfax Media Publications Pty Limited, The Age Company Pty Limited and The Federal Capital Press of Australia Pty Limited, filed an interlocutory application for an order under s 40 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) directing a trial by jury of these defamation proceedings in accordance with the roles of judicial officers and juries set out in s 22 of the Defamation Act 2005 (NSW).

Background

2    Peter Gregg, the applicant, commenced these proceedings on 18 April 2016 by filing his originating application and statement of claim in which he alleged that the various respondents had published defamatory matter of and concerning him on 11 separate occasions, not necessarily involving each of the respondents. It is convenient to refer to the respondents cognately, as Mr Gregg alleged that the 11 publications conveyed similar defamatory imputations and the joint defence raised common defences to all of the 11 alleged torts.

3    On 12 May 2016, the proceedings were listed for a first case management hearing. On that occasion, I stood the proceedings over for further directions on 22 July 2016 and made orders that the respondents file and serve their defences by 17 June 2016, that Mr Gregg file and serve any reply by 1 July 2016, and relevantly that:

3.    The respondents file and serve any interlocutory application and evidence in support of any application for a trial by jury by 15 July 2016.

4    On 20 June 2016, the respondents filed their defence, pleading justification of each of the imputations alleged by Mr Gregg. However, the respondents did not file any such interlocutory application. On 22 July 2016, I made directions for the filing of an amended defence and an amended reply and listed the proceedings for argument about the pleadings on 2 September 2016.

5    On 2 September 2016, I heard argument concerning a number of allegations that the respondents had pleaded in their defence in support of their pleas of justification of the serious imputations that Mr Gregg had alleged the matters complained of conveyed of and concerning him. He alleged that the matters complained of carried imputations, among others, that in effect, he had engaged in corrupt conduct whilst the chief financial officer of a public listed company, Leighton Holdings Limited, by authorising payment of a $15 million bribe to a company run by an allegedly corrupt Indian businessman, Mahesh Khemka, and that Mr Gregg took part in a global bribery racket by authorising that payment. In essence, the respondents’ defence had alleged that, on or about 1 August 2011, Mr Gregg had contravened s 184(1) of the Corporations Act 2001 (Cth) by failing with intentional dishonesty to exercise his powers and discharge his duties as a director and officer of Leighton for a proper purpose by authorising a payment of $15 million.

6    As a result of the argument, the respondents undertook to re-plead their defence in a way that formally pleaded the substance of their allegations of Mr Gregg’s criminal wrongdoing having regard to the relevant physical and fault elements in accordance with the provisions of the Criminal Code in the Schedule to the Criminal Code Act 1995 (Cth). In their original defence the respondents had pleaded in a generalised way, without regard to the physical and fault elements constituting the alleged criminal offences.

7    I also required Mr Gregg to reply responsively to each of the detailed pleaded material facts on which the respondents would rely in their to be re-pleaded defence so as to be able to identify the real issues that will have to be resolved at trial. I did that rather than permitting Mr Gregg to file a reply that merely joined issue on matters which he did not admit in accordance with the usual form of pleading in defamation actions in New South Wales.

8    In my view, it was essential that the issues in the proceedings be pleaded in accordance with r 16.02 of the Federal Court Rules 2011. I intended that each of the re-pleaded defence and the reply would identify the issues that the party pleading wanted the Court to resolve and would state the material facts on which the party relied that were necessary to give the opposing party fair notice of the case to be made against that party at trial, in a manner that was not evasive or ambiguous, or likely to cause prejudice, embarrassment or delay in the proceedings.

9    The proceedings came before me again on 27 September 2016 for further directions. I then made orders, substantively by consent and I fixed the proceedings for hearing with an estimate of four weeks, commencing on 4 September 2017. During the course of argument on 27 September 2016, counsel for the respondents said that one reason for giving an estimate that the case would run longer than about two weeks was that the respondents were considering an application for a trial by jury and that her clients:

… had previously instructed us that they did not want to make that application. Through the process we've been going through of starting to prepare the evidence, it appears to us that it might be a case more amenable to a trial by jury … my client has not given us those instructions yet, but that’s something that we’re following up, and if those instructions are we will make that application. (emphasis added)

10    In light of that indication, I ordered on 27 September 2016 that by 12 October 2016 the respondents file and serve any interlocutory application for a trial by jury and evidence in support and made directions for the preparation of any such application for hearing today.

11    On 28 September 2016, the respondents filed a further amended defence.

12    As I have noted, the respondents filed the present interlocutory application on 5 October 2016, but they filed no evidence and, in particular, gave no verified explanation of why they had changed their instructions to their lawyers or why they had not availed themselves of the earlier opportunity to apply for a trial by jury pursuant to order 3 made on 12 May 2016.

The nature of the current pleadings

13    For the purposes of these reasons, it suffices to say that it is obvious from the imputations that Mr Gregg alleged were conveyed by the 11 matters complained of and the nature of the defence of justification that there is likely to be a very large amount of evidence, principally documentary, on which the respondents will rely at trial in order to seek to prove the justification defence. Moreover, they have also relied on other defences, including the defence of statutory qualified privilege under s 30 of the Defamation Act. In order to make good that defence, s 30(1) of that Act provides that a defendant must prove that the recipient, being, here, the readers of the 11 matters complained of, have an interest, or apparent interest, in having information on some subject, each matter complained of was published to the recipient in the course of giving to the recipient information on that subject, and, relevantly:

(c)    the conduct of the defendant in publishing that matter is reasonable in the circumstances.

14    There is, apparently, a live issue as to whether ss 22(2) and (5)(b) of the Defamation Act alters the common law that the question whether defamatory matter is published on an occasion of qualified privilege is a question of law for the judge and not one for the jury. It suffices to note that, in Daniels v State of New South Wales (No 6) [2015] NSWSC 1074 at [34], McCallum J held that the issue whether the conduct of a defendant in publishing the matter complained of was reasonable in the circumstances, so as to establish a defence of qualified privilege under s 30(1)(c) was a matter that, pursuant to s 22(2), the jury, and not the judge, had to determine.

The parties’ submissions

15    The parties engaged in a detailed and considerable debate as to the authorities on whether a trial by jury should or should not be ordered under s 40 and its analogue, the subject of decisions of the High Court such as McDermott v Collien (1953) 87 CLR 154.

16    Mr Gregg opposed the application for a trial by jury, relying on Roozendaal v Fairfax Digital Australia and New Zealand Pty Limited (2015) 232 FCR 487. He pointed to the insufficiency of the reasons that the respondents had given for making their application at this stage. He argued that they had made an election not to seek a trial by jury when they decided not to file an interlocutory application pursuant to order 3 made on 12 May 2016. He noted that s 21 of the Defamation Act provided a procedure for the making of an election by any party to defamation proceedings to have a jury in New South Wales proceedings. Nonetheless, Mr Gregg accepted that the present application was made under s 40 of the Federal Court Act and that the statutory provisions in relation to the ability of a party to elect under s 21 of the Defamation Act did not apply in proceedings in this Court by reason that ss 39 and 40 of the Federal Court Act governed the circumstances in which such an order could be made.

17    Mr Gregg argued that the ordinary mode of trial in this Court by judge alone should not be displaced. He pointed to the complexity of the issues and the substantive prejudice that he could suffer at a jury trial were he to split his case in chief, or elect not to give evidence in chief as to his hurt to feelings and the impact of the defamatory publications on him, so as not to be subject to the likelihood that he would be cross-examined twice on issues relating to the justification defence, once before the respondents went into evidence and, secondly, in reply to their case.

18    Moreover, he argued that, if the decision of McCallum J in Daniels [2015] NSWSC 1074 were correct, the respondents could call evidence to the reasonableness of their journalists’ states of mind in publishing the matters complained of, when that evidence would be irrelevant to the issue of justification. He contended that such evidence could cause considerable prejudice to his case, since the journalists would then be giving evidence as to their own conduct and issues going to why they asserted that it was reasonable for them to have published the imputations, when that evidence bore no relationship to the issue of justification.

19    Mr Gregg also submitted that he might have to call evidence as to damages before the jury in a cognate trial on all issues, even though the assessment of damages under s 22(3) of the Defamation Act is a matter that must be determined by a judge and not a jury. He submitted that, potentially, this would create a bifurcation of roles in the tribunals of fact that, in the circumstances of this case, would not be expedient. Mr Gregg argued that merely because his imputations and the justification defence raised serious allegations that he had engaged in criminal conduct, that circumstance did not require that a jury, rather than a judge, should be the tribunal of fact to determine them. He noted that civil trials of allegations of criminal conduct had to be conducted on the civil, not criminal, onus of proof and that, analogously, such civil trials did not need to be heard by a jury. He called in aid cases such as Helton v Allen (1940) 63 CLR 691 and Rejfek v McElroy (1964) 112 CLR 517 in which civil courts must decide, on the civil onus of proof, questions of whether a party had committed a crime.

20    He argued that the expression, “the ends of justice appear to render it expedient”, in s 40 required that it be made to appear to the Court that it was necessary, or necessary in the interests of justice, to order a jury. In any event, he fell back on the submission that the authorities required that an applicant for the trial by jury demonstrate “substantial” or “special” reason to justify the making of an order under s 40. He also contended that, while, in theory, juries are required to, and judges must assume that juries, obey directions of the trial judge, on matters of law as to how they have to approach their task, there was a real risk in a trial by jury in complex proceedings, such as these, things could miscarry.

21    The respondents argued that they had not made any election and that they had retained a right to make a subsequent application under the Federal Court Rules after the time fixed by order 3 made on 12 May 2016.

22    The respondents noted that, were Mr Gregg to have been charged with a contravention of s 184(1) of the Corporations Act, although the Director of Public Prosecutions had power to elect under s 4J of the Crimes Act 1914 (Cth) to proceed with a summary trial of such a charge, ordinarily the charge would be prosecuted on indictment. Accordingly, the respondents argued it would be expedient to order trial of these proceedings by jury, being the ordinary tribunal by whom guilt or innocence of criminal charges of the nature forming the basis of their defence of justification would be determined.

23    The respondents also argued that the factual decision as to how ordinary reasonable readers of the matters complained of would have understood them in relation to whether those publications convey the alleged defamatory meanings on which Mr Gregg relies would be best determined by a jury.

Consideration

24    I have come to the firm conclusion that this is not an appropriate case in which to exercise my discretion to grant the respondents’ application for a jury trial. That is because I am satisfied that the respondents made a considered decision not to apply for a trial by jury after they had had a fair and sufficient opportunity to consider that question on or before 15 July 2016, pursuant to order 3 made on 12 May 2016.

25    In exercising the Court’s case management powers, Pt VB of the Federal Court Act imposes obligations on the Court, the parties and their lawyers to facilitate the achievement of the overarching purpose of the civil practice and procedure provisions prescribed in s 37M(1), namely, to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

26    While it is true, as the respondents argued, that the Rules do not prescribe any particular time by which an application under s 40 may be made, order 3 made on 12 May 2016 did. In Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at 215 [103], Gummow, Hayne, Crennan, Kiefel and Bell JJ said that:

Generally speaking, where a discretion is sought to be exercised in favour of one party and to the disadvantage of another, an explanation will be called for. (emphasis added)

27    In Tamaya Resources Limited (in Liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199 at 226 [154]-[157], Gilmour, Perram and Beach JJ emphasised the importance of the giving of an explanation by a party who seeks a favourable exercise of a discretion to be afforded a further forensic opportunity to do something in the proceedings that the party had not done or failed to do earlier. They said:

[154]    Just what explanation is called for will necessarily depend upon the particular case. The explanation will be given by, or on behalf of, the moving party. Affidavit evidence may or may not be necessary. In Cement Australia [Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261], for example, as the explanation was that the error was one of judgment by senior counsel for the ACCC, a statement by him from the bar table, to which no objection was taken, was accepted by the Court as sufficient.

[155]    It must be borne in mind that the explanation required is that of the moving party, not merely their solicitor or counsel. The client may very well know of matters relevant to the explanation for delay which are not known by the lawyers.

[156]    Evidence as to the explanation for delay will often be given by an applicant’s solicitor from their own knowledge but that may, in some cases, not be sufficient. This is such a case. The primary judge was correct to conclude that the explanation offered by Tamaya was deficient because Ms Banton could not explain why she did not know of the Chilean audit issues until she was told by Mr Basford. Her Honour’s approach does not involve any error of principle.

[157]    We observe, in this respect, that in Aon the plurality had regard to letters which were in the possession of the ANU one year or so before proceedings commenced and which bore on the issues the subject of the amendment application as relevant to the consideration of the adequacy of the explanation for the delay: Aon at [54] and [106]. (emphasis added)

28    I accept that the lawyers for the respondents gave consideration to the making of an application for trial by a jury at, or shortly before, their counsel made the statement during the course of the directions hearing on 27 September 2016 to which I have referred. However, that does not explain, in any way, what reasoning process the respondents themselves adopted earlier when they decided not to make an application in accordance with the order made on 12 May 2016, or, why they subsequently changed their minds.

29    This is not a case in which the respondents’ lawyers suggested that they or their clients had made some error of judgment at that earlier stage of the proceedings, or that some new circumstance had occurred so as to warrant their change of course. Nor is there any explanation as to why the respondents gave instructions to make the present application. The respondents had filed their original defence on 20 June 2016, that pleaded justification, a month before 22 July 2016, being the time fixed by order 3 made on 12 May 2016 for them to apply for a trial by jury.

30    At this stage neither party has exchanged any outlines of evidence of the witnesses whom each proposes to call, in accordance with orders 11 and 12 that I made on 27 September 2016. Those orders required the respondents, as the parties alleging serious criminal and civil wrongdoing by Mr Gregg, to serve outlines of their witnesses’ evidence first, and then for Mr Gregg to serve his witnesses’ outlines in reply. Nonetheless, if I were to order a trial by jury, it would be necessary to revisit precisely how the evidence would be called at trial and probably to make rulings in advance of the trial as to substantive disputes concerning admissibility, in order that the trial could proceed with the jury in as smooth and convenient way as possible.

31    Were I to order a trial by a jury at this time, I am of opinion that it would be necessary to make substantive further procedural directions as to how the proceedings should be prepared for trial and to have significant preliminary hearings as to the admissibility of evidence proposed to be led in relation to the justification defence. In addition, there would be a need to craft careful directions relating to the way in which evidence was to be called before the jury. A jury trial potentially would take significantly longer than the four weeks estimate given for a trial by a judge alone.

32    The factor that a jury trial may involve greater complexity, may or may not ultimately weigh in determining whether or not a trial by jury ought be ordered under s 40 of the Federal Court Act in particular cases. However, s 80 of the Constitution requires trials on indictment for serious criminal offences against the laws of the Commonwealth to be heard by juries, and trials of that nature are heard every day in the nation’s criminal courts. Indeed, experience has shown that often civil trials by juries are shorter and more efficient for the reason that parties need to tailor their cases appropriately to the real issues in dispute so as not to lose the attention and potential sympathy of the jury in determining the outcome of the proceedings. Frequently, a trial by a judge alone involves the judge being deluged with an overwhelming amount of unnecessary evidence in the thought that, if all is given to the judge, somehow that will make things clearer rather than more obfuscated.

33    Section 11 of the Defamation Act 2005 (NSW) and its analogues in every State and Territory provide that in cases of multiple publications, the law of the Australian jurisdictional area with which the harm occasioned by the publication as a whole has its closest connection, will be the substantive law for determining all of the rights and liabilities of the parties.

34    I reviewed the authorities that I considered to be relevant to the exercise of the discretion under s 40 of the Federal Court Act in Ra v Nationwide News Pty Ltd (2009) 182 FCR 148. Besanko J, in Roozendaal 232 FCR 487 declined to follow my decision and held that the historical mode of trial in defamation actions at common law and in New South Wales, as the venue of the trial, was largely irrelevant to the exercise of the discretion under s 40. He considered that the general policy of trial by judge alone was settled by the words of ss 39 and 40 of the Federal Court Act. He said that the respondents in that case had not established a sufficient reason to depart from the normal mode of trial (232 FCR at 495 to 496 [26]-[27]).

35    It is important that applications under s 40 are not hamstrung by the artificial development of implications, or unstated limitations, that the words of the section do not themselves convey, in the context in which they appear in connection with the general policy evinced by s 39 of the Federal Court Act. In Owners of “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404 at 421 Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ said:

It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words.

36    Those principles were echoed by Gummow, Hayne, Heydon and Kiefel JJ in Campbell v Backoffice Investments Pty Limited (2009) 238 CLR 304 at 361 [178] where they said that a power given to a Court under s 233(1)(d) of the Corporations Act, in relation to an oppression action, “should not be hedged about by implied limitations”.

37    The Parliament has conditioned the exercise of the power, in s 40 of the Federal Court Act, to direct a trial with a jury of a suit or issue of fact in circumstances “in which the ends of justice appear to render it expedient to do so”. The ordinary natural meaning of the word “expedient” includes:

    conducive to advantage in general or to a definite purpose; fit proper or suitable to the circumstances of the case; something that helps forward or that conduces to an object, a means to an end (Oxford English Dictionary online); and

    tending to promote some proposed or desired object, fit or suitable for the purpose, proper in the circumstances, conducive to advantage or interest as opposed to right (Macquarie Dictionary online).

38    Those meanings convey the sense in which “expedient” is used in s 40, namely that, the moving party for a trial by a jury must satisfy the Court that the ends of justice appear to render a trial by a jury convenient or likely to promote the overarching purpose of the civil practice and procedure provisions. To the extent that Besanko J expressed a different view in Roozendaal 232 FCR 487, I respectfully disagree with his Honour.

39    The issue is whether the moving party has satisfied the Court or, perhaps, the Court itself is satisfied, that the ends of justice render it expedient to order a trial by a jury. That discretion must be exercised having regard to, among other things, the general policy in s 39 that the Parliament has selected, namely that, ordinarily, trials in this Court should be by a judge alone without a jury.

40    Nonetheless, where the law of the place at which the Court is sitting is the substantive law to be applied in the way in which, as s 11 of the Defamation Act operates, that law is relevant to, but not determinative of, the selection of the mode of trial for the purposes of s 40 of the Federal Court Act. I have written on this elsewhere: S Rares: Defamation and Media Law update 2006: Uniform National Laws and the Federal Court of Australia (2006) 28 Aust. Bar Review 1: S Rares: The Jury in Defamation Trials (2010): 33 Aust. Bar Review 93.

41    It is likely that the publications in The Age have their closest connection in Victoria, where the Defamation Act 2005 (Vic) is materially identical to the New South Wales Act, including in requiring a trial by jury where a party makes an election for that mode of trial, and that the publications in The Canberra Times have their closest connection with the Australian Capital Territory where the Civil Law (Wrongs) Act 2002 (ACT) does not provide for any civil trials by jury, in particular in Ch 9, in respect of defamation actions. However, the extent of publication in The Canberra Times is likely to be much smaller than those for The Sydney Morning Herald and The Age.

42    Nonetheless, for the reasons I have given earlier, in my opinion in this matter, the respondents have not persuaded me that it is expedient in the interests of justice to order a trial by jury, having once had and, for unexplained reasons, recanted from their opportunity to make this application at an earlier stage of the proceedings. It is not desirable to encourage parties to proceedings who do not advance, at least, some substantive explanation for doing so, to seek to change their course in proceedings, after having made a deliberate choice of how they wish them to proceed. A mere change of heart as to whether such a choice may or may not suit the party forensically in a way in which he, she or it declines to explain, is calculated to result in the Court being unpersuaded to exercise the discretion in the party’s favour.

43    Whether I would have ordered a trial by jury under s 40, had the respondents made a prompt application in accordance with the orders of 12 May 2016, is not necessary for me to decide. Nor is it necessary for me to resolve the many disputed arguments, as to whether these proceedings should have been heard by a jury, which each of the parties addressed on the particular factual circumstances of this matter.

Conclusion

44    For these reasons, I dismiss the respondents’ interlocutory application with costs.

Associate:

Dated:    7 December 2016