FEDERAL COURT OF AUSTRALIA

Wing v Fairfax Media Publications Pty Limited [2017] FCAFC 191

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ interlocutory application dated 4 November 2016 be dismissed.

2.    The respondents pay the applicant’s costs of and incidental to the application.

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

REASONS FOR JUDGMENT

ALLSOP CJ AND BESANKO J:

Introduction

1    The applicant brings a proceeding in this Court for defamation against Fairfax Media Publications Pty Limited (Fairfax Media) and Mr John Garnaut. He claims damages and an injunction permanently restraining the respondents from publishing any defamatory imputation of and concerning him as identified by him and found by the Court. In addition, the applicant also seeks an order that certain matter be permanently removed from websites operated by Fairfax Media.

2    The pleadings have closed and the respondents have filed an interlocutory application seeking an order pursuant to s 40 of the Federal Court of Australia Act 1976 (Cth) that, to the extent permitted by law, the proceeding be heard by a jury. That application has been referred to the Full Court for hearing and determination and it is that application which is the subject of these reasons.

3    It is convenient to begin with a description of the issues as revealed by the pleadings.

THE ISSUES

4    Fairfax Media, or one of its related corporations, employs Mr Garnaut as a journalist. The applicant alleges that Fairfax Media publishes material on two websites identified as the SMH websites which are available for downloading and publication in the Australian Capital Territory, New South Wales and all of the other States and Territories within Australia.

5    The applicant alleges that on or about 15 October 2015, Fairfax Media published of and concerning the applicant an article entitled “Are Chau Chak Wing’s circles of influence in Australia – China ties built on hot air?” (the matter complained of). The applicant alleges publication took place in the Australian Capital Territory, New South Wales and in the other States and Territories of Australia. Fairfax Media published the article by uploading it and making it available for download to large numbers of users and/or subscribers in each State and Territory of Australia of the SMH websites. The applicant alleges that the matter complained of was, in fact, downloaded and read in the Australian Capital Territory and each State and Territory of Australia and, by reason of the large number of users and/or subscribers, it is to be inferred that the matter complained of was published to a substantial number of readers in each State and Territory of Australia.

6    The applicant claims, and the respondents deny, that the matter complained of in its natural and ordinary meaning was defamatory of him. The applicant claims, and the respondents deny, that the matter complained of carried the following defamatory imputations of and concerning him:

(a)    The Applicant bribed the President of the United Nations General Assembly, John Ashe;

(b)    The Applicant participated in a conspiracy to bribe the President of the United Nations General Assembly;

(c)    The Applicant acted in so seriously wrong a manner as to deserve extradition to the United States on criminal charges, including charges of bribery; and

(d)    The Applicant created his business empire in Australia by making illicit payments to government officials.

These imputations, if they arose from the matter complained of, are clearly defamatory.

7    The applicant claims, and the respondents deny, that he suffered damage as a result of the publication of the matter complained of and that he is entitled to damages and aggravated damages.

8    In their Defence, the respondents plead that, insofar as and to the extent the matter complained of carried one or more of the imputations alleged by the applicant, the matter complained of was published on an occasion of qualified privilege pursuant to s 30 of the Defamation Act 2005 (NSW) and to the extent necessary, the corresponding provisions in the defamation legislation of each other Australian State and Territory and accordingly, the respondents have complete defences in respect of the publication of the matter complained of. The respondents provide extensive particulars of their plea of qualified privilege. One of the two main submissions made by the respondents placed reliance on the defence of qualified privilege and it is convenient to set out the following concerning the respondents’ plea on that matter.

9    Section 30 of the Defamation Act relevantly provides:

30    Defence of qualified privilege for provision of certain information

(1)    There is a defence of qualified privilege for the publication of defamatory matter to a person (the “recipient”) if the defendant proves that:

(a)    the recipient has an interest or apparent interest in having information on some subject, and

(b)    the matter is published to the recipient in the course of giving to the recipient information on that subject, and

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

…

(3)    In determining for the purposes of subsection (1) whether the conduct of the defendant in publishing matter about a person is reasonable in the circumstances, a court may take into account:

(a)    the extent to which the matter published is of public interest, and

(b)    the extent to which the matter published relates to the performance of the public functions or activities of the person, and

(c)    the seriousness of any defamatory imputation carried by the matter published, and

(d)    the extent to which the matter published distinguishes between suspicions, allegations and proven facts, and

(e)    whether it was in the public interest in the circumstances for the matter published to be published expeditiously, and

(f)    the nature of the business environment in which the defendant operates, and

(g)    the sources of the information in the matter published and the integrity of those sources, and

(h)    whether the matter published contained the substance of the person's side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and publish a response from the person, and

(i)    any other steps taken to verify the information in the matter published, and

(j)    any other circumstances that the court considers relevant.

…

10    The respondents’ plea that their conduct was reasonable in the circumstances is as follows:

D    The respondents’ conduct in publishing the matter complained of was reasonable in the circumstances in that:

(i)    the matter complained of related to the Subjects, which were subjects of proper and legitimate public interest;

(ii)    the respondents took care to distinguish between allegations, suspicions and proven facts;

(iii)    it was in the public interest in the circumstances for the matter complained of to be published expeditiously;

(iv)    the respondents are engaged in the business of providing information to the public, and published the matter complained of in the ordinary and legitimate course of that business;

(v)    the matter complained of was based on information obtained from a criminal complaint filed in court proceedings in the Southern District of New York against various defendants including John Ashe, Shiwei Yan (aka Sheri Yan) and Heidi Hong Piao (aka Heidi Park) (the Complaint);

(vi)    the Complaint referred to the applicant by the pseudonym “CC-3”;

(vii)    alternatively, the respondents believed on reasonable grounds that the person referred to in the Complaint as “CC-3” was the applicant;

(viii)    the respondents were reasonably satisfied about the integrity of the sources of the information in the matter complained of and the authenticity and accuracy of the information provided by those sources;

(ix)    the respondents were reasonably satisfied as to the fairness of the language and the manner in which the matter complained of was composed;

(x)    prior to publication of the matter complained of, the first respondent, through its agent Philip Wen, contacted the applicant and provided the applicant with an opportunity to respond to the allegations;

(xi)    the respondents fairly and accurately reported the substance of the applicant’s responses to Mr Wen in the matter complained of;

(xii)    prior to publication of the matter complained of, the respondents contacted the applicant’s executive secretary, Jim Zheng, and provided the applicant with an opportunity to respond to the allegations;

(xiii)    prior to the publication of the matter complained of, the respondents took steps to verify the information in the matter complained of, namely:

(a)    the respondents obtained a copy of, and read, the Complaint and fairly and accurately reported the contents of the Complaint;

(b)    the respondents obtained a copy of, and read, a media release issued by the United States Attorney’s Office dated 6 October 2015 and fairly and accurately reported the contents of the media release;

(c)    the respondents obtained copies of, and read, publications in other media, including a publication in Black Star News entitled “Sheri Yan, woman in alleged John Ashe bribe scheme made rambling speech at United Nations”;

(d)    the respondents sought comment form the applicant’s daughter and fairly and accurately reported the applicant’s daughter’s response;

(e)    the respondents conducted internet searches and reviewed the search results of the website of the applicant’s company, Kingold, and the website of the Global Summit of SME Leaders, and fairly and accurately reported the information obtained from those searches/websites;

(f)    the respondents made enquiries with a number of confidential sources and fairly and accurately reported information obtained from those confidential sources;

(g)    the respondents drew on their background knowledge and experience of the applicant, including the second respondent’s knowledge obtained during his time as one of the first respondent’s China correspondents from about 2009 to 2013 and his knowledge gained during meetings with the applicant including at the applicant’s property, and fairly and accurately reported that background knowledge and experience; and

(h)    the respondents drew on their background knowledge and experience of Yan, including the second respondent’s knowledge obtained during his time as one of the first respondent’s China correspondents from about 2009 to 2013;

(xiv)    the respondents believed the matters set out in the matter complained of to be true;

(xv)    the matter complained of contained the following facts, each of which was a matter of substantial truth:

[It is not necessary to set out the particulars under this heading.]

A number of matters may be noted about these particulars. First, to a point, the particulars follow the matters identified in s 30(3). For example, particulars (i), (ii), (iii) and (iv) reflect subss (a), (d), (e) and (f) in s 30(3). There is no express particular directed to the matter in subs 30(3)(c). Secondly, a number of particulars relate to the content of the matter complained of, for example, particulars (i), (ii), (iii) and (xi). Finally, a number of the particulars raise matters relevant to the respondents’ belief and satisfaction, for example, particulars (vii), (viii) and (ix).

11    In their Defence, the respondents also plead matters and facts in mitigation of the applicant’s alleged damage.

12    In his Reply, the applicant joins issue with the respondents’ Defence and pleads that the defence of statutory qualified privilege is defeated by express malice (see s 30(4) of the Defamation Act).

13    There is no dispute between the parties about this Court’s jurisdiction. The Court has jurisdiction because the applicant alleges that the matter complained of was published in the Australian Capital Territory, among other places (Crosby and Another v Kelly (2012) 203 FCR 451).

THE Constitutional ISSUE

14    The respondents gave notice of a Constitutional matter under s 78B of the Judiciary Act 1903 (Cth). None of the Attorneys-General sought to intervene.

15    The relevant statutory provisions are as follows.

16    Sections 39 and 40 of the Federal Court of Australia Act provide as follows:

39    Civil trials to be without jury

In every suit in the Court, unless the Court or a Judge otherwise orders, the trial shall be by a Judge without a jury.

40    Power of Court in civil proceedings to direct trial of issues with a jury

The Court or a Judge may, in any suit in which the ends of justice appear to render it expedient to do so, direct the trial with a jury of the suit or of an issue of fact, and may for that purpose make all such orders, issue all such writs and cause all such proceedings to be had and taken as the Court or Judge thinks necessary, and upon the finding of the jury the Court may give such decision and pronounce such judgment as the case requires.

“Suit” is defined to include any civil action or original civil proceeding between parties (s 4 of the Federal Court of Australia Act).

17    Sections 21 and 22 of the Defamation Act provide as follows:

21    Election for defamation proceedings to be tried by jury

(1)    Unless the court orders otherwise, a plaintiff or defendant in defamation proceedings may elect for the proceedings to be tried by jury.

(2)    An election must be:

(a)    made at the time and in the manner prescribed by the rules of court for the court in which the proceedings are to be tried, and

(b)    accompanied by the fee (if any) prescribed by the regulations made under the Civil Procedure Act 2005 for the requisition of a jury in that court.

(3)    Without limiting subsection (1), a court may order that defamation proceedings are not to be tried by jury if:

(a)    the trial requires a prolonged examination of records, or

(b)    the trial involves any technical, scientific or other issue that cannot be conveniently considered and resolved by a jury.

22    Roles of judicial officers and juries in defamation proceedings

(1)    This section applies to defamation proceedings that are tried by jury.

(2)    The jury is to determine whether the defendant has published defamatory matter about the plaintiff and, if so, whether any defence raised by the defendant has been established.

(3)    If the jury finds that the defendant has published defamatory matter about the plaintiff and that no defence has been established, the judicial officer and not the jury is to determine the amount of damages (if any) that should be awarded to the plaintiff and all unresolved issues of fact and law relating to the determination of that amount.

(4)    If the proceedings relate to more than one cause of action for defamation, the jury must give a single verdict in relation to all causes of action on which the plaintiff relies unless the judicial officer orders otherwise.

(5)    Nothing in this section:

(a)    affects any law or practice relating to special verdicts, or

(b)    requires or permits a jury to determine any issue that, at general law, is an issue to be determined by the judicial officer.

18    The Notice of a Constitutional matter under s 78B of the Judiciary Act identifies the nature of the Constitutional matter in the following way:

1.    Whether section 21 of the Defamation Act 2005 (NSW) is inconsistent with sections 39 and 40 of the Federal Court of Australia Act 1976 (Cth) for the purposes of section 109 of the Commonwealth of Australia Constitution Act.

2.    Whether section 22 of the Defamation Act is inconsistent with sections 39 and 40 of the Federal Court of Australia Act for the purposes of section 109 of the Constitution.

3.    The extent (if any) to which section 21 of the Defamation Act is binding on the Federal Court of Australia by operation of section 79 of the Judiciary Act.

4.    The extent (if any) to which section 22 of the Defamation Act is binding on the Federal Court of Australia by operation of section 79 of the Judiciary Act.

5.    Whether, to the extent that section 21 of the Defamation Act is found to be invalid (in whole or in part) by reason of section 109 of the Constitution, it is permissible to have regard to section 21 of the Defamation Act in exercising the discretion under section 40 of the Federal Court of Australia Act.

6.    Whether, to the extent that section 21 [sic 22] of the Defamation Act is found to be invalid (in whole or in part) by reason of section 109 of the Constitution, it is permissible to have regard to section 21 [sic 22] of the Defamation Act in exercising the discretion under section 40 of the Federal Court of Australia Act.

19    At a hearing before the primary judge on 8 December 2016, his Honour raised with the parties whether, if the Court made the order sought in the application for a jury, such an order would encompass the jury determining the issue of damages (if any). In addition, there is a dispute between the parties as to whether the issue of reasonableness for the purpose of the defence of qualified privilege (s 30(c) of the Defamation Act) is a question of fact (for the jury) or a question of law (for the trial judge). The hearing was adjourned to enable the Notice of a Constitutional matter to be issued. The application was then referred to the Full Court.

20    In this case, there was multiple publication in more than one Australian jurisdictional area and we assume, for the purposes of the discussion which follows, that the substantive law which will apply in this case will be the law in New South Wales (see s 11(2) of the Defamation Act).

21    The parties are agreed that ss 21 and 22 of the Defamation Act are inconsistent with ss 39 and 40 of the Federal Court of Australia Act within s 109 of the Constitution and are inutile or inoperative to the extent of the inconsistency. Both parties are agreed that ss 21 and 22 of the Defamation Act are not “picked up” by s 79 of the Judiciary Act. The point on which the parties disagree is whether, as the respondents contend and the applicant denies, the Court in exercising the discretion under s 40 of the Federal Court of Australia Act may have regard to ss 21 and 22 of the Defamation Act. Before addressing this point, it is appropriate that we set out the steps whereby we reach the conclusions of inconsistency within s 109 of the Constitution and the fact that ss 21 and 22 of the Defamation Act are not picked up by s 79 of the Judiciary Act.

22    The tests for inconsistency under s 109 of the Constitution are well-known. They were stated by Dixon J (as his Honour then was) in The State of Victoria and Others v The Commonwealth of Australia and Others (1937) 58 CLR 618 at 630 as follows:

… When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent. Cf., too, Stock Motor Ploughs Ltd. v. Forsyth. …

(Citation omitted.)

(See also Telstra Corporation Limited v Worthing and Another (1999) 197 CLR 61 at [28]; Dickson v The Queen (2010) 241 CLR 491 at [13].)

23    In this case, there is a direct inconsistency between ss 39 and 40 of the Federal Court of Australia Act and ss 21 and 22 of the Defamation Act.

24    Section 39 of the Federal Court of Australia Act provides that, in the ordinary case and without an order of the Court, a civil action is tried by a judge without a jury. Section 40 of the Federal Court of Australia Act provides the Court with a broad discretionary power guided by the ends of justice to direct the trial with a jury of the civil action or of any issue of fact in the civil action.

25    Section 21 of the Defamation Act provides that, subject to a contrary order, a plaintiff or a defendant in defamation proceedings may elect for the proceedings to be tried by jury. The New South Wales Court of Appeal has said that, upon a proper exercise of the power of election, the section gives rise to a vested or accrued substantive right which may be defeated only by an order properly made under ss 21(1) and 21(3) of the Defamation Act (Channel Seven Sydney Pty Ltd v Fierravanti-Wells (2011) 81 NSWLR 315 at [50] per McColl JA (with whom Giles JA agreed); at [138] per Handley AJA). By contrast, under ss 39 and 40 of the Federal Court of Australia Act a party to proceedings before this Court has no more than the ability to approach the Court for an order that the proceeding or an issue of fact in the proceeding be tried by a jury.

26    Section 22 of the Defamation Act prescribes in mandatory terms a division of functions between jury and judicial officer in a proceeding to be tried by jury. The jury “is to determine” whether the defendant has published defamatory matter about the plaintiff and, if so, whether any defence raised by the defendant had been established and the judicial officer “is to determine” the amount of damages and any unresolved issue of fact and law relating to the determination of the amount. By contrast, s 40 of the Federal Court of Australia Act provides that the Court may direct the trial with a jury of the suit or of an issue of fact. The Court could order the trial with a jury of any issue of fact, including damages.

27    There is direct inconsistency between ss 39 and 40 of the Federal Court of Australia Act, and ss 21 and 22 of the Defamation Act. In those circumstances, ss 21 and 22 of the Defamation Act could not be binding on the Court by reason of s 79 of the Judiciary Act.

28    There is another way of analysing the circumstances in this case which leads to the same result. It is that the Defamation Act has substantive provisions such as s 30 and provisions such as ss 21 and 22 which are directed towards how an existing defamation matter is to be heard and determined. This Court hears and determines a matter such as the present matter in accordance with “independently existing substantive laws” (Australian Securities and Investments Commission v Edensor Nominees Pty Limited and Others (2001) 204 CLR 559 at [55], [57] per Gleeson CJ, Gaudron and Gummow JJ). This includes any applicable statute law, including that of a State. This is because State laws are preserved by the Constitution (ss 106, 107 and 108) and not by reason of the operation of s 79 of the Judiciary Act (Rizeq v The State of Western Australia [2017] HCA 23 at [25] per Kiefel CJ; at [40]-[41] per Bell, Gageler, Keane, Nettle and Gordon JJ). Under this analysis, ss 21 and 22 of the Defamation Act would not operate according to their own terms, but only if they are “picked up” by s 79 of the Judiciary Act. They would not be picked up by s 79 of the Judiciary Act because a law of the Commonwealth (i.e., ss 39 and 40 of the Federal Court of Australia Act) otherwise provides within s 79 of the Judiciary Act (Northern Territory of Australia v GPAO and Others (1999) 196 CLR 553 at [78]-[86] per Gleeson CJ and Gummow J, and Austral Pacific Group Limited (In Liquidation) v Airservices Australia (2000) 203 CLR 136 at [17]-[28]). Under this approach, s 109 of the Constitution is not engaged because there is not otherwise an applicable State law.

29    We do not need to choose between these approaches because under either approach, the result is the same.

30    The respondents submitted that despite these conclusions as to inconsistency, this Court should still have regard to ss 21 and 22 of the Defamation Act in determining their application for a jury. The precise basis upon which the Court should do that was not made clear in the respondents’ outline of submissions. There was a reference in the outline of submissions to this Court not being the ordinary forum for an action of this nature. The argument was developed by counsel for the respondents at the hearing of the application.

31    The argument starts from the premise that the natural forum for the hearing of this proceeding is the Supreme Court of New South Wales, not this Court. The Supreme Court of New South Wales would be bound to apply ss 21 and 22 of the Defamation Act. The respondents do not have available to them the doctrine of forum non conveniens or the ability to make an application under cross-vesting legislation where the criterion is the interests of justice. Despite that, this Court (so the argument proceeds) should adopt a mechanism available to it to recognise that the Supreme Court of New South Wales is the natural forum. That mechanism is that this Court is able and should take into account ss 21 and 22 of the Defamation Act in exercising the discretion under s 40 of the Federal Court of Australia Act.

32    This argument is misconceived and must be rejected. There is no notion of natural forum between this Court and the Supreme Court of New South Wales and reference to the doctrine of forum non conveniens and cross-vesting legislation is a distraction and apt to mislead. This Court is a national court and it has jurisdiction in this matter. Importantly, there are provisions in the Act which established the Court which address trial by judge without a jury and trial with a jury. Acceptance of the respondents’ argument would mean that this Court sitting in different registries in Australia would exercise the discretion in s 40 of the Federal Court of Australia Act differently in each place, albeit that the Court was dealing with one Australia wide publication with different applicants in different registries. That cannot be either correct, or a circumstance appropriately reflective of a national court.

33    The flaw in the respondents’ argument is exposed at a practical level in this case by the following. The order which the respondents seek is that there be a trial with a jury of all issues of fact “despite the legislative policy underlying section 22 of the Defamation Act”. The respondents submitted that the division of roles between judge and jury under s 22 of the Defamation Act gives rise to the risk that, for the purposes of assessing damages, the trial judge may accept or reject evidence, making findings of fact contrary to the jury’s reasoning, or attach weight to particular pieces of evidence that is different from that of the jury. In addition, it is inefficient (so the respondents submit) as it can involve the trial judge performing a task that the judge knows must have or is likely to have been performed by the jury. In effect, the respondents ask this Court to apply s 21 of the Defamation Act, but not s 22. Another way of putting the point is that the respondents are not asking the Court to have regard to what might be seen as the one policy which underlies ss 21 and 22 of the Defamation Act.

34    In our opinion, for the reasons we have given, ss 21 and 22 of the Defamation Act do not apply to this proceeding and the sections are not relevant to the exercise of the discretion in s 40 of the Federal Court of Australia Act.

THE RESPONDENTS’ APPLICATION

35    The other main submission made by the respondents in support of their application is that the nature of the issues raised in this proceeding is a strong factor in favour of a trial with a jury. It is said that the issues are eminently suitable for a trial with a jury. Counsel for the respondents candidly identified the issues as “meaning” (not whether the imputations are defamatory), reasonableness, malice and, if the applicant succeeds, damages, including aggravated damages (which topic overlaps with malice). Later in his submissions, he emphasised “the section 30 defence and the question of reasonableness”.

36    Before considering this submission we make some general observations about ss 39 and 40 of the Federal Court of Australia Act and we address the relevant authorities.

37    First, trial by judge alone is the normal mode of trial in a civil proceeding in this Court. Secondly, the Court has a discretion to direct a trial with a jury either of all the issues of fact in a civil proceeding or of particular issues of fact in the proceeding. Thirdly, the power is a broad one constrained by only one broad criterion being that the “ends of justice appear to render it expedient to do so”. Fourthly, stating the matter broadly, the issue raised by ss 39 and 40 is whether in the particular case and, bearing in mind that the normal mode of trial of a civil proceeding in this Court is by a judge without a jury, it would promote, further or be conducive to the attainment of justice for there to be a trial with a jury. Important considerations will be the nature of the issues or allegations in the case and the particular circumstances of the case.

38    We turn now to the authorities. In 1953, ss 12 and 13 of the High Court Procedure Act 1903-1950 (Cth) were in materially similar terms to ss 39 and 40 of the Federal Court of Australia Act (see today Part XA Division 1 ss 77A and 77B of the Judiciary Act). In McDermott v Collien and Another (1953) 87 CLR 154, Fullagar J considered the sections in a case where the plaintiff, who was a resident of one State, asked for a jury in an action against the defendants, who were residents of a different State. The cause of action arose in connection with the sale of a motor car. The application for a jury was refused. His Honour said (at 157):

… But, so far as any question of general policy is involved, it is settled for me by the High Court Procedure Act. Trial without a jury is the normal mode of trial of actions in this Court, and some special reason must be shown for a departure in any particular case from that normal mode. The second thing that seems clear is that it is not enough to show that the cause of action is of a kind which could quite properly be tried with a jury and which was normally tried with a jury in England before the Judicature Act 1873 (36 & 37 Vict. c. 66).

His Honour said that he was not prepared to go as far as to say that the nature of the cause of action is an irrelevant consideration and, in fact, in some cases it may be a potent consideration. Nevertheless, it was a complete answer to the application that nothing more could be said than that it was a case suitable for trial with a jury and equally a case suitable for trial without a jury. In terms of the ends of justice, no advantage was shown in a trial with a jury.

39    In Insurance Commissioner v Australian Associated Motor Insurers Ltd and Others (1982) 65 FLR 172, Northrop J refused an application for a trial with a jury even though he said that the claims before the court based upon the Trade Practices Act, were eminently suitable to be tried by a judge and jury. His Honour considered that some substantial reason for a departure from the normal method or mode of trial needed to be shown and that that had not been done.

40    In Ra v Nationwide News Pty Ltd and Another (2009) 182 FCR 148 (Ra), the applicant, a brothel owner, sought damages from certain newspaper organisations in relation to an article headed “Sex Slave Trade Revealed”. The causes of action upon which the applicant relied were defamation and s 53B of the Trade Practices Act. The respondents sought an order that the issues in the proceeding other than damages be tried by a jury. Justice Rares ordered that there be a trial by a jury of 12 of all issues other than damages and any other questions under the Defamation Act that ought to be tried by a judge alone. His Honour said that damages were excluded because such a course reflected the policy choice in s 22(3) of the Defamation Act and “the ordinary mode for assessing damages in this Court” (at [30]).

41    The following passages contain his Honour’s reasons for ordering a trial by jury (at [25]-[26]):

I am of opinion that where the real substance of a matter in this Court’s jurisdiction is a claim for damage to reputation, ss 39 and 40 of the Federal Court Act permit the Court to have due regard to the appropriate procedural law of the State or Territory that is the lex loci delicti and the historical mode of trial of such actions in order to decide how best the controversy between the parties should be resolved at trial. Ordinarily, where any party to a defamation action in New South Wales so elects, there will be a trial of that action by a jury. Of course, there will be cases where it may be more appropriate to try a defamation action without a jury, as s 21 of the Defamation Act itself provides. And, in some States and Territories, their laws provide that the trial of a defamation action must be by judge alone.

This matter raises issues that very much involve giving effect to moral and social values of the community. I am satisfied that a trial by a jury would be a better mode of trial than by judge alone to assess the various claims and defences in these defamation proceedings. The jury will be better able to make such an assessment than a judge and to do so in a way likely to arrive at a reflection of the attitude of society generally: Lamb 150 CLR at 506.

In the passage from Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 to which his Honour referred, Brennan J (as his Honour then was) said (at 506):

But the moral or social standard by which the defamatory character of an imputation is determined is not amenable to evidentiary proof; it is pre-eminently a matter for the jury to give effect to a standard which they consider to accord with the attitude of society generally.

42    Earlier in his reasons, Rares J said (uncontroversially in our respectful opinion) that Parliament has evinced a general policy in s 39 of the Federal Court of Australia Act of trial in this Court by judge alone (at [23]). His Honour considered that that general policy had been displaced in the case before him by the following overlapping matters: the fact that injury to reputation was to be judged by the ordinary reasonable person having regard to community standards; the fact that trial by jury was part of the appropriate procedural law of the State or Territory that is the lex loci delicti and the historical mode of trial of such actions. We will come back to the first matter. As to the second and third of these matters, his Honour considered he could have regard to them “in order to decide how best the controversy between the parties should be resolved at trial” (at [25]). With respect, we do not think that that is the correct question, but in any event, for the reasons we have already given (at [30]-[34]), we do not think that these are relevant matters in terms of the exercise of the discretion. We note that in Roozendaal v Fairfax Digital Australia and New Zealand Pty Ltd and Another (2015) 232 FCR 487, Besanko J said (at [26]):

With great respect to Rares J, I would not follow aspects of his Honour’s decision in Ra. In my respectful opinion, s 39 of the Act means that what his Honour referred to as “the historical mode of trial” in defamations actions (at [25]), is largely irrelevant. The Federal Parliament and the Parliaments of South Australia, the Northern Territory and the Australian Capital Territory have made one choice, the Parliaments of the other States have made a different one. Insofar as Rares J relied on the procedural law of the lex loci delicti, in this case the wrongs were alleged to have been committed in a number of places, including the Australian Capital Territory where trial by jury in a defamation action is not the norm.

43    In Comcare v John Holland Rail Pty Ltd and another (2010) 189 FCR 173 at [22]-[25], Bromberg J made the point (with which we respectfully agree) that an applicant for a departure from the normal mode of trial by judge alone bears a burden of bringing the case within s 40 of the Federal Court of Australia Act and that he or she must do so not by reference to general considerations relating to the virtues of a jury trial, but by reference to the particular case (see also Verrocchi and Another v Direct Chemist Outlet Pty Ltd and Another (2015) 228 FCR 189 at [316]-[326] per Middleton J).

44    We return to the first matter identified by Rares J in Ra and relied on by the respondents in this case. As far as we can see, the principal issues at the trial are likely to be meaning, reasonableness under s 30(3) of the Defamation Act, malice and probably damages. Meaning and some aspects of reasonableness will require the tribunal of fact to interpret the article containing the matter complained of through the eyes of the ordinary reasonable reader and at least some aspects of the plea of reasonableness will call for the application of a normative standard. Judges of this Court carry out both of those exercises on a regular basis. For example, as to the former, in the field of misleading or deceptive conduct and passing off, the Court may be required to interpret statements from the perspective of the members of the class to whom they are directed (Campomar Sociedad, Limitada and Another v Nike International Limited and Another (2000) 202 CLR 45 at [103]-[106]). As to the latter, the Court is not infrequently assessing conduct by reference to the standards of the community or a section of the community such as the commercial community (Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50; (2015) 321 ALR 584; Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; (2016) 341 ALR 572). In our opinion, there is no reason to think that the ends of justice will be advanced or promoted if a jury hears and determines the factual issues in this case, rather than a judge. It is true that some aspects of this case would be suitable for trial with a jury, but equally (at least) the case is suitable for trial by a judge sitting alone.

45    We note that we can envisage cases where there might be good reason to have a jury. For example, although not this case, there might be a case where there is a real issue as to whether changing community standards mean that the words considered defamatory of a person, say 30 years ago, would no longer be considered defamatory. There may be other circumstances and it is neither possible nor desirable for us to state in advance the cases that might call for an order for a jury.

46    The respondents have not established that there should be a departure from the normal mode of trial in this Court.

conclusion

47    The application should be dismissed with costs.

Associate:

Dated:    27 November 2017

REASONS FOR JUDGMENT

RARES J:

48    In their reasons, which I have had the privilege of reading, the Chief Justice and Besanko J have set out the pleadings, relevant statutory provisions and the reasons why ss 21 and 22 of the Defamation Act 2005 (NSW) are directly inconsistent with ss 39 and 40 of the Federal Court of Australia Act 1976 (Cth).

49    I agree with their Honours’ reasons for concluding that it is not appropriate to have regard to ss 21 and 22 of the Defamation Act when this Court is determining whether to exercise its discretion to order a trial by jury under ss 39 and 40 of the Federal Court Act. When I held, incorrectly, to the contrary in Ra v Nationwide News Pty Ltd (2009) 182 FCR 148 at 155 [25], there was no issue before me concerning the direct inconsistency between the State and Commonwealth legislation operating to preclude the Court (as I now accept it does) taking ss 21 and 22 of the Defamation Act into account, as opposed to treating them as surrogate federal laws, when exercising the discretion in ss 39 and 40 of the Federal Court Act. This question arose directly when I heard, as a single judge, the initial argument on the respondents’ present interlocutory application for an order for a trial by jury. I also then raised with the parties the issue whether, if a trial by jury were ordered, s 22(3) of the Defamation Act, in requiring that the judge and not the jury must decide the amount of any damages, was, as this Full Court has now decided, also inconsistent with s 40 of the Federal Court Act.

50    Accordingly, I agree with their Honours that my view of the above factors in Ra 182 FCR 148 was erroneous.

The nature of the discretion to order a trial by jury

51    I also accept that a person who seeks an order for a jury trial under ss 39 and 40 of the Federal Court Act bears an onus to persuade the Court that “the ends of justice appear to render it expedient to” order such a trial of the suit or an issue of fact, since that is what s 40 itself prescribes. In Gregg v Fairfax Media Publications Pty Ltd [2016] FCA 1470 at [35]-[39], I considered the meaning of that expression, saying:

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.

52    I remain of that opinion. It follows that the mere fact that, ordinarily, cases in this Court of whatever nature, other than criminal trials on indictment, will be tried by judge alone by force of s 39 of the Federal Court Act, does not preclude the Court from exercising the broad evaluative discretion that s 40 creates. The discretion operates in the context of a particular case in which it appears that the ends of justice render it expedient to order the different mode of trial, namely, by jury. The Court has similar powers under ss 53A and 54A of the Federal Court Act to refer proceedings in the Court or a part of them to an arbitrator, to a mediator, to a suitable person for resolution by an alternative dispute resolution process and to a referee. Each such referral creates, as does a jury, a different mode of trial of a proceeding in the Court.

53    In Buckley v Bennell Design & Constructions Pty Ltd (1978) 140 CLR 1 at 15, Stephen J discussed the character of a court order for an arbitrator or referee to decide a proceeding or part of it as follows:

As Mr. Quintin Hogg, as he then was, said in Law of Arbitration (1936), p. 193, such a reference “is a species of trial, and the decision is now equivalent to a form of judgment or verdict and not an award”. In such a reference the court’s procedures of adjudication are not abandoned in favour of extra-curial settlement of the dispute by arbitration. Instead the court directs that, for the better resolution of the particular proceedings initiated before it, resort should be had to this special mode of trial which the legislation has made available. (emphasis added)

54    And, in Super Pty Ltd (formerly known as Leda Constructions Pty Ltd) v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549 at 558B-C, Gleeson CJ (with whom Mahoney and Clarke JJA agreed (see too at 567E-G per Mahoney JA)) said:

There is a danger in seeking to resolve the present problem by relying upon broad generalisations which pay insufficient regard to the particular context. The proposition that all litigants are entitled to have a judge (or, presumably, a master) decide all issues of fact and law that arise in any litigation, is unsustainable. It ignores the existence, in many civil cases, of trial by jury. (emphasis added)

55    I remain of opinion that juries are well suited, and often better suited than a judge, to use and evaluate community standards and the sense in which ordinary reasonable people understand a publication in considering, first, whether it conveys meanings or imputations about a person, secondly, whether such meanings would be understood as statements of fact or opinion, and, thirdly, the amount of damages necessary not only to compensate for hurt feelings, but also to vindicate a person who has been defamed.

56    Where fundamental community values, namely the right to reputation and the freedom of speech or opinion, clash, it often will be the case that the ends of justice render expedient that a trial of a defamation action be by jury, for as Brennan J (with whom Gibbs CJ, Stephen, Murphy and Wilson JJ agreed) said in Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 505-506:

Where no true innuendo is pleaded and the published words clearly related to the plaintiff, the issue of libel or no libel can be determined by asking whether hypothetical referees – Lord Selborne’s reasonable men (Capital and Counties Bank v. Henty [(1882) LR 7 App Cas 741, at p 745]) or Lord Atkin’s right-thinking members of society generally (Sim v. Stretch [(1936) 52 TLR 669, at p 671]) or Lord Reid’s ordinary men not avid for scandal (Lewis v. Daily Telegraph Ltd. [[1964] AC, at p 260]) – would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation (Byrne v. Deane [[1937] 1 KB 818, at p. 833], being a standard common to society generally (Miller v. David [(1874) LR 9 CP 118]; Myroft v. Sleight [(1921) 90 LJKB 883]; Tolley v. J.S. Fry & Sons Ltd. [[1930] 1 KB 467, at p. 479]). …

But the moral or social standard by which the defamatory character of an imputation is determined is not amenable to evidentiary proof; it is pre-eminently a matter for the jury to give effect to a standard which they consider to accord with the attitude of society generally. (emphasis added)

57    I agree with what Bromberg J said in Comcare v John Holland Rail Pty Ltd (2010) 189 FCR 173 at 178 [22], that the “burden is not necessarily onerous” so as to establish that the ends of justice appear to render it expedient to order a jury trial under s 40 of the Federal Court Act. And, as Fullagar J acknowledged in McDermott v Collien (1953) 87 CLR 154 at 157, “The nature of the question involved is such that one can hardly expect much guidance from decided cases”. He also said that the nature of the cause of action “might in some cases be a potent consideration”. But, he reasoned, in order to warrant a departure from the usual mode of trial prescribed by a provision in the terms of s 39 of the Federal Court Act, first, “some special reason” had to be shown and, secondly, the mere fact that the case was suitable for a trial by jury would not, of itself, suffice (87 CLR at 157).

58    In five, including the four more populous, States of the Commonwealth, a party has an election to choose that a defamation action be tried by jury.

59    The mere fact that s 39 reflects a policy choice by the Parliament that, unless a judge otherwise orders, trials in this Court are to be by judge alone does not warrant ossifying that choice into the very position that the Parliament denied, namely that, invariably, there can never be cases where s 40 permits an order for a jury trial. The fact that in the 40 years of the existence of ss 39 and 40 in the Federal Court Act, Ra 183 FCR 148 is the only occasion on which a judge has ordered a jury trial, suggests that the application of the discretion, and litigants’ perception of its application, has not been what the Parliament intended. In my opinion, the use of the epithets “special” or “sufficient” have circumscribed too much the capacity of a case to fall into a category where “the ends of justice appear to render it expedient” to order a jury trial. Of course, there must be a reason why such an order should be made, but, as Fullagar J noted, the nature of the cause of action in the particular case may be a potent consideration.

60    The purpose of the discretion created by ss 39 and 40 is to enable a judge to evaluate not just whether the case is one that is capable of being tried by a jury, but if it is “expedient” or more convenient or likely to promote the overarching purpose of the civil practice and procedure provisions in accordance with s 37M of the Federal Court Act that there be a jury trial. Thus, s 40 simply allows the judge to determine, by reason of the particular features of a case, including the nature of the cause of action, whether it is better or more conveniently tried by a jury than by a judge.

This application

61    In this proceeding, the substantive issues that could be tried by a jury are whether the imputations pleaded were conveyed to an ordinary reasonable reader (and, as there could be little doubt, they were defamatory of him), whether the publication of the matters complained of was made under qualified privilege because the respondents’ conduct in publishing the matters complained of was reasonable in the circumstances (s 30(1)(c) and (3) of the Defamation Act), or whether the publication was actuated by malice (s 30(4)), and, if the defence fails, the assessment of damages.

62    At common law in a trial of all issues by a judge and jury, the question of whether the occasion on which a publication was made was one of qualified privilege is a question of law for the judge: Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 377 [22] per Gleeson CJ, Hayne and Heydon JJ; Guise v Kouvelis (1947) 74 CLR 102 at 117 per Dixon J. The jury only decides, if there were any evidence to go to them, whether, in publishing the matter complained of on a privileged occasion, the defendant was actuated by malice: Bashford 218 CLR at 377 [22].

63    In contrast, s 30 of the Defamation Act requires factual assessments of:

•    whether the recipients, namely the readers of a mass media publication, had an interest or apparent interest in having information on some subject and the matter complained of was published to them in the course of giving them information on that subject, as s 30(1)(a) and (b) of the Defamation Act provide;

•    the reasonableness of the defendant’s conduct (s 30(1)(c)); and

•    whether (if there be any evidence of it) the defendant in publishing the matter complained of was actuated by malice (s 30(4)).

64    In relation to the statutory antecedent of s 30 of the Defamation Act (namely s 22 of the now repealed Defamation Act 1974 (NSW)), Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ said in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 573:

The defendant must establish that its conduct in making the publication was reasonable in all the circumstances of the case. In all but exceptional cases, the proof of reasonableness will fail as a matter of fact unless the publisher establishes that it was unaware of the falsity of the matter and did not act recklessly in making the publication.

65    In a practical sense, the substantive issue at a trial in this proceeding is likely to focus on the defence of qualified privilege. If it fails, the damages can be expected to be significant given the seriousness of the imputations, and a judge would so direct any jury were one empaneled.

66    I am not persuaded that the ends of justice render it expedient for the trial of the issues in this proceeding to be heard by a jury. The reasonableness and state of mind of the respondents, in the circumstances of a case like the present, can be decided by a judge as conveniently as by a jury. Those matters and the issues of whether the imputations were conveyed, their defamatory quality and of damages can also be decided by a judge as conveniently as by a jury. I am not persuaded that this case warrants a departure from the ordinary mode of trial under s 39 of the Federal Court Act.

67    Different considerations will apply in cases where there are real issues as to whether the ordinary reasonable reader, listener or viewer of a publication would have understood that the matter complained of conveyed the meanings or imputations alleged, or, in some cases, that they were defamatory, or whether a defence of justification, contextual truth or honest opinion can be established.

Conclusion

68    For these reasons the respondents’ interlocutory application must be dismissed with costs.

Associate:

Dated:    27 November 2017