Federal Court of Australia

Herron v HarperCollins Publishers Australia Pty Ltd (No 2) [2022] FCAFC 119

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The respondents pay the second appellant’s costs of the appeal.

3.    In proceeding NSD1620/2017 (the Herron proceeding):

(a)    The orders made on 25 November 2020 be set aside and in lieu thereof it be ordered that:

(i)    John Gill be released from his undertaking to pay any costs that may be ordered against the applicant, John Herron.

(b)    It be noted that:

(i)    The applicant died and the proceeding abated on 7 February 2021.

4.    In proceeding NSD1621/2017 (the Gill proceeding):

(a)    The orders made on 25 November 2020 be set aside and in lieu thereof it be ordered that:

(i)    Judgment be entered for the applicant.

(ii)    The proceeding be reallocated to a docket judge for a retrial on the remaining issues.

(iii)    The applicant’s costs of and occasioned by the trial that commenced on 1 June 2020, and thrown away, be paid by the respondents.

(b)    Orders 1 and 5 made on 26 August 2021 be set aside.

5.    The respondents’ interlocutory application filed on 16 June 2021 be dismissed with costs.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

RARES J:

1    On 29 April 2022, the Court published its reasons for allowing the appeal and asked the parties to prepare draft orders to give effect to our reasons: Herron v HarperCollins Publishers Australia Pty Ltd [2022] FCAFC 68. We called for submissions limited to two pages in respect of any disputes about those orders. As it turned out, the submissions that the parties filed suggested there was a need for an oral hearing, which occurred today. There were four issues that arose between the parties.

2    The first issue arises because I found, at [76], that imputation L, namely that the second (and sole surviving) appellant, Dr John Gill, a psychiatrist, had defrauded his patients’ health funds, had been conveyed and the publishers did not plead that it was substantially true. Accordingly, when the matter is retried, because of the Court’s conclusion that the qualified privilege defences were not maintainable, and subject to the third argument raised today, there will be no defence to imputation L. Dr Gill argued that he was entitled to have judgment entered on the basis that the publishers’ remaining pleas of justification to the other imputations amounted only to a plea in mitigation of damages. He contended that they could not maintain any defence of partial justification at common law or under the Defamation Act 2005 (NSW) that could defeat his entitlement to judgment based on the lack of a defence to imputation L (the entry of judgment issue).

3    The second issue was whether Dr Gill was entitled to an order that his costs of the first trial thrown away should be paid by the publishers in any event (the costs issue).

4    The third issue, raised by the publishers, arose because of what I had said in [158]. They argued that it was still possible at a retrial for HarperCollins to embark upon a reopening of its defences of qualified privilege. However, Dr Gill argued that if HarperCollins were now allowed to run such an argument, it would abjure its position at the trial and on the appeal of seeking to prove that its conduct was reasonable in the circumstances by reason only of what Mr Cannane had done. It had called no evidence at the trial about its state of mind and, in nailing its colours plainly to the mast, said both at the trial and in the appeal that it relied entirely on Mr Cannane’s conduct to establish its reasonableness. I found, with the agreement of Wigney and Lee JJ, that the trial judge had erred in finding Mr Cannane’s conduct was reasonable in the circumstances and that, in fact, his conduct was unreasonable. That issue went away when I pointed out that this issue had to be dealt with on the basis of the positions on which the parties fought the trial (the qualified privilege issue).

5    The fourth issue was the publishers’ submission that, although the order made by the primary judge dismissing the Herron proceeding could be set aside on appeal, in some way, her Honour’s costs order in that proceeding should remain in place pending the outcome of the second trial (the abatement issue).

6    I will deal with each of the issues in turn.

The entry of judgment issue

7    The publishers argued that in Woodger v Federal Capital Press of Australia Pty Ltd (1992) 106 FLR 183 at 200–201, Miles CJ had explained his understanding of the defence of partial justification in five numbered propositions, the fourth of which was as follows:

Where the plaintiff alleges a particular defamatory meaning, the defendant may, without denying that defamatory meaning, seek to assert a separate and additional defamatory meaning which is justified and the effect of which is so serious that there can be no further injury to the plaintiff’s reputation caused by the meaning upon which the plaintiff relies. This is what is called in New South Wales the defence of contextual imputation. In my view, it applies in the Australian Capital Territory.

(emphasis added)

8    The publishers contended that, as McColl JA pointed out, in dissent, in Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547 at 551 [12]:

Views differ as to whether it is a defence to the cause of action, which is the publication of defamatory words or merely relevant to the question of damages, and if proven, results in a reduction of damages (Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1; [2003] VSCA 161 at [306(iii)] (Gillard AJA; with whom Winneke ACJ and Warren AJA relevantly agreed); cf Whelan [v John Fairfax Publications Pty Ltd (2002) 56 NSWLR 89] at [54]ff).

9    In Whelan v John Fairfax Publications Pty Ltd (2002) 56 NSWLR 89 at 102 [58], Levine J quoted in full the passage from Miles CJ’s reasons that included proposition 4, that I have set out at [7] above. The publishers argued that it ought be left to a retrial to determine whether, as Miles CJ suggested, a defence of partial justification, based on their pleas in respect of all of the imputations alleged by Dr Gill other than imputation L, would amount to, in effect, what Miles CJ described as a common law “defence of contextual imputation”.

10    The publishers’ argument should be rejected. There is debate in the authorities about the nomenclature of whether partial justification is in fact a defence or simply a plea in mitigation of damage. First, Levine J said in Whelan 56 NSWLR at 108 [79]–[80] that a defendant is:

not entitled to justify the separate distinct meaning with a view to defeating that (untrue) meaning of which the plaintiff expressly complains.

11    His Honour said that this principle did not derogate from the common law defence of partial justification. He had explained (at 56 NSWLR at 108 [76]) that partial justification was a defence at common law to a number of imputations, only some of which could be justified or could be sought to be justified.

12    Secondly, in Australian Broadcasting Corporation v Wing (2019) 271 FCR 632 at 641–642 [19]–[20], and again at 662–663 [92]–[93], Besanko, Bromwich and Wheelahan JJ discussed the principles upon which a person may seek to justify some, but not all, of the pleaded defamatory imputations or meanings. Importantly, they referred with approval to The Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1 at 63 [306], where Gillard AJA, with whom Winneke ACJ and Warren AJA agreed, said that it was well established that a pleading of defence of justification of common law required:

The whole libel that is all the defamatory imputations must be proved as true; it is no defence to prove that part of the defamatory libel is true.

(emphasis added)

13    The general rule, Gillard AJA said, was that “the publisher must prove every injurious imputation which the jury may find in the words complained of”. However, Gillard AJA recognised that (see also Barilaro v Shanks-Markovina (No 2) (2021) 393 ALR 417 at 455–456 [146] per Rares J):

A publisher may justify part only of the words complained of provided the part sought to be justified contains a distinct and separate imputation. What is important is that the particular defamatory imputation is severable from the other defamatory imputation and conveys a distinct and separate imputation. … The plaintiff must not be left in any doubt as to what the defendant seeks to justify. But importantly this partial justification is not a defence to the cause of action, which is the publication of defamatory words. However, it is relevant to the question of damages and if proven, results in a reduction to damages.

(emphasis added)

14    Miles CJ cited no authority for proposition 4 in Woodger 106 FLR at 200–201 that there was any common law defence of “contextual imputation”. It is difficult to understand exactly what his Honour meant by that statement. It was not relied upon by Levine J in Whelan 56 NSWLR 89 and, so far as the researches of counsel have discovered, no other Court has determined that such a defence exists or approved or applied the proposition of Miles CJ.

15    The defence of contextual truth was first introduced as result of the report of the Law Reform Commission of New South Wales (Law Reform Commission, Defamation (Report No 11, 1971)) leading to the Defamation Act 1974 (NSW), and is now to be found in s 26 of the uniform Defamation Acts of the States and Territories. The defence of contextual truth is statutory and is not the subject of any common law principle. That suggests that Miles CJ may have uttered a loose phrase in proposition 4. In any event, to the extent that Miles CJ may have held that there is a “defence of contextual imputation” at common law, his Honour erred.

16    Another reason why it is appropriate to make such an order at this stage, before remitting the Gill proceeding for a retrial, is that, like Mr Herron was, Dr Gill is an elderly man who may, at some stage, pass away, perhaps before judgment. In light of the history of these proceedings, including the untimely death of Mr Herron, it is in the interests of justice that the Court provide some certainty as to the parties’ position.

17    For these reasons, Dr Gill’s proposition that he is entitled to an order for judgment is correct.

The costs issue

18    The publishers oppose Dr Gill’s claim that he is entitled to an order for the costs thrown away by the first trial to be payable to him in any event. The publishers argued that it was necessary to have a retrial to see whether or not at the end of that Dr Gill could be regarded as having succeeded in any way at all. They pointed out that they had sought to accommodate Dr Gill and Mr Herron and had had their own costs thrown away by having to bring the trial forward by 12 months due, at that stage, to the failing health of Mr Herron. They had lost the investment in their senior and junior counsel who, previously, would have been able to conduct a trial that would have been heard 12 months later. They argued that the judge hearing the new trial would be able to work out all of the intricate issues about costs and the like given the likely complexity, that had been a feature of the trial below, being repeated on a retrial. They argued that, although a number of issues now have passed out of the forensic ring, including whether the imputations were conveyed, the qualified privilege defences and the admissibility of the evidence from the dead experts on which the publishers relied, which Lee J and Wigney J explained should not have been admitted, it would not be appropriate to make the order that Dr Gill seeks at this stage. They urged that many other matters going to their defences of justification of all of the imputations, other than imputation L, would need to be reagitated at the retrial.

19    The very point of the publishers’ submission tells against the wisdom of deferring a decision about Dr Gill’s entitlement to costs of issues that cannot be reagitated at the retrial. It is clear that there are significant costs that Dr Gill has incurred that were thrown away by reason of issues which, on appeal, were found against the publishers and cannot be relitigated. Dr Gill does not seek and, indeed, could not seek, that his entitlement to costs thrown away be taxed forthwith. That is because determining what was, and what was not, thrown away will need to be assessed in a taxation once the dust has settled at the end of the second trial.

20    The Court cannot second guess that position now, but the justice of the case requires, for the purposes of the exercise of our discretion under s 43 of the Federal Court of Australia Act 1976 (Cth), that Dr Gill, being successful and having judgment in his favour as a result of the decision on the appeal, should also be entitled to such costs of the first trial as have been thrown away, which can be quantified in the future.

The qualified privilege issue

21    The qualified privilege issue, as I said, was abandoned by the publishers when I pointed out that they were bound by the conduct of their case below and on appeal. Until now, they had argued that Mr Cannane’s state of mind was determinative of whether HarperCollins’ conduct in publishing the book was reasonable in the circumstances. This position could not be sustained in light of my reasoning, at [191]–[192], that the primary judge had erred in finding Mr Cannane’s conduct in failing to approach Mr Herron or Dr Gill for comment was not reasonable in the circumstances. The publishers should not have an opportunity to run a new case that they abjured at trial and in the conduct of the appeal, that would allow HarperCollins to call new evidence about whatever it might have considered or done in determining whether it should publish. The time for doing that has long since passed.

22    It would otherwise have been appropriate to make the order that the Court proposed originally, namely that judgment be given in favour of Dr Gill on the publishers’ defences of qualified privilege at common law and under s 30 of the Defamation Act. However, in light of the decision on the entry of judgment issue, Dr Gill’s success on the qualified privilege issue will be reflected in the order for judgment to be made in his favour.

The abatement issue

23    The last issue that the publishers raised was that, notwithstanding the effect of s 10 of the Defamation Act and the common law that Mr Herron’s cause of action abated on his death, the Court should leave hanging the primary judge’s order for costs against him to await the outcome of the new trial. The publishers put this argument recognising that they could not rely upon the amendment to s 10 of the Defamation Act brought about by the Defamation Amendment Act 2020 (NSW) (the 2020 Act). That was because, by force of the transitional provisions in Sch 1 of the 2020 Act (now found in Sch 4 of the principal Act in Part 3, item 7), an amendment made by the 2020 Act applies only in relation to the publication of defamatory matter that occurred after that Act commenced on 1 July 2021. There is no prospect of the amended s 10 being able to apply to the publication of the matter complained of that occurred in 2016.

24    Nonetheless, the publishers sought to assert that, in some way, the imputations against Mr Herron could be relitigated at the second trial and that this necessarily would involve much of the evidence that they would lead against Dr Gill. They contended that this situation required, in the interests of justice, that the costs order against Mr Herron in the Herron proceeding be left in place so that Dr Gill could be held to his undertaking to pay Mr Herron’s costs of that proceeding if, after the retrial, the new trial judge, somehow, could hold that the earlier costs order stood.

25    At one point, the publishers argued that the question should be remitted to the judge at the retrial as to whether or not the costs order made by the primary judge should be vacated. When it was pointed out by the Full Court that the judge at the retrial would be exercising the original jurisdiction of the Court, and there was no longer a matter that was justiciable in the Herron proceeding because that proceeding abated by force of s 10 and the common law, the publishers then urged upon this Court that we should reserve the question of costs and not decide it now, but await the determination of the second trial so that all the supposed issues could be determined.

26    This is not an attractive proposition. First, there was no dispute at the trial that the matter complained of conveyed seven imputations about Mr Herron, six of which, imputations A, B, C, D, I and N, related to his treatment of Barry Hart. That conduct could, on no conceivable view, be an issue at the retrial involving only the imputations conveyed in respect of Dr Gill, or otherwise reflect on Dr Gill. The matter complained of did not suggest Dr Gill was involved in Mr Herron’s alleged mistreatment of Mr Hart. Those issues took up a considerable part of the trial, including the calling of expert evidence and relitigating parts of the proceeding brought by Mr Hart against Mr Herron in the Supreme Court of New South Wales, that was decided by a jury.

27    Secondly, the invitation that the matter should be remitted to the trial judge as to whether the other imputations involving Mr Herron, that crossed over with the similar imputations involving Dr Gill, seemed to suggest that in some way the controversy previously identified in the abated Herron proceeding still existed. However, Mr Herron’s cause of action no longer exists. When the order, that the publishers do not resist, is made that the appeal in the Herron proceeding be allowed, and the order dismissing it be set aside, the consequence will be as set out in my reasons (at [209]). That is, as Knox CJ, Higgins and Starke JJ explained in Ryan v Davies Bros Limited (1921) 29 CLR 527 at 533:

The right of action for the original wrong has merged in the judgment, and a new, higher and different obligation has been created by the judgment (King v. Hoare (3 M & W 494 at 504). The right under the judgment has never been treated as an actio personalis or a right of action based upon the original wrong. The right to enforce the judgment survives to the personal representative of the deceased (Williams on Executors, 9th ed., voL II., p. 1614; Whitacres v. Onsley (Dyer 322); Farrands v. Melbourne Corporation ((1909) VLR 531; 31 ALT 78), and also the right to maintain that judgment to a Court of final appeal (see Carr v. Rischer (119 NY 117); Lewis v. St. Louis and Iron Mountain Railroad Co. (21 Am Rep 385). The obligation upon the judgment is thus at once beyond the limits of the doctrine expressed in the maxim already referred to, because according to that doctrine the right of action is put an end to by the death of either party. If the obligation on the judgment survives for the benefit of the representative of the plaintiff, the burden of discharging that obligation falls upon the defendant and his representative. And the defendant and his representative must have the right of attacking and destroying the judgment by appeal or other legal process.

(emphasis added)

28    It is not in the interests of justice that, indeed, it is impossible to understand how, a judge on a retrial of the Gill proceeding could decide whether or not the publishers had a defence to imputations conveyed about Mr Herron in circumstances where Mr Herron’s cause of action no longer exists. Those matters are not currently issues in the Gill proceeding and are irrelevant to any issue in it.

29    The question which arises about whether the costs order in the Herron proceeding should be set aside on appeal involves the conduct of a separate proceeding in the Court that is not the same as the Gill proceeding. The fact that at a retrial there may be similar, or the same, evidence relating to both Mr Herron and Dr Gill and their conduct at Chelmsford Hospital when they practised there, is not a reason to leave the costs orders made by the primary judge in limbo in circumstances where it is highly unlikely that this Court as presently constituted will be able to be reconstituted after a new trial. The justice of the case is that the primary judge’s costs orders against Mr Herron, just as her Honour’s costs orders against Dr Gill (which it is not disputed) will be, should be set aside.

30    Accordingly, the costs order in the Herron proceeding should, like the judgment against him, be set aside.

Associate:

Dated:    11 July 2022

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

WIGNEY J:

31    I agree with Rares J. I would only add the following brief observation to clarify a minor aspect of my substantive reasons for judgment in respect of the appeal: Herron v HarperCollins Publishers Australia Pty Ltd [2022] FCAFC 68. At [254] of my reasons, I intimated that the proposed retrial might also address HarperCollins’ defence of qualified privilege. There is, however, no basis for that issue to be addressed at the retrial. That is because it was at all times common ground between the parties that HarperCollins’ defence of qualified privilege effectively rose or fell on Mr Cannane’s defence of qualified privilege. For the reasons given by Rares J in relation to the appeal, with which Lee J and I both substantially agreed, Mr Cannane’s defence of qualified privilege was unmeritorious and should have been rejected by the primary judge. It follows that HarperCollins’ defence of qualified privilege was equally unmeritorious and should also have been rejected. HarperCollins should not be permitted to re-agitate that defence at the retrial.

Associate:

Dated:    11 July 2022

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

32    I agree with the reasons of Rares J.

33    Mr Blackburn SC for the respondent urged us to eschew consideration of the legal argument as to the principle of “partial justification”. However, it has been appropriate for us to do so because it is consistent with the mandatory requirement that the Court, in its appellate as well as its original jurisdiction, should facilitate the just resolutions of civil disputes according to law, and as quickly, inexpensively and efficiently as possible: see s 37M(3) of the Federal Court of Australia Act 1976 (Cth).

34    Of course, as Ms Chrysanthou SC recognised, the substantial truth of the remaining imputations could be relevant to the reduction of damages if the respondent amends to include a Burstein plea: see Burstein v Times Newspapers Ltd [2001] 1 WLR 579. Although this would require leave, argument proceeded before us on the express basis that such leave would not be opposed by Dr Gill.

Associate:

Dated:    11 July 2022