FEDERAL COURT OF AUSTRALIA

Palmer v McGowan (No 5) [2022] FCA 893

SUMMARY

In accordance with the practice of the Federal Court in cases of public interest, the following summary has been prepared to accompany the orders made today. This summary is intended to assist in understanding the outcome of this proceeding and is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet at the Court’s website. This summary is also available there.

INTRODUCTION

Enoch Powell once remarked: “for a politician to complain about the press, is like a ship’s captain complaining about the sea”. As these proceedings demonstrate, a politician litigating over the barbs of a political adversary might be considered a similarly futile exercise.

Both the applicant, Mr Palmer, and the respondent, Mr McGowan, have chosen to be part of the hurly-burly of political life. Many members of the public will have instinctive views about them absent any personal interaction. These views are likely to align with their broader political beliefs.

Although Mr Palmer resisted characterisation as a “political figure”, in truth, these proceedings arise out of a prolonged and heated dispute between two political antagonists dealing, in large part, with matters best described as political. This reality presented a recurring challenge during all stages of these proceedings, including when dealing with both liability and damages.

BACKGROUND

Two contextual matters dominate the background to this dispute: first, the COVID-19 pandemic and the controversy as to the Western Australian “hard border”; and secondly, the enactment of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) (Amendment Act) preventing the maintenance of a claim for damages (said to have been worth approximately $30 billion) arising from the Western Australian Government’s proven breach of an agreement with Mineralogy, a company controlled and beneficially owned by Mr Palmer.

While the first of these matters is well known, the second requires some elaboration.

In late May 2020, Mr Quigley and Mr McGowan had an SMS exchange in the following terms:

Mr Quigley:    I must be a bit OCD! I have been awake since 4.15 thinking of ways to beat big fat Clive and his arbitration claim for 23.5 billion in damages remembering the turd has pulled off 2 big wins in arbitration … The solution is to be found in an amendment to legislation obstensibly [sic] to protect us Re [the possibility of an unrelated dispute] … which amendment for that purpose is merely a Trojan horse as within the very small legislative amendment will be a poison pill for the fat man … It’s such a neat solution obstentially [sic] to solve one almost non existent problem but the side wind could drop drop the fat man on his big fat arse ! … Hey are you glad me single again … not making love in sweet hours before dawn instead worrying how to defeat Clive! 😂😂😂🤣

Mr McGowan:    Let’s discuss the $23 billion claim

        We need to really sort out what to do.

        I don’t want to let Parker know or any journo before we r ready

Mr Quigley:    Absolutely secrecy of essence … 😂😂😂

Work on the proposed legislation continued until just before 5pm on 11 August 2020, when the Bill was introduced in the Legislative Assembly. The Bill moved through the Parliamentary process with the speed of summer lightning. It reached the Legislative Council on the morning of 13 August; passed the Legislative Council at about 10:35pm on the same day; and the Governor provided Royal Assent approximately 40 minutes later.

Other than Mr McGowan and Mr Quigley, and possibly one or two other Ministers, no member of Cabinet had any inkling of the Bill’s existence until 45 minutes prior to its introduction.

It was common ground that the Amendment Act was extraordinary legislation. Among other things, it terminated the arbitration in relation to the damages claim of Mineralogy, and granted immunity from the criminal law to “the State” (including Mr McGowan) in relation to “protected matters” (including any conduct “connected with” the Amendment Act).

On 13 August 2020, Mr Quigley gave a colourful radio interview on ABC Radio Perth, during which he purported to explain the tactics adopted in relation to the preparation of the Amendment Act:

(1)    “[I]t is like a complicated game of chess, but in no way is it a game. I certainly, together with the Premier, feel the heavy weight of responsibility on behalf of all Western Australians to repel this rapacious claim by this … by this … Palmer man”.

(2)    “[T]his is a game of tactics. Ah, Mr Palmer got … an Arbitrator’s award back in 2014 and in the intervening six years has failed to register the award. We … identified this weakness … in his position. And so we prepared legislation that terminates the arbitration, terminates it, full stop … the crucial part was it had to be terminated prior to … the arbitration being registered in the Supreme Court.”

(3)    “[W]e kept it so tight and then brought it in at 5:00pm on Tuesday, after every court in the land was closed, and the doors were locked”.

(4)    “And as I said to you, it is like, it is like a fight. And like my near neighbour, Danny Green says, you’ve just got to jab, jab, jab with your right, and move him over to the left, and then just knock him down with a right – a left hook. And what’s happened here is that Mark McGowan has been jab, jabbing away with insults, his lawyers have been busying themselves, were sending us back reams of defamation writs, when they should have been looking at the main game, of file – of registering the arbitration. And we got through in time. We got that legislation into the Assembly on Tuesday night while all the courts were locked”.

(5)    “This is crucial that this bill is introduced and passed. And the academics and the other people can write about it afterwards, can analyse it afterwards, all they like for months to come. And criticise us, whatever. I don’t care. But we’ve got to unleash the left hook today. We’ve gotta knock [Mr Palmer] down, and knock him down today. There is too much at risk for all Western Australians, for namby pamby inquiries; “what does this word mean, what does that word mean?””.

With the background now explained, it is appropriate to turn to the alleged defamatory publications.

THE PLEADINGS AND PUBLICATIONS

Mr Palmer commenced these proceedings in August 2020. He sues Mr McGowan on six alleged defamatory publications, all made in a two-week period between 31 July and 14 August 2020 (Primary Proceeding). By way of response, in September 2020, Mr McGowan filed a cross-claim, by which he sues Mr Palmer in respect of nine alleged defamatory publications (Cross-Claim).

In the Primary Proceeding, Mr Palmer’s pleaded defamatory imputations, and my findings as to whether those meanings were conveyed, are as follows:

As to the Cross-Claim, Mr McGowan’s pleaded imputations, and my findings, are as follows:

As is evident from their terms, each of the imputations conveyed was defamatory.

DEFENCES

Mr McGowan’s only substantive defence is to rely upon three versions of qualified privilege: (1) common law qualified privilege; (2) statutory qualified privilege under s 30 of the Defamation Act 2005 (NSW) (Defamation Act); and (3) the species of common law qualified privilege concerned with publication of government or political matters, being the defence identified in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520.

Mr Palmer advances three defences against the Cross-Claim: (1) substantial truth; (2) contextual truth; and (3) the reply to attack aspect of common law qualified privilege.

For the factual and legal reasons set out at length in the judgment, the defences advanced by Mr McGowan and Mr Palmer have been unsuccessful.

OBSERVATIONS AS TO THE WITNESSES

In making factual findings and considering relief, it has been necessary to pay close regard to the evidence of three witnesses. Both parties made lengthy submissions as to credit. In summary, my findings are as set out below.

Mr Palmer

Mr Palmer is an indefatigable litigant. This was evidently not his first experience in a witness box. His confidence and self-assuredness was evident. Indeed, he carried himself with the unmistakable aura of a man assured as to the correctness of his own opinions.

Although Mr Palmer displayed obvious intelligence and was across the relevant detail, he was generally a combative and evasive witness who, on more than one occasion, was unwilling to make obvious concessions. Further, in one important respect, he gave fantastic evidence (in the original but now secondary sense of that word).

Mr Palmer gave evidence-in-chief (not adduced directly by his highly experienced senior counsel) that upon first reading the Amendment Act, he had a genuine fear for his physical safety, the safety of his employees in Western Australia, and his family. I asked clarifying questions on this topic because I was unsure of what Mr Palmer meant. Was he really saying that he thought the Premier or other agents of the State may either initiate or authorise physical violence towards him or those associated with him? The unsettling spectre of Western Australian Government thugs or assassins needing immunity from the State to absolve them from the criminal consequences of physical violence had, I confess, not occurred to me.

To even his most rusted-on partisans, Mr McGowan would be unlikely to have been thought to resemble Ian Fleming’s fictional MI6 character, James Bond. But Mr Palmer gave evidence that he thought Mr McGowan had a “licence to kill”. He swore he regarded the Amendment Act as “a statute that authorised Mark McGowan to kill Clive Palmer”. One does not need to dwell long on the principles explained by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 to form the view that this is an unsound construction of the relevant provisions of the Amendment Act.

But Mr Palmer is not a lawyer. He submits that any attempt to discredit him by reference to his fears upon reading the Amendment Act must be rejected. It is not to the point that Mr Palmer’s approach to statutory construction does not accord with orthodox notions, but his assertion he was fearful was genuine.

This submission is fanciful. Although Mr Palmer may have subjectively believed that the Amendment Act was drafted in such broad terms so to absolve specified persons (including the Premier) from criminal liability for physically harming him, this is not to be equated with any belief of Mr Palmer that the passage of the Amendment Act meant that there was a real prospect that he or those associated with him would be attacked.

Mr Palmer was angry and upset about the Amendment Act. That is hardly surprising. No doubt he thought he had wide scope in attacking its swingeing immunities. But his evidence he was genuinely concerned about his health and safety was so unbelievable that it had the effect of seriously undermining the persuasiveness of his evidence as to his subjective feelings generally.

Further, other aspects of his evidence were unsatisfactory and overall, my impression was that Mr Palmer was often willing to fashion his evidence to suit what he perceived to be best for his case. After reflecting upon his evidence generally, I do not consider it safe to place any significant reliance upon it.

Mr McGowan

Mr McGowan is often required to field questions from journalists. Superficially, such engagements might be perceived as being similar to exchanges between a witness and cross-examiner in a courtroom. But there are many differences, including one critical distinction: in the courtroom, a witness cannot (or at least should not) avoid a question with an indirect answer. The witness is there on the cross-examiner’s terms. Mr McGowan was generally an impressive witness, but sometimes when he was pressed on aspects of his evidence, he did exhibit what might be described as the muscle memory of a questioned politician in being non-responsive. It suffices to mention one example.

In his cross-examination, Mr McGowan accepted that what he was telling the public over an extended period was that the medical advice was that the hard border was “necessary”. In response to questions from senior counsel for Mr Palmer, Mr McGowan skirted the substantive question as to whether Dr Robertson (the Chief Health Officer) had given advice to the effect that a hard border was necessary. This approach did not assist. But although Mr McGowan was sometimes non-responsive, he was otherwise generally candid in his evidence.

Mr Quigley

Mr Quigley is the Attorney-General of Western Australia. Regrettably, his evidence was both confused and confusing. Mr Quigley’s evidence-in-chief was directed to one proposition: there had been no “Attack Plan” as alleged by Mr Palmer.

During cross-examination, however, Mr Quigley debunked the claim made by him in the ABC Radio Perth interview that he and Mr McGowan had “identified a weakness” in Mr Palmer’s position, namely the non-registration of the arbitral awards. In doing so, he engagingly accepted that his version in the witness box was “truly spectacularly different” to what he had said at length and in detail in the radio interview and repeatedly stressed that his evidence should be preferred because he was under oath.

Then, on 8 April 2022, Mr Quigley was recalled. Mr Quigley’s second appearance in the witness box just added to the brume of his testimony. Mr Quigley was placed in the uncomfortable position of having to concede that part of the account he gave in the radio interview was not “completely and utterly false” – as he had asserted on 9 March 2022 – but was, in fact, “completely and utterly true”.

Mr Palmer submits that Mr Quigley’s evidence was a web of untruthfulness. I do not accept this submission. Senior counsel for Mr McGowan frankly conceded that “[i]f one were to try logically to reconcile [Mr Quigley’s evidence], you would be utterly defeated”, labelling it as “outright silly”. To similar effect, my comment at the time was that I considered Mr Quigley’s evidence was not dishonest, but was “all over the shop”. I adhere to this view. It is worth stressing that being a confused witness is a quite different thing from being a dishonest one. As anyone experienced in calling witnesses is aware, the unexpected sometimes happens. This is one of the vicissitudes of litigation. It appears Mr Quigley had limited time to prepare himself for the giving of evidence. But whatever the combination of reasons for Mr Quigley’s confounding testimony, I do not think any are malign. It suffices to note that Mr Quigley was not a reliable historian of events.

Damages

The defences having failed for a combination of legal and factual reasons, it was necessary to turn to the question of relief. Damages were sought for non-economic loss. The award of damages is governed by the statutory requirement “to ensure that there is an appropriate and rational relationship” between the harm sustained and the damages awarded. This requirement ensures remedies are fair and effective in the context of achieving the objects of the Defamation Act with the aim of ensuring consistency of awards and correcting any imbalance with awards of damages for personal injuries.

The three purposes of an award are: first, consolation for the personal distress and hurt caused; secondly, reparation for harm done to the person’s reputation; and thirdly, vindication of reputation. The assessment is an intuitive, evaluative process conducted at large, but subject to the provisions of Pt 4 Div 3 of the Defamation Act.

Four general observations are worth making about damages in this case before identifying the assessment.

The first relates to the environment in which the publications were made. Mr Palmer submits that it is incorrect to characterise the exchanges between the parties as taking place “between two political combatants”, and that any characterisation of him as “an active political figure” needs to be approached with care. This is because at the time of Mr McGowan’s publications, Mr Palmer was a former Australian politician, having retired from Parliament in 2016. Rather, it is said that at the time of the relevant publications, Mr Palmer was involved in actively pursuing his business and philanthropic interests.

These facts may be accepted, but no-one picking up a newspaper in Australia in 2020 could be in any doubt as to the political profile of Mr Palmer. Although he was not running for office in 2020, he was the Chairman of the United Australia Party, and was one of the most well-known figures operating in the sphere of Australian politics generally. The contention that the exchanges between the parties in July and August 2020 were not taking place between two political combatants is unpersuasive and superficial.

Secondly, and relatedly, a consequence of the protagonists in this case being political figures is that many listeners and readers will have had well-entrenched perceptions as to their character and reputation. Indeed, people could likely be placed on a continuum between admiration and resentment, with some who are neutral or open-minded in the middle. The parties recognised that those on the admiration end will tend to support the political figure no matter what material is published, while those who resent the political figure will tend to disbelieve and criticise. Some in the middle, in an ideal world, will be influenced by reason, independent judgment and a scrutiny of the facts. Mr Palmer submits it is necessary to put aside those persons who have views about either Mr Palmer or Mr McGowan that are so prejudiced or stubborn to mean they are impervious to the impacts of defamatory statements. That is said to be because such a person is not an ordinary, reasonable listener, viewer or reader. But this puts the matter too highly. As White J explained in Hanson-Young v Leyonhjelm (No 4) [2019] FCA 1981 (at [78]) and repeated in Dutton v Bazzi [2021] FCA 1474; (2021) Aust Torts Reports ¶82-713 (at 63,437 [186]), many ordinary, reasonable people will not be influenced, positively or negatively, by statements concerning a politician about whom they have already formed a view.

Thirdly, this is a case where Mr McGowan and Mr Palmer have taken advantage of the opportunities created by publication of the impugned matters to respond forcefully in public and (particularly in the case of Mr McGowan) to advance themselves politically. Because there must be an appropriate and rational relationship between the harm sustained and the amount of damages awarded, if a person defamed is able to avoid some of the damage to reputation by use of media and public statements to reduce, to an appreciable extent, some of the harm to reputation which would otherwise have resulted, this is necessary to take into account in an assessment.

Fourthly, both parties advanced lengthy submissions as to aggravated damages, which largely mirror arguments deployed in seeking to establish malice, being arguments I rejected. No aggravated damages should be awarded.

As to Mr Palmer

Imputations 3(a), 3(b), 5(b) and 11(b) (which relate to Mr Palmer representing a threat and danger to the people of Western Australia and Australia) position Mr Palmer as acting contrary to the interests of the broader community. Imputations 7(a), 9(a) and 13(c) (that Mr Palmer promotes a drug which all the evidence establishes is dangerous, selfishly uses money he has made in Western Australia to harm Western Australians, and is so dangerous a person that legislation was required to stop him making a claim for damages against Western Australia) are pointed criticisms of Mr Palmer.

One cannot dismiss these imputations as being trivial, but any evaluative assessment as to seriousness must take into account context.

Justice Windeyer observed in Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185 (at 210) that political discourse “extends to the use of language that is vigorous, and sarcastic, as well as that which is reasoned, restrained and elevated. Invective is not banned”. Further, and importantly, his Honour remarked that “a man who chooses to enter the arena of politics must expect to suffer hard words at times”. 

Mr McGowan had a bully pulpit. He was a highly popular Premier who had an opportunity to speak out to a wide audience. The tone of political discourse in this country is not usually characterised as being milquetoast (or to adapt Mr Quigley’s term, used in a different context, “namby-pamby”). Mr McGowan was speaking to an audience including reasonable people used to receiving criticisms by politicians expressed forcefully, and often couched in hyperbolic terms. Mr McGowan used hard words, but Mr Palmer’s submission that the publication of these defamatory imputations amounted to a serious libel pitches his case too highly.

Linking or demonstrating any causal connexion between the defamatory publications and any actual damage to reputation cannot ignore the reality that for many, views as to Mr Palmer’s reputation were already “baked in”. The estimation of some may have diminished, or the adverse views held by some may have become more entrenched, but identifying any real or material damage to reputation in the present context is difficult. While damage to reputation is presumed, I conclude there was very little damage to Mr Palmer’s reputation caused by reason of the defamatory publications.

Mr Palmer also gave evidence about his hurt feelings.

While I accept that Mr Palmer was upset with the course that the State was taking as to the hard border, it seems to me that his real frustration and anger, unsurprisingly, was directed to the passage of the Amendment Act. Although standard hurt to feelings evidence as to the publications was carefully adduced, this case reinforced my view that it is best to receive such evidence in person and orally. In general it was unpersuasive, peppered with defensive comments as to why Mr Palmer was in the right and Mr McGowan was in the wrong, and consistent with Mr Palmer not suffering great vexation but rather forming the view that he “didn’t think [the comments] were called for” and thought they were “unfair”.

I have not reached a state of actual persuasion or reasonable satisfaction that Mr Palmer suffered any real or genuine hurt to feelings by reason of the defamatory publications.

Mr Palmer submitted that even if the Court considers that there is no damage to reputation, vindication is still necessary and the judgment should still reflect the baselessness of the charges. While I accept that vindication is a separate consideration that must be given weight in assessing any award of damages, the relationship between the three purposes of damage, particularly damage to reputation and vindication, ought not to be forgotten. To use language drawn from the speech of Lord Hailsham LC in Broome v Cassell & Co Ltd [1972] AC 1027 (at 1071), there is little need for an award of damages to convince the ordinary bystander of the baselessness of the charge if it has not been demonstrated that the charge has materially affected the opinion of the ordinary bystander.

Given the lack of significance of the damage to reputation, the appeal to vindication is overstated.

In the end, I am required to ensure that there is an appropriate and rational relationship between the harm I have found sustained (which is very minor) and the amount of damages awarded (which should, as a consequence, be very minor). Taking all matters into account, I assess damages in the amount of $5,000.

As to Mr McGowan

Mr McGowan’s case as to damage to reputation collided head on with the objective facts.

It is not in dispute that at the time of First Cross-Claim Matter, in July 2020, the West Australian celebrated Mr McGowan as “Mr 89%”. As at March 2021, some seven months later, Mr McGowan’s personal approval rating was still at the stratospheric level of 88% or 89%. Indeed, a little later, at the state election that same month, the Australian Labor Party won 53 out of 59 seats in the Legislative Assembly. This victory made the “Wranslides” of 1978 and 1981 look close run things. Further, Mr McGowan increased the margin in his own seat of Rockingham to 37.7%, achieving a swing that made it the safest seat in Western Australia.

Notwithstanding any presumption that arises from the extent of publication and the seriousness of the imputations carried, the evidence establishes the inconsequential impact of the publications upon Mr McGowan’s reputation. Indeed, it is more likely that Mr McGowan’s reputation was enhanced. As Mr McGowan accepted, Mr Palmer was someone with whom Mr McGowan was “happy to have a blue with”.

Although his damage to reputation was non-existent, Mr McGowan’s evidence as to an aspect of the subjective hurt he suffered was compelling. But he is the Premier of Western Australia. Robust criticism is, and should be, part and parcel of the job. Weighing up all the factors, I have concluded that the appropriate amount for general damages is an award of $20,000.

Other Relief

As to the mutual applications for an injunction, this is a part of the case where context matters. The right of free speech is essential to the proper functioning of a representative democracy, and subject to certain statutory and other exceptions, should generally not be interfered with or restricted. No injunction should run.

Conclusion

The game has not been worth the candle.

These proceedings have not only involved considerable expenditure by Mr Palmer and the taxpayers of Western Australia, but have also consumed considerable resources of the Commonwealth and, importantly, diverted Court time from resolving controversies of real importance to persons who have a pressing need to litigate.

Political figures occupy a special place in our system of representative and responsible government. Insofar as a subset of political figures (serving members of Parliament) are concerned, this special place carries with it protection against civil or criminal liability for actions done or statements made in the course of their legislative duties. Political figures more generally have a position which allows them to further their agenda, and potentially influence the course of economic and social policy and current events. But balanced against these considerable privileges are the costs or downsides of a political profile, including the reality that such figures must expect a degree of public criticism, fair or unfair, not usually visited upon other members of the public.

Article 17 of the International Covenant on Civil and Political Rights, opened for signature 19 December 1996, 999 UNTS 171, 6 ILM 386 (entered into force 23 March 1976) relevantly provides that no-one shall be subjected to “unlawful attacks on his honour and reputation” and that “(e)veryone has the right to the protection of the law against such interference or attacks”. This important human right does not vanish like a will-o’-wisp once someone becomes a political figure. But at a time when public resources devoted to courts are under strain, and judicial resources are stretched, one might think that only a significant interference or attack causing real reputational damage and significant hurt to feelings should be the subject of an action for defamation by a political figure.

I will hear the parties on the appropriate award of costs. A relevant consideration will be the glaring disproportion between the damages awarded and the extent of legal expense.

JUSTICE M B J LEE

2 August 2022