6.1 Chapter 2 of this Report points out that the law, currently, protects reputation primarily through the remedy of damages. One of the Commission’s major concerns, in reviewing the law of defamation, has been to develop remedies which are more clearly aimed than damages at vindicating the plaintiff’s reputation. As foreshadowed in DP 32,1 we have investigated, in particular, the possibilities offered by declaratory orders and correction orders. In this Chapter, we recommend the introduction of a new remedy, the “declaration of falsity”, which will, in our view, effectively achieve the object of restoring the plaintiff’s reputation. For reasons which we explain below,2 we do not, at this stage in the development of the law, favour the development of mandatory correction orders as a general statutory remedy.
THE DECLARATION OF FALSITY
6.2 The Commission proposes the development of a new remedy in defamation litigation, to be called the “declaration of falsity”, whose objectives are to:
- promote findings on the issue of truth or falsity;
- recognise the public nature of reputation and the injury done to it by defamatory imputations;
- promote the prompt public restoration of reputation as equally important as compensation for its loss;
- reduce the length and cost of proceedings by removing defences which are irrelevant to the issue of truth or falsity;
- provide plaintiffs who do not seek or who are denied a damages remedy by reason of the constitutional implication of freedom of political speech with a method of vindicating their reputations; and
- ensure that special damages remain available to compensate for financial loss.
6.3 The notion that declarations should be used as a remedy in defamation cases received support in submissions to the Commission.3 However, a number of submissions were critical of the particular proposal in Discussion Paper 32.4 These submissions argued that declarations under that model would not be much cheaper or quicker than actions for damages and therefore would be unlikely to satisfy plaintiffs. In addition, it was argued that the proposal to make falsity an ingredient of the cause of action only in actions for damages would complicate the law. In response, the Commission has simplified and streamlined the proposal both to address the desire of plaintiffs to correct those things said about them which are false and defamatory and to protect freedom of speech.
The rationale of the declaration of falsity
6.4 The most important justification for the use of declarations in the law of defamation is found in the prospect which they (but not necessarily damages)5 hold out of the effective vindication of the plaintiff’s reputation. Effective vindication means, first, that the declaration must be available to defamed plaintiffs as soon as possible after publication, for this is the time at which such empirical evidence as is available suggests that plaintiffs are most likely to be satisfied with non-monetary relief.6 The Commission’s proposals therefore seek to deliver a judicial declaration of falsity to successful plaintiffs as expeditiously as is possible.7 Our proposals also address a second requirement of effective vindication, namely, the publication of the court’s findings, by requiring that the declaration be published by the defendant.8
6.5 Another justification for declarations of falsity is that defamation law should promote public findings on the issue of truth or falsity.9 It is the Commission’s view that it is inadequate to rely on the conflict of allegations in the media to establish truth. Media ownership in Australia is too heavily concentrated to produce a reliable “marketplace of ideas”.10 Courts do make findings of fact every day, and are far more likely to make reliable findings after hearing all the evidence from both of the most interested parties than a media organisation which relies on its own inquiries.11
The relationship between the declaration of falsity and damages
6.6 Notwithstanding s 63 of the Supreme Court Act 1970 (NSW) (which requires that, in any proceedings, the court should grant all the remedies to which the parties may be entitled so that, as far as possible, all matters in controversy between the parties are finally resolved), the Commission recommends that plaintiffs must elect to bring an action either for a declaration or for damages for non-economic loss (“general damages”) in respect of the same defamatory matter.12 In other words, declarations and damages for non-economic loss cannot be claimed in the same proceedings. If it were possible for a party to pursue both, the capacity of the declaration of falsity to resolve expeditiously the single issues of falsity and defamatory meaning, and thus to achieve the effective vindication of the plaintiff’s reputation, would be lost.
6.7 A plaintiff may, however, claim damages for economic loss in conjunction with a declaration of falsity. The claim for economic loss, in which all the usual defences are applicable,13 will not be dealt with by the court until the declaration has been granted. Once again, the reason is to avoid defeating the effectiveness of the declaration of falsity.
6.8 The Commission proposes that the election of a plaintiff who successfully obtains a declaration of falsity should be binding and final after the defendant has complied with the terms of any orders ancillary to the declaration granted. To this extent, the plaintiff’s election will avoid a multiplicity of proceedings concerning the matters in controversy between the parties. This is fair to the plaintiff, who is not denied relief in damages where, for example, the defendant refuses to publish the terms of the declaration as directed by the court.
6.9 If the defendant fails to comply with the court’s orders regarding publication (and if the defendant has not obtained a stay of the proceedings), the plaintiff should then be permitted to amend the proceedings to make a claim for damages for non-economic loss. The defendant may also be in contempt for its failure to comply with the direction of the court. A recalcitrant defendant may, therefore, find itself facing (i) a claim for damages to which all the usual defences will be applicable, but in which the plaintiff will already have a favourable finding on the issue of falsity; (ii) the prospect of a substantial fine for contempt; and (iii) the costs of both proceedings. On the other hand, where the defendant’s failure to comply with the court’s orders is inadvertent or otherwise excusable (because, for example, the defendant was unaware that the orders had been made), the court may grant to the defendant such relief as the interests of justice may require. That relief may include restraining the plaintiff from pursuing the claim for general damages.
6.10 In the case of a plaintiff who unsuccessfully applies for a declaration, no specific provision is necessary. Where the declaration is refused because the plaintiff fails to satisfy the court that the imputations are false and defamatory, any subsequent action for damages would be pointless because it would be defeated by operation of the principles of issue estoppel. In all other cases, the plaintiff should, as a matter of justice, be allowed to make out a claim in damages if he or she can. This includes cases where:
- the court refuses to entertain declaratory proceedings because the defendant has a triable defence of absolute privilege, protected report or court or official notice;14
- the imputation is not capable of being proved true or false;15 and
- the declaration is refused in the court’s discretion.16
6.11 Another potential problem arises in defining the relationship between the declaration of falsity and damages. That problem occurs where the plaintiff attempts to establish more than one cause of action out of the same defamatory matter. Suppose, for example, that a plaintiff unsuccessfully seeks a declaration of falsity on the basis of an imputation which the court finds the matter is not reasonably capable of carrying. Can the plaintiff then seek to establish another cause of action (either for a declaration or for damages) on the basis of a different imputation arising from publication of the same matter? In the Commission’s view, this problem is best accommodated, as it is under the existing law, by providing that further proceedings cannot be brought in respect of the publication of the same matter without the leave of the court.17
Factual imputations
6.12 In an application for a declaration, as in other defamation actions, the plaintiff will have the onus of establishing the threshold requirements that the defendant has published of and concerning the plaintiff a false and defamatory imputation. In addition, the plaintiff must establish that the imputation is one of fact. The reason is that, if the imputation is incapable of being proved true or false, no declaration of falsity can be made. Of course, if the imputation is reduced to some form of words which is capable of being declared false, and the plaintiff is able to prove that it is false, then the declaration may issue. The danger is that this reduction will produce a strained or forced imputation. But, in such cases, it will usually be impossible to prove that the imputation is conveyed in the first place. However, if the plaintiff succeeds in doing so and proving the falsity of the imputation, there is no reason why a declaration of falsity cannot be granted.18 Since only the pleaded imputation will be declared false, there will be no “undeserved whitewashing” of the plaintiff’s reputation such as could result from an award of damages in such a situation.19
The court’s discretion
6.13 As with all declaratory relief, the declaration of falsity will be available only in the discretion of the court.20 That discretion will be relevant to the determination of whether or not a declaration should be granted,21 and, if so, as to the form it should take.22 All of the circumstances of the case will be relevant to the exercise of the court’s discretion so far as they relate to the nature of the relief sought (that is, relief whose object is to provide judicial determinations of the issue of truth or falsity). In theory, the circumstances of the case can justify regard being had to any consideration which the court thinks appropriate, whether such considerations are of a strictly legal, moral or ethical nature. In practice, broad discretionary factors relevant to the grant of declaratory relief have emerged, and it is possible to predict the force of these principles in particular types of proceedings.23
6.14 Without being exhaustive, it is possible to identify some factors which will generally render inappropriate the grant of a declaration of falsity. These include: where any determination of the issue of truth or falsity will no longer serve any useful purpose, as where the defendant has published an adequate and otherwise appropriate correction;24 or where the defendant has made an offer of amends.25
6.15 Another example of a situation in which the court’s discretion is likely to be exercised against the declaration of falsity is where the defendant has no real concern to contradict the declaration sought.26 At present, a defence of innocent publication is available in an action for damages to distributors or vendors of defamatory matter in certain limited circumstances, allowing those persons to escape liability in damages even though they participate in the publication of defamatory matter and extend its area of dissemination.27 For reasons which are explained in Chapter 9, the Commission recommends little change to the existing law in this respect. It is inappropriate, however, that a declaration of falsity should be made against an innocent publisher. First, such a publisher may have no knowledge of the truth or falsity of the imputations in question and will usually have no interest in contesting the declaration. Secondly, the interests of the original publisher could be prejudiced by the grant of the declaration and a court will generally not grant a declaration which can prejudice the interests of third persons who are not parties to the proceedings.28 Of course, in the normal course of events, the original publisher would be joined as a party to the proceedings.
No affirmative defences
6.16 Where the plaintiff seeks a declaration of falsity, the defendant may, of course, traverse the issue of falsity and assert that the imputation is true. The Commission does not, however, believe that the defendant should generally be allowed to oppose the declaration of falsity by relying on one of the recognised defences (that is, privilege, comment, contextual truth or unlikelihood of harm) which apply to an action for damages in defamation (an “affirmative defence”).29 Two considerations have led the Commission to this conclusion.
6.17 First, the primary objective of the declaration of falsity is to obtain a judicial determination of the issue of truth or falsity. Yet, with the exception of justification (which ceases to be a defence when the burden of proof of falsity rests on the plaintiff),30 the recognised defences which apply to actions for damages in defamation cases do not traverse the issue of truth or falsity; they are simply irrelevant to it. In our view, unless there are compelling countervailing policy reasons, the defence in question ought not to apply to declarations of falsity even though that defence will, of course, continue to be relevant in a claim for damages (where the award is aimed at providing compensation for injury to reputation rather than simply determining the issue of truth or falsity).31
6.18 Secondly, we have kept in mind that the purpose of the remedy is to provide the plaintiff with a speedy vindication of reputation. This goal will be frustrated if the trial of the issue turns into a lengthy determination of the application of complex defences which bear no relation to the issue of falsity.
6.19 The strength of the second consideration is put to the test in those cases in which the policies underlying a recognised defence suggest that the plaintiff should be denied a declaration of falsity in circumstances to which the defence applies even though the issue of truth or falsity is not traversed. The Commission’s evaluation of the policies underlying the traditional defences in damages actions has led us to the conclusion that the policies which underlie three recognised defences do have this effect. These defences are absolute privilege,32 protected reports33 and court and official notices.34
6.20 In such cases, the Commission was faced with a choice of allowing those defences to be raised and determined in the plaintiff’s application for a declaration of falsity or effectively requiring the plaintiff to bring an action for damages. The Commission prefers the latter course. In our view, the objective of obtaining a speedy vindication of the plaintiff’s reputation is unacceptably compromised if the court is required to determine, in an action for a declaration of falsity, the complicated issues of fact and law to which these defences can give rise. Further, the “summary procedure” which we envisage will apply to declarations of falsity will simply be an inappropriate context for the making of such determinations.35 Our recommendation is, therefore, that if the defendant raises a defence of absolute privilege, protected report or court or official notice, the judge should make a summary ruling on whether or not there is a triable issue in respect of that defence. If there is, it must be resolved in an action for damages and the application for a declaration of falsity refused.
Absolute privilege
6.21 The policy underlying absolute privilege is that certain proceedings or occasions require completely unrestricted freedom of speech in order to ensure the proper operation of governmental institutions, whether legislative, executive or judicial. In the Commission’s view, this policy applies to protect true and false statements whether a plaintiff seeks damages, a declaration or any other remedy. If, in any case, the defendant raises this defence, the judge will need to make a summary ruling on its application. In many cases, it will be obvious whether or not absolute privilege is a triable issue. But where the applicability of the privilege depends on the resolution of disputed issues of fact and law,36 the application for a declaration of falsity must be refused and the disputed issues resolved in an action for damages should the plaintiff wish to bring one.
Protected reports and court or official notices
6.22 In cases of protected reports the defendant is either relying on a derivative privilege flowing from the protection given to some original proceedings (statements or proceedings in court or parliament, or proceedings before statutory bodies) or on a legislative policy of maximising the publicity given to certain proceedings (such as those at a public meeting on a matter of public interest). In both cases the underlying policy is the promotion of publicity for the proceedings, which is desirable because of the public interest in what occurs in those proceedings.37 In the Commission’s view, that policy precludes the making of a declaration of falsity in a case to which it applies. Pragmatic considerations support this conclusion. It seems clearly inappropriate to make a declaration that what the defendant reported (although fair) was false where such a determination cannot be made directly in respect of the original proceedings. A possible result would be, for example, that one court would declare that what was said in proceedings before another court (and fairly reported) was false.38 Nor is the publisher of such a report a proper contradictor in relation to the truth of what has been accurately reported.
6.23 In cases of court notices and official notices, the defendant is relying on a privilege flowing from a direction made by a court or from an official request by a government officer or public authority. A plaintiff who wishes to challenge the veracity of the contents of such notices in a defamation action should proceed against the maker of the notice. If such an action lies, it is the appropriate avenue of redress. If it is does not (because the notice itself is privileged), it is clearly inappropriate to call into question the veracity of the direction or notice by obtaining a declaration of falsity against the person who publishes it under authority.
6.24 Cases of protected reports or court and official notices, which raise issues of “fairness”, “good faith” and “public interest”, are more likely to give rise to disputed questions of fact and law than cases of absolute privilege. Where this is so, these issues are appropriately resolved in an action for damages.
Inapplicable defences
6.25 Qualified privilege at common law and under section 22.39 The development of defences of qualified privilege has tended to direct attention away from the issue of truth or falsity. The issues under qualified privilege relate to such matters as a reciprocal duty and interest between defendant and recipients, the defendant’s state of mind, and (under s 22 of the Defamation Act 1974 (NSW)) whether the conduct in publishing was reasonable. While these issues are relevant to an action for damages whose objectives include compensating the plaintiff for harm suffered, they are, logically, simply irrelevant to a declaration of falsity. That they should be is supported by policy considerations. The rationale behind the Commission’s proposal for the declaration of falsity is to facilitate the flow of accurate information to the public. While qualified privilege may encourage the free flow of information, it does nothing to ensure its accuracy or promote the public interest in the vindication of injured reputations.
6.26 The irrelevance of qualified privilege to a declaration of falsity is recognised in some of the American literature. Many proposals for reform of libel law in the United States are designed to avoid the problems caused by the focus on “actual malice” under the constitutional privileges.40 Proposals for declaratory judgments recognise that issues relating to a defendant’s state of mind are simply irrelevant to a remedy whose object is to deliver a judicial finding on the issue of truth or falsity.41 A number of the proposals have also specifically suggested that common law qualified privilege should be disregarded.42
6.27 The Commission recognises that the adoption of its recommendations would mean that a judicial declaration of falsity will be available even where no damages would be payable because an action for damages would be met with a defence of qualified privilege. In our view, plaintiffs in that situation should still be given the opportunity to correct the record through a declaration. This avoids the lack of compromise in the current law under which there is no middle position: the plaintiff gets damages or nothing. And we do not believe that media or other defendants should, under the protection of qualified privilege (which protects less important social interests than absolute privilege), have a privilege to publish falsehood while leaving plaintiffs with no remedy.43
6.28 Contextual truth. The defence of contextual truth applies where one or more imputations which are contextual to the imputation complained of are matters of substantial truth, and either relate to a matter of public interest or are published on an occasion of qualified privilege. If, by reason of the substantial truth of the contextual imputations, the plaintiff’s reputation is not further harmed by the imputation complained of, it is considered inappropriate to make the defendant liable in damages.44 For example, if the defendant imputes that the plaintiff is a murderer, a thief and an illegal immigrant, and if the first two charges are true but the third is not, then the plaintiff should not recover damages because, in the light of the truth of the first two imputations, the plaintiff’s reputation is not further harmed by the falsity of the third. Awarding damages in this case could leave the impression that all the imputations are false.
6.29 However, there is no reason why the defence should apply where the plaintiff seeks only a declaration of the falsity of the pleaded imputation. The defence raises issues which are irrelevant to this question. The plaintiff should be entitled to correct those parts of the matter complained of which are false. Thus, in the example given, the plaintiff should be entitled to a declaration that he or she is not an illegal immigrant if that imputation is false. The other imputations will remain untouched. Of course, the court’s general discretion remains relevant, and that discretion may well be exercised against the grant of declaratory relief if the plaintiff seeks correction of parts of the matter complained which are absolutely or comparatively trivial, such that the intervention of the court cannot be justified.
6.30 It is the finely adjusted nature of the declaratory remedy which makes it possible to do without the defence of contextual truth. By contrast, the crude message conveyed by an award of damages makes the defence necessary. Without contextual truth, an award of damages can result in an “undeserved whitewashing” of the plaintiff’’s reputation.45
6.31 Unlikelihood of harm. This defence accepts that a defamatory imputation was published by the defendant but that the circumstances of its publication were such that the plaintiff was not likely to suffer harm.46 In such cases it would be inappropriate to impose liability in damages on the defendant. However, if the plaintiff shows that the defendant published a false and defamatory imputation then (subject to the exercise of the court’s discretion where the claim is too trivial to warrant its intervention), he or she should get a declaration to that effect. The order for publicising the declaration can be tailored to ensure that it is not circulated any more widely than the original imputation. If appropriate, this order could be dispensed with altogether where the matter complained of was not disseminated to any significant extent.
6.32 Comment. The defence of comment (another “traditional” defamation defence) cannot be raised in opposition to a declaration of falsity. This flows directly from the requirement that the imputation be capable of being proved true or false.47
Recommendation 14
“Affirmative defences” to actions for damages in defamation cases cannot be raised to defeat an application for a declaration of falsity. However, where the defendant has a triable defence of absolute privilege, protected report or court or official notice, the court will not grant a declaration of falsity.
Speed
6.33 Reputation cannot be restored satisfactorily if too much time elapses between publication and the grant of a declaration of falsity. In such circumstances, the declaration may serve only to remind those who have forgotten of the imputations made. The plaintiff should not, therefore, be allowed to delay in bringing a claim. The Commission has decided that a declaration should be sought within four weeks of publication or, exceptionally, within such longer period as the Court should in its discretion permit, to a maximum of one year from publication (the limitation recommended for the tort generally in Chapter 13). Factors which may activate the court’s discretion to extend the time include cases where the plaintiff was not within the jurisdiction at the time of publication and was not aware of it, or where the parties must spend some time gathering sufficient evidence.
Recommendation 15
Declarations should be sought within four weeks of publication or, exceptionally, within such other period as the court may in its discretion determine, to a maximum of one year from publication.
Procedure
6.34 The Commission believes that the speed necessary to a declaration of falsity can only be achieved by taking action in the Supreme Court where an established Defamation List, with its existing procedures and expertise, will facilitate their determination.
6.35 At present, an application for a declaration would be heard by a judge alone. The Commission recommends that this should continue to be the case where a plaintiff seeks a declaration of falsity, notwithstanding our view, expressed in Chapter 3, that juries should be retained at the imputations stage of proceedings in actions for damages. The empanelling of a jury to determine the defamatory nature of the imputations in a declaratory action would, in our view, destroy the essential requirement of speed which here outweighs the desirability of community input. Apart from ruling on the defamatory nature of the imputations, a judge in a declaration claim performs functions eminently suited to a judge alone - namely, the determination of the falsity of the imputations;48 the triability of certain defences in an action for damages; and the exercise of a judicial discretion as to whether or not the remedy should be granted and, if so, in what form. Indeed, the latter two issues, which involve questions of law, could not be dealt with by a jury in any event.
6.36 The Commission believes that the introduction of the declaration of falsity will not require the commitment of significant judicial and court resources. The issues in declaratory proceedings are narrowly drawn and can usually be promptly disposed of. The plaintiff will file originating process pleading the imputations. At trial, the defamatory nature of the imputations will generally be decided on the pleadings. If the defendant appeals to the court’s discretion or points to a possible defence of absolute privilege, protected report or court or official notice, a summary ruling is required. If the court decides against the defendant, the court would then decide whether or not a declaration should be granted.
6.37 The threat to the speed and efficiency of declaratory proceedings comes from those cases where the defendant wishes to present significant evidence of truth, or the plaintiff relies on a true innuendo. It will, of course, generally be reasonable, subject to the court’s discretion, to allow defendants to interrogate as to the issue of truth. But, with the onus on the plaintiff to prove falsity, the elimination of defences and of all issues going to damages, the scope of any discovery or interrogatories will be narrowly confined.49
The publication of the declaration of falsity
6.38 The declaratory judgment must be published to be effective. The Commission has considered the argument that ordering the defendant to publicise a declaratory judgment may be viewed by some as a serious intrusion on freedom of speech or of the press.50 However, the Commission does not now propose that defendants be forced to adopt statements with which they disagree. Nor do we propose that they be ordered to retract or apologise, which would seriously erode editorial freedom. The order should simply be to publish the judicial finding of falsity made by the court against them, much as they do now voluntarily in relation to determinations against them by the Press Council. Compliance with that order can clearly be distinguished from the defendant’s own views.
6.39 The Commission does not view the requirement that the defendant publish the court’s declaration as offensive to any known constitutional or other norms of free speech or of freedom of the press. Where the plaintiff proves falsity, it appears that such an order does not violate even the extensive protection of free speech and freedom of the press in the First Amendment to the United States Constitution.51 It therefore seems unlikely to violate the more limited freedom of political discussion in the Australian Constitution (which does not, in any event, explicitly refer to freedom of the press).52 Further, the Commission notes that, in the case of media defendants, the action of publishing the court’s declaration could be seen as giving effect to their ethical obligation to “do their utmost to correct any published or broadcast information found to be harmfully inaccurate”.53
6.40 The Commission has considered whether defendants should be able to avoid publishing the declaration by paying for a sufficently prominent advertisement in a competing publication. However, there may not be any other publication which is capable of reaching substantially the same audience. Other problems may arise where all of the media outlets in a particular location run the same defamatory story. Accordingly, the Commission recommends that the unsuccessful defendant should be ordered to provide an adequate remedy for the wrong done to the plaintiff.
6.41 To ensure that plaintiffs receive an adequate remedy, the Commission proposes that the Court’s order should ensure that the published declaration, in its location and prominence, is reasonably likely to reach substantially the same audience as the original publication. The guidelines in Chapter 8 for determining the adequacy of a requested correction are applicable to this exercise.54
6.42 This recommendation is directed primarily at media publications. It could be tailored to fit other situations, in order to ensure that the plaintiff’s reputation is vindicated by giving the same publicity to the declaration as was given to the original defamatory imputation. For example, if a false defamatory statement is published on a club noticeboard, the court could order that the declaration be published in the same place with the same prominence and for the same length of time.
6.43 There may be a concern that defendants would choose not to bother defending an action for a declaration where they have no liability in damages. However, in such cases, the declaration could state that the defendant has not defended the action, which could be seen as an admission of guilt. And the defendant will be liable in costs and ordered to publish the declaration. Thus, the court’s findings will be publicised anyway, in terms less favourable to the defendant than if it had defended the action.
Costs
6.44 Costs in a fully litigated defamation suit are substantial. It has been argued that damages are a necessary remedy to cover such costs.55 However, in a declaration of falsity, no matter which party succeeds, the costs liability must be far lower than it is for a fully litigated defamation action simply because the issues are narrowly drawn. If the defendant does not wish to dispute the issue of truth or falsity, the costs will not be very great at all. The availability of the procedure and the prospect of an order for costs may well encourage defendants to publish corrections voluntarily more often. The Commission is of the view that where successful plaintiffs have chosen to seek a remedy designed to restore their reputation, rather than to compensate for its loss, they should be entitled to costs, prima facie on an indemnity basis. The reason is that there will be no fund of damages from which any discrepancy between party and party and solicitor and client costs can be met.
6.45 The normal costs rule is that the successful party recovers costs on a party and party basis56 unless, pursuant to statute, rules of court or its general discretion,57 the court awards costs on an indemnity basis.58 In practice, costs are seldom awarded on an indemnity basis. The reluctance of courts to award costs on this basis justifies a prima facie rule from which courts will have to justify any departure in the circumstances of the individual case. It is neither possible nor desirable to lay down in advance a list of circumstances which the Court should take into account in deciding whether or not to depart from an award of indemnity costs. Nor does the Commission attempt to specify the circumstances in which “indemnity costs” should mean (as they usually do) all reasonable costs, with any doubts as to what is reasonable being resolved in favour of the receiving party,59 as opposed to a complete indemnity (that is, everything the plaintiff has actually spent).60
6.46 The Commission has carefully considered whether its recommendation that successful plaintiffs should, prima facie, be awarded indemnity costs pursuant to a declaration of falsity breaches the constitutional implication of freedom of political discussion. In Theophanous the reasoning of the majority was based on a desire to protect freedom of political discussion from the chilling effect of damages awards.61 The Commission notes that Justice Deane was of the view that a liability for costs can have a like chilling effect.62 There is, however, no Australian legal procedure known to us in which the loser does not run the risk of paying costs. In any event, we believe that where the plaintiff must prove falsity and the defendant has no liability in damages, the imposition of indemnity costs, subject to the discretion of the court, on an unsuccessful defendant to a declaratory judgment is consistent with the constitutional implication.
Economic loss
6.47 The Commission is of the view that a grant of a declaration of falsity should not preclude any claim in the same proceedings for economic loss caused by the defamation, provided that the claim is determined after the declaration has been made. Any issues which have been resolved by the declaratory judgment proceedings will also be established for the claim for economic loss, bearing in mind that, with the exception of the availability of all current defences, the same substantive rules apply to both. Defendants who can establish any of the affirmative defences currently available to a claim for damages should not be liable for economic loss. Discovery and interrogatories relevant to these defences and to the claim for special damages would be allowed, but only after the declaration is made so as not to impede the prompt determination of the declaration. To the extent that a plaintiff obtains advantages from having certain issues determined in proceedings for the declaratory judgment, this should be seen as a reward for not seeking general damages.
The declaration of falsity and the constitutional implication of freedom of political discussion
6.48 In fashioning the declaration of falsity, the Commission has been concerned to ensure that the new remedy does not fall foul of the constitutional implication of freedom of political discourse. In our view, a remedy whose simple object is to vindicate reputation by declaring whether or not defamatory material which the defendant published of and concerning the plaintiff is true or false cannot generally be regarded as having a chilling effect on freedom of speech.
6.49 It may be argued that the remedy breaches the constitutional implication in the case of statements published in the course of political speech. The argument here would be that the imposition of strict liability for false statements is incompatible with the tolerance which freedom of speech requires be given, in an action for damages, to defamatory and false material published without knowledge of falsity, carefully and reasonably. The basis of the argument is found in the joint majority judgment of Chief Justice Mason, Justices Toohey and Gaudron in Theophanous.63 Their Honours held the constitutional implication does not protect statements which are knowingly false, or made with reckless disregard for their truth or untruth. “The public interest to be served does not warrant protecting statements made irresponsibly”.64 In addition to these concepts derived from American law, the Court imposed a requirement that the publication be reasonable in the circumstances, involving taking steps to check the accuracy of the material where “the standards and expectations of the community” demand it.65 No defences of this sort are available to the Commission’s proposed declaration of falsity.
6.50 Ultimately, the Commission regards this argument as being without foundation, since the effect of the existence or otherwise of specified defences cannot be isolated from the cause of action generally or from the remedy sought. The rationale underlying the decisions of all four majority judges in Theophanous was the concern to avoid the chilling effect on political discussion caused by the onus on the defendant to prove truth and the prospect of unlimited liability in damages should it fail.66 Under the Commission’s proposals, the onus is on the plaintiff to prove falsity67 and there is here no liability in damages. Further, the requirement that the judicial declaration be published68 effectively ensures the free flow of information to the public (in addition to vindicating the plaintiff’s reputation). We believe that our suggested approach advances, rather than impairs, the cause of freedom of political discussion and freedom of speech generally. The declaration of falsity should, therefore, be available even in the context of the political discussion to which the constitutional implication applies. We find some support for this view in the judgment of Justice Deane in Theophanous.
6.51 In Theophanous, Justice Deane expressed the view that the constitutional guarantee of freedom of political communication required that State defamation laws should not apply at all to render a citizen liable in damages for criticism of the official conduct of high public officials.69 He thus took a more radical view than the joint judgment of Chief Justice Mason and Justices Toohey and Gaudron, who would impose liability where the defendant failed to make out the elements of the “implied freedom of speech” defence.70 Justice Deane stated that the application of the constitutional guarantee to State defamation laws did not affect the laws of contempt, and then added:
Nor should anything in this judgment be understood as precluding the establishment of alternative procedures (not involving the imposition of liability to pay damages or costs) to which a parliamentarian or other holder of high office might resort for the purpose of vindicating his or her reputation when subjected to unjustified attack.71
Thus, even under Justice Deane’s radical view, remedies directed to the vindication of reputation are consistent with the constitutional implication if they have no chilling effect in damages or costs. The declaration of falsity involves no liability in damages and, as we have pointed out in para 6.46, the costs rules which we propose do not, we believe, have a chilling effect on freedom of speech.
OTHER REMEDIES
6.52 The Commission has also considered the availability of two other remedies in defamation cases: injunctive relief and account of profits.
Injunctions
6.53 Two sorts of injunctions may be of use in the law of defamation. First, a prohibitory injunction which seeks to restrain the defendant from publication of matter which is potentially defamatory of the plaintiff. Secondly, a mandatory injunction which is designed to restore the plaintiff’s reputation consequent on the defendant’s publication of defamatory matter of and concerning the plaintiff.
6.54 Clearly, the most effective way of preventing injury to a plaintiff’s reputation, especially where that injury is merely threatened, is to prohibit publication of the offending matter by interlocutory injunction. The objection to doing so is that such a prohibition inhibits freedom of speech, that is, freedom of speech as recognised by the common law which is wider than the constitutional freedom in so far as it is not limited to political discussion. The current law has developed expressly with this consideration in mind,72 so that interlocutory injunctive relief is only rarely available in defamation cases where, in the circumstances of the particular case, there is clearly no threat to the public interest in freedom of speech.73 The Commission believes that the current law is satisfactory and proposes no change to it.
6.55 It is also possible that mandatory orders can be framed requiring defendants to issue correction statements aimed at vindicating the reputations they have harmed. The New Zealand Court of Appeal has recently recognised that an injunction to this effect can be issued in principle in cases of injurious falsehood and defamation.74 The Commission does not favour the incorporation of a general mandatory injunction remedy of this sort in any statutory reform of the law. First, correction orders intrude on the principles of freedom of speech and of the press, since they require defendants to publish, as their own statement, something which they may not believe to be true.75 This differs substantially from being compelled to publish the declaration of a court, identifying it as such.76 Secondly, unlike the Commission’s proposed declaration of falsity where the emphasis is on the truth or falsity of the published imputation, it is questionable whether procedures could be put in place to ensure the rapid determination of correction orders.77
6.56 This leaves open the possibility that a court may, in its equitable jurisdiction, issue a correction order in the form of a mandatory (and, usually, interlocutory) injunction if, in all the circumstances of the case, it is appropriate to do so. The Commission believes that it is sensible to leave any development of the law in this respect to the equitable jurisdiction of the courts. That jurisdiction is sensitive to the considerations mentioned in para 6.55, especially to the intrusive effect of mandatory orders,78 and is well developed to determine and fashion relief according to the particular circumstances of the case.
Account of profits
6.57 The availability of account of profits in defamation cases has never been put to the test in Australian law. It has sometimes been argued that a plaintiff ought to be allowed to mount a restitutionary claim to recover from the defendant profits made at the plaintiff’s expense,79 especially in cases where the defendant has deliberately calculated that the profits to be made from publication outweigh any damages it may have to pay to the plaintiff.80 We do not consider that this remedy should be developed as a general remedy in defamation cases because it is not addressed to the purpose of vindicating the plaintiff’s reputation. We also consider that the uncertainties generated by the difficulties of calculating its quantum may (like large awards of damages) have a chilling effect on freedom of speech. We also note that the argument that the remedy ought to apply in cases of calculated wrongdoing has strong punitive overtones. It is, indeed, to such cases (amongst others) that English law restricts the availability of exemplary damages,81 which are not available in defamation cases in New South Wales.82
FOOTNOTES
1. New South Wales Law Reform Commission, Defamation (DP 32, 1993), Chapter 2.
2. See paras 6.55-6.56.
3. Australian Press Council, Nine Network Australia, Consolidated Press Holdings: Submissions.
4. Law Society of NSW, Young Lawyers Section of the Law Society, Law Institute of Victoria, Australian Broadcasting Corporation: Submissions.
5. See para 2.11.
6. DP 32 para 2.8.
7. See paras 6.33-6.37.
8. See paras 6.38-6.43.
9. See paras 4.7-4.15.
10. M R Chesterman, “The Money or the Truth: Defamation Reform in Australia and the USA” (1995) 18 UNSW Law Journal 300 at 312-316. See Australian Capital Television Pty Limited v Commonwealth (1992) 177 CLR 106 at 169 per Deane and Toohey JJ (declarations can be seen as “conducive to the overall availability of the effective means” of political (and other) communication). See also Miami Herald Publishing Co v Tornillo (1974) 418 US 241 at 250-251.
11. Dun & Bradstreet, Inc v Greenmoss Builders Inc (1986) 472 US 749 at 768 note 2, per White J (concurring). White J rejects the argument that only the interplay of ideas in the media can generate truth; even in the US, courts in libel cases are entrusted with making findings of whether what was published was true or false; if they were not competent to do this, then no libel suits could be allowed at all.
12. For economic loss, see para 6.7.
13. See para 6.47.
14. See paras 6.19-6.20.
15. See para 6.12. The potential for an action for damages here lies in a plaintiff’s ability to establish that the imputation is not capable of being proved true or false: see Recommendation 8 in Chapter 4.
16. See paras 6.13-6.15.
17. See Defamation Act 1974 (NSW) s 9(3).
18. Indeed, the requirement of having to prove the falsity of the pleaded imputation should help to ensure that strained or forced imputations are not pleaded in the first place. An imputation that “The plaintiff is a bad playwright” would not be pleaded unless the plaintiff could prove he or she was a good playwright - a difficult task given the value judgments inherent in such a statement. See O’Shaughnessy v Mirror Newspapers Ltd (1970) 125 CLR 166. Cf B Reichel, “Artists, Critics and Defamation Law Reform” (1994) 2 Torts Law Journal 26.
19. See paras 6.28-6.30 regarding contextual truth.
20. See I Zamir, Lord Woolf and J Woolf, The Declaratory Judgment (2nd ed, Sweet & Maxwell, London, 1993) Chapter 4; E Borchard, Declaratory Judgments (2nd ed, Banks-Baldwin Law Publishing Co, Cleveland, 1941) Chapter 6.
21. See paras 6.14-6.15.
22. See, for example, paras 6.31, 6.42.
23. See Zamir and Woolf at Chapter 4.
24. In cases where the plaintiff has agreed to accept a prompt and adequate correction in satisfaction of his or her claim, the principles raised by the general tort defences of release (or accord and satisfaction) would apply and usually deny any further remedy: see further Chapter 8. See also Hogg v Scott [1947] KB 759 at 767 (effect of delay on declaratory proceedings).
25. Under Defamation Act 1974 Division 8 ss 36-46.
26. See generally Russian Commercial and Industrial Bank v British Bank for Foreign Trade [1926] 2 AC 438 at 448.
27. See Chapter 9.
28. Zamir and Woolf at para 6.12.
29. For the avoidance of doubt, the Commission stresses that this discussion concerns affirmative defences available in the law of defamation. Defences available to all claims at general law (such as consent, accord and satisfaction, release and estoppel) may, of course, operate to defeat a declaration of falsity: see Gatley on Libel and Slander (8th ed, Sweet & Maxwell, London, 1981) at paras 851-865; Ettingshausen v Australian Consolidated Press Limited (1993) A Def R [51,065] per Hunt J (consent).
30. See para 4.15.
31. See para 2.12.
32. See Chapter 11.
33. See Chapter 12.
34. See paras 12.28-12.29.
35. See paras 6.34-6.37.
36. An example is Rajski v Carson (1988) 15 NSWLR 84.
37. See New South Wales Law Reform Commission, Report of the Law Reform Commission on Defamation (LRC 11, 1971) Appendix D at para 121.
38. See DP 32 at 2.107.
39. For the issues arising under the constitutional implication of freedom of political discussion, see paras 6.48-6.51.
40. See Chapter 5. While “actual malice” creates the worst problems, difficulties also arise where plaintiffs must prove a lesser standard of fault, such as those private figure plaintiffs who need prove only negligence.
41. D A Barrett, “Declaratory Judgments for Libel: A Better Alternative” (1986) 75 California Law Review 847 at 853-856; G C Cook, “Reconciling the First Amendment with the Individual’s Reputation: the Declaratory Judgment as an Option for Libel Suits” (1989) 93 Dickinson Law Review 265 at 265-266, 271-273.
42. Barrett at 864 and note 104; J S Hulme and S M Springer, “Vindicating Reputation: An Alternative to Damages as a Remedy for Defamation”, in J Soloski and R P Bezanson (eds), Reforming Libel Law (Guildford Press, New York, 1992) at 165-167; R A Smolla, “The Annenberg Libel Reform Proposal” in Soloski and Bezanson at 234. But cf M A Franklin, “A Declaratory Judgment Alternative to Current Libel Law”. (1986) 74 California Law Review 809 at 819 note 35.
43. DP 32 at para 2.105; Chesterman (1995) at 320-322; J G Fleming, “Retraction and Reply: Alternative Remedies for Defamation” (1978) 12 University of British Columbia Law Review 15 at 16.
44. Defamation Act 1974 (NSW) s 16. See LRC 11, Appendix D, paras 73-74.
45. England, Law Reform Committee, Report on the Law of Defamation, Cmnd 7536 (1948) (Porter Committee Report) at para 80.
46. Defamation Act 1974 (NSW) s 13.
47. See paras 4.26, 6.12.
48. See para 3.15.
49. Franklin at 828-830; Barrett at 877-879; R A Smolla, “Taking Libel Reform Seriously” (1987) 38 Mercer Law Review 793 at 798-799, 802.
50. See DP 32 para 2.113.
51. Miami Herald Publishing Co v Tornillo (1974) 418 US 241 at 258-259; Coughlin v Westinghouse Broadcasting and Cable Inc (1988) 689 F Supp 483 at 489-490; Kramer v Thompson (1991) 947 F 2nd 666 at 680-682; Model Communicative Torts Act, para 9-107 (see (1990) 47 Washington and Lee Law Review 1 at 64).
52. Nor may it need to. The Commission notes that a recent US based survey has found that Australia (together with Belgium) has the world’s least restrictive media environment: see W Harris, “Australia Tops Press Survey Freedom” (1995) 2 Media Law Reporter 152.
53. Registered Rules of the Media, Entertainment and Art Alliance, Rule 64 (Journalists’ Code of Ethics), Item (j).
54. See paras 8.11-8.16.
55. Law Institute of Victoria, Submission (2 December 1993) at paras 2.1.4, 2.3.2, 2.4.1. This argument does have serious flaws: it could not be suggested that damages should remain high in any other area of law where costs are high.
56. See Legal Profession Act 1987 (NSW) Pt 11 Div 6.3.
57. See, for example Colgate-Palmolive Company Pty Ltd v Cussons Pty Ltd (1993) 46 FCR 226 at 233-234; Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 at 279, 280-281.
58. The immediate source of the Supreme Court’s general power to award costs is s 76 of the Supreme Court Act 1970 (NSW). See also Supreme Court Rules 1970 (NSW) Pt 52 r 28A; Legal Profession Act 1987 (NSW) s 208I and s 208F(3).
59. Legal Profession Act 1987 (NSW) s 208F(3); Supreme Court Rules 1970 (NSW) Pt 52 r 28A.
60. This is the equivalent of an award of costs on a trustee basis: Supreme Court Rules 1970 (NSW) Pt 52 r 31(4).
61. See Mason CJ, Toohey and Gaudron JJ at 130-133; Deane J at 175-177, 184-186.
62. Theophanous at 187.
63. Theophanous at 137.
64. At 134.
65. At 138.
66. Theophanous at 132, 175-177. The joint judgment noted that this chilling effect has been reduced in Australia by the decision in Carson v John Fairfax and Sons Ltd (1993) 178 CLR 44.
67. See paras 4.7-4.15.
68. See paras 6.38-6.43.
69. (1994) 182 CLR 104 at 185-186. See also Stephens v West Australian Newspapers Limited (1994) 182 CLR 211 at 257.
70. As it was termed by Levine J in Williams v John Fairfax & Sons Limited (unreported, Supreme Court of NSW, 24 October 1994, CLD 10872/89) at 10-11. The joint judgment in Theophanous also broadened the protection available under common law qualified privilege for political discussion: see paras 10.6.
71. Theophanous at 187.
72. See R P Meagher, W M C Gummow and J R F Lehane, Equity: Doctrines and Remedies (3rd ed, Butterworths, Sydney, 1992) at para 2126.
73. See Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153; National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VR 747.
74. TV3 Network Ltd v Eveready New Zealand Ltd [1993] 3 NZLR 436.
75. See England and Wales, Supreme Court Procedure Committee, Report on Practice and Procedure in Defamation (July 1991) (Neill Report) at 145. See also DP 32 at para 2.76.
76. See paras 6.38-6.43, 6.50.
77. DP 32 at paras 2.78-2.81. Cf paras 2.87-2.91.
78. See Meagher Gummow and Lehane at paras 2191-2197.
79. See Lord Goff and G Jones, The Law of Restitution (4th ed, Sweet & Maxwell, London, 1993) at 722.
80. See Goff and Jones at 723; P Birks, An Introduction to the Law of Restitution (Clarendon Press, Oxford, 1985) at 326-327.
81. Rookes v Barnard [1964] AC 1129 at 1226-1227.
82. Defamation Act 1974 (NSW) s 46(3)(a).
