Keramianakis & Anor v Regional Publishers Pty Ltd [2008] HCATrans 230 (13 June 2008)

Last Updated: 17 June 2008

[2008] HCATrans 230

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S21 of 2008

B e t w e e n -

CONSTANTINE KERAMIANAKIS

First Applicant

DR ALBERT SMAGARINSKY

Second Applicant

and

REGIONAL PUBLISHERS PTY LTD

Respondent

Application for special leave to appeal

GUMMOW ACJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 JUNE 2008, AT 2.15 PM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC: If the Court pleases, I appear with MR A.A. HENSKENS for the applicants. (instructed by Pryor Tzannes & Wallis)

MR J.S. WHEELHOUSE, SC: If the Court pleases, I appear for the respondent. (instructed by Johnson Winter & Slattery)

GUMMOW ACJ: Yes, we would like to hear first from you, Mr Wheelhouse.

MR WHEELHOUSE: Your Honours, if one just deals with the two positions, that is to say, the position of the majority and the minority. I suppose it is best to simplify it by saying that Justice Basten and Justice Beazley published a note agreeing with him said one should not imply the words “with or without a jury” in section 127(1) of the District Court Act (1973), whereas Justice Rothman in the minority necessarily came to the view that you would imply the words “with or without a jury” in section 127(1), thus allowing those words “order or judgment” to give rise to a right of appeal in respect of trials which had been heard by a judge and a jury, as was the case here.

In my respectful submission, the judgment of the majority is correct and for that reason leave should not be granted, and the judgment of the minority, Justice Rothman, on that point is incorrect.

GUMMOW ACJ: Is there is a history in New South Wales of legislation dealing with District Court appeals?

MR WHEELHOUSE: Yes, your Honour.

GUMMOW ACJ: I do not know whether it was put to the Court, but it does not really seem to have been considered. There is a decision of Clutha (1989) 18 NSWLR 86 where Chief Justice Gleeson, when he was Chief Justice of New South Wales, went back to the 1850s. There is a judgment of Justice Windeyer of The Nominal Defendant v Hook [1962] HCA 50; 113 CLR 641 at 656. Against that background, there may be some added force to what the dissenting judge was saying in this case.

MR WHEELHOUSE: Your Honour, I have not read those two decisions. I looked at the history just to the change of the legislation, as had been exposed by a decision of Justice Basten. That line of legislation does seem to follow the old position, which was that there was a different position in relation to an appeal arising from an error of law and an application for a new trial where there had been some perverse finding or misdirection. Your Honour, in my respectful submission - - -

GUMMOW ACJ: A new trial had to be sought within the District Court.

MR WHEELHOUSE: Yes, as is presently the case with section 126(1). Your Honours, my submission would be that there is no lacuna in the present system of legislation comprised of sections 126 and 127 of the District Court Act 1973 and sections 48(1)(a)(iv) and 48(2)(f) of the Supreme Court Act 1970. The legislative system works quite well and could have been applied in this case. As your Honours are aware, this was a 7A trial, as it is colloquially known, and the jury answered its questions - - -

GUMMOW ACJ: No, we do not all live in New South Wales, Mr Wheelhouse, and we do not all read the Defamation Act.

MR WHEELHOUSE: Your Honours, this was a jury trial provided under the Defamation Act 1974, which at the time – it no longer does – provided that the jury answers the questions of whether a publication conveys imputations and whether they are defamatory. So the jury’s argument here in this case, which included oral testimony and written documents – sorry, hears evidence and then argument upon those documents and is then invited to ask questions.

In this case there were some 34 questions, but in relation to the publication for which my client was responsible, a newspaper article, there were much less, of course. The jury answers questions, “Has the plaintiff established that the matter complained of conveyed the imputations?” Answer yes or no. “Has the plaintiff established that the imputations are defamatory?” Yes or no. The jury, in effect, makes those findings of fact and announces those findings of fact when the questions are read to them by the judge’s associate.

Now, at that point in time, after the jury answered its questions, there is no verdict. So, contrary to my learned friend’s submission, namely, that the judgment or order made by the trial judge does not affect the jury verdict, one has to apply for a verdict, and that is exactly what happened here. If I could take your Honours to the relevant page of the application book, which is 180, your Honours can see precisely what happened. The jury makes its finding of fact. That is announced, as it were, in open court. The jury has, of course, the questions on a piece of paper to assist them. Then as in this case, I, appearing for the defendant, apply for judgment, and that appears at page 180, line 15.

Your Honours, at this point in time counsel appearing for the plaintiff, appearing for the applicant here, had made no application for any further direction from the trial judge in any aspect that was relevant to the matters dealt with in the Court of Appeal, had made no complaint or sought no direction in relation to the address of counsel for the defendant, namely, myself, and was aware of the fact that the jury had answered the relevant questions that are now complained of in the way that it had. Your Honour, at line 20 on page 180 I say:

Your Honour I ask for judgment for the second defendant in relation to the claim brought by the first plaintiff against it and costs.

His Honour then says something. Then:

HIS HONOUR: Yes Mr Henskens?

HENSKENS: Your Honour in respect of judgment, I can’t say anything against that.

Now, your Honours, at that point in time when his Honour says, “Yes Mr Henskens”, because my learned friend was then facing what he now says to be a perverse jury verdict, he could have applied under section 126(1) of the District Court Act for a new trial. Your Honours, in my learned friend’s bundle at page 18 there is a copy of the relevant section.

GUMMOW ACJ: Yes.

MR WHEELHOUSE: Your Honour, that says, section 126(1):

The Court in its discretion –

this is a reference to the District Court –

may, after judgment in an action, order that a new trial of the action be had if:

(a) the parties to the action consent –

so I could have been asked to consent –

(b) the action is tried with a jury and on the day on which the jury gives its verdict in the action a party to the action:

(i) in the presence of the other party, or

(ii) in the absence of the other party but after such notice as the Court thinks reasonable has been given to the other party,

makes application for the order, or

(c) the action is tried without a jury . . .

an application can be made for a new trial. That is subsection (2).

The Court may, before judgment in an action and if no verdict in the action has been entered, order, on sufficient cause being shown, that the hearing of the action be discontinued and that a new trial be had.

That is section 126(2). Your Honours, in effect, we would say that is the old common law position. Only one applies immediately to the judge in the District Court hearing the trial, for a new trial, because the first trial has miscarried in some way. Now, it was open to my learned friend appearing for the plaintiff at that point in time to say, “Your Honour, I submit that the questions answered by the jury are perverse in that, in view of your Honour’s summing up on identification, they are inconsistent”.

GUMMOW ACJ: Am I right in thinking that if Justice Basten had been satisfied as to the existence of the appellate jurisdiction, he would have allowed the appeal?

MR WHEELHOUSE: Yes, your Honour, and he also would have entered - - -

GUMMOW ACJ: Ordered a new trial?

MR WHEELHOUSE: No. Justice Basten said he would have entered verdict, which we say would have been incorrect.

GUMMOW ACJ: Justice Rothman would have ordered a new trial, would he?

MR WHEELHOUSE: Justice Rothman would have ordered a new trial, which we say would have been a correct position. We say that the question of whether the Court of Appeal has power to enter verdict has been well discussed by this Court in a case called Gacic and by the New South Wales Court of Appeal in many cases, including most recently a case called Bennette v Cohen in the context of section 108(3) of the Supreme Court Act 1970. But nevertheless, the underlying proposition is that if a party is entitled to a verdict as a matter of law, then the Court of Appeal can direct there be a verdict but, we would submit, not otherwise. So our position, in our submission, in relation to Justice Basten’s position on that, if he allowed the appeal, he ought to have remitted it for a retrial consistent with what Justice Rothman says.

CRENNAN J: Do you accept that the extent of jurisdiction under 127(1) is a question of general public importance?

MR WHEELHOUSE: No, I do not accept that, your Honour. I would submit that if there is a lacuna in the legislation, which we say there is not, that would be most appropriately fixed by some amendment to the legislation in New South Wales because it particularly fits into the New South Wales system. If it is the case that section 105, as it were, of the Supreme Court Act is a vestige of some previous legislative structure that has not been properly addressed in the last round of amendments in 1996, the appropriate place for sorting out, as it were, this legislative system is the New South Wales Parliament, and we say, with great respect, this is not a matter that ought to be dealt with by the High Court as it has been thoroughly considered by the New South Wales Court of Appeal - - -

GUMMOW ACJ: I am not sure it has been, you see, because they did not refer to all the relevant authorities, including authorities on the 1973 Act, in Clutha. That is what worries me. It is not their fault. I suspect the fault lies with those who were appearing before them.

MR WHEELHOUSE: Yes, your Honour. Your Honours, my submission would be that, first, there is no reason to grant special leave as the legislative structure works reasonably well and is clear but was simply not availed of in the usual way in this case in that it was always open to my learned friend not to, as it were, say nothing against the entry of judgment, it was open to him to say, judgment should not be entered, and then if a judge then proceeded to enter judgment, notwithstanding his submissions in relation to the inconsistency between the two verdicts, he then had a perfectly good right of appeal on a matter of law under section 127(1), and that would have maintained the old and traditional dichotomy between applications for new trial and rights of appeal based on errors of law.

My first submission as to why special leave should not be granted is centred on the proposition that properly understood and utilised the system of legislation works reasonably well and there is in fact no lacuna, and Justice Basten is correct in his judgment. The next matter where a question has been raised - - -

GUMMOW ACJ: Just before you move on, Mr Wheelhouse, just look at page 187 for a moment, that is the amended notice of appeal.

MR WHEELHOUSE: Yes, your Honour.

GUMMOW ACJ: At about line38 it says:

2. The Appellants appeal against all of the jury findings that imputations . . . and the verdicts and judgments with costs - - -

MR WHEELHOUSE: Our submission is, your Honour, that that misconceives the position because the judgment was consented to. There was no, as it were, judgment or order that was perverse, it was a jury finding that was perverse.

GUMMOW ACJ: It was consented to in the sense that it inevitably followed from what the jury had decided.

MR WHEELHOUSE: Pardon, your Honour?

GUMMOW ACJ: The consent was a product of the realisation that this step had to follow inevitably from what the jury had done, is that right?

MR WHEELHOUSE: It was considered to in the sense that after the jury answered the question, no question was raised as to whether or not judgment should be entered in my client’s favour following the answers to the questions, or the findings of fact of the jury.

GUMMOW ACJ: Why is there then not a judgment or order and an action within the meaning of 127(1)?

MR WHEELHOUSE: We say, your Honour, there is not because it is a judgment or order of the judge following an application by the defendant. It is not an application that necessarily follows from the verdict of the jury. It necessarily follows from the fact that an application was made for the judgment or order following the questions from the jury, it does not follow automatically.

My submission, your Honour, is that the judgment or order does not give effect to the jury’s finding. The judgment or order follows upon an application, as was made here, by the party in whose favour the questions were properly answered or successfully answered for a judgment, and one has a gateway through which to pass and that is section 126(1) and section 126(2). So it is not a Fox v Percy situation, your Honour, with great respect. In my respectful submission, that takes it out of the ordinary and traditional position.

Thus, your Honour, if one looks at many of the sections that deal with powers of appeal – and a good example is section 75A – those kinds of sections always indicate whether or not the judgment or order is following a trial with or without a jury. The fact that section 127(1) expressly does not include judgment or order following a trial with a jury, in my respectful submission, would give a proper basis to say that those words ought not to be implied as Justice Basten has found.

In my respectful submission, if Parliament intended judgment or order in section 121 to expressly include judgment or order of a trial judge following a trial with a jury, the section would have said so and in clear terms because that is the traditional structure and the usual structure of all legislation involving determination of rights of appeal in new trials following jury trials, and that is quite apparent when one looks through the structure of the Supreme Court Act, particularly from sections 101 to 108.

Your Honours, in relation to the first ground, I cannot say more than that the pith of the two judgments appears to be as I have indicated. One says, you should not imply those words in, as Justice Basten, and Justice Rothman says you should not. Justice Basten comes to that concluded view having looked at the legislative history and taking into account section 126 and the effect that has, and Justice Rothman does not do that. So, in my submission, leave should not be granted in relation to that first question.

Does your Honour wish me to move on to the second question, which is the republication of defamatory hearsay question?

GUMMOW ACJ: Yes, you say what you want to say.

MR WHEELHOUSE: Your Honours, the question of whether or not a publisher is responsible for defamatory hearsay has been the subject now of numerous decisions both in this Court and particularly in the New South Wales Court of Appeal. It was very thoroughly explored by the excellent judgment of Justice McColl in John Fairfax Publications Pty Ltd v Obeid, and that judgment, your Honour, is in my learned friend’s bundle.

If I could take the Court to page 33 of the bundle, which is paragraph 99 of her Honour’s judgment in Obeid? Your Honours, at 99 her Honour commences her discussion with looking at the old High Court decision in Ronald v Harper 11 CLR 73, and it is the genesis of all these types of arguments, with great respect. Her Honour then goes through and discusses the long history of the matter. Her Honour quotes the more recent judgments, particularly Heggie Justice Hodgson’s decision, which is at page 509 of the judgment in Obeid and appears at 36 of the bundle. Her Honour helpfully sets out her conclusions from that long line of authority, and her clear statement in relation to the difference between the two types of adoption, one in the primary sense and one in the secondary sense, at paragraph 119 of her Honour’s judgment, page 37 of the bundle. Her Honour says there:

This review of the authorities demonstrates that:

(a) Republication of defamatory hearsay constitutes adoption of the defamatory statement – using “adoption” in the primary sense;

(b) As a general rule the republisher is liable in defamation as if the author of the defamatory hearsay;

(c) To determine what, if any, defamatory imputations are conveyed by the publication in which the defamatory hearsay appears, the matter complained of must be viewed as a whole. Relevant indicia will include whether the defamatory hearsay is approved, reaffirmed and/or endorsed (adopted in the secondary sense), repudiated or discounted and the purpose of the republication.

Your Honours, I need to take you to the publication upon which my client was sued. It is entirely different to the one upon which the other defendant, Dr Wagstaff, was sued. The supplementary appeal book, page 2, contains the article. Can I take you to that please, your Honour?

GUMMOW ACJ: Yes, we have read that, Mr Wheelhouse. You are about to run out of time.

MR WHEELHOUSE: The short point is this. It was put to the jury that they should read the matter as a whole and they should take into account whether or not the statements made by Dr Wagstaff had been neutralised by the words attributed to Dr Smagarinsky in response to them. The jury was taken particularly, your Honours, to paragraphs 5, 6, 7, 8, 9, 18, 19 and 20, and invited to come to the finding, in respect of the first imputation about entrepreneurial medicine, that those paragraphs neutralised any allegation about entrepreneurial medicine that may have flowed from the words attributed to Dr Wagstaff.

As a matter of fact, the jury accepted that argument and, with great respect, your Honours, that should be the end of the matter. It was a clear finding of fact, reasonably open to the jury, based almost entirely on the propositions identified by Justice McColl. May it please the Court.

GUMMOW ACJ: Yes, Mr Gageler.

MR GAGELER: Your Honours, the question of jurisdiction was raised by the Court of Appeal itself in the course of oral argument. It was dealt with in part on the run and it was dealt with on the written submissions afterwards. It was never fully researched, it was never fully argued. The decision of Justice Basten is, as your Honour Justice Gummow has pointed out, to some extent per incuriam, but it is also to some extent based on a misunderstanding of the actual legislative history since 1973.

Without taking your Honours necessarily to the passages in his Honour’s judgment, what he says on a couple of occasions indicates that he saw the position between 1973 and 1975 as being the only form of review that was available in the Supreme Court to challenge a judgment of the District Court where there had been a trial with a jury, was on an application for a new trial. He said that on a couple of occasions.

He also said on a couple of occasions that the only appeal that was available was an appeal on a point of law, and then he said there was nothing in the second reading speech for the 1995 Act that shed any light on what its purpose was, and then he went on in a subsequent judgment, which we have quoted in our written submissions but is not reproduced in the application book, to say, well, what has been uncovered by the Court of Appeal in the present case is a lacuna inadvertently created by Parliament in 1995.

Now, all of that is just wrong. From 1975 there was an appeal which was created by a provision that your Honours will see in our bundle of authorities at page 7. It was section 128(2)(a), which was a general right or appeal, subject to limitations in sections 129 and 130, to the Supreme Court from a decision of a judge in an action commenced after that particular date in 1975. So there was that general right of appeal that existed from 1975. So far as the intention of the 1995 Act is concerned, at page 14 of the same bundle, in the second reading speech, towards the top of the page, second full paragraph, second sentence, it is said:

The proposal does not alter the policy underlying the existing sections. Appeals from erroneous directions to juries are preserved and a provision will be retained - - -

GUMMOW ACJ: Does the relevant statute for this case appear at page 18 of this bundle? That is the consolidation up to - - -

MR GAGELER: Yes, that is right. So you just have the general words.

GUMMOW ACJ: Can you just take us through section 127 and explain how it spoke to this case?

MR GAGELER: Yes. My clients were parties who were dissatisfied with a judgment in the action, that is, the judgment of the judge pronounced and then entered to give effect to the verdict of the jury. The judgment encompasses whatever is - - -

GUMMOW ACJ: It said that that was by consent.

MR GAGELER: It is said it was by consent, but it was my learned junior acknowledging the inevitable, as we all do, where you have lost on the facts, you suffer judgment against you, that is what he was doing.

CRENNAN J: Where certain answers have been given to certain questions.

MR GAGELER: Exactly, yes. Our learned friend was saying, well, section 126 was the route to go here and under section 126 what Mr Henskens should have done on the spot was say, well, you should not enter judgment. Section 126 though – and your Honours see it at the same page, page 18, says:

The Court in its discretion may, after judgment in an action, order that a new trial of the action be had –

I am not quite sure how my learned friend tries to - - -

GUMMOW ACJ: So is the result that there could have been after the entry - - -

MR GAGELER: An application for a new trial to the - - -

GUMMOW ACJ: - - - in the District Court itself?

MR GAGELER: Yes, that is right.

GUMMOW ACJ: But that that was something that was an election?

MR GAGELER: Pardon?

GUMMOW ACJ: There was an election to pursue that course, or to go to the Court of Appeal?

MR GAGELER: Yes, these are alternative rights. Section 126 has always been there, of course. There was previously a section 127 that said you can apply for a new trial in the Supreme Court, so a concurrent right, you could go apply to the District Court, you could apply to the Supreme Court. Then section 128 in its original form gave the right to appeal, only on the question.....from certain rulings or decisions of a judge.

Now, all that changed in 1995 and the reason it changed was to simplify things. You do not need the ability to approach the Supreme Court for any retrial if you have an ability to appeal without restriction to point of law. In our submission, all the authorities – and I confess, your Honour, not to having fully researched it myself - - -

GUMMOW ACJ: I think under the 1912 Act the scheme of the legislation was to force you to apply within the District Court for an order for a new trial.

MR GAGELER: That was abandoned by the 1973 Act.

GUMMOW ACJ: Yes, that seems to be so.

MR GAGELER: Yes. All that has happened since the 1973 Act with the 1995 Act is, in effect, to replace that procedure by a simplified appeal procedure.

GUMMOW ACJ: What would happen if we were to give you special leave and you succeeded on this jurisdiction point? What would we do then as to the future of this litigation?

MR GAGELER: Justice Basten sensing that, in his words, others may take a different view, indicated how he would dispose of the matter if there was - - -

GUMMOW ACJ: I suppose the question is, would we then simply refer it back to the Court of Appeal for consideration of the merits, or would that be pointless because they have already considered them?

MR GAGELER: That would be pointless because they have already considered them, and on the merits they have found in our favour in respect of two imputations.

GUMMOW ACJ: Mr Wheelhouse will want to say that they were wrong on that.

MR GAGELER: I am not sure he has indicated that he wants to put on a notice of contention, but they have reached a very firm view on all of the imputations, your Honour. We would wish to contest the way in which they dealt with what has been described as imputation (a) in the High Court. I accept that it is factual, but I can say that it is pretty short, and even a non-defamation lawyer, as I confess I am, can come to grips with it fairly quickly. Your Honours, what imputation (a) really comes down to is this.

The imputation that the jury was asked to find was that the article that your Honours have indicated that you have read carried the imputation that each of the applicants, who are doctors, were more concerned with making money than with the wellbeing of their patients. That is actually what the article says in as many words. If your Honours have it open, page 2 of the supplementary appeal book, paragraph 12, and what there is being recorded is the language used by a local GP, Dr Bruce Wagstaff, and there it is in black and white. That was the imputation that the jury was asked to find was carried by the article and they found it was not, even though they found separately the exact same imputation in what Dr Wagstaff had said to the reporter.

Now, how is that oddity explained? It appears to be explained best by what my learned friend said to the jury at the top of page 82 of the application book, and it is in the first 20 or so lines there. He says it in a number of different ways, but basically what he was saying was, “Well, we report and we report both sides of the debate and the reader decides and, provided we have reported both sides of the debate, it cannot be said that as a publisher by reporting one of those sides of the debate we can be responsible for any imputation”. Now, that is a surprising and indeed erroneous approach to any defamation lawyer.

Justice Basten recognised as much when he got to page 210 of the application book, paragraph 39, but when he got to page 212, while accepting that what was said in the course of the address to the jury could have led to error, he gave answers at page 213, and that the answers were simply these. He said in paragraph 46, last sentence – or you have got to read all of this in context, and the context involved:

repeated statements, both from counsel and from the trial judge, as to the correct approach.

His Honour does not state what those statements are and we simply cannot find them. Then he goes on in paragraph 47 to say that there was “no request for a discharge” of the jury at that time, nor does he - - -

GUMMOW ACJ: I think all we have to be satisfied of at the moment is that if you were correct on this jurisdictional point, it cannot be said that the appeal on the merits would be a hopeless one and would have to be looked at.

MR GAGELER: Yes. The appeal on the merits would be focusing on the adequacy of what his Honour says at paragraphs 46 and 47, that is, acknowledging error but saying it really did not matter.

GUMMOW ACJ: The question then, though, if you just look at page 246 of the application book, you would want us to set aside the District Court and then either do one or other of ourselves enter verdicts or remit not to the Court of Appeal but to the District Court for retrial.

MR GAGELER: Yes, that is right. If your Honours please.

GUMMOW ACJ: Is there anything you want to say, Mr Wheelhouse?

MR WHEELHOUSE: Yes, shortly, your Honour. My learned friend misquoted section 126 of the District Court Act. Section 126(1) deals with applications after judgment, but section 126(2) expressly deals with applications before judgment:

The Court may, before judgment in an action and if no verdict in the action has been entered, order, on sufficient cause being shown, that the hearing of the action be discontinued and that a new trial be had.

Your Honour, that was the section that should have been relied upon when I applied for judgment on behalf of my client. If that then had been refused, there then would have been an appeal under section 127(1) from the order refusing the grant of a new trial.

Your Honour, one other small point. Your Honour, my learned friend said he could not find anything in counsel’s address where counsel asked the jury to consider the whole article and the effect of the statements attributed to Dr Wagstaff, et cetera.

GUMMOW ACJ: We do not want to get into that, Mr Wheelhouse.

MR WHEELHOUSE: Your Honour, in my respectful submission, there is no prospect of success on the merits in relation to the facts of this matter that would warrant a grant of special leave. Your Honours, this was a finding of fact that was reasonably open to the jury and, in my respectful submission, the matters put to the jury were completely consistent with the then law with her Honours judgment, particularly in Obeid v Fairfax. May it please the Court.

GUMMOW ACJ: Yes. There will be a grant of special leave in this matter, which will be a one-day case. We do not want to hold out any hope for you, Mr Gageler, but if you succeed on the jurisdictional point, you will nevertheless get us to go into the question of what verdicts we enter.

MR GAGELER: Yes. We take that on notice, your Honour.

GUMMOW ACJ: All right. We will adjourn to reconstitute.

AT 2.51 PM THE MATTER WAS CONCLUDED