Reported Decision : 62 NSWLR 594 New South Wales Supreme Court CITATION : John Zunter v John Fairfax Publications Pty Limited [2005] NSWSC 119 HEARING DATE(S) : 09/06/04; 28/10/04 JUDGMENT DATE : 2 March 2005 JUDGMENT OF : Nicholas J DECISION : Paras 49, 50, 51 CATCHWORDS : DEFAMATION - issues for jury - cross-claim for contribution under s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 - whether cross-claim should be tried by jury - whether s 7A Defamation Act 1974 applies to trial of cross-claim - whether cross-claim for contribution a common law claim within s 19(1) Supreme Court Act 1970 - whether cross-claim for contribution proceedings to which s 86 Supreme Court Act 1970 applies Defamation Act 1974 s 7A Law Reform (Miscellaneous Provisions) Act 1946 ss 5(1)(c); 5(2) LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1965 ss 9; 15 Supreme Court Act 1970 ss 19(1); 86 AIS Pty Ltd v Jumbo Scheepvaart (1988) 14 NSWLR 507 Blackburn v The State of New South Wales (BC 9102416) Burrows v Knightley (1987) 10 NSWLR 651 Caledonian Collieries Limited v Fenwick (1959) 76 WN (NSW) 482 CASES CITED : Evans v Lynch (1984) 3 NSWLR 567 Griffith & Ors v Australian Broadcasting Corporation & Ors (2003) NSWSC 298 Harding v Coburn (1976) 2 NZLR 577 Unsworth v Commissioner for Railways (1958) 101 CLR 73 John Zunter - Plaintiff John Fairfax Publications - First Defendant/Cross-Claimant PARTIES : State of New South Wales - Second Defendant/Cross-Defendant FILE NUMBER(S) : SC 20316/02 C A Evatt - Plaintiff COUNSEL : G O'L Reynolds SC/D R Sibtain - First Defendant/Cross-Claimant K L Andronos - Second Defendant/Cross-Defendant Russell McLelland Brown - Plaintiff SOLICITORS : Freehills - First Defendant/Cross-Claimant The Crown Solicitor - Second Defendant/Cross-Defendant LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST Nicholas J 2 March 2005 20316/02 John Zunter v John Fairfax Publications Pty Limited JUDGMENT 1 His Honour: The present state of these proceedings is as follows: 2 John Zunter (the Plaintiff) claims damages against John Fairfax Publications Pty Limited (Fairfax) arising out of the publication in the edition of the newspaper "The Sydney Morning Herald" of 5-6 January 2002 of the article under the heading "Illegal backburn that went wrong ruined our strategy, firefighters say" (the article). 3 At the trial under s 7A Defamation Act 1974 (the Act) held on 19 June 2003 the jury found the following imputations were conveyed by the article and were defamatory of the Plaintiff: "(i) The Plaintiff lost control of his own backburn. (ii) The Plaintiff wrecked the main strategy of the Shoalhaven fire control officer". 4 The trial in relation to defences and damages is fixed to begin on 18 July 2005. 5 On 14 February 2005 leave was granted to file a further amended statement of claim which joins the State of New South Wales as the Second Defendant (the State). Questions as to whether the publication alleged to have been made by the State is capable of conveying the pleaded imputations and, if so, whether the imputations are defamatory have yet to be heard and determined. 6 Fairfax filed its further amended defence on 12 March 2004. The State has not yet filed a defence. 7 Fairfax, as Cross-Claimant, by its amended cross-claim filed 7 September 2004 claims against the State, as Cross-Defendant, an order for contribution pursuant to s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 (the contribution claim) toward any verdict for the Plaintiff against it. Fairfax claims that an employee of the State published to two of its reporters matter which it republished as part of the article sued upon by the Plaintiff. It claims that this matter conveyed the imputations of the Plaintiff which the jury has found were conveyed by the article and to be defamatory. Fairfax claims that the State authorised the republication and/or that it was the natural and probable consequence of the publication by the State to its reporters. In the circumstances Fairfax claims that the State is liable as a tortfeasor for any damage occasioned by the publication of the article, and claims indemnity or contribution in respect of such damage. 8 The present question for determination is whether the issues of fact to be tried on the cross-claim should be tried with a jury. The parties proceeded on the basis that the question be decided separately pursuant to Pt 31, r 2. 9 Mr K Andronos, of counsel, appeared for the State, and contends that these issues should be tried with a jury pursuant to s 86(1) Supreme Court Act 1970. He submitted that the provisions of s 7A of the Act are not an exhaustive code as to the functions of judge and jury in proceedings on a claim in respect of defamation. In essence he puts that subs (1), (2) and (3) prescribe the separate functions of judge and jury with regard to determining whether the matter complained of was capable of carrying, and in fact conveyed, the imputation pleaded by the Plaintiff, and whether the imputation was capable of being, and was in fact, defamatory. He puts that subs (4) goes no further than to designate as the function of the judge and not the jury the determination of all issues relating to any defence raised by the Defendant, and of any amount of damages to be awarded to the Plaintiff, and has no application to the trial of issues on a defendant's cross-claim against a third party. 10 He submitted that the effect of the preservation of s 86 Supreme Court Act 1970 in subs (5) is that the trial of issues on such a cross-claim should be by a jury. 11 In reply, Mr Reynolds, SC, submits that the plain effect of s 7A(4) is that all issues on the cross-claim must be dealt with by the judge. He puts that as the Defendant's claim is for contribution towards the Plaintiff's damages under s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 it raises issues relating to the amount of damages which it might be required to pay the Plaintiff and is thus within the scope of subs (4)(b), and thus s 86(1) Supreme Court Act 1970 has no application. 12 Additional submissions for Fairfax were made by Mr D Sibtain of counsel that the contribution claim is not a claim to which s 86(1) Supreme Court Act 1970 applies. The legislation 13 Prior to its repeal by the Courts Legislation Amendment (Civil Juries) Act 2001 (the amendment act) which came into effect on 18 January 2002, s 88 Supreme Court Act 1970 was in force. Relevantly, it provided: "88. Proceedings on a common law claim in which there are issues of fact - (a) …, or (b) on a claim in respect of defamation, malicious prosecution, false imprisonment, seduction or breach of promise of marriage, shall be tried with a jury. 14 The amendment act substituted for s 86 Supreme Court Act 1970 a new section in the following terms: "86(1) Proceedings on a common law claim in which there are issues of fact on a claim in respect of defamation are to be tried with a jury. (2) Despite subsection (1), the Court may order that all or any issue of fact be tried without a jury if: (a) any prolonged examination of documents or scientific or local investigation is required and cannot conveniently be made with a jury, or (b) all parties consent to the order". 15 The new section preserves the earlier position with respect to defamation proceedings. 16 Under s 19(1) Supreme Court Act 1970 the expression "common law claim" is defined to mean: "a claim for damages or other money, or for possession of land, or for detention of goods, in proceedings in the Common Law Division". 17 By operation of s 3 and Sch 2 of the amendment act, a new Pt 12 was inserted into Sch 4 Supreme Court Act 1970 in the following terms: "19. Section 85, 86, 87, 88 or 89, as in force immediately before its amendment by the Courts Legislation Amendment (Civil Juries) Act 2001, continues to apply in relation to proceedings commenced but not finally determined before the commencement of that amendment as if the section had not been amended". 18 Section 7A was inserted into the Act by the Defamation (Amendment) Act 1994 which came into effect on 1 January 1995. It provided: "7A Functions of judge and jury (1) If proceedings for defamation are tried before a jury, the court and not the jury is to determine whether the matter complained of is reasonably capable of carrying the imputation pleaded by the plaintiff and, if it is, whether the imputation is reasonably capable of bearing a defamatory meaning. (2) If the court determines that: (a) the matter is not reasonably capable of carrying the imputation pleaded by the plaintiff, or (b) the imputation is not reasonably capable of bearing a defamatory meaning, the court is to enter a verdict for the defendant in relation to the imputation pleaded. (3) If the court determines that: (a) the matter is reasonably capable of carrying the imputation pleaded by the plaintiff, and (b) the imputation is reasonably capable of bearing a defamatory meaning, the jury is to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory. (4) If the jury determines that the matter complained of was published by the defendant and carries an imputation that is defamatory of the plaintiff, the court and not the jury is: (a) to determine whether any defence raised by the defendant (including all issues of fact and law relating to that defence) has been established, and (b) to determine the amount of damages (if any) that should be awarded to the plaintiff and all unresolved issues of fact and law relating to the determination of that amount. (5) To the extent that section 88 of the Supreme Court Act 1970 applies to proceedings for defamation, it applies subject to the provisions of this section". 19 Section 7A(1), (2), (3), (4) remain as originally enacted. The amendment act made a consequential amendment to subs (5) so that it then provided: "(5) Section 86 of the Supreme Court Act 1970 applies subject to the provisions of this section". 20 During the second reading speech the Attorney General explained the proposed amendment in the following terms: "Amendment No. 1 makes a consequential amendment to the Defamation Act 1974. It clarifies the link between the Supreme Court Act and the Defamation Act to ensure that the status quo is maintained in relation to defamation matters. Section 7A (5) of the Defamation Act currently refers to section 88 of the Supreme Court Act. The bill omits section 88 of the Supreme Court Act, which provides that defamation proceedings are to be tried with a jury. The provisions of section 88 in relation to defamation matters are incorporated into new section 86 (1)". (NSW Legislative Assembly, Hansard, 6 December 2001). 21 For completeness I note that subs (5) was further amended by the Defamation Amendment Act 2002 which came into force on 17 February 2003. It now provides: "(5) Section 86 of the Supreme Court Act 1970 and section 76B of the District Court Act 1973 apply subject to the provisions of this section". 22 Section 4 of the Act addresses the repeal of the Defamation Act 1958 and provides: "4 Repeal of Defamation Act 1958 (1) The Defamation Act 1958 is repealed. (2) The law relating to defamation, in respect of matter published after the commencement of this Act, shall be as if the Defamation Act 1958 had not been passed and the common law and the enacted law (except that Act and any enactments repealed by that Act) shall have effect accordingly". 23 The relevant provisions of the Law Reform (Miscellaneous Provisions) Act 1946 are: "5(1) Where damage is suffered by any person as a result of a tort (whether a crime or not): … (c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought (2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity". The term "court" is not defined. 24 These proceedings were commenced by statement of claim filed on 22 July 2002 some six months after the amendment act came into force. The cross-claim was filed on 12 March 2004. It is common ground that the transitional arrangements in Pt 12 Sch 4 Supreme Court Act 1970 do not apply and these proceedings are governed by s 86. The scope of s 7A 25 The parties proceeded on the basis that the term "court" where appearing in s 7A is synonymous with "judge". 26 As far as I am aware since s 7A came into effect on 1 January 1995 there has been no decided case which has considered whether it remains the function of a jury to try issues of fact on a defendant's claim against a third party. Reference was made to Griffith & Ors v Australian Broadcasting Corporation & Ors (2003) NSWSC 298 in which the plaintiffs claimed that the first and second defendants were liable for the republication of matter earlier published. The question for decision was whether issues of fact as to republication were to be determined by the jury to be empanelled pursuant to s 7A. Levine, J ruled that these issues were not for the jury. It was implicit in his reasons, as I understand them, that those issues were within the scope of matters reserved for the court under s 7A(4)(b). Mr Andronos submitted that I should not follow the judgment. I disagree. With respect to His Honour, I consider his ruling was entirely correct. In my opinion issues of republication between a plaintiff and a defendant are directly relevant to damages and hence within subs (4)(b) and, depending on the circumstances, may be relevant to a defence within subs (4)(a). The case concerned a substantially different question to that presently before me and does not affect the approach to be taken in deciding it. 27 Until the enactment of s 7A issues of fact on a claim in respect of defamation were to be tried by a jury pursuant to s 88 Supreme Court Act 1970. The exceptions to this requirement were under s 89(2) and (3). Under s 89(2) the court might order a defamation trial to proceed without a jury where it involved any prolonged examination of documents or scientific or legal investigation, or where all parties consented to the order. Section 89(3) provided that proceedings which involved issues of fact on a defence arising under certain provisions of the Workers' Compensation Acts of 1926 and 1987 were to be tried without a jury. By the amendment act ss 88 and 89(2) were incorporated in the new s 86. 28 Section 7A(4) brought about a change in the functions of judge and jury in proceedings for defamation as between the plaintiff and the defendant whereby the judge instead of the jury is required to determine all issues of fact and law on any defence, and to determine the amount of any award for the plaintiff and all issues of fact and law relating to the determination of that award. To this extent this provision is inconsistent with s 86(1). 29 However the effect of s 7A(5) resolves the inconsistency. It is plain from the words of subs (5) that the intention of the legislature was to preserve the application of s 86 Supreme Court Act 1970 subject to the provisions of s 7A. As a matter of construction this means that the provisions of s 7A are to prevail to the extent that they are inconsistent with s 86. The principle was stated in Harding v Coburn (1976) 2 NZLR 577 at p 582 thus: "The qualification "subject to" is a standard way of making clear which provision is to govern in the event of conflict. It throws no light, however, on whether there would in truth be a conflict without it. As was said by Megarry J in C & J Clark Ltd v Inland Revenue Commission [1973] 1 WLR 905; [1973] 2 All ER 513, "where there is no clash, the phrase does nothing: if there is a collision, the phrase shows what is to prevail" (ibid, 911; 520)". 30 In my opinion the intention and effect of s 7A is to regulate the manner of trial of proceedings for defamation in which the issues of fact and law are raised on the claim brought by the plaintiff against the defendant and any defence to it. The issues for determination by the jury as to publication and imputation(s) which are specified in subs (3) and (4) are as between the plaintiff and the defendant. The issues for determination by the court as to defences and damages under subs (4)(a) and (b) are also as between the plaintiff and the defendant. To this extent, at least, the language of the section is unambiguous. 31 It is also plain that s 7A says nothing about the functions of judge or jury in defamation proceedings in which there are issues of fact on claims involving third parties. Indeed, it appears that the draftsman has been careful in the use of language to ensure that the application of the section extends only to the trial of claims as between plaintiffs and defendants. The clearest indication of that intention is the preservation of s 86 Supreme Court Act 1970 by subs (5) which is consistent with subs 4(1) of the Act and the statement in the second reading speech. If it were otherwise, it is difficult to see what work is left for s 86 to do and why it was not repealed. 32 In my opinion Fairfax's cross-claim does not raise issues which attract the application of s 7A(4). Obviously, it raises no issue by way of any defence to the Plaintiff's claim and thus subs (4)(a) does not apply. Nor does it raise issues relating to the determination of the amount of damages to be awarded to the Plaintiff and thus subs (4)(b) does not apply. Accordingly I hold that s 7A(4) does not govern the procedure for the trial of issues on the contribution claim. The submission on behalf of Fairfax that s 7A(4)(b) requires that all issues on the cross-claim are to be determined by the court are rejected. The scope of s 86(1) 33 Mr Sibtain's submission that the contribution claim is not a claim to which s 86(1) Supreme Court Act 1970 applies was based on a number of grounds. 34 Firstly, he contended that upon its proper construction the term "court" where appearing in s 5(2) Law (Miscellaneous Provisions) Act 1946 refers to a judge alone. For support he relies upon the decision of Else Mitchell, J Caledonian Collieries Limited v Fenwick (1959) 76 WN (NSW) 482. 35 In my opinion, with due respect to the learned Judge, the case should not be treated as a binding decision on the point. Analysis of his reasons shows that His Honour's conclusion was arrived at against the background of the procedures then prevailing under the Common Law Procedure Act 1899-1957 and the Jury Act 1912-1957, and after giving much weight to the fact that the jurisdiction conferred on the court was judicial or discretionary in nature, which involved the making of an assessment of a kind which he found was not one which a jury could perform. 36 The legislative context which apparently persuaded the learned Judge to find that the legislature's intention was to exclude the jury no longer exists. Furthermore, the notion that a discretionary assessment to be made on just and equitable grounds is one which cannot be performed by a jury is no longer tenable. The legislature itself has recognised that such an assessment is appropriate for a jury as, for example, s 9 and s 15 Law Reform (Miscellaneous Provisions) Act 1965 as to apportionment of liability in cases of contributory negligence demonstrate. 37 That others may share a similar view to mine may be inferred from the observation of Hunt, J in Blackburn v The State of New South Wales (BC 9102416 at p 17) that in his experience the decision in Caledonian has been universally ignored in jury trials in this Court. 38 In my opinion, upon its proper construction, s 5(2) operates to establish the jurisdiction of the court to determine questions of contribution or exemption. It says nothing about the mode or conduct of the proceedings by which these questions are to be determined. Where proceedings including contribution claims are brought in this Court the procedures are governed by the Supreme Court Act 1970 and the Rules. Of course, there may be statutory exceptions, of which s 7A is an example. Relevantly, Div 2, Pt 6 Supreme Court Act 1970 (which includes s 86) governs the manner of trial of proceedings in this Court. 39 Accordingly I reject the submission that under s 5(2) a claim for contribution must be tried without a jury. 40 Mr Sibtain further submitted that the contribution claim is not a common law claim within the meaning of s 86(1). He put that a statutory claim for contribution is neither a claim for damages nor for other money, and is therefore outside the definition of a common law claim in s 19(1). He also submitted that because a claimant's entitlement to contribution is based on its liability to the Plaintiff a claim for contribution is not a claim to vindicate an existing right and, therefore, is not to be characterised as a common law claim. Finally he argued that the contribution claim did not attract the application of s 86(1) because it was not a claim in respect of defamation. 41 In my opinion these submissions should not be accepted. 42 Section 86(1) applies to common law claims in which there are issues of fact on a claim in respect of defamation. A common law claim is defined to include a claim for damages or other money in proceedings in the Common Law Division. The question whether or not a claim is a common law claim depends upon the meaning of these words, not upon the general law. 43 It may be accepted that the contribution claim is not one for damages (Unsworth v Commissioner for Railways (1958) 101 CLR 73 at pp 90-91). However, in my opinion, there can be no doubt that such a claim is a claim for money within the terms of the definition of common law claim in s 19(1). A claim for the sharing of the financial burden of damages is, plainly enough, a claim for money. Although neither counsel referred me to any authority directly in point I am prepared to make that finding without reference to authority. As Hunt, J pointed out in Burrows v Knightley (1987) 10 NSWLR 651 at p 656: "Very often there is no authority for an obvious proposition because no-one has previously had the hardihood to dispute it: Morgan v Odhams Press Ltd [1971] 1 WLR 1239 at 1246; [1971] 2 All ER 1156 at 1163; Kavanagh v Chief Constable of Devon and Cornwall [1974] QB 624 at 634; or because there has been a general consensus of opinion that the contrary proposition is not tenable: Re KL Tractors Ltd (In Liq) (1961) 106 CLR 318 at 338. 44 It was also put that the contribution claim was not a common law claim because it is not one to vindicate an existing right at law. This is said to be so because the right to recover contribution or indemnity is conditional upon the Defendant being found liable to the Plaintiff. Therefore, it is put, such right does not exist until such time as that determination has been made and, thus, the contribution claim is not one within the definition or to which s 86(1) applies. 45 Support for the submission was said to be found in Evans v Lynch (1984) 3 NSWLR 567. The proceedings there under consideration were brought by way of statement of claim in the Supreme Court pursuant to s 247 Customs Act 1901 (Cth) which involved a claim for forfeiture of a ship, the prosecution of certain offences, and a claim for a penalty. Hutley, JA (p 570) held that the order for the payment of money which emerges as the result of a claim for a penalty is not a vindication of an existing right and thus is not a common law claim within the definition. Mahoney, JA (p 570) thought that the claim, as framed, was not a common law claim, and referred, inter alia, to the fact that it involved a claim for forfeiture of a ship. 46 In my opinion the finding that, in the circumstances, the proceedings for a penalty did not fall within the term "common law claim" as defined as not being in vindication of an existing right provides no support for the contention that a contribution claim under s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 should be similarly characterised. The statute establishes the right to make a contribution claim. The existence of this right is not conditional upon the determination of the liability of the claimant for the damage in respect of which the claim for contribution or indemnity is made. It is the entitlement to an order for contribution which is conditional upon the claimant's liability for damage, as distinct from the right to take proceedings for such contribution. By way of comment, the submission appears to be made in ignorance of the general rule that where a defendant seeks contribution or indemnity (whether as a statutory right or pursuant to a contract) such proceedings, brought by way of cross-claim, should in all but exceptional circumstances be heard and determined at the same time as the claim between plaintiff and defendant. Primarily, this is done so that the third party is bound by the result of the trial between the plaintiff and the defendant. (AIS Pty Ltd v Jumbo Scheepvaart (1988) 14 NSWLR 507 at p 521; Blackburn at p 14). 47 Finally it was put, but faintly, that assuming that the contribution claim is a common law claim as defined, it is not one in which there are issues of fact on a claim in respect of defamation, and therefore the requirement for a jury under s 86(1) does not arise. 48 It was put that issues of fact on the contribution claim should be regarded as different in substance from those in respect of the (Plaintiff's) claim for defamation, and therefore outside the section. The submission defies a common sense reading of the cross-claim and of the words of the sub-section. Fairfax claims contribution or indemnity on the basis that it and the State are jointly liable to the Plaintiff for the republication of defamatory matter by Fairfax, and that the damage caused by that publication should be shared. It is plain that the claim is in respect of defamation within the meaning of s 86(1). The submission is without merit, and is rejected. General conclusion 49 Section 7A(4) of the Act operates to take away from the jury issues of fact relevant to any defence raised by the Defendant, and to the determination of damages to be awarded to the Plaintiff. That is the extent of the change made by the legislature to the procedure by which defamation claims are to be tried under s 86(1) Supreme Court Act 1970. Issues of fact on a cross-claim under s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 by which the Defendant claims contribution from another party or other parties remain to be tried by a jury. 50 Accordingly, in answer to the question for separate decision I hold that the issues of fact on the contribution claim should be tried by a jury pursuant to s 86 Supreme Court Act 1970. 51 I direct that the cross-claim be tried pursuant to s 86 Supreme Court Act 1970. 52 In the circumstances it would be appropriate that Fairfax be ordered to pay the costs of the State of the proceedings in which the question was heard and determined. However, it is appropriate that the parties have the opportunity to address me on the question of costs should they fail to reach agreement on the order to be made. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.