Case Law, Australia: Gacic v John Fairfax Publications Pty Ltd, Damages increase for restaurateurs defamed by Sydney Morning Herald review – Yvonne Kux

2 05 2015

gazetteIn the case of Aleksandra & Ljiljana Gacic & Branislav Ciric v John Fairfax Publications Pty Ltd & Matthew Evans ([2015] NSWCA 99) the NSW Court of Appeal increased the $160,000 damages awarded to each of three former restaurateurs defamed by a Sydney Morning Herald review twelve years ago.

Giving the leading judgment on appeal, Justice Ruth McColl concluded:

“The amount the primary judge awarded should be increased to $180,000 to take into account his Honour’s omission in respect of aggravated damages.

I would, however, reduce those amounts to $175,000 to take into account the mitigation facts.”

The Court of Appeal also backdated the interest on compensatory and aggravated damages to take effect from 2009, the date of Justice Ian Harrison’s judgment in favour of Fairfax and awarded $20,000 in exemplary damages for continued publication of a story about the Gacics’ initial legal loss on the Fairfax website.

Background

GacicIn September 2003, Matthew Evans, then The Sydney Morning Herald’s restaurant critic, wrote areview of a new King Street Wharf restaurant, Coco Roco, owned and operated by sisters Aleksandra and Ljiljana Gacic and Ljiljana’s husband Branislav Ciric (pic).

He scored the restaurant nine out of 20.

Four months later Coco Roco closed and the Gacics and Ciric commenced defamation proceedings against Fairfax and Evans.

After an “unreasonable” section 7A jury verdict in 2005 and trips to the NSW Court of Appeal and theHigh Court, a second 7A jury in 2007 found the review conveyed three defamatory imputations.

(a) The plaintiffs sell unpalatable food at Coco Roco.

(b) The plaintiffs provide some bad service atCoco Roco.

(c) The plaintiffs are incompetent as restaurant owners because they employ a chef at Coco Roco who makes poor quality food.

Fairfax pleaded truth to imputations (b) and (c ) and comment to all three.

In December 2009, after a three-week trial, Justice Ian Harrison upheld the defence of comment for all three imputations.

He found imputation (b) true against all the plaintiffs, but imputation(c ) true only in respect of Ciric.

Had he been wrong, Justice Harrison estimated the damages payable to each plaintiff at $80,000.

A subsequent appeal and remitter by the Court of Appeal on November 24, 2011 resulted in Justice Peter Hall awarding each plaintiff $160,000 damages (plus interest) in December 2013.

In June last year, His Honour refused to backdate the damages judgment and ordered costs on an indemnity basis for proceedings before him.

Appeal

On appeal, the Gacics and Ciric complained that the primary judge’s award of damages was manifestly inadequate.

The appellants submitted they should have been awarded damages in the vicinity of $400,000 each.

They also claimed Justice Hall erred by not backdating his judgment to December 18, 2009, the date of Harrison J’s judgment, therefore depriving them of four years’ interest.

Fairfax cross-appealed, contending that Justice Hall’s damages award was excessive because he erred in respect of their plea of mitigation.

Specifically, damages should be reduced because “of the truth of matters pleaded in support of their defences of truth and comment”.

Judgment

Damages

In reviewing Justice Hall’s damages judgment, Justice McColl found no error in his estimation of compensatory damages, but concluded that the continued publication online of an article titled Coco Roco loses action over stay home review did justify an award of exemplary damages of $20,000.

In doing so, Her Honour rejected Fairfax’s contention that:

“There must be a distinction between a publication first made with knowledge of its falsity and in contumelious disregard of a plaintiff’s rights, and the continuing publication of the review, notwithstanding a judicial determination that it was defamatory.”

Justice McColl (pic) followed Justice Barrett’s reasoning, which stated:McColl

“Once it has been determined that particular matter is defamatory of a plaintiff and that no defence is available, the defendant who has been found to have engaged in tortious conduct by publication of that matter cannot, with impunity, commit the same wrong again.”

Justice Barrett went on to characterise Fairfax’s conduct after special leave was refused in June 2012, as “high-handed conduct by an organ of the mass media”.

With regard to aggravated damages, Justice McColl found the primary judge correctly determined that Fairfax’s failure to apologise was unreasonable.

This finding combined with the falsity of the imputations, meant they were entitled to have their compensatory damages increased.

Her Honour found that the primary judge gave sufficient weight to the appellants’ distress over the failure of their business, noting Justice Hall “was at pains not to include in the award an amount which might be seen to represent a special damages component”.

However, she concluded the primary judge should have backdated interest (at three per cent) on the damages to Justice Harrison’s 2009 judgment on the basis that:

“The task of the primary judge on the remitter was to determine the quantum of damages Harrison J ought to have awarded on 18 December 2009 when, on the Court of Appeal judgment, he ought to have entered judgment both on liability and damages for the appellants.

Mitigation

Justice McColl largely accepted Fairfax’s contention that the primary judge erred when he found Justice Harrison’s findings were only matters of opinion.

She found there were also matters of fact, “embedded” in the statements of opinion, such as “pork that was dry, apricots that were rubbery, some salad leaves that were wilting and some that were yellow, scallop shells that were jagged, lentils that were starchy, cheese cake that had a soggy base and potatoes that were over-cooked”.

However, Her Honour noted:

“None of the mitigatory facts referred to Roco. To the extent that they referred to Coco, they reflected the experience of one man. Others had different experiences…”

She found these mitigating facts would not have had a “devastating” effect on the appellants’ reputations, saying any reduction in damages should be therefore be “modest”.

Damages

The court increased the primary judge’s award from $160,000 to $180,000 for each appellant.

That figure was reduced to $175,000 due to mitigation, to take effect from December 18, 2009.

The court ordered that $20,000 awarded to each appellant in exemplary damages take effect from the date special leave was refused – June 22, 2012.

Appearances

For the plaintiffs: Clive Evatt, Roger Rasmussen and Christopher Dibb instructed by David Leamey.

For the defendants: Tom Blackburn SC and Dauid Sibtain instructed by Leanne Norman of Banki Haddock Fiora.

Reporter: Y.C. Kux

This post originally appeared in the Gazette of Law and Journalism, Australia’s leading online media law publication.


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