#HockeyFairfax defamation case: Federal Court won forum shopping competition, but why, and how?
In May 2014, Treasurer Joe Hockey issued defamation proceedings against the publishers of the Sydney Morning Herald, The Age, The Canberra Times and their online services in the Federal Court of Australia over the headline “Treasurer for Sale”.
This week, Justice Richard White of the Federal Court is presiding over a trial about:
- What the headline actually means (going to the question of the seriousness of the imputation);
- Whether the article concerned governmental or political speech (protected by the qualified privilege defence); and
- Whether Fairfax’s conduct in publishing the headline was reasonable (necessary to establish the defence); or
- Whether the media organisation in fact had a collateral purpose for targeting Mr Hockey, which would defeat the qualified privilege defence.
The Sydney Morning Herald published a good synopsis of the claim shortly after proceedings were instituted.
Justice White came to prominence as a member of the Full Federal Court hearing James Hird’s failed appeal against ASADA. Based in Adelaide, he is hearing the Joe Hockey trial in Sydney, showing the true national spirit in which the Federal Court operates. I provided a précis of Justice White’s background in a previous post, here.
Why Mr Hockey sued has no doubt interested many people. When he commenced proceedings, his office reportedly released a statement saying that: “Any suggestion that the Treasurer is for sale is offensive and repugnant.” (The ABC reported the statement, but it does not appear on Mr Hockey’s website).
Pundits wondering whether the case might settle before trial should also have taken note of: “The Treasurer’s determination to seek to prosecute this matter against the relevant publications should not be underestimated.”
For Supreme Courts across the land, however, of greatest intrigue was where Mr Hockey sued.
The Supreme Court is the highest superior court in each state. It is also the natural jurisdiction in which defamation cases are brought. This is because defamation law is state based law. Defamation laws between states used to differ substantially, although since 2006, when uniform defamation laws were introduced, the legal position across the country is pretty similar.
Why did Mr Hockey choose the Federal Court?
Starting with the question of “why”, on what basis did Mr Hockey decide to sue in the Federal Court? Put another way, why did Mr Hockey not sue in the ACT Supreme Court, the NSW Supreme Court, or in the Victorian Supreme Court? In fact, because offending online publications were alleged (technically published everywhere), why was every single Supreme Court within Australia determined to be an unacceptable place to sue?
Forum shopping is part of the litigator’s way of life. However, what makes Mr Hockey’s decision particularly interesting is that it may be the first case based solely on defamation law ever heard in the Federal Court of Australia.
I say ‘may’ for two reasons. First, there may have been another cause of action tacked on to the Statement of Claim under Commonwealth law (such as misleading or deceptive conduct under s. 18 of the Australian Consumer Law). However, this has not been reported.
An example of such a case is Madden v Seafolly Pty Ltd  FCAFC 30 (Justices Robertston, Marshall, Rares, 24 March 2014). This case involved cross-claims between the parties. Ms Madden had made incorrect claims about Seafolly’s conduct on her Facebook page and in emails to media outlets. Seafolly obtained damages for misleading or deceptive conduct in relation to this. During the dispute, Seafolly had itself issued a press release complaining that Ms Madden’s complaints were maliciously motivated. The Full Federal Court dismissed Ms Madden’s cross-claim for defamation in this regard. However, it upheld an additional claim she made that the press release was nevertheless misleading or deceptive.
Secondly, despite fruitlessly searching for cases in a database using the search terms ‘defamation’ and ‘Federal Court’ or ‘Federal Magistrates’ Court’, it would not be the first time search tools have failed to yield an accurate result.
If though, it is truly the first time ever (or even the second or third or fourth time) that a ‘pure’ or ‘mainly’ defamation case has been heard by the Federal Court, it is remarkable that Mr Hockey’s case falls into this exceptional category.
Reasons for avoiding the Supreme Court, in the context of this case, might include concerns that:
- The matter will be heard by a jury, when the plaintiff would prefer trial by judge alone;
- The plaintiff will not get a fair hearing, because the trier of fact may be diverted from evidence about harm caused to the plaintiff, and focus instead on his current political position as Treasurer (e.g. if heard in the ACT); or
- The trier of fact may have a jaundiced view of defamation claims having seen so many of them, such that the claim would benefit from ‘fresh eyes’.
Note: I am setting out these possible concerns. Do not assume I think them valid!
Interestingly, press reports about the case do not suggest Fairfax challenged the Federal Court’s jurisdiction. If that is so, perhaps both parties were of the view that ‘fresh eyes’ looking at this area of the law could be beneficial for all.
How could the Federal Court hear a “pure” defamation case?
When the uniform defamation laws were introduced, a Federal Court judge, Justice Steven Rares, delivered a paper called “Defamation and the Uniform Code” which considered possible ways in which the Federal Court may have jurisdiction in “pure” defamation actions.
One gains the impression from reading the paper that Justice Rares was very enthusiastic about the idea! His presence on the Full Court for the Seafolly case (see above) perhaps therefore does not surprise.
His answer was “Yes, we can!” based on two key propositions, both of which seem to apply to Mr Hockey’s case:
- Where the publication involves the implied constitutional freedom of communication on government and political matter; and
- Where there is an interstate or, possibly other intranational publication.
Implied constitutional freedom
For fans of The Castle, point 1 really is about the Constitution (and not just ‘the vibe’). The task is to see whether the relevant section of state legislation conforms to the concept of implied constitutional freedom of communication.
Section 30 of the Defamation Act, which concerns the qualified privilege defence, does not refer to “implied constitutional freedom of communication on government political matter” (which is one reason why the freedom is ‘implied’ rather than ‘express’). In fact, section 30(1) says:
There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that—
(a) the recipient has an interest or apparent interest in having information on some subject; and
(b) the matter is published to the recipient in the course of giving to the recipient information on that subject; and
(c) the conduct of the defendant in publishing that matter is reasonable in the circumstances.
Whilst this is helpful in providing a broad overview of how the qualified privilege works, the action really starts at s. 30(3). This sub-section lists a range of factors the court must take into account when working out whether the conduct was reasonable. These factors are replete with terms such as whether publication is in the “public interest”, concerns the “performance of public functions or activities of the person”, and so on.
In other words, if you are a media organization writing defamatory content otherwise in the public interest or about a person performing public functions, this communication is likely to be protected by the defence of qualified privilege so long as you are engaging in responsible journalism.
Further, if the topic is of a government or political nature, then this will likely invoke the jurisdiction of the Federal Court based on the nexus between the subject matter and the Constitution.
Notably, a defence of qualified privilege is defeated if the plaintiff (Mr Hockey in this case), proves that the publication of the defamatory matter was actuated by malice: s. 30(4).
Interstate or intranational publication
Section 11 of the uniform defamation code is a complicated choice of law provision. Here is the Victorian provision.
Justice Rares explains that where interstate publications are sued on in a defamation action, the law of each place of publication will create a substantive right to sue on that publication in that jurisdiction.
He also goes through the complicated route by which he arrives at that conclusion. All I can say is: I commend it to you: see paras  to .
Could there have been a jury?
The default position in the Federal Court is that, unless the court or a judge otherwise orders, the trial shall be a judge without a jury: section 39 Federal Court of Australia Act 1976 (Cth) (FCA Act).
For a plaintiff unenthusiastic about members of the public being the triers of fact in a defamation case, so far so good.
However, the FCA Act does, in fact, provide for jury trials: section 40 FCA Act.
It does not appear that Fairfax sought a jury trial in this case, when it is common for a defendant to take the plunge by asking for one (particularly if the plaintiff does not). That Fairfax did not do so might have something to do with its qualified privilege defence. Fairfax might have decided that a judge is better placed to wade through the technicalities.
It might also be the case that, because juries are so unusual in Federal Court cases, the prospect of breaking with convention might have been deemed an administrative nightmare.
There is much about the choice of jurisdiction in this case which intrigues.
Perhaps if the Federal Court Registry established an online case file for this matter, as it has done for the Essendon & Hird v ASADA litigation, and the Fair Work Australia v Craig Thomson litigation, we might become more enlightened…
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[…] cases. Mr Hockey’s decision to file in the Federal Court had therefore surprised some (see my previous post on this […]