Introduction

In Cao v Stuff Ltd,¹ the High Court considered whether a declaration of liability (with costs) under s 24 of the Defamation Act 1992 should be granted if the defendant establishes the defence of responsible publication on a matter of public interest.

 

Facts

The plaintiffs, Cao and Oulton, were hosts of an annual cherry blossom festival in the Waikato region. Following success in 2017 and 2018, the couple sought resource consent from the Waikato District Council for the 2019 event as numbers were expected to exceed those allowed under the District Plan. Consent was declined by the District Council three days prior to the commencement of the event on the basis that requested information had not been provided before the deadline imposed.

Gary Farrow, a reporter for Stuff Limited, published numerous articles in 2019 relating to the plaintiffs’ request for resource consent and its ultimate rejection. The piece released by the reporter on 15 September 2019 involved discussion about the management and neighbourhood impact of the 2017 and 2018 festivals. Cao and Oulton sued Stuff and Farrow for defamation, claiming that Farrow had implied that they had operated the first two festivals unlawfully for lack of resource consent.

 

Decision

The High Court decision of Johnstone J provided guidance on several aspects of the application of the availability of the defence of responsible publication and declarations of defamation.

The roles of the judge and jury

The judgment first clarified the roles of the judge and the jury in relation to the defence of responsible publication on matters of public interest. In Durie v Gardiner,² the approach of the Court of Appeal had been informed by both Canadian law, and the law of England and Wales. In Grant v Torstar Corp,³ the Supreme Court of Canada held that it was a matter for the trial judge to determine whether the communication was on matters of public interest, and for the jury to determine whether it was responsible. Abella J dissented, considering that both elements should be considered by the trial judge, with a similar view being expressed by the House of Lords in Reynolds v Times Newspapers Ltd.⁴

Johnstone J referred to a passage from Durie, indicating that the two elements “are established based on the primary facts as found by the jury”.⁵ As to whether the decision in Durie meant that juries should now be asked to determine additional matters to inform the trial judge, he observed that the Durie judgment contained no elaboration of the concept of primary facts. Primary facts were only referred to when addressing a concern expressed in Torstar that separation of the elements between trial judge and jury in Reynolds would cause a “complex back and forth” between the jury determining primary facts, and the trial judge determining responsibility.⁶

Johnstone J concluded that a trial judge should strictly limit the finding of primary facts by a jury to the disputed elements of the tort of defamation (and of any defence pleaded) and to the quantum of damages. Seeking the jury’s view on additional factual matters would add complexity, length, and cost to the proceeding. Evidence presented to the jury should be limited to what was relevant to the proceedings.⁷

The judge added that, by adopting such an approach, the “complex back and forth between jury and judge” concern in the Torstar case would be avoided.⁸ The separation of the different roles and their corresponding elements would facilitate the efficiency of determinations in defamation summary judgments brought by those publishers who believe that they can establish the responsibility of their publications.

Following a trail of questions presented to the jury, it delivered a verdict that the 15 September 2019 article was defamatory, albeit not deliberately so.

Responsible publication

The judge, sitting alone, then considered the defence of responsible publication. The publishers had argued that the article had been worded incorrectly, and its defamatory nature was not intended. The judge did not accept that explanation and instead held that, despite being aware that the 2017 and 2018 festivals had not required resource consent to be lawfully operated, the reporter had deliberately asserted that there was some unsatisfactory aspect to the consenting for the previous two events.

The reporter’s knowledge was a key element in the judge’s application of the list of responsible publication factors set out in Durie. The judge found that the article failed to satisfy the five factors owing to his knowledge of lawful operation and the fact that the information communicated was inaccurate. He concluded that the article was not published responsibly.

Declaration, costs, and responsible publication

The final part of the judgment concerned the availability of the defence of responsible publication where a declaration was sought without damages.

Section 24 of the Defamation Act 1992 provides for a plaintiff to seek only a declaration that the defendant is liable to the plaintiff in defamation (and costs). If successful, the plaintiff is to be awarded solicitor and client costs against the defendant, unless the court orders otherwise.

Cao and Oulton had removed a claim for damages against the publishers in an amended statement of claim, leaving only a claim for declaration under s 24 remaining. The judge held that the jury verdict, coupled with the failure of the responsible publication defence was sufficient to grant the declaration sought.

Although the plaintiffs’ claim for a s 24 declaration was granted, they were not awarded solicitor and client costs for the following reasons:⁹

(a)   The 15 September 2019 article was not one of the original publications in respect of which the plaintiffs had initially sued.

(b)   The jury had rejected the entire balance of the plaintiffs’ case.

(c)   The reporter would have been correct in his assertion if he had simply said that the 2018 festival had been operated unlawfully (because the number of those attending were in excess of what was permitted).

(d)   Most of the harm suffered by Cao and Oulton appeared to be the result of their own organisational failures and the evidence did not establish harm arising from the article.

(e)   Although the jury had found that the publishers had not proved the harm caused was no more than minor, the extent could not be decided with precision, and it only appeared modest to the judge.

Costs

In the High Court decision on costs, the publishers claimed that they were entitled to compensation, as they had made various without prejudice written offers to Cao and Oulton under r 14.10 of the High Court Rules 2016.¹⁰  The question then arose of whether these offers would have been more beneficial to the plaintiffs than the judgment obtained and, if so, whether they were close to the value or benefit of the judgment obtained.¹¹  

The judge considered two substantial offers in answering those questions. As the publisher’s 26 April 2023 offer would not have provided any vindication to Cao and Oulton’s reputation (due to the condition that the settlement would be confidential), it was not considered close to the value or benefit of the judgment obtained.  However, their 31 August 2023 offer consisting of public apologies across multiple media platforms, removal of the 19 September 2019 article from the Stuff news website, and a contribution to the plaintiffs’ costs of $75,000, was considered comfortably more beneficial to Cao and Oulton.  This is because the plaintiffs’ major complaints were centred around the 19 September 2019 article, and because the settlement and the payment involved would not have been confidential.¹²  As a result, the plaintiffs were ordered to pay the defendants’ costs for steps taken after 31 August 2023: $54,970.00 plus $15,868.74 in disbursements.

Availability of reasonable publication defence to declaration claim

While not critical to the decision, the judge also addressed the parties’ arguments regarding whether, as a matter of law, the defence of responsible publication on matters of public interest was available in cases where the only remedy sought is a s 24 declaration. He did so to record his view that the issue was not resolved determinatively by statute or prior case law.

Counsel for the plaintiffs had argued that allowing the defence would mean that “defamed persons would have no means by which to obtain even that modest form of relief”.¹³ In response, counsel for the defendants submitted that unavailability of the responsible publication defence would be inconsistent with the wording of s 24, that the Court of Appeal did not indicate in Durie that the defence would not be available, and that the presumption of solicitor and client costs would be “chilling” of communications on matters of public interest.¹⁴

On examining the genesis of s 24, the judge considered that the section appeared to have been enacted for efficiency (and not necessarily for remuneration). He observed that it may be that s 24 should now be interpreted such that a declaration should only be sought without consideration of the responsible publication defence because, in that situation, the nature of the defendant’s declared liability in defamation would be limited to expressing the fact of defamation without regard to non-truth defences. If this interpretation were adopted, s 24 may better serve its apparent purpose of expedient reputational vindication. Although many New Zealand cases have proceeded on the basis that a declaration is only available where no defence has been established, Elias J’s obiter comment in Lange, where her Honour had reservations about allowing the defence, indicated that this should be decided on a case-by-case basis.¹⁵

While the judge did not consider that Durie had disposed of the issue, he resolved to leave this assessment to an occasion on which the facts required it. While exposure to solicitor and client costs is significant, the consequence of recognising the defence and depriving defamed plaintiffs of vindication of reputation is also severe.

 

Comment

The decision is a useful exploration of several issues arising from section 24, the provision for a declaration of defamation and a presumption of costs. A central issue identified remained unresolved (because the defence was not established on the facts), but the decision clarified several other issues arising, including the role of judge and jury, the application of the Durie factors and an example of presumed solicitor and client costs not being awarded.

 

Endnotes

¹ [2024] NZHC 44.

² [2018] NZCA 278.

³ 2009 SCC 61, [2009] 3 SCR 640.

⁴ [2001] 2 AC 127 (HL).

⁵ Cao v Stuff Ltd, above n 1, at [44].

⁶ At [45].

⁷ At [49].

⁸ At [50].

⁹ At [113].

¹⁰ Cao v Stuff Ltd [2024] NZHC 1367

¹¹ At [13].

¹² At [24].

¹³ At [92].

¹⁴ At [94].

¹⁵ At [91].