Acp Publishing Pty Limited v John Fairfax Publications Pty Limited & Anor [2004] ACTSC 53 (25 June 2004)

Last Updated: 17 September 2004

ACP PUBLISHING PTY LIMITED v JOHN FAIRFAX PUBLICATIONS

PTY LIMITED & ANOR [2004] ACTSC 53 (25 June 2004)

DEFAMATION - newspaper article - imputation about corporation's managerial competence as publisher of magazines - whether likely injury to business as well as reputation - damages.

No. SC 43 of 2000

Judge: Whitlam J

Supreme Court of the ACT

Date: 25 June 2004

IN THE SUPREME COURT OF THE )

) No. SC 43 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ACP PUBLISHING PTY LIMITED

Plaintiff

AND: JOHN FAIRFAX PUBLICATIONS PTY LIMITED

First Defendant

FRED HILMER

Second Defendant

ORDER

Judge: Whitlam J

Date: 25 June 2004

Place: Canberra

THE COURT ORDERS THAT:

1. Judgment be entered for the plaintiff against the first defendant for $113,500 with costs.

1. This is an action for defamation. The matter complained of was published by the first defendant in its newspaper, The Sydney Morning Herald, on 16 December 1999. The business pages of the newspaper on that day included a marketing section, which was said to be edited by Andrew Hornery. Mr Hornery's name also appeared on a column called `The Pitch' in that section. The matter complained of appeared in this column.

2. The text of the column was broken up by line spacing and the use of bold initial capitals into thirteen parts. The first part stated it was how the newspaper saw marketing in 1999. This was followed by a part for each calendar month. The core of this case is the first paragraph for the month of February, which stated:

"Woman's Day launched its own television show, which was tipped to deliver 50,000 more magazine sales a week. Publisher Australian Consolidated Press and the Nine Network, both subsidiaries of Kerry Packer's publicly listed Publishing and Broadcasting, joined forces to launch Woman's Day ET hosted by entertainment reporter Richard Wilkins and Marie Patane. The show was axed in November. Woman's Day sales dropped an average of 236,255 copies a week in the six months to June 30."

3. There is no issue that the plaintiff is the publisher of the magazine, Woman's Day, identified in that piece. The statement of claim specified the following imputations:

"(a) that the plaintiff so poorly managed the publication of Woman's Day magazine that its circulation fell by more than 200,000 copies over a 6 month period;

(b) that the plaintiff was an undesirable company with which to place advertising in its magazine, Woman's Day, because that magazine had suffered a disastrous circulation slump."

4. This action was commenced on 24 January 2000. The first defendant published in the marketing section of the business pages of The Sydney Morning Herald on 9 March 2000 the following apology:

"WOMAN'S DAY

On December 16, 1999, the Herald reported that Woman's Day circulation decreased by an average of 236,255 copies a week in the six months to June 30, 1999. This was incorrect. The decrease was 6,412. The Herald apologises to Woman's Day for the error."

The first defendant denies that the pleaded imputations are conveyed and that they are defamatory of the plaintiff.

5. Counsel for the first defendant subjected the pleaded imputations to a very fine analysis. As to imputation (a), they contended that the matter complained of said nothing about the `publication' of Woman's Day from which any inference could be drawn about the quality of the plaintiff's management. Counsel pointed out, correctly, that no evidence had been adduced of the magazine's actual sales for any period in 1999. Counsel submitted that an imputation about the management of the plaintiff was not conveyed because there was no suggested link between the launch of its magazine's own television show and the drop in sales. As to imputation (b), counsel for the first defendant submitted that that was a conclusion, which was not stated in the matter complained of. There was not a word in the core paragraph about `advertising' or the magazine being an `undesirable' advertising medium. Counsel emphasized the importance of focussing attention on what was conveyed by the published material in the mind of the ordinary reasonable reader: Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293 per Mason J at 301.

6. In my opinion, the impugned piece does invite the ordinary reasonable reader to draw a link between the launch of the television show and the drop in sales. The imputation is plainly conveyed that the marketing exercise in question was a failure which caused a monumental drop in sales in the period of just four months. That is the obvious point of contrasting the sales objective of 50,000 extra copies in February with the `average' fall in sales over the first six months of 1993 and of mentioning the subsequent cancellation of the television show in November. The implication of managerial incompetence on the part of the plaintiff is overwhelming. The publisher of a magazine is responsible for its sales and marketing just as an editor is responsible for the editorial copy. In that way, therefore, the imputation pleaded in paragraph (a) of poor management in the `publication' of the magazine is made out. It may be that this meaning is more refined than the meaning pleaded in that paragraph. If so, it is simply a variant upon which the plaintiff may rely in accordance with the principles of pleading explained in Chakravarti v Advertiser Newspapers Limited [1998] HCA 37; (1998) 193 CLR 519. On the other hand, I do accept counsel's submission that the matter complained of is not capable of conveying the imputation pleaded in paragraph (b).

7. Counsel for the first defendant submitted that the matter complained of was not disparaging of the plaintiff's reputation. It was submitted that it was not defamatory to say of a person that a commercial strategy failed. That may be so. However, once it is accepted that an imputation of managerial incompetence was conveyed, I think such an imputation is plainly defamatory. Defamation embraces disparagement of reputation in trade and business. Sales figures are the life-blood of a magazine. The ridicule implicit in the contrast between the goal for increased sales of 50,000 copies and the massive drop in average sales of 236,255 copies is calculated to damage the reputation of a corporate publisher of magazines.

8. The offending article was published in all States, this Territory, and the Northern Territory. Counsel for the plaintiff relied on the publication in Queensland and Tasmania, therefore, to allege a likely injury to the plaintiff's business under the Code in those States. To a large extent this submission may depend on the second imputation which I have held was not made out. For the sake of completeness, I should say that I am not prepared to find that such injury is likely. Advertising agencies and media buyers would have access to the true sales figures. Such sophisticated persons would not rely on the information in this article. Nor would advertisers themselves. The magazine is a well-known national title. It is not a local throwaway newspaper.

9. I turn now to the question of damages. The reflection upon the business reputation of the plaintiff was most grave. The evidence establishes that the estimated sales and readership of the 16 December 1999 issue of The Sydney Morning Herald were significant, particularly in New South Wales and this Territory. Counsel for the first defendant submitted that this was a simple case of mistake. I cannot accept this submission as no explanation for the error has been given. Moreover, the error in sales figures was quite massive as the subsequently published correction recognised. The plaintiff is a corporation and thus not entitled to damages for hurt feelings. The quantum of compensatory damages must be enough to be vindicatory without being extravagant. In my view, that requires a substantial sum in the circumstances of this case. The harm suffered by the plaintiff would be only slightly mitigated at best by the terms of the subsequent apology. In my view, a sum of $100,000 is the appropriate award.

10. The plaintiff also claims exemplary damages. Its counsel relied on the lack of explanation for the error. Without more, I do not consider that I could infer from that fact `conscious wrongdoing in contumelious disregard of another's rights.' I do not propose, therefore, to increase the quantum of the damages awarded.

11. Interest is also claimed. The publication occurred four and a half years ago. The damage to the plaintiff's business's reputation is likely to have been suffered most acutely in the months following publication. I think that the impact of the publication may now be exhausted and that the damage will have diminished over the time in between. I shall, therefore, allow interest at a rate of 3 per cent on the whole of the amount for the period since publication. That results in an additional amount of $13,500.

12. There will be judgment for the plaintiff in the sum of $113,500. The first defendant must pay the plaintiff's costs.

I certify that the twelve (12) preceding paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam

Associate:

Date: 25 June 2004

Counsel for the plaintiff: B R McClintock SC with M Richardson

Instructing solicitors: Phillips Fox

Counsel for the defendants: T K Tobin QC with R D Glasson

Instructing solicitors: Sparke Helmore

Date of hearing: 2 June 2003

Date of judgment: 25 June 2004