Simpsons Solicitors

Rebel With A Cause Part 2: Appeal results

June 26th 2018

Nothing Special: Rebel Wilson’s defamation payout reduced on appeal

Rebel Wilson’s record-breaking $4.5 million defamation payout has largely evaporated following a decision of the Victorian Court of Appeal.

To recap our previous article, Ms Wilson’s claim was that a number of articles published in print and online by Bauer Media Pty Ltd had imputed that she was a serial liar who had told lies about her real name, age, aspects of her upbringing, and events in her life. The jury agreed, and rejected all of Bauer’s defences (including that the publication was justified, that any defamatory imputations were trivial, and that the publications were covered by qualified privilege). The trial judge awarded Ms Wilson $650,000 in compensatory and aggravated damages, plus some $3,917,472 in special damages.

The appeal

Bauer has not challenged the findings that its publications were defamatory and that its defences were not made out – it has only appealed the assessment of damages by the trial judge.

Bauer’s grounds of appeal fell under three main headings:

  • First, that the trial judge had erred in finding a number of aggravating factors in Bauer’s conduct;
  • Second, that the trial judge had misapplied section 35 of the Defamation Act (relating to the cap on general damages); and
  • Third, that the trial judge had erred in awarding Ms Wilson special damages.

Aggravating factors

Under Australian defamation law, a general damages award (i.e. an award for non-economic loss) can be made up of two components – “pure” compensatory damages, and aggravated damages. Compensatory damages are awarded as a matter of course in recognition for injury to a plaintiff’s reputation. Aggravated damages are awarded where a court finds that the plaintiff’s injury was increased by conduct of the defendant that was improper, unjustifiable, or bad faith.

At first instance here, the trial judge had found a number of aggravating factors, including that Bauer had known the articles were false and had published them in such a way as to maximise their commercial opportunity. Most of these findings were left unchallenged by Bauer.

However, the Court of Appeal upheld Bauer’s appeal on other aggravating circumstances, including Bauer’s maintenance of a triviality defence, and its refusal to consent to Ms Wilson’s remuneration being kept confidential at trial. The Court of Appeal’s decision allowed Bauer a little more lee-way than the trial judge in running a robust defence. The Court particularly noted the dangers of hindsight in assessing whether an argument run by a defendant at trial should be considered an aggravating circumstance.

The assessment of compensatory and aggravated damages in defamation is a notoriously imprecise exercise. In reassessing Ms Wilson’s general damages, the Court reduced the primary judge’s $650,000 award by $50,000 – perhaps reflecting a “broad strokes” view that the primary judge had placed some, but not especially significant, weight on the erroneous findings.

Section 35

Section 35 operates as a statutory cap on general damages awards in defamation. Subsection 35(2) provides that an award in excess of the cap may be ordered “if, and only if, the court is satisfied that the circumstances of the publication of the defamatory matter to which the proceedings relate are such as to warrant an award of aggravated damages.”

Bauer had argued, essentially, that the section 35 cap always applies to pure compensatory damages, but that additional aggravated damages can always be awarded on top. Ms Wilson (with whom the trial judge agreed) argued instead that the section 35 cap is lifted with respect to both pure compensatory and aggravated damages as soon as any aggravating circumstance is found.

In the face of some apparently conflicting authority, the Court rejected this ground of Bauer’s appeal, preferring Ms Wilson’s and the trial judge’s construction.

It is worth noting that this construction of section 35 has the effect that even very minor aggravating factors have the potential to significantly increase a publisher’s damages bill. Consider, for example, a case where “pure” compensatory damages would be assessed by the judge at $500,000. Ordinarily, section 35 operates to cap such an award at just under $389,500 (the figure increases each year). However, if even minor aggravating conduct is found (say, conduct which would justify $10,000 in aggravated damages), the now-uncapped damages award would, in theory, shoot up significantly to $510,000.

Special damages

In contrast to general damages – which recognise non-economic injury to a plaintiff’s reputation, and are largely presumed – special damages are awarded to compensate a plaintiff for actual economic loss and must be specifically proven.

Here, at first instance, the trial judge found that Bauer’s publications had caused Ms Wilson to lose an opportunity to be cast in prominent roles in three Hollywood films for at least US$5 million apiece which, allowing for various contingencies, resulted in a significant special damages award of almost AU$4 million.

The trial judge’s findings were based on inferences he drew from Ms Wilson and others’ evidence. He assessed Ms Wilson’s career trajectory, found it to have stalled after the articles were published, and found the “grapevine effect” of their publication in Australia was the cause of that stall.

The Court of Appeal found this reasoning to be unpersuasive, for a whole host of reasons. In some cases, the trial judge seems to have made clear errors – for example, citing figures for Ms Wilson’s remuneration which were not in evidence. The Court was also extremely critical of some witnesses’ testimony (and the trial judge’s reliance on it) – including that of Ms Wilson’s Hollywood expert, who was described by the Court as knowing “almost nothing” about her career. The Court seems to have found that, in some instances, the trial judge impermissibly placed the onus on Bauer to disprove factual matters which were really Ms Wilson’s to positively establish. The Court was also more willing than the trial judge to draw adverse inferences from Ms Wilson’s failure to call certain evidence – particularly in relation to the level of awareness in the United States (and, specifically, the Hollywood film industry) of Bauer’s articles.

On balance, the Court found that the evidence at trial could not justify inferences that:

  • the alleged valuable opportunity had existed at all; or
  • even if the opportunity had existed and been lost, that the articles were a cause of that loss.

Accordingly, the special damages award was wiped out in its entirety.

Conclusions

While a significant reversal of fortune for Ms Wilson, this decision has not closed the door on awards of special damages in Australia – even significant ones. It is, however, an important illustration of the principle that courts will generally take a detail-oriented approach to special damages claims. Evidence sufficient to demonstrate (or at least properly justify an inference) that the defamation actually caused the alleged loss is required, and may be difficult to come by.

Following the decision, Ms Wilson quickly took to Twitter to complain that the Court’s judgment was “bizarre” and “so obviously challengeable”, foreshadowing an appeal of her own to the High Court. Of course, special leave is by no means guaranteed. Similar issues may also rear their heads in another case, with Geoffrey Rush claiming special damages in his ongoing case against the publishers of the Daily Telegraph.

While publishers may take some comfort in this decision, it should not result in complacency. $600,000 remains a significant award, and it is likely that Bauer’s liability for costs (its own and Ms Wilson’s) will add up to a comparable or greater figure. For that reason, our recommendations for publishers and authors in our previous article still stand.

If you require advice on defamation law – as a publisher, or as someone who believes they have been defamed – contact defamation lawyers Adam Simpson or Ian McDonald at Simpsons Solicitors.