Genl 2032 Assignment 2

SUMMARY

OF FACTS

In examining Sally Normans chance of success in claiming

defamation against the New York Magazine Sports God, its
website and also the Australian mainstream news website of the
Sydney Morning Herald, we must consider several key facts.
These being that, Sports Gods published an article in their
magazine that questioned Sallys performance and alleged that
she had used performance enhancing drugs at a State swimming
competition which was all kept hidden by Australian officials. This
magazine sold ten million copies in the United States but there
are only around 34 subscribers in Australia. This article was also
available on its website. However, access to the article requires a
$20 US annual subscription fee. Approximately 200 of the
subscribers have paid using Australian credit cards.
Furthermore, a short article is later published repeating these
allegations but carrying a denial from Sallys coach and Australian
Swimming Officials in the Sydney Morning Herald.

INTRODUCTION

TO

DEFAMATION

IN

AUSTRALIA

Defamation is when a person intentionally states or spreads

information about another person or organisation that may cause
others to think less of them. 1 The law of defamation aims to
protect the reputation of these victims through the right to sue for
damages. 2 Criminal prosecution is also possible but is only
utilised in the extreme cases.
Prior to 2006, defamation laws varied from were different state to
state across Australia, but now there are Uniform Defamation
1 Brian Martin, Defamation Law and Free Speech (1996). <
https://www.uow.edu.au/~bmartin/dissent/documents/defamation.html>

2 Ibid.
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Genl 2032 Assignment 2

Laws which are similar across all states and territories. Law
reform in Australia has seen all States and Territories enact
legislation based on a model uniform defamation legislation. 3 The
uniform laws adopted and adapted a number of statutory
provisions from old laws but still retain the basic principles of
common law.
The publication of defamatory matter can be by (a) spoken
words or audible sound or (b) words intended to be read by sight
or touch or (c) signs, signals, gestures or visible representations,
and must be done to a person other than the person defamed. 4
The Rindos v Hardwrick 5 case also established that material that
is uploaded, sent or posted on the internet which has been
viewed has to be treated as a method of publication. The internet
has created significant headaches for defamation law and the
complexity of the treatment of Internet Service Providers (ISPs)
and Internet Content Hosts (ICHs) are one of the many reasons
there isnt specific legislation in relation to defamation involving
the internet.
In general terms the following elements need to be present to
establish defamation:
1. A defamatory statement (or material) or an imputation.
Section 8 of the Defamation Act 2005 (NSW) requires that
imputation is the basis of the cause of action
2. The statement (or material) identifies the plaintiff

3 Electronic Frontiers Australia , Defamation Laws & The Internet (2006).

<https://www.efa.org.au/Issues/Censor/defamation.html#os>
4 Ibid.
5 Rindos v. Hardwick [1994] Unreported Judgement 940164, (31 March

1994).
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3. The statement (or material) is published to a third person,

i.e. at least one person other than the plaintiff. Section 8
requires that the imputation is made by means of its
publication. 6
There are also several defences against the charge of defamation
which is under Sections 25-33 of the Defamation Act. These
include: the information being true, you had a duty to provide the
information; you were just merely expressing an opinion and
finally the defence of innocent publication. 7
Furthermore, as we will find later, jurisdictional issues have the
made the creation of an international law on defamation law
extremely difficult. For example, complexities arise when in
comparison with Australia; defamation laws in the UK and USA are
less restrictive due to their constitutional right to free speech and
various other laws. 8

SPORTS GOD MAGAZINE & WEBSITE

Firstly, let us determine whether there was defamation present in
the original article published in Sports God Magazine. To do this
we must refer to the three elements mentioned earlier.
1. To start with it is quite evident a defamatory statement it
evident. That being Sallys performances are questionable,
and reports that she was once busted for using performance
enhancing at a State swimming competition, but this was
hushed by Australian officials.
6 Defamation Act 2005 (NSW) s 8.
7 Ibid s 25-33.
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2. The statement clearly identifies the plaintiff as the whole

article is about swimming star and media personality Sally
Norman.
3. The article is published in hard copy in the United States and
also to subscribers in over 10 other countries. Ten million
copies are sold and here are 34 subscribers in Australia.
Furthermore, it is also published on the magazines website
which can be accessed by a further 7000 subscribers. It is
quite obvious the article has been accessed by a third
person.
Hence, the statement satisfies the three criteria and defamation
can be potentially established.
Despite there being a clear defamatory statement against Sally,
the main issue that arises is which jurisdiction Sally should pursue
legal action against Sports God.

To aid us on jurisdictional issues we must refer to the landmark

case of Dow Jones & Company Inc v Gutnick. 9 This case
possesses similar facts to our current situation and will
significantly aid us in our judgement. In 2000, Dow Jones based in
the US, published an article in its Barrons magazine which
accused Gutnick (a prominent Victorian businessman) of improper
business dealings with a convicted tax evader Nachum Goldberg.
10
This article was also later published on the magazines website.
It was found that the article was accessed by many Americans
and approximately 300 people in Victoria as well as 14 people
who had purchased the magazine. Gutnick sued Dow Jones in the
Supreme Court of Victoria for defamation, but only limited the
9 Dow Jones & Company Inc v Gutnick [2002] HCA 56
10 Ibid 2.
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claim to the loss of reputation suffered in that state. 11 Parallel to

our current situation, the main issue was whether the defamation
proceedings should be heard in New York (where the article was
written), New Jersey (where the article was uploaded to the
website) or Victoria (where there is a loss of reputation).
Dow Jones argued that the Internet was unique way of
communication between humans and that it required a
reassessment of the law of the defamation. 12 They stated that
for Gutnicks argument to succeed then publishers around the
world would be liable to be sued every time they published
something on the Web that may be considered to be defamatory.
13
They further implied that this was a breach of free speech and
publishers would be afraid to circulate any material. This appeal
was rejected by the Australian High Court.
The High Court sided with Gutnicks argument which put forward
that the internet may be a new and different medium, but is
merely part of the development of technology and should be
treated in the same away as any other form of publication in the
media. 14 Furthermore, Gutnick stated if Dow Jones were to
succeed in their contentions, online publishers would locate to
jurisdictions where defamation laws favoured the publishers such
as the US. 15
Gleeson CJ, McHugh, Gummow and Hatne JJ issued a joint
judgement which unanimously dismissed the appeal put forward
11 Ibid 6.
12 Ibid 20.
13 Ibid 23.
14 Ibid 183.
15 Ibid 74.
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by Dow Jones stating that It is where that person downloads the

material that the damage to the reputation may be done... that
will be where the tort of defamation is committed. 16 Gutnick was
able to sue Dow Jones for defamation under Victorian law and
later received a settlement sum of approximately $400,000.
How can we apply this to our current situation?
Sally faces quite a similar situation that was experienced by
Gutnick. She has the options of suing Sports God in the multiple
countries the article was accessed by readers and subscribers on
the website. However, there are limitations, which include the
varying laws in different jurisdictions (some states/countries may
favour the publisher) and all this legal action would result in a
hefty expenses (as discussed later). This is accentuated by the
fact that there is no specification of which part of Australia the
approximately 200 subscribers reside in. Gutnick had the
convenience of suing in Victoria as most of the readers were from
that state. Due to this being unknown in our situation, this could
mean multiple court proceedings in different states of Australia in
which not all of them may be successful, not to mention the
immense legal costs.
Sally must also firstly figure out what her objective and desired
outcome would be pursuing legal action. For example, if she
wanted to claim damages it would be unwise to launch legal
action in multiple jurisdictions as this would result in high costs
and uncertainty in success in every jurisdiction due to
desynchronised laws. Following Gutnicks actions, she would be
better off focusing on a single jurisdiction where the laws tend to
favour the plaintiff (e.g. Victoria as opposed to other Australian
States and the US). On the other hand, if retaining her reputation
was her primary aim and money was not a concern, it would be

16 Ibid 44.
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recommended to pursue court action in multiple jurisdictions.

However, success may not be achieved in every jurisdiction.

SYDNEY MORNING HERALD WEBSITE

The Internet creates a significant problem as Internet Service
Providers (ISPs) and Internet Content Hosts (ICHs) as they have no
control of any material that is published. In determining whether
SMH is liable for defamation we must consider whether they
republished the article or they are just a mere distributor.
Republication is a recognised form of publication and may make
SMH liable to Sallys claim. It is most probable SMH will utilise the
defence of an innocent disseminator in court.
As SMH is an Australian website we must refer to the Defamation
Act to see whether the defence of innocent dissemination is
applicable here.
Under Section 32 17 the defence of innocent dissemination is
applicable if the defendant can prove:
1. They published the matter merely in the capacity, or an
employee or agent, of a subordinate distributor.
2. They neither knew, nor ought reasonably to have known, that
the matter defamatory.
3. The lack of knowledge was not due to any negligence on the
part of the defendant. 18
The relevant precedent that will aid us in establishing the first
point would the Australian case of Thompson v Australian Capital
Television Pty Ltd & Ors.19 In summary, Channel 7 re-broadcasted
a live relay of a program produced by Channel 9. It was claimed
17 Defamation Act 2005 (NSW) s 32.
18 ibid.
19 Thompson v Australian Capital Television Pty Ltd & Ors (1996) 186 CLR 57.
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Genl 2032 Assignment 2

on The Today Show that the plaintiff had committed incest with
his step-daughter despite there being no evidence to suggest this
was true. 20 Channel 7 used the defence of an innocent
disseminator of the program but the High Court later rejected
this. They ruled that even though Channel 7 had no involvement
with the production of the material they had the ability to control
and supervise the material. 21 Most importantly, in relation to our
current situation SMH would have to prove they had no control
over the material they published. This seems unlikely as SMH
clearly has the capacity to control the material they choose to
publish online or in their newspaper. However, the significant
distinction between our current situation and Channel 7 is that
SMH not only repeats the allegations carried in the original article,
but also carries a denial from Sallys coach and Australian
Swimming Officials.
As a result, SMH has presented both sides to the story which
highlights that they did have control over the material but have
happened to edit the article in which the final product may not be
defamatory. Furthermore, it is quite evident that SMH had no
reason to believe that they knew the matter was defamatory
through their actions to publish another perspective. Lastly,
SMHs obvious effort to edit the original article and to gain access
to a denial from Sallys coach and Australian Swimming officials
suggest their actions were not negligent. We can infer that SMH is
most probable to satisfy the requirements under Section 32 of the
Defamation Act which would allow their defence of an innocent
disseminator to be valid.

TENTATIVE CONCLUSION
20 Ibid.
21 Ibid.
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After analysing Sallys situation in relation to Sports God Magazine

and its website, a clear defamatory statement has been made.
However, the fact the article is published and viewed by people in
multiple countries complicates the whole situation. Dow Jones v
Gutnick accentuated that the location of where the material is
downloaded or viewed should be the basis upon where the tort of
defamation is committed. Relying upon this judgement, Sally has
the ability to sue in the multiple countries the article were
published and read in. However, due to inconsistencies of laws in
different countries Sally may have little success in countries and
jurisdictions which free speech can be used as a shield (e.g. US).
As mentioned earlier, Sally must decide whether she values her
money or her reputation more. This should be the basis of what
her decision should be. If damages were her primary concern, it is
recommended to pursue legal action in a single jurisdiction in
which the local laws favour Sally in which she will have a strong
case in. (e.g. Victoria) However, if Sally wants to clear her name
and to keep her reputation, she may need intimate multiple court
hearings in different jurisdictions. There is no guarantee of
success in every jurisdiction due to differing laws, let alone the
immense legal and other expenses which may be incurred to be
able to follow this course of action.
On the other hand, her chances against SMH are very slim to say
the very least. Due to the fact SMH had control of what they
published (principle established in Thompsons case) they are
considered to be publishers of material. However, this material is
different from what was published in Sports God. The denial of
allegations in the article imply that SMH is unsure whether the
original statement is defamatory, whilst going through all the
effort to gaining a comment from the coach and officials entail
that they not negligent in their actions. SMH have a strong case
as they fulfil the requirements of Section 32 of the Defamation Act
in which their reliance on the defence being a mere distributor
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(innocent disseminator) is probable to succeed in the courts if

Sally were to decide to undertake legal action.

POTENTIAL COSTS

AND

RISKS

A 2002 NSW Law reform report stated that defamation trials are
overly lengthy. Historically some cases have taken years resolve.
22
This may not only cause anxiety to the people involved but also
as the old saying goes time is money.
This leads to the next significant issue that Sally may face
significant legal costs in court proceedings. Even if Sally is
successful in her claims; she will still have to pay for the cost of
legal advice. Judgments may also be appealed and this could lead
to further legal expenses. A study done in the mid 1980s found
that the eventual compensation paid out in court ranged
between 3.5% and 8% went to the plaintiff, and over 90%
(maybe well over 95%) went to legal fees and expenses. 23 It also
doesnt help by the fact that Sally is going against large
organisations (SMH & Sports Gods) who arent exactly short on
resources.
As a consequence, defamation law has been criticised to be only
be able to be used by the rich and powerful to deter potential
criticisms. It is only rarely helpful to ordinary people who have the
reputations attacked unfairly. 24
22 Gareth Griffith, Defamation Law Revisited (2002) NSW Parliamentary Library
Research Service Briefing: Paper No 13 20.
23 David Boies, The Chilling Effect of Libel Defamation Costs : The Problem and
Possible Solution (1995) St Louis U.L.J 1207.
24 Brian Martin, Defamation Law and Free Speech (1996) <
https://www.uow.edu.au/~bmartin/dissent/documents/defamation.html>

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OTHER AVENUES
Another possible solution would be utilising alternative dispute
resolution. As the name suggests, this is a variation of the
traditional court process in which disputes may be resolved
quicker with less emphasis on resources which can be
significantly incurred through the court process as mentioned
earlier. The different dispute resolution methods include
mediation, conciliation, arbitration and negotiation. A NSW Law
Reform Report stated that in particular mediation would be the
best method of dispute resolution in the situation of defamatory
related cases. 25 Mediation typically involves a third party which
assists the parties involved to come to an agreement. The whole
process is private and confidential. The potential benefits of
mediation likely to appeal to parties to defamation actions include
speed, lower costs, flexibility, informality, confidentiality and the
consensual and creative nature of settlements. 26 However, these
agreements are not necessarily legally binding which entails that
they cannot be enforced by Sally. Furthermore, it may be quite
difficult for Sally to persuade large international organisations
such as Sports God to participate in mediation as they are not
short in money or legal advice.

25 NSW Law Reform Commission: Defamation (1995) Report 75 114.

26 Ibid.
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BIBLIOGRAPHY
Brian Martin, Defamation Law and Free Speech (1996).
<
https://www.uow.edu.au/~bmartin/dissent/documents/defamation.
html>
David Boies, The Chilling Effect of Libel Defamation Costs : The
Problem and Possible Solution (1995) St Louis U.L.J 1207.
Defamation Act 2005 (NSW)
Dow Jones & Company Inc v Gutnick [2002] HCA 56
Electronic Frontiers Australia , Defamation Laws & The Internet
(2006).
<
https://www.efa.org.au/Issues/Censor/defamation.html#os >
Gareth Griffith, Defamation Law Revisited (2002) NSW
Parliamentary Library Research Service Briefing: Paper No 13
20.

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NSW Law Reform Commission: Defamation (1995) Report 75

114
Rindos v. Hardwick [1994] Unreported Judgement 940164, (31
March 1994).
Thompson v Australian Capital Television Pty Ltd & Ors (1996)
186 CLR 57

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