Bauer Media Pty Ltd & Anor v Rebel Wilson

Case Note

Bauer Media Pty Ltd and Bauer Media Australia Pty Ltd v Rebel Melanie Elizabeth Wilson [No.2] [2018] VSCA 154.

Background:

Following publication of a number of articles in various weekly magazines Australian actress, Rebel Wilson, commenced defamation proceedings against Bauer Media Pty Ltd and Bauer Media Australia Pty Ltd (Bauer). On 13 September 2017, Justice John Dixon entered judgment (Trial Judgment) in favour of Wilson in the amount of $4,749,920.60, the largest defamation award ordered in Australian legal history. Bauer subsequently appealed the award.

Bauer sought to appeal his Honour’s findings largely for:

1. The findings that particular conduct of Bauer justified an award of aggravated damages in the amount of $650,000; and
2. The award of $3,917,472 to Wilson in relation to special damages.

Relevant Factual Matters

The proceeding concerned the publication of a number of articles on 18, 19, 20 May 2015 (the articles) which, variously, asserted that Wilson was a serial liar and lied about matters including her age and upbringing. Wilson alleged that the articles were defamatory.  In its defence to the claim Bauer, variously:

• Denied the articles were defamatory;
• Asserted the articles were true or substantially true;
• Pleaded the defence of justification, qualified privilege; and
• Claimed Wilson was unlikely to sustain any harm from publication of the Articles.

The jury found in favour of Wilson and rejected Bauer’s defences.

Aggravated Damages

A plaintiff in defamation proceeding is entitled to aggravated damages in circumstances where the defendant engages in conduct which is “improper, unjustifiable or not bona fide and such conduct increases the plaintiff’s injury”.¹

In the Trial Judgment, his Honour found that there were a number of factors which justified such an award. These included that Bauer was reckless as to the consequences of publishing the articles, failed to undertake proper and necessary investigations, and published the articles despite knowing the imputations were false.

On appeal, Bauer did not challenge all of the findings in relation to aggravated damages, instead they contended his Honour had erred in relation to finding its conduct justified an award of aggravated damages, namely:

1. Bauer’s pursuit of the defences of justification and triviality;
2. Bauer’s submissions as to the meaning of the articles;
3. The opening and closing addresses made by counsel for Bauer;
4. Bauer’s failure to apologise;
5. The legal counsel for Bauer knowingly swore a false answer to an interrogatory; and
6. Bauer adopted an ‘unjustified approach’ in seeking the disclosure of confidential information including in relation to Wilson’s remuneration.

Defence of Justification

Even though Bauer did not appeal his Honour’s findings that Bauer published the articles despite knowing they were false, they did challenge his Honour’s findings in relation to their prosecution of the defence of justification², in particular his conclusion that “no responsible analysis could have informed advice that any of the articles were substantially true”.³

Bauer claimed his Honour provided insufficient reasoning to support his finding and contended that there was no impropriety in pursuing arguments about justification and meaning which were open to be made at trial. Wilson contended his Honour’s findings should be upheld; in circumstances where there was an unchallenged finding that Bauer knew the articles were false.

In considering these matters, the Court of Appeal drew a distinction between the conduct of a litigant in pursuing a defence of justification where it knows that it published false and defamatory publications, and the conduct of the lawyers in pursuing a defence based on the evidence that was relied upon at trial. They also observed that although the justification arguments relied upon by Bauer may have been “weak and unpersuasive, they were not, of themselves, improper or unjustifiable.”⁴ Further, any assessment of the propriety of Bauer’s conduct, must be made at the “time the step was taken, rather than by reference to whether the jury did or did not ‘comprehensively reject’ the losing party’s case.⁵ In light of these matters the Court of Appeal did not accept his Honour’s finding that there was impropriety in running the defence of justification as was advanced at trial.

Defence of Triviality

Similarly his Honour held that Bauer’s conduct was improper in running the defence of triviality. At first instance, Bauer relied upon this defence to claim that even if the articles were defamatory, they were unlikely to cause harm to Wilson as they were “light entertainment”. The Court of Appeal ultimately held that his Honour erred at first instance by making a finding that the conduct of this defence was improper. The Court of Appeal held that the defence was a “topic of which reasonable minds might differ” and which was “open to be put”.⁶

Failure to Apologise

Bauer challenged his Honour’s finding that the jury’s verdict was relevant in finding that Bauer’s failure to apologise was not bona fide. The Court of Appeal agreed and reiterated that the conduct of a defendant must be assessed at the time of its commission, and that “the mere fact that the jury verdict found for the plaintiff (comprehensively or otherwise) could not determine whether particular conduct was or was not justifiable at the time of its occurrence“.⁷

The Court of Appeal found that his Honour had erred insofar as he found that Bauer’s failure to apologise, after the commencement of the trial, constituted a distinct aggravating factor. The Court of Appeal held that Bauer’s failure to apologise from the outset was improper and justified an award of aggravated damages.

Disclosure of Confidential Material

Bauer also challenged his Honour’s finding that they adopted an “unjustified approach” in seeking to disclose information in relation to Wilson’s remuneration. Once again, the Court of Appeal considered that the judge erred by using “impermissible hindsight analysis”⁸ to assess Bauer’s conduct. The Court of Appeal held that Bauer did not act improperly in seeking to disclose Wilson’s remuneration and, that his Honour’s conclusion that an alternative approach to cross examine Wilson about her remuneration could have been equally effective was not, in and of itself, a basis for a finding of aggravation.

In relation to Bauer’s submissions as to meaning, the purportedly false answer to the interrogatory, and the opening and closing addresses of counsel, the court held that these did not form the basis of his Honour’s award of aggravated damages. Accordingly, they rejected the grounds of appeal.

The Court of Appeal ultimately reassessed the award of damages for non economic loss, including aggravated damages, in the sum of $600,000. In making this finding, the Court of Appeal found that judges can exceed the statutory cap imposed pursuant to s 35(1) of the Defamation Act 2005 (Vic) in awarding aggravated damages for non economic loss.

Special Damages

His Honour’s award of damages was based on inferences drawn on the balance of probabilities that:

1. A valuable opportunity asserted to exist by Wilson, existed and was lost;
2. The ‘grapevine effect’ in the United States caused Wilson to lose that opportunity; and
3. Wilson had a particular opportunity to earn $15 million during the relevant period.

As his Honour’s decision was based on ‘inferential reasoning’, as a threshold matter the Court of Appeal had to consider the basis on which it could disturb inferences drawn by trial judges. Wilson sought to argue that ‘inferential reasoning’ much like a finding of fact should only bet set aside by an appeal court where it was ‘glaringly improbable’ or ‘contrary to compelling inference’. The court did not accept that this approach was correct. For the reasons set out below, the court concluded that his Honour’s inferential reasoning could not be supported by the evidence.

The existence of the valuable opportunity

The court concluded  his Honour had erred in finding  the valuable opportunity characterised by Wilson had in fact existed.  In particular it held that:

1. His Honour had erred in painting an ‘overly successful picture’ of Wilson’s career and had failed to take into account setbacks and other ‘hiccups’ experienced by Wilson; and
2. The expert evidence relied upon by Wilson was ‘very weak’ and in cross examination the expert had failed to identify any suitable roles for Wilson during the relevant period.

The Grapevine Effect

Wilson gave evidence to the effect  the publication of the articles caused a ‘huge international media firestorm’ which resulted in her being ‘shunned’ by Hollywood executives. This characterisation of the global response to the articles being ‘of unprecedented scale that cannot be overestimated‘ was an inferential fact accepted by his Honour and was purportedly founded on:

1. Wilson’s evidence that she had heard discussion of the articles on American radio and entertainment shows;
2. Wilson’s own characterisation of articles as causing a ‘huge international media firestorm’;
3. Evidence from Australian actor Mr Hugh Sheridan that he was aware of discussion about the articles; and
4. Evidence from Australian journalist Ms Caroline Overington that she had ‘possibly’ heard the articles mentioned on American radio and television.

The Court of Appeal did not accept that  the inference of the ‘grapevine’ effect could be drawn given, among other things,

5. Witnesses called by Wilson including her American agent and a Los Angeles talent manager were not aware of the articles. This was despite the fact that these individuals were ‘enmeshed in the affairs’ of Hollywood;
6. There was little evidence that the articles were circulated in the United States and no evidence that the articles had circulated throughout Hollywood; and
7. Following the publication of the article Wilson continued to accept work in London, which pointed away from the inference that there was an ‘unprecedented grapevine effect’. Similarly Wilson was engaged to perform a ‘live show’ at the Hollywood Bowl which, again, did not ‘sit comfortably’ with Wilson’s assertion she had been ostracised from the entertainment industry.

Opportunity to earn $15 million

The court held that this ground would not be established where Wilson had failed to demonstrate the opportunities had in fact existed and the loss was caused by the grapevine effect.

Further, they also found there was ‘some force’ in Bauer’s submissions that his Honour had erred in failing to apply appropriate discounts to Wilson’s earning opportunity of $15 million. In particular, his Honour failed to make the appropriate deductions for actual earnings made by Wilson during the relevant period, and the fact that although Wilson may have had an ‘opportunity’ to earn $15 million, her net receipts would only amount to an estimated 50% of that sum.

Conclusion

In conclusion the Court of Appeal held that inferences drawn by his Honour in making the award of special damages could not be maintained, and ordered that it be set aside.

Special Leave application

At the time of writing this article is has been reported that Wilson is making a special leave application to the High Court to overturn the court of appeal’s decision.

This article was written by Nicholas Pullen, Partner and Priya Wakhlu, Associate.

¹Bauer Media Pty Ltd v Wilson [No 2] [2018] VSCA 154 (the Appeal Decision).
²The defence of justification entitles an defendant to defend a claim of defamation on the basis that the imputations were substantially true.  Section 30 of the Defamation Act 2005 (Vic).
³Wilson v Bauer Media Pty Ltd [2017] VSC 521 (Judgment at First Instance).
⁴The Appeal Decision, [103].
⁵The Appeal Decision, [105].
⁶[The Appeal Decision, [110].
⁷The Appeal Decision, [121].
⁸The Appeal Decision, [138].