How and why do people keep bringing defamation claims in the Federal Court? A brief discussion by Justice Lee of the Federal Court’s jurisdiction in tort claims

Perhaps the two most widely commented-upon defamation cases in Australia during the last year have been Senator Sarah Hanson-Young’s claim against Senator David Leyonhjelm and actor Geoffrey Rush’s claim against the publishers of The Daily Telegraph. For most people, the fact that both of these claims were brought in the Federal Court (and not in a State Supreme Court) is the least interesting thing about them. And that is a fair view, given the many far more important issues raised by each case. However, the increasing use of the Federal Court as a forum for defamation claims is an interesting development that draws attention to the nature of the Court’s jurisdiction and of federal jurisdiction more generally. In a recent judgment in Oliver v Nine Network Australia Pty Ltd, Lee J provided a succinct analysis of that jurisdiction as it relates to defamation claims. As his Honour noted, ‘everyone practising in courts exercising federal jurisdiction should be’ interested in how that jurisdiction works. For that reason, the judgment in Oliver is well worth reading.

Factual background

In Oliver, the applicant alleged that a news report published by the respondent carried with it the imputation that he had perpetrated an unprovoked assault on a third party and that he had ‘got away with it’ after being acquitted of criminal charges. The applicant alleged that the news report had been published throughout Australia, including in the Northern Territory and the Australian Capital Territory. This brief background is sufficient to understand the jurisdictional issues addressed by Lee J in his judgment.

The Federal Court’s jurisdiction

It is important to remember that the jurisdiction of the Federal Court is narrower than the constitutional concept of ‘federal jurisdiction’. As Gageler J explained in Burns v Corbett, the constitutional expression ‘federal jurisdiction’ denotes the authority of a court to ‘adjudicate a matter identified in s 75 or s 76′ of the Commonwealth Constitution. Federal jurisdiction may be exercised by a State court in proceedings in which the rights of the parties derive entirely from State law. For example, a proceeding in a State court between two individuals who are residents of different States is, by virtue of s 75(iv) of the Constitution, a proceeding in federal jurisdiction, even if the rights of the parties are governed entirely by State legislation. In such a case, s 39(2) of the Judiciary Act 1903 (Cth) confers upon the State court federal jurisdiction, which is conferred to the exclusion of any non-federal jurisdiction the court might otherwise exercise in respect of the matter. The result is that the rights of the parties derive from State law, but the authority of the court to adjudicate those rights derives from federal law. Adjectival matters related to the exercise of the court’s federal jurisdiction are governed by federal law, including s 79 of the Judiciary Act, which operates to ‘pick up’ and apply State adjectival laws as ‘surrogate federal law’.

The jurisdiction of the Federal Court, on the other hand, is limited to a sub-set of matters that fall within the scope of federal jurisdiction and in respect of which jurisdiction has been conferred on the Court by federal legislation (including legislation made by the governments of the self-governing territories, which are established by Commonwealth legislation enacted pursuant to s 122 of the Constitution). Pursuant to ss 39B(1) and (1A) of the Judiciary Act, the Federal Court’s jurisdiction extends to judicial review proceedings against officers of the Commonwealth, to matters arising under the Constitution or involving its interpretation and to civil proceedings arising under Commonwealth law. Pursuant to the Admiralty Act 1988 (Cth), it extends to a range of maritime proceedings. And pursuant to a combination of Territory and Commonwealth cross–vesting legislation, it extends to matters in which the Supreme Courts of the self-governing territories have jurisdiction (other than matters in which that jurisdiction arises from State law or from a law made directly by the Commonwealth Parliament).

The assertion by a party to a proceeding of a right or obligation (or the assertion of a defence) the existence of which the Federal Court has authority (derived from one of the statutory sources described above) to determine results in the accrual to the Court of jurisdiction to hear and determine the entire ‘matter’ (being ‘the justiciable controversy between the actors to [the proceeding] comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or amongst them‘), including those aspects of the matter that do not involve any claim of a federally-sourced right or obligation. The federal claim or defence need not be made out in order for jurisdiction over the entirety of the matter to accrue – it is sufficient that the claim or defence is not ‘colourable’, in the sense of being ‘fabricated in order to bring the [non-federal] claims within the Court’s jurisdiction‘. A claim that is ‘obviously doomed to fail’ will ordinarily be regarded as colourable, although this may not always be the case.

Accrual of cause of action in defamation

The essence of the tort of defamation is the publication by A to B (or multiple Bs) of material that is defamatory of C. Because of this, a cause of action in defamation accrues at the place ‘where the material which is alleged to be defamatory is available in comprehensible form assuming, of course, that the person defamed has in that place a reputation which is thereby damaged.’ In this regard, the position in defamation is different from that in the tort of negligence, in which the place where the cause of action accrues is determined by ‘ascertaining the place of “the act on the part of the defendant which gives the plaintiff his cause of complaint”.’ The result is that a cause of action in respect of material published on the internet may accrue in any one or more of an almost infinite number of places on Earth, including (of course) places located within the self-governing territories of Australia.

Justice Lee’s application of these principles

Applying these principles, Lee J observed that there are (at least arguably) five ways in which jurisdiction to decide a claim for damages in defamation may accrue to the Federal Court:

• First, the defamation claim may form part of the same matter as a claim brought under a law of the Commonwealth. For example, the applicant may assert that material published by a trading corporation was both misleading and deceptive within the meaning of the Australian Consumer Law and defamatory.
• Second, if the applicant reasonably anticipates that the implied constitutional freedom of political communication may form part of the respondent’s defence or may otherwise impinge on the applicant’s claim, this may be sufficient to attract jurisdiction on the basis that the matter is one involving the interpretation of the Constitution.
• Third, if the impugned material was published in multiple Australian law areas, each with its own version of the Defamation Act 2005, the possibility of a conflict of State laws implicating the ‘full faith and credit clause’ contained in s 118 of the Constitution may arise, again causing the matter to be one involving the interpretation of the Constitution. This seems to me to be an interesting but speculative potential source of jurisdiction.
• Fourth, it is arguable that the Federal Court has jurisdiction in respect of any matter in which one or more of the parties is a corporation established pursuant to the Corporations Act 2001 (Cth). In this regard, it is arguable that because the capacity of such an entity to sue and be sued derives from a law of the Commonwealth, any proceeding in which it sues or is sued is a proceeding ‘arising under’ a law of the Commonwealth Parliament for the purposes of s 39B(1A)(c) of the Judiciary Act. Again, this seems to be a speculative basis for jurisdiction that has not yet become widely accepted.
• Finally, most publications that are sufficiently notable to be worth suing over will be published throughout Australia (including the self-governing territories) by one or more electronic means. In such a case, cross-vesting legislation will provide a source of jurisdiction. This will be so even if an allegation of publication in the territories is made by the applicant but is not pursued (or even if it is ultimately rejected by the Court). That is, ‘[i]f an allegation of publication in the Territories is made bona fide, the Court is properly seized with jurisdiction to deal with the controversy and always will be even if the non-colourable allegation was unnecessary to decide, abandoned, struck out, or otherwise rejected on the evidence adduced at trial.’

Having noted these matters, Lee J found that while the applicant’s allegation that the impugned material had been published in the self-governing territories was denied by the respondent, there was no basis for suggesting that the allegation was a colourable attempt to attract the Court’s jurisdiction. His Honour thus held that cross-vesting legislation provided a clear source of jurisdiction to hear and determine the applicant’s claim. It was therefore unnecessary to consider whether any of the more esoteric sources of jurisdiction identified earlier in his Honour’s reasons was also available.

So why bring a defamation claim in the Federal Court?

There are a range of reasons why an applicant might prefer to bring a defamation claim in the Federal Court than in a State Supreme Court. Perhaps the most compelling is that issuing proceedings in the Federal Court largely (though, because of the Federal Court’s power to transfer a proceeding to a State Supreme Court under s 5(4) of the Jurisdiction of Courts (Cross‑vesting) Act 1987 (Cth), not entirely) removes the possibility that the respondent will choose to have the matter tried before a jury. Trial by judge alone may be very attractive to an applicant who, though his or her case is legally strong, is unsympathetic for some reason. It should also be borne in mind that the procedure of having questions tried separately is extremely difficult to employ in a matter that is to be tried before a jury. That procedure is only infrequently used in Australia, even though there is at least some (albeit rather old) statistical evidence from the United States to show that the widespread employment of ‘split trials’ can save significant amounts of court time (at least in personal injury proceedings). Unfortunately, it seems that little further empirical study into this issue has been done. But it may be that this mode of proceeding can produce significant advantages in defamation proceedings. In particular, where a respondent pleads both a defence of justification and some other defence (such as qualified privilege or honest opinion), the number of witnesses (and thus the amount of court time) required to deal with the justification defence will generally significantly exceed that required to deal with the other defence (or all of the other defences combined). In such a case, trying the non-justification defence separately may present a means of preserving both the parties’ and the public’s resources. In this regard, the observations of May LJ in GKR Karate (UK) Ltd v Yorkshire Post Newspapers Ltd seem to be of particular relevance to Australia, a country that has increasingly become known as the ‘defamation capital of the world‘ and in which there seems to be a real risk of scarce court resources being diverted away from truly important matters and into an unending proliferation of defamation claims involving wealthy celebrities. In that case, his Lordship said that:

Libel cases generally have historically been notoriously long drawn out and expensive and are especially amenable to the culture of the new procedural code. They need novel and imaginative case management to achieve what has hitherto often not been achieved … A fair means of determining privilege and malice expeditiously in this case without having to trudge expensively through the mire of justification achieves the overriding objective.

If the trend of bringing defamation claims in the Federal Court results in the development of creative case management approaches that diminish the strain of defamation litigation on parties and (more importantly) the public, it may prove to be a welcome one.