Rare victory for truth defence in vocational education case – #MLGriff

By MARK PEARSON Follow @Journlaw

CASE REPORT: Charan v Nationwide News Pty Ltd [2018] VSC 3

The Australian newspaper had a rare victory using the truth (or justification) defence to defamation in a recent case involving a vocational education businessman.

Pure truth defences rarely make their way through the courts because they are usually either settled or decided on other defences such as honest opinion, fair report, triviality or qualified privilege.

Plaintiffs will not usually undergo the pain of public defamation trials if there is some semblance of truth to the allegations against them which will be aired for all to see in media coverage.

Facts

On November 20, 2015, The Australian newspaper published a print article (‘Watchdog takes peak training college to court’) and a similar online version (‘ACCC to take top training college Phoenix Institute to court’). The story was about proposed court action by the Australian Competition and Consumer Commission (ACCC) against a vocational training college called Phoenix Institute owned by the publicly listed Australian Careers Network company (CAN) in the midst of a general crackdown on the sector over unscrupulous door-to-door marketing practices. The article mentioned earlier media reports that alleged Phoenix had sent sales staff into housing commission estates, pressuring potential students to join up and stated that the parent company was under investigation by both the Federal Department of Education and the Australian Skills Quality Authority and that its shares had been suspended from trade for the previous month. The article identified the plaintiff, Atkinson Prakash Charan, as one of the company’s heads and stated he had amassed a $35 million fortune from the vocational education business. In short, it suggested that, “whilst under his management, VET organisations acted unscrupulously, in breach of regulatory standards, and that he made a large amount of money as a result of that conduct” (para 2). Mr Charan had in fact left the company about a year earlier and The Australian the next day published a correction to that effect in its print edition and later an online apology for the error.

Law

The plaintiff pleaded eight imputations arose from the article, which the judge grouped into four headings:

1. Mr Charan was head of ACN, a company which engaged in unscrupulous business practices that took advantage of vulnerable consumers

2. Mr Charan was head of ACN, a company which engaged in misleading and deceptive conduct.

3. Charan was head of ACN, which engaged in unscrupulous door-to-door marketing practices to vulnerable consumers

4. Mr Charan [as head of] ACN carried on a business which was significantly non-compliant with quality standards (para 27).

The defendant Nationwide News – publisher of The Australian – argued successfully that imputations 2 and 3 did not arise and defended the imputations of unscrupulous business practices and significant noncompliance with quality standards successfully using the justification defence by proving that the imputations were substantially true as required under section 25 of the Defamation Act 2005. To prove the unscrupulous conduct allegations it had to convince the court under the civil burden of proof – the ‘balance of probabilities’ – that there was ‘clear and cogent proof’. To do so it drew upon a host of material obtained after the publication, including:

(a) the oral testimony of a number of witnesses who had worked in the CTI group;

(b) the oral testimony of three “students” allegedly enrolled in CTI courses conducted by CTI companies;

(c) the contents of a series of audit reports, student interviews and file reviews (with associated documentation) of CTT and AMA, carried out in 2015 under the instructions of DET; and

(d) a large number of emails and associated documents flowing to and from Mr Charan and other officers or employees of the CTI companies” (para 77).

The latter included records of phone calls and messages subpoenaed from Mr Charan’s telephone service provider Telstra.

Justice Forrest found the plaintiff was ‘was an entirely unreliable witness, not only on this issue but as to all matters relevant to his claim’ (para 111). He concluded with a concise summary of his 768 paragraph judgment:

(a) Mr Charan was defamed in both the written and online versions of the article;

(b) the article defamed him by conveying imputations that:

(1) Mr Charan managed a VET organisation which engaged in unscrupulous business practices which took advantage of vulnerable consumers which resulted in him making a large amount of money; and

(2) Mr Charan managed a VET organisation which was significantly non-compliant with quality standards

I am satisfied that Nationwide has established the substantial truth of both imputations. (paras 762 -763).

Lessons for professional communicators

Several lessons arise from this rare but successful use of the justification (truth) defence by a publisher:

• Considerable evidence can be required to prove the truth of imputations stemming from an article, and sometimes this has to be located after the reporting and publishing process has finished, although as much evidence as possible should be available at the time of publication;
• A publisher defendant can still win a case on the pleaded imputations even if there is basic error in the story – in this case the fact that Mr Charan had not been formally involved with the management of the company for a year. (Of course, such errors should normally be avoided).;
• Defamation cases can be enormously expensive. In this case the 35-day trial was reported to have cost both side mores than $3.5 million in legal fees (Duke and Vedelago, 2018)

Disclaimer: While I write about media law and ethics, nothing here should be construed as legal advice. I am an academic, not a lawyer. My only advice is that you consult a lawyer before taking any legal risks.

© Mark Pearson 2018