Defending truth: case study from our new edition

By MARK PEARSON Follow @Journlaw

DEFENDING a defamation action using the truth or justification defence can have its hurdles, but this case we profile in the forthcoming sixth edition of The Journalist’s Guide to Media Law (Allen & Unwin, 2019) demonstrates how a major publication used it effectively.

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The Vocational Education case

Charan v Nationwide News Pty Ltd [2018] VSC 3

Facts

In late 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. 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 (ASQA) and that its shares had been suspended from trading on the stock exchange for the previous month. The article identified the plaintiff, Atkinson Prakash Charan, as one of the company’s heads and stated that 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 next day The Australian published a correction to that effect in its print edition and later an online apology for the error.

Law

The plaintiff pleaded that eight imputations arose from the article, which the judge grouped into four headings (para. 27):

1. Mr Charan was head of ACN, a company that engaged in unscrupulous business practices that took advantage of vulnerable consumers.
2. Mr Charan was head of ACN, a company that engaged in misleading and deceptive conduct.
3. Mr 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.

The defendant, Nationwide News—publisher of The Australian—argued successfully that imputations 2 and 3 did not arise in the articles and defended the imputations of unscrupulous business practices and significant non-compliance with quality standards using the justification (truth) defence by proving that the imputations were substantially true as required under section 25 of the Defamation Act 2005. To prove the substantial truth of 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:

• the oral testimony of a number of witnesses who had worked in the Community Training Initiatives (CTI) group
• the oral testimony of three ‘students’ allegedly enrolled in CTI courses conducted by CTI companies
• the contents of a series of audit reports, student interviews and file reviews (with associated documentation), carried out in 2015
• 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 that 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 762–3).

Lessons for professional communicators

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

• Considerable evidence can be needed to prove the truth of imputations stemming from an article, and sometimes this has to be located after publication and before trial, 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 a 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 sides more than $3.5 million in legal fees (Houston, Duke and Vedelago, 2018)

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Like earlier editions, our text aims to give professional communicators and students a basic working understanding of the key areas of media law and ethical regulation likely to affect them in their research, writing and publishing across media platforms. It tries to do this by introducing the basic legal concepts while exploring the ways in which a professional communicator’s work practices can be adapted to withstand legal challenges.

If you wish to request a copy for course inspection or media review please contact the publisher, Allen & Unwin, who will have printed copies available from late November.

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