Landmark case: Chakravarti v Advertiser Newspapers Ltd.

In the 1990s, Johnston Withers Lawyers (through former director and now special counsel Richard Bradshaw) along with Paul Heywood-Smith QC (at the time junior counsel and, prior to that, one of the Johnston Withers Lawyers’ directors) acted in a highly influential and long-running defamation case: Chakravarti v Advertiser Newspapers Ltd.

Manobendro Chakravarti had been a senior executive of Beneficial Finance Corporation, a subsidiary of the State Bank of South Australia. The collapse of the Bank owing to high-level mismanagement led to a Royal Commission being established in March 1991. In or about late June 1992, the Bank’s former chairman gave evidence over a number of days, in the course of which he spoke about loans from Beneficial Finance to some of its senior executives, including Mr Chakravarti. His evidence suggested that our client may have engaged in civil or criminal misconduct in obtaining these.

This evidence was reported in the main front page articles in two separate editions of the Advertiser in the same week, and immediately following publication of the first of the articles Mr Chakravarti’s new job as the general manager of Leal Boss, a business outside of the finance and banking industries, was abruptly terminated.

Proceedings for defamation were instituted in the SA Supreme Court a few days later and were vigorously defended by the Advertiser on the grounds that:

• the articles did not bear the defamatory meanings asserted;
• the articles had been fair and accurate reports of the Royal Commission hearing; and
• (in the alternative) the defamatory allegations of misconduct were true.

The trial in 1994 lasted 16 days.

Justice Cox handed down his decision in April 1995, finding for Mr Chakravarti. He held that the articles had materially misreported the Royal Commission evidence, rendering it substantially more damaging to reputation than the evidence given at the Royal Commission hearing – particularly with regard to the loans made to Mr Chakravarti. The Judge held that both articles were seriously defamatory and were not fair and accurate reports of the Royal Commission hearing and that the defamatory allegations of misconduct were not true. He awarded Mr Chakravarti $268,000, including special damages of $175,000 for economic loss, on the basis of the causal link between the first article and the termination of his employment with Leal Boss.

The Advertiser appealed to the Full Court and was wholly successful in relation to the first of the articles and to a significant degree in relation to the second, resulting in a reduction in the award of damages to $40,000.

That was in January 1996.

After special leave to appeal was granted by the High Court later that year, the full appeal was heard in August 1997. The High Court allowed Mr Chakravarti’s appeal and remitted damages to be re-assessed by the SA Full Court.

In October 1998 the Full Court re-assessed damages at $796,000, including $625,000 for economic loss, plus interest from the date of Justice Cox’s decision, taking the total to over a million dollars. This is believed to have been the highest award of damages for defamation in Australia up until then.

However, that was not the end of the matter. The Advertiser sought special leave to appeal in relation to the substantially increased damages; and leave was refused by the High Court at a hearing in Sydney in late 1999.

The litigation had taken over 7 years to conclude, after a long trial in the SA Supreme Court, four hearings in the Full Court and three separate hearings in the High Court!

The High Court decision was and has remained a significant authority in Australia and in various other (non-US) common law jurisdictions in relation to a number of aspects of defamation law, including as to what constitutes a fair and accurate report of judicial and other public proceedings. After more than 30 years, it continues to be cited several times in Gatley on Libel and Slander, the nearest equivalent to the Bible for defamation lawyers.