Australian defamation laws impose a statutory cap on the amount of damages that can be awarded for 'non-economic loss' in defamation proceedings. As of 1 July 2014, the cap was raised to $366,000.
A recent decision by the Supreme Court of Victoria (Cripps v Vakras1) provides useful insights into both how the statutory cap is applied, and the calculation of damages in proceedings where multiple parties are involved.
Importantly, the Court confirmed that, contrary to some opinions, the cap is not a reference point against which damages are to be assessed, but rather, a ceiling which general damages cannot exceed, even if a greater sum is justified.
As is becoming increasing common in today's 'technology era', the case of Cripps v Vakras involved the publication of defamatory comments online.
Mr Cripps, and his gallery company, Redleg Museum Services, brought defamation proceedings against two artists who had exhibited their work at the gallery. Corporations in Victoria generally can't sue for defamation, however Redleg, as a small business that satisfied the exclusions under the Defamation Act 2005, qualified to do so.
The claim centred on three defamatory articles the artists had posted on their website in which they alleged Mr Cripps was, amongst other things, a 'disgraceful individual', a 'bellicose bully', and someone who has 'sexually harassed volunteers and staff at his gallery, and would continue to do so unless he is stopped'.
The website was also found to convey that that Mr Cripps was a 'racist who [held] similar views to those of Adolf Hitler,' something which Mr Cripps claimed had caused immense damage to his personal and professional reputation.
The Court found that the artists' statements were defamatory of both Mr Cripps and Redleg, and that the publications suggested Redleg was a 'disreputable' and 'untrustworthy' business that other artists should seek to avoid.
A new Victorian high watermark for damages
Despite the relatively narrow publication of the defamatory comments (ie primarily on the artists' own website), the Court's finding that the comments were 'so vile that they necessarily caused immense damage to Mr Cripps' reputation', meant that the damages awarded were always likely to be significant. The total award of $450,000 plus costs can, however, be considered a new high water mark for post-cap defamation in Victoria.
In arriving at this sum, the Court took into account the 'grave and enduring' emotional impact the artists' conduct had had on Mr Cripps. To that end, the Court confirmed that when assessing damages for defamation, the "eggshell skull" principle often referred to in personal injury cases is equally applicable to defamation.
In addition to general damages of $300,000, Mr Cripps was also awarded $120,000 in aggravated damages. In granting aggravated damages, the Court found the artists published the defamatory material maliciously, intending to smear Mr Cripps' name and maximise the damage to his reputation. Furthermore, far from recanting once defamation proceedings were commenced, the artists not only refused to take down the defamatory website, but also supplemented it with further defamatory content repeating the libel and criticising Mr Cripps and his lawyers for commencing proceedings.
How does the statutory cap work?
Whilst the sum of damages awarded in this case is noteworthy in its own right, the decision is particularly relevant for its analysis of how the statutory cap operates.
Prior to this judgment, many assumed that the statutory cap represented the final notch on a scale of damages against which all matters were to be assessed, ranging from trivial defamation at one end, to the worst possible allegations at the other.
The Supreme Court in Cripps rejected this reasoning, finding that the cap should not be the reference point to determine damages. Instead, the Court found the cap represents no more than a final cut off beyond which general damages must not exceed, even where this may be justified.
Calculating damages where multiple parties are involved
The Court also considered the impact of multiple plaintiffs on the calculation of damages. The artists suggested that the statutory cap should apply jointly to all plaintiffs ie to Mr Cripps and to Redleg. This argument was rejected by the Court on the basis that it would disadvantage any plaintiffs who chose to commence a single, consolidated proceeding rather than issuing separate claims.
As a result, in addition to the combined $420,000 in damages awarded to Mr Cripps against the two artists, Redleg was awarded a further $30,000 in general damages. The disparity in damages between Mr Cripps and Redleg was primarily explained by the fact that as a corporate entity, Redleg could not obtain damage for hurt feelings. Additionally, its corporate status (and consequent inability to suffer emotional distress) meant that it was not entitled to share in the substantial aggravated damages that were awarded to Mr Cripps.