A REVIEW OF SHAILEND SHANDIL AND ANOTHER V AIR FIJI LIMITED[*]
SURUJ
SHARMA[**]
This was an appeal heard by the Fiji Court of Appeal in its July sitting this
year. The hearing was concluded on 12 July and judgement was delivered 3 days
later. The appeal arose from the award of damages made by Mr. Justice Pathik in
an assessment decision. Both judgments deal with substantive issues of law.
Although the claim was based in defamation the underlying principles for
assessment of damages generally were discussed at length in both Courts. The
guidance given is invaluable in assessing damages in defamation claims in
particular and in torts generally. The decision is unreported at present and no
appeal has been filed challenging the decision of the Fiji Court of Appeal. It
is the Fiji Court of Appeal decision, which forms the basis for this Case Note,
however, reference will be made to the High Court decision as well as it lays
down the framework on which the appeal was founded.
THE
FACTS
On 24 July 1999, an aircraft owned by the plaintiff and bound
for Nadi from Nausori crashed in the course of its flight. All 15 passengers and
the two crew members on board died as a result. This was a fatal crash that
could not be compared with any other previous air disaster in Fiji. The news of
the crash shook the nation as a whole and both the local travelling public and
those in the industry continue to be affected by it even some five years later.
It took the Civil Aviation Authority of Fiji [CCAF] and their Air Inspectors
several weeks to analyze the crash.
Ten days after this crash an aircraft of
the plaintiff had to undergo some repairs after a flight to Moala in Lau. The
defendants Shalend Shandil and Island Network Corporation Limited broadcast a
news item stating that another aircraft of the plaintiff’s had
”managed to make safe landing after its propeller suffered a mechanical
failure mid-air.” This report was broadcast twice on 3 August 1999 and
once on 4 August 1999.
HISTORY OF PROCEEDINGS
On 13 August
1999 defamation proceedings were issued by the Appellant Company in its capacity
as the Plaintiff in the High Court at Suva. In the particulars of claim the
plaintiff set out ad seriatim the full transcript of the broadcast as
read by the first defendant. Although the proceedings were initiated by a Writ
of Summons the Statement of Claim filed in the first place, was ordered by Madam
Justice Shameem to be amended appropriately so as to incorporate the full
broadcast to enable the defendants to properly file a defence. The defendants
did not respond to the amended statement of claim within the required time. This
lack of response resulted in the entry of judgment by default with damages to be
assessed. It is unclear why a defence was not filed against the claim and it is
again unclear why no effort was made to set aside the judgment by default once
it was entered and brought to the attention of the Defendants and or their
solicitors. This point is made considering the fact that the learned counsel for
the Appellant made every effort on appeal to seek to introduce arguments to
contest the issue of defendant’s liability.
The second defendant was the parent company of the oldest radio station
more commonly known as ‘Radio Fiji’ and it is the publisher of the
news item complained of. Amongst other things, the broadcast, in the manner and
form it was written and presented, impliedly reminded its listeners of the
earlier crash of the Plaintiff’s aircraft in the jungles of Naitasiri.
More importantly, the context in which the said broadcast was made implied that
in the natural and ordinary meaning of the words the reasonable man would
believe that the plaintiff’s aircraft was not airworthy. It could also
imply that it was unsafe, prone to serious malfunction and that it had suffered
a serious malfunction to its propeller in mid-flight on 3 August 1999.
Apart from the issue of damages no strict legal issues were contested,
tried and determined in the proceedings before the High Court when the pleadings
closed. In fact the defendants had lost the opportunity to contest the matter,
except as to quantum, by failing to file and deliver a statement of defence to
the amended statement of claim lodged by the plaintiff. Judgement by Default
with damages to be assessed having been duly entered against the defendants, the
only contest was as to the quantum of damages. It must be noted that in the
Fiji Court of Appeal the defence tried its utmost to seek opportunity to orally
challenge the question of liability as well and it even went to the extent of
mounting challenges to it in their written outline. Their Lordships were clearly
determined to uphold the ever-strong celebrated decisions on the subject and
cited cleverly researched authorities in limiting the defendant’s
arguments to the quantum only. The rule stated by the Fiji Court of Appeal on
the question of seeking opportunity to attack liability on appeal will be set
out appropriately in the ratio section of this note.
The task of assessing damages was undertaken in the High Court by His
Lordship Mr Justice Pathik, sitting as a first instance court. As there was no
statement of defence filed by the defendants their Counsel had little or nothing
to offer in assistance before the learned judge. The best he could do in the
circumstances was to concede that the basis for assessment of damages lay
squarely on the amended statement of claim filed as per order of Madame Justice
Shameem.
The plaintiff was claiming damages under the following
heads:
(a) General damages
(b) Special damages
(c) Punitive damages
(d) Interest
It was also seeking the usual relief of
“such other orders” as the Court deemed fit.
In support of its claim in seeking damages the Plaintiff led evidence
through its Chief Executive Officer and the Chartered Accountant and Manager
Finance. These two witnesses were so to say the heart and soul of the Plaintiff
Company. The defence did not lead evidence by calling any witnesses. It
nevertheless cross-examined both witnesses of the plaintiff.
The tendering
of evidence of witnesses was followed by submissions from respective Counsel.
Although legal submissions were in fact advanced by the defence, no evidence was
adduced on their behalf. The only pleading was the amended statement of claim
and reliance upon it by the Court was crucial for the assessment
process.
Although judgement by default with damages to be assessed was
already entered against the Defendants, His Lordship took the ever-guarded
approach to satisfy himself that the words of the broadcast must have affected
the Plaintiff adversely in the estimation of reasonable persons generally. This
is usually done on formal proof of matters and to some extent the process before
him was no different. His Lordship accordingly found that the said broadcast was
not only defamatory but irresponsible as well.
OUTCOME IN THE HIGH COURT
In commencing his assessment His Lordship states that in defamation
claims generally damages are awarded on a compensatory basis but exemplary or
punitive damages can be awarded where the situation demands. He reiterated that
compensatory damages by their very nature are awarded as compensation for injury
and not as punishment for wrongdoing. In doing so His Lordship was merely
setting out well-established principles to afford sufficient explanation and
credence to his assessment.
The award of damages was discussed under
the following heads:
(A) Compensatory damages,
(B) Special damages and
(C) Exemplary damages
His Lordship also considered the award of interest under the above headings.
Compensatory Damages
Under this head the learned judge appears to have relied on the
defamation text Duncan and Neill on
Defamation[1] which cites Lord
Blackburn’s pronouncements in Livingston v Rawyards Coal Co,
on the requirement of correct assessment on the size of injury for which
compensation is sought and payable. Compensation, it is noted, was also referred
to as reparation in those days and continues to be so referred to in some
jurisdictions even now. Reparation means compensation or damages and the term
was significantly used to deal with damages for defeated states after
wars.
His Lordship then moved to distinguish the developments thus far made
in terms of uniformity in the two major areas of claim namely personal injuries
involving pain and suffering and loss of amenity. He is indeed correct in
drawing the inference that by way of comparison in defamation cases, awards are
not seen to approximate to any conventional scale. This is worthy of note,
however, the explanation given for this may be genuine as well, as the magnitude
of defamation cases is far smaller compared to that of personal injuries for
pain and suffering and loss of amenities.
While still dwelling on the
subject of nature of damages and purposes for their award His Lordship referred
to the observations of Windeyer J in the famous Australian Case of Uren v
John Fairfax & Sons Pty Ltd [1967] 117 CLR,
150.[2] In that case the learned judge
was comparing award of damages in defamation suits to that of cases in personal
injuries. He referred to award of damages in defamation as being “at
large.”
The learned judge then sets out very succinctly factors that
ought to be taken into account in assessing damages. He said that although
seriousness of the libel was a relevant consideration other factors that needed
attention were:
(1) special damages;
(2) injury to the plaintiff’s feelings including any aggravating factors therein;
(3) extent of publication and
(4) mitigating factors
His Lordship sought in aid the
decision of Singapore Court of Appeal in Tang Liang Hong v. Lee Kuan Yew
& Anor, [1998] 1 SLR 97 (CA) in expressing some relevant and established
principles determined in earlier
cases[2], to confirm some basic
matters he had in mind while determining the award of damages. The fact that
defamation was an action to vindicate a person’s reputation falsely
defamed, award of damages was primarily to mark that vindication. The size of
the award in damages was part of that exercise in vindication and it in addition
reflected any aggravation caused to the plaintiff or defendant’s
mitigation and subsequent conduct. The learned judge concluded here by
confirming that evidence had been received in relation to the alleged loss
suffered the plaintiff. He made an award of $80, 000.00 as compensatory
damages.
In dealing with special damages His Lordship alludes to the definition
referred to in the textbook by Duncan and Neil namely that it is any material or
temporal loss, which is either a pecuniary loss or is capable of being estimated
in money. This text sets out that “special damages can include
the loss not only of a specific contract or of any specific customers but also a
general loss of business”. In adopting this statement His Lordship was
mindful of the plaintiff’s claim of ‘general loss of business’
and the fact that details of such loss including figures had been evidenced
before him. He was also particularly persuaded by views expressed in Neills text
that publication in a national newspaper or radio brings the defamatory material
to a very large public thus culminating in “a very substantial award of
damages”.
Whilst discussing his views and authorities under this
head of damages the learned judge appears to confirm his findings, which, he
said, he made upon evidence before him, in regard to the success and the good
reputation of the plaintiff as an airline. He nevertheless makes mention of the
fact that a serious air accident 10 days before the defamatory broadcast could
not be lost sight of in assessing damages in this case. Although concluding that
the said air accident undoubtedly seriously affected peoples wish to travel by
the plaintiff’s aircraft, he was firm in his view that the plaintiff was
nevertheless entitled to special damages. It is on this point that the learned
judges of the appellate court found themselves in disagreement with the learned
first instance judge.
The learned judge in assessing special damages noted
that it could include the loss not only of a specific contract or of any
specific customers but also a general loss of business. He relied on the summary
of claim for loss, which was quantified by the plaintiff at $245,383.00 as was
set out in the statement of claim. The plaintiff’s witness Mr. Pitt
obviously gave evidence in support of this figure and the manner in which he
arrived at it. Towards the end of his assessment His Lordship sets out in
substantial detail the working of the quantum as was arrived at by the plaintiff
and as supported by its witness. Even after this point he does not appear to
misplace the fact that the fatal crash of 24 July 1999 caused more loss of
revenue or business than the broadcast of the defamatory statement. He even then
relates the greatest loss to the plaintiff through the fatal crash and states
that 4.10% loss as worked out by the plaintiff was not quite the loss it
suffered. These repeat statements by the learned judge in his assessment are
capable of reinforcing the view that he did attribute the majority of the loss
to the plaintiff to the fatal crash.
His Lordship, it appears, was
determined to award damages under this head. Upon production of facts and
figures he was satisfied that the plaintiff had suffered general loss of
business. However, in making an award of special damages in the sum of
$120,000.00 he overlooked to make sufficient allowance for losses the plaintiff
had suffered as a result of the serious accident 10 days before the defamatory
publication.
Under this head His Lordship discusses the salient feature of this head
of damages by referring to Lord Devlin’s statement in Rooks v. Barnard
and others [1964] AC 1129, which states that the object of exemplary damages
is to punish and deter. That decision further sets out the three categories of
cases in which exemplary damages could be awarded. First, cases of oppressive,
arbitrary or unconstitutional acts by government servants. Second, where
defendant’s conduct had been calculated by him to make a profit for
himself which might well exceed the compensation payable to the plaintiff and
thirdly where expressly authorized by statute. From the Singapore Case
previously referred to, His Lordship cited an extract, which confirms that
exemplary damages may only be awarded if the libel had been done with guilty
knowledge and that chances of economic advantage outweigh chances of economic
penalty. The learned judge concluded on this head by forming the view that in
all the circumstances of the case an award was not justified. He added that in
any event he had made up his mind to award adequate sum as compensation
including special damages sufficient to punish the defendants.
Interest
The learned judge also considered award of
interest on the damages he assessed and found support in Gatley on Libel and
Slander[3] in this respect. In a
claim for damages for financial loss, His Lordship found that interest was
payable. He awarded interest at the rate of 5% on full sum of award calculated
from the date of the filing of the claim in the matter.
It is noted that the although the learned judges in the Court of Appeal
did not really query the primary judges finding of the fact that the statements
were in fact libellous, they did examine critically the claim of the Plaintiff.
They observed that the Plaintiff’s references in the broadcast to “a
mechanical failure mid-air” and to the aircraft having to make “an
emergency landing” were not really expressly referenced in the broadcast
matter. They, however, attributed this to the rather overstatement in the
pleadings and the somewhat strained version of the ordinary and natural meaning
of the words.
The learned judges of the Court of Appeal identified the
issues on appeal as being a challenge to the award of damages under the both
categories of general and special damages. Their Lordships, from the outset,
acknowledged that one of the difficulties associated with assessing damages for
libel was that “the categories of general and special damages were not
completely well defined nor altogether mutually exclusive.” They also
considered that Mr. Pitt’s method of calculating special damages was not
sufficient to establish it as a matter of proof either in law or in fact.
Further they declined to accept that the degree of hurt to the plaintiff’s
business as a result of defamatory statement was capable of being disentangled
with a degree of such precision as to entitle the plaintiff to an award on this
score.
Ratio
1. An action of libel will lie at the suit of an incorporated trading company in respect of libel calculated to injure its reputation in the way of its business without proof of special damages. 2. It is not open to the defendants on appeal from assessment of damages in the High Court, to challenge the judgment given against them as distinct from the amount assessed. 3. In libel the categories of general and special damages are not completely well defined, nor altogether mutually exclusive. 4. An incorporated trading company was, without proof of actual loss, entitled to general damages for the injury caused by the defamatory matter published about it in the course of its business. 5. The Company was nevertheless not entitled to compensation for the loss suffered in the way of hurt feelings and the like, which would have been recoverable by an individual defamed in similar circumstances.
CONCLUDING COMMENTS
There are at least two matters which are worthy of comment in the Court
of Appeal. First, that damages for the general decline of business by the
plaintiff was recoverable, however, the court found that the plaintiff failed to
quantify these losses in any specific way. The court nevertheless found that
damages under this head were likely to be contained in the assessment of
$80.000.00 as general damages. Presumably this is the reason why it did not
attempt to reduce the said amount while explicitly commenting that the award of
that size was rather high.
Second, on the point of special damages in the
sum of $120,000 as assessed by the learned judge in the High Court, the Court of
Appeal found grounds to disagree with the learned judge. It observed that the
method of calculating special damages as offered by the plaintiff through its
witness was not sufficient to establish as a matter of law or in fact. It went
further to state that even though accepting that plaintiff evidence was showing
likely loss of goodwill or reputation it could not be construed as being capable
with any precision of being disentangled from the consequences of earlier fatal
accident. Therefore the Court of Appeal vacated in total the learned
judge’s assessment of special damages in the sum of $120,000.00. The
learned judges said they were not satisfied that the plaintiff had proved
special damages to the sum assessed or to any degree. They leave room to accept
that any loss suffered by the plaintiff as a result of defamatory statement was,
nevertheless reflected in the assessment of $80,000.00, under the head of
general damages.
The analysis of the Court of Appeal is sound in respect of
all matters it was asked to intervene and their approach in dealing with
assessment of damages in the area of defamation law is commendable. It will be
interesting to see, what if any, guidelines they may issue should they have
another opportunity in the near future in dealing with general damages on this
subject.
[*] [2005] FJCA 25 (15 July 2005).
[**] Fellow in Legal Practice & Coordinator, Professional Diploma in Legal Practice Program Institute of Justice & Applied Legal Studies, University of the South Pacific, Suva, Fiji.
[1] Duncan, Colin, Neill, Sir
Brian, Duncan & Neill on Defamation (1st ed, 1978),
130.
[2]. Air Fiji limited v Shalend
Shandil & Another (unreported, High Court Fiji, Civil Case 380 of 1999
Pathik J).
[2] For Instance,
Dingle v Associated Newspapers Ltd. & Ors [1964] AC37; John
Fairfax & Sons Ltd. V Carson [1991] 24 NSWLR 259; Sutcliffe v
Pressdram Ltd [1991] 1QB 153; Rantzen v Mirror Group Newspapers [1986]
Ltd. & ors [1994] QB 670 and, Carsonv John Fairfax and Sons
Ltd. [1993] 178 CLR 44.
[3]
Gatley J.C.C., Gatley on Libel and Slander (9th ed, 1998).