Offers of amends in defamation disputes – not your usual settlement offers

Last month, the New South Wales Court of Appeal delivered its judgment in Nationwide News Pty Ltd v Vass¹ (click here for the decision).

Nationwide News Pty Ltd (Nationwide) appealed the decision below to award judgment in favour of the plaintiff, Mr Damien Vass (Vass), regarding his purported acceptance of a settlement offer in defamation proceedings he’d issued against the publisher.

Facts 

Nationwide published an article in The Sunday Telegraph in 2015 regarding Vass, an art collector.  The article reported on his alleged dealings with a five panel artwork.

Vass issued Nationwide with a defamation concerns notice alleging the article conveyed defamatory imputations about him.

In response to the concerns notice, Nationwide conveyed an offer to make amends under the scheme in the Defamation Act 2005 (NSW) (the terms of which are the same in WA’s Defamation Act 2005 (WA)).  The terms included that:

• Nationwide agree not to republish the article complained of, or the alleged defamatory imputations.
• The offer was open to be accepted until commencement of the trial, unless withdrawn in writing by Nationwide.

This was the First Offer of Amends.

Vass responded complaining to Nationwide that its First Offer of Amends was unreasonable.

Vass filed his statement of claim against Nationwide.  A year after doing so, Vass issued Nationwide with an offer of compromise pursuant to the Uniform Civil Procedure Rules 2005 (NSW) (First Offer of Compromise).  An offer of compromise is a statutory form of without prejudice settlement offer, a step which can also be taken under Western Australia’s Rules of the Supreme Court.

Vass’ First Offer of Compromise required Nationwide to pay him compensation of $149,001.

In response to the First Offer of Compromise, Nationwide expressly withdrew its First Offer of Amends and made a second offer of amends on the same terms, the only difference being the inclusion of an offer to pay Vass $50,000 by way of damages (Second Offer of Amends).  Importantly, the Second Offer of Amends retained the condition that the offer was “open to be accepted until commencement of the trial, unless withdrawn in writing”.

Following Nationwide filing and serving its defence, Vass issued a second offer of compromise requiring Nationwide to pay him compensation of $449,001 (Second Offer of Compromise).

Nationwide did not respond to the Second Offer of Compromise.

Five weeks prior to the commencement of trial, Vass wrote to Nationwide accepting its Second Offer of Amends. Nationwide rejected Vass’ contention that the Second Offer of Amends remained open for acceptance and the parties appeared before Justice McCallum in the NSW Supreme Court for a decision.

Her Honour held that Vass had validly accepted the Second Offer of Amends.  Her Honour rejected Nationwide’s argument that the Second Offer of Compromise was conveyed as a counter-offer to the Second Offer of Amends which had the effect of rejecting the publisher’s Second Offer of Amends.

Nationwide sought leave to appeal to the Court of Appeal with the principal issue being whether common law principles of contract concerning offer and acceptance operate within the framework of the Defamation Act offer of amends scheme provisions.

Decision

The NSW Court of Appeal dismissed Nationwide’s appeal.

Her Honour Justice McColl stated:

The amends provisions are a creature of statute.  While they use expressions common to the general law of contract such as “offer” and “accept”, that is not a necessary indication that the legislature intended that the general law of contract apply to their interpretation.²

[The offer of amends provisions] indicate that an agreement formed in accordance with the amends provisions “is not a contract in the sense of creating contractual rights and obligations, because it contains express provisions as to what should or should not happen next and the Court retains a role.³

Lavan comment

This decision is a warning to parties negotiating settlement of a defamation dispute under the offer of amends scheme in the Defamation Act to have their lawyers carefully review the legal principles that apply in the context of offers of settlement being made. 

Furthermore, parties must ensure that any of amends made pursuant to the Defamation Act scheme are structured to expire within a reasonable period, or are expressly withdrawn, to avoid being caught out by a still live, unaccepted offer of amends previously conveyed earlier in the settlement discussion landscape.