Clarifying the Publishers’ Defence – Bond v Barry [2007] FCA 1484

Issues:

The issues in this case were whether the publishers defence under section 65A of the Trade Practices Act 1974 (TPA) could be invoked by the freelance journalist who wrote and the media organisation which published an article about Alan Bond in The Sunday Telegraph and whether a news organisation could liable as an accessory for publishing a news article purchased from a freelance journalist.

Context:

Paul Barry, a freelance journalist, wrote an article for The Sunday Telegraph, concerning Mr Alan Bond’s involvement in the Lesotho Diamond Corporation plc. In his article, Mr Barry alleged amongst other things that Mr Bond was effectively running the company, maintaining a lavish London office at the company’s expense, and had forced a number of senior executives to leave the company. Mr Barry also reported on claims by various shareholders that Mr Bond was paying himself massive fees, trying to sell “dud” assets to the company and using shareholder’s money for personal advantage.

Mr Bond took action against Mr Barry and News Limited, as the publisher of The Sunday Telegraph, for misleading and deceptive conduct under section 52 of the TPA. Mr Barry and News responded by seeking to have Mr Bond’s claim struck out as having no reasonable prospects of success due to the likelihood that a defence under section 65A of the TPA would succeed.

Decision:

The decision of Justice French (prior to his elevation to Chief Justice of the High Court of Australia) was that the publishers defence was likely to apply. Accordingly, he dismissed Mr Bond’s action.

In his decision, Justice French reviewed the legislative history of the publishers defence. He noted that the publishers defence was enacted in 1984 as a response to concerns that news media could be liable for incorrect news reports under the misleading and deceptive conduct provisions of the TPA.

The first question was whether News could take advantage of the publishers defence. As Mr Barry was a freelance reporter who sold his story to The Sunday Telegraph, Mr Bond argued that News was not able to take advantage of the defence in section 65A, as it was not the primary contravener, but rather an accessory to Mr Barry’s conduct. Section 65A provides no exemption for a media organisation which is an accessory to a contravention not covered by section 65A. In other words, a news organisation may be liable as an accessory due to the operation of section 75B of the TPA for publishing a genuine news story if it aided, abetted or induced another party to engage in misleading and deceptive conduct and that party was unable to avail itself of the publishers defence in section 65A.

Justice French adopted a purposive approach to interpreting section 65A of the TPA –

The publications which are protected by s65A include the transmission of information or articles by freelance journalists to media organisations. Absent such coverage media organisations could be exposed to liability as accessories for publishing articles prepared for publication by freelance journalists in contravention of s 52...It would be a major and unintended gap in the coverage of the exemption and completely at odds with its purpose.The second question was whether Mr Barry could invoke the publishers defence. Mr Bond argued that as Mr Barry had a contract to provide articles to News, the article was “in connexion” with the supply of journalistic services which was excluded from the scope of the defence.

Justice French rejected this argument. Justice French decided that the scope of the defence also extended to the communication of information or articles by freelance organisations to media organisations. In this regard he stated –

The purpose of s65A was clearly stated in the Second Reading Speech. To exclude from the exemption the supply of information by freelance journalists to media organisations is to partially defeat that purpose. The communication of news articles to media organisations by freelance journalists is so plainly within the intended purpose of the section that a construction covering it should be adopted provided that construction is open. In my opinion, as stated above, such communication is within the natural and ordinary meaning of publication as publication to the world at large.

Significance:

The significance of Bond v Barry is that it clarifies the scope of the publishers defence in section 65A of the TPA. There has been considerable concern as to whether news organisations could be liable as an accessory for publishing news articles obtained from freelance journalists or other news agencies. As section 65A does not provide a defence to an accessory, news organisations could be liable for news articles simply because they were publishing articles which they had obtained from external sources rather than in-house journalists.

This case makes effectively closes this “loophole” in the operation of section 65A. As stated by Justice French, to apply section 65A in any other way would constitute a major and unintended gap in coverage of section 65A.

More importantly, this decision ensures that Part V of the TPA and its mirror provisions in state Fair Trading Acts are not used as a means of preventing or restricting the publication of genuine news stories by news organisations or the preparation of genuine news stories by freelance journalists.