At what stage should the question of Serious Harm be considered in defamation cases under the Uniform Defamation Laws?

The recent decision in GRC Project Pty Ltd trading as GRC Property Management v Lai [2023] NSWDC 63 provides an insightful look into when the issue of serious harm is addressed in defamation cases under the uniform defamation laws. (Note: the serious harm test does not yet apply in Western Australia).

Serious Harm: A Key Element in Defamation Cases

As a result of amendments that took effect on 1 July 2021, proof of serious harm is a necessary element in the cause of action in defamation cases in New South Wales (Wilks v Qu (Ruling) [2022] VCC 620 at [40]–[4] and Wilks v Qu (Ruling 2) [2022] VCC 1503 at [6]–[11]).

The purpose of establishing serious harm is to discourage the bringing of cases likely to result in modest awards where the costs are out of proportion to the damages (Newman v Whittington [2022] NSWSC 249 at [30]–[46]).

Timing and Determination of Serious Harm

Under the uniform defamation laws, the question of serious harm must be determined early in the litigation unless there are “special circumstances” (s 10A(5)).

Special circumstances, as outlined in GRC Project Pty Ltd trading as GRC Property Management v Lai [2023] NSWDC 63 at [48], include situations where:

1. The nature of the publications (e.g., slanders in a foreign language) requires the trial judge to hear the evidence and manner of publication before determining serious harm.

2. Serious harm cannot be disentangled from other trial issues, such as financial loss or the grapevine effect.

3. The determination of serious harm could take a significant amount of time, requiring many witnesses to give evidence twice, which would result in additional costs, emotional burdens, and time constraints for the court.

The court also relied on guidance from English decisions, such as Ames v The Spamhaus Project Ltd [2015] EWHC 127 (QB), where it was determined that the proceedings were "not ripe" for a preliminary hearing on serious harm, as the facts deserved further examination.

Where the burden lies

The burden of satisfying the court that there are special circumstances justifying the postponement of the determination of serious harm to a later stage in the proceedings lies on the plaintiff (Hossein v Ali (Ruling) [2022] VCC 2195 at [45]).