Damages and causation in defamation law: lessons from Rayney v The State of Western Australia

15 years after his wife was murdered in 2007, former barrister Lloyd Rayney (Rayney) has finally ended his long-running battle with the Western Australian government, walking away with an acquittal for murder and just under $3m in damages.

In the recent decision of Rayney v The State of Western Australia (No 4), the Western Australian Court of Appeal rejected Rayney’s claim for increased damages, in doing so emphasising the specificity of evidence required to establish causation for economic loss in defamation claims and otherwise affirming one of the biggest defamation damages awards in Australia at $2.72 million.

Procedural history

In 2008, Rayney commenced defamation proceedings against the Western Australian government after Detective Senior Sergeant Jack Lee (DSS Lee) conducted a press conference where he named Rayney as the "prime" and "only” suspect in the murder investigation of his wife (Defamatory Statements). A more detailed timeline of relevant events is as follows:

Timeline

August 2007: Rayney’s wife goes missing and was later found buried off of a bush track in Perth.

September 2007: DSS Lee conducted a press conference where he named Rayney as the "prime" and "only” suspect in the murder investigation.

September 2008: Rayney commenced defamation proceedings against the WA government.

December 2010: Rayney was arrested and charged with the wilful murder or, in the alternative, manslaughter of his wife. 

February/March 2011: the Legal Practice Board imposed conditions on Rayney’s practising certificate.

July to November 2012: the murder trial commenced. Whilst it raised alarming issues with respect to Rayney’s conduct, he was acquitted in November 2012. Rayney was subsequently charged (and acquitted) of telecommunication charges for recording phone calls with his wife, faced professional misconduct charges for knowingly giving false evidence under oath and had his practising certificate cancelled.

December 2012: Rayney sought to overturn the decision to cancel his practising certificate. However, after the government appealed the acquittal decision, the Board requested Rayney cease practicing until further notice and he gave an undertaking to do so.

September 2013: the Court of Appeal dismissed the appeal against the acquittal decision.

February 2016: the cancellation of Rayney’s practising certificate was overturned and he was released from his undertaking. Rayney was ultimately struck off the roll in 2020.

2017: Rayney was successful against the government in defamation proceedings and was awarded a total of $2.6 million in damages.

At first instance, Justice Chaney found the Defamatory Statements bore the imputation that Rayney murdered his wife. His Honour awarded Rayney $846,180.82 for non-economic loss and $1,777,235 for economic loss for lost earnings during the period between the making of the Defamatory Statements and Rayney’s murder charge.

Justice Chaney found that DSS Lee did not have reasonable grounds to suspect Rayney of murder, but nonetheless chose to “venture into a level of detail as to the basis for suspicion and… conveyed the imputation that the suspicion was well‑founded”. This included referencing inaccuracies, such as knowing the murder took place in the family home, when he did not know this, and indicating Rayney may yet confess that day, at a time when his police interview had already concluded.

Rayney was awarded significant damages because the imputation conveyed was extremely serious and resulted in him experiencing an “extraordinary level of odium and contempt [with] correlative hurt and distress” and this was “a case where the effect of the defamation surfaced regularly and forcefully.”

Nor was Rayney’s acquittal sufficient vindication in circumstances where “the evidence supports a conclusion that at least some significant component of the public does not view Mr Rayney's acquittal and the dismissal of the appeal as vindicating his reputation.”

In addition, aggravated damages were awarded given the unjustifiable conduct of DSS Lee at the press conference, including inaccuracies and careless choice of language, failure to apologise, and gratuitous comments by DSS Lee regarding his ongoing opinion of Rayney’s guilt at the trial.

However in submissions as to the damages that should be awarded for economic loss, Rayney argued that he was also entitled to approximately $10.7 million for his lost earnings as a barrister, in the years 2010-2012 (the period between the murder charge and Rayney undertaking not to practise) as well as 2016-2018 (the period between Rayney obtaining his practising certificate once again and the professional misconduct judgment).

Contrary to Rayney’s submissions, Justice Chaney ruled the Defamatory Statements only affected his income for three years, from September 2007 when the comments were made, up until December 2010, when he was charged with murder, stating that any losses after that point were entirely attributable to other causes. His Honour noted the murder and phone intercept charges and the publicity surrounding the evidence adduced in relation to them was bound to have resulted in a disinclination on the part of solicitors to brief Rayney.

The appeal decision

Rayney lodged an appeal seeking a higher award of damages for economic loss. He contended that the judge erred on the question of causation by not awarding him damages for economic loss after the date on which he was charged with murder, as well as the failure to award him interest during the period he had sustained economic loss.

Causation

The Court of Appeal affirmed Justice Chaney’s view that whilst Rayney’s general damages suffered after December 2010 were causally linked to the Defamatory Statements, different considerations apply for economic loss.

Significantly, the Court of Appeal found Justice Chaney correctly determined causation by applying common sense to the particular facts of the case, reiterating that after December 2010 Rayney faced and appeared as an accused at a murder trial for the intentional killing of his wife and had restrictions imposed on his practising certificate, concluding that such events broke the chain of causation between the Defamatory Statements and the reduction in Rayney’s capacity to earn income as a barrister.

The Court of Appeal found that the Defamatory Statements neither expressly nor by implication, were a factor materially contributing to the reduced state of Rayney’s practice in the period post-2010 and as such, Rayney’s appeal was dismissed.

The Court of Appeal was critical of the high level of generality and lack of particularisation in Rayney’s evidence adduced in support of his claims for damages post-2010. For example, while numerous witness statements were submitted to the effect that solicitors were disinclined to brief Rayney in this period, there was no evidence from a solicitor to the effect that it was the Defamatory Statements specifically, rather than the other notorious matters that were behind this.

Interest on damages for economic loss

Rayney also argued he was not fairly compensated for economic losses that occurred between 20 September 2007 and 8 December 2010, on account of Justice Chaney determining  that simple interest should be awarded from the end date of the period the economic loss was sustained.

The Court of Appeal confirmed the conventional basis for allowing interest over the period in which the loss is incurred was more appropriate, citing Cullen v Trappell  [1980] HCA 10.

Using this formula (principal sum for economic loss x period of time x (0.5 x interest rate)), Rayney was awarded an additional sum of $121,831.

Key takeaways

  1. A plaintiff claiming economic loss must establish the dual requirements that the defamatory publication caused a loss of earning capacity and the extent to which that loss of capacity produces, or might produce, financial loss. However, often, this is a high bar to meet for plaintiffs, especially in cases where the sum sought is significant.  The Rebel Wilson decision (see Bauer Media Pty Ltd V Wilson [No.2] [2018] VSCA 154) also demonstrates the difficulty of these claims if there isn’t sufficient evidence. Whilst Ms Wilson was originally awarded AUD $3.9m for damages for economic loss, this was overturned on appeal with the complete rejection of Ms Wilson’s claim for her lost opportunity of screen roles.  Plaintiffs should carefully consider the specificity of evidence required to prove the defamatory publication was causative of the economic loss alleged. 
  2. The question of whether a subsequent event operates as a novus actus interveniens (a ‘new intervening act’ which breaks the chain of causation) is very much a matter of fact and degree. In the context of damages it is important to consider that the plaintiff’s earning capacity could have been lost, in whole or in part, from a cause independent of a defendant’s defamatory publication, which must be taken into account in determining damages.  
  3. Whilst Rayney was unsuccessful with his appeal (for the most part), it is worth noting that this decision leaves undisturbed one of the highest awards of damages (both for economic loss and non-economic loss, both separately and together) to an individual in Australia.