"Traveller drug king” defamation case settled ten minutes before Supreme Court decision

By Tina English
8 August, 2017

The appeal of a €900,000 award in a 17 year defamation case against the Sunday World was settled ten minutes before a seven-judge Supreme Court was to deliver a majority judgment substituting the award for a figure as low as €75,000. Despite the settlement, the Supreme Court published its judgment with the substituted figure redacted.

High Court Trial

In 2008, a High Court jury found that Martin McDonagh had been defamed by a 1999 Sunday World article which described him as a “Traveller drug king” following a Garda seizure in 1998 of cannabis and amphetamines worth IR£500,000 in Sligo.

Mr McDonagh issued High Court defamation proceedings and although he denied any involvement in drug dealing, the newspaper pleaded justification. The jury found that the newspaper failed to prove that Mr McDonagh was a drug dealer and a loan shark but proved he was a tax evader and a criminal. He was awarded damages of €900,000, which at the time was the highest award granted by a jury for defamation in this jurisdiction.

Court of Appeal

The newspaper appealed the decision and in October 2015, a three judge Court of Appeal overturned the jury verdict that Mr McDonagh was not a drug dealer and found as a matter of fact that he was. A second allegation of loan sharking was remitted to the High Court for a retrial. Mr Justice Hogan said the evidence overwhelmingly showed Mr McDonagh was a drug dealer and the jury’s conclusion to the contrary was perverse. Consequently, he had no entitlement to damages and was ordered to repay the interim payment of €90,000 awarded to him by the High Court.

Mr McDonagh was granted leave to appeal the decision to the Supreme Court in February 2016.

The Supreme Court

The Supreme Court considered, among other things, the role of an appellate court in reversing findings of fact and, in particular, substituting its own ruling in place of a trial court’s determination as the Court of Appeal had done.

The majority decision of the Court, delivered by Mr Justice Charleton was that the Court of Appeal was incorrect in its order setting aside the jury verdict on the allegation of drug dealing and imposing its own determination on the matter and that its order must be reversed in full.

He opined that the task of finding whether a newspaper has lowered a plaintiff in the eyes of ordinary and right-thinking people, is currently entrusted to 12 randomly chosen citizens in High Court cases and in the Circuit Court to a judge. They decide the verdict on the basis of the evidence before the court. He said “it is in this way that the tension between the right to a good name and the entitlement to express the truth is resolved”.

Mr Justice Charleton said the Court of Appeal had heard no evidence and effectively substituted the appellate bench for the jury in the High Court. Having considered the case law, he concluded that a jury verdict in a defamation case could only be overturned in exceptional circumstances which did not apply here.

As to how the case should be resolved, the Supreme Court sought submissions from both sides as to whether the matter should be sent back to the High Court for a new hearing or whether damages could be dealt with by the Supreme Court.

Remittal or Assessment of Damages

Mr McDonagh was strongly in favour of the assessment of damages being dealt with by the Supreme Court but the Sunday World favoured remittal to the High Court.

Chief Justice Denham in her majority judgment noted that in all the circumstances, including the fact that the issue of damages was argued in the Court of Appeal, the guidance from the European Court of Human Rights, the time elapsed since publication of the defamation, the costs incurred and the further potential costs of a full re-trial, with possible appeals, it would be a fair administration of justice to assess the damages in the Supreme Court.

In her judgment, Ms Justice Dunne held that although the Supreme Court has jurisdiction to assess damages and enter a judgment it considers proper, a jury is generally best placed to assess damages in a defamation action. However, she felt it was undoubtedly in the interests of justice for the parties in this case to bring an end to this lengthy litigation and avoid further expense and delay.

In his dissenting judgment, Mr Justice McMenamin disagreed that damages should be assessed by the Supreme Court. His view was based on his apprehension that an award by the Supreme Court would be portrayed by critics of the jury system as begging the question of whether juries are necessary in defamation proceedings.

Issue of Damages

The Supreme Court found the award of €900,000 was disproportionate having regard to the gravity of the defamation, the effect on Mr McDonagh, the extent of publication and the conduct of the newspaper. Other relevant factors were that Mr McDonagh had a criminal record, had evaded tax, and had entered a settlement with the Criminal Assets Bureau. There was also undisputed evidence in relation to Mr McDonagh and drugs. Thus, as Chief Justice Denham opined, Mr McDonagh did not enjoy a good reputation. While she noted this did not give a licence to defame him, it was relevant to the assessment of damages.

Although this case pre-dated the Defamation Act 2009, which introduced guidelines on damages to juries in defamation cases, Chief Justice Denham pointed to pre-2009 Act cases where both she and the European Court of Human Rights had favoured giving guidelines to juries towards assessments of damages bearing a relationship of proportionality to the injury sustained by the plaintiff to their reputation, private and family life. She interestingly stated it was helpful to keep in mind factors such as the value of money, average wage, cost of a car and possibly the awards in personal injury cases taking into account the usually high proportion of special damages in those awards.

In its final determination, the Supreme Court concluded that the award of €900,000 was excessive and a fair, reasonable and proportionate award of damages would be a very substantially reduced sum, much nearer to the figure proposed by the Newspaper in its submissions to the Supreme Court, which was €75,000. Interestingly, as interest had accrued on the full award of €900,000, if the award and the interest were upheld by the Supreme Court, the sum would have increased to €1,545,000.

As to the issue of costs, the Court of Appeal had granted two-thirds of the High Court costs to the Sunday World together with full costs in respect of the appeal. A stay on these orders was granted pending the Supreme Court appeal, however the issue of costs was ultimately agreed between the parties on settlement.

The decision, while it is to be welcomed by media organisations in the context of the proportionality of awards of damages in defamation cases, has given some interesting food for thought as to the role of juries in defamation cases, and the circumstances in which it may be appropriate for appellate courts to overturn a jury verdict.

For more information on the content of this Insight contact:
Tina English, Associate Solicitor, tina.english@rdj.ie, + 353 21 4802700