Fairfax appealed a decision of the NSW Court of Appeal, which overturned a jury decision in their favour against the owners of the Coco Roco restaurant.

Freehills advised Fairfax, and Beazley Singleton Lawyers advised the restaurant owners.

The owners argued a review of their restaurant written by a Sydney Morning Herald food writer, Matthew Evans, soon after the opening of Coco Roco in 2003 had damaged their business reputation.

The Coco Roco restaurant complex, including the Coco fine dining restaurant and Roco bistro, was opened on King Street Wharf in Sydney in 2003 after a $3 million fit-out.

Herald critic Matthew Evans gave the restaurant a score of 9 out of 20 after dining their twice. He said the best thing about the restaurant was the view, but this didn’t make up for the fact that it was expensive, the food unpalatable, and the menu flawed in concept and execution.

The restaurant later closed.

The NSW Supreme Court found four imputations could be seen as defamatory, including (a) Coco Roco’s owners sell unpalatable food, (b) they charge excessive prices, (c) they provide some bad service, and (d) they are incompetent as restaurant owners because they employ a chef who makes poor-quality food.

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The jury, however, found (a) and (c) were not defamatory, and (b) and (d) were not “conveyed”.

The NSW Court of Appeal found the jury’s decision was unreasonable on (a) and (c) and remitted a decision on (d) to another jury decision.

In John Fairfax Publications Pty Ltd and Matthew Evans v Aleksandra Gacic, Ljiljana Gacic and Branislav Ciric, the High Court, in a 6—1 verdict, upheld the Court of Appeal decision and rejected Fairfax and Evans’ argument that the Court of Appeal had exceeded its powers under s 108(3) of the Supreme Court Act to correct unreasonable jury verdicts.

“There was every reason to suppose that the jury, having found that the imputations were conveyed, decided they were not defamatory because of a misunderstanding of what was meant by defamatory,” states the joint decision of Justices Gleeson and Crennan.

They add: “The evidence was bare and undisputed. There were not, as was argued, ‘community standards’, bearing upon the question whether to say that a restaurant has unpalatable food and bad service has a tendency to injure the proprietors in their business, of such a kind as to require the evaluation of a jury. The decision of the Court of Appeal was correct.”

Justice Michael Kirby was the only dissenting judge. He said “community standards” were important.

“I cannot agree that the function of the jury in reflecting ‘community standards’ was somehow immaterial, or of little relevance, to a decision in a case of ‘business defamation’, such as the present,” he states.

“Moreover, on subjects such as a criticism of a restaurant’s food and service, lay jurors are much more likely to reflect community standards than judges, many of whom, like myself, have no special interest in culinary matters, expensive restaurants or cuisine generally. Astonishing as it may seem, judges may occasionally lack a sense of irony or humour.”