ALAN JONES v JOHN FAIRFAX PUBLICATIONS PTY LTD & ANOR

SOLICITORS : Freehills (Defendants)

CATCHWORDS : Contextual imputations - threshold issue of capacity of matter complained of to carry - mitigation of damages - post publication events LEGISLATION CITED : Defamation Act 1974 Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 Australian Broadcasting Corporation v McBride [2001] NSCA 322 Bishop v New South Wales [2000] NSWSC 1042 Chappell v Mirror Newspapers (1984) Aust Tort Rep 80-691 Coopers Brewery Ltd v Panfida Foods (1992) 26 NSWLR 738 Hansen v Border Morning Mail, Hunt J, unreported, 24 October 1986 Harb v Illawarra Newspapers Pty Ltd, Levine J, unreported, 10 November 1995 Hepburn v TCN Channel Nine [1984] 1 NSWLR 386 Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36 CASES CITED : John Fairfax Publications Pty Ltd & Anor v Blake (2001) 53 NSWLR 541 MacGrath v Black (1925) 95 LJ KB 951 Maisel v Financial Times (1925) 112 LT 953 Marsden v Amalgamated Television Services Pty Ltd, Levine J, 4 May 1998 BC9801908 McBride v Australian Broadcasting Corporation [2000] NSWSC 747 Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 NRMA Insurance Ltd v Amalgamated Television Services Pty Ltd (1989) A Def R 50-055 TCN Channel Nine Pty Ltd v Antoniadis (1998) 4 NSWLR 682 Waterhouse & Anor v Hickie (1995) Aust Tort Rep 81-347 Whelan & Anor v John Fairfax Publications Pty Ltd & Ors [2002] NSWSC 1028 DECISION : See paragraph 40

• 13 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

JOHN FAIRFAX (PUBLICATIONS) PTY LTD (First Defendant)

JUDGMENT (Contextual imputations - threshold issue of capacity of matter complained of to carry - mitigation of damages - post publication events) 1 The plaintiff has sued the defendants in respect of an article headlined "Nightmare on Struggle Street for former AMP boss" published in The Sydney Morning Herald on 20 July 1999. 2 In February 2000 a jury found that that matter complained of carried the following imputation defamatory of the plaintiff: The plaintiff was a dishonest broadcaster, in that he secretly agreed with the AMP Society that he would cease to criticise the AMP Society on air in return for the AMP Society agreeing to provide a substantial benefit to the South Sydney Rugby League Club of which he was Director of Football. 3 A transcription of the matter complained of is appended to these reasons. 4 On 18 March 2002 the defendants filed their Defence to the Amended Statement of Claim filed by the plaintiff after the s7A trial. It is that Defence that is the subject of the current application. 5 By Notice of Motion filed on 30 May 2002 the plaintiff seeks relief in relation to various aspects of the Defence. 6 Paragraph 1 of the Defence is in the following terms: The defendants admit the allegations in paragraphs 1, 2, 3 and 4 of the Amended Statement of Claim ("the Statement of Claim"), except that while the defendants admit that the Sydney Morning Herald was published in New South Wales, they do not admit that it was published "throughout Australia" as alleged in paragraph 2 thereof. 7 The plaintiff seeks to have struck out the emphasised passage. He seeks to do so on the basis that at the s7A hearing the issue of publication was said to have been admitted by the defendants without qualification. The only issues for the jury were whether the words carried the imputations pleaded and whether they were defamatory. The defendants, the plaintiff says, in no way reserved their position in relation to what is described as the "admission". 8 I gather it to be the case that there was not followed at the time of this s7A trial the practice more recently in place to the effect that a defendant be directed to file a Defence to those issues for consideration by the jury pursuant to s7A of the Defamation Act 1974. 9 S7A(4) of the Act states: "If the jury determines that the matter complained of was published by the defendant and carries an imputation that is defamatory of the plaintiff…"

That is the only reference to "publication" being an issue for the jury. 10 The plaintiff contends that, conformably with the principles stated by Rogers CJ Comm D in Coopers Brewery Ltd v Panfida Foods (1992) 26 NSWLR 738, the defendants should apply to the Court, if so advised, to withdraw the admission. 11 It seems to me that in the absence of any other evidence, it can be taken that at the s7A trial the defendants admitted publication of the matter complained of for the purposes of the New South Wales jury determining the question of whether they published that matter carrying what was found to be the sole defamatory imputation. It is still open to the defendants to put the plaintiff to proof of the extent of publication on the issue of damages as provided for by the same subsection referred to above (see Bishop v New South Wales [2000] NSWSC 1042, per Dunford J). 12 To that extent the defendants are entitled to preserve their position in the Defence. No doubt discovery and interrogatories on the issue will be given and delivered, and it is to be assumed that the defendants will provide full and proper answers to interrogatories in respect of the issue of the extent of publication. 13 I decline to strike out so much of paragraph 1 of the Defence as is objected to. 14 The plaintiff seeks to have struck out the substantive defences pleaded in paragraphs 4, 6, 7 and 8 of the Defence and the accompanying particulars. 15 In paragraph 4 of the Defence the defendants plead a defence pursuant to s16 of the Defamation Act 1974, being a defence of contextual truth. The contextual imputations pleaded in that Defence are: (1) the plaintiff was a dishonest broadcaster; (2) the plaintiff was a dishonest broadcaster in that be betrayed his audience's trust in the integrity of his favourable on-air treatment of a company, by keeping secret an arrangement with that company under which a substantial benefit was provided as he directed; (3) the plaintiff was a dishonest broadcaster in that he kept secret an arrangement with a company under which a substantial benefit was provided as he directed, which arrangement was calculated to influence the way in which he treated that company on air; (4) the plaintiff betrayed his audience by secretly directing payment from an undisclosed source to influence his on-air conduct for the benefit of that source; (5) the plaintiff abused his position as a broadcaster by failing to disclose to his audience the existence of a commercial arrangement which he knew his listeners might regard as likely to influence his on-air conduct; (6) the plaintiff was a misleading and deceptive broadcaster in that he intentionally concealed relevant facts from his audience; 16 In paragraph 5, with respect to Victoria, Western Australia, South Australia and the Northern Territory the defendants appear to be pleading defences akin to "Polly Peck" defences, relying upon the same meanings as "the defendant's contextual imputations" and a defence by way of common sting founded in the first such (contextual/defendants') meaning. Paragraph 7 raises cognate defences in respect of publication in Queensland, Tasmania and the Australian Capital Territory and in paragraph 8 a similar approach is taken with respect to publication in Tasmania. 17 As to the availability as a matter of principle of such defences see my judgment in Whelan & Anor v John Fairfax Publications Pty Ltd & Ors, 1 November 2002, [2002] NSWSC 1028. 18 The pleading of this cascade of contextual imputations gave rise to what is now the standard dispute between a plaintiff and a defendant as to the considerations arising from such cases as Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36; Hepburn v TCN Channel Nine [1984] 1 NSWLR 386; Hansen v Border Morning Mail, Hunt J, unreported, 24 October 1986; NRMA Insurance Ltd v Amalgamated Television Services Pty Ltd (1989) A Def R 50-055; Waterhouse & Anor v Hickie (1995) Aust Tort Rep 81-347; Harb v Illawarra Newspapers Pty Ltd, Levine J, unreported, 10 November 1995; TCN Channel Nine Pty Ltd v Antoniadis (1998) 4 NSWLR 682; Marsden v Amalgamated Television Services Pty Ltd, Levine J, 4 May 1998 BC9801908; McBride v Australian Broadcasting Corporation [2000] NSWSC 747, Levine J and John Fairfax Publications Pty Ltd & Anor v Blake (2001) 53 NSWLR 541. 19 As I remarked in Whelan, paragraph 25, it is fundamental to the consideration of all aspects of s16 on a strike out application, when the matter is in issue, that it be determined that the matter complained of is capable as a matter of law of carrying the pleaded contextual imputations (or defendant's alternative imputations). There is, with respect, a tendency in defendants to plead imputations which they are convinced they can prove in the hope that the matter complained of carries them, rather than to seek available imputations from the matter complained of and hope to be able to prove them. 20 The test to be applied in determining the availability of a possible contextual imputation for the purposes of s16 is no different, of course, to that propounded in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158, namely that of "reasonableness". 21 On any fair and reasonable reading of the matter complained of, a conclusion safely can be reached that it is essentially quite focused in its dealing with the AMP and Mr Jones and South Sydney Leagues Club. I say this neither ignoring or notwithstanding so much of the submission for the defendants as points to the article being published in a context of banks and their dealings with Mr John Laws. 22 Any fair reading of the matter complained of will expose disparagement of the plaintiff in the context of the AMP matter. 23 The defendants' meanings seek to encapsulate notions of "dishonesty" in a generalised sense in relation to "a company"; "betrayal" by the plaintiff of his audience and "abuse" of his position as a broadcaster, with the notion of "misleading and deceptive" (conduct) thrown in to contextual imputation (6). 24 The defendants rightly concede that whether or not an imputation arises is a matter of impression and the ordinary reasonable reader is entitled to engage in a certain amount of loose thinking. The defendants go on to say, however, that the import of this matter complained of is "clear". It may be that certain of the meanings contended for by the defendants do not have their exact counterparts "in the denotative meaning" of the words employed. It is then argued that when one focuses on the real issues which the article addresses, there can be no question that the reader would understand it to suggest that the plaintiff had "betrayed" his audience, "abused" his position and engaged in that "deceptive and misleading" conduct. 25 As the plaintiff suggests, by looking at the contextual imputations, a strong impression is gained that they have been constructed or "tailored" with a view to extraneous matters which the defendants conceive they might have a chance of proving rather than by reference to the matter complained of itself. They are employed as a mechanism for "shoehorning" the defence into perceived parameters the Australian Broadcasting Authority inquiry as set out in the particulars; (the report of the ABA inquiry was delivered to me). 26 The defendants protest that the plaintiff cannot complain about a generalised imputation as to his dishonesty as a broadcaster when that concept, it is said, has by the plaintiff himself been made "generally" and then been specifically exemplified by reference to the AMP matter. I do not agree with the defendants' contention that the matter complained of is "clearly not confined to" the specific instance where the plaintiff entered into a "secret deal" with the AMP and that it invites the ordinary reader to consider the general character of the plaintiff - that is, a person who would enter into a "secret deal" - in circumstances where there is a public controversy in relation to Radio Station 2UE and its affiliates and/or presenters broadcasting comments of an editorial nature for which a fee or otherwise valuable consideration was received. 27 Contextual imputations 2 to 6 are "simply not there", that is, I hold to be incapable of being carried by the matter complained of. They are far-fetched, forced, strained and fanciful meanings. 28 As to the first contextual imputation that the plaintiff is a dishonest broadcaster, I reject that meaning; it is incapable of arising generally or more specifically as sought to be advanced by the defendants by reason of the invitation to the ordinary reasonable reader referred to, above. Such authorities as Maisel v Financial Times (1925) 112 LT 953 and MacGrath v Black (1925) 95 LJ KB 951 do not permit the defendants to run a case which those authorities sustain when there is no meaning available to found such a case.

29 The defendants' reference to what is described as "the material in the box" (the reference to John Laws), is insufficient to found the proposition that the article is really dealing with, on a reasonable basis, generalised dishonesty on the part of this plaintiff. 30 I propose therefore to strike out paragraphs 4, 6, 7 and 8 of the Defence and the particulars A(1), (2), (3) and (4) and the particulars of interstate defences (A). 31 The plaintiff seeks to have struck out the particulars of mitigation of damages appended to the Defence. 32 Insofar as the particulars in mitigation of damages rely upon the substantial truth of the contextual imputations, they have gone, so must these particulars go. 33 The second particular of mitigation of damages is in the following terms; The plaintiff's bad reputation in the sector of honest broadcasting, and the defendants will rely in that respect upon the effect on the plaintiffs' reputation of the publicity of the hearings and report of the Australian Broadcasting Authority hearing into Radio 2UE Sydney Pty Ltd. 34 The matter complained of was published on 20 July 1999 and the hearing of the inquiry conducted by the ABA, I gather, commenced on 19 October 1999 and after the disqualification of Chairperson, continued on 8 November 1999, its report being published in February 2000. 35 The plaintiff complains that the defendants' reliance on what is said to be publicity as a mitigating factor is not permissible by reason of the decision of the Court of Appeal in Chappell v Mirror Newspapers (1984) Aust Tort Rep 80-691 (a case concerned, inter alia, with s13). 36 However, as the defendants submit, there have been recent judicial pronouncements both in New South Wales and Victoria that operate against my striking out the defendants' particulars. Those authorities are Australian Broadcasting Corporation v McBride [2001] NSCA 322 particularly at paragraphs [64]-[75] per Ipp AJA (with whom Beazley JA agreed) and [97] per Fitzgerald AJA and also the decision of Gillard J in Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 at 281-342. 37 In the light of those recent pronouncements which favour the maintenance on the record of particulars of the plea in mitigation of damages I will decline to strike out that part thereof relating to bad reputation in the relevant sector and post-publication "events". Many matters will be determined on admissibility bases at the trial. 38 Accordingly, I will strike out particulars in mitigation of damages (1) only. 39 The major component in this application was of course the plea of contextual truth and cognate interstate defences in relation to which the defendants have failed. The appropriate order for costs is that the defendants pay two thirds of the plaintiff's costs. 40 The orders are:

1. Paragraphs 4, 6, 7 and 8 of the Defence are struck out.
2. Particulars of New South Wales defences (A)(1), (2), (3) and (4) are struck out.
3. Particulars of interstate defences (A) are struck out.
4. Particulars of mitigation of damages (1) are struck out.
5. The defendants are to pay two thirds of the plaintiff's costs.
6. An Amended Defence which accords with these reasons and orders is to be filed by Friday 24 January 2003.
7. The matter is stood over to the Registrar's Defamation Directions List on 7 February 2003.

As the banks were deciding yesterday to terminate their $1.2 million deal for favourable treatment from John Laws, details emerged of another corporate deal involving Law's radio colleague, Alan Jones. DAVID LESER reports.

The former chief executive of the AMP turned a blind eye to a secret deal between the company and the broadcaster Alan Jones in the early 1990s in which it agreed to a $7 million debt refinancing scheme for South Sydney Leagues Club, of which Jones was then director of football.

Mr Ian Salmon believed the deal was designed to stop Jones's damaging on-air attacks on the AMP but said he made "an absolute point of not knowing…because sometimes it is best if things are taken out of your hands".

"If anyone wanted to do the talking [to Jones] behind the scenes I didn't want to know".

There is no suggestion that Jones benefited personally from the arrangement.

Mr Salmon told the Herald that Jones, the 2UE personality, had attacked the AMP and himself "mercilessly" over a sustained period in 1992 and 1993 but that suddenly the attacks seemed to stop.

"I suspect they stopped because somebody - and it certainly wasn't me - was persuaded to provide some support for something he was interested in".

Asked why, as chief executive, he did not know the nature of the support, he said: "I can't be more specific because I deliberately went out of the way to not discover what was happening … I knew that one of these days he would go too far. At that stage some of our people thought he [already] had."

In late 1992, Jones launched a campaign of sustained criticism against the AMP Society because of its decision to sell a slice of its shareholding in Arnott's Biscuits to the United States company Campbell Soups.

He also attacked the AMP for its "nexus" with Westpac, its loans to directors, its executive salary increases (including Salmon's) and what Jones described as its disregard for the views of its 2 million policy-holders.

The AMP responded by signing up Jones's now-beleaguered stablemate, John Laws, to do a series of advertisements endorsing the society.

Laws is fighting for his professional life over the $1.2 million deal in which he agreed to stop criticising the banks. The arrangement, which was terminated last night by the banks, is the subject of at least six inquiries (Full report, Page 4).

Mr Salmon, who was AMP chief executive from late 1990 to 1994, said Jones's attacks on the society and him were so damaging that he was forced to employ security guards at his home.

"We had threats. We had a bullet through the post [and a message] saying this is for you next. That wasn't him [Jones] but [his comments] stirred people's emotions. He should have known better."

Mr Salmon said the AMP chairman, Mr Ian Burgess, was the only person who could have authorised any arrangement with Jones because he [Salmon] didn't want to be party to such a deal.

Mr Burgess yesterday confirmed weekend reports that support for Jones had come in the form of investing in South Sydney Leagues Club. The AMP

(From Page 1) had refinanced the club's debt. According to a company statement, "the refinancing arrangement … was assessed on commercial terms, was priced accordingly and continues to be a high-yielding investment today for AMP."

Mr Burgess said yesterday that he had authorised the deal. "The essence of it was that the AMP wanted to do something for so-called Struggle Street - that was the Jones term and I think I talked to Kerry Packer [a friend of Jones's] and he defined Struggle Street as the South Sydney Rugby League Club, which he [Packer] was helping a lot," he said. "AMP subsequently invested in it and it was a successful commercial venture … never at any time was it suggested or hinted that the money would go to Alan Jones."

Mr Burgess suggested that the AMP would never have been in this position in the first place had it not been for Mr Salmon's inability to defend the company and himself against Jones's attacks.

"It all arose through Ian Salmon's stupidity - his incapacity to answer questions about his salary," he said. "There were a whole lot of things he couldn't deal with on air with Jones, and Jones was attacking Salmon for a long time. I got concerned because it started to become a cause célèbre, and it was resolved very satisfactorily by doing something for Struggle Street."

Mr Salmon admitted that his interview with Jones had not gone well, but rejected claims of stupidity. "I would like to take issue with him on that. You have to face the fact that when you do an interview with these guys they own the station."

Mr Salmon said Jones, who was unable to return the Herald's calls yesterday, would never have been able to strike a deal with him but he said he understood the pressures on the company to come to some arrangement.

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