COTTER v JOHN FAIRFAX PUBLICATIONS PTY LTD

• 1 - Ex tempore: revised IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

JOHN FAIRFAX PUBLICATIONS PTY LTD (Defendant)

JUDGMENT (contextual imputations - capacity) 1 In June of 2001 a jury found that an article published in The Sydney Morning Herald on 11 April 1997 in fact carried the following three imputations defamatory of the plaintiff: (b) that he sought, by attending as Mayor of Marrickville a meeting of a project team of which he was not a member, to influence the decision of that team in favour of an architect with whom he had a private business relationship; (d) that there are reasonable grounds to suspect that as a member of Marrickville Council he has engaged over a period of ten years in business and property deals which have conflicted with his duty as a member of council; (f) that as Mayor of Marrickville he had deliberately conducted himself in relation to the council civic centre development as to give a financial benefit to an architect with whom he had a private business relationship.

2 An Amended Defence was filed on 1 November last year in which the defendant has pleaded a defence under s 16 of the Defamation Act 1974 relevantly asserting that the matter complained of carries two contextual imputations: (1) The plaintiff, as Mayor of Marrickville Council, failed over a substantial period of time to comply with his obligations of disclosure as a councillor; and (2) The plaintiff breached his obligations as a councillor by preferring the interests of his business and personal associates over his duties as a councillor.

3 This is an application by the plaintiff to have disposed of at this stage the defence of contextual truth on the basis that the matter complained of is incapable of carrying either of these meanings. 4 I have remarked elsewhere (Whelan & Anor v John Fairfax Publications Pty Ltd 7 Ors [2002] NSWSC 1028 (para 90)), and it does not appear to be in issue, that the determination for the purposes of contextual truth of the issue whether a publication is capable of conveying contextual meanings is the same as the determination of whether the article as sued upon by the plaintiff can carry that plaintiff's pleaded meanings. 5 In relation to the first contextual imputation which is general in its terms, it is submitted for the plaintiff that the ordinary reasonable reader could not understand this article as carrying it by reason of that reader understanding matters of refinement within the body of the article, especially that set out in paragraph 17: "Of the matters referred to the department, Mr Mills said in a letter to Sylvia Hale that Cr Cotter had admitted failing to include in his 1995-96 declaration of pecuniary interests that he was a director in three companies: Jowai Holdings Pty Ltd; Bincoe Pty Ltd and Jellyfish Productions Pty Ltd. He also did not include details of two properties he owned in Glebe Point Road, Glebe and Hordern Street, Newtown".

6 I am not persuaded in relation to the first contextual imputation on a capacity basis by that submission. 7 This article (the text of which is appended hereto) carries a prominent headline "Probe into Mayor's decade of deals" and a photograph of him with the caption "…under fire from Marrickville council opponents". It commences with a very general statement: "Business interests and property purchases of the Mayor..." - paragraph 3. 8 The fourth paragraph is in general terms when it refers to the Council's general manager having taken action as a result of questions about the plaintiff's business affairs. The questions were asked by political opponents who also had "detailed a decade of property and business transactions" by the plaintiff and ask why some have not been noted on his annual pecuniary interest declaration (which could be understood as referring to more than one such annual declaration). 9 There is, for the purposes of this present application, an introduction to the piece of a generalised nature that could infect, flow through, or establish a tenor for the piece as a whole, capable of giving rise to the first contextual imputation irrespective of the reference in paragraph 17, and a pointer in paragraph 5 to something less general, namely the pecuniary interest declaration. The overall theme, however, in my view that could be understood is that the whole of this plaintiff's business interests, property purchases and relationships are the subject of a probe by the Department of Local Government. 10 This article is of a kind, and here I must disagree with Mr Molomby, that by virtue of the headline, caption and introductory paragraphs, and I am paraphrasing what I have just said, that lends itself to the ordinary reasonable reader reading between the lines and using that degree of loose thinking which is attributed to such a reader and which could permit the availability of the first contextual imputation. 11 As to the second context actual imputation it is in the following terms: (2) The plaintiff breached his obligations as a councillor by preferring the interests of his business and personal associates over his duties as a councillor.

12 Whilst the matter complained of, in respect of what is encompassed by that imputation, is not as broadly based, there is reference in it to the relationship between the plaintiff and Mr Lee, the relationship between the plaintiff and Mr Lee as directors of Evbaca Pty Ltd and what seems to me to be an additional component, the relationship between Mr Cotter and Mr Lee as having shares in a house in Newtown, which is not otherwise explained. 13 Whilst there is more focus, it is not to that degree of acuity that would permit the exclusion, in my view, on a capacity basis, of the second proposed contextual imputation. 14 Further to the general observation that I have made at the outset of these reasons, I add that there is little utility in seeking some assistance, on a capacity argument as to contextual imputations, in the consideration of what a defendant might prove, if it succeeds in having the imputations found. Further, interesting though it might be, it is quite speculative, when one thinks about it, to test the matter, after a 7A trial in particular, by considering, what the defendant would have done had the plaintiff pleaded these contextual imputations as causes of action. One answer, of course, could be that the defendant would seize upon those imputations and put on its defence of truth … or anything else. 15 The plaintiff's application is dismissed. I hold the matter complained of capable, as a matter of law, of carrying the contextual imputations. 16 The plaintiff is to pay the defendant's costs. 17 I place the matter in the Registrar's Directions List for directions on 7 March 2003.

Business interests and property purchases of the Mayor of Marrickville, Councillor Barry Cotter, have been referred to the Department of Local Government for investigation.

The council's general manager, Mr Colin Mills, has taken the action as a result of questions about Cr Cotter's business affairs, lodged last week by four councillors who are political opponents.

They have detailed a decade of property and business transactions by Cr Cotter and asked why some had not been noted on his annual pecuniary interest declaration.

In a matter to be discussed at next Tuesday's council meeting, the opponents also raise questions about Cr Cotter's business relationship with Mr Evan Lee, an architect and ALP member, who prepared the design brief for the council's proposed $28 million civic centre development on the site of the old Marrickville hospital.

Cr Cotter and Mr Lee are directors of Evbaca Pty Ltd (formerly Evan Lee Management Pty Ltd), which owns a block of flats in Dulwich Hill. They also have shares in a house in Newtown.

They were appointed directors of Evbaca on March 21, 1996, and Cr Cotter informed Mr Mills four days later. On March 28, Cr Cotter attended a meeting of the project team, of which he was not a member, where there were discussions about quotations for the preparation of a design brief. A week later, the project team awarded the contract to Mr Lee's architect firm, Evan Lee Pty Ltd.

At a council meeting on June 18, Cr Cotter moved the motion that accepted the design brief prepared by the company. A subsequent "hospital site probity review" prepared for the council by Fraud Prevention Services Pty Ltd warned that "attention should be paid in the drafting of the tender brief to ensure that Evan Lee Pty Ltd does not have an advantage over other tenders".

It said: "If the design brief drafted by Evan Lee becomes the basis of the tender brief, any possible concerns of the other tenderers could be increased".

Mr Lee's consortium is one of a number of companies which have lodged expressions of interest in tendering for the project if it goes ahead.

Cr Cotter told a steering committee in February that he would step aside if discussions reached a stage of approving a contract for the project.

He conceded yesterday that he had misunderstood the requirements of the act to declare directorships and property interests, and had asked Mr Mils to put his mistake on the public record.

But Cr Cotter denied there was any impropriety in his association with Mr Lee, insisting he played no part in awarding the contract. Cr Cotter said he attended the March 28 meeting, where he "made a few comments" and left.

"By law, I am not required to declare an interest but it was always my intention to do so when I believed a decision would confer a financial benefit for Mr Lee," he said.

Mr Lee said he had tried to discuss the civic centre development with Cr Cotter but the mayor had refused: "Barry won't even talk to me about it."

Of the matters referred to the department, Mr Mils said in a letter to Cr Sylvia Hale that Cr Cotter had admitted failing to include in his 1995-96 declaration of pecuniary interests that he was a director in three companies: Jowai Holdings Pty Ltd; Bincoe Pty Ltd; and Jellyfish Productions Pty Ltd. He also did not include details of two properties he owned in Glebe Point Road, Glebe, and Hordern Street, Newtown. **********

Last Modified: 02/21/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.