FAKHOURY & ANOR v JOHN FAIRFAX PUBLICATIONS PTY LTD

PRESTIGE CRANES Pty Ltd (ABN 003 302 618) PARTIES : (Second plaintiff)

JOHN FAIRFAX PUBLICATIONS Pty Ltd (Defendant) FILE NUMBER(S) : SC 20441 OF 2002 B McClintock SC (Plaintiffs) COUNSEL : K Smark (Defendant) Abbott Tout (Plaintiffs) SOLICITORS : Freehills (Defendant)

[2003] NSWSC 561 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

PRESTIGE CRANES Pty Ltd (ABN 003 302 618) (Second plaintiff)

John Fairfax Publications Pty Ltd (Defendant)

JUDGMENT (Imputations - corporate plaintiff) 1 The plaintiffs sue the defendant in relation to an article published on 29 August 2002, presumably in "The Sydney Morning Herald". 2 The text of the matter complained of is appendix A to these reasons. 3 The following imputations of the first plaintiff are pleaded: 4(a) The First Plaintiff participated in money laundering; (b) The First Plaintiff corruptly paid $10,000.00 to support the election of a Union official; (c) The First Plaintiff attempted dishonestly to cover up the fact that he had made a corrupt payment of $10,000.00. (d) The First Plaintiff had been the subject of evidence at the Building Royal Commission which evidence suggested that he had participated in extortion, intimidation, money laundering and illegal pay-offs. (e) The First Plaintiff had paid a bribe of $10,000.00 to a Union official. 4 The following imputations are pleaded of the second plaintiff, Prestige Cranes Pty Ltd: 4(f) The Second Plaintiff participated in money laundering; (g) The Second Plaintiff corruptly paid $10,000.00 to support the election of a Union official; (h) The Second Plaintiff attempted dishonestly to conceal and cover up the fact that it had made a corrupt payment of $10,000.00. (i) The Second Plaintiff had been the subject of evidence at the Building Royal Commission which evidence suggested that it had participated in extortion, intimidation, money laundering and illegal pay-offs. (j) The Second Plaintiff had paid a bribe of $10,000.00 to a Union official. 5 It is appropriate to deal with the first objection taken by the defendant. Simply stated, it is that this matter complained of is incapable of carrying any imputation of the second plaintiff, the company Prestige Cranes Pty Ltd. There is a reference at lines 24 - 25 of the article capable of referring to the second plaintiff "Prestige Cranes", and possibly at lines 30-33. It is submitted that the latter reference does not seem to have any particular relevance. I add that no conclusion can be drawn that the company referred to in the second extract is in fact the second plaintiff. There is no other reference in the matter complained of to the second plaintiff. It is submitted that this material, taken at its highest, as part of the whole of the matter complained of and the matter of course itself, is incapable of carrying any imputation of the corporate plaintiff. There is no suggestion that the company itself was responsible for any of the conduct which was the subject of the evidence of the Royal Commission. 6 The article makes clear that the first plaintiff owns the second plaintiff (line 24). As was submitted for the plaintiffs it is implicitly stated that the second plaintiff was a company engaged in building and construction. One would have thought from the name of it, especially in context, that it was quite clear. It was also suggested that lines 2 - 4 indicate that the first plaintiff's company had participated in the Angel Place building project. The only thing I am prepared to say about that component of the plaintiffs' submission is that leaving aside "unprescribed Viagra", which can only relate presumably to persons rather than corporate entities, "extortion and intimidation, money laundering and pay-offs" are generalised and could be described as "species neutral". 7 It was next submitted for the second plaintiff that if the acts of the first plaintiff are not imputed to the second plaintiff (possibly on an alter-ego basis) then the reference to the second plaintiff in the article is meaningless. 8 I do not consider it an aid to the determination of whether or not this whole article is capable of defaming the corporate plaintiff to ask a question to the effect "well, why is this corporate plaintiff mentioned?" That question could lead to endless speculation, rational and irrational, reasonable and unreasonable. However, the second plaintiff is mentioned, that is the factor of importance. Speculation as to why it is mentioned cannot answer the primary question. I reject the submission that the clearly asserted connection between the first and second plaintiffs in line 24 (which is no more than that the first plaintiff was the owner of the second) leads to an "irresistible inference" that references to the first plaintiff are references to the second. 9 A fair and reasonable reading of this short piece on a reasonable basis, points to the involvement of "persons" in the various activities to aid other "persons", rather than corporate entities. 10 I hold that the matter complained of is incapable as a matter of law of carrying imputations 4(f) - (j) and will enter a verdict for the defendant in respect of each of them. 11 I turn to the imputations of the first plaintiff: Mr Fakhoury. 12 The objection taken to imputation 4(a) centres on "participated in" as being a phrase of some ambiguity. Mr Smark conceded that this was a "fine" point. For the first plaintiff Mr McClintock SC argued that when one has regard, in a sensible way, to context, the addition of a word such as "knowingly" would be entirely superfluous. In my view there can be little doubt that a rational approach to the issues which would arise in a s7A trial in the light of the content of lines 23 - 25 could leave no doubt in anyone's mind as to what would be understood in ordinary English language against the background of this article of the expression "participated in". 13 Imputation 4(a) I find to be proper in form, capable of being carried and capable of being defamatory and it will go to the jury. 14 As to imputation 4(b), it of course contains the word "corruptly" and thus leaps out as a formulation that should be consigned to the dustbin of proscribed pleadings. I do not propose to take that course. As Mr McClintock has argued, things have changed in the light of the judgment of Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 and Greek Herald v Nikolopoulos (2001) 54 NSWLR 165. The plaintiff has correctly suggested that "corruptly" in the sense of paying a bribe to a union official could be made clear by amendment or correction to the jury. The former course is far preferable. If that course is taken no doubt the first plaintiff will give consideration to whether or not imputation 4(b) differs in substance from imputation 4(e). 15 Imputation 4(c) will be the subject of two amendments, namely, first, to omit the words "conceal and", and, presumably, in relation to, secondly "corrupt". Otherwise no objection is taken to imputation 4(d) and (e). 16 The orders are:

1. The matter complained of, as a matter of law is incapable of carrying imputations 4(f) - (j) of the second plaintiff and I enter a verdict for the defendant in respect of those causes of action
2. The first plaintiff is to file an amended statement of claim within 14 days in accordance with these reasons.
3. Each of the plaintiffs and the defendant is to pay its own costs.
4. The defendant within 14 days of the filing of the amended statement of claim is to file its defence in relation to any issues to be determined by the jury under s7A of the Defamation Act 1974.
5. Pursuant to SCR Pt 31 r 2 I order the trial by jury of the issues joined between the parties for the determination by jury under s7A of the Defamation Act 1974.
6. I place the matter in the list to be called up for hearing.

schedule A Inquiries into the Angel Place building project in the, CBD had revealed a tale of extortion, intimidation, money laundering and payoffs including unprescribed Viagra, the building royal commission heard yesterday. Through this tangle of corruption wove the figure of crime figure Tom Domican, who was supporting the election of Craig Bates to a senior position in the Construction, Forestry, Mining and Energy Union. According to evidence, Mr Bates and the union's delegate at Angel Place, Martin Warner, were standing over sub-contractors. They had extorted money in return for union-endorsed enterprise bargaining agreements. Nick Green, counsel assisting the inquiry, told the commissioner, Terry Cole that the Angel Place project undertaken by Leighton Contractors from 1997 to 2001 had a serious corruption problem. Mr Bates and Mr Warner had approached sub-contractors demanding money in return for harmony and future work. Those complying had paid cash or sent cheques in response to false invoices. Access Australia Rigging and Scaffolding and later Proactive Consultants had been set up, operated by Rees Ginns, to issue false invoices, receive the cheques, cash them and hand the money to Mr Bates and Mr Warner. Mr Green said the money-laundered through the account of Proactive Consultants and distributed to Mr Bates and Mr Warner was between $390,000 and $484,000. Mr Warner has claimed Mr Bates took the lion's share. Mr Ginns agreed yesterday that he had participated in money-laundering. He had attended a meeting with John Fahkoury, the owner of Prestige Cranes, and Tom Domican, an industrial relations consultant for Prestige. At the time, Domican was collecting 20 or 30 statutory declarations for Mr Bates to contest the union election. Mr Ginns had contributed to the election fund. He had bought four packets of Viagra for $100 from Mr Bates and Mr Warner at Angel Place. They had a stock of them and said a doctor working in their union building in Kent Street in the city, had helped acquire them. Mr Ginns said his scaffolding company had been taken over by another company operated by Mr Fahkoury. But it was not true that Domican had assisted Mr Fahkoury to get the company. In mid-2000, Mr Ginns had been at a meeting at the Toxteth Hotel, Glebe, with sub-contractors, contractor representatives, Domican and Mr Bates. Mr Fahkoury had said he would start up a "fighting fund" for Mr Bates's election. Mr Fahkoury later told Mr Ginns that police were inquiring into a donation of $10,000 to Mr Bates's fighting fund and Mr Ginns should tell Mr Bates to "keep his mouth shut" about where the money came from. The union's state building and general division secretary, Andrew Ferguson, said outside the hearing yesterday that neither Mr Bates nor Mr Warner were now in the union.

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