HARVEY v JOHN FAIRFAX PUBLICATIONS PTY LTD

JOHN FAIRFAX PUBLICATIONS PTY LTD ACN 003 357 720 (Defendant) FILE NUMBER(S) : SC 20002 OF 1998 B McClintock SC (Plaintiff) COUNSEL : T Blackburn SC (Defendant) Carneys (Plaintiff) SOLICITORS : Freehills (Defendant)

[2004] NSWSC 188 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

John Fairfax Publications Pty Ltd acn 003 357 720 (Defendant)

JUDGMENT (Plaintiff's application to amend to add fresh imputations - after unsuccessful s7A trial - after partially successful appeal - new trial confined to one imputation - res judicata - Anshun principles - status of Court of Appeal's order) 1 On 20 September 1997 the defendant published the matter complained of, a lengthy article with the headline "The man who sank Elle". The sub-headline read: "What do a beautiful supermodel, three premiers, 30 racing-car drivers and millions of taxpayers have in common? They all wish they had never heard of a man named John Harvey". 2 A statement of claim was filed on 2 January 1998 in which the following imputations were pleaded: 3(a) That the plaintiff, in his operation of a farm, placed public health at risk in so serious a manner as to warrant his being sued by the local council. (b) That the plaintiff had so seriously mismanaged two companies of which he was a director as to make them insolvent. (c) That the plaintiff had behaved in so bad a manner as an employee of the NSW Premier, Nick Greiner as to warrant his peremptory dismissal by Mr Greiner. (d) That the plaintiff had defrauded a company of which he was a director of $170,000. (e) That the plaintiff was a dishonest businessman who refused to pay his just debts. 3 On 20 April 2000 after hearing submissions, Bell J ([2000] NSWSC 337) held that imputations 3(b), (c) and (d) would go to the jury, struck out imputations 3(a) and (e) and gave the plaintiff leave to replead them. 4 On 2 March 2001 pursuant to the leave granted by Bell J the plaintiff filed an amended statement of claim pleading the following imputations:

3(a) That the plaintiff, in his operation of a farm, endangered public health. (b) That the plaintiff had so seriously mismanaged two companies of which he was a director as to make them insolvent. (c) That the plaintiff had behaved in so bad a manner as an employee of the NSW Premier, Nick Greiner as to warrant his peremptory dismissal by Mr Greiner. (d) That the plaintiff had defrauded a company of which he was a director of $170,000. (e) That the plaintiff dishonestly refused to pay his just debts. 5 On 29 August 2001 a s7A trial was conducted before Kirby J and a jury of four. The jury found that the matter complained of carried none of the imputations. His Honour, Kirby J, thereupon entered a verdict for the defendant in respect of each of the imputations. 6 The plaintiff appealed to the Court of Appeal and on 9 April 2003 ([2003] NSWCA 70) that Court made the following orders relevant to the present application: that the appeal be allowed in part, that the verdict and costs entered by Kirby J be set aside and a new trial was ordered "confined" to imputation (a). Those orders were made after Mason P had said: "[31] The appellant seeks only a new trial (cf Charlwood Industries Pty Ltd v Brent [2002] NSWCA 201 at [60]-[69]). The respondent strongly supports this outcome if perversity be established.

[32] The appellant argues that established perversity in relation to a single imputation would entitle him to a new trial on all imputations. This proposition cannot be accepted. The authorities relied upon ( Rivkin and Trustees of the Roman Catholic Church v Hogan (2001) 53 NSWLR 343) are distinguishable. In Rivkin , there was an inexplicable persistency in a series of unreasonable answers by the jury (see at [112]). In Hogan , there was a real chance that the error which affected the jury verdict in relation to one aspect of damages affected their conclusions on another aspect of damages. In other cases, a general new trial may be ordered because of material indicative of a jury compromise (see the discussion in Charlwood at [52]-[54]). [33] In the present case, only one finding has revealed real cause for concern and there is nothing about it that suggests cross-infection". 7 On 6 May 2003 the plaintiff filed a notice of change of solicitor. 8 On 23 August 2003 the plaintiff filed and served a notice of motion. The notice of motion seeks leave to amend the statement of claim. In such further amended statement of claim the plaintiff proposes to plead the following imputations: 3(a) That the plaintiff, in his operation of a farm, endangered public health. (b) That the plaintiff caused harm to ("sank") Elle McPherson. (c) That the plaintiff had behaved in such a way that he had caused a beautiful supermodel, three premiers, thirty racing car drivers and millions of taxpayers to wish they had never heard of him. (d) That the plaintiff wheedled more than $2,000,000 from the premiers of Victoria and Western Australia for sports promotions which ultimately flopped. (e) That the plaintiff wasted $2,000,000 which he had wheedled from the premiers of Victoria and Western Australia on sports promotions that ultimately flopped. (f) The plaintiff behaved in an increasingly overbearing manner towards Ken Hooper during a controversy over the Eastern Creek Raceway. (g) That the plaintiff had been sacked by the New South Wales premier Nick Greiner. (h) That the plaintiff did not pay his debts. (i) That the plaintiff withdrew two cheques totalling $170,000 to which he was not entitled from a company, International Sports Services Limited. (j) That the plaintiff breached his duties as a director of International Sports Services Limited by withdrawing two cheques totalling $170,000 from that company. 9 In the meantime on 13 June 2003 Kirby J fixed the second s7A hearing to take place on 20 August 2003. 10 According to the affidavit in support of the notice of motion sworn by Arthur Anthony Carney on 25 August 2003, the defendant was first notified of the proposed amendments on 29 July 2003. 11 The s7A hearing fixed for 20 August 2003 was not reached. 12 The defendant opposes the application on essentially 2 bases. The first basis I will merely call the "Anshun basis"; the second basis relates to the imputations now sought to be relied upon and questions of form, capacity and difference in substance. 13 Strictly there can be some overlap between the two bases. 14 The defendant relies upon the decision of the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1980-1981) 147 CLR 589, in particular the extract, at 598 in the joint judgment of Gibbs CJ, Mason Aickin JJ, from Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 where Sir James Wigram VC said (at 3 Hare 115; 67 ER at 319): "The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time".

15 The reference to this part of the judgment in Anshun I take to be read with their Honours' subsequent remarks at pages 602 and 604 to the effect that the plaintiff cannot now, by reason of having been awarded a new trial by the Court of Appeal, raise matters for the determination in that trial because those matters were so relevant to the subject matter of the first trial that it was unreasonable for the plaintiff not to have relied upon them. Mr Blackburn SC clearly acknowledged that advancing the proposition in this way does not deal with the fact that there were separate actions in the Anshun matter, a distinguishing factor upon which Mr McClintock SC relied. 16 Bearing in mind that limitation, nonetheless, it was argued for the defendant on an alternative basis, notwithstanding that, as luck would have it, there is only one proceedings, that akin to the principle in Anshun, and I assume by reason of it potentially being an abuse of the processes of the Court, the plaintiff should not be allowed now to amend to plead causes of action which it failed to plead prior to the s7A hearing in August 2001. 17 Mr McClintock SC argued that Anshun does not preclude a plaintiff from running a "different" case. He acknowledged that there was a role for res judicata to play in this present application in the sense that by reason of the defendant having the benefit of verdicts in relation to all but one of the imputations sued upon it was necessary for the plaintiff to show that the proposed causes of action, i.e. the imputations, differed in substance from those rejected by the jury. 18 Nothing in Anshun, it was submitted for the defendant, prevents a party from litigating new material in the same proceedings, to put it shortly. 19 The problem here, with respect to the position of both parties, is that the Court of Appeal has made its order that there be a new trial limited to imputation (a). 20 Order 2 made by the Court of Appeal set out in para [34] is: "Set aside the verdict and costs order entered by Kirby J". In view of order 3 being that there be a new trial confined to imputation (a), I have understood the order of the Court of Appeal not to set aside the verdicts entered in relation to the remaining imputations. 21 It is a matter of some concern to me that to accede to the plaintiff's application would put the plaintiff in the position of abusing the processes of the Court in the light of order made by the Court of Appeal. Indeed, were I to make the order, then it would seem to me that the effect of the Court of Appeal's order, in the light of the history of the matter which came to that Court, would be completely negated in terms of justice having been done between the parties in that Court as reflected in the order that the learned President made. 22 In this area I have had regard to what the Court of Appeal said in Amalgamated Television Services v Marsden [1999] NSWCA 313 in relation to the propriety of a trial judge displacing the Court of Appeal's order by reference to matters which were not argued in the Court of Appeal. Indeed, in this instance, matters could not have been argued in the Court of Appeal because the plaintiff chose to create his new case in July 2003. 23 I am of the view that the plaintiff is disentitled to the relief he seeks by reason of the first leg of the Anshun argument advanced for the defendant not being excluded by authority, that is, in such a circumstance as the present, the fact that there is no separate proceedings in which the status of the latter is considered in relation to the former, does not preclude the application of the same principles; secondly, if that be incorrect, and on the second basis advanced for the defendant, that on an abuse of process basis cognate with the principle in Anshun, the plaintiff should fail, as the plaintiff should fail by reason of the peculiar nature of the existing order on foot of the Court superior to me, that there be a new trial limited to imputation (a). I do not see any way that I can make an order that would amount to setting aside or disregarding the effect of the order made by the Court of Appeal between these parties (see Marsden, above, particularly at paras [34]-[36], per Mason P). 24 I should indicate, however, my views on the proposed imputations. As to proposed imputation (b): "That the plaintiff caused harm to ("sank") Elle McPherson". I would merely strike this out as being bad in form by reason of the word in brackets. I am not persuaded that the matter complained of is incapable of carrying an appropriately drafted imputation. 25 As to proposed imputation (c): "That the plaintiff had behaved in such a way that he had caused a beautiful supermodel, three premiers, thirty racing car drivers and millions of taxpayers to wish they had never heard of him". This is an imputation which I would find reflects hyperbole in journalism and rhetorical flourish to an unacceptable degree. Simply stated, an ordinary reasonable reader could not understand this matter complained of as conveying that particular meaning of the plaintiff. I would add that I am also impressed by the uncertainty that attends the use in an imputation, even in this case, of "had behaved in such a way". 26 As to proposed imputations (d): "That the plaintiff wheedled more than $2,000,000 from the premiers of Victoria and Western Australia for sports promotions which ultimately flopped" and (e): "That the plaintiff wasted $2,000,000 which he had wheedled from the premiers of Victoria and Western Australia on sports promotions that ultimately flopped". The plaintiff seeks to distinguish them by saying that the first imputation indicates the method of acquisition, namely "wheedled" and the second imputation says what he did with it; "wasted" the "wheedled" money. 27 In my view these imputations do not differ in substance: the notion of "wasting" is contained in the second component of each imputation namely "for sports promotions which ultimately flopped". The plaintiff will have to elect as to upon which of the two he proposes to rely. 28 As to proposed imputation (f): "The plaintiff behaved in an increasingly overbearing manner towards Ken Hooper during a controversy over the Eastern Creek Raceway". The defendant says that this is plainly incapable of being defamatory. I would disagree. It is clearly capable in my view of arising from the article and is capable of being defamatory. 29 As to proposed imputation (g): "That the plaintiff had been sacked by the New South Wales premier Nick Greiner". I would reject the defendant's argument that this is incapable "without more" of being defamatory. 30 As to proposed imputation (h): "That the plaintiff did not pay his debts". The jury found that the matter complained of did not carry, as a matter of fact, the imputation "The plaintiff dishonestly refused to pay his just debts". The defendant argues that the proposed imputation is simply a "back-door" method of attempting to put before a jury an imputation which was rejected. The plaintiff contends that, unlike the imputation rejected by the jury, the proposed one does not contain any suggestion of "dishonesty". If the plaintiff wants a jury seriously to consider such an almost anodyne statement as constituted by proposed imputation (h) I would not stand in his way. 31 As to proposed imputations (i): "That the plaintiff withdrew two cheques totalling $170,000 to which he was not entitled from a company, International Sports Services Limited" and (j): "That the plaintiff breached his duties as a director of International Sports Services Limited by withdrawing two cheques totalling $170,000 from that company". Again the defendant says that these are "back-door" imputations in substitution for the jury rejecting the imputation "The plaintiff had defrauded a company of which he was a director of $170,000". 32 The proposed new imputation (i), it is argued for the defendant, is bad in form because it does not make clear whether the withdrawal of $170,000 was done in the knowledge that the plaintiff was not entitled to it and thereby, in effect, fraudulent or whether the sting of the imputation is in effect that he withdrew the money to which he was not entitled but not knowingly or fraudulently. If the first meaning is intended, it is argued that the proposed imputation (i) does not differ in substance from imputation (d), rejected by the jury. If the second meaning is intended the imputation does not differ in substance from proposed imputation (j). I agree. However, here I really think the plaintiff is playing word games. Neither imputation can be said in terms of its true sting and substance to differ from that which was rejected by the jury. 33 However, for the reasons stated above, the application by the plaintiff to amend fails.

1. The plaintiff's notice of motion is dismissed with costs.
2. I place the matter in the list to be called up for the new s7A trial as ordered by the Court of Appeal.

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