Lew v Herald & Weekly Times Ltd [1998] VSC 2

Supreme Court of Victoria|1998-07-24|Before: CHERNOV, J.

interlocutory - Alleged defamatory publication - Disclosure of journalist's source - Newspaper rule - Application in interlocutory proceeding -Whether necessary in the interests of justice - Relevance - Aura of authenticity.

In this proceeding, the plaintiff, Solomon Lew, claims that he has been defamed in a number of articles published by the first defendant, The Herald & Weekly Times Ltd, in late May 1997. The plaintiff applied by Summons issued 23 February 1998 for interlocutory orders requiring the first defendant to make further and better discovery, including the notes of its journalists who wrote the articles complained of, which, inter alia, disclose the source of the information on which they relied in writing the articles. The Master who heard the application, ordered that the reporters' notes be discovered, but that there be effectively deleted from them, material which identified the source of the information contained therein. The plaintiff has appealed against that part of the Master's order which enables the first defendant to withhold the identity of the source of the information.

In the morning edition of The Herald Sun of 27 May 1997, the first defendant published an article concerning a break-in into the Melbourne offices of the Australian Securities Commission (ASC). The article claimed that the raiders ignored money and valuables and went only to the room which contained documents relating to the Yannon-Coles Myer Ltd transaction. Some of the publications contained the photograph of the plaintiff. It was well known at that time that the ASC was investigating the Yannon-Coles Myer Ltd transaction, with which the plaintiff was associated, and that it was one of the largest investigations undertaken by the ASC. It can also be assumed that it was well known that the plaintiff was the former chairman of Coles Myer Ltd and a substantial shareholder in that company. A major part of the plaintiff's case in support of its present application, is the claim that in the articles published by it, the first defendant relied on outside sources to give them an "aura of authenticity". In light of that claim, it is desirable to set out certain passages from the articles. It is sufficient for that purpose, if I reproduce the relevant parts from the article of 27 May 1997.

"INTRUDERS have broken into the Australian Securities Commission's Melbourne headquarters to spy on documents at the centre of the country's biggest corporate probe.

The raiders by-passed an array of lift security devices and electronically coded locks and sensors.

They ignored money, valuables and unlocked doors and made for the `Coles Myer' room.

The locked room contains sensitive documents about the notorious 1990 Yannon transaction, which effectively transferred an $18 million loss from Coles Myer's former chairman, Solomon Lew, to the retailing giant.

The weekend break-in - undetected until commission staff arrived for work yesterday morning - came as the corporate watchdog considered charges after a two-year investigation.

A source close to the investigation said: `The thieves knew what they were doing. They must have been good to get around the security system.'

The break-in was hushed up to the extent that some people central to the two-year investigation did not know about it last night. ...

Corporate espionage is suspected as the motive for the weekend break-in.

A commission spokeswoman said it was not known whether anything was taken.

But sources said the intruders could easily have photographed documents or photocopied them on commission machines nearby.

The Yannon transaction is the largest file the ASC is working on.

Sources said the raiders broke a window on the ground floor of the Commercial Union building at 485 La Trobe St, where the ASC's Melbourne office occupies five floors.

The high-rise offices were reached although a security key is needed to operate the lift.

The intruders then by-passed the electronic security system on each floor, which requires a six-digit code to be punched into a keypad, and entered the commission offices.

Sensors on each floor connected directly to a security firm failed to detect the break-in.

Sources said the intruders ignored money, valuables and unlocked doors, concentrating on locked drawers.

It was suggested they knew what they were looking for - the keys to the Coles Myer room.

A spokesman for the Australian Federal Police confirmed last night they were `undertaking initial inquiries' about a reported incident at the commission offices'.

`As these inquiries are ongoing it would be inappropriate to make further comment at this time,' he said."

The substance of that article was repeated in other newspapers in Australia published by the first defendant. A number of interviews were also conducted over the radio in relation to the break-in. One of the people interviewed was the editor-in-chief of The Herald Sun, Peter Blunden. He was interviewed on the ABC's John Faine programme on 27 May 1997. During that interview, he praised the reporter who wrote the first article and said "these people obviously knew what they wanted and they knew how to get it and they by-passed all sorts of security to get to what is known in the ASC as the Coles Myer room".

The Reuters release of 27 May 1997, however, which was published at 8.30 a.m., stated that the ASC denied that the raiders who broke into its Melbourne offices, had taken or copied files linked with Coles Myer Ltd. It reported that the ASC had stated that the intruders who got into the building did not get anywhere near the Yannon-Coles Myer Ltd documents. (It can be assumed that by that time, the morning edition of the first defendant's newspaper had been published.) A similar release was made by AAP on 27 May 1997 at 6.14 p.m., namely, that no documents relating to the Yannon-Coles Myer Ltd investigation were seen by the intruders. In a sense, the first defendant corrected the error on the following day by publishing that the raiders did not gain entry to the Yannon-Coles Myer Ltd room or to any relevant documents.

On 29 May 1997, Mr Lew's then solicitors wrote to the Group Editorial Manager of News Limited, the parent of the first defendant, and claimed that the articles carried the clear imputation that the plaintiff was responsible for the criminal act of breaking and entering the ASC headquarters. The letter went on to say that The Herald Sun "has conducted a malicious and defamatory campaign against him, based on incorrect facts and mischievous speculation." It went on to point out that in the article of 27 May 1997, the newspaper asserted that intruders broke into the ASC to spy on documents at the centre of the country's biggest corporate probe and that these allegations were false. The letter pointed out that the ASC has now made it clear that there was no evidence that the Yannon-Coles Myer Ltd probe was a target of the break-in. After referring to other matters about which complaint was made, the letter concluded that "Solomon Lew requires a front page apology, in terms to be agreed to by him. A writ will be issued and served on The Herald & Weekly Times Limited".

No apology was published by the newspaper and on 24 June 1997, a writ was issued naming Solomon Lew as plaintiff and The Herald & Weekly Times Ltd and other newspapers as defendants. Subsequently, the proceeding against the other newspapers was discontinued and the matter continued only against the first defendant, The Herald & Weekly Times Ltd (hereafter, "the defendant").

The Statement of Claim alleges that in its ordinary and natural meaning, the articles were defamatory of the plaintiff and meant and were understood to mean that he had instigated or arranged or was knowingly concerned in a burglary of the Melbourne headquarters of the ASC for the purpose of spying on sensitive documents which were material to an ASC investigation relating to him. A claim is made for aggravated and/or exemplary damages. In the Particulars of its claim for such damages, the plaintiff asserts that:

(a) the defendant published the relevant material with the deliberate intention of thereby injuring the plaintiff;

(b) the defendant knew or ought to have known that the imputations conveyed by the relevant material were untrue and without foundation;

(c) the publication was made recklessly by the defendant who did not care whether the imputations thereby conveyed about the plaintiff were true or false;

(d) the defendant failed to make any proper enquiry to ascertain whether any material was true.

There are other matters particularised going to the claimed entitlement of the plaintiff to be awarded aggravated and/or exemplary damages.

In its Defence filed on 23 July 1997, the defendant denied that the publication complained of was defamatory of the plaintiff and claimed that he was not identified in the publications as having instigated and arranged and/or being knowingly concerned in the burglary. Furthermore, the defendant pleaded qualified privilege recognised by the High Court in Theophanous v. The Herald & Weekly Times Ltd [1994] HCA 46; (1994) 182 C.L.R. 104 (as modified by Lange v. Australian Broadcasting Corporation [1997] HCA 25; (1997) 145 A.L.R. 96, at p.118), as well the defence of fair comment.

The plaintiff complained about the Theophanous and fair comment defences and threatened to strike them out. They also wrote directly to the journalists demanding that they reveal the identity of their sources and said that in light of the defences relied upon by the defendant, it was the plaintiff's intention to join as defendants in the proceeding any persons who were the sources of the articles and broadcasts. Following this correspondence, the defendant amended its Defence by deleting reliance on fair comment and qualified privilege. The plaintiff contends that this amendment was made because the defendant knew that it could not establish that it took reasonable steps to verify its material. (Hence, it could not succeed in its defence of qualified privilege.) The defendant, on the other hand, claims that it dropped those defences because of the risk that otherwise, its reporters would become embroiled in the litigation as defendants. Thus, the only remaining issue of substance between the parties going to liability, is whether the articles complained of are defamatory and if so, whether they identify the plaintiff.

On 20 February 1998, the plaintiff issued a Summons seeking further and better discovery, including in paragraph (a)(iii), photocopies of all "reporters' notes". It is necessary to summarise the circumstances in which such action was taken because the plaintiff claims that they disclose conduct on the part of the defendant which is relevant to the exercise of my discretion as to matters to which I will refer later. The defendant filed its affidavit of documents on 19 November 1997. On 29 January 1998, the defendant's solicitors informed the solicitor for the plaintiff that "further reporters' notes have come to light." The letter went on to say that "these notes are privileged in the sense that their disclosure would reveal the identity of certain people whose identity our clients do not want revealed. Accordingly, privilege is claimed. Our client is happy to make available the notes to you providing names and any references to the aforementioned people are not disclosed." In response, the plaintiff's solicitor informed the solicitors for the defendant that, without conceding the defendant's "concern", he would be willing to consider an undertaking that he would not disclose the names referred to in the notes to anyone "other than my client and his other legal advisers."

During February 1998 there was correspondence between the parties' respective solicitors on the question of whether the notes were relevant given that, according to the defendant, the claim for qualified privilege had been withdrawn, leaving as the principal issue, the question of whether the words convey a defamatory meaning. The defendant did not provide the notes and in the result, the plaintiff issued its Summons on 20 February 1998.

On 13 March 1998, Master Wheeler ordered, inter alia, that the defendant provide copies of the documents (in question) to the plaintiff, "with names and other identifying details of the defendant's sources blacked out ... " The defendant then produced to the plaintiff's solicitor, copies of the notes of the two journalists concerned, but deleted from them passages which identified the source of the material (or some of the material) in those notes. On 6 April 1998, the plaintiff inspected the original notes in question. The evidence shows that in the case of the notes of one journalist, parts were covered by adhesive stickers. The notes of the other journalist had parts blacked-out by the ink from a felt-tip pen. It seems to be common ground that such action was taken because the reporters considered that it was their ethical obligation to maintain the confidence as to the sources of their material.

On 7 April 1998, the plaintiff sought from the defendant's solicitors legible copies of the notes. On 15 April 1998, he wrote and complained about the interference with the reporter's notes by permanently blacking-out parts of them and sought advice as to the circumstances in which the notes were interfered with. On 20 April 1998, the plaintiff's solicitor sought clarification as to whether or not there was in existence an unmarked version of the notes of the second journalist (parts of which had been blacked-out). He also said that he was instructed to offer to undertake that if the full notes were provided to him for inspection, he would not until the trial of the proceeding, without leave of the Court or the defendant's consent in writing, disclose to any person other than senior or junior counsel retained to act for the plaintiff in this proceeding, the names or any other identifying details of any of the defendant's sources revealed to him by the notes or copies. He also undertook not to use any documents for any purpose other than for the preparation and the conduct of the trial of this proceeding. On 5 May 1998, the plaintiff's solicitor again sought clarification as to whether there was an unmarked version of one of the second reporter's notes in the possession of the defendant. He repeated the undertakings to which I have previously referred. There was, however, no meaningful response by the defendant to the above enquiries.

In those circumstances, the plaintiff pressed on with its appeal against the order of Master Wheeler to the extent that it permitted the defendant to delete from the reporters' notes details identifying the source of the material contained in them.

The plaintiff claims that it has a good case against the defendant both on the substantive issue and for aggravated and/or exemplary damages. As to the first matter, it claims that the contents of the articles concerning the break-in, which refer to the Yannon-Coles Myer Ltd investigation and the plaintiff, give rise to the inference that the person behind the break-in was the plaintiff. As to its case for damages, the plaintiff says that the information provided to the journalists was so obviously unreliable, that the defendant should have verified it before it was published. Its failure to do so goes to show that the defendant was reckless and published the material with malice. (The plaintiff also foreshadowed that he will seek to amend the Particulars to allege that the defendant had no sources available to it at all.) In that context, the plaintiff points to the following.

(a) Material in the articles which relied on sources that were "close to the investigation", was wrong. For example, the articles reported that the raiders gained entry into the room containing the Yannon-Coles Myer Ltd documents, whereas the reality was that they did not gain such entry. (I have already mentioned that this error was recognised by the defendant which printed the fact that the raiders did not enter the Yannon-Coles Myer Ltd room, on 28 May 1997.)

(b) The defendant's pattern of conduct in the interlocutory stages, namely, whenever it was pressed to reveal the sources, it refused to do so and ultimately, under threat of a strike out, abandoned its defence of qualified privilege.

(c) The statements by Blunden during the radio interview were inconsistent with the articles.

(d) There is some divergence between the notes and the articles.

Thus, says the plaintiff, the identify of the source of the material in the articles is relevant to the issue of the plaintiff's entitlement to aggravated and exemplary damages. It is also contended on his behalf, as I understand it, that the identity of the source is relevant to the issue of identification. It is said that it bears on the question of the defendant's intention in publishing the articles and that, in turn, goes to the question of identification. In those circumstances, the plaintiff submits, it is entitled to have discovery of documents which identify the source of the material on which the articles were based. Whilst the plaintiff recognises that generally, the right of a plaintiff in a libel action against a newspaper to have it disclose all relevant documents may be restricted by the newspaper rule, he says that in this case, I should exercise my discretion and order or direct that the full documents be produced.

The newspaper rule is a rule of practice which, in the context of an interlocutory proceeding in a libel case against a newspaper or a journalist, operates to protect the journalist's confidential sources from discovery unless it is necessary in the interests of justice to do otherwise. In a sense, it is a qualification of the wider public policy rule that journalists and editors of newspapers cannot withhold, in the context of a legal proceeding, the source of information contained in their writing or publication where it is relevant to the resolution of the proceeding, notwithstanding that such information was conveyed to them in confidence. The reason for this public policy rule was explained by Dixon, J. (as his Honour then was) in McGuinness v. Attorney-General (Victoria) [1940] HCA 6; (1940) 63 C.L.R. 73, at pp.102, 104.

In John Fairfax & Sons Ltd v. Cojuangco [1988] HCA 54; (1988) 165 C.L.R. 346, the High Court, in a joint judgment, once again explained the reason why it is a fundamental principle of our law that journalists may not claim a public interest immunity from disclosure of their source of information. Their Honours said, at pp.354-355:

"The point is that there is a paramount interest in the administration of justice which requires that cases be tried by courts on the relevant and admissible evidence. This paramount public interest yields only to a superior public interest, such as the public interest in the national security. The role of the media in collecting and disseminating information to the public does not give rise to a public interest which can be allowed to prevail over the public interest of a litigant in securing a trial of his action on the basis of the relevant and admissible evidence. No doubt the free flow of information is a vital ingredient in the investigative journalism which is such an important feature of our society. Information is more readily supplied to journalists when they undertake to preserve confidentiality in relation to their sources of information. It stands to reason that the free flow of information would be reinforced, to some extent at least, if the courts were to confer absolute protection on that confidentiality. But this would set such a high value on a free press and on freedom of information as to leave the individual without an effective remedy in respect of defamatory imputations published in the media." "The liability of the media and of journalists to disclose their sources of information in the interests of justice is itself a valuable sanction which will encourage the media to exercise with due responsibility its great powers which are capable of being abused to the detriment of the individual. The recognition of an immunity from disclosure of sources of information would enable irresponsible persons to shelter behind anonymous, or even fictitious, sources."

At the same time, however, the Courts have recognised that this prohibition is not unqualified in the context of an interlocutory proceeding in a libel action. For example, Dixon, J. in McGuinness v. Attorney-General (Victoria), supra, at p.104, said that a special exception is made in favour of the journalists and newspaper editors and publishers who are defendants in libel actions from the general rule that disclosure and answers to interrogatories "must be made of all relevant matters". His Honour said that:

" ... a practice is recognized of refusing to compel such a defendant to disclose the name of the writer of an article complained of as a libel or of the sources of information he has relied upon. The foundation of the rule is the special position of those publishing and conducting newspapers, who accept responsibility for and are liable in respect of the matter contained in their journals, and the desirability of protecting those who contribute to their columns from the consequences of unnecessary disclosure of their identity."

His Honour recognised that this qualification was not a rule of evidence, but a practice which does not rest on a principle of privilege, "but on limitations of discovery". In the same case, Starke, J., at p.92, said that the rule was founded upon convenience and to limit fishing expeditions and oppressive inquiries. (Thus, in that case, the newspaper rule did not provide a lawful excuse for the editor to refuse answering questions as to his source of information.)

Similarly, the High Court in John Fairfax & Sons Ltd v. Cojuangco, supra, has recognised that the Courts' refusal to accord immunity from disclosure by journalists of the source of their material, is not unqualified and the Courts have imposed "some restraint on the entitlement of a litigant to compel disclosure of the identity of the source". Their Honours said, at pp.334-335, that:

"In effect, the courts have acted according to the principle that disclosure of the source will not be required unless it is necessary in the interests of justice. So, generally speaking, disclosure will not be compelled at an interlocutory stage of a defamation or related action and even at the trial the court will not compel disclosure unless it is necessary to do justice between the parties."

Thus, the defendant here is entitled to withhold from the plaintiff such parts of the journalists' notes which disclose the identity of the source on which they are based, unless their disclosure is "necessary in the interests of justice".

The plaintiff claims that the interests of justice require that he be given access to that documentation and that significant injustice would result if he had to wait until trial to obtain such information. Briefly, his reason for so contending are these.

(a) The source of the information on which the articles were based (and the reporters' notes) are relevant to the issues of damages and identification.

(b) In the articles themselves, the defendant created an aura of authenticity by stating that it had sound sources for the material and it would be incongruous and unjust to allow it to shield behind the newspaper rule until trial. In this regard, the defendant relies, in particular, on what the High Court said in John Fairfax & Sons Ltd v. Cojuangco, supra, at p.358.

(c) The defendant would have the tactical advantage of being able to choose when it identified the source. Similarly, the plaintiff would not know how to open its case before the jury.

(d) The notes containing the blacked-out parts are difficult to decipher because of the deletions. It is necessary to read the deleted parts to make sense of much of the remainder.

(e) The Court should exercise its discretion in the plaintiff's favour, having regard to the conduct of the defendant during the interlocutory process, particularly its failure to produce the documents sought.

In my view, it is at least arguable that the identity of the source of the information used by the journalists to write the articles may be relevant to the plaintiff's claim for aggravated and exemplary damages. Arguably, that material could go to the defendant's intention when publishing the articles and, or alternatively, to the question of whether it did so recklessly.

In light of that conclusion, it is, strictly speaking, not necessary for me to decide whether, as the plaintiff has contended, the identity of the source is also relevant to the issue of identification, although I very much doubt whether it is. For the reasons given by Hunt, J. in Baltinos v. Foreign Language Publications (1986) 6 N.S.W.L.R. 85, at pp.91-96, the subjective intention of the publisher is not relevant to the question of identification. Intention is to be determined on an objective basis having regard to the words in question (albeit looked at in the context of relevant extrinsic facts where they are alleged: see, for example, Cassidy v. Daily Mirror Newspapers Ltd [1929] 2 K.B. 331, at pp.338-340). Despite his criticism of Lloyd v. David Syme & Co Ltd [1986] A.C. 350, Hunt, J. nevertheless felt bound to follow that case. No such requirement is presently in force, given that the Privy Council is no longer the apex of our judicial hierarchy (R v. Judge Bland; Ex parte Director of Public Prosecutions [1987] VicRp 17; [1987] V.R. 225). I should mention that it has also been submitted by the plaintiff, that Menhennitt, J. has left this question open in Erwin v. Southdown Press [1976] VicRp 31; [1976] V.R. 353, at p.361. Assuming that the plaintiff is correct and his Honour did leave this question open, he nevertheless did not decide that the publisher's intention was relevant to the question of identification.

I also note that since the defendant has withdrawn the defence of qualified privilege, it will be precluded from leading evidence as to the credibility of the source of the material which found its way into the articles.

As I have said, however, it should be assumed for present purposes that the identity of the source of the information is relevant to the plaintiff's claim for aggravated and exemplary damages. That fact alone, however, does not necessarily require that disclosure of the source is necessary in the interests of justice.

This was recognised by the Court of Appeal in Maxwell v. Pressdram Ltd & Anor [1987] 1 All E.R. 656, at pp.665-6. That case was concerned with whether disclosure should be ordered in the context of the statutory privilege which was created by s.10 of the Contempt of Court Act 1981 (UK), which is cast in the following terms:

"No court may require a person to disclose, nor is any person guilty of contempt of court for refusing to disclose, the source of information contained in a publication for which he is responsible, unless it be established to the satisfaction of the court that disclosure is necessary in the interests of justice or national security or for the prevention of disorder or crime."

The question concerned the correctness of the ruling of the trial judge that the witness need not disclose the identity of the source. The publisher had sworn an affidavit that the defendant would justify the material. At trial, however, the defence of justification was abandoned and the judge said he would make a (strong) comment adverse to the defendant in the course of his charge of the jury, but he held that the witness need not reveal the source of his material. His Honour's decision was upheld by the Court of Appeal. In the course of his decision, Parker, L.J. made the point that "it is not sufficient merely to say that the information which is sought (to be obtained) is information which is relevant to the determination of an issue before the court. Were that so, it would always be possible to obtain an order for disclosure ... ".

The plaintiff in this case sought to distinguish, or at least minimise, the effect of that decision, submitting that it was made ex tempore and that it dealt with a statutory privilege which went to the question of evidence (in contrast to the newspaper rule, which is a mere rule of practice). In my view, however, the case cannot be distinguished merely on the basis that it dealt with statutory privilege going to evidence. The critical issue there was relevantly similar to the one here, namely, whether it was necessary in the interests of justice to require the party to disclose the information which was otherwise not required to be disclosed. It is true that the proposed comment of the trial judge may have been seen as meeting the justice of the situation, but the Court did recognise that merely because the information sought was relevant to an issue, did not necessarily make its production necessary in the interests of justice. This also applies in the context of the newspaper rule. Were it otherwise, as Parker, L.J. observed, the plaintiff would be able to overcome this rule merely by a pleading which would make the identity of the information relevant to the issue of damages. In my view, that was not the intention behind the exception to the newspaper rule.

The defendant also relied on Hodder v. Queensland Newspapers Pty Ltd [1994] 1 Qd.R. 49, where Davies, J.A. and Byrne, J. said, at p.57, that mere relevance is not sufficient justification for compelling disclosure. The plaintiff argued that this case only decided that in the circumstances, it was premature to compel disclosure of the relevant information. The judgment of their Honours, however, particularly at pp.48-9, makes it clear that a question which they considered was whether disclosure was necessary in the interests of justice (a question which is relevantly similar to the one considered here and to that examined in Maxwell v. Pressdram Ltd & Anor, supra). In that context, they said "with necessity in the interests of justice as the guiding criteria, mere relevance is not a sufficient justification for compelling disclosure". The Court concluded that there was assertive (but inadmissible) material claiming it was necessary to know the source "to be able to properly prepare" the case and that apart from the pleadings, there was no evidence touching upon (the need to know) the informant's identity.

In my view, it would necessarily defeat the policy behind the newspaper rule if it could be put aside merely because the informant's identity became relevant to an issue of, say, damages. That appears to be the view taken in the two cases to which I have just referred. In the circumstances of this case, I would not be prepared to order that the newspaper rule be waived merely because the identity of the source of the information provided to the journalists here, may be relevant on the issue of damages.

The plaintiff's principal point was that by referring in the articles to sources on which some of the material contained therein was based, the defendant created an aura of authenticity as to the material so published and in the circumstances, it would be incongruous and unjust to allow it to shield behind the newspaper rule until trial. In support of this contention, the plaintiff relies on what the High Court said in John Fairfax & Sons Ltd v. Cojuangco, supra.

In that case, Fairfax published an article which Cojuangco claimed was defamatory of him. The newspaper intended to plead statutory qualified privilege. If that defence proved successful, the plaintiff would be without remedy. Consequently, the plaintiff sought an order for pre-trial oral examination of the journalist for the purpose of obtaining the source of the information upon which his newspaper article was published. Hunt, J. exercised his discretion and ordered that the journalist attend for oral examination. He made a like order in relation to the newspaper. The Court of Appeal upheld the trial judge's exercise of discretion and the appeal to the High Court failed. The High Court said:

(a) Where an applicant complains of a defamatory publication in a newspaper, a Court will refuse to order preliminary discovery if it appears that the applicant has an effective remedy against the newspaper or journalist without the necessity for making such an order.

(b) But where it appears that the newspaper and journalist may plead statutory qualified privilege (and thereby avoid liability) a judge is entitled to exercise his discretion to make the order sought for preliminary discovery if the newspaper and journalist do not relinquish that defence and the judge considers that the defence might prevail.

At p.358, their Honours said that the striking feature of the case was that the publication complained of, consisted essentially of defamatory imputations attributed to "a senior American bank official and prominent local businessmen" and "one of the leading local US banks". The thrust of the publication, said the Court, was that the imputations "have a solid basis of support in the views of persons prominent in banking and business circles and of a leading bank having its headquarters in the United States. By identifying their sources in this general way and giving prominence to them, the appellants have endowed the imputations with an aura of authority and authenticity which would be lacking if the imputations rested merely on the newspaper's and the journalist's assertions. From the respondent's viewpoint the attribution of the imputations to these apparently authoritative sources is far more damaging than a mere assertion of the imputations without any reference to sources would have been. It is incongruous and unjust that the appellants, having derived the advantage that comes from identifying in general terms the sources of the allegations that they may make against the respondent, should now seek to deny him an opportunity of identifying precisely those sources, by invoking the newspaper rule."

Their Honours went on to say, "we much doubt whether the newspaper rule would be applied to a case such as the present if the question were to arise in the context of an interlocutory application in a defamation action against the appellants in which malice was in issue. It may be that the rule has no application when the newspaper identifies its source in a general way and relies on that source to point up the authenticity of the imputations. But this is by the way."

Although counsel for the plaintiff accepted that the last part of the judgment was obiter, they nevertheless relied heavily on the High Court's conclusion that it would be "incongruous and unjust" if the newspaper could derive advantages that come from identifying, in general terms, the sources of the allegations that they make against the plaintiff, yet seek to deny him the opportunity of identifying those sources by the invocation of the newspaper rule.

In my view, however, the Fairfax case does not lay down the proposition that merely because a newspaper article attributes some part of its contents to a source, it thereby loses the benefit of the newspaper rule in a proceeding brought on the basis that the article defamed the plaintiff. The matter must depend on whether, in the circumstances of the particular case, the interests of justice require disclosure. In the Fairfax case, the Appeal Court found that the trial judge made no error of principle when he ordered pre-trial examination for the very purpose of enabling the plaintiff to obtain the identity of the source so that he could have the opportunity to bring proceedings against the informants because, otherwise, he may have no remedy if the defendant succeeded in its defence of qualified privilege. The interests of justice in that case required that such disclosure be made. But in my view, the Fairfax case is materially different from the present situation. That case did not deal with a claim for the identity of the source for the purpose of enabling the plaintiff to prosecute the case against the defendant. As I have said, the claim was made in order to avoid the possibility of the plaintiff being left without a remedy, given that the defendant was going to pursue the defence of qualified privilege (which the trial judge obviously thought had merit). The injustice that was sought to be overcome in that case by the waiver of the newspaper rule, was the likelihood of the plaintiff being left without a remedy. Here, the waiver of the newspaper rule is sought for an entirely different purpose, namely, to enable the plaintiff to be better able to press his case against the defendant.

There are other, perhaps less important, differences between the cases. In the Fairfax case, so far as I can gather from the report, the whole or at least most of the article which was said to have been defamatory of the plaintiff, was attributed to what were apparently "high level" sources. That is not the case here. Here, the information that the intruders gained access to the Yannon-Coles Myer Ltd room and knew what they were looking for, was attributed to a "source close to the (Yannon-Coles Myer Ltd) investigation". The material so attributed to the source would have to be viewed in the context of the remainder of the article, much of which is not attributed to any source at all. Furthermore, the sources relied on in the Fairfax article were of a different character and were more extensive, than are the sources in the articles here in question. In the Fairfax case, their status was more definitively stated and their standing appeared much higher than that of the source referred to in the articles published by the defendant. Moreover, the defendant here effectively acknowledged that its source lacked credibility, at least to some extent. It made it clear in its publications on the second day, that the claim made on the previous day that the intruders gained access to the Yannon-Coles Myer Ltd room, was incorrect. That correction was attributed to the same source that had earlier provided the incorrect information, namely, "a source close to the Yannon investigation".

It should also be borne in mind in this context, as I have said earlier, that the defendant does not intend to rely on its sources by way of defence.

For these reasons, it is my view that the reference in the articles to sources of information does not create the situation whereby it is necessary in the interests of justice to waive the newspaper rule and order that the defendant provide the plaintiff with the identity of the sources of its information.

The plaintiff's case that the defendant would have a tactical advantage unless the newspaper rule was waived, rests principally on the proposition that the defendant will have the advantage of being able to choose when it will identify the sources. In my view, however, since the defendant has not relied on the sources in its Defence, it will not be able to lead evidence as to the sources, unless the plaintiff opens the issue during the trial in such a way as to enable the defendant to lead evidence on that topic if it so chooses. Thus, the defendant does not have the advantage claimed by the plaintiff. But even if I am incorrect on this point, it is my view that any advantage so possessed by the defendant, does not create an injustice that would warrant waiving the newspaper rule.

It is convenient to mention at this point, that the defendant claimed that the question of whether the imputation pleaded is capable of being borne out, is a matter that should be determined first by the trial judge and only after he has ruled positively on that point, would the question go forward as to whether the publication in fact bears out that imputation. Thus, it was said, the question of whether the newspaper rule should apply, should be determined after the trial judge has ruled on the legal issue. The claim was that the approach of determining first the legal question in the way described, is consistent with the practice that is often adopted in New South Wales and in that context, counsel referred to Radio 2UE Sydney Pty Ltd v. Parker (1992) 29 N.S.W.L.R. 448 and TCN Channel 9 Pty Ltd v. Mahony (1993) 32 N.S.W.L.R. 397. It was also submitted that such a procedure was favourably considered by Byrne, J. in Roux v. Australian Broadcasting Commission [1992] VicRp 87; [1992] 2 V.R. 577. In my view, however, although such an approach may have merit in a given situation, whether that should be pursued here, is a matter for the trial judge.

Even if some parts of the notes are difficult to decipher because of deletions, in my view, any injustice that may arise would not be such as to warrant waiving the newspaper rule.

On the face of the material, the defendant has been less than forthcoming in the provision of the documentation and has dragged its feet in responding to the plaintiff's various requests for documents and information. Nevertheless, the defendant's dilitariness has not been of such magnitude as to create such injustice as would make it necessary to waive the newspaper rule.

For the above reasons, it is my view that the factors relied on by the plaintiff to establish the relevant level of injustice, whether taken singularly or collectively, do not make out such a degree of injustice as to warrant waiving the newspaper rule. Consequently, I decline to make the order sought. It follows, that the plaintiff's appeal fails.

I certify that this and the 18 previous pages are a true copy of the reasons for judgment of Chernov, J. of the Supreme Court of Victoria delivered on 24 July 1998.

Contempt of Court Act 1981

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (58 paragraphs)

Parties

Legislation Cited (1)