Considerations underlying the newspaper rule
162As already noted, although the newspaper rule does not apply directly to applications for preliminary discovery, the decision of the High Court in Cojuangco holds that the policy considerations underlying the existence of the rule must be taken into account in the exercise of the Court's discretion to grant preliminary discovery. Thus in considering whether the applicant has satisfied the requirement to show that the order sought is necessary in the interests of justice, the Court must place a high value on the public interest in the free flow of information. The discussion above in respect of the freedom of discussion on government and political matters protected by the Constitution reveals that there is a particularly strong public interest in the free flow of information on such matters.
163The issue was formulated by the defendants in their "agreed statement of issues" (it is not clear to me whether their version of that document was in fact agreed) in the following terms:
Are the defendants entitled to protection from disclosure of the information and/or material sought by the summons pursuant to the newspaper rule?
164I think it is probably wrong to regard the newspaper rule as conferring any right or entitlement to protection on journalists and newspapers. Rather, the rule directs attention to the public interest in the free flow of information as an important discretionary factor militating against preliminary discovery where the person concerned is a journalist's source who has sought to have his or her identity kept confidential by the journalist as the price of providing the information in question.
165The relevant factors identified in Cojuangco at 353 to 354 were conveniently collected in the defendants' written submissions, as follows:
(a) the importance of freedom of the press;
(b) the important part played by newspapers in promoting the free flow of information to the public;
(c) the public interest and the benefit for society in having discussion and evaluation of affairs that is informed;
(d) potential sources of information that might usefully be aired in public should not be discouraged by the distracting thought that their identity could quickly be disposed in proceedings taken against a newspaper without there being a trial;
(e) the desirability of discouraging plaintiffs at the interlocutory stage from delving round for other targets;
(f) the public has a right to access of information which is of public concern and of which the public ought to know - the newspapers are in effect the agents of the public to collect that information and to tell the public of it;
(g) the role of the media in collection and disseminating information to the public;
(h) the free flow of information is a vital ingredient in the investigative journalism which is an important feature of our society; and
(i) information is more readily supplied to journalists when they undertake to preserve confidentiality in relation to their sources of information.
166The defendants sought to adduce evidence from the well known journalist, Mr Chris Masters, directed to establishing the important role of confidentiality of sources in investigative journalism. I rejected that evidence, principally in the interests of sparing court time, since I regarded the propositions sought to be proved by calling Mr Masters as being so obvious that no further time on them was warranted: Liu v The Age Company [2010] NSWSC 1176 at [50] to [54].
167It must be acknowledged, however, that there are competing considerations. Indeed, for the reasons explained above in the context of the constitutional issues raised in this case, in my view an absolute and immutable protection of confidentiality wherever demanded by a journalist's source (in cases of political discussion) would itself be inimical to the maintenance of the system of government required by the Constitution. It would expose politicians and others involved in government and politics to the risk of false and malicious attack from their detractors without recourse or remedy. To allow such sources to shield themselves under the respectable cloak of investigative journalism would be contrary to the high ideals of a free press.
168In my assessment, the present case sits poised uncomfortably on the fault-line of strong, competing public interests. The position is complicated by the fact that, to a significant extent, the respective positions of the plaintiff and the defendants rest on conflicting factual contentions which cannot satisfactorily be resolved in the present proceedings.
169The defendants' case is that, following lengthy and careful negotiation, they obtained documents which reveal the making of corrupt payments by the plaintiff to a Federal Member of Parliament. They contend that the documents were obtained from sources who entertain real and substantial fear of reprisal in the event that their identities are revealed, contrary to undertakings given to them by the defendants. Accepting those contentions without qualification, there would be a strong case for refusing the discretionary relief sought by the plaintiff.
170Conversely, the plaintiff's case is that a person or persons conducting a vendetta against her have provided documents to journalists which have been deliberately forged or falsely attributed to her. Accepting those contentions without qualification, to refuse the relief sought would perpetuate the fraud. That would plainly be a strong reason for exercising the Court's discretion in favour of the plaintiff.
The forgery allegations
171In those circumstances, a substantial portion of the hearing was consumed by the forgery allegations. The parties acknowledged, however, that it is not my task in the present proceeding to determine those issues on a final basis. The defendants submitted that I should determine whether the documents are likely to be forgeries, as alleged by the plaintiff. It was submitted on behalf of the plaintiff that it would be enough (to overcome the powerful considerations raised by the newspaper rule) to show that the documents may well be forged or otherwise falsely attributed to her.
172The plaintiff gave evidence at the hearing as to the handwritten documents. It is necessary to assess that evidence by reference to what was said about those documents in the newspaper articles.
173The article on the front page of The Age was illustrated with a large image combining a photograph of Joel Fitzgibbon, a photograph of the plaintiff and the extract from a letter to a Bank of China executive discussed above.
174The article opened with the allegation that the plaintiff's private records "show Ms Liu recorded her 1997-98 payment of 850,000 Chinese yuan - approximately $150,000 at the then current values - to Joel Fitzgibbon under the heading 'money paid including expenses and gifts'".
175The article said:
The 135 pages of personal and business records obtained by The Age after a 10-month investigation include a list prepared by Ms Liu recording "money paid" for unstated purposes to 22 individuals, including Joel Fitsgibbon, variously connected with her property interests in Sydney and Qingdao.
176The list referred to in that passage of the article (exhibit J) is handwritten and is in the Chinese language. Before the hearing, the plaintiff had access only to a translation of the list (exhibit RJB-35 to Mr Baker's affidavit). She swore an affidavit in which she denied writing any such list and denied making the payments allegedly recorded in the list. The plaintiff was subsequently granted access to the handwritten list (see Liu v The Age Company Ltd [2011] NSWSC 53 at [21]). After seeing that document, she gave evidence (through an interpreter) that it was not in her handwriting.
177The letter quoted in the article became exhibit D in the proceedings (the translation was exhibit RJB-38 to Mr Baker's affidavit). The main body of the letter is typed in Chinese character. The letter bears a signature in the English language attributed to Ms Liu and a handwritten note in Chinese character.
178The plaintiff gave evidence that she did not send a letter in that form to anyone at any time (T152). She gave evidence (at T152 to 156) as to a series of features of the composition of the letter indicating that it was not hers, including the form of address, the way in which the letter was set out and the fact that she would not have written Mr Fitzgibbon's name, or signed her own name, in English as they appear in exhibit D.
179The plaintiff also said that the handwritten note was not her handwriting. She did not say that the signature was not her signature, and it was not contended that the signature itself was forged. However, a submission was put that the document could have been prepared by cutting and pasting a sample of the plaintiff's genuine signature onto the letter. A handwriting expert called by the defendants gave evidence that the signature was likely to be that of the plaintiff but did not rule out the possibility that it had been placed there in the manner contended for on behalf of the plaintiff. Given that the newspaper obtained only an electronic copy of the letter, and was not in a position to produce the original letter, that possibility cannot be excluded.
180The plaintiff's evidence as to the second letter (exhibit G and RJB-21) was to like effect (at T157 to 160). Interestingly, the signature attributed to the plaintiff on that document appears slightly cut off or distorted at the bottom of the signature. The defendants' handwriting expert had not seen exhibit G before he gave evidence, and would not be drawn on that issue (see T247 to 250). Whilst his caution in declining to express an expert opinion impromptu in the witness box is understandable, the distortion is plain to the naked eye. The cause for its appearing that way is, of course, not established but it does provide some slim independent support for the plaintiff's contentions.
181The plaintiff was cross-examined as to the credibility of her denial that she had made payments to the persons listed in exhibit J. The defendants submitted, on the strength of that cross-examination, that she should not be accepted as a witness of truth. That submission rested heavily on the answers given by the plaintiff as to whether she knew one of the people on the list. The plaintiff said that she did not know that person in 1992. She later said, when asked as to his position in 2000 and 2001, "I did not know him. I do not know him". She later agreed that she had met him in 2001.
182The defendants' submissions have not persuaded me that I should treat the plaintiff as an unreliable witness on account of the answers given on that issue. A close consideration of the passages of the transcript relied upon by the defendants confirms my recollection of a confusing exchange between the witness and counsel. The submissions as to her alleged unreliability focus heavily on the fact that the answer quoted above was expressed in the present tense. However, due regard must be had for the fact that the plaintiff's evidence was given through an interpreter. It is not uncommon for confusion to arise as to the proper tense of an answer interpreted from another language.
183The cross-examiner's task was further complicated by the fact that the witness had before her both the Chinese document (exhibit J) and a translation of that document which, for reasons that are not clear to me, lists the names and alleged payments in a different order from the order in which they appear in exhibit J. When asked to explain her allegedly contradictory evidence, the plaintiff referred to the confusion between the Chinese list and the English list (T207.17). The defendants derided that response, submitting that the plaintiff was looking at the English language version of the list which had been numbered by her own counsel and put before her (T198.30). However, it is clear that the plaintiff had both versions before her during the relevant part of the cross-examination (see T194.27). It is difficult to know what version she was considering at various points (eg T194.7-194.42; T198.6-199.47).
184Having regard to all of those difficulties, I am not persuaded that the plaintiff was dishonest, or was prevaricating, as to whether or when she knew the person in question.
185There is a further issue that must be considered in respect of the forgery allegations. As noted above, the email correspondence between Mr Baker and the contact reveals that, shortly before publication of the newspaper articles, the contact informed Mr Baker that "Helen's handwritten papers" should not have been included among the documents sent to the defendants. In a separate email, he requested the newspaper not to publish "Helen's handwritten", evidently expressing fear as to the consequences for at least one of the sources if that were to occur.
186It is difficult to know what to make of that correspondence. The defendants submitted that the expression of such fears points strongly to the conclusion that the handwritten documents are genuine. They pointed to the unlikelihood that the sources would have asked The Age not to use the documents if they were forgeries prepared for the purpose of duping The Age. There is some force in that submission. However, the sudden change in attitude revealed in the correspondence between the contact and the defendants suggests other possibilities. After months of offering information for reward, the urgent request not to publish "Helen's handwritten" might equally reveal the recognition by the sources, after discussion among themselves, of a risk of being implicated in fraud. It is impossible to know, from the emails alone, where the truth lies.
187One difficulty in assessing the force of the defendants' submission arises from the fact that the relevant email exchanges were before me in redacted form. I have given close consideration to the emails in question (exhibits N and 2). I am left unable to draw any firm conclusion on that question.
188My conclusion as to the forgery allegations is that the handwritten documents may well have been falsely attributed to the plaintiff. I am firmer in that conclusion in respect of the handwritten list, which does not purport on its face to be the plaintiff's document. The defendants' reliance on it as such derives from its inclusion in the bundle provided to them as being the plaintiff's personal papers. Whether or not it was deliberately forged as a false document, it could well have been falsely or wrongly attributed to the plaintiff.
189As to the letters, the plaintiff's case rests unequivocally on a more serious allegation. Each letter bears a signature attributed to the plaintiff. In the absence of any suggestion that the signatures are not hers, the plaintiff is left to a case that someone deliberately appended her signature to a document that was not hers. As accepted by the defendants, however, it is not necessary to decide whether that occurred. It is enough to say that the plaintiff's evidence, the appearance of the second letter and the absence of any original documents point to the conclusion that it may well have occurred. My consideration of the email exchanges between Mr Baker and the sources (exhibit N) has neither reinforced nor derogated from that conclusion.
Did the defendants undertake not to disclose the identity of the sources?
190A further consideration relevant to the exercise of my discretion is whether the defendants undertook not to disclose the identity of the sources.
191As already noted, the 135 pages alleged to be the plaintiff's personal papers were provided to Mr Baker as attachments to seven emails (evidently owing to the fact that the amount of material was too great to be sent as a single attachment). Those emails were sent directly to Mr Baker by one of the sources, not by the contact. Otherwise, all of Mr Baker's correspondence was with the contact.
192The plaintiff noted that there was no request for confidentiality in any of those seven emails. However, the exchange of correspondence does reveal, in my view, that the sources did not wish to have their identity revealed.
193Separately, Mr McClintock submitted that the documents were not handed over in circumstances importing an obligation of confidentiality or suggesting that the identity of the sources was confidential. It may be acknowledged in that context that the primary focus of much of the early correspondence was the question of payment. The contact referred to the sources having been in contact with other media organisations attempting to sell the same material. That is perhaps a factor militating against the conclusion that confidentiality as to their own identities was a concern at that stage.
194Further, the position of the sources was not unequivocal on that issue. In particular, it is by no means clear that the sources were given to understand that it would be possible to protect their identity if the information supplied by them was used in an article published in the newspaper. In one email, the contact stated that if any parties such as Helen Liu wanted to buy the documents, "it is need our proving" (perhaps intended to read "approval"). That suggests that the sources' primary concern was to receive payment, not to conceal their identities.
195Other parts of the correspondence, however, suggest an understanding that the identities of the sources would not be disclosed to the public. The defendants made some express representations to that effect. On balance, I am persuaded that the correspondence proceeded largely on that premise.
"Helen's handwritten papers"
196There is, however, another aspect of the communications between the defendants and the sources which must be considered. As already explained, the defendants were informed that the 135 pages allegedly comprising the plaintiff's personal papers should not have included "Helen's handwritten papers". The correspondence suggests that one of the sources sent the papers voluntarily but was subsequently informed by the other source (not the contact) that the handwritten papers should not have been included in what was sent. The contact thereupon withdrew any request for money and said "just not mention Helen's handwritten please" (email dated 31 January 2010, page 53 of Exhibit N).
197The following day, the contact sought Mr Baker's word that the newspaper "won't publish Helen's handwritten please" and similarly conveyed a request on behalf of the source that the defendants "not publish about Helen's handwritten please". As noted above, there was some debate at the hearing as to the meaning of that and subsequent requests. In my view, it is clear that, from 31 January 2010, the sources were requesting the defendants not to use the handwritten papers in any publication.
198The night before the articles were published, Mr Baker responded to those requests by stating that, after discussing matter with the editors, it had been decided that the information was "of the highest importance to Australians in regards to honesty and integrity in our political system". He stated that the editors had accordingly decided to publish a story, based on the documents, in the near future. Mr Baker's email said:
We hold to our commitment to provide a research fee of a reasonable nature. We've not provided copies to any third parties and have not referred to any documents being hand-written. I understand your friend will be concerned but the fact is the public interest in the dishonesty being exposed is paramount. The identities of you and your friend have not been disclosed to anyone.
199The contact responded the next day (evidently after seeing the article) recording the anger of one of the sources at the contents of the article, which he said "will exposure Helen's handwritten". He expressed a concern that the publication of the article would force the newspaper to release those papers to a third party.
200I am satisfied that, as submitted on behalf of the plaintiff, the correspondence reveals that Mr Baker disobeyed a specific request made to him by the contact on behalf of the sources. It was clearly indicated, so far as at least one of the sources was concerned, that the handwritten papers had been included inadvertently among the documents sent. A request was made on that basis not to publish those papers. Contrary to that request, The Age published details of the handwritten papers on its front page.
201The newspaper's decision to use the handwritten documents in the face of requests from the contact not to do so had the tendency, in my view, to undermine the very protection sought to be achieved by the practice of not requiring journalists to disclose their sources unless such disclosure is necessary in the interests of justice.
202The nature of the protection sought to be achieved by the newspaper rule was explained by Dixon J in McGuinness at 104 (approved in Cojuangco at 355.5):
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...
203However, the protection of sources from disclosure of their identity is not a right or an end in itself. The rationale for the protection lies in the public interest in cultivating trust between sources and journalists as a boon to free speech and, in particular, free political discussion.
204The defendants unilaterally determined in the present case that the interests of the sources must yield to what the defendants claimed was a paramount public interest. It was that decision which exposed the sources to the risk of disclosure of their identity. Having invoked the relativity of competing interests as the basis for that decision, the defendants can hardly maintain that interests competing with the public interest in protecting confidentiality of journalists' sources must be set to one side in the determination of the present application. In my assessment, the force of the considerations underlying the newspaper rule is substantially lessened in the present circumstances.
205It is important, of course, not to overlook the interests of the sources. It is convenient to consider that issue in the context of the submissions put by the parties as to the application of s 126B of the Evidence Act , discussed below.
Section 126B of the Evidence Act
206Section 126B of the Evidence Act provides that the court may direct that evidence not be adduced in a proceeding if the court finds that adducing it would disclose:
(a) a protected confidence, or
(b) the contents of a document recording a protected confidence, or
(c) protected identity information.
207Section 131A of the Act extends the application of that provision to the present proceedings.
208The plaintiff acknowledged that the application of section 126B will have to be considered in the event that the Court is minded to grant the relief sought in the present proceedings. However, the plaintiff submitted, in effect, that the time for consideration as to whether such a direction should be given has not yet arisen. As noted on behalf of the defendants, if the Court did not make any direction at this stage but was satisfied that one must be given at any examination or in relation to any documents produced pursuant to an order under rule 5.2, the practical result would be the same.
209Section 126B(3) provides that the court must give a direction that the evidence not be adduced if it is satisfied that:
(a) it is likely that harm would or might be caused (whether directly or indirectly) to a protected confider if the evidence is adduced; and
(b) the nature and extent of the harm outweighs the desirability of the evidence being given.
210The defendants initially submitted that those requirements were satisfied on the strength of the affidavit evidence of their solicitor, Mr Bartlett. Mr Bartlett's evidence addressed, at a broad level, publicly available information concerning Chinese government intelligence services and China's military capabilities. The cogency and relevance of that evidence for present purposes was substantially overtaken by events during the course of the hearing. In my assessment, the question whether any direction should be made under s 126B should primarily be informed by the contents of the email exchanges now in evidence.
211Unfortunately, as already indicated, the extent of redaction of those emails substantially reduces their intelligibility. Further, it is difficult to form any conclusion as to the likelihood that harm might be caused to the sources on the strength of the emails alone, without knowing anything as to the identity or circumstances of the people behind them. For those reasons, I am not presently persuaded that any direction should be made under s 126B. As acknowledged by the plaintiff, that conclusion does not foreclose further consideration of that issue upon the making of orders under rule 5.2.
212Separately, the defendants submitted that the interests of the sources should be taken into account in determining whether to exercise the discretion to grant the relief sought by the plaintiff. The evidence as to that issue comes primarily from the contents of the email correspondence (Exhibits N and 2). That correspondence reveals that the sources initially contacted the defendants with a view to selling information. They sought payment in the order of $120,000. The defendants responded by offering up to $10,000. A suggestion that one of the sources might lose his employment upon providing the information was plainly tied to attempts to negotiate a higher payment in that context.
213As submitted on behalf of the plaintiff, the early correspondence did not include any explicit request that the defendants not disclose the identity of the sources. Rather, the focus of the correspondence was upon obtaining reassurances that the defendants would not sell the information to any third party without consulting the sources.
214A consideration of the emails in chronological order reveals that it was in fact the defendants who first volunteered that they would not disclose the identity of the sources.
215After considering the contents of the relevant correspondence before me (Exhibits N and 2), I am not persuaded that there is any tangible risk of adverse consequences to the sources in the event that their identity is revealed beyond the risk of their being sued for defamation and the consequential impact upon their relationship (if any) with the plaintiff.