Liu v The Age Company Ltd

Supreme Court of NSW|2011-02-10|Before: McCallum J

Judgment 1HER HONOUR : These are proceedings for preliminary discovery under Part 5.2 of the Uniform Civil Procedure Rules 2005. The application is brought in aid of proposed defamation proceedings in relation to two articles concerning the plaintiff, Ms Helen Liu, published in The Age on 3 February 2010 (exhibits B and C). The articles make reference to a collection of documents said to be Ms Liu's private records "obtained by The Age after a 10-month investigation". The identity of the people from whom those documents were obtained is not disclosed in either article. 2One of the articles states that the documents "show Ms Liu recorded her 1997-1998 payment of 850,000 Chinese Yuan - approximately $150,000 at the then current values - to Joel Fitzgibbon" (correctly identified at the time the article was published as "former defence Minister"). It is common ground that the document there referred to is the document that has been identified in the proceedings as "the handwritten list". The article also makes specific reference to a letter allegedly written by Ms Liu to a senior bank executive concerning Mr Fitzgibbon. 3Ms Liu alleges that, to the extent that those and other documents referred to in the articles purport to have been written by her, they are forgeries. The substance of the relief sought in these proceedings is to compel the newspaper and its journalists to disclose their sources. The defendants contend that they are bound in conscience not to disclose the identity of their sources or the contents of any communications with them. The relief sought, which is discretionary, is opposed on that basis. 4This judgment publishes my reasons for a number of procedural rulings given during the course of the hearing of the application.

Mr Baker's affidavit 25On 3 February 2011, I ruled on a series of objections to Mr Baker's affidavit. It is appropriate to state my reasons as to two determinations that governed the rulings I made. 26The first relates to the purpose for which a large amount of the evidence was to be admitted. Mr Baker had set out, at length, the investigations he undertook and the information he received during the course of his investigation culminating in the preparation and publication of the two articles. 27That evidence is plainly admissible for the purpose of establishing the fact that the defendants received such information during the course of preparation of the two articles. The relief sought by Ms Liu is discretionary. In opposition to her application, the defendants rely (among other things) on the considerations that underlie the newspaper rule, which are factors to be taken into account in the exercise of the Court's discretion: John Fairfax & Sons v Cojuangco [1988] HCA 54; 165 CLR 346 at [22], 357.1. In that context, plainly it will be relevant to consider the integrity of the investigation and whether the newspaper acted with "a due sense of responsibility" (as it was put by Lord Denning in British Steel v Granada Television (1981) AC 1096 at 1191, cited in Cojuangco at [12], 354.1). Mr McClintock did not oppose the admission of the material for that purpose. 28However, Mr Blackburn sought in addition to rely upon the material for the purpose of establishing the truth of its contents. That submission was made in the context that, for the reasons stated in my earlier judgment at [25] to [36], this hearing is being conducted on the premise that the proceedings are interlocutory. Accordingly, the hearsay rule does not apply if the party adducing the evidence also adduces evidence of its source: s 75 of the Evidence Act 1995. 29The fairness of admitting the evidence must nonetheless be considered in the context of the nature of the questions of fact that arise for the Court's determination. The defendants' case is that the very serious allegations concerning Ms Liu made in the two articles are true. As to most of the material objected to, I was of the view it was of insufficient relevance or weight in establishing the principal contentions against Ms Liu to warrant its being admitted for that purpose. As to much of the material, to allow the underlying factual contentions to be established by evidence in that form would have afforded Ms Liu no real opportunity to test the matters alleged which, in my view, would have been unfairly prejudicial to her. 30Accordingly, as to a number of paragraphs, I made an order pursuant to s 136 of the Evidence Act 1995 limiting the use to be made of the evidence to establishing what Mr Baker had in his possession and what information he took into account in the preparation of the two articles. I ruled that the evidence was not to be used for the purpose of establishing the truth of its contents. 31The paragraphs to which that ruling related (referred to as "the material admitted on the limited basis") were paragraphs 6 to 10, 12 to 14, 19 to 20, 43, 48 and 49 and the exhibits to those paragraphs. 32Paragraphs 6 to 10 and 12 to 14 set out "preliminary information provided by the sources", further inquiries made by Mr Baker of Mr Fitzgibbon (at the time he was the Defence Minister) concerning his relationship with Ms Liu and a disclosure to Parliament made by Mr Fitzgibbon shortly after that exchange of correspondence. Mr Blackburn submitted that a separate basis for admitting that material was that it included representations made by Mr Fitzgibbon in furtherance of a common purpose. He submitted that such representations should be taken to be admissions by Ms Liu admissible under s 87 of the Evidence Act . 33Section 87 provides: Admissions made with authority (1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that: (a) when the representation was made, the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made, or (b) when the representation was made, the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person's employment or authority, or (c) the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party. (2) For the purposes of this section, the hearsay rule does not apply to a previous representation made by a person that tends to prove: (a) that the person had authority to make statements on behalf of another person in relation to a matter, or (b) that the person was an employee of another person or had authority otherwise to act for another person, or (c) the scope of the person's employment or authority. 34Mr Blackburn submitted that the representations, considered in combination with other evidence, were some evidence of a common purpose Mr Fitzgibbon had with Ms Liu to receive payments, benefits and gifts from her. I was not satisfied that it was reasonably open, on the documents relied upon, to find that there was any such common purpose or that the representations made by Mr Fitzgibbon were made in furtherance of any such common purpose. 35Paragraphs 19 to 20 related to similar inquiries made of Mr Eric Fitzgibbon by the fourth defendant, Nick McKenzie. That material was admitted on the limited basis for the same reasons. 36Paragraph 43 exhibited a report prepared by a forensic accountant for the purpose of other proceedings in this Court. The report allegedly identifies "numerous unexplained payments" made to a solicitor, Mr Donald Junn, from the rental receipts of companies associated with Ms Liu. The report (exhibit RJB 30) is unsigned and marked "draft for discussion purposes only". The report was plainly not admissible in that form, except on the limited basis. 37Paragraphs 48 and 49 set out information relied upon by Mr Baker as tending to establish the likely authenticity of the handwritten list on the basis of its consistency with other material available to him. I considered that his view on those matters was not admissible except on the limited basis. 38The second determination as to which I should state my reasons relates to Mr Baker's evidence as to conversations he had with the solicitor, Mr Junn. The conversations are set out verbatim and in great detail in paragraphs 37 to 41 of Mr Baker's affidavit. Separately, documents were exhibited to the affidavit (in paragraphs 21 to 25) for the purpose of establishing that Mr Junn had frequently been retained as a solicitor by Ms Liu or companies associated with her. 39The defendants contend, in some instances on that basis alone, that a series of damning statements made to Mr Baker by Mr Junn amounted to admissions by Ms Liu made with her authority and were accordingly admissible under s 87 of the Evidence Act . 40To the extent that the submission was based on the contention that the statements were made in furtherance of a common purpose (s 87(1)(c)), in my view it was misconceived. There is simply no evidence that Mr Junn and Ms Liu reached any relevant arrangement or understanding to do anything together at all. 41As to whether any of the representations was made with Ms Liu's authority so as to attract the application of s 87(1)(a) or (b), a careful consideration of the content of the relevant paragraphs of Mr Baker's affidavit discloses no basis for that conclusion. 42Paragraph 37 of the affidavit sets out the conversation that is alleged to have taken place when Mr Baker first approached Mr Junn. It is quite plain from the terms of the conversation that Mr Junn can have had no authority to say anything on behalf of Ms Liu as to the substantive matters raised by Mr Baker during that conversation. Even assuming Ms Liu was Mr Junn's client in respect of that matter at that time (which is questionable) he had, so far as the affidavit discloses, obtained no instructions from her prior to the meeting as to the matters discussed. A solicitor is not cloaked with authority to make admissions on behalf of a client merely as a result of having previously being retained in other matters, or even as a result of being retained in the matter in question. 43The remaining paragraphs relate to two further conversations between Mr Baker and Mr Junn. As to the first further conversation, the statements made by Mr Junn were prefaced by the following remark made by him: I am trying to get her. She is apparently with people and the moment. I don't really expect her to authorise me to say anything. These are rather momentous matters for her. She is likely to consider it. 44I do not think it is reasonably open, in light of that statement, to find that any of the representations made in the balance of that conversation was an admission made with Ms Liu's authority. 45The next conversation was prefaced with the following exchange: Mr Baker: Do you have a response from Helen for us? Mr Junn: No I don't. She wants me to fly over to see her. 46I do not think it is reasonably open to conclude that any of the representations made following those prefatory statements was an admission made on behalf of Ms Liu with her authority. Mr Blackburn submitted that it could be concluded from that exchange that Mr Junn had by then spoken directly to Ms Liu and that, in that context, his failure to resile from anything he had previously said demonstrated that retrospective authority had been given by Ms Liu to make the representations he made. I do not accept that submission. That Mr Junn made full disclosure to Ms Liu as to all that he had said to Mr Baker is barely open as an inference. Leaving aside the temporal problem (that s 87 requires authority at the time the representation was made), I am not prepared to speculate as to what was said between Mr Junn and Ms Liu. 47For those reasons I rejected paragraphs 21 to 25 and 37 to 41 of Mr Baker's affidavit (paragraphs 37 to 41 were later admitted on the limited basis following Mr McClintock's cross-examination of Mr Baker). 48For the same reasons, I rejected the tender by Mr Blackburn of certain paragraphs of an affidavit sworn by Mr Junn and served but not read on behalf of Ms Liu.

Calls for documents made on 9 February 2011 49On 9 February 2011, Mr McClintock made a number of further calls for the production of documents for inspection on behalf of Ms Liu. He indicated that access was not sought by Ms Liu personally and that she was content, for the time being at least, for access to be confined to her legal representatives. 50The first call was for access to the documents produced to the Court last October in response to the notice to produce dated 13 September 2010. The documents identified in that notice are certain documents referred to in an affidavit sworn by the defendants' solicitor, Mr Peter Bartlett. As with the other documents produced to the Court at that time, access to those documents was not sought at the time they were produced. 51Secondly, Mr McClintock called on the plaintiff's Fifth Notice to Produce. The documents identified in that notice were certain documents referred to in an affidavit sworn by the second defendant, Mr Baker. The documents sought in that notice have not yet been produced to the Court. 52In addition, Mr McClintock renewed a call made during the hearing on 4 February 2011. The call made on that date arose as a result of the following exchange in Mr McClintock's cross-examination of Mr Baker (at T264.27): Q. I just want to go back to what's on page 44. What your evidence is, I take it now Mr Baker, is at the time you wrote these articles you did not know, because the source had not told you, whether or not the list was in my client's handwriting, is that your evidence? A. *No. My evidence is that in correspondence with the source, and we're asking questions about a number of documents in there, including the list, most obviously the list, the source came back expressing a fear about certain handwritten documents and one could only take that to be in reference to the questions I was asking. McCLINTOCK: I call for the production of the emails to which the witness has just referred. I want them produced now. I also renew my call for the document that conveyed the 135 pages that was said was handed over in late January that I sought before, and I ask for their production now. 53A short adjournment was granted to enable counsel for the defendants to consult with Mr Baker to obtain instructions in respect of the call. When the hearing resumed, several emails were produced in answer to the call for "the document that conveyed the 135 pages that was said was handed over in late January". However, those emails had no content except the words "subject documents". 54Mr McClintock then made a further call (at T266) in effect seeking any email that contained a description of the information that was being offered in the 135 pages said to be Ms Liu's personal papers. Mr Blackburn indicated on behalf of the defendants that he was not in a position to answer the call at that point, and Mr McClintock was prevailed upon (by me) to continue his cross-examination. He indicated, however, that he wished to see the documents before concluding his cross-examination of Mr Baker. That is the call renewed on 9 February 2011. 55Finally, presumably for abundance of caution, Mr McClintock called for the complete exchange of correspondence between Mr Baker and his contact to the extent that any email forming part of that exchange was not caught by any of the earlier calls.

Documents sought by the Notices to Produce 56Mr McClintock identified two grounds for the calls. First, as to the documents sought by the two notices to produce, he relied upon rule 21.10(1) of the Uniform Civil Procedure Rules 2005. That rule provides: (1) Party A may, by notice served on party B, require party B to produce for inspection by party A: (a) any document or thing that is referred to in any originating process, pleading, affidavit or witness statement filed or served by party B, and (b) any other specific document or thing that is clearly identified in the notice and is relevant to a fact in issue. 57Secondly, Mr McClintock relied upon the power of the Court to make an order akin to a subpoena order requiring production of documents to the Court (presumably under s 68 of the Civil Procedure Act 2005). 58In order to explain the issues raised by the calls, it is necessary to record something of the history of the proceedings. When the hearing of the proceedings commenced in October last year, the defendants sought to rely on the affidavit of Mr Bartlett to which I have already referred. That affidavit sought to explain, on information and belief, the basis on which the defendants contend that they are bound by undertakings of confidentiality not to disclose the identity of their sources. 59For the reasons explained in my earlier judgment, I rejected the evidence in that form but afforded an opportunity to the defendants to put on further evidence. 60Mr Blackburn submitted on behalf of the defendants that, in light of the rejection of the evidence, the purpose of the entitlement to make a call under rule 21.10 is spent. In my view, that submission assumes that the entitlement is more narrowly constrained than is the case. 61Unlike a number of production powers and obligations (such as the subpoena power and the discovery obligation), the entitlement of a party to require production for inspection of a document referred to in an affidavit is not expressly constrained by the requirement that the document be relevant to a fact in issue. That may be because, as suggested in the annotations to the rule in Ritchie's Uniform Civil Procedure New South Wales , the rule implicitly assumes the likely relevance of a document that has been "referred to" in a pleading, affidavit or other document to which the rule applies. 62Alternatively, the rule may be intended to give effect to a principle that a party who chooses to refer to a document in a pleading or affidavit should not be permitted to oppose production of the document for inspection, whether or not it is relevant to a fact in issue. That is not an unlikely construction of the rule. In any event, it is not necessary for me to determine that question. Assuming (conservatively) that a party may be excused from producing for inspection a document referred to in an affidavit on the grounds that the document is not relevant to any fact in issue, the relevance of the documents referred to in Mr Bartlett's affidavit in the present case is manifest. 63Indeed it is plain that the documents were referred to by Mr Bartlett for the purpose of supporting the defendants' case as to a critical fact in issue in the proceedings, namely, whether the defendants are bound in conscience not to disclose the identity of their sources, in light of undertakings allegedly given to the sources in the very communications now sought. 64Further, nothing in the terms of rule 21.10(1)(a) lends any support to the proposition that the obligation to produce a document expires upon rejection of the relevant part of the affidavit. The contention that it does lacks any force, in my view, in the circumstance where (as in the present case) the affidavit was rejected on the grounds of form, not for want of relevance. 65For those reasons, I was satisfied that the specific documents referred to in the affidavit of Mr Bartlett and in the affidavit of Mr Baker were liable to be produced for inspection, notwithstanding the fact that some of the relevant parts of the affidavits were not admitted into evidence. For the reasons explained below, that ruling did not extend to the documents identified in paragraphs 3(b) and 4 of the Notice to Produce dated 13 September 2010.

Documents describing the information offered by the sources 66As to the documents called for at T266, Mr Blackburn indicated during argument that the defendants would not resist an order requiring production of documents identified as follows: Any document recording or referring to the personal papers of the plaintiff referred to in the articles published in The Age (Exhibits B and C) or containing any description of the information that the contact or sources were offering to supply to The Age, except to the extent that those documents need to be redacted to conceal material which tends to identify any of the sources . 67Accordingly, I made an order requiring documents answering that description to be produced. 68As to the broader call made by Mr McClintock during argument for all correspondence between Mr Baker and the contact, which I deferred for further consideration, my present view is that the defendants should not be required to produce documents in answer to that call (except to the extent that any such document is required to be produced in answer to either of the notices to produce or the call expressed in the agreed terms set out above). The principal forensic basis identified for a call in such terms was that it might disclose a failure on Mr Baker's part to make reasonable inquiries as to the provenance of the documents provided to him. However, in light of the terms of the other calls, that would be demonstrated (if it were the case) by an absence of any such email among the material to be produced. 69Further correspondence from the defendants on that issue sent to the Court during the evening during which they were required to collate and redact the relevant documents noted that the documents identified in some parts of the notice to produce fall into the same category, effectively seeking the entire chain of communication. I indicated in response to that correspondence that the defendants would not be required to produce the documents identified in paragraphs 3(b) and 4 of the notice to produce dated 13 September 2010 without having an opportunity to be heard further as to those paragraphs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 February 2011

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