Liu v The Age Company & Ors

(c) the first defendant received a further email from the Contact on 31 March 2009 stressing that the information that the sources wished to discuss was very sensitive and requiring confidentiality;

(d) the second defendant subsequently responded to the Contact's two emails and between June 2009 and February 2010 engaged in a series of communications with the Contact regarding the sources' offer to provide information and documents and the terms on which such information might be provided; …. (f) in the course of this correspondence and as a consequence of independent investigations conducted by the second and third defendants, the defendants were able to verify the identity of the Contact and form a view as to the sources' credibility. The defendants achieved this by testing the accuracy of certain preliminary pieces of information provided by the sources concerning the plaintiff during this initial correspondence. The defendants were able to verify this information by cross-referencing it to information obtained from other sources and channels, as well as publicly available information such as corporate records, Chinese news websites and specific editions of Chinese newspapers. In every such instance, the information provided by the sources was able to be verified. The defendants thus satisfied themselves that the sources were credible and could be trusted to provide accurate and truthful information concerning the plaintiff;

(g) also, in the course of this initial correspondence, the sources required on a number of occasions that their identities be kept confidential as a condition of providing any information or documents, and the second defendant gave (on behalf of the first defendant) confidentiality undertakings not to reveal the sources' identities. In particular: (i) on 27 September 2009, the second defendant received an email from the Contact in which the Contact expressed the concern that one of the sources would lose their job should their identity be disclosed to the plaintiff or publicly; (ii) on 28 September 2009, the second defendant sent an email to the Contact in which he stressed that the first defendant would keep its dealings with the sources completely confidential and that their identities would be protected in all cases;

(iii) on 14 October 2009, the second defendant received an email from the Contact in which the Contact reiterated the sources' requirement that their identities not be disclosed to any person in any situation;

(iv) on 30 November 2009, the second defendant sent an email to the Contact in which he stressed that the first defendant would take every step possible to protect the identities of the sources; (v) on 29 January 2010, the second defendant sent an email to the Contact in which he asked whether publication by the first defendant might expose one of the sources to any danger, and re-confirmed that the first defendant would not disclose the identity of the sources; (vi) on 1 February 2010, the second defendant received an email from the Contact in which the Contact expressed the concern that publication of any document with the plaintiff's handwriting on it might identify the sources and lead to one of their families being hurt; and

(vii) on 3 February 2010, the second defendant received an email from the Contact in which the Contact expressed the concern that disclosure of the identity of the sources might cause a tragedy to one of their families; (h) the sources are deeply concerned that their identities remain confidential and are fearful of reprisals should their identities be revealed; (i) the sources fear that disclosure of any particulars relating to them may be sufficient to reveal their identities, and they have told the second defendant that only a small number of people had access to the Documents; …" 22 Mr Blackburn accepted that much of that evidence is hearsay and, indeed, double hearsay. He submitted, however, that the present proceeding is interlocutory and that the evidence is accordingly admissible under s 75 of the Evidence Act 1995. 23 The first question is whether the proceeding is interlocutory. Uninformed by authority, I would have been confident that it is not. The test as to what is an interlocutory proceeding is easily stated but notoriously elusive in its application. The test is whether the proceeding will finally determine the rights of the parties in respect of the dispute. Its elusive quality lies in the scope for disagreement as to the juridical parameters of the relevant dispute. 24 The present proceedings were commenced by summons. Mr Blackburn submitted that the application should more properly have been brought by notice of motion in the earlier proceedings brought against the proprietor of The Age, but that is by no means clear. The last orders made in those proceedings included orders that the summons be dismissed but also that the plaintiff have leave to file a statement of claim. Ms Liu has not filed a statement of claim in accordance with the leave ostensibly granted. It is not clear to me whether those proceedings should be regarded as remaining on foot in the circumstances. 25 In Levis v McDonald (1997) 75 FCR 36, Lindgren J expressed the view that an application for preliminary discovery under the equivalent provision of the Federal Court Rules: "is not an interlocutory proceeding, since the relief provided for finally determines the rights of the parties in relation to the particular issue tendered for decision, that is to say, the issue whether the person concerned is to be ordered to do the things provided for in the rule." 26 I would respectfully agree with that analysis. There is, however, a body of authority to different effect. The authorities relied upon by Mr Blackburn on this question included Hall v Nominal Defendant (1966) 117 CLR 423; Ex Parte Britt (1987) 1 Qd R 221; Herald & Weekly Times Ltd v Guide Dog Owners & Friends Assoc [1990] VR 451; Brouwer v Titan Corp Ltd (1997) 73 FCR 241; London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932 and Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2007] FCA 1560; 163 FCR 554. 27 Whilst I do not think those other authorities compel the conclusion that the hearing of the summons in the present matter is an interlocutory proceeding, I respectfully accept that the weight of authority appears to be against my view. 28 The decision of the High Court in Hall provides useful guidance as to the test as to what is a final order, but that was a case involving an application for extension of time against the proposed defendant to the barred proceedings. I note that Windeyer J posed the question in these terms: "Does [the order] put an end to an existing dispute or existing action?" I think that approach is consistent with my analysis in the present case. 29 The decision of McPherson J in Britt was also concerned with an application for an extension of the time within which to give notice of a motor accident claim to the nominal defendant. 30 Herald & Weekly Times v Guide Dog Owners was an application of the same kind as is brought in the present proceeding. It appears, however, that the application was brought in existing defamation proceedings against the media defendants. The Victorian Court of Appeal held that the proceeding was interlocutory because the order merely set in motion an investigation by examination of documents and persons and did not fully exercise the rights of the plaintiff to the discovery sought: at 455.45 per O'Bryan J; at 461.45 per Marks J; Murphy J agreeing. 31 In Brouwer, the Full Court of the Federal Court held that an order for the production of documents by a non-party to proceedings is interlocutory in nature for the purposes of determining whether leave to appeal should be granted. The basis for that decision was that the word "interlocutory", in that particular context, was to be understood as bearing a meaning by reference to the meaning of the word "final". The Court noted that the final orders to be made in the proceedings would be the orders that finally determined the rights of the parties to those proceedings. The significant factor was that the party against whom the production order had been made was a stranger to the proceedings. 32 In London Economics, Finkelstein J expressly disagreed with the decision of Lindgren J in Levis and ventured the view (at [21]) that his Honour would have reached a different conclusion had he been referred to a number of decisions to the opposite effect, including Herald & Weekly Times v Guide Dog Owners. 33 In Optiver, Tamberlin J, noting (at [10]) that the test is whether the determination of the application finally disposes of the rights of the parties, stated that the question arose in that case whether the rights referred to were the substantive rights on the final hearing of the prospective action which may be instituted or the rights affected by an order under the relevant rule to produce documents. It is not clear to me whether, in Optiver, the respondent to the application for preliminary discovery was the prospective respondent to the claim in aid of which the application was brought. 34 The position in the present case is that the application is brought in aid of a potential claim against third parties. I accept that the defendants to the present application are among the potential defendants to any claim in defamation brought by Ms Liu in respect of the article. However, it is no part of the present application to ascertain whether Ms Liu has a potential cause of action against the present defendants. That she does is plain. 35 The purpose of the present application is discrete. It is to enable Ms Liu to identify persons other than the present defendants who may separately be liable to her, either as publishers of the proposed matter complained of or on some other basis arising out of the alleged forgeries. In my view, the proper analysis is that the rights of the parties raised by the present application are, on the one hand, Ms Liu's right to invoke the Court's discretionary power under Part 5.2 to compel disclosure of the identity of the sources of the documents and, on the other hand, the newspaper's right to oppose the exercise of that discretion. The determination of the present application will finally dispose of those rights. 36 However, in light of the contrary view taken in the cases relied upon by Mr Blackburn, it is prudent to consider Mr McClintock's objection on the premise (with which I do not agree) that the present proceeding is interlocutory. 37 The second question is whether, assuming the proceeding is interlocutory, the evidence is admissible under s 75 of the Evidence Act. That section provides: "In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source." 38 As I have already noted, Mr Bartlett's evidence is, in large measure, double hearsay. Such evidence is not in itself necessarily inadmissible in an interlocutory proceeding: see Bray v F Hoffman-La Roche Limited [2002] FCA 243; 118 FCR 1 at [117]. 39 In my view, however, s 75 applies in that circumstance to both levels of hearsay. The section creates an exception to the hearsay rule subject to a condition, namely, that the party adducing the evidence also adduces evidence of its source. Mr Bartlett has identified the source of his information (the second defendant) but the second defendant has not, in turn, identified the source or sources of his. 40 Mr Blackburn submitted that, in the context of the present application, where the right to seek disclosure of that information is the very cause of action against his clients, it would operate unfairly on the newspaper to construe s 75 so as to require the newspaper to adduce evidence identifying the sources of the hearsay evidence. He submitted that that construction would have the result of precluding a defendant to an application of the present kind from ever using information provided by the relevant source to resist the application. 41 An answer to that submission, although it is perhaps not an entirely satisfactory answer, is that it appears to be what is required by s 75. In any event, in my view, there is good reason for imposing such a requirement. It is plainly calculated to mitigate the risks inherent in hearsay evidence. 42 In Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 949, Palmer J held that the requirement of s 75 to adduce evidence of the source of the hearsay evidence was not fulfilled in that case by references in correspondence to "our client". His Honour noted that the purpose of s 75 is to facilitate the conduct of interlocutory proceedings in circumstances where it is difficult at short notice to adduce evidence in direct and admissible form. His Honour observed, however: "without any indication of the source of the evidence proffered on information and belief, the Court is unable to assess its weight, nor can the opponent test the evidence or make any sensible submission as to its weight". 43 Those remarks were cited with approval in New South Crime Commission v Vu [2009] NSWCA 349 at [45] per Spigelman CJ; Allsop P and Hodgson JA agreeing at [55] and [59] respectively. In that case, the Chief Justice observed that nothing in s 75 suggests that it is necessary to provide evidence of the ultimate source of the information contained in the hearsay statement. However, his Honour implicitly endorsed (at [46]) the proposition that the task of assessing the weight of the evidence in question requires identification of a person reasonably likely to have knowledge of the relevant fact. 44 The failure to adduce evidence of the source of the hearsay evidence was not due to any exigencies of time in the present case. It was deliberate, for the perfectly acceptable reason that to identify the source would defeat any resistance to Ms Liu's application. Nonetheless, I think the simple result is that the evidence is inadmissible. 45 I note that it would have been open to the defendants to seek to adduce the evidence in admissible form by tendering the relevant correspondence with the sources, masking the names of the sources and any other identifying information. I do not mean to rule pre-emptively that the evidence would be admissible in that form, but it is a course that could have been pursued. 46 In any event, I am satisfied that the evidence of Mr Bartlett objected to by Mr McClintock does not fall within the exception under s 75 and, accordingly, that the evidence must be rejected. 47 In case my analysis of s 75 is wrong, I should add that, even if the evidence were capable of falling within the exception to the hearsay rule under that section, I would exercise my discretion under s 135 of the Act to refuse to admit the evidence on the basis that its probative value is substantially outweighed by the danger that it might be unfairly prejudicial to the plaintiff. The prejudice of being unable to test the evidence or make any meaningful submission as to its weight is manifest. The probative value of the evidence in its current form is extremely low. 48 For those reasons, paragraphs 35(b), (c), (d), (g), (h) and (i) of Mr Bartlett's first affidavit are rejected. 49 Paragraph 35(f) was the subject of an objection as to form. I indicated separately at the hearing that I would reject that paragraph.

50 The final task in this judgment is to publish my reasons for rejecting the evidence of Chris Masters sought to be relied upon by the newspaper. Mr Masters is a well-known Australian journalist. He swore an affidavit setting out his experience over many years of obtaining information from sources who have demanded confidentiality. He gave a series of examples of significant stories published by him based on information provided to him by such sources. 51 The affidavit provided a welcome distraction from the tedium of evaluating contested evidence. It was an interesting, if incomplete, review of important achievements in Australian journalism and made compelling reading. In my view, however, its probative value was very slight, for the simple reason that the matters it established are entirely unexceptionable and in accordance with human experience and common sense. 52 Mr Blackburn relied on the affidavit as support for the inference that the protection of the identity of journalists' sources is valuable and desirable because it tends to expose corruption and malpractice by bringing it to light in the independent press; that such protection is an effective and important means of promoting accountability and the public interest; that it is "a healthy thing" that people expose corruption and that such exposure is more likely to be made in circumstances where the informant is protected; and that Part 5.2 is likely to inhibit political communications made to journalists because a requirement to divulge sources would make it less likely that such information would be divulged. 53 Similar propositions as to the public interest in the free flow of information, and the undesirability in that context of compelling journalists to disclose their sources, were readily accepted by the High Court in John Fairfax and Sons Limited v Cojuangco (1988) 165 CLR 346 without proof of the experience of esteemed journalists. 54 Mr McClintock indicated that, if the affidavit were admitted, he would wish to cross-examine Mr Masters as to the equally unexceptionable proposition that the publication of false information can do great harm to individual reputation. In light of the obviousness of that proposition, I formed the view that such cross-examination would result in undue waste of Court time. Accordingly, I excluded the affidavit in exercise of my discretion under s 135 of the Evidence Act. **********

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