McMahon v John Fairfax Publications Pty Limited

Judgment 1These are proceedings for defamation and injurious falsehood arising out of the publication of two articles in the Australian Financial Review . The proceedings are being tried before me with a jury. 2The plaintiff has objected to a number of documents tendered by the defendants. These are my rulings and reasons in respect of those objections.

Summary of expenditure on overseas trips 3During his cross-examination of the plaintiff, Mr Dawson directed certain questions to the issue of the plaintiff's expenditure on overseas trips during the period from August 2004 to October 2005. In response to a relevance objection taken by Mr McClintock, Mr Dawson submitted that the questions went to two issues. 4First, it was submitted that they fell within the scope of the defence of substantial truth pleaded by the defendants, specifically in respect of imputations (b) and (c) relied upon by the plaintiff as arising from the first article. 5Imputation (b) is: That the plaintiff behaved in a dishonourable way by permitting his old firm to go into administration and, on the same day, opening a new firm. 6The particulars of truth relied upon to justify that imputation included a list of the debts the plaintiff had in the period from July to October 2007, which included debts on three credit cards totalling over $110,000. 7In an amended defence propounded shortly before the commencement of the trial, the defendants sought to recast those particulars by characterising "the plaintiff's expenditure on credit cards" as a particular of the allegation that "the plaintiff engaged in an extravagant and expensive lifestyle, funded by his firm's revenue, which led to further financial difficulties for him and his firm and contributed to his personal bankruptcy and the collapse of his firm in early October 2007". 8Imputation (c) relied upon by the plaintiff in respect of the first article is: That the plaintiff cheated the staff of his firm by failing to pay the superannuation monies which they were owed. 9The particulars of truth relied upon to justify that imputation include the allegation that, prior to 2 October 2007, the plaintiff had substantial outstanding debts including his credit card accounts. 10The second issue to which the cross examination was directed was credit. The credit issue arose in the following way. On 2 October 2007, the plaintiff became bankrupt on his own petition. That was a "show cause event" under the Legal Profession Act 2004 (as defined in section 4 of the Act). The plaintiff adduced into evidence his statement to the Law Society Council made pursuant to section 67(2)(b) of the Act in which he sought to explain why, despite the show cause event, he considered himself to be a fit and proper person to hold a practising certificate (Exhibit R). In that document, the plaintiff said, under the heading "Lifestyle": I do not and have not led an extravagant lifestyle. I have only had one holiday in the past two years and that was my honeymoon in October last year. This was within Australia and was for only ten days. I do not gamble and have not had significant investments. I don't believe that my drawings have been a burden on the firm. 11By the cross examination, the defendants sought to establish (as an issue going to credit) that the letter was deliberately selective as to the period of time referred to and misrepresented the true position so far as holidays were concerned. 12As to whether the cross examination was relevant to the truth defence, Mr McClintock complained that the particulars given in the defence went only to the aggregate level of debt and that the plaintiff was prejudiced by the failure to particularise the individual holidays as incidents of extravagant expenditure. 13Had that been the only issue to which the cross-examination was directed, I might have contained it. I had some reservations as to the fairness of permitting the defendants to rely on individual items of expenditure having regard to the generality of the particulars to which I have referred. However, I was satisfied that the evidence could substantially affect the assessment of the plaintiff's credibility, having regard to the representations he made to the Law Society in Exhibit R. Accordingly, I determined that the cross examination was permissible in accordance with s 103 of the Evidence Act 1995. Since the basis for permitting the cross examination to proceed was that it went to the issue of credibility, I acceded to a submission put by Mr McClintock that the plaintiff should not be questioned about the specifics of the credit card and bank statements sought to be put before him by Mr Dawson except as provided by s44 of the Evidence Act (see T682-689). 14In the cross examination that followed, it was put to Mr McMahon that he spent a total of about $29,000 on a trip to Europe and Thailand in late 2004, just under $28,000 on a trip to Hong Kong and China in early 2005 and just under $32,000 on a trip in late 2005 to Montreal, Havana, Quebec, New York, London, Paris, Bangkok and Chiang Mai. Mr McMahon accepted that he had travelled to all of those places. However, his response to the propositions as to his expenditure was that he was unable to answer without looking at the bank statements in question. Assuming the correctness of the figures, he did not agree that it was extravagant to spend $90,000 on overseas holidays within a 15-month period (T695). 15In re-examination, Mr McMahon said that he had checked the figures and that he was "nowhere near $90,000" (T771). In those circumstances, Mr Dawson now tenders the credit card and bank statements as being admissible under s 106 of the Evidence Act . In response to a concern expressed by me as to material in those statements unrelated to the overseas trips, the defendants prepared a summary of the relevant items which it was suggested might be admissible in accordance with s 50 of the Act. 16In opposition to the tender, the plaintiff repeated the submissions made when the cross examination began, to which I have already referred. It was further submitted that, if the documents went only to credit, it would be unfair to admit them because a bare addition of the amounts in question does not distinguish business expenses from personal expenses. Mr McMahon drew no such distinction in his evidence in re-examination that the amount in question was "nowhere near" $90,000. He did say in cross examination that two of the trips involved trips to London to see Lloyds underwriters, which he described as being a necessary part of the conduct of his practice. He said that he spent about a week to two weeks in London (T693) but did not say how much of that time was spent on business, or how much of his expenditure was attributable to business activities. 17In light of the evidence given in re-examination, I was satisfied that the evidence was properly admissible under s 106. I determined that I would hear the plaintiff as to whether the evidence should be admitted in the form of the summary prepared by the defendants or by redacting the relevant bank statements.