Nu-Tec v ABC

Goldsworthy v Radio 2UE Sydney Pty Limited (unreported 22 March 1999) Greig v WIN Television NSW Pty Limited [2009] NSWSC 632 Griffith v Australian Broadcasting Corporation [2003] NSWSC 483 CASES CITED : McKenzie v Mervyn Holdings Pty Ltd & Anor (1990) 20 NSWLR 42 Mirror Newspapers v World Hosts (1979) 53 ALJR Morgan v Odhams Press Ltd (1971) 1 WLR 1239 Radio 2UE Sydney Pty Limited v Parker (1992) 29 NSWLR 448 Vacik Distributors Pty Limited v Australian Broadcasting Corporation (unreported 4 November 1999)

Nuclear Utility Technology & Environmental Corporation Inc (Nu-Tec) (1st Plaintiff) PARTIES : Brian Robertson (2nd Plaintiff) Gregory Symons (3rd Plaintiff) Australian Broadcasting Corporation (Defendant)

COUNSEL : Ms D Reid / Ms L Brown (Plaintiffs) Mr A T S Dawson (Defendant)

SOLICITORS : R A Bayliss & Co Solicitors (Plaintiffs) ABC Legal Services (Defendant)

• 2 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

2006/266839 NUCLEAR UTILITY TECHNOLOGY & ENVIRONMENTAL CORPORATION INC (NU-TEC), & ORS v AUSTRALIAN BROADCASTING CORPORATION

JUDGMENT 1 HER HONOUR: These are proceedings for defamation arising out of the defendant's broadcast of two programmes on the 7.30 Report on ABC television. The programmes were broadcast on 21 and 22 March 2005. The proceedings are accordingly governed by the Defamation Act 1974, which has since been repealed (see Defamation Act 2005, Schedule 4, clause 2(3)). 2 The second and third plaintiffs' claims were tried before a jury in accordance with s 7A of the 1974 Act. The trial concluded last week, on 23 June 2010. I made two rulings during the trial as to which I reserved my reasons, so as not to detain the jury. These are my reasons for those two decisions.

Transcripts of the broadcasts 3 The first issue was the admissibility of a transcript of each of the two broadcasts. There was already in evidence a recording of each broadcast on DVD. Ms Reid, who appeared with Ms Brown for the plaintiffs, noted that the jury would have those discs with them as exhibits in the jury room. She submitted, in effect, that it would make no difference for the jury also to have the transcripts and that they may be assisted by having them. 4 Different views have been expressed as to both the permissibility and the desirability of that course. In Radio 2UE Sydney Pty Limited v Parker (1992) 29 NSWLR 448, three judges of the Court of Appeal were in agreement that a transcript of a radio broadcast sued on in a defamation case should not be admitted into evidence where there is no difficulty in understanding the tape played before the jury: at 472G - 473E per Clarke JA, Cripps JA agreeing; per Handley JA at 474B. Clarke JA emphasised the general principle that the meaning drawn from a broadcast by the ordinary, reasonable listener or viewer (who sees it only once) is in many cases a matter of impression. In that context, his Honour saw force in the contention that a transcript could only have distracted the jury from their task of assessing the matter from that perspective. 5 Parker was decided before the commencement of the Evidence Act 1995. In Goldsworthy v Radio 2UE Sydney Pty Limited (unreported 22 March 1999), Dunford J held that under s 48(1)(c) of the Evidence Act, both a tape of a radio broadcast and a transcript of it are admissible. However, his Honour saw "some difficulty in a transcript in that the provision of a written transcript of what was said may tend to mislead the jury into considering the material as if it were print media, eg a book or newspaper, rather than an oral broadcast". On that basis, his Honour admitted the tape but exercised his discretion under s 135 of the Evidence Act to exclude the transcript. 6 In Vacik Distributors Pty Limited v Australian Broadcasting Corporation (unreported 4 November 1999), Sperling J took a different view. His Honour reached the same conclusion as had Dunford J that the transcript was admissible under s 48(1)(c) of the Evidence Act, subject only to the exercise of the Court's discretion pursuant to s 135. The discretion to refuse to admit evidence under that section arises if the probative value of the evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, misleading or confusing or cause or result in undue waste of time. 7 Sperling J acknowledged that, where a tape of the broadcast is available and the only use for a transcript is as an aide-mémoire or for ease of reference, the transcript should not be regarded as having any significant probative value at all. On that basis, his Honour accepted that, if there was any significant unfair prejudice to a defendant of admitting a transcript, that prejudice "would necessarily substantially outweigh the probative value of the evidence for the purposes of s 135". 8 Sperling J was of the view, however, that the admission of a transcript did not entail prejudice of the kind perceived by Clarke JA in Parker. His Honour noted (as Clarke JA had) that much of what occurs at a trial in which a jury determines the question of defamatory meaning has a tendency to distract the jury from the task of assessing the effect of the broadcast at the time it was published, given that the ordinary reasonable viewer would have seen it only once. Sperling J concluded that an accurate transcript is an aid to that task, rather than a distraction from its proper performance. 9 Counsel informed me that the most recent substantive consideration of the issue is contained in the decision of Levine J in Griffith v Australian Broadcasting Corporation [2003] NSWSC 483. In that case, Levine J came to a different conclusion (from that reached by Sperling J) as to the threshold question of admissibility. His Honour considered that, since the "best" evidence of the broadcast (a tape or a disc) is before the jury, there is no fact in issue to which a transcript of the broadcast can be relevant. On that basis, his Honour held (at [13]) that a transcript is not relevant evidence within the meaning of s 55 of the Evidence Act and, accordingly, that it is not admissible under s 56 of the Act. On that analysis, s 48(1)(c) of the Act did not assist. 10 Levine J stated further (at [14]), in case his primary analysis was wrong, that he would certainly exercise his discretion under s 135 so as to exclude the transcript. His Honour emphasised the importance of the concept of "impression" in relation to transient publications and did not agree with the analysis of Sperling J in Vacik that an accurate transcript is a proper aid to the jury's assessment of that impression. 11 The conclusion reached by Levine J that a transcript of a broadcast is not "relevant" within the meaning of s 55 of the Act where a tape or disc recording of the broadcast is available to be put before the jury may be open to debate. Assuming the tape itself is admissible, it is probably a "document in question" as defined in s 47. On that basis, there may be force in the view expressed by Dunford J in Goldsworthy that a transcript of the tape is admissible by reason of the operation of s 48(1)(c). 12 However, it is not necessary for me to decide that question. Assuming for present purposes that the transcript is admissible, I would exercise my discretion under s 135 to exclude it, for the reasons explained by Clarke JA in Parker, by Dunford J in Goldsworthy and by Levine J in Griffith. In my view, there is a significant danger that the availability of a written version of a transient publication would compromise the already difficult task for the jury of assessing the likely impression of the publication on the viewer who saw it once, in its original form, as an ordinary, reasonable member of the community would see it. 13 Further, as noted by Levine J in Griffith at [11] (and accepted by Sperling J in Vacik), the probative value of a transcript is negligible where a tape or disc that can be understood is available to the jury. In my view, the probative value is plainly outweighed by the danger to which I have referred.

14 For those reasons, I rejected the tender of the two transcripts.

Dismissal of the claim brought by the second plaintiff 15 The second issue arose when, after the plaintiffs had closed their case, the ABC made an application under r 29.9(1) of the Uniform Civil Procedure Rules 2005. That rule provides: "(1) A defendant in proceedings in which the plaintiff is the beginning party may apply to the court for an order: (a) for the dismissal of the proceedings, or (b) for the dismissal of the proceedings to the extent to which they concern any cause of action relevant to the plaintiff's claim for relief against that defendant, on the ground that, on the evidence given, a judgment for the plaintiff could not be supported." 16 The application was made in the following context. The second plaintiff, Mr Robertson, is not named in either of the broadcasts sued on in these proceedings. It was accordingly necessary for him to establish that the broadcasts identified him as the subject of any defamatory imputation they conveyed. 17 The principles as to identification of a plaintiff in proceedings for defamation are well-known. In Morgan v Odhams Press Ltd (1971) 1 WLR 1239, Lord Morris said (at 1252): "The question for the Judge at the end of the plaintiff's case was whether there was evidence upon which the jury could (not would) decide in favour of the plaintiff. That in turn raised the question whether the jury could decide that some readers (having knowledge of certain circumstances) would reasonably understand the words as referring to the plaintiff. If no reasonable reader could have understood the words as referring to the plaintiff, then there would be nothing to be left to the jury." 18 The test assumes that the identifying circumstances known to some readers or viewers are circumstances that in fact exist. A publisher is not liable for a defamatory meaning imputed to the plaintiff as a result of some erroneous belief on the part of a person to whom the matter is published. That proposition is well established in the context of true innuendo: Mirror Newspapers v World Hosts (1979) 53 ALJR at 246. The position is no different in respect of particulars of identification. 19 Mr Robertson's case was, in substance, that the criticism levelled at Nu-Tec and Mr Symons in the two programmes reflected on him because he was a director of Nu-Tec and was involved in its management. He sought to establish that the programmes were viewed by at least two persons who knew those facts, Mr Peter Koltai and Mr Graham Thomas. 20 Mr Robertson sought to establish that the following circumstances were known to those two gentlemen:

(a) Nuclear Utility Technology and Environmental Corporation (Nu-Tec) had three directors comprising Mr Robertson and Mr Symons and a third director who resided in the United States;

(b) Mr Robertson and Mr Symons were directors of Nu-Tec;

(d) The votes of Mr Robertson and Mr Symons determined the implementation of the procedure, policies and conduct of Nu-Tec. 21 It was common ground at the trial that the references to Nu-Tec were references to the company incorporated in Delaware (formerly the first plaintiff in these proceedings), not a company of the same name incorporated in Nevada. An earlier round in these proceedings had seen confusion in that respect, the detail of which is recorded in my judgment given 1 May 2008. 22 Before a case could go to the jury on that basis, it was necessary for there to be evidence capable of establishing the existence of the circumstances allegedly known to the two identification witnesses, that is, evidence capable of establishing that Mr Robertson was a director of Nu-Tec or that he was involved in its management. 23 One might have thought it to be a relatively simple matter for Mr Robertson to establish that he was a director of Nu-Tec at some relevant point of time. In the case of a company incorporated in one of the States of Australia, an ASIC search would have provided adequate proof. Nu-Tec, however, was incorporated in the State of Delaware. Ms Reid stated from the bar table that a record of the kind that can be obtained from ASIC stating who were the officers from time to time of a company incorporated under the Corporations Law was not able to be obtained from the State of Delaware in relation to Nu-Tec. 24 The only document tendered on behalf of Mr Robertson (before his case was closed) to prove that he was a director of Nu-Tec was a set of draft papers to be sent to shareholders providing information about a Special Meeting (also identified in the papers as an Extraordinary General Meeting for the benefit of "our foreign investors", including investors in Australia). That material included a draft letter from "the CEO of Nu-Tec", Mr Symons. The letter stated: "Further the Board has elected to appoint to the Board a qualified Company Secretary to ensure regulatory compliance requirements are brought up to date and kept current. One of Nu-Tec's largest investors, Mr Brian Robertson has agreed to join the Board to oversight corporate governance, including the protection of patents and the intellectual property of the company". 25 Part II of the papers for the Special Meeting consisted of a letter from the President of Nu-Tec, Mr John Green. At the head of that letter, the directors of Nu-Tec were listed as being John Green, Brian Robertson and M G Symons. The President's letter set out in some detail the circumstances in which the Special Meeting was to be convened. Although dated 5 January 2005, the letter stated: "On the 10 th January 2005 the Company announced its intention through an advertisement on its web page … to convene a Special Meeting ("EGM"). Notice of this meeting, to be held on Monday, 31 st January 2005, is set out on page 11. The announcement reported that Mr Gregory Symons would be standing down as President of the Corporation and that a new President, Mr John Green would be joining the Board as President. The announcement also reported that Mr Roger Smith had resigned from the Board and that Mr Brian Robertson had subsequently appointed (sic) to the Board." 26 Notice of the meeting in fact appears on page 13 of the papers. The purpose of the meeting stated in the Notice was to consider and if thought fit pass the following resolutions, to be proposed as ordinary resolutions (my underlining):

(1) To accept the Appointment notice filed by Mr John Green acknowledging his appointment as President of Nu-Tec and to allocate him 70,000 shares options

(2) To accept the Appointment notice filed by Mr Brian Robertson acknowledging his appointment as a non-executive director of Nu-Tec and to allocate him 50.000 shares

(3) To offer for sale the Technology of the Company by public tender. 27 Part III of the papers (headed "Additional Information") stated, in relation to Mr Robertson (my underlining): "Pursuant to a letter of engagement dated 22 August 2004 Brian Robertson was appointed as a non-executive Director and Secretary of the Company. His remuneration consists of a per diem Meeting fee of $220, a stock grant of 50,000 shares and the reimbursement of normal out of pocket expenses incurred in the performance of his duties. Mr Robertson's appointment is renewed annually and must be ratified by shareholders every three years." 28 I admitted the draft papers for the Special Meeting into evidence (Exhibit C) as being relevant to a fact in issue, namely proof of the particular of identification that Mr Robertson was a director of Nu-Tec. At the close of Mr Robertson's case, however, that was the only evidence admissible to prove that fact. Mr Robertson did not give evidence and did not tender the supposed letter of engagement dated 22 August 2004 referred to in Part III of the papers or the Appointment notice referred to in the Notice of Meeting. 29 After the ABC's application to have the proceedings dismissed had been made and partly argued, Ms Reid sought leave to re-open her case to call Mr Robertson as a witness. I rejected that application. The plaintiffs were directed on several occasions before the trial to notify the ABC of the witnesses they proposed to call in relation to the extrinsic facts. They did not give notice that Mr Robertson was to be called as a witness. The ABC prepared the case accordingly. Counsel for the ABC, Mr Dawson, stated (and I accept) that the ABC would have required an adjournment to deal with the case on a different basis. Further, Mr Dawson was careful to establish before making the application that the plaintiffs' case was closed. In those circumstances, and in light of the history recorded in my earlier judgments in these proceedings, I was satisfied that it would have been unfair to the ABC to permit the plaintiffs to re-open their case to call Mr Robertson. 30 Ms Reid also sought to re-open the plaintiffs' case to tender an unsigned document provided to her for the first time during the lunch adjournment purporting to be Minutes of a Board meeting on 22 August 2004 at which a resolution was passed appointing Mr Robertson to the Board (MFI 5). I rejected the tender, for reasons given during the trial. 31 There was otherwise no evidence of Mr Robertson's appointment at a meeting of the Board. Further, the contents of the papers for the Special Meeting suggest that, even if such a resolution was passed by the Board, the appointment had to be ratified by the shareholders. 32 In addition, there was no evidence that the Special Meeting ever took place. Indeed, the evidence of one of the identification witnesses was to the effect that it had not. 33 Ms Reid submitted that there was enough for the case to go to the jury in the evidence of Mr Peter Koltai. Mr Koltai was called to give evidence directed to establishing that the programs were viewed by someone having knowledge of the particulars of identification set out above. The difficulty is, however, that his evidence did not establish the underlying truth of those matters. At the outset of Mr Koltai's evidence, Mr Dawson took an objection to the admission of the evidence for anything other than a hearsay purpose. 34 In those circumstances, to the extent that Mr Koltai gave evidence that he understood Mr Robertson to be a director of Nu-Tec, that evidence was not capable of establishing particulars (a) and (b) set out above (see discussion at T20-21 in the presence of the jury continued at T22-26 in the jury's absence). 35 Separately, Ms Reid submitted that the evidence of Mr Koltai was capable of establishing particular (c), that Mr Robertson and Mr Symons ran Nu-Tec. Mr Koltai gave the following evidence (at T33.31-45): "Q. Now, in what capacity were you working for Nu-Tec? A. I didn't have an official title. I was hired as a consultant to assist Nu-Tec with formulating the return of their business, which had been in hiatus. Q. At that time when you were asked to join the company, were you made fully aware of the company structure? A. Short answer is yes. Q. Who did you regard as being the management people in the company? A. That would be Mr Symons and Mr Robertson. Q. To your knowledge were they directors of the company? A. It was - it was my understanding they were, yes." 36 However, that evidence also fell within the objection taken by Mr Dawson (see T21.21-30). 37 A careful review of Mr Koltai's evidence discloses that he went no further than to say that he regarded Mr Robertson as a person who was involved in the management of Nu-Tec. That was a conclusion. Mr Koltai gave no evidence of any facts to sustain it. He said that he was first introduced to Mr Robertson through a telephone call. He said "I then met Mr Brian Robertson at a later time face to face as an observer at a Board meeting, a Nu-Tec Board meeting " (T21.15). 38 That was the answer that drew Mr Dawson's global objection, which resulted in an interruption to the evidence. When Mr Koltai returned to the witness box, it was not clarified whether it was he or Mr Robertson to whom he was referring as an observer at the Board meeting. Nonetheless, taking the evidence at its highest and assuming that Mr Koltai was the observer, there was simply no evidence as to Mr Robertson's conduct, if any, in the management of the company. There was certainly no evidence capable of establishing that he together with Mr Symons "ran Nu-Tec". 39 The parties agreed that the test to be applied is that stated in McKenzie v Mervyn Holdings Pty Ltd & Anor (1990) 20 NSWLR 42; recently reaffirmed by McClellan CJ at CL in Greig v WIN Television NSW Pty Limited [2009] NSWSC 632 at [85]-[86]. In McKenzie v Mervyn Holdings, Clarke JA said at 47: "A trial judge who is confronted with a submission that an issue should be withdrawn from a jury for lack of evidence is required to determine whether there is any evidence upon which the jury could reasonably find that the party opposing the motion has made out his case on the probabilities on that issue. In considering the motion the judge is bound to pay regard only to the evidence which favours the party opposing the motion and to disregard the evidence in favour of the proponent of the motion." 40 Applying that test, and after carefully reviewing the contents of Exhibit C and the evidence of Mr Koltai, I was not satisfied that there was any evidence upon which the jury could reasonably find that any of Mr Robertson's particulars of identification was established on the probabilities. For those reasons, I acceded to the defendant's application and dismissed the claim brought by Mr Robertson. **********

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.