Obeid v John Fairfax Publications Pty Limited

Supreme Court of NSW|2006-10-12|Before: Hoeben J

CITATION : Obeid v John Fairfax Publications Pty Limited [2006] NSWSC 1059

HEARING DATE(S) : 14/08/2006, 15/08/2006, 16/08/2006, 17/08/2006, 21/08/2006, 22/08/2006, 23/08/2006, 24/08/2006, 12/09/2006, 13/09/2006

DECISION : I enter judgment in favour of the plaintiff against the defendant in the sum of $162,173. Liberty to apply re: costs.

Defamation Act 1974 (NSW) LEGISLATION CITED : Defamation Act 1957 (Tas) Defamation Act 1989 (Qld)

Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 Clark v Ainsworth (1996) 40 NSWLR 463 Evatt v Nationwide News Pty Limited [1999] NSWCA 99 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 CASES CITED : Makim v John Fairfax & Sons Ltd (1990) 5 BR 196 at 209 MBP (SA) Pty Limited v Gogic (1991) 171 CLR 657 Mirror Newspapers v Jools (1985) 5 FCR 507 Morgan v John Fairfax (No 2) (1991) 23 NSWLR 374 Morosi v Mirror Newspapers Limited (1977) 2 NSWLR 749 at 797 Rogers v Nationwide News Pty Limited 216 CLR 327 at 351 [72] - [76]

PARTIES : Edward Obeid - Plaintiff John Fairfax Publications Pty Limited

COUNSEL : BR McClintock SC/M Richardson - Plaintiff G Reynolds SC/R Glasson/K Smark - Defendant

SOLICITORS : Gilbert and Tobin - Plaintiff Freehills - Defendant

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

20387/2002 - Edward OBEID v JOHN FAIRFAX PUBLICATIONS PTY LIMITED

JUDGMENT 1 HIS HONOUR: Nature of Proceedings In these proceedings the plaintiff sued the defendant for defamation arising out of an article which was published in the Sydney Morning Herald (SMH) on 30 August 2002 ("the article"). Pursuant to s7A of the Defamation Act 1974 (NSW) (the Act) a trial before a jury took place on 11 August 2005. The jury found that the article carried four defamatory imputations. 2 The imputations found were: "(a) The plaintiff is a corrupt politician prepared to assist the Bulldogs Leagues Club with a development in return for payment of $1M to the Australian Labor Party (ALP);

(b) The plaintiff attempted to obtain a bribe, that is a payment of $1M for the ALP, in return for facilitating the completion of the Oasis development;

(c) The plaintiff lied when he denied that he had sought a bribe for the ALP in return for facilitating the completion of the Oasis development;

(d) The plaintiff is a corrupt politician in that he was prepared to evade the legal restriction on licensing poker machines in return for payment of $1M to the ALP." 3 As of 30 August 2002 the plaintiff was the Minister for Mineral Resources and Fisheries in the Government of New South Wales. The defendant was the publisher of the SMH, a daily newspaper distributed principally in NSW, but also in the other States and Territories of Australia. The sales figures for the SMH as of 31 August 2002 were NSW - 361,200, ACT - 8,057, Queensland - 8,623, Victoria - 1,335, Northern Territory - 18, South Australia - 902, Western Australia - 292, Tasmania - 242. The readership, of course, would have been significantly greater than the sales figures. 4 The question which now arises for determination by me concerns the defence of qualified privilege, both statutory and at common law, raised by the defendant. The defendant carries the onus of establishing that defence. If the defence is not made out, the plaintiff's entitlement to damages will need to be assessed. 5 The defences relied upon are: NSW A defence under s22 of the Act. A defence of common law qualified privilege based on Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 (hereinafter called "the Lange defence").

Victoria, South Australia, Western Australia, the Northern Territory and the Australian Capital Territory

A defence of common law qualified privilege based on "the Lange defence".

Queensland A defence of qualified protection under s16(e) and (h) of the Defamation Act 1989 (Qld).

A defence of common law qualified privilege based on the Lange defence.

Tasmania A defence of qualified protection under s16(e) and (h) of the Defamation Act 1957 (Tas).

A defence of common law qualified privilege based on the Lange defence. 6 In relation to publication of the article in NSW, the plaintiff made the following admissions:

(i) That the readers of the matter complained of had an interest or apparent interest in receiving the information contained in the article and that the article was published to readers in the course of giving information on that subject as specified in ss22(a) and (b) of the Act.

(ii) That the matter complained of related to political and/or government matters;

(iii) That the matter complained of in the imputations related to matters of public interest.

Accordingly, the only issue to be established by the defendant in making out its defence of qualified privilege, either by statute or at common law, was whether its conduct in publishing the article was reasonable in the circumstances. 7 In order to understand the submissions, it is necessary to set out the article. In that regard it should be noted that three columns of the article, the headline and the caption beneath two photographs appeared on the front page of the Friday edition of the newspaper. The fourth column appeared on page 4 under a "spill headline" as indicated. The numbering of the paragraphs did not appear in the article as published, but has been added in these proceedings to enable easier identification of specific parts of the article.

8 Except as otherwise indicated, I find the factual background to be as set out in the following paragraphs. 9 In August 2002 Anne Davies was an employee of the defendant and was the Urban Affairs Editor of the SMH. She was at that time a very experienced journalist. She had been aware of the Oasis development for about two years. The Oasis project was a very large and ambitious development which was proposed for the Liverpool area. It involved the Liverpool Council and the Canterbury Bulldogs Rugby League Club (the Bulldogs). 10 By late July 2002 Ms Davies and another senior journalist with the SMH, Kate McClymont, had become interested in the Oasis project. Until then each had carried out her own inquiries and research into the project. It was at about this time that they agreed to co-operate in investigating the project with a view to jointly producing a report about it if those investigations revealed matters of interest. They were both aware that Bill Moss was a senior executive of Macquarie Bank which was involved with the project and that Al Constantinidis was closely associated with the Bulldogs and the project. 11 It was the evidence of Ms McClymont that she met with Mr Moss on 30 July 2002 in the Macquarie Bank building. She said that on that occasion Mr Moss told her that the Bulldogs were significantly breaching the salary cap imposed by the National Rugby League (NRL). According to Ms McClymont, Mr Moss also said the following on that occasion: "You know Mr Obeid is involved in this… the Oasis has been having difficulty getting through and Gary McIntyre has told me that Eddie has been asking for a sizeable donation in order for this to get through … Oh, yes, I actually asked Eddie about it … Mr Obeid was actually in my office just recently … I said to Eddie "Eddie, Gary tells me you're trying to put the squeeze on them for money to get the Oasis project" … He (Obeid) said absolutely nothing. He just changed the subject." (T.342.32-.52) 12 Ms McClymont said that the following day, she repeated to Ms Davies what Mr Moss had told her (T.345.21). 13 It was submitted by the plaintiff that this evidence was untrue. The basis for the submission was that despite its importance it was not incorporated into the article, that it was not supported by any notes (unlike other conversations), it was not referred to in answers to interrogatories, it was not mentioned in exhibit S (being the 13 August 2006 affidavit referring to communications with Mr Brammer of ICAC), and it was not mentioned by Ms Davies in her evidence. When these matters were put to Ms McClymont she responded that she did not have permission from Mr Moss to use this material and that he did not wish his name to be associated with the article. 14 I have difficulty in accepting that Mr Moss made these remarks about Mr Obeid on this occasion. Since this was the first occasion that an allegation about Mr Obeid had been raised and the only occasion it was directly put to him, it is surprising that no reference had been made to it at any time in the preparation of the case until that evidence was given. It is surprising that it did not find its way into the article. Given the importance of the exchange, it is surprising that there was no note made of it. It sits uneasily with Ms McClymont's evidence at T.347.6. What I find decisive, however, is the failure of Ms Davies to make any mention of that conversation. 15 If Ms McClymont had told Ms Davies about this conversation the following day, this would have been the first time that Ms Davies was made aware not only of the salary cap scandal, but also of the allegation against Mr Obeid and his refusal to deny it. It would be extraordinary if this conversation did not remain fixed in her recollection despite the passage of time. Not only did Ms Davies make no mention of this conversation in her evidence, her evidence is otherwise inconsistent with it (T.183.38). This leads me to conclude that she was not told about such a conversation by Ms McClymont. 16 The conclusion I have reached is that Ms McClymont was mistaken in that evidence and that she was not told anything about Mr Obeid seeking money for the ALP by Mr Moss on or about 30 July 2002. That finding does not significantly affect the defence in that the evidence did not find its way into the article, Ms Davies clearly placed no reliance upon it and Ms McClymont made no further reference to it other than when cross-examined specifically with regard to it by senior counsel for the plaintiff. Neither Mr Coleman nor Mr Whitehead were apparently told about it and accordingly neither placed any reliance upon it when deciding to publish the article. 17 As part of their co-operative effort, a meeting took place at the Merchant Court Hotel between Ms Davies, Ms McClymont on the one hand and Bill Moss and Al Constantinidis. Not long before the meeting, Macquarie Bank had ceased its association with the Oasis project and Mr Constantinidis had been forced out of the Bulldogs and the Oasis project in acrimonious circumstances. 18 There was some disagreement between Ms Davies and Ms McClymont as to the detail of what they were told at that meeting although the general thrust of the information which they received was consistent. 19 Ms Davies said that she was told about breaches of the NRL salary cap by the Bulldogs and heard mention of Mr Obeid's name for the first time in relation to the Oasis project (T.183.38). Mr Constantinidis referred to a meeting in June 2002 when representatives from the Bulldogs (including the president of the Bulldogs, Mr McIntyre) had been told that for the Oasis project to go ahead he had to be removed from the project and a two million dollar donation had to be made to the ALP. In relation to that latter condition, Ms Davies thought that the information had come from Mr Moss, but she was not sure. Mr Constantinidis said that the proposal was for the donation to be made through Walter Constructions which would be given the tender for the project and that that company would channel the donations to the ALP. 20 According to Ms Davies, Mr Constantinidis mentioned another occasion when the question of a donation to the ALP had come up in the context of the Oasis project. Mr Constantinidis referred to a lunch at the Noble House Restaurant when Arthur Coorey had come into the restaurant and advised those at the table "I've been at a meeting with Eddie Obeid. If we make a donation to the ALP, the project will go through". Mr Constantinidis said that this lunch had occurred around Easter 2000. 21 She said that Mr Moss referred to a conversation which he had with Mr McIntyre on an aircraft while they were both travelling overseas. Mr McIntyre had told him that the ALP wanted a big donation of about two million dollars before the Oasis project could be approved and its difficulties overcome. Mr Moss said that he was told that the big donation would help to solve problems with the poker machines and land. 22 Ms McClymont's recollection of 5 August meeting was that Mr Moss said "Gary McIntyre said to me that Eddie Obeid has told them that they have to make a $2M dollar donation in order to get their Oasis project through and that the donation had to be done through a builder of Mr Obeid's nomination". Mr Moss said that this conversation had taken place between him and Mr McIntyre while they were on a plane trip to Europe. 23 Ms McClymont said that Mr Constantinidis referred to a conversation which he had with Mr McIntyre at Lizard Island when Mr McIntyre had told him that if the Bulldogs made a $2M donation the Oasis project would be able to go through. "Gary said that Eddie Obeid says we have to make this donation in order for this project to go through. We discussed it on Lizard Island." 24 Ms McClymont said that most of the meeting was spent talking about breaches by the Bulldogs of the NRL salary cap and that her focus was mainly on that subject. Nevertheless she had made notes of the whole conversation (exhibit 26, page 5). 25 It was Ms McClymont's evidence that she was not told about the lunch at Noble House until a telephone conversation with Mr Constantinidis on 19 August. On that occasion Mr Constantinidis told her that the lunch had occurred around mid 2000 and that: "We are right in the middle of lunch when Arthur Coorey came in and said "I've just come from Eddie Obeid's office. We can get this through if we pay a million dollar donation to the ALP, our problems are going to go away with the Oasis project." (T.354.56) 26 It was Ms Davies' recollection that she and Ms McClymont met with Mr Constantinidis again at his office at Burwood on 13 August. In that meeting no mention was made of Mr Obeid. It related to the methods by which the Bulldogs were avoiding the NRL salary cap and remuneration received by Mr McIntyre from the Bulldogs. It was for that reason, I assume, that Ms McClymont made no mention of that meeting. 27 In carrying out her investigations Ms Davies concentrated upon the financial arrangements in place for the Oasis development and on the involvement of Liverpool Council. She did, however, participate with Ms McClymont in another meeting with Mr Moss and Mr Constantinidis on 18 or 19 August in the apartment of Mr Moss. On that occasion Mr Moss repeated what he had said about his conversation with Mr McIntyre while they were travelling on an aircraft overseas. Mr Moss also spoke about a briefing on the Oasis project which the Bulldogs had given to representatives of the state government. Following that briefing, Mr Arthur Coorey had told Mr McIntyre that "if we pay, give money to the ALP like the hotels do, then the project will go through". That briefing had taken place at the Sheraton Hotel in approximately November 2000. Mr Moss was angry that he had not been invited to attend the briefing. Mr McIntyre later told him what had happened during and after the briefing and what Arthur Coorey had said. 28 Ms McClymont's recollection of the meeting in the apartment of Mr Moss on 19 August 2002 was in accord with that of Ms Davies. Mr Moss spoke about the briefing which had taken place at the Sheraton Hotel in November 2000. He spoke about the participation of Arthur Coorey. He repeated what he had previously said Mr McIntyre had told him while they were travelling on an aircraft overseas. The only difference between her recollection and that of Ms Davies was that Ms McClymont remembered that Mr Constantinidis had referred to the lunch at the Noble House Restaurant and the information which Arthur Coorey had passed on to those at the lunch about what Mr Obeid had told him if the Bulldogs paid a million dollar donation. 29 It is clear from the evidence of Ms Davies and Ms McClymont, both in chief and in cross-examination, that when Mr Constantinidis and Mr Moss were describing the various conversations which they had had with Mr McIntyre which concerned a request for a donation to the ALP, Mr McIntyre had not received such a demand directly or personally from Mr Obeid. The request had come by way of Arthur Coorey as an intermediary (T.211.16, T. 214.6 and T355.34). That evidence from both journalists in chief clearly establishes that proposition. To the extent that clarification was needed, this took place in cross-examination. 30 Accordingly, I find that the understanding of Ms Davies and Ms McClymont after their meetings and conversations with Messrs Moss and Constantinidis was that no direct conversations had taken place between Mr Obeid and Mr McIntyre in which Mr Obeid had sought a donation from the Bulldogs for the ALP as a condition of the Oasis project proceeding, but that all approaches had come to Mr McIntyre through an intermediary, Mr Arthur Coorey. It should be noted that although Mr Coorey was contacted by Ms McClymont on 29 August concerning another matter, he was not asked anything about this subject (T.469). 31 On 17 August 2002 the first of the articles in the SMH relating to breaches of the NRL salary cap by the Bulldogs and relating to the Oasis project was published. Twenty one articles on that subject were published by the SMH between 17 August and 30 August 2002 (exhibit 20). Ms Davies and Ms McClymont contributed to most but not all of those articles. The article, the subject of these proceedings, is to be seen as part of that series. 32 On 23 August 2002 ICAC announced that it was going to conduct an inquiry into the possible misuse of Liverpool Council ratepayers' funds in relation to the Oasis project. 33 It was the recollection of Ms Davies that she and Ms McClymont on either 26 or 27 August 2002 met Mr Moss between 5 and 6 pm in an upstairs bar of the Merchant Court Hotel. The purpose of the meeting was to clarify with Mr Moss the precise occasions that Mr McIntyre had spoken to him about payments being requested from the Bulldogs by the ALP. Mr Moss confirmed his earlier statements that the two occasions which he recollected were a discussion between him and Mr McIntyre in a coffee shop after the briefing in the Sheraton Hotel and the conversation in the aircraft while they were both overseas. Ms McClymont made no mention of this meeting in her evidence, but I accept that it took place as described by Ms Davies. 34 On 28 August Ms McClymont telephoned Mr Mark Wells for reasons unrelated to the Oasis project. During the course of that conversation, Mr Wells volunteered that he had attended a dinner at the Bulldogs Club and that during that dinner Mr McIntyre had told him that if the Bulldogs made a donation to the ALP, the Oasis project would go through. Mr McIntyre said that this offer had come from Mr Obeid. Mr Wells indicated that he was prepared to "go on the record" in respect of that information. At the hearing this occasion was referred to as the "Atrium dinner". 35 Ms McClymont made a note of the telephone conversation and discussed its contents with Ms Davies. She said that she was very excited because Mr Wells was prepared to be quoted on this matter. She arranged to meet Mr Wells later that day at a café to personally confirm the information. 36 At the meeting Mr Wells confirmed and expanded on the information which he had provided over the phone. Mr Wells had been doing PR work for the Bulldogs until shortly before the meeting with Ms McClymont. He told her how important it was to the Bulldogs and to the Oasis project that a certain piece of Crown land be obtained and that the government freeze on the number of poker machines be lifted. It was in that context during the Atrium dinner that Mr McIntyre had told him about the proposal which had come from Mr Obeid. Mr Wells identified the persons at the dinner as Peter Wilkinson, his wife Claire, Al Constantinidis, himself and Gary McIntyre. The dinner had taken place on 21 November 2001. Ms McClymont took full notes of this conversation with Mr Wells. Mr Wells made no secret of the fact that his services had been terminated by Mr McIntyre. 37 In order to verify the information received from Mr Wells, Ms Davies telephoned Mr Wilkinson on two occasions and asked him about the dinner. Mr Wilkinson remembered the dinner and confirmed that Mr McIntyre and Mr Wells had been present. Thereafter the evidence was as follows: "I said "Do you remember Gary McIntyre talking about being approached by Eddie Obeid to pay money, pay a donation to help smooth the way for the project?" and he said "No, I don't recall that conversation." He said "But I do recall that Mr McIntyre was talking about donations generally and saying that he wished he had paid it, it would have made it much easier." Q. And did he tell you anything about who Mr McIntyre was talking about making donations to? A. To the ALP. … Q. If you could give us your recollection extending into the second call too? A. I think I called him back and said did he recall Eddie being mentioned around the club and he said "Yes, Eddie was regarded as one of the friends of the club". Q. Yes? A. And you know, he said Arthur Coorey was often talking about Eddie Obeid and that, you know, it was always Eddie this, Eddie that. I didn't quite know what he meant by that but Eddie was regarded as a close friend and ally of the Bulldogs. And that he again, I think said to me, you know, Mr McIntyre had rued that he hadn't made a donation because the hotels had and seemed to get favourable treatment from the ALP. Q. A donation to? A. To the ALP and that they had done better than, say, the Bulldogs." (T.218-219) 38 It was common ground that neither Ms Davies nor Ms McClymont made any inquiries of Mrs Wilkinson as to her recollection of the Atrium dinner. Mr Constantinidis did not make any mention of the Atrium dinner or anything said at it in any of his conversations with Ms Davies or Ms McClymont. When asked about it, Mr Constantinidis did not confirm Mr Wells' evidence concerning what was said at the dinner (T.452.36). 39 On the morning of 29 August Ms Davies and Ms McClymont reviewed the information which they had and decided that the article concerning Mr Obeid and Mr McIntyre should proceed. In that regard the information received from Mr Wells and his willingness to have his name associated with the article seems to have been decisive. Ms Davies and Ms McClymont agreed as to what tasks each was to perform that day in relation to the preparation of the article. 40 Ms Davies made inquiries of the Liverpool Council and of Mr McIntyre. The results of her discussion with Mr McIntyre are set out almost verbatim in paragraphs 11-13 of the article. Otherwise Ms Davies focused on the preparation of the article. Some paragraphs she prepared herself and others were jointly prepared by her and Ms McClymont and the remainder were prepared by Ms McClymont. 41 Ms McClymont telephoned the Law Society to obtain information about Mr McIntyre's practising certificate. She telephoned Mark Wells and read to him a draft of what ultimately became paragraphs 4, 5, 6 and 7 of the article to confirm his agreement with them. She tried to contact Mr Moss but was initially unsuccessful. When she made contact with him she read to him the draft of what ultimately became paragraphs 2 and 3 of the article and he agreed with the content. Later in the day Ms McClymont spoke to Mr Constantinidis and read to him the draft version of what became paragraphs 8 and 9 of the article. Mr Constantinidis agreed with what was read to him. 42 Throughout the day Ms McClymont like Ms Davies was developing the article. As ultimately published paragraphs 1-3 were written by Ms Davies and Ms McClymont together, paragraphs 4-9 by Ms McClymont, paragraph 10 was written together, paragraphs 11-13 by Ms Davies, paragraphs 14-15 by Ms McClymont, paragraph 16 by both journalists together, paragraph 17 by Ms Davies, paragraphs 18-19 by Ms McClymont and paragraphs 20-21 were jointly composed. A substantial part of the article had been prepared by about the middle of the day. 43 At some time before 2.50 pm Ms Davies and Ms McClymont drafted a number of questions to be sent to Mr Obeid and to which he was asked to respond. The intention was to seek his response to matters which were specifically raised in the article. The questions as finally prepared were emailed by Ms McClymont at 2.50 pm to Ms Ingrid Piper, Mr Obeid's press secretary at the time. Before emailing the questions Ms McClymont had telepholned Ms Piper in order to inquire of her the best way to send the questions and to bring them to Mr Obeid's attention. 44 Shortly after those questions were sent to Mr Obeid a similar, but not identical, set of questions was sent by Ms Davies to Mr Iemma, another Minister in the State Government at the time. After those questions had been sent, Ms Davies contacted Ms Amanda Lampe in the Premier's office to tell her that they had sent questions to two Ministers about the Oasis project. Ms Davies said: "We have sent some questions. They raise serious issues and we are very anxious to get responses and we just want you to know that we have made these inquiries." (T.227.30-.58) 45 When no reply had been received from Mr Obeid, Ms McClymont left a message on Ms Piper's answering machine enquiring whether any reply would be forthcoming. Replies from Mr Obeid were in fact received by email at 5.20 pm. 46 The questions addressed to Mr Obeid and the answers received are set out in exhibit B as follows: "Dear Mr Obeid, As you know my colleague Anne Davies and I have been covering the Oasis/Liverpool development story. Your name has been mentioned to us frequently during the course of our inquiries and I was wondering if you would answer the following questions please? 1) Have you, or your office staff, at any time placed pressure on councillors at Canterbury Council to get the Bulldogs proposal through? A. No 2) Have you ever had discussions with Gary McIntyre and/or any other party connected to the Bulldogs and/or Liverppol Council about payment to the ALP in return for helping getting the Oasis project through? A. No 3) Did you at any stage suggest the payments could be hidden through companies that the ALP would nominate to work on the Oasis development? A. No 4) Could you detail your meetings with Mr McIntyre and/or other club officials? 5) What is your relationship with Gary McIntyre? 6) If Gary McIntyre has had conversations with numerous people about your offer to "help" with the crown land and the poker machine licence if they contributed btween $1 and $2 million to the ALP, what would you say to that? A. To 4, 5, 6 - Has only met Gary McIntyre a mere handful of times. 7) When was the last time you spoke with Mr McIntyre? A. At a public function which was the Arabic Youth Implementation Committee held at Canterbury Leagues Club on August 7. Thank you for your assistance, Kate McClymont PS: I can be contacted on 9282 2388 or fax 9282 2409 or email." 47 Ms McClymont and Ms Davies were not satisfied with the answers which they received to Questions 4, 5 and 6. Accordingly a second email was sent by Ms McClymont to Ms Piper at 5.43pm. A reply was received from Mr Obeid's office at 5.56pm. The further question and answer were as follows: "Ingrid, I note that answers to 4, 5 and 6 are all rolled into one. I really would like a specific answer to question 6 - that is can Mr Obeid offer any explanation as to why Mr McIntyre would speak to people of this conversation if it didn't happen? Thanks, Kate.

A. The answer to this question is "No". 48 Both Ms Davies and Ms McClymont regarded the answer received from Mr Obeid to the second email as inadequate. Ms McClymont did not think that it answered question 6 in the first email. Ms McClymont confirmed that she drafted paragraph 10 of the article after she had received Mr Obeid's answer to the second email. She said that she intended to accurately summarise Mr Obeid's responses in that paragraph. 49 The final composition of the article was completed by about 6pm. A copy of it was then sent to Mr Coleman. Mr Coleman is a lawyer experienced in defamation matters and at the time was the inhouse counsel for the defendant. Earlier that afternoon he had discussed the article with Ms Davies and Ms McClymont and had explained to them what is known as the Lange defence. He advised them to try to structure the story so that it came within the Lange defence. In that discussion Mr Coleman pointed out that they had to have a reasonable belief in the truth of what was in the article. He also pointed out that it was necessary to contact the persons affected by the article and obtain comment from them and include that comment in the article. 50 An important change to the article which Mr Coleman recommended was positioning the denial by Mr Obeid as the first paragraph. This was done, he said, to make it clear that the article contained no more than allegations and responses to those allegations. In order to be fair to Mr Obeid, Mr Coleman thought it was necessary to emphasise that Mr Obeid was denying the allegations. 51 During that day Ms McClymont had discussions with the editor of the SMH, Mr Whitehead, in relation to the article. Mr Whitehead said that he regarded the content of the article as important because it raised serious questions about government which needed to be investigated. Mr Whitehead also had a discussion with Mr Coleman on 29 August. It was Mr Whitehead who approved the article for publication in its final form, including headlines and captions. Like Mr Coleman he considered that the article did no more than to report certain allegations and the responses to those allegations. 52 The headlines and captions were not prepared by Ms Davies or Ms McClymont. They were written by Mr Barrett, who at that time was a subeditor for the SMH. When he gave evidence Mr Barrett agreed that he must have written the headlines and captions but at the time of giving evidence he had no recollection of them, nor of the circumstances surrounding their composition. 53 It should be noted that as well as Messrs Moss, Wells and Constantinidis there was a fourth primary source for the article being a person to whom Ms McClymont had given an undertaking of confidentiality. That person was not identified in the proceedings and did not give evidence. Nothing further was known about the person other than that which I have just indicated. 54 Both Ms Davies and Ms McClymont in their evidence said that they did not intend the article to convey the imputations found by the jury. They intended the article to convey that there were allegations and that there were denials by the persons who were the subject of those allegations. That was the only imputation which they wanted the article to convey. In that regard they believed in the truth of that imputation. 55 It was the opinion of Ms Davies and Ms McClymont that their three sources were reliable. Mr Wells made no secret of the fact that his services had been terminated by Mr McIntyre, he had volunteered his information and was prepared to allow his name to be used in the article. Mr Moss was a well known businessman and had no obvious antipathy towards Mr Obeid and Mr McIntyre despite the fact that his bank no longer was involved in the Oasis project. Mr Constantinidis had apparent grievances against Mr Obeid and Mr McIntyre but otherwise what he said was consistent with the information received from Messrs Wells and Moss. 56 Both Ms McClymont and Ms Davies regarded Mr McIntyre as unreliable in his responses because he had been consistently denying salary cap breaches by the Bulldogs whereas the fact of such breaches had been clearly established. 57 On the day the article was published Mr Obeid issued the following press release: "An allegation reported by the Sydney Morning Herald concerning me is untrue and defamatory, the Minister for Mineral Resources and Fisheries, Eddie Obeid said today. Mr Obeid said this was made clear to the Sydney Morning Herald last night when the assertions were flatly rejected as untrue and absurd. "This is a case of the Herald trying to dress up unsubstantiated hearsay as a yarn." "If the Sydney Morning Herald has any confidence in the allegation published, it should send it to the Independent Commission Against Corruption. "In any case, the allegation is absurd for these reasons. "First, as Minister for Mineral Resources and Minister for Fisheries, it should surprise no-one that I have no role in assessing or approving the licences of registered clubs. "Second, I have no role in assessing applications made by clubs for gaming machine permits. "These matters are assessed independently by the Magistrates of the Licensing Court and the Liquor Administration Board. "Permits can't be granted unless they meet the LAB's stringent Social Impact Assessment test and they can't be granted because of the cap on poker machine numbers announced by the Government a year ago. "Third, I have never raised the subject of the Oasis project with the Minister for Gaming and Racing. "Fourth, I have no role in the Crown land issue." (exhibit C)

Section 22 of the Act and the Lange defence 58 At the time of publication (30 August 2002) s22 of the Act was: "22(1) Where, in respect of matter published to any person: (a) the recipient has an interest or apparent interest in having information on some subject; (b) the matter is published to the recipient in the course of giving to him information on that subject; and (c) the conduct of the publisher in publishing that matter is reasonable in the circumstances, there is a defence of qualified privilege for that publication. (2) For the purposes of subsection (1), a person has an apparent interest in having information on some subject if, but only if, at the time of the publication in question, the publisher believes on reasonable grounds that that person has that interest. (3) Where matter is published for reward in circumstances in which there would be a qualified privilege under subsection (1) for the publication if it were not for reward, there is a defence of qualified privilege for that publication notwithstanding that it is for reward." 59 By amendment which took effect in February 2003, an additional subsection was added: "(2A) In determining for the purposes of subsection (1) whether the conduct of the publisher in publishing matter concerning a person is reasonable in the circumstances, a court may take into account the following matters and such other matters as the court considers relevant: (a) The extent to which the matter published is of public concern, (b) The extent to which the matter published concerns the performance of the public functions or activities of the person; (c) the seriousness of any defamatory imputation carried by the matter published; (d) The extent to which the matter published distinguishes between suspicions, allegations and proven facts, (e) whether it was necessary in the circumstances for the matter published to be published expeditiously, (f) the sources of the information in the matter published and their integrity; (g) whether the matter published contained the substance of the person's side of the story and, if not, whether a reasonable attempt was made by the publisher to obtain and publish a response from the person; (h) any other steps taken to verify the information in the matter published." 60 Lange extended the defence of common law qualified privilege to publications concerning government and politicial affairs, so long as the publisher acted reasonably in publishing it. (Lange p 571.) In the context of s22 their Honours said: "But the damage that can be done when there are thousands of recipients of a communication is obviously so much greater than when there are only a few recipients. Because the damage from the former class of publication is likely to be so much greater than from the latter class, a requirement of reasonableness as contained in s22 of the Defamation Act, which goes beyond mere honesty, is properly to be seen as reasonably appropriate and adapted to the protection of reputation and, thus, not inconsistent with the freedom of communication which the Constitution requires. Reasonableness of conduct is the basic criterion in section 22 of the Defamation Act which gives a statutory defence of qualified privilege. It is a concept invoked in one of the defences of qualified protection under the Defamation Codes of Queensland and Tasmania. And it was the test of reasonableness that was invoked in the joint judgment in Theophanous . Given these considerations and given, also, that the requirement of honesty of purpose was developed in relation to more limited publications, reasonableness of conduct seems the appropriate criterion to apply when the occasion of the publication of defamatory matter is said to be an occasion of qualified privilege solely by reason of the relevance of the matter published to the discussion of government or political matters." ( Lange 572-3) "Moreover, even without the common law extension, s22 of the Defamation Act ensures that the New South Wales law of defamation does not place an undue burden on communications falling within the protection of the Constitution. That is because section 22 protects matter published to any person where the recipient has an interest or apparent interest in having information on a subject, the matter was published in the course of giving information on that subject to the recipient, and the conduct of the publisher in publishing the matter was reasonable in the circumstances." ( Lange 575) 61 Against that background I accept the submission that the defence of common law qualified privilege in the extended sense, as explained in Lange, conforms to the s22 defence. It follows that the requirement of reasonableness is no less onerous under Lange than it is under s22 and that the authorities concerning the requirement for a defence under s22 to be made out are equally applicable to the Lange defence. 62 In relation to the concept of reasonableness, the guidance given in Lange is: "Whether the making of a publication was reasonable must depend upon all the circumstances of the case. But, as a general rule, a defendant's conduct in publishing material giving rise to a defamatory imputation will not be reasonable unless the defendant had reasonable grounds for believing that the imputation was true, took proper steps, so far as they were reasonably open, to verify the accuracy of the material and did not believe the material to be untrue. Furthermore, the defendant's conduct will not be reasonable unless the defendant has sought a response from the person defamed and published the response made (if any) except in cases where the seeking or publication of a response was not practicable or it was unnecessary to give the plaintiff an opportunity to respond." ( Lange p574) 63 With that guidance as background it seems to me that the matters set out in s22(2A) are relevant to a consideration of the concept of "reasonableness" and provide a useful but not exhaustive check list. This is so even though s22(2A) was not in force when the article was published.

Reasonableness 64 It was submitted by the defendant that after the High Court decision in Lange, cases which involved political comment were to be treated in a different way to other defamation matters. In particular cases which considered the question of "reasonableness" in a context other than that of political information which predated Lange, ought no longer be regarded as applicable to political information cases. It was submitted that Morgan v John Fairfax (No 2) (1991) 23 NSWLR 374 ought no longer be regarded as providing guidance as to the concept of what was reasonable when the subject matter of an article was political information. 65 No authority was cited for this proposition. It was said to flow from the treatment of the publication of political information by the High Court in Lange. 66 I do not agree. In Lange the High Court specifically endorsed the proposition that s22 encompassed the extended defence of qualified privilege which the provision of political information by mass media outlets potentially gave rise to. The High Court drew no specific distinction between the application of s22 and the extended defence of qualified privilege at common law in Lange. In my opinion cases which considered the question of reasonableness, such as Morgan No 2, remain good law and provide binding authority as to what conduct is reasonable even where the subject article provided political information. 67 Morosi v Mirror Newspapers Limited (1977) 2 NSWLR 749 at 797 contains a useful statement of principle with application to the facts of this case: "Newspaper publications are made to the public at large, and the conduct of a publisher in publishing defamatory matter in a newspaper must be reasonable having regard, inter alia, to that wide publication. Any person publishing defamatory matter should be careful to ensure that it is proper for him to make the publication, no matter how limited in extent it is. Since s22 provides a defence, the onus is upon the publisher to show that he is entitled to its protection. To satisfy this onus, the newspaper publisher must establish circumstances, or point to proven circumstances, which make it reasonable to publish the defamatory matter to the world at large. It is rarely, if ever, that this onus would be satisfied by the terms of the publication alone: see Wright v Australian Broadcasting Commission ; it is possible that, in some cases, it would be satisfied by the evidence of witnesses called by the plaintiff; but commonly its satisfaction would require the publisher to call evidence to establish what care he had taken. In satisfying this onus, a newspaper publisher is in no different position to a private citizen in possession of the same information. The fact that the publisher has sources for his information, and that he has made the best check possible in the time to ensure that the defamatory matter is accurate does not of course necessarily make reasonable the publication of that matter in a newspaper. It is difficult to see how publication in a newspaper of "understandings", "speculation", "beliefs" or rumours that a person has been guilty of discreditible conduct can ever be reasonable; but, if a newspaper wishes to establish that it is, it will be a heavy onus indeed." 68 In Morgan No 2 the statement of principle on this issue is at 387-388: "In my opinion, all of those cases support the following propositions in relation to the requirement of s22(1)(c) that the conduct of the defendant in publishing the matter was reasonable in the circumstances: (1) The conduct must have been reasonable in the circumstances to establish each imputation found to have been in fact conveyed by the matter complained of. The more serious the imputation conveyed, the greater the obligation upon the defendant to ensure that his conduct in relation to it was reasonable … (2) If the defendant intended to convey any imputation in fact conveyed, he must … have believed in the truth of that imputation. (3) If the defendant did not intend to convey any particular imputation in fact conveyed, he must establish: (a) That … he believed in the truth of each imputation which he did intend to convey; and (b) That his conduct was nevertheless reasonable in the circumstances in relation to each imputation which he did not intend to convey but which was in fact conveyed. If, for example, it were reasonably forseeable that the matter complained of might convey the imputation which the jury finds was in fact conveyed, it will be relevant to the decision concerning s22(1)(c) as to whether the defendant gave any consideration to the possibility that the matter complained of would be understood as conveying such an imputation, as will be his belief in the truth of that particular imputation and what steps he took to prevent the matter complained of being so understood: Evatt v John Fairfax & Sons Ltd at 13-14; Makim v John Fairfax & Sons Ltd (1990) 5 BR 196 at 209; see also Wright v Australian Broadcasting Commission at 712 (whether the defendant "knew" whether he was likely to convey a misleading impression"); Austin v Mirror Newspapers Pty Limited (at 362) (Privy Council). (4) The defendant must also establish: (a) That, before publishing the matter complained of, he exercised reasonable care to ensure that he got his conclusions right, (where appropriate) by making proper inquiries and checking on the accuracy of his sources; (b) That his conclusions (whether statements of fact or expressions of opinion) followed logically, fairly and reasonably from the information which he had obtained; (c) That the manner and extent of the publication did not exceed what was reasonably required in the circumstances; and (d) That each imputation intended to be conveyed was relevant to the subject about which he is giving information to his readers. The extent to which the inquiries referred to in para (4)(a) should have been made will depend upon the circumstances of the case, in particular the nature and the sources of the information which the defendant has obtained, and whether the position, standing, character and opportunities of knowledge of the informant (as perceived by the defendant himself) are such as to make his belief in the truth of the information a reasonable one." 69 The statement of principle in Morgan No 2 was further explained in Evatt v Nationwide News Pty Limited [1999] NSWCA 99 as follows: "25 To revert to the passage from Morgan v John Fairfax & Sons Ltd (No 2) at 387-8 earlier set out, reasonable care in making proper enquiries is only part of what the defendant must generally establish. Paragraph 3 in the passage was concerned with reasonableness in a different respect, in particular where (as in the present case) the defendant did not intend to convey the imputation in fact conveyed. The correctness of what was stated in that paragraph was not contested in this appeal. Paragraph 3(b) showed that reasonableness in the circumstances included whether the defendant's conduct was reasonable "in relation to each imputation which he did not intend to convey but which was in fact conveyed". 26 Section 22(1)(c) is concerned with publication of "matter", by regard to s 9 of the Act being the article rather than the imputation found by the jury (see Morgan v John Fairfax & Sons Ltd (No 2) at 390). But the imputation conveyed by the article was still relevant to the reasonableness of the respondent's conduct (ibid). Newman J seems to have recognised this when he described the contentions as "whether the conduct of the defendant in publishing the article in question (and in particular the defamatory imputation) was reasonable in the circumstances". That the article conveyed the unintended imputation was itself part of the circumstances and threw up, amongst other issues, the questions described in the latter part of para 3 in the passage from Morgan v John Fairfax & Sons Ltd (No 2) . 27 It was therefore relevant, and necessary, to ask whether Mrs Younes gave consideration to the possibility that the article would be understood as conveying the imputation found by the jury, that the appellant was derelict in her duties as secretary of the Ivanhoe Place Residents Association, and what was her belief in the truth of that imputation, rather than take as the premise her belief that the imputation conveyed was the lesser imputation that others believed that the appellant was derelict in her duties. The reason is obvious. To be accurate and fair, a journalist must endeavour to ensure that his or her work does not convey a misleading impression, and a defendant's conduct will not be reasonable in the circumstances if, through the journalist carelessly or irresponsibly failing to do so, the matter published conveys an unintended defamatory imputation. The respondent's particulars of the defence of qualified privilege indirectly acknowledged this. To confine the consideration of reasonableness to the journalist's belief could reward the carelessness or irresponsibility. …

39 The presently material element in the defence of qualified privilege, s 22(1)(c), requires an assessment of the conduct of the defendant in publishing the matter "in the circumstances". It is for the defendant to establish that its conduct was reasonable. While regard must be had to all the circumstances in which the matter was published, it may be that the deficiency in the defendant's conduct in a particular respect was so marked that, viewed with the other circumstances, the deficiency in that respect means that the conduct can not be found to have been reasonable. In my opinion that is so in the present case, and this Court can properly conclude that the respondent has not established that its conduct in publishing the article was reasonable in the circumstances. 40 Mrs Younes believed in the truth of what was published; she believed that the article conveyed that others alleged that the appellant was derelict in her duties, and intended to convey, and believed to be true, that a significant number of people believed that the appellant was not performing her duties in the Ivanhoe Place Residents Association to the level she was expected to. Her belief was founded on a course of making inquiries, including obtaining the minutes of the meeting and the record of so-called "resolutions" to be put to it. She did not intend to convey the imputation found by the jury. All this may be taken in the respondent's favour. 41 But the jury found that the article conveyed the more serious imputation, that the appellant was derelict in her duties as secretary of the Ivanhoe Place Residents Association, and it would be a rare case where a jury's finding did not carry with it that it was reasonably foreseeable that the imputation might be conveyed. In Evatt v John Fairfax & Sons Ltd (Hunt J, 20 June 1985, unreported), one of the cases referred to in para 3 of the passage from Morgan v John Fairfax & Sons Ltd (No 2 ), it was said that, in the absence of evidence from the defendant that it did not intend an article to convey certain imputations, "if the jury finds that the ordinary reasonable reader interpreted the matter complained of in that context, the journalist would have interpreted it in the same way". In Howard v Nationwide Publishing Services Pty Ltd (Hunt J, 26 February 1987, unreported) this was described as a case "where it was reasonably obvious that a particular imputation could be conveyed by what was published and where, although the author did not intend that imputation to be conveyed, he would not have acted reasonably (as required by s22) unless he made certain - by some form of express disclaimer - that it was not intended to be understood in that sense". 42 In the present case Mrs Younes did give evidence that she did not intend to convey the imputation found by the jury. But so far as the evidence showed, save so far as may be inferred from her intention in relation to the lesser imputation, Mrs Younes gave no thought to the possibility of the more serious imputation. On the one occasion when she might have explained her conduct in that respect, the cross-examination set out earlier in these reasons, she did not say that she did not include the word "allegation" or some similar word in what was obviously enough the potentially most detrimental paragraph of the article because she had considered whether it could be read in the more serious way and was satisfied that it could not. She said, "I have no idea", and in the following exchange in the cross-examination seemed to accept the availability of the alternative reading while describing it as purely a personal interpretation. 43 It is a commonplace of life that words and phrases, and the sentences and paragraphs constructed from them, may have more than one meaning, and (to borrow from Austin v Mirror Newspapers Ltd at 365) an indulgent view should not be taken of the conduct of a journalist who fails to appreciate that his or her work conveys a defamatory imputation, or of the conduct of a publisher which in editing the journalist's work fails to appreciate that the editing causes it to convey a defamatory meaning. Some explanation of the conduct of the journalist or publisher is to be expected. Here there was none. Without finding fault in the other circumstances, in my opinion because of this deficiency in its conduct the respondent failed to establish that its conduct was reasonable in the circumstances."

Consideration 70 I accept the evidence of the defendant's witnesses in particular Ms McClymont and Ms Davies that they did not intend to convey the imputations found by the jury. Accordingly it is necessary to determine whether the defendant's conduct was reasonable in relation to each imputation which it did not intend to convey but which was in fact conveyed. An important consideration in that process is whether it was reasonably foreseeable that the article might convey the imputations which the jury found. 71 No-one in the defendant's organisation appears to have given specific consideration to the possibility that the article would be understood or might be understood as conveying the imputations which the jury found. A possible exception to that general statement is Mr Coleman, who thought that it was a possibility that the article might convey imputation (c). (T.511.17) That such was the case is surprising, given the nature of the article and the importance given to that consideration in the authorities (Morgan No 2 and Evatt v Nationwide News). 72 Given the headline and spill headline which were couched in the form of accusations and the structure of the article, I am of the opinion that it was clearly foreseeable had anyone in the defendant's organisation properly turned his or her mind to the question, that the imputations found by the jury could be conveyed by the article. There is no element of denial or qualification in the headlines. I accept the plaintiff's submission that the denial in paragraph 1 is significantly undercut by the eight paragraphs of allegations which follow it. Far from balancing one side of the story with the other, the readily foreseeable consequence of such a structure is that an ordinary reader might consider that the initial denial was false. 73 The denial in paragraph 1 followed by eight paragraphs of allegations is also affected by the contents of paragraph 10. The almost inevitable inference to be drawn from a reading of paragraph 10 is that Mr Obeid could have "elaborated" but declined to do so. Implicit in paragraph 10 is the unstated premise that Mr Obeid had an obligation to elaborate, but did not do so, ie that he was being evasive and not telling the whole truth. 74 On my reading of paragraphs 1-10 of the article, not only was it reasonably foreseeable that the imputations found by the jury might be conveyed, it was likely. Were there any doubt (which in my opinion there is not) on the foreseeability issue the observation by Giles JA in Evatt is pertinent: "It would be a rare case where a jury's finding did not carry with it that it was reasonably foreseeable that the imputation might be conveyed." 75 In my opinion reasonableness on the part of the defendant in the circumstances of this case required a consideration of whether imputations other than those which it intended to convey could in fact be conveyed by the article. Where it was reasonably obvious that imputations adverse to the plaintiff could be conveyed by the article, (as it was here), the defendant would not act reasonably as required by s22 unless it made certain by some form of express disclaimer or otherwise that the article was not intended to be understood in that sense. Such did not occur here. It follows that I am not satisfied that in this respect the defendant acted reasonably in publishing the article. 76 The reasonableness of the defendant's conduct cannot be evaluated in isolation from the gravity of the imputations which it published. To publish of a Minister in the State Government that he was a corrupt politician, that he attempted to obtain a bribe and that he lied when these matters were raised with him is not only a very serious accusation, it attacks the very foundation of his position. It attacks his probity as a citizen, his suitability for public office and it imputes criminal misconduct. Accordingly great care would have to be taken by a defendant publishing such allegations to ensure the reliability of their source. 77 This raises two matters: the adequacy of the inquiries made and the accuracy of the information published. 78 The nature of allegations reported and the journalists' knowledge about them is troubling. Insofar as the information provided by Messrs Moss and Constantinidis is concerned it was known by both journalists that the alleged request for money had not come directly to Mr McIntyre from Mr Obeid but through an intermediary, Mr Coorey. In the case of Mr Wells, it was not clear whether that was Mr Wells' understanding or whether he believed that Mr Obeid had spoken directly to Mr McIntyre. Those three persons then related to the journalists what they said had been told to them by Mr McIntyre. Not only was the source of the allegations hearsay but it was a remote and unreliable form of hearsay. The dangers inherent in such material would have been known to the journalists but not necessarily obvious to an ordinary reader. 79 The alleged source of all of the allegations, Mr McIntyre, was a person whom both journalists believed to be dishonest in that he had sought to deceive to them during preceding weeks in relation to the Bulldogs breaches of the NRL salary cap. Against that background it would be reasonable to expect the two journalists to carefully investigate the accuracy of what they were being told. Yet at no time were any of the specific occasions of the allegations (ie Atrium dinner, Nobel House lunch, Lizard Island) raised with Mr McIntyre). 80 As indicated, the information provided by Mr Wells was of particular importance in the publication of the article. The source of his information was what he had been told by Mr McIntyre at the Atrium dinner. Mr McIntyre was not asked specifically about the Atrium dinner. Mr Constantinidis did not confirm what Mr Wells had said. Mr Wilkinson did not confirm what Mr Wells had said. No inquiries were made of Mrs Wilkinson. Whether Mr Hagan was present at the dinner or not, he did not confirm what Mr Wells had said. 81 Given the seriousness of the allegations the enquiries about the Atrium dinner were patently inadequate. To the extent that an investigation took place into what was said by Mr McIntyre at the Atrium dinner, it failed to elicit any confirmation of what the journalists had been told by Mr Wells. No explanation was offered for this lack of proper investigation. 82 Mr Constantinidis told the journalists about what he had been told at the Noble House lunch and at Lizard Island. It was not disputed that four people, other than Mr Constantinidis, had attended the Noble House lunch. None of those persons was asked any question by either journalist about the lunch. This is despite the fact that at least two of them (Mr Hagan and Mr Coorey) were interviewed about other matters before the publication of the article. In relation to Lizard Island, Mr Constantinidis identified two other persons who had been present (Mr Bob Hill and Ms Brinsmead) but no inquiries were made of those persons by either journalist. Accordingly the information provided by Mr Constantinidis about the Noble House lunch and about what was said at Lizard Island also remained unconfirmed at the time when the article was published despite the reservations which both journalists had as to the reliability of Mr Constantinidis. 83 It was not suggested in the defendant's case that such inquiries and investigations were not possible or could not have taken place in the time available before the article was published. Accordingly, I am not satisfied that it was reasonable for the defendant to include in the article the allegations made by Messrs Wells and Constantinidis concerning Mr Obeid when it was known that those allegations were hearsay, occurred mainly at dinners or social occasions and when either no attempt had been made to confirm that such statements had been made by Mr McIntyre or where attempts had been made, the resulting information failed to confirm that such statements had been made. 84 The defendant submitted that in accordance with its intention to publish only allegations and denials the information conveyed in the article was accurate. I do not agree. 85 The use of direct speech in paragraph 9 of the article clearly implied direct person to person contact between Mr Obeid and Mr McIntyre. Since this paragraph was based on information provided by Mr Constantinidis it was known by the journalists that no such direct contact had taken place but that all contact had been by way of Mr Coorey as an intermediary. In giving the impression of direct contact between Mr Obeid and Mr McIntyre paragraph 9 was clearly inaccurate to the knowledge of both journalists. This is the case whether paragraph 9 refers to a conversation at Lizard Island or at the Noble House Restaurant. 86 This inaccurate presentation was clearly deliberate. The allegations carried much more force if the impression was created of some private and direct meeting between Mr McIntyre and Mr Obeid (see paragraph 12 of the article). A statement of the true position would only have emphasised the remote and hearsay nature of the allegation. 87 Paragraph 10 is also inaccurate. It does not properly reflect the response given by Mr Obeid. The reformulated question put to Mr Obeid by Ms McClymont was "Can Mr Obeid offer any explanation as to why Mr McIntyre would speak to people of this conversation if it didn't happen?" Mr Obeid's response was "No". I do not see any ambiguity in that response and I do not accept that any such ambiguity was apparent to either Ms McClymont or Ms Davies. It follows that the response attributed to Mr Obeid in paragraph 10 was not only inaccurate, it was misleading. 88 In order to justify paragraph 10, it was submitted by the defendant that a simple denial by Mr Obeid was an inadequate response to the questions which had been put to him. It was submitted that the response which he should have given was of the kind which he gave in his press release (exhibit C and exhibit 1). It was said that this failure to provide a full explanation such as was in the press release and which could have been given in response to the questions submitted to him, justified the use of the phrase "would not elaborate" in paragraph 10. 89 The submission does not answer the difficulties created for the defendant by paragraph 10 (see also para [73] hereof). Mr Obeid's response to the question put to him was adequate and appropriate. If he chose to answer the question, there was no obligation on him to do other than answer it to the best of his knowledge. The obligation on the defendant, if it were to act reasonably, was to accurately record Mr Obeid's response. This it did not do. 90 I am not satisfied that the defendant acted reasonably when it included in paragraphs 9 and 10 of the article material which it knew to be inaccurate. These were paragraphs which were highly significant in the context of the whole article insofar as it conveyed imputations adverse to Mr Obeid. 91 It follows from the above analysis that the defendant has not satisfied me that its conduct in publishing the article was reasonable in the circumstances and consequently the defendant has not made out its defence of qualified privilege, either at common law or under s22 of the Act.

Interstate defences 92 To the extent that the defendant relied upon a defence of common law qualified privilege based on "the Lange defence" in States outside New South Wales, that defence fails for the same reasons it fails in New South Wales. Sections 16(e) and (h) of the Defamations Acts of Queensland and Tasmania do not resemble s22 of the New South Wales Act. The reference to "reasonableness" in s16(e), for example is far more specific than it is in s22. Nevertheless, it seems to me that the concept of reasonableness there specified must conform to the findings of the High Court in Lange. Accordingly the requirements for reasonableness under the Queensland and Tasmanian Acts cannot be less than they are at common law after the decision in Lange. It is therefore necessary in both Queensland and Tasmania to establish reasonableness in publishing as a prerequisite for success under ss16(e) and (h). This the defendant has failed to do and I find that it has accordingly failed to establish qualified protection under s16(e) and (h) of the Defamation Acts in Queensland and Tasmania.

Damages 93 There was agreement between the parties as to the application of general principle in the assessment of damages. It was agreed that damages are at large in the sense that the award was a figure which could not be arrived at by any purely objective computation. It was agreed that the purposes of an award of general damages for defamation are threefold: to compensate for harm to reputation, to compensate for hurt to feelings and to vindicate by showing the falsity of the allegations made. 94 Insofar as damages are awarded by way of vindication, their purpose is to permit the plaintiff to convince a bystander of the falsity of the allegations should they resurface at some time in the future. As Brennan J noted in Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at 72 damages for vindication are not to be added to damages assessed under other heads but the same sum operates simultaneously as vindication, compensation and solatium. It was agreed that the amount of damages for injury to reputation and injury to feelings may need to be increased or decreased in order to amount to vindication. 95 Finally it was agreed that compensation in the context of an award of general damages for defamation is a solatium rather than a monetary recompense for harm measurable in monetary terms. 96 The parties also agreed that regard had to be had to the statutory provisions of the Act, in particular s46 and s46A. Section 46(2) provides: "Damages for defamation shall be the damages recoverable in accordance with the common law, but limited to damages for relevant harm." 97 Section 46A provides: "(1) In determining the amount of damages to be awarded in any proceedings for defamation, the court is to ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded. (2) In determining the amount of damages for non-economic loss to be awarded in any proceedings for defamation, the court is to take into consideration the general range of damages for non-economic loss in personal injury awards in the State (including awards made under, or in accordance with, any statute regulating the award of any such damages)." 98 Some guidance has been provided as to how those statutory provisions ought be interpreted and applied: "72 No doubt the purpose of comparing awards for defamation and awards in personal injury cases is to ensure that what Diplock LJ called "the scale of values of the duel" is not adopted. A person's reputation is not to be valued more highly than life or limb. If an award of damages for defamation is greater than the amount that would be allowed for the non-economic consequences of the most serious physical injuries with permanent disabling consequences, it may be evident that the amount awarded for defamation is manifestly excessive. In this way, the comparison which s46A requires limits awards for defamation. What it does not do, however, is identify where, within the outer limits of proper awards, a particular case should find its proper level. It does not, for example, say that some or all forms of defamation should attract awards less than (or greater than) an award that might be for (say) the loss of a limb. 73 Nor would it be consistent with the statutory adoption of the rule that "damages for defamation shall be damages recoverable in accordance with the common law" (s46(2)) to understand section 46A as prescribing a particular, let alone a mathematical, relationship between the damages to be awarded for defamation and the damages for non-economic loss in personal injury awards. It is of the first importance to recall the fundamental principle that the damages to be awarded for defamation must compensate for the effect of the defamation on the particular plaintiff. Likewise, it is fundamental that the damages for non-economic loss and personal injury awards must compensate for the effect of the injury on the particular plaintiff. Classifying kinds of defamation and kinds of personal injury, and using that classification to assert some relationship between the damages to be awarded in these cases would deny those fundamental principles. Nothing in section 46A permits or requires it to be done. 74 In the end, what section 46A draws to attention is that damages awarded for defamation must take their proper place in the administration of justice. In particular, they must stand in a proper relationship with awards for the non-economic consequences of personal injury. The relationship which section 46A(2) identifies is not, however, some precise or mathematical relationship between particular cases of defamation and personal injury or between particular classes of such cases. To do that would compare the incomparable. Nonetheless section 46A(2) should be understood as having two particular consequences of relevance to the present appeal. 75 First, it invites attention to the nature of the injury done by defamation compared with the consequences of physical injury. The injury done by defamation, even if serious, is often evanescent. By contrast, some personal injuries are permanent and devastatingly disabling. One of the principal purposes of an award of damages for defamation is to vindicate the wrong that was done. By contrast, damages for personal injury can compensate, but cannot right the wrong that was done. Yet, in neither defamation nor in personal injuries is there any measure by which compensation for the non-pecuniary loss which the particular plaintiff has suffered can be assessed except what is "reasonable". 76 The second effect of section 46A(2) flows from both the reference to the "general range" of damages allowed in personal injury cases and the inclusion, within the class of personal injury cases to be considered, of cases where the damages to be allowed are regulated by statute. Treating cases where the damages allowable are capped by statute as included within the "general range" to be considered shows that those statutory limits imposed in cases of motor or workplace accident are not to be taken as being indirectly imposed as limits on the amount to be allowed in defamation. But the reference to the general range of damages does identify the highest sums awarded for the non-economic consequences of personal injury as what might be called a presumptive outer limit to awards for defamation. So much follows from the fact that rarely, if ever, will the harm done by a defamation be greater than the most serious form of physical injury which leads to permanent and serious disability. If that represents the presumptive outer limit to awards for defamation, each particular award that is made must find a place within a range which is marked out in that way." ( Rogers v Nationwide News Pty Limited 216 CLR 327 at 351 [72] - [76] Hayne J.) 99 Against that background the defendant accepted that if its defence of qualified privilege failed, the imputations found to be conveyed by the jury were serious. The defendant also accepted that having regard to the extent of publication it followed that damages of a non-trivial kind would have to be awarded to the plaintiff. The real issue between the parties on the question of damages was whether, as the plaintiff submitted, the damages should be "at the high end of the range". 100 There was no challenge to the evidence called on behalf of the plaintiff that prior to the publication of the article he had a good reputation. As of 30 August 2002 the circulation of the SMH was substantial in NSW and significant in other States and Territories. The readership in NSW was 903,000 (exhibit L). Quite clearly the article and the imputations were widely disseminated. 101 The plaintiff's case on damages focused on two matters - damage to his political reputation and damages for hurt feelings. 102 On the first issue it was the plaintiff's case that having started from humble beginnings, he became a successful businessman and an influential member of the Lebanese community. The acme of his career was his appointment as a Minister in the NSW Government. It was the plaintiff's case that the article had substantially damaged his political career and had contributed to him being dropped from the Cabinet after the State elections in 2003. 103 There is no doubt that his position in politics and in the Lebanese community was damaged. His evidence as to political colleagues avoiding contact with him and about a significant reduction in invitations to functions and activities within the Lebanese community was not challenged in cross-examination. 104 I do not accept, however, that this article of itself was a direct cause of him being dropped from the ministry after the 2003 elections. The diary notes of the then Premier, Mr Carr, make it clear that there were a number of other reasons why this occurred. Nevertheless it is clear, as Mr Carr said in his evidence, that this article played a part in Mr Carr's reasoning process when he suggested to Mr Obeid that he not renominate for the ministry. 105 On this issue the defendant submitted that a matter which needed to be taken into account was that Mr Obeid had been exonerated by ICAC in its report of 27 February 2003 which was widely disseminated in the press. It was submitted by the defendant that the damage caused to Mr Obeid's political career had been largely repaired by the ICAC report which of itself vindicated Mr Obeid. 106 I agree with the defendant that the contents of the ICAC report of February 2003 need to be taken into account when assessing the damage to Mr Obeid's political career. Having said that it is a regrettable fact of life that people tend to pay greater attention to and to remember negative and sensational matters. Put bluntly, mud sticks no matter how completely a person is exculpated from wrongdoing. 107 The conclusion which I have reached is that the article did cause significant damage to Mr Obeid's political career. That damage was ameliorated but by no means eliminated by his subsequent exoneration by ICAC some six months later. The article was a factor, but not a major factor, in the loss of his ministerial position after the 2003 State elections. 108 In relation to damages for hurt feelings the impression I gained from Mr Obeid as a witness, was that he was possessed of a resilient and robust personality and was well able to deal with insults and attacks directed at him personally. He could not have been a prominent member of the NSW Parliament otherwise. 109 Where I perceived Mr Obeid to be vulnerable was in relation to his family. I accept his evidence that he was very upset and hurt by the treatment of his children and wife following the publication of the article. I accept that he did in a sense blame himself for exposing them in this way because of his decision to enter into politics. 110 In its submissions on damages, the defendant relied upon s48 of the Act. This relevantly provides: "48 In proceedings for damages for defamation in respect of the publication of any matter, evidence is admissible on behalf of the defendant, in mitigation of damages, that the plaintiff: (a) has already recovered damages; (b) has brought proceedings for damages or (c) has received or agreed to receive compensation, for defamation in respect of any other publication of matter to the same purport or effect as the matter complained of in the proceedings." 111 It was common ground that the plaintiff has brought proceedings in the District Court against the Australian Broadcasting Commission (ABC) which related to "matter to the same purport or effect as the matter complained of" in the present proceedings (exhibit 6). Qualified privilege has been raised as a defence in those proceedings. The proceedings are continuing. Apart from tendering the Statement of Claim, no other evidence was adduced in relation to those proceedings. 112 The relevant principle is set out in Mirror Newspapers v Jools (1985) 5 FCR 507 at 512. It requires a tribunal of fact to consider to what extent damage to the plaintiff's reputation is the joint result of similar publications or is solely the result of one of the publications. Where there is a joint effect, the tribunal must ensure that the plaintiff is not doubly compensated. 113 In the absence of any evidence as to the effect of the material published by the ABC on the plaintiff's reputation and his reaction to it, I am not in a position to make an assessment of whether that publication caused damage in the relevant sense to the plaintiff. I certainly cannot say that the damage to the plaintiff's reputation was the joint result of both this article and the material published by the ABC. Accordingly I do not see how exhibit 6 assists the defendant in the absence of evidence of those matters. In any event I make it clear that the damages which I award to the plaintiff relate solely to the publication of this article and the evidence led in the proceedings as to its effect on him. 114 The plaintiff made a claim for aggravated damages. The basis for this claim was the defendant's failure to apologise for the article. Particular regard was had to the failure to apologise after the findings by ICAC in February 2003 and after the jury verdict in August 2005. The plaintiff also relied upon the use which the defendant made of this article in nominating itself for the Walkley Award in 2003. 115 The principle underlying an award of aggravated damages was set out in Clark v Ainsworth (1996) 40 NSWLR 463. Only unjustifiable or improper conduct by a defendant can be taken into account in awarding aggravated damages. I do not consider that the defendant's conduct in failing to apologise and in nominating itself for a Walkley Award constituted conduct which could be properly characterised as unjustifiable or improper in the sense contemplated in Clark v Ainsworth. Accordingly the plaintiff has failed to establish an entitlement to aggravated damages. I do, however, have regard to the defendant's failure to apologise to Mr Obeid in my assessment of compensatory damages. 116 Taking all those matters into account, I conclude that an appropriate sum to compensate Mr Obeid for the damage done to his reputation is $150,000. 117 It was agreed that in assessing interest on damages I should follow the approach of the High Court in MBP (SA) Pty Limited v Gogic (1991) 171 CLR 657. In a case which involved personal injuries, the High Court held that a rate of 4% was an appropriate rate of interest on damages for non-economic loss. Where those damages were not suffered at a single point in time but incurred over a period of time, that figure should be averaged so as to produce an annual rate of interest of 2%. 118 In this case significant damage to Mr Obeid's reputation and injury to his feelings occurred at the time of publication. For the reasons I have indicated, it can be taken to have continued from the date of publication to the date of this judgment vindicating his reputation. Generally speaking therefore the damage which the plaintiff has suffered was spread (perhaps not evenly) over the period between the date of publication and the date of judgment. I find that the plaintiff's entitlement to damages ceased as of the date of judgment and that the figure I have awarded is applicable entirely to the period between the date of publication and the date of judgment. 119 Although it could be argued that greater damage was occasioned in the period immediately following the publication of the article, it is not possible to be precise in matters of that kind. The better approach which is fair to both parties is to treat the damage as spread evenly over the whole of the period. Accordingly I award interest on $150,000 at 2% per annum from 30 August 2002 to date, ie $12,173.

Orders 120 I enter judgment in favour of the plaintiff against the defendant in the sum of $162,173. 121 No submissions were made in relation to costs. I propose to defer any order as to costs to enable the parties to make any further submissions to me on that question. Should no special costs orders be sought, the order which I have in mind is that costs should follow the event and that the defendant ought pay the plaintiff's costs. **********

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Defamation Act 1974(NSW)

Defamation Act 1957(Tas)

Defamation Act 1989(Qld)

At a glance

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Judgment (35 paragraphs)

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Legislation Cited (3)

Cases Cited (8)