OBEID v JOHN FAIRFAX PUBLICATIONS PTY LTD

JOHN FAIRFAX PUBLICATIONS PTY LTD (ACN 003 357 720) (Defendant) FILE NUMBER(S) : SC 20387 OF 2002 B McClintock SC (Plaintiff) COUNSEL : G Reynolds SC (Defendant) Gilbert & Tobin (Plaintiff) SOLICITORS : Freehills (Defendant)

[2003] NSWSC 563 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

John Fairfax Publications Pty Ltd (acn 003 357 720) (Defendant)

JUDGMENT (Imputations - capacity - form - difference in substance) 1 The plaintiff sues the defendant in respect of an article published in "The Sydney Morning Herald" on 30 August 2002 and also in respect of what is said to be publication on "The Sydney Morning Herald" website on the internet "as from 30 August 2002". 2 The text of the matter complained of is appended to these reasons. 3 The plaintiff contends that this publication in its natural and ordinary meaning carries the following imputations defamatory of him (included are the plaintiff's references to the lines of the text): 9(a) The plaintiff is a corrupt politician prepared to assist a property developer with a development in return for a payment of $1 million to the Australian Labor Party (ALP). (b) The Plaintiff attempted to obtain a bribe, that is a payment of $1 million for the ALP, in return for facilitating the completion of the Oasis development. (Passage relied on: the whole; lines 1-2; 4-34; 39-49). (c) The Plaintiff behaved in such a way as to give rise to the suspicion that he had sought to obtain a bribe, that is $1 million for the ALP, in return for facilitating the completion of the Oasis development. (Passages relied on: the whole; lines 1-2; 4-34; 39-49). (d) 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. (Passages relied on: the whole; lines 35-49). (e) 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 $1 million to the ALP. (Passages relied on: the whole; lines 1-2; 4-34; 39-49). (f) The Plaintiff is a politician without integrity, in that he offered benefits available through his office as a Minister of the Crown in return for secret payments to his political party. (Passages relied on: the whole; lines 1-2; 4-34; 39-49). (g) The Plaintiff sought a bribe for his political party from the developers of oasis in order to obtain personal political advancement within the ALP. (Passages relied on: the whole; lines 1-2; 4-34; 39-49). 4 Pursuant to SCR Pt 67 r 12 A the defendant gave notice of objection to the imputations pleaded by the plaintiff. By consent pursuant to SCR Pt 31 r 2 the question of the capacity of the matter complained of, as a matter of law, to carry the imputations was ordered to be tried and was argued. Additionally, the objections related to matters of form and compliance with SCR Pr 67 r 11(3) namely, the requirement that the imputations differ in substance. 5 The "umbrella" complaint by the defendant is that the pleader has gone beyond what is said to be a "theme" in the whole of the matter complained of and has picked out every conceivable variation in defiance of the rules especially specificity and difference in substance. This argument was amplified against the background of what was described as a "paradigm" imputation drafted by senior counsel for the defendant in the following terms: The plaintiff is a corrupt politician in that he offered to use his position as a politician to assist a property development in return for a payment of $1 million to his political party.

This sample imputation was proffered on the basis that the defendant made no concession that it is capable of arising from the matter complained of. The example was proffered as one of an imputation not defective in form. 6 As to imputation 9(a) it is first contended that the imputation does not state with the appropriate degree of specificity the act or condition relied upon; for example, the word "corrupt" is said to be inherently vague and is not given any narrower definition within the imputation. I find this proposition very difficult to accept. What the imputation is doing is attributing a "condition" to the plaintiff namely that of being "corrupt" which is in my view clearly further defined as being a person "prepared to assist a property developer…" It is not an imputation that could be described as "rolled up" in that "corruption" and "preparedness" are two distinct concepts. The latter defines the former. 7 The phrase "prepared to" is particularly seized upon as one that is inherently vague and ambiguous. It is, to my mind, the employment of ordinary English words to characterise, define, and explain the quality of the plaintiff in terms of his being corrupt. 8 It is further argued that the second part of the imputation, namely that part commencing with the words "prepared to" does not support the assertion of the quality of the plaintiff or the condition in him of being "corrupt". I reject this submission. A politician who is prepared to assist a developer in return for a payment of $1 million to the politician's party lends himself to be appropriately described as "corrupt". I do not understand any notion of "corruption" in terms of requiring the payment of money to involve the person who demands the money to be paid to be himself the recipient of it or the beneficiary of the payment. I find imputation 9(a) proper in form and capable of being carried by the matter complained of and capable of being defamatory. 9 Imputation 9(b) is said, first, not to differ in substance from 9(a). I have indicated my view that 9(a) attributes a "condition" to the plaintiff. Imputation 9(b) accuses him of "an act" namely, the attempt to obtain a bribe. The bribe is identified, in my view, in terms of the payment of the $1million to the ALP in return for facilitating of the completion of the of the development. The matter complained of is capable of suggesting that which is encapsulated in 9(b), which, as I have said, differs in substance from 9(a). 10 As to 9(c), this is clearly a "fallback" imputation and a fallback imputation to 9(b) because the suspicion is as to an act, namely, the seeking to obtain a bribe rather than the suspicion as to a condition, namely, of being "corrupt". There is nothing in the matter complained of capable of identifying in any meaningful way, if at all, the identity of a person who held a suspicion. This imputation can only be available as a "fallback" imputation, and will be allowed to remain as such. 11 In the course of considering the submissions for both sides in relation not merely to the first three imputations but to all of them, recourse was had, of course, to the decision of the Court of Appeal in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 and Greek Herald v Nikolopoulos (2002) 54 NSWLR 165 as well as earlier decisions as to form especially Sergi v Australian Broadcasting Commission (1983) 2 NSWLR 669. Nikolopoulos is clear authority for the availability of the matter complained of to provide context for the determination of whether an imputation can be defamatory. Nikolopoulos does not in any way derogate from the requirement of proper pleading as propounded by Gleeson CJ in Drummoyne at 137D; see Mason P at paras [18] - [24]. In my view Nikolopoulos, again, not discordantly with what the Chief Justice said in Drummoyne recognises the good sense and reality that imputations simply cannot be viewed, in terms of both form, that is, on a pleading basis, or on capacity, in the abstract. Recourse can, and good sense demands that it must be, had to that which generates the grievance namely the matter complained of which has been published. 12 Imputation (d) introduces a concept hitherto not embraced by the preceding three imputations. The concept is, of course, that the plaintiff "lied". The lie is founded upon the publication of a denial. No complaint is made about the form of the imputation, but here the question is one of capacity. In what would be a rare journalistic event, where there is no more than the blandly simple assertion of "x" (the making of the allegation), and the blandly simple denial of it, a real question might arise as to whether such a publication would be capable of carrying the meaning that the person who simply denied the simple allegation was lying in the denial. Here, the format and the theme of the matter complained of is of critical importance. It might well be, and this could ultimately be a question for the jury, that in this State our society has evolved a new concept of "denial". It may well be that amongst ordinary reasonable people, informed if not infected by modern standards of journalism, informed if not affected by the subject matters of modern journalism, that the "denial" of the "allegation" or an "assertion of guilt", in some way carries a presumption that the denial is merely a lie, more probably than not, a "lie of convenience". That "lie of convenience" it might now have to be understood in the environment to which I have referred, rests until revived and tailored or "spun" at some later point of time when what might be characterised as "an acceptable truth" has either been negotiated between the accuser and the person accused or is otherwise required. Be that as it may, the denial in context could found such an imputation as pleaded. 13 I hold the matter complained of capable of carrying, as a matter of law, imputation 9(d) and that that imputation is capable of being defamatory. 14 As to imputation 9(e), to my mind, there is no ambiguity or uncertainty in the imputation by the use of the words "evade the legal restriction". To my mind there is no impropriety in having recourse to the matter complained of to find a source for those ordinary English words in such words in the matter complained of as the caption to the photograph "fix-it plan" and "smooth any licensing problems relating to the number of poker machines the club was seeking" in lines 9 and 10. Again the submission is made that the second part of the imputation does not support the opening words. Not only do they support them, those words in my view define them clearly. I add that insofar as during the course of submissions it was suggested that the plaintiff's position purported to assert two separate payments of $1 million for separate purposes, that suggestion cannot be sustained on any rational consideration of the matter complained of or indeed of the imputations. 15 I hold imputation 9(e) to be proper in form, capable of being carried and capable of being defamatory. 16 Imputation 9(f) is an imputation which in my view legitimately can be held to contravene SCR Pt 67 r 11(3). This imputation is saying nothing more about the "condition" of the plaintiff, namely "corrupt" (politician without integrity) and his acts, namely, the offering of benefits than have been referred to in imputations 9(a), (b), (d) and (e). 17 I strike out imputation 9(f) as contravening the rule referred to. 18 As to imputation 9(g) I do not agree with the submissions for the defendant that the matter complained of is incapable of suggesting that the plaintiff sought a bribe and that the imputation is defective in form in that the words "a bribe for his political party" do not make "sense" and are inherently vague and ambiguous. I do accept the submission for the defendant that the matter complained of is simply incapable, applying the test of reasonableness, of carrying the imputation the thrust and sting of which is concerned with notions of personal advancement of the plaintiff within the ALP. This is not a "minds might differ" situation. The matter complained of does not even give the "impression" of any such meaning. 19 It was argued for the plaintiff that whilst not breaching the "inference upon inference" rule stressed again in Marsden v Amalgamated Television Services Pty Ltd (1998) 43 NSWLR 158 at 167, an inference is otherwise available from the whole of the matter complained of (see Saint v John Fairfax Publications Pty Ltd [2002] NSWSC 312 at para [5]). The inference it might arguably be said is available, but I am perfectly satisfied that it is simply not a reasonable one. 20 Imputation 9(g) is incapable of being carried by the matter complained of and the defendant is entitled to a verdict in relation to that cause of action. 21 The orders are:

1. Imputations 9(a), (b), (c), (d) and (e) I hold to be proper in form, different in substance, capable of being carried by the matter complained of and capable of being defamatory.
2. Imputation 9(f) is struck out without leave to amend.
3. Imputation 9(g) I find to be incapable of being carried by the matter complained of and enter a verdict for the defendant in relation to that cause of action.
4. I order the defendant to pay two-thirds of the plaintiff's costs.
5. I direct the defendant within 14 days to file a defence to the issues remaining in the statement of claim for the determination of a jury pursuant to s7A of the Defamation Act 1974.
6. Pursuant to SCR Pt 31 r 2 I direct the trial by jury of the issues joined between the parties on the pleadings for the determination by that tribunal pursuant to s7A of the Defamation Act 1974.
7. I place the matter in the list to be called up for trial by jury pursuant to s7A of the Defamation Act 1974.

APPENDIX A alp push for oasis cash: obeid accused Kate Mclymont and Anne Davies Photos of the plaintiff and Gary McIntyre appear above the words: $1 million fix-it plan alleged…Eddie Obeid and Gary McIntyre. The state Fisheries Minister Eddie Obeid, has denied attempting to seek $1 million payment to the ALP in return for solving the Bulldogs' problem with their Oasis development. Several sources have told the Herald that the then president of the Bulldogs Leagues Club, Gary McIntyre, discussed with them Mr Obeid's offer to help get the crucial price of Crown land needed for the development as well as smooth any licensing problems relating to the number of poker machines the club was seeking. In turn, $1 million had to be handed to the ALP. This was to be done by Mr Obeid nominating the companies to work on the project, and those companies would then inflate their prices, with the excess to be paid back to the ALP as donations. A political lobbyist, Mark Wells, previously employed to run the Bulldogs' media strategy, told the Herald he had dinner with Mr McIntyre at the Bulldogs Leagues Club on November 21 last year. Mr McIntyre had told him of the conversation with Mr Obeid. According to Mr McIntyre, Mr Obeid had said: "If you make a million-dollar payment to the ALP it'll [the development] go straight through." Mr McIntyre also explained that the payments were to be hidden through donations form various suppliers and that Mr Obeid had said they would tell him which suppliers would be used. Mr Wells said Mr McIntyre had said: "I wish I'd paid it." Another source, who did not wish to be named, said that 18 months ago Mr McIntyre had told him he thought the ALP was being too greedy and he did not want to pay. This person said Mr McIntyre had told them that Mr Obeid said "if he [McIntyre] used a particular building company [named the company], that company would increase its contract price by $2 million, which would find its way into the ALP coffers." When Mr Obeid was asked in writing why Mr McIntyre would say these things, the minister would not elaborate except to say that he had met Mr McIntyre on only a handful of occasions, the most recent of which was at a public function at the Bulldogs Leagues Club on August 7. When Mr McIntyre was asked whether the club had been pressured into making a donation to the NSW Labor Party in return for a waiver on the poker machine freeze, he replied: "That's absolute garbage." So there wasn't a meeting with Eddie Obeid where he had suggested that? Mr McIntyre: "I have never had a meeting with Eddie Obeid. Oh, sorry, I have recently. Look, I don't want to comment of this because I am giving oxygen to something that doesn't have legs at all. Look, this club has never been involved in any impropriety at all." In response to questions in Parliament yesterday about the meetings Mr Obeid had attended in regard to the Oasis development, the minister said he had only been to one presentation on the project and that was 2½ years ago. The Treasurer, Michael Egan, told Parliament he had had a meeting in his office with Liverpool Council representatives in which he said they would not get "a brass razoo" from the Government. The Premier, Bob Carr, has been steadfast in his opposition to the number of poker machine the Bulldogs have been seeking for their new club and, to date, Obeid accused of Oasis raid From page 1 the Government has not handed over a piece of Crown land central to the Oasis development in Woodward Park, Liverpool. In other developments yesterday, it appears, that Mr McIntyre, who stood down as president of the leagues club last week, has been endorsed to stay on as the Bulldogs' official representative on the Oasis project, a move that is said to have licensed Liverpool Council. The Herald has also learnt that Mr McIntyre does not have a fully independent practising certificate meaning he can work as a salaried solicitor but cannot charge costs for his legal work or practise other than as an employee. However, the Bulldogs Leagues Club annual report says Mr McIntyre's private company has sent a bill for "legal and consulting services to the company". Lat year is was $114,974, compared with $197,0000 in 2000. Meanwhile, the former state minister for health Kevin Stewart is expected to be the new president of Bulldogs Leagues Club, following a meeting yesterday at the club's Belmore headquarters. Mr Stewart is part of an ALP dynasty that included his brother Frank, a sports minister in the Whitlam government.

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