Packer v John Fairfax Publications Pty Ltd

Packer v John Fairfax Publications Pty Ltd - [2006] NSWSC 940 - NSWSC 2006 case summary — Zoe

[16]

(1) that the plaintiff was at all material times the Executive Chairman of PBL; (2) a wholly owned subsidiary of PBL has a 25% ownership interest in Foxtel; (3) in the proceedings the subject of the matter complained of, the 7 Network and other companies associated with Kerry Stokes had sued, amongst other parties, PBL for breaching the provisions of the Trade Practices Act 1974 by engaging in anti-competitive conduct including, specifically, aiding and abetting Foxtel in a misuse of market power. 10 During the course of argument, paragraph 5, but not the particularisation of the facts and circumstances thereto, was redrafted in recognition of defects in the way it was previously formulated. 11 Originally, paragraph 5 of the statement of claim was pleaded as follows: "In the alternative to paragraphs 4(a) and (c) above [i.e. imputations 4(a) and (c)], if it is found that the facts particularised below were not part of the general knowledge of the community nor matters of public notoriety, then the plaintiff says that each of the imputations pleaded in paragraphs 4(a) and (c) above were conveyed to the ordinary reasonable reader by reason of the asserted facts." 12 The second half of this paragraph is, on its face, a pleading of a true innuendo, and it is conventionally followed by the particulars of extrinsic fact, said to be known to some recipients of the matter complained of, which could convert an otherwise innocuous publication into a defamatory one in the minds of those recipients. However, the first half of the paragraph is not apposite to such a pleading and is, in my view, quite mysterious. After hearing argument, it appeared to me that it was intended to bolster the plaintiff's claim as to the natural and ordinary meaning of the contents of the matter complained of, and its capacity to convey the imputations pleaded. So to plead is, obviously, quite inappropriate. 13 That that was the intention of the pleader appears to be confirmed by the plaintiff's response to the defendant's Rule 12A Notice. 14 I accept that facts that are part of the general knowledge of the community or matters of public notoriety may be factored into the evaluation of whether the matter complained of is capable, in its natural and ordinary meaning, of conveying the defamatory imputations pleaded. Eventually, after a good deal of argument, senior counsel for the plaintiff sought leave to amend the opening part of paragraph 5 to read: "In the alternative to paragraphs 4(a) and (c) above, the plaintiff says that each of the imputations pleaded in paragraphs 4(a) and (c) above were conveyed to such persons who had knowledge of the following facts."

[21]

With the word 'competitor', … there is no statement that Mr Packer is a competitor … it is not said that Mr Packer is a competitor of anyone and it is not said even that PBL is a competitor of anyone." 18 In support of the imputation, senior counsel for the plaintiff pointed to the words "we'll wipe you out", "key suspect", "billion dollar damages suit"; a reference to damages claimed against rivals of Mr Stokes; a reference to an intention (said to have been expressed by a different person) to destroy C7 (identified in the first substantial paragraph as a pay TV channel once run by the Seven Network); a reference to an intention to create monopolies, which, the argument ran, could be attributed to the plaintiff or PBL; and a suggestion that, although PBL was not the instigator of the plan, it was implied that it was a participant. 19 I am unimpressed with the argument that the words "unlawfully", "market power of PBL", and "competitor" are not specifically used in the item. The whole point of pleading imputations is to draw from the matter complained of a defamatory imputation which may not be explicit. 20 The tone of the article is to convey an accusation of unlawful conduct in competition between rival media organisations. This emerges, perhaps most clearly, from the passage which appears under the photograph, and which is repeated in the substance of the item, which attributes to the plaintiff a statement made to Mr Stokes that "we" were going to take the AFL rights, that "we're all" going to get together to take them; from the use of the words "key suspect"; from the use of the words "designed to destroy C7". Alone, perhaps this may be construed as tough but legitimate competition in a competitive business environment. But I am concerned with the capacity of the matter complained of to convey the imputations pleaded. In my opinion, as I have indicated, the tone of the article, with particular reference to those passages I have mentioned, is capable of conveying unlawfulness. 21 I am not, however, satisfied that the article is capable of conveying that part of the imputation that asserts that this would be done by the use of PBL's market power. The item is unspecific as to the power proposed to be used. In so far as the imputation includes the intention to use market power to achieve the stated purpose it will be disallowed. I will grant leave to amend. 22 That leaves the question of whether the element of "competitor", that part of the imputation that identified Mr Stokes as a competitor of the plaintiff, is capable of being conveyed. I am of the view it is so capable by reason of what is contained in the second paragraph. There Mr Stokes is said to have "pointed the finger at his opposite number" at PBL. This, in my opinion, is sufficient to identify the plaintiff and Mr Stokes as competitors. 23 I have concluded that imputation (a) requires some amendment, in the manner I have suggested, but is otherwise capable of being conveyed.

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As with the matter complained of in proceedings numbers 20324 of 2005, the matter complained of is published as a news item, and refers to court proceedings, this time proceedings said to have been brought in this court by the Australian Securities and Investments Commission ("ASIC") against "former One.Tel chief Jodee Rich" and a Mark Silbermann, said to have been the former chief financial officer of One.Tel. As in the 20324 of 2005 proceedings, the item gives the impression of being one of a continuing series of articles purporting to report the litigation, and assumes in the reader a level of knowledge and of familiarity with the subject matter. A small photograph captioned as being the plaintiff accompanied the article. The caption identified the plaintiff , and posed the question: "… how early did he know the worst?" 51 A separate box was headed: "Ringing up the charges". 52 The body of article commenced with the following: "James Packer, chairman of Publishing and Broadcasting Limited and a former director of telecom One.Tel, was likely to have known as early as November 1999 that One.Tel was running short of money and needed a cash injection. That was 18 months before the company collapsed, at the end of May 2001." 53 The following relevant passages also appeared in the article: "ASIC is seeking declarations that One.Tel was trading while insolvent in the three months before it collapsed and wants Mr Rich and Mr Silbermann to pay compensation and be banned from serving as company directors. … Then Mr Williams [Mr David Williams, SC, counsel for Mr Rich] asked him [Mr Geoffrey Kleeman, PBL's chief financial officer] about a file note he had prepared which said the 'business needed a cash injection'. Mr Kleeman replied: 'If that's what it says.' And you told that to James Packer? - I may have, I just don't recall. Are you worried about giving some evidence that might implicate James Packer? - I am not worried about it. Your gave the file note to James Packer? - I just don't recall if I did. Asked by Mr Williams if it was likely he did, Mr Kleeman agreed it was."

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imputation (a): the plaintiff had committed a serious breach of his duties as a director of One.Tel by knowingly permitting it to trade while insolvent 56 On behalf of the defendant it was argued that this imputation is incapable of being conveyed for the following reasons: "(a) nowhere in the matter complained of is it asserted or inferred (sic) that One.Tel traded whilst insolvent. The matter does make reference to ASIC seeking declarations that One.Tel was trading while insolvent in the three months before it collapsed but that cannot support an assertion that One.Tel did actually trade whilst insolvent. (b) nowhere in the matter is it stated or inferred (sic) that the plaintiff 'knowingly' permitted One.Tel to trade whilst insolvent. That element is simply not there. (c) nowhere in the matter complained of is it stated or inferred (sic) that the plaintiff committed a serious breach of his duties as a director of One.Tel in any manner whatsoever." 57 It is true that the statement that ASIC was seeking a declaration that One.Tel was trading while insolvent does not permit an inference that that was the fact: Mirror Newspapers Ltd v Harrison [1982] HCA 50; 149 CLR 293. However, the matter complained of can, in relation to imputations, be confined too literally. There is more than this in the matter complained of. The opening paragraph contains an assertion that, to the probable knowledge of the plaintiff, One.Tel was "running short of money and needed a cash injection" eighteen months before its ultimate collapse. 58 Given a certain amount of loose thinking, and allowing for less than analytical reading of the matter complained of, in my opinion the flavour of the article is such that an ordinary reasonable reader would draw the inference that One.Tel had been trading whilst insolvent. So also could it be inferred that the plaintiff was aware of this. This, again, emerges from the opening paragraph, which I have extracted above, and also from the caption to the photograph: "… how early did he [the plaintiff] know the worst?" 59 In my opinion both of these aspects of the imputation are capable of being conveyed. 60 A final complaint is that there is no explicit reference in the matter complained of to "a serious breach" of director's duties on the part of the plaintiff. 61 I also reject this complaint. The plaintiff was identified as the former director of a failed company, who was said to know of its financial plight well in advance of its collapse; and it was said that the company continued to trade for eighteen months after he had that knowledge. An ordinary reasonable reader could infer that failure to act constituted a breach of director's duties.

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Judgment (42 paragraphs)

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