Parras & 2 Ors v Channel Seven Sydney Pty Limited

PARTIES : HOTEL PURSUITS PTY LIMITED (ACN 071 584 944) (Third Plaintiff)

CHANNEL SEVEN SYDNEY PTY LIMITED (ACN 000 145 246) (Defendant) JUDGMENT OF : Levine J

B McClintock S.C. S Kerr COUNSEL : (Plaintiff)

M Lynch (Defendant) Back Schwartz & Vaughan (Plaintiff) SOLICITORS : Mallesons Stephen Jaques (Defendant) CATCHWORDS : Imputations - capacity - Harrison Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 CASES CITED : Mirror Newspapers Limited v Harrison (1982) 149 CLR 293 Rigby v John Fairfax Group Pty Limited (unreported, 1 February 1996; special leave to the High Court refused 13 September 1996) DECISION : See paragraph 16

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST No. 20149 of 2000

ANDREW LAZARUS (Second Plaintiff) HOTEL PURSUITS PTY LIMITED (ACN 071 584 944) (Third Plaintiff) v

CHANNEL SEVEN SYDNEY Pty Limited (ACN 000 145 246) (Defendant)

JUDGMENT (Imputations - capacity - Harrison ) 1 The first and second plaintiffs are directors of the third plaintiff. They conduct and manage its business. That business is the business of the Piccadilly Hotel in Victoria Street Potts Point and the "Soho Bar". 2 The plaintiffs sue the defendant in respect of a publication on 29 January 2000 during the course of a news telecast. 3 Appended to these reasons is a transcript of the matter sued upon. 4 The plaintiffs, who are not referred to by name in the matter complained of, are the subject of particulars of identification being the repetition of the facts I have just recited. 5 It is contended for the plaintiffs that the published material carries the following imputations: "6. (a) The plaintiffs are criminal drug dealers who supplied large quantities of the illegal drugs ecstasy and cocaine. (b) The plaintiffs had managed the business of the Piccadilly Hotel and the Soho Bar in such a way as to deserve to be suspected on good grounds by the New South Wales Police of being drug dealers. (c) The plaintiffs has so recklessly managed the business of the Piccadilly Hotel and the Soho Bar that the Soho Bar was raided by police who arrested several staff members on drug and weapons charges. (d) The plaintiffs knowingly permitted the premises of the Soho Bar to be used by drug dealers to sell illegal drugs. (e) The plaintiffs have so incompetently managed the business of the Piccadilly Hotel and the Soho Bar that the Soho Bar was raided by police who arrested several staff members on drug and weapons charges". 6 By consent pursuant SCR Pt 31 r 2 the separate question of law as to the capacity of the telecast to carry the imputations has been argued. 7 For the defendant the point is really quite short. The program is dealing with two nightclubs, the first is the "Underground Cafe" and the second is the "Soho Bar". It is argued that the Soho Bar was only the subject of remark in the last paragraph. In relation to the "Underground Café" it is conceded that the imputations would be capable of, the material published going beyond the bare requirement for the application of the principles in Mirror Newspapers Limited v Harrison (1982) 149 CLR 293 not to permit the understanding of the broadcast to convey imputations of "guilt". 8 For the defendant it was submitted that the reference to the "Soho Bar", at the end of the program was such as to isolate it from all that precedes it and thus permit no more than imputations of suspicion on reasonable grounds. 9 These submissions cannot be sustained on a fair viewing of what the defendant telecast. The segment opens with a reference to ten people being arrested and subsequently explains that seven were at the "Underground Café". It is not an unreasonable inference to note that the balance were at the "Soho Bar". The program refers to "overnight raids at two Sydney nightclubs" by "heavily armed police" and the seizure, in general terms, of a large quantity of drugs and cash. There are visual scenes of plastic bags containing pills and large quantities of bank notes. The program at greater length in reference to the "Underground Café" is, as the defendant concedes, clearly capable, by reference to the words and particularly the images, of carrying imputations of guilt. 10 The structure, theme, words and images in the program, unarguably, are capable of conveying to the reasonable viewer that there is no difference between what was happening at the "Underground Café" and the "Soho Bar". Both were the targets of "Operation Planwell" and were the two Sydney nightclubs referred to in the introductory comments. 11 The telecast sued upon is a very good example of the impact of the medium and its capacity to convey (as was conceded in part by the defendant) imputations of the kind upon which the plaintiffs sue. The general principles have been reviewed by Hunt CJ at CL in Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 and were earlier considered by the Court of Appeal in Rigby v John Fairfax Group Pty Limited (unreported, 1 February 1996; special leave to the High Court refused 13 September 1996). 12 This component of the defendant's application must fail. 13 It is also submitted in respect of imputation 6(a) that it was incapable of defaming the corporate plaintiff insofar as it describes it as a "criminal drug dealer". It was further argued that imputations (c) and (e) are incapable of being conveyed of any of the plaintiffs and are incapable of being defamatory of them. I have found that each is capable of being conveyed and reject the submission that of any relevant plaintiffs no one would think any the less by reason of the charge contained in each imputation. To persons knowing the facts enabling identification it will be a question of fact (if seriously in issue) for the jury to determine whether or not the material conveyed imputations of and concerning those plaintiffs. I am satisfied that it is clearly arguable that the ordinary reasonable viewer would understand, in an adverse way, that those connected with the proprietorship and management of the club, by the fact that servants/employees of the club had been arrested in the circumstances referred to in the program, were connected with such criminal activity. 14 I am further not persuaded after reflection that there is no difference in substance between an allegation of "recklessness" and "incompetence". Whether the plaintiffs will choose to run both imputations before the jury will be a matter for them to decide. 15 When next this matter is listed for directions it will be for the purposes of making orders pursuant to SCR Pt 31 r 2 for the separate trial of issues by the jury and to direct the defendant to file a Defence limited to issues to be determined by the jury. If identification is seriously to be in issue then directions as to the service of witness statements will also be made. 16 The formal orders are:

1. Pursuant to SCR Pt 31 r 2 I found that as a matter of law the matter complained of is capable of carrying of the plaintiffs each of the pleaded imputations.

2. I find that each of the pleaded imputations is capable of being defamatory of each of the plaintiffs.

3. I find that imputations 6(c) and 6(e) differ in substance.

5. The matter is listed for directions on 18 August 2000.

Transcript of Channel Seven's Evening News Broadcast Saturday 29 January 2000 sound visual opening sequence Tonight ten people arrested as Police Plastic bags containing pills and a crackdown on designer drugs in Sydney quantity of cash. Nightclubs.

Another blow to Sydney's troubled power grid. Explosion rips through a substation.

And Lindsey Davenport blasted Martina Hingis off the Court to claim her first Australian open.

Good evening, 10 people have been Chris Bath on screen arrested after overnight raids at two Sydney nightclubs. Heavily armed Police seized a large quantity of drugs and cash.

It's alleged one of the clubs "The Plastic bags containing pills and a Underground Café" is a front for dealing quantity of cash. designer drugs.

sound visual Three thousand ecstasy tablets, large Plastic bags containing pills and a quantities of speed and cocaine plus quantity of cash. $75,000 in cash, the fruits to the three Pictures of a nightclub and people month long Police sting on one of dancing. Sydney's most notorious dance clubs.

Disguised as ravers undercover Police Pictures of a nightclub and people say they've been buying amphetamines dancing. across the bar of "The Underground Café" for the past four months.

Police claim all of the café's staff were Reporter at the front of the Underground involved from the owner and Manager to Café. the Security guard on the front door.

Seven people from the club now face Reporter at the front of the Underground charges of supplying large quantities of Café. ecstasy and cocaine as well as numerous Plastic bags containing pills and a individuals supply charges. quantity of cash.

The club's licence is now also under Reporter at the front of the Underground review. Café.

Police allege the Nightclub is just a front for the real business of dealing drugs. Trading there has been suspended for seventy-two hours while Police apply to the Licensing Court to have "The Underground Café" shut down for good.

Tagged "Operation Planwell", Police Front of the Soho Bar/Piccadilly Hotel. also targeted the Soho Bar in Kings Cross arresting several staff, they're facing Pills in plastic bags and cash. drugs and weapons charges.

Last Modified: 09/26/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.