WATERS v JOHN FAIRFAX PUBLICATIONS

• 16 - 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 - form - capacity) 1 The plaintiff sues the defendant for damages for defamation in relation to two articles published in The Sydney Morning Herald on 29 and 30 August 2002. 2 The text of each article is appended to these reasons. 3 The plaintiff pleads that the first article carries the following imputations defamatory of him: 5(a) The Plaintiff is corrupt in that, when a member of the Tow Truck Industry Advisory Council, a body set up by the government to reform the tow truck industry, the Plaintiff employed the criminal Ian Clissold, to work in the tow truck industry. (b) The Plaintiff is corrupt in that when a member of the Tow Truck Industry Advisory Council, a body set up by the government he made a collusive deal with the NRMA. 4 The second article is said to carry the following imputations defamatory of the plaintiff: 6(a) The Plaintiff is corrupt in that, when a member of the Tow Truck Industry Advisory Council, a body set up by the government to reform the tow truck industry, the Plaintiff employed the criminal Ian Clissold, to work in the tow truck industry. (b) The Plaintiff is corrupt in that when a member of the Tow Truck Industry Advisory Council, a body set up by the government he made a collusive deal with the NRMA. (c) The plaintiff is guilty of serious misconduct while an advisor to the Tow Truck Industry Advisory Council in that he employed as licensed tow truck drivers criminals including Ian Raymond Clissold who was found guilty of the manslaughter of a bikie gang member. 5 The defendant has objected to the imputations as pleaded on the basis of form and capacity.

First matter complained of 6 The objection to form is founded upon the decision of Hunt J in Mayfield-Smith v Mirror Newspapers Ltd [1982] 2 NSWLR 419 at 421: by way of example the words "when a member of the Tow Truck Industry Advisory Council, a body set up by the government to reform the tow truck industry" are objected to on the basis that they add nothing to, nor qualify in any way, the sting of the imputation and should be deleted. 7 For the plaintiff it is conceded that the principle as enunciated by Hunt J is correct but that it has no application in the present case. I accept the submission of the plaintiff in regard to this question of form as it relates to both imputations said to arise from the first matter complained of. In my view it certainly adds to the sting to identify the plaintiff as a member of the body referred to in the context of the whole of this article. 8 It is further contended that the imputations suffer the traditionally asserted defect in not identifying "corrupt" or, to put it another way, the balance of the imputation does not explain the concept vis-à-vis the plaintiff. With this I must disagree. Whilst I acknowledge that if the complained of clause was omitted, merely to say that the plaintiff employed the criminal and was thus corrupt would not, as such, be proper in form in that it would fail to disclose the nature of the corruption or any suggestion of knowledge. As a whole, however, the imputation is adequately clear. 9 The same considerations relate to the second imputation founded in the first matter complained of. 10 In the light of the matter complained of and viewed discretely as an imputation I do not consider the plaintiff to have offended what was enunciated by the Chief Justice in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 especially at 138, or what was said by Hunt J in Whelan v John Fairfax and Sons Ltd (1988) 12 NSWLR 148 at 152 (see also Hall & Ors v Gould [2002] NSWSC 359, Levine J, at paragraph [13]). 11 A further question of form, especially in relation to the second imputation, is argued to the effect that the word "collusive" is ambiguous and imprecise. Reference is made to the Oxford English Dictionary's definition involving "fraud" and "trickery". I am of the view that there are parts of the matter complained of as well as the overall theme which support the proposition of "collusion" and a deal being done between the plaintiff and the NRMA in secret. By way of example, the plaintiff is referred to as the "favoured operator" for the NRMA, those parts of the matter which refer to the absence of information being passed to the general manager of the Tow Truck Authority and the notion of "surprise" in relation to the announcement of the deal. 12 As to the question of capacity of the matter complained of to carry these imputations the defendant is confronted by an article to which the attributes of the ordinary reasonable reader, as a person who engages in "loose thinking" and reads between the lines, will be particularly relevant. The prominence given to the plaintiff in the opening parts of the matter complained of set a theme: the article proceeds to deal with the plaintiff's employment of the convicted criminal and, to use as neutral a word as possible, "an arrangement" being made with the NRMA. Everything, the ordinary reasonable reader would understand, has been referred to the Independent Commission Against Corruption. That is the thrust of the whole matter complained of. Refined distinctions between the Tow Truck Authority and the Advisory Council could play no part, arguably, in the ordinary reasonable reader's conclusions as to what the defendant has published in the context of the two imputations pleaded. 13 The defendant's complaints in relation to both form and capacity with respect to the first matter complained of fail.

Second matter complained of 14 First it is to be noted that from imputation 6(a) the words "a body set up by the government to reform the tow truck industry" are to be deleted and the imputation grammatically reconstructed. The same applies to imputation 6(b) by the omission of "a body set up by the government". 15 Taking into account those amendments, the objections as to form on the Mayfield-Smith basis and in my view "corrupt", are not available generally for the reasons adverted to in connection with the first matter complained of. 16 The concept of referring "everything" to ICAC exists in the second matter complained of. There is also express use of the word "collusion". 17 There is some confusion within the text as to the Tow Truck Authority and the Tow Truck Industry Advisory Council, however the article does make clear that the plaintiff was "one of Mr Scully's council advisers and a preferred towing operator for NRMA". I am satisfied as to the issues of form and capacity. 18 It was also argued for the defendant that imputations 6(a) and (c) do not differ in substance. A fair reading of the imputations indicates that they clearly do. The act in the second imputation identifies a serious misconduct in the employment of criminals generally and Clissold in particular; the act in the first imputation is specifically corruption in relation to Clissold. 19 The defendants application thus fails. 20 The orders are:

1. I find the first matter complained of capable as a matter of law of carrying imputations 5(a) and (b).
2. I find the second matter complained of capable as a matter of law of carrying imputations 6(a), (b) and (c).

3. I direct the defendant to file a defence to those issues to be determined by the jury pursuant to s7A of the Defamation Act 1974 by 17 January 2003.
4. Pursuant to SCR Pt 31 r 2 I order that there be a separate trial of the issues of fact joined between the parties pursuant to s7A of the Defamation Act 1974.
5. I place the matter in the list for call up for the purpose of fixing a date for hearing of the trial by jury.
6. The defendant is to pay the plaintiff's costs.

The Sydney Morning Herald, Thursday August 29, 2002

THE TOW TRUCKS THAT ATE SYDNEY 1A The Carr Government promised to reform the perennially volatile tow truck game. Four years later 1B the industry is about to explode amid allegations of favouritism and corruption. 1C Darren Goodsir reports.

1D TOW TRUCK INDUSTRY ADVISORY COUNCIL 1E Picture of the members of Council

1F PETER ANDERSON: 1G The only chairman of the 1H Tow Truck Authority. 1I He was informed by 1J NRMA Insurance of its 1K intentions for the preferred 1L towing scheme five 1M months before it was 1N announced - but never 1O raised the matter with his 1P general manager who 1Q looked after all operators.

1R CARL SCULLY: 1S Appointed Waters and 1T Willis as industry 1U experts on cleaning up 1V the industry. Has just 1W referred serious 1X allegations of 1Y misconduct to ICAC, 18 1Z months after first being 1AA alerted to misconduct.

1BB Picture of Steve Willis: 1CC STEVE WILLIS: Former 1DD member of Tow Truck 1EE Industry Advisory Council. 1FF He has secured a lucrative 1GG deal with NRMA 1HH Insurance.

1II KEVIN WATERS: One of 1JJ the city's biggest towing 1KK operators. Has won the 1LL blessing of NRMA 1MM Insurance for preferred 1OO towing

1PP FRANCES MARSHALL: 1QQ The inaugural general 1RR manager of the Tow Truck 1SS Authority. She secured a 1TT 25 per cent performance 1UU bonus.

1 Kevin Waters is a big player 2 in Sydney's notorious 3 towing scene. He is also 4 arguably its most contro- 5 versial, a top operator 6 with a formidable reputation, a man of 7 extraordinary influence whose reach 8 goes all the way to the top.

9 The Transport Minister, Carl Scully, 10 thought so highly of Water's expertise 11 that he appointed him as a govern- 12 ment adviser to overhaul towing, get 13 rid of criminal elements and boost the 14 profession's horrendous reputation.

15 Since 1999, along with Steve Willis, 16 another operator, Waters has been 17 Scully's expert on the Tow Truck 18 Industry Advisory Council.

19 Today, their reform efforts are in 20 tatters.

21 The industry is to be examined by 22 the Independent Commission Against 23 Corruption. Such an investigation 24 also reflects poorly on Peter 25 Anderson, the ebullient chairman of 26 the Tow Truck Authority and the 27 former Labor police and health 28 minister entrusted by Scully to over- 29 see massive changes. Until now, 30 Scully has claimed some success in 31 reforming the industry, citing occu- 32 pational health and safety reforms, 33 with drivers no longer wearing 34 "stubbies and thongs" at accidents.

35 But last week, almost out of the blue, 36 Scully announced he had referred the 37 industry's difficulties to ICAC.

38 Only six weeks earlier, Scully was 39 praising Anderson for doing a "fine 40 job" and ridiculing Opposition 41 concerns of maladministration.

42 Today, Anderson is effectively 43 sidelined - with Scully "suspending" 44 indefinitely all authority and board 45 meetings.

46 Why the sudden change of heart? 47 For the past six months, the Herald 48 has assembled hundreds of docu- 49 ments, emails, correspondence and 50 cabinet papers detailing the towing 51 industry's truly rotten predicament, 52 and the employment by Scully's 53 industry adviser, Waters, of at least 54 one member of the Comanchero's, the 55 bikie gang involved in the so-called 56 Milperra massacre.

57 In its inquiries, the ICAC will find that 58 the Tow Truck Authority's computer 59 system - set up to keep track of licences 60 and keep out criminals - was ineffec- 61 tive. For three years, the computer 62 failed to perform - with an audit in May 63 last year determining 80 per cent of all 64 files were either incorrect or corrupt.

65 During that period, rapists, armed 66 robbers and other criminals were 67 routinely given fresh licences.

68 This was despite the law making it 69 mandatory for criminals to be 70 excluded.

71 "Any person or organisation that was 72 refused a driver's certificate or an oper- 73 ator's licence was not being entered onto 74 the database," one officer told the investi- 75 gators, "and therefore we had no check 76 of anyone who had been refused either a 77 licence or an operator's certificate.

78 "In other words, any operator or 79 driver who was refused a licence or 80 certificate could return to the TTA 81 some time later, speak to a different 82 person at the counter and subsequently 83 be issued with a licence or a certificate, 84 depending on who served them.

85 "I am aware that this did actually 86 occur on some occasions."

87 Despite such failings, the auth- 88 ority's inaugural general manager, 89 Frances Marshall, was granted a 25 90 per cent bonus. The deal, approved by 91 Anderson, was also ratified by offic- 92 ials from the Premier's Department.

93 Marshall took leave in 2000 and 94 has never returned to work. But the 95 day after taking leave, she turned up 96 at Water's office to perform unpaid 97 work.

98 For 12 years, Waters, the NRMA's 99 favoured operator, based in 100 Blacktown, employed the sergeant at 101 arms of the Comancheros outlaw 102 motorcycle gang. The bikie, Ian 103 Raymond Clissold, was sentenced to 104 jail for killing a fellow bikie last April 105 (see separate story).

106 Of course, Clissold is not the only 107 bikie to be working in the towing 108 industry. But his employment of 109 Clissold by Waters was problematic - 110 not least as Waters held the position 111 of a trusted ministerial adviser.

112 Waters and Wills say they went to 113 the NRMA out of "frustration" at the 114 Government's failure to have an 115 "orderly rosters scheme" trial 116 implemented. The two men, who 117 were meant to be advising the 118 Government on how to introduce a 119 fair job allocation scheme, spent five 120 months in painstaking negotiations 121 with the NRMA to secure a deal that 122 favoured their companies.

123 When the deal was announced in 124 February, NRMA Insurance's claims 125 and assessing manager, Paul 126 Pemberton, said the arrangements 127 had "been discussed with the Tow 128 Truck Authority and complement its 129 operation. If the objectives of these 130 initial arrangements are reached, 131 preferred towing within the Job Allo- 132 cation Scheme will be considered for 133 introduction across NSW."

134 No-one had bothered to inform the 135 authority's general manager, Terry 136 Hickey, of this important new indus- 137 try development.

138 On the day the deal was revealed, 139 shortly after midday, Hickey faxed 140 Anderson, his chairman, to alert him 141 to the industry uproar over the 142 Waters-Willis deal and concern that 143 "the TTA has been involved in nego- 144 tiations and endorsed this 145 agreement".

146 "They feel that Kevin Waters and 147 Steve Willis have undercut rates, will 148 be towing in their areas and feath- 149 ered their own nests when they are 150 supposed to be spokepersons for the 151 industry …"

152 He went on to report to Anderson 153 that irate operators were suggesting 154 that "if the TTA was in talks with 155 these parties, why was nothing 156 mentioned in the recent newsletter?"

157 After faxing Anderson, Hickey 158 started telling towing operators the 159 authority had been caught by 160 complete surprise by the NRMA 161 announcement.

162 Later, Hickey wrote to the chief 163 executive of NRMA Insurance, 164 Michael Hawker, to complain in most 165 vigorous terms.

166 "I only became aware of the 167 NRMA's intentions when I received a 168 facsimile from a third party …" he 169 wrote.

170 "I was disappointed that the NRMA 171 did not have the courtesy to provide 172 the TTA with the letter despite 173 mentioning the authority in the text.

174 "The lack of information supplied 175 by NRMA Insurance concerning the 176 scheme does not assist the TTA in its 177 dealings with the tow truck industry."

178 But the NRMA had a surprise of its 179 own. On March 4, Rick Jackson, 180 NRMA's chief operating officer, 181 replied. Not only did he reject 182 Hickey's assertion that the authority 183 had been ignored on the Waters- 184 Willis deal, he outlined in detail 185 regular meetings, emails and select 186 exchanges of correspondence the 187 insurer had with Anderson, his chair- 188 man, for the five months before the 189 deal was announced.

190 According to Jackson, the meetings 191 with Anderson started on October 17 192 last year, where "NRMA Insurance's 193 plans to develop expanded arrange- 194 ments … [were explained]… 195 following an approach to NRMA 196 Insurance by Kevin Waters Towing and 197 Combined Towing."

198 Later in October, NRMA executives 199 met Anderson to "discuss how to struc- 200 ture arrangements…"

201 There was a further meeting in early 202 November, again in December and 203 follow-up emails in December.

204 Among other briefings, Anderson 205 was consulted by an NRMA spin doctor 206 about how to handle ensuing media 207 inquiries.

208 Indeed, in a letter to Anderson on 209 January 21 - only weeks before the 210 scheme was to be launched - 211 Pemberton thanked the former police 212 minister for his help with the preferred 213 towing scheme and declared he was 214 pursuing Anderson's "suggestion to 215 provide operators with whom we have 216 agreements with digital cameras to 217 record the accident scene and the 218 damage to vehicles involved".

219 Anderson agrees there were 220 meetings with the NRMA, but 221 strenuously denies being a party to a 222 commercial deal.

223 He says he in no way gave his 224 imprimatur to the scheme. "I did tell 225 them that if they were going to do 226 this, they better make sure it 227 complied with the law. It did then … 228 and I believe it still does."

229 Meanwhile, with NRMA Insurance 230 soon expected to put the preferred 231 towing scheme to tender, the majority 232 of operators are still in the jungle - 233 fighting for the scraps.

The Sydney Morning Herald, Friday August 30, 2002 1A Standover men keep on trucking

1 Threats of murder and other 2 methods of "extreme pressure" 3 are still being directed at officers 4 at the Tow Truck Authority, four 5 years after the Carr government 6 vowed to "kick out the cowboys" 7 and clean up standover tactics.

8 The Director-General of Trans- 9 port, Michael Deegan, said yester- 10 day that officials in charge of 11 reforming the industry were 12 regularly under armed guard, and 13 many staff received death threats 14 from operators daily.

15 Mr Deegan said he expected 16 the outbursts of "frustration" 17 would increase when the trial of 18 the job allocation scheme began 19 later this year. The roster-based 20 system was supposed to be 21 operating three years ago.

22 "Dealing with a lot of tow 23 truck drivers is a pleasure," Mr 24 Deegan said in response to a 25 Herald report detailing serious 26 industry failings.

27 "But there are still significant 28 issues for the tow-truck industry 29 to face, and I think we will be in 30 for a difficult period.

31 "Our staff are being 32 threatened each and every day."

33 Last week the Transport Min- 34 ister, Carl Scully, referred to the 35 Independent Commission 36 Against Corruption "serious" 37 claims of collusion and the use by 38 one of his advisors of outlaw 39 motorcycle gang members to 40 intimidate rivals.

41 Mr Scully also suspended 42 indefinitely the authority, 43 chaired by the former Labor 44 police minister Peter Anderson 45 and the Tow Truck Industry 46 Advisory Council.

47 The Herald revealed yesterday 48 that Mr Scully and Mr Deegan 49 had been notified of serious mis- 50 conduct at the authority-includ- 51 ing armed robbers and rapists 52 receiving tow truck licences - in 53 April last year in a critical report 54 by Paul McKinnon, the former 55 Olympic security chief.

56 The article also detailed how 57 Kevin Waters, one of Mr Scully's 58 council advisors and a preferred 59 towing operator for NRMA In- 60 surance, had employed for 12 61 years a member of the Coman- 62 cheros motorcycle club.

63 The biker, Ian Raymond 64 Clissold, the club's sergeant-at- 65 arms, is now serving 16 years 66 in jail for manslaughter over 67 the bashing death of 68 another gang member.

69 NRMA Insurance stressed its 70 preferential dealings with Mr 71 Waters - and Combined Towing, 72 operated by Steve Willis, another 73 council member - were part of a 74 "trial" in parts of Sydney. There 75 would be a tender for a statewide 76 selective towing program.

77 Since the preferred scheme 78 started in February, NRMA In- 79 surance has added Active Towing 80 to the program. The scheme 81 applies only to accidents.

82 Mr Deegan said he was con- 83 vinced ICAC would act "fiercely" 84 in detecting whether the industry 85 was still bedevilled by corruption.

86 Rejecting charges he failed to 87 act promptly when first advised 88 of misconduct 18 months ago, he 89 said he immediately told ICAC 90 about the McKinnon report.

91 Mr Deegan released a letter he 92 sent at the time to the ICAC head, 93 Irene Moss, in which he advised 94 her of "corrective measures" he 95 was undertaking. But at that stage 96 there was no formal ICAC inquiry.

97 The Opposition transport 98 spokesman, Peter Debnam, 99 yesterday called for Mr Scully to 100 stand aside pending the outcome 101 of ICAC's investigation. He said 102 Mr Scully had clearly misled 103 parliament in claiming seven 104 weeks ago that the industry was 105 in fine shape.

106 The Australian Competition 107 and Consumer Commission said 108 it would be looking into some of 109 the industry's selective deals. **********

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