AAMAC Warehousing & Transport Pty Limited v Fairfax Media Publications Pty Limited - [2009] NSWSC 970

No judgment structure available for this case.

CITATION: AAMAC Warehousing & Transport Pty Limited & Ors v Fairfax Media Publications Pty Limited & Ors [2009] NSWSC 970
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 24, 25, 26, 29 and 30 June 2009

JUDGMENT DATE :
21 September 2009

JURISDICTION: Equity

JUDGMENT OF: Slattery J at 1

DECISION: ORDERS:
(1) Orders 1 and 2 made on 24 June 2009 are discharged;
(2) The operation of this order is stayed until 5.00pm on Thursday 24 September 2009;
(3) Liberty to apply is granted;
(4) Reserve the question of costs; and
(5) Direct the parties to contact my associate by 5.00pm on Thursday 24 September 2009 with a view to fixing a date to argue any questions of costs;
(6) Exhibits may be returned after 28 days.

CATCHWORDS: EQUITY - equitable remedies - injunctions against publication - party seeking an injunction ex parte - duty of candour to make disclosure of material matters - issue of what are material matters - matters not disclosed are material - discretion to discharge orders obtained through non disclosure - non disclosures deliberate and serious - injunction discharged.

LEGISLATION CITED: Fair Trading Act 1987

CATEGORY: Principal judgment

CASES CITED: ABC v Lenah Meats (2001) 208 CLR 199
Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350
Ellinger v Guinness Mahon & Co [1939] 4 All ER 16
Garrand v Email Furniture Pty Limited (1993) 32 NSWLR 662
Kaplan v Go Daddy Group [2005] NSWSC 636
Kolback Securities Limited v Epoch Mining N L (1987) 8 NSWLR 533
Lazard Brothers & Co v Midland Bank [1933] AC 289
Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213
Thomas A Edison Ltd v Bullock (1912) 15 CLR 679
Victoria Teachers Credit Union Limited v KPMG (a firm) & Anor (2001) 1 VR 654
Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Limited [2005] FCA 955

PARTIES: First Plaintiff: AAMAC Warehousing & Transport Pty Limited (ACN 100 947 091)
Second Plaintiff: Peter Panayi
Third Plaintiff: Bruce Clark
First Defendant: Fairfax Media Publications Pty Limited (ACN 003 357 720)
Second Defendant: Linton Besser
Third Defendant: John Fairfax Limited (ACN 008 396 585)
Fourth Defendant: Fairfax Media Limited (ACN 008 663 161)

FILE NUMBER(S): SC 3397/09

COUNSEL: Plaintiffs: Mr P E King
Defendants: Mr A T S Dawson

SOLICITORS: Plaintiffs: McKell's Solicitors
Defendants: Johnson Winter & Slattery

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

SLATTERY J

MONDAY 21 SEPTEMBER 2009

3397/09 AAMAC WAREHOUSING & TRANSPORT PTY LIMITED (ACN 100 947 091); PETER PANAYI & BRUCE CLARK v FAIRFAX MEDIA PUBLICATIONS PTY LIMITED (ACN 003 357 720); LINTON BESSER; JOHN FAIRFAX LIMITED (ACN 008 396 585) & FAIRFAX MEDIA LIMITED (ACN 008 663 161)

JUDGMENT

1 HIS HONOUR: Introduction: Parties seeking ex parte relief assume an obligation of utmost candour with the Court. This case illustrates the importance of strict observance of that serious obligation.

2 The first named plaintiff AAMAC Warehousing & Transport Pty Limited (“AAMAC”) provides warehouse, transport and container handling services on the waterfront on Sydney Harbour. The second plaintiff, Mr Peter Panayi is, with his brother, a 50 % shareholder in AAMAC. He also performs functions as a workshop manager in AAMAC’s business which is conducted from Homebush Bay. AAMAC employs the third plaintiff, Mr Bruce Clark, as a sales manager.

3 The first, third and fourth defendants are responsible for the publication of the Sydney Morning Herald, The Age and other printed and online publications in the Fairfax stable of publications. The second defendant, Mr Linton Besser (erroneously described in early Court documents as “Lynden” Besser), is a journalist employed by the other defendants.

4 On the afternoon of 24 June 2009, the Court gave leave to AAMAC, Mr Panayi and Mr Clark to file the summons commencing these proceedings. In a short hearing AAMAC read affidavits and adduced limited oral evidence. The plaintiffs’ case on the ex parte hearing on 24 June and in the subsequent contested hearing was that if the defendants published certain material that was threatened to be published, that the plaintiffs would suffer irreparable harm. It is said that AAMAC’s business which employs 80 people and has substantial financial commitments would be destroyed on the basis of information supplied to the defendants by envious competitors. The Court then granted orders for ex parte relief. The nature of the threatened publications is evident from the terms of the relief granted. The relief was that:

“1. The defendants be restrained from publishing or causing or permitting to be published any material or information of or concerning the plaintiffs to the effect that the plaintiffs or one of them is knowingly involved in or knowingly has affiliation with gangland or criminal activities by or through the operation of the first plaintiff’s business of clearing, handling and transportation of containers and goods from Sydney Wharves up to and including 5.00pm tomorrow 25 June 2009.

South Pacific

5 This judgment will describe the restrained publication in order 1 as the “criminal affiliation representation”. The restrained publication in order 2 will be described as the “South Pacific representation”.

6 The injunction granted on Wednesday 24 June 2009 was made returnable the following day. The defendants appeared for the first time on 25 June. The matter was then heard on parts of Thursday 25 June and Friday 26 June as time permitted in the course of the duty list. Further evidence was read and written submissions were spoken to on 29 and 30 June. The plaintiffs had liberty to file further written submissions in reply which they exercised on 1 July. Judgment was reserved.

7 The defendants sought the Court’s determination of two issues. The defendants submitted that these orders should be dissolved on the basis that the plaintiffs had failed to make material disclosures in relation to both the South Pacific and the criminal affiliation representations when the ex parte orders were obtained. Alternately, the defendants submitted that there was no proper basis for the grant of the orders in the first place and that they should not be extended. This judgment deals with the issues in this order.

8 Although this was an interlocutory hearing, the Court permitted cross-examination of Mr Clarke so the defendants could confront Mr Clark with the items of alleged non disclosure. This course generated a more detailed contest of and subsequent analysis of evidence than would ordinarily be encountered on an interlocutory application of this nature. At one point in the hearing the Court proposed the idea of a hearing on the non disclosure issues followed, if necessary, by another hearing on issues associated with extension of the injunction. In the end that idea was abandoned and evidence was read and submissions put on the basis that the parties asked me to decide both issues at the one time if I needed to do so. In that sense this case came more to resemble a normal trial and I regret that partly as a result and partly due to other urgent matters before me judgment has taken longer to deliver than the parties would have anticipated at the time it was reserved.

9 Mr P King appeared for all the plaintiffs at the ex parte application and during the subsequent days of contested hearing. Mr A Dawson appeared for Fairfax throughout the hearing.

The Defendants’ Non Disclosure Case

10 The plaintiffs’ evidence at the 24 June 2009 ex parte hearing was that late in the previous week Fairfax had begun making investigations through Mr Besser with a view to publishing both representations. Late the previous week Mr Clark traced an outline of these investigations in a short conversation he had with Mr Besser:

“2 Last week the Second Defendant attempted to contact me on Thursday 18 June 2009 and at about 3pm on Friday 19 June 2009. I spoke to the Second Defendant on the evening of 18 June 2009. He said words to the effect, “I am Lynden [Linton] Besser, a reporter with the Sydney Morning Herald. I am writing an article from the Crime Commission notes on the gang related wharves. I said, “Why are you contacting me?” He replied with words to the effect, “I’m trying to get hold of Peter Panayi and you regarding illegal movements from the waterfront”.
3 Linton Besser then said words to the effect, “I want to write a report about Aamac Warehousing and WSI about the wrongdoings from the waterfront”.

I said words to the effect, “There are no wrongdoings from the waterfront”.

He then said words to the effect, “How did Peter Panayi get his customs licence?”

I replied, “Peter Panyi hasn’t got a customs licence”.
He said “What about the bondstore, CDC Packing?” I said, “That was 10 years ago”.”

11 Mr Clark’s affidavit then referred to specific matters that Mr Besser put to Mr Clark that are the subject of the defendant’s specific non disclosure contentions that are dealt with below. The conversation with Mr Besser continued, with the defendants said to be threatening imminent publication in the following terms:

“10 Last night Lynden [Linton] Besser rang and said “I’m going to put this in the press”. I asked “When is this going to appear?” and he said “Probably Thursday in the Sydney Morning Herald and The Age in Melbourne”.

He said “If I can’t get hold of Peter Panayi, I’m going to write about him. It will be in his best interests to ring me”. I said, “What about me?” He said “I’m gong to mention you as a member of the Michael Hurley gang”. I said “I’m not involved with him”. He said “you were involved with his 21C, Malcolm Field” I said, “His freight came through my depot. I had nothing to do with him”. He murmured “Uh Uh”. I said “Is that all you can say when you are going to destroy my life”.

He said “Get Peter Panayi to ring me tomorrow. It’s going to press”.

12 Mr Clark supplemented his affidavit evidence with oral evidence on the application for ex parte relief. Mr Panayi also gave evidence on that occasion. Relevant parts of that oral evidence are dealt with under each item of alleged non disclosure.

13 The matters the defendants say were not disclosed were divided into five topics during the proceedings.

South Pacific

14 The first of these topics concerned the South Pacific representation. The other four topics related to the criminal affiliation representation. Before analysing the evidence in relation to these five topics it is necessary to state the legal principles to be applied to determine whether there has been a material non disclosure warranting the discharge of ex parte relief.

Principles Relating to Non Disclosure in Obtaining Ex Parte Relief

15 A party seeking an injunction ex parte has a duty of the utmost good faith to make disclosure to the Court. The obligation of such a party is to bring to the notice of the Court all facts material to the determination of his right to that injunction. It is no excuse for the party to say that he was not aware of their importance. The content of the duty and the reasons for its existence are explained in this classic passage of the judgment of Isaacs J in Thomas A Edison Ltd v Bullock (1912) 15 CLR 679, at 681-682:

“There is a primary precept governing the administration of justice, that no man is to be condemned unheard; and therefore, as a general rule, no order should be made to the prejudice of a party unless he has the opportunity of being heard in defence. But instances occur where justice could not be done unless the subject matter of the suit were preserved, and, if that is in danger of destruction by one party, or if irremediable or serious damage be imminent, the other may come to the Court, and ask for its interposition even in the absence of his opponent, on the ground that delay would involve greater injustice than instant action. But, when he does so, and the Court is asked to disregard the usual requirement of hearing the other side, the party moving incurs a most serious responsibility.

Dalglish v Jarvie 2 Mac & G 231, a case of high authority, establishes that it is the duty of a party asking for an injunction ex parte to bring under the notice of the Court all facts material to the determination of his right to that injunction, and it is no excuse for him to say that he was not aware of their importance. Uberrima fides is required, and the party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts in forming its judgment is unfulfilled and the order so obtained must almost invariably fall. I add the word ‘almost’ in deference to such an
exceptional case as Holden v Waterlow 15 WR 139. The obligation is stated by Turner LJ in that case (at 140) to be to ‘state their case fully and fairly’, and so by Sugden LC in Dease v Plunkett Drury 255 at 261 where he said: ‘The plaintiff had not fully and fairly disclosed the entire facts of the case.

Garrand v Email Furniture Pty Limited

16 The non disclosure must be material in the sense that it is likely to influence the Court in acceding to the application: Trewenack v Clippers Anchorage Pty Ltd (1983) Ritchie Practice Decisions 13,030, per Powell J and Kaplan v Go Daddy Group [2005] NSWSC 636 at [22] per White J.

17 Particular practical considerations relevant to making full disclosure are engaged where a party, such as the plaintiffs here, come to the Court seeking urgent relief. These were identified by Allsop J (as the President then was) in Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Limited [2005] FCA 955 at [38]. In that case, after setting out the principle in Edison’s Case that it is the obligation of the party seeking ex parte orders to take the place of the absent party to the extent of bringing forward all the material facts which that party would have brought forward in defence of the application, his Honour said:

“That does not mean stating matters obliquely, including matters in voluminous exhibits, and merely not misstating the position. It means squarely putting the other side’s case, if there is one by coherently expressing the known facts in a way such that the court can understand in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the Court to search out, organise and bring together what can be said on the respondent’s behalf. That is the responsibility of the applicant through its representatives.”

18 Upon proof of material non disclosure which justifies the discharge of the ex parte order, the Court has a discretion nevertheless to continue the order or to make a new order on terms. The legal principles applicable to the exercise of that discretion are discussed later in this judgment where the exercise of that discretion in this case is considered.

19 Before analysing the evidence on each of the topics of alleged non disclosure it is important to recognise that Mr Clark’s principal affidavit served dual purposes in these proceedings. The plaintiffs used the conversations in the affidavit to show what communications had occurred with Mr Besser in the days before 24 June 2009 and thus to identify what particular publications the defendants were threatening. This founded the basis for urgent injunctive relief.

20 On the issue of non disclosure, Mr Clark’s affidavit, together with his limited additional oral evidence served an additional purpose. It also measured the extent of disclosure to the Court before the ex parte injunction. Each issue raised by Mr Besser in relation to the South Pacific and criminal affiliation representations, was answered in some way by Mr Clark in the conversation deposed to in the affidavit. For understandable convenience on an urgent application, the plaintiffs treated Mr Clark’s answers in conversation with Mr Besser as part of the evidence of the answer that he, Mr Clark, also made to the Court to the allegations being made by the defendants. It was both a response to the journalist and the disclosure of material facts to the Court.

21 In places the plaintiffs’ submissions dwelt upon the first of these functions of the affidavit as if its use in that way was an also a sufficient answer to the defendants contention that there had been non disclosure to the Court. The plaintiffs used this kind of argument in respect of several of the allegations of non disclosure, contending that the response to Mr Besser had been adequate in the circumstances. Such submissions did not recognise that however complete or appropriate Mr Clark’s answer may have been to Mr Besser, that the plaintiffs’ obligation to the Court of the utmost candour was a separate and wider duty.

22 The evidence relevant to each of the defendants’ five topics of alleged material non disclosure is now separately analysed.

(i) The Waitresses on Board the South Pacific

23 The defendants allege there was non disclosure in relation to waitresses employed on occasions on board the MV South Pacific. They contend that the waitresses were in fact strippers. The defendants say the impression given to the Court when ex parte relief was sought was that these personnel provided waitressing services as that term is commonly understood. They put that this non disclosure warrants discharge of the injunction at least because it is relevant to the truth of the South Pacific representation. The issue arises from the following course of evidence.

24 Upon the application for ex parte relief the plaintiffs adduced affidavit and oral evidence to support their contention that the defendants were threatening to publish the South Pacific representation and that it was false. To that end Mr Clark deposed to the following exchange in the conversation with Mr Besser:

“4. Lynden [Linton] Besser then said “were you involved with the South Pacific prostitutes and people from the Customs Bureau?” I said, “No, I know nothing about it.” The second defendant then said “What about the night [a customs official named in the affidavit] fell off the fly-bridge whilst entertaining prostitutes?” I said, “while my arse points to the ground we never had any prostitutes on the South Pacific .”

….

South Pacific

25 Mr Clark here stated that waitressing staff was sourced from the establishments known as the Brandy Balloon, the Governor’s Pleasure and the Men’s Gallery to provide services on board the South Pacific.

26 When Mr Clark was called to give supplementary oral evidence at the ex parte application, he expanded on this subject. He did so in the course of attempting to explain how the defendants’ information had probably come from AAMAC’s competitors in the industry. The following relevant exchanges occurred between Mr Clark and counsel and Mr Clark and the Court:

“Q. What was the basis of your feeling that a competitor had been providing him with information?
A. Just things he was saying, like getting from the "Brandy Balloon ". No one would know about that unless they work in the industry. I don't think a press person would know.

HIS HONOUR

Q. When you refer to a " Brandy Balloon", do you have your affidavit there?
A. No.

HIS HONOUR: Do you have a spare copy?

KING: I do, yes.

HIS HONOUR

Q. You refer there to the girls in the Brandy Balloon. What are they, hotels?
A. Restaurants.

Q. Are they restaurants that supply staff in the industry for cruises, are they?
A. They don't supply them but if we are looking for waitresses that is where we get them from as well.

Q. Why did you say probably someone only in the industry knows you use those places to supply the staff?
A. Well, we are on the boat, take clients on the boat and do get the girls from there to go into the waitressing.

27 I am mindful that judges should be cautious about attributing too much significance to their own questions. However the Court’s question about the Brandy Balloon and the other establishments, “What are they, hotels?” and the next question, “are they restaurants that supply staff in the industry for cruises, are they?”, once asked, did signal that the nature of the establishments supplying the female staff and what that said about the expertise of the staff was potentially relevant to the Court’s task on the ex parte application. I reason below that these were indeed matters relevant to an assessment of the truth of the South Pacific representation. The picture created by the evidence of Mr Clark at the ex parte hearing was that when AAMAC wanted ordinary waitressing staff to perform waiting services during cruises on board the South Pacific, they were sourced from three places that could be described without more as “restaurants”. A rather different picture emerged in subsequent evidence about both the restaurants and their staff.

28 Mr Panayi also gave oral evidence on the ex parte application supporting the plaintiff’s case that the South Pacific representation was false.

South Pacific

29 On this evidence the Court had nothing to indicate that these female staff were either dressed to provide or provided services that were different from what would be expected by dining patrons in most Sydney restaurants. The image conjured up by the evidence was that the waitresses were there to provide food and drink service and nothing more.

30 On the return of the injunction under cross examination Mr Clark revealed more about the female waitressing staff and the establishments from which they came.

Q. You've been on the boat, the South Pacific , haven't you?
A. Yes.

Q. And you've been on there while Mr Panayi has been on the boat?
A. Yes.

Q. And you've been on there with people who Mr Panayi has invited to come on to the boat?
A. Yes.

Q. You've been on there while employees of the Brandy Balloon, Governor's Pleasure and Men’s Gallery has been on the boat, haven't you?
A. That's correct.

OBJECTION.

Q. The answer was "that's correct." You're aware of the nature of those establishments, aren't you?
A. Yes.

Q. How would you describe them?
A. Restaurant.

Q. Would you seriously describe the Mens' Gallery as a restaurant, Mr Clark?
A. Yes.

Q. Anything else that you would include in the description of that particular establishment?
A. Topless restaurant.

Q. It's not just a topless restaurant, is it, it's a place where women strip for the entertainment of men?
A. I don't know

OBJECTION.

HIS HONOUR: Mr Dawson is in effect saying he's not leading any affidavit or any other evidence, he has a limited way that he can put proof of these things. He understands, I've suggested what the limitations are here, he's working within them.

QUESTION ALLOWED.

DAWSON

Q. Can you answer the question please?
A. I haven't been there so I wouldn't know.

Q. Are you seriously saying you don't know that women strip at the Men's Gallery?
A. I haven't been to the Men's Gallery.

Q. That's not what I'm asking
A. Well how would I know?

Q. I'm asking you a straight question, I'd like a straight answer.
A. How would I know?

OBJECTION.

KING: My friend is now in an argument with the witness, it's entirely inappropriate and the witness has given a clear answer to a clear question.

HIS HONOUR: I allow it to be put once more, Mr Dawson.

DAWSON

Q. Let me be clear. I'm not asking you whether or not you've ever been to the Men's Gallery, I'm asking whether, to your knowledge, it is a place where women strip for the entertainment of patrons?
A. Yes.

Q. You know that, don't you?
A. Yes.

Q. You didn't say that a moment ago, did you?
A. I haven't been there, sir. That's what I'm saying. I haven't seen it.

Q. Have you been to the Brandy Balloon?
A. Yes.

Q. And what happens there?
A. That was a long time ago, was in the 1990s.

Q. What happens there, Mr Clark?
A. Same thing.

Q. And when you say the "same thing" you mean by that women strip, don't you?
A. Yes.

Q. And you've been to the Governor's Pleasure?
A. Yes.

Q. And the same thing happens there, doesn't it?
A. Yes.

Q. And so you knew, didn't you, when these women were on the boat that they were the premises from where they came?
A. I was asked were they prostitutes and I said no.

Q. But you knew, didn't you, that they came from those establishments?
A. Yes.

Q. These were women who stripped on the boat?
A. Yes, but not prostitutes. That was the question, sir.

Q. But my question is just whether or not they stripped on the boat?

OBJECTION.

Q. Did the women you're referring to in paragraph 9 take their clothes off at any time when you were on the South Pacific ?

OBJECTION.

KING: In whole or in part?

DAWSON

Q. Did they take any of their clothes off when they were on the boat?
A. Yes.

Q. Did they take all of them off?
A. Yes.

Q. And they were paid to come on to the boat?
A. I don't know that. I wasn't involved.

Q. You'd assumed they were?
A. You'd assume.

Q. Who arranged it?
A. Peter Panayi.

Q. Peter Panayi?
A. I don't know if it was him or someone from the company would have done it but I didn't organise it.

Q. You're not seriously suggesting they came on for free, are you?
A. I would not know.

Q. Are you able to tell us how many women were on the boat on the occasions that you were on the boat with them?
A. Two.

Q. Any more than that?
A. No.

Q. Were you in their company the entire time they were on the boat?
A. Not the entire time, no.

Q. So if they had a conversation with another person on the boat, another guest, you wouldn't necessarily have overheard it, would you?
A. No.

31 The oral evidence of Mr Clark together with his earlier evidence allows the Court to find the following matters:

(a) Mr Clark and Mr Panayi have been on board the South Pacific when female employees of the Brandy Balloon, the Governor’s Pleasure or the Men’s Gallery have been on the boat.

(b) Each of these establishments are places where women strip for the entertainment of patrons. The Mens Gallery can be more completely described as a “topless restaurant”.

(c) The women who came on board the South Pacific stripped all their clothes off on board for the entertainment of persons on the boat.

(d) Mr Clark assumes the two women on board the South Pacific when Mr Clark was on board were paid to be there. That assumption on his part and the fact that either AAMAC or Mr Panayi had organised them to be there for the entertainment of the company’s customers are a basis to infer that these women were paid for their services.

South Pacific

32 Matter (a) above was disclosed to the Court on the ex parte application. Matters (b) to (e) inclusive were not disclosed. The question is whether matters (b) to (e) are material. Their suggested materiality is as to the truth or falsity of the South Pacific representation.

33 The plaintiffs argue that the defendants have failed to prove the truth of the South Pacific representation, that there were prostitutes (as opposed to strippers) on board the South Pacific. The plaintiffs contend that mere proof that there were strippers on board is not material because it does not prove the truth of the South Pacific representation, which remains false. The plaintiffs say that therefore there is no basis to discharge the injunction.

34 The defendants submit in reply that the question on a discharge application is not whether the South Pacific representation is true but whether material matters were withheld on the ex parte application. The defendants say that:

South Pacific

35 I agree with this submission. On the application to dissolve the injunction restraining the South Pacific representation the defendants do not have to prove the truth of the South Pacific representation. They merely have to establish that the plaintiffs withheld information that was material in the sense described in Edison’s case:

“...party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application.”

36 The falsity of the South Pacific representation is an element of both the causes of action for injurious falsehood and under s 44 Fair Trading Act 1987. The Court must at this interlocutory hearing assess that element in that cause of action, at least to determine whether there is a serious question to be tried at a final hearing on causes of action including that element. The plaintiffs have sought to support their claim there is a serious question to be tried by adducing evidence that to their knowledge no prostitution took place on board the South Pacific, or at least that if it did it was a single incident back in 1991. They make a positive case of the falsity of the South Pacific representation. It is difficult for the plaintiffs to deny the materiality of matters tending to show the truth of the South Pacific representation. Matters (b) to (e) in paragraph [31] above were material to the issue of the falsity of the South Pacific representation for the following reasons.

37 If the defendants had been present at the ex parte hearing they “would presumably have brought forward in [their] defence” evidence about the striptease acts of these female staff as tending to show the truth of the pro South Pacific representation. The inference that persons involved in full striptease might also be engaged in prostitution is an inference more readily to be drawn than an inference that fully dressed waitresses might be so engaged. This does not amount to a general finding that striptease artistes do engage in prostitution or that these particular artistes did engage in prostitution. Such a finding would not be supportable on the evidence before me. The plaintiffs contended that such a finding would involve ‘sexist’ stereotyping of striptease artists. It is not necessary for the Court reach any conclusions about the conduct of striptease artistes generally for the defendants to succeed on the argument that they put.

38 It is to be expected that defendants seeking to argue that the South Pacific representation was likely to be true would adduce evidence of facts that would make the inference of prostitution on board the boat more probable. A party seeking to establish that prostitution took place on a vessel is further advanced on the journey of persuasion to that conclusion if it first establishes, as the defendants did on the return of the injunction, that:

(a) public displays of full female nudity for the entertainment of guests took place during cruises on the vessel;

(b) the strippers involved were paid for their services; and

39 Minds will reasonably differ about the extent to which these three matters combined support an inference of prostitution on board. However the underlying element of the making of commercial arrangements for women to provide services involving sexual display for the pleasure of apparent strangers, is an element common to this particular striptease and to prostitution. This common element supports the defendants’ argument that evidence about matters (b) to (e) inclusive is material to the truth of the South Pacific representation. It was material in the sense described in Edison’s Case that it was something the defendants would presumably have deployed in their defence had they been present at the ex parte hearing.

40 Deployment of this material substantially narrows the relevant ultimate issue for trial down to the question whether payment to women to take all their clothes off for the pleasure of strangers may also have involved payment to them to have sexual intercourse with those strangers. The defendants say that had they been present at the ex parte hearing and had the full facts then been available, that it was open to them to argue that such a narrow issue was less likely to attract the discretionary intervention of Equity on an urgent basis. That is an argument that would have had considerable persuasive force. It makes the non disclosure material.

41 Against this conclusion the plaintiffs mount a number of arguments additional to those already covered. The plaintiffs first say that the revealed information in matters (b) to (e) is not material which can readily be shown because the fact that there were strippers on board the South Pacific could be published now and is not caught by the Courts orders. The plaintiffs say that the defendants do not want to publish that because it is not very remarkable news and they would prefer to publish a falsehood that the plaintiffs are running a floating brothel. The answer to this materiality argument is my reasoning above that proof that there were strippers on board in the circumstances that were established is a step in a chain of reasoning from which prostitution was more likely to be able to be inferred.

42 Secondly, the plaintiffs say that the representations have not been proven to be false because in part the women on board from these establishments were waitresses. The evidence relied on by the plaintiff (transcript 25 June 2009 p20.ln50 to p21.ln2) does not prove that the women on board did provide ordinary services as waitresses. Indeed Mr Clark did not seek to take a position at any time in his oral evidence on 25 June 2009 that the two women who stripped on board the South Pacific also provided any more conventional services as waitresses, even though it was open to him to do so.

43 Thirdly, the plaintiffs tendered the actual article published on the morning of 25 June 2009 in the Sydney Morning Herald, under the headline “Crime Gangs Infest Ports” and submitted that the article and the conversation with Mr Besser all putatively concerned the involvement of AAMAC through its business in current gangland and criminal activities. AAMAC only commenced business in 2002. Whereas the affidavit evidence of Mr Svilans, the defendant’s solicitor, the relevant part of which was read by the plaintiffs, shows that an event with a prostitute on board the South Pacific with a customs officer was alleged to have taken place as long ago as 1991 and the evidence establishes that the Brandy Balloon was closed in 1995. It is said that the cross examination of Mr Clark did not prove that waitresses stripping for the entertainment of vessel passengers took place after 2002 after AAMAC’s business was established.

44 There are two difficulties with this submission of the plaintiffs. First the cross examination of Mr Clark about strippers on board was not confined to time and is capable of being read as covering a period since 2002. The conduct on board the South Pacific was not sought to be confined to a period before 2002 during re-examination, apart from the evidence about the closure of the Brandy Balloon. Second, the restraint in respect of the South Pacific representation was not confined to the conduct of AAMAC’s business. It only concerned Mr Panayi and Mr Clark and the vessel South Pacific and it too was unconfined as to time. The restraint the plaintiffs sought and obtained invited a cross examination that was not limited before or after particular dates.

45 In conclusion on this first topic, there has been non disclosure of matters (b) to (e) inclusive in [31] above relating to the South Pacific representation at the ex parte hearing. These matters should have been disclosed. Their non disclosure misled the Court. These matters are material to the grant of relief against the publication of the South Pacific representation. The injunction restraining that representation should be dissolved unless there is a good discretionary reason not to do so. The exercise of discretion in relation to dissolution is dealt with later in this judgment with respect to all the non disclosures.

(ii) Mr. Clark’s Ecstasy Charge and his Association with Mr Field

46 The defendants alleged multiple non disclosures at the ex parte hearing with respect to the criminal affiliation representation. The first of these related to an ecstasy possession charge brought against Mr Clark. On this subject Mr Clark deposed in paragraph 5 of his affidavit to the following conversation with Mr Besser:

“He [Mr Besser] then said, “what about your dealings when you were charged with possession of ecstasy?” I replied “I was innocent and its been proven.”

47 In oral evidence he said:

48 In a matter said to be related to the ecstasy charges Mr Clark also deposed in paragraph 11 of his affidavit to the following relationship with a Mr Malcolm Field.

“He [Mr Besser] said “you were involved with his 21C Malcolm Field.” I said, “His freight came through my depot. I had nothing to do with him.” He murmured, “uh uh”.

49 Paragraphs 5 and 11 of Mr Clark’s affidavit were advanced as evidentiary support for a restraint against the defendants’ publication of the criminal affiliation representation by providing evidence not only of the threat of publication of that representation but evidence of the falsity of that representation.

50 On the return of the injunction the defendants contended that there was far more to the resolution of the ecstasy charge than Mr Clark’s statement “I was innocent and its been proven.” Counsel for the defendants cross examined Mr Clark at some length about this ecstasy charge. Mr Clark agreed with the following matters:

51 The defendants submit that this evidence shows that the material provided to the Court on the ex parte application was misleading in three relevant respects. The defendants first say that Mr Clark’s statement “I was innocent and its been proven”, gives the impression there were no dealings (with prosecutors) in relation to the ecstasy charge. It is said that a simple impression of Court established innocence by acquittal was conveyed. It is particularly emphasised that the words “…it’s been proven” are inconsistent with any indemnity arrangement of the kind that was actually reached. Next the defendants say that the Court was not told that Mr Clark was charged with the ecstasy offence together with Mr Malcolm Field. Finally the defendants say that the Court was not told anything of the dealings that took place between Mr Clark and Mr Field, such as the telephone conversations, the meetings and the payment to Mr Clark of the amount of $10,000 for turning a “blind eye” in relation to certain customs duty.

52 The defendants’ first submission faces the problem of what “its been proven” really means. The words do not obviously convey the impression of public proof in a courtroom. They are equally consistent with the happening of verifiable events that Mr Clark believes demonstrate his innocence. Words such as “proven”, in ordinary language, do not always mean proof in a courtroom. “Its been proven” does not infer that charges were thrown out on account of inadequate supporting evidence or that Mr Clark was acquitted after a full trial. The fact that neither of these things occurred does not make the words “Its been proven” a misleading representation of what actually occurred. The fact that there was a bargain reached in which Mr Clark agreed to give evidence for the prosecution against Mr Field is not alone inconsistent with the statement “I was innocent and its been proven”. To the lay mind, Mr Field’s ultimate conviction on Mr Clark’s evidence may be just the kind of public proof Mr Clark had in mind.

53 This conclusion is not diminished by the question and answer relied upon by Fairfax as showing that Mr Clark appeared to agree with the submission Fairfax now puts.

“Q: I’m suggesting that those words [“I was innocent and its been proven.”] suggest, don’t they, that the allegations about ecstasy made against you by the police -
A: Yes

54 In this exchange Mr Clark was not agreeing with what became the cross-examiner’s closing submission, namely that these words suggest that the charges must have been thrown out as being unsupported by evidence. He was actually expressing quite the opposite view, namely that in his mind a correct description of what happened to him as a result of the bargain his lawyers made with the prosecution was that the charges against him were “thrown out”.

55 The defendants’ second point has more force. Read together paragraphs 5 and 11 of Mr Clark’s affidavit in combination give the impression that Mr Clark had “nothing to do with…” Mr Field beyond handling Mr Field’s freight as a customer. The unqualified nature of this statement implies that Mr Clark had nothing “to do with” Mr Field in respect of any of the matters described by Mr Clark in his affidavit. Contrary to that impression Mr Clark was a co-defendant with Mr Field on serious criminal charges and then had those charges dropped as a result of becoming a prosecution witness against Mr Field. This shows a depth of contact with Mr Field that is inconsistent with the bare statement that he, Mr Clark, had “nothing to do with…” Mr Field. The simple impression the Court was left with from the evidence at the ex parte application was that Mr Clark had never met Mr Field. Giving evidence against a person on oath in criminal prosecution about their dealings with one another, which dealings led to the conviction of one of them, is a long way from having “nothing to do with” the person. The Court was misled by this non disclosure.

56 The defendant’s final point is also persuasive. The impression left with the Court on the evidence at the ex parte application was that Mr Field was someone who sent freight through a depot managed by Mr Clark but that Mr Clark otherwise had nothing to do with Mr Field through conventional means of contact such as meetings, telephone conversations or other dealings. As the findings above show, the facts were otherwise. He had phone calls, meetings and significant dealings with Mr Field. Although Mr Field was not, on the evidence, a convicted criminal at the time that these meetings took place, he was by the time Mr Clark’s affidavit was sworn. It was a fact relevant to the criminal affiliation representation. The separate evidence in relation to the payment of the $10,000 for turning a “blind eye” in relation to certain customs duty is not conclusive and cannot be used to make a non disclosure case against the plaintiffs.

57 The restraint in existence is against the publication of a falsehood to the effect that the company, Mr Clark and Mr Panayi “are knowingly involved in or knowingly have affiliation with gangland or criminal activities…” This evidence does not itself show even in 2001 that Mr Clark was “knowingly involved in or knowingly had affiliation with criminal activities”. However the evidence does show a closer relationship with persons who became criminals because of the very engagements Mr Clark had with them, than any of the ex parte evidence led the Court to believe. The association with Mr Field is relevant to the truth or falsity of the criminal affiliation representation. It is a shorter step to infer that a person who has close dealings with someone else who becomes a convicted criminal as a result of those very dealings is a person who is more likely to be involved in criminal activity than someone who had no such dealings. It can be presumed that this is an argument the defendants would have wished to deploy in their defence had they been present at the ex parte hearing to influence the Court as to the arguable truth of the criminal affiliation representation and that the difference between the truth and what was sought to be restrained was far less than what the Court had been led to believe.

58 The plaintiffs argue that the evidence does not establish that Mr Clark was in a joint criminal enterprise with Mr Field so the criminal affiliation representation remains false. This submission makes the same error the plaintiffs made in respect to the South Pacific representation. It wrongly argues that the defendants must prove the truth of the criminal affiliation representation. Their onus is only to prove the non disclosure of material relevant to the truth of that representation or any other matter that would be material to the grant of interlocutory relief.

59 The plaintiffs also argue that the restraint in respect of the criminal affiliation representation operates in respect of the plaintiff’s current activity through the operation of AAMAC’s business. AAMAC did not commence business until 2002. The trial of Mr Field took place in 2001. AAMAC says that events involving Mr Clark preceding the creation of AAMAC cannot be material for present purposes. I do not agree.

60 It is artificial to say as the plaintiffs do that Mr Clark’s conduct prior to 2002 cannot be material to the Court’s judgment about the truth or falsity of the criminal affiliation representation or to whether there is a serious question to be tried in relation to causes of action of which that representation is an element. The criminal affiliation representation is one of current activity. It is that “the plaintiffs are knowingly involved in or knowingly have affiliation with gangland or criminal activities by or through the operation of [AAMAC’s] business…” However past conduct, even conduct that occurred before AAMAC was founded is material to the truth or falsity of that representation provided that conduct is of sufficient seriousness or closeness to criminal activity that it might be a basis to infer an enduring criminal habit. Such matters could be material to a judgment of the truth or falsity of the criminal affiliation representation.

(iii) Mr Clark’s Criminal Record

61 The defendants’ next topic of non disclosure in relation to the criminal affiliation representation is that it is said Mr Clark seriously understated his criminal record in material ways. The starting point is paragraph 6 of Mr Clark’s affidavit of 24 June 2009 which was relevantly to the following effect:

“6. Lyndon [Linton] Besser then said, “what about the tax frauds?” I replied, “yes, I did make two mistakes but I’ve never been involved with drugs or gangs from the waterfront.”

62 The defendants’ submission is that this disclosure trivialised as “two mistakes” two criminal offences in relation to tax fraud which involved depriving the revenue authorities of excise duty. The defendants’ case is that the non disclosure on this subject has three parts: first, the plaintiffs did not disclose that he was involved in tax fraud; second, the plaintiffs understated the number of “mistakes” that Mr Clark made – there were more than “two” mistakes; and third, the plaintiffs did not disclose that the frauds related to the avoidance of customs duties. .

63 Mr Clark’s cross examination on this subject on 25 June 2009 established the following additional material that was not available to the Court on 24 June 2009:

(a) Mr Clark was convicted of tax frauds involving defrauding revenue authorities of excise duty;

(b) Mr Clark conducted the activity that led to those charges being brought against him at the Hobbs Brothers Depot at Rozelle;

(c) Mr Clark participated in a scheme to defraud the revenue authorities of a quantity of excise duty that would otherwise have been payable in relation to a $450,000 shipment of imported scotch whisky. This scheme involved swapping flour for whisky;

(d) Mr Clark also participated in a similar excise duty scam in relation to cigarettes for which he was charged and convicted. This scam also involved swapping flour for cigarettes;

64 The defendants’ first argument is that Mr Clark was convicted of criminal offences involving tax fraud is disclosed in the affidavit. In response to Mr Besser’s question, “what about the tax frauds?” Mr Clark replies, “yes I did make two mistakes...”. By this answer Mr Clark is accepting that he was convicted of tax fraud. The reference to “two mistakes” is an obvious colloquial euphemism signalling his acceptance that he was convicted of tax fraud as put to him. He just prefers to call these tax frauds “mistakes”.

65 The defendants secondly argue that Mr Clark did not disclose that he made three mistakes “in relation to tax fraud”, rather than just two. The first two involved the whisky and cigarette substitutions with flour. The third involved the perfume substitution with flour. Fairfax relies on the following question and answer for this submission.

66 Although this is technically an admission of a third and undisclosed mistake it is not a matter that establishes material non disclosure. Mr Clark did not agree, nor is there any other evidence to support the inference that the particular perfume the subject of the substitution was dutiable, that any duty was evaded, or that the matter proceeded to criminal charge or conviction. He only admitted to receiving a sum of “probably a thousand” for something that it is not established was criminal conduct. There is no reason to conclude that anything in relation to the third mistake about perfume should have been disclosed to the Court.

67 There is more force in the defendants’ third argument however that the use of the word “mistakes” tends to underplay the nature and seriousness of the frauds. There is nothing in paragraph 6 of the affidavit that reveals either the size of the frauds or that they were related to customs and excise duties. Paragraph 6 of the affidavit would without more have supported, for example the supposition that Mr Clark had perhaps understated his income or overstated his expenses in his personal income tax return on more than one occasion. Indeed this impression was reinforced when counsel for the plaintiff adduced evidence from Mr Clark on 24 June about that paragraph by saying “Looking at paragraph 6…You were agreeing that you had made some error in your tax?” to which the witness replied “That was in 1999”.

68 Instead, it emerged that the two frauds for which he was convicted related to customs and excise duty. One of them was on a $450,000 shipment of whisky. Both of them involved the active concealment of dutiable goods from revenue authorities by a scheme involving the substitution of less valuable goods in the place of dutiable goods. The non disclosed evidence involves at least four factors relevant to the assessment of the truth or falsity of the criminal affiliation representation. The undisclosed material about these fraud convictions demonstrate that Mr Clark’s relevant dishonest conduct involved:

(a) a degree of artifice and planning consistent with organised criminal activity;

(b) fraud in the “clearing, handling and transportation” of goods which is the very aspect of the company’s business which is the subject of the allegation of criminal activity in the criminal affiliation representation;

(c) fraud having the effect of undermining the system of orderly regulation of the importation of goods into this country; and

69 These conclusions about Mr Clark’s conduct flow from the admissions made by Mr Clark under cross examination by the defendants’ counsel. The Court knew nothing of them at the time of the ex parte application. They are relevant to the truth or falsity of the criminal affiliation representations because of their closeness to the terms of the restrained conduct relating to criminal activity. They are also relevant to whether the Court would have exercised its discretion to restrain a publication on the basis that it would do irreparable harm to the plaintiffs. It can be presumed that even though the tax fraud convictions were in 1999 the defendants would be likely to have deployed such conclusions based upon the undisclosed evidence about those frauds in its defence, had it been present at the ex parte hearing.

(iv) Mr Clark’s Association with Mr Les Mara

70 The defendants next contend that at the ex parte hearing AAMAC did not disclose the relationship between Mr Clark and a Mr Les Mara. This is said to be a further basis for dissolving the ex parte injunction in relation to the criminal affiliation representation. This subject arises from paragraph 7 of Mr Clark’s affidavit in which he deposes to the following conversation with Mr Besser.

I said. “no, I used train at Joel’s Gym but I didn’t train with him.”

71 Fairfax’s counsel cross examined Mr Clark about this subject. The cross examination established that:

(a) Mr Les Mara played rugby league for the Balmain club in New South Wales;

(b) Mr Clark said in his evidence at the trial of Mr Field that he [Mr Clark] “did train with a Les Moto at Joel’s Gym when I was playing football and I did train with a guy called Les Mara as well”;

72 There is no other evidence before the Court to suggest that Mr Clark’s clarification in these proceedings of what he said at the trial of Mr Field is incorrect.

73 The defendants have not established that the statement in Mr Clark’s affidavit “I used to train at Joel’s Gym but I didn’t train with him” was false or even subject to doubt or debate. There is insufficient evidence of any relationship between Mr Clark and Mr Mara, at training or otherwise, to infer material non disclosure in relation to this subject matter.

(v) Previous Publications about AAMAC and Mr Clark

74 There was no mention in Mr Clark’s affidavit or in his oral evidence on the ex parte application of any prior publication by Fairfax of his or the company’s or Mr Panayi’s involvement in criminal conduct. The defendants contend that there were prior publications of that kind which should have been brought to the Court’s attention on the ex parte application. The failure to do so is said to be another non disclosure. This is said to be relevant to the criminal affiliation representation and to the Court’s assessment of whether AAMAC would suffer irreparable damage from the publication.

75 In support of this submission the defendants tendered an article in the weekend edition of the Sydney Morning Herald published on 16 and 17 September 2006: (exhibit 1). This article provided detailed information about Mr Panayi’s alleged activities in relation to an importation of ecstasy in a container landing at Port Botany and said:

“The Australian Crime Commission charged Panayi in connection to the importation, but the charge was withdrawn on the advice of the Department of Public Prosecutions. In secret recordings of Panayi ringing Lambley as the wharfies searched for the container – which were played to the Court – he asks Lambley: “it wouldn’t have went walkabouts already?”

76 The plaintiffs’ submission about this article was that almost two years had elapsed since it was published; its subject matter is different from that of the current proceedings; and, it did not mention either Mr Clark or AAMAC. It only stated that Mr Panayi was the subject of a charge that was withdrawn on the advice of the DPP. The plaintiffs submit there was a contrast between the relatively benign comments in the 2006 article and the extreme falsehoods proposed in the criminal affiliation representation which make the grant of an injunction here even more necessary. It was further submitted that there was no evidence that any of the plaintiffs saw the article or were even aware of it.

77 The defendants accepted that there was no direct evidence that any of the plaintiffs knew of the existence of exhibit 1. However, the defendants contend that it is most unlikely that Mr Panayi would not know of the article given its terms. There is internal evidence in exhibit 1 of Mr Panayi’s denial, to the journalist involved with the article, of the allegations being made in relation to the container the subject of the charges against Mr Nikolic.

78 Mr Panayi was present when the ex parte injunctions were obtained on 24 June 2009. He was not present in Court on 25 June 2009 or on any of the subsequent days of the hearing. He was not cross examined about these matters. His absence from the court room occasioned a degree of controversy between the parties during submissions in the subsequent days of the hearing. Be that as it may, he did not give evidence and none of his evidence relevant to non disclosure was able to be tested. The defendants have not established that he was aware of this article. The internal evidence of the article, even if it is taken as showing that Mr Panayi was interviewed for it, is not itself a sufficient basis to infer that he was aware of its subsequent publication. There is nothing to suggest that AAMAC or Mr Clark was aware of its publication. A party only has an obligation of candour in respect of things of which he was aware. No inference of non disclosure can be drawn against the plaintiffs in respect of the contents of exhibit 1.

The Discretion to Discharge Orders Obtained through Non Disclosure

79 Despite proof of material non disclosure justifying the discharge of orders obtained ex parte the Court has discretion whether of not to set aside the order or to make a new order on terms. It has been recognised that there may be a dispensation from the normal result that would follow from proven non disclosure: Lazard Brothers & Co v Midland Bank [1933] AC 289 per Lord Wright at 307; Victoria Teachers Credit Union Limited v KPMG (a firm) & Anor (2001) 1 VR 654 at 659-60 and Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213 at [25] – [33] per Gillard AJA. The courts recognise this discretion, so that this judge made rule does not itself become an instrument of injustice: Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1351, per LJ Balcombe and Savcor Pty Ltd v Cathodic Protection International APS [29].

80 The question arises as to whether such discretion should be exercised in this case. Authority has identified several factors that may be taken into account in the exercise of this discretion. The issue is whether the wrongdoing should be excused. Deliberate or intentional non disclosure will not be excused and usually leads to discharge: Savcor Pty Ltd v Cathodic Protection International APS [31]. In the absence of deliberate non disclosure the court will consider that the discharge order will not necessarily preclude another application. If a subsequent application is likely to be successful the court may continue the order to save a probable waste of time and costs: Ellinger v Guinness Mahon & Co [1939] 4 All ER 16 at 25 per Morton J. Other relevant factors are the seriousness of the non disclosure, the importance or weight that should be attached to the omitted factor in the decision-making process, delay by the defendant and any hardship if the order were set aside or were not set aside: Savcor Pty Ltd v Cathodic Protection International APS [33] and [87].

81 There are several reasons why in the present case the usual course should follow and that the non disclosures should result in a discharge of the orders obtained ex parte.

82 First, the non disclosures with respect to the South Pacific representations were deliberate. In final oral submissions on 30 June 2009 the defendants submitted that Mr Clark’s responses to the Court’s question, “You refer there to the girls in the Brandy Balloon. What are they, hotels?” was actively misleading and a lie. Mr Clark first said in answer “Restaurants”. That was misleading on its own for its failure to mention the nature of the restaurants. The other answers that followed this inquiry from the Court compound the problem, “They don’t supply them but if we are looking for waitresses that is where we get them from as well” and “we …do get the girls from there to go into the waitressing”. All of these statements cumulatively gave the Court the impression of waitresses providing normal food and drink service on the South Pacific. When the full details came out the next afternoon Mr Clark did not attempt to explain away what had been said the day before as a mistake on his part either in cross examination or in re examination. The impression the transcript gives on 25 June that he was reluctant to concede the nature of these establishments and of the expertise of the staff from them, when he was under cross examination that day is the very impression he gave to the Court at the time of his cross examination. He is not likely to have forgotten what these establishments and these staff were like when he gave evidence the previous day. His answers to the Court’s questions were calculated to mislead the Court.

83 It is not possible to draw any clear conclusion about a deliberate intention to mislead about the other non disclosures. The Court did not ask any direct questions about them. However as I have found there were several non disclosures relating to the criminal affiliation representations, some in relation to Mr Clark’s ecstasy charge and some in relation to Mr Clark’s criminal history. The combination of these non disclosures about the criminal affiliation representation was serious. Once disclosed this combined information gave a very different impression to the Court on 25 June than the one presented the evening before about the level of involvement of some of the plaintiffs with aspects of criminal activity.

84 In order to satisfy the practical approach to disclosure in urgent cases traced out by Allsop J (as he then was) in Walter Rau Neusser Oel Und Fett AG at [38] what was really required of the plaintiffs here was to reveal this information and to identify its relevance to a hypothetical case for the defendants and then to attempt to explain its lack of real significance. One explanation for this not occurring is the fact that the plaintiffs were under real time pressures on the afternoon of 24 June 2009. Some of the plaintiffs’ evidence on 24 June was given orally to complete the plaintiffs case for this reason. Be that as it may the material relevant to the defendants’ case was not disclosed.

85 These findings are without more enough to make clear that the injunctions granted on 24 June should be discharged. None of the other discretionary factors will alter the result that follows here from the findings that the Court was deliberately misled through Mr Clark’s evidence and from the seriousness of the combined non disclosures in relation to the criminal affiliation representation.

Role of the Plaintiffs’ Legal Representatives

86 The deliberate non-disclosures identified in this judgment are the responsibility of AAMAC, Mr Panayi and Mr Clark. Nothing in the evidence before me gives any ground to infer that their barrister or solicitor were aware of the material that was not disclosed to the Court on the ex parte application on 24 June. Nor was any such thing suggested by the defendants. The plaintiffs’ application was of its very nature assembled under the pressure of time, in an attempt to obtain urgent relief before a publication deadline. Such pressured circumstances are fraught with the risk of non disclosure, a risk that was fulfilled here.

Non Disclosure, Parties and Restraining Orders

87 Any one of these non disclosures is sufficient to lead to the discharge of the injunction to which it relates. I have found separate non disclosures in respect of each as the two restraining orders made on 24 June 2009. Both restraints will therefore be dissolved.

88 If non disclosures had been found with respect to only one of the restraints it may have been necessary to decide whether that non disclosure affected the other restraint to which it did not directly relate. It is not necessary to decide that question.

89 It is not possible to separate out the non disclosures that have occurred and attribute them to fewer than all of the plaintiffs. The plaintiffs were represented by the same counsel and solicitors. They relied upon the same evidence and legal submissions. When ex parte relief was sought the position of individual plaintiffs was not differentiated. This is reflected in the form of the orders that were made on 24 June 2009. Each plaintiff relied on the non disclosures. The defendants submitted that there is no way of quarantining one or other of the plaintiffs from the effect of the non disclosures that have occurred. The plaintiffs did not provide any satisfactory way of isolating one or other of the plaintiffs from the effect of the non disclosure. I doubt that there is a way to do this. The non disclosures I have found therefore will result in the discharge of the injunctions obtained by each of the plaintiffs.

The Extension Application

90 If the defendants’ application to discharge the injunction for non disclosure were to fail, the plaintiffs sought to extend the operation of the injunction so as to convert it into an interlocutory regime pending final hearing. I have found that the defendants’ application to discharge the injunction on grounds of non disclosure succeeds, resulting in the discharge of all ex parte orders. It is not necessary therefore to decide whether the injunction should be extended. Indeed once a finding of a deliberate non disclosure is made, as it has been here, extension of the injunction will not be permitted. In the circumstances there seems little utility in the Court now offering conclusions as to what the fate of the extension application would have been were it necessary to decide it on this application. If that question still has to be decided it will be decided in different circumstances from those presented to me on this application. Those difference circumstances will include, for example, the findings made in this judgment. If a further application is made the matter will need to be looked at afresh on the basis of new evidence.

91 The plaintiffs submitted that the injunction should be extended in a case such as this where the entitlement to ultimate relief is uncertain and where the consequences of not continuing injunctive relief will be grave for he plaintiffs. Mr King urged upon the Court the classic passage of McLelland J in Kolback Securities Limited v Epoch Mining N L (1987) 8 NSWLR 533 describing the approach that the Court should take in considering the grant of extension of an interlocutory injunction:

Appleton Papers Inc v Tomasetti Paper Pty Ltd

A v Hayden (No 1)

A vHayden (No 1)

Cohen v Peko-Wallsend

Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland

Tableland Peanuts Pty Ltd v Peanut Marketing Board

A v Hayden (No 1)

Castlemaine-Tooheys Ltd v South Australia

Cohen v Peko-Wallsend Ltd

Beecham Group Ltd v Bristol Laboratories Pty Ltd

Cayne v Global Natural Resources plc

Brayson Motors Pty Ltd v Federal Commissioner of Taxation

Castlemaine-Tooheys Ltd v South Australia

NWL Ltd v Woods

Cayne v Global Natural Resources plc

92 Mr King drew upon this passage and submitted that the present case is one where the grant or refusal of interlocutory injunctive relief will destroy the plaintiffs’ business. He emphasised that there are contested matters of fact in issue that should be decided at a trial and that there are contested questions of law that cannot be resolved on the current state of the evidence. He submitted that the balance of convenience in the circumstances is that the injunction be continued.

93 The discharge of the injunction for non disclosure reveals the difficulty with the plaintiffs’ submission. If the ex parte injunction should be discharged by reason of the plaintiffs’ non disclosure, then that occurs in order to remove the effect of the non-disclosure. That result will follow even if it means there is consequential prejudice to the plaintiffs. The misuse of the Court’s processes by deliberate non-disclosure requires the injunction to be dissolved in the interests of justice. If the threatened publications occur the plaintiffs are not without any remedy as they have an action for damages which they would still be at liberty to pursue.

Conclusion and Orders

94 In the result I have found that at the ex parte hearing of this matter on 24 June 2009 that the plaintiffs failed to disclose a number of matters material to the injunctive relief granted both with respect to the South Pacific representation and the criminal affiliation representation. This would normally lead to the discharge of the ex parte orders made unless other discretionary factors required their continuation. I have also found that the plaintiff’s material non disclosure was deliberate. In those circumstances the orders the Court made in this matter on 24 June 2009 should be discharged.

95 The plaintiffs will need a brief opportunity to read my judgment and to take advice as to whether they wish to appeal. The immediate discharge of these orders may prejudice the plaintiffs’ rights of appeal. It is appropriate therefore for the Court to allow a brief period for the plaintiffs to assess their position in relation to a possible appeal. Unless any submission to the contrary is made I propose to stay the operation of this order until 5.00pm on Wednesday 23 September 2009.

96 The defendants have been successful in discharging the orders obtained on 24 June 2009 on the grounds of material non disclosure. Costs would normally follow the event and the plaintiffs would be ordered to pay the defendants costs of this application. I have not called for submissions in relation to costs and the plaintiffs or the defendants may wish to contend for a different order than the one I have foreshadowed. I will reserve the question of costs so that the parties have an opportunity to notify one another of the costs orders they seek in the light of these reasons.

97 Accordingly, after hearing submissions, I will order that:

(1) orders 1 and 2 made on 24 June 2009 are discharged;

(2) the operation of this order is stayed until 5.00pm on Thursday 24 September 2009;

(3) liberty to apply is granted;

(4) I reserve the question of costs; and

(5) I direct the parties to contact my associate by 5.00pm on Thursday 24 September 2009 with a view to fixing a date to argue any questions of costs;

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30/09/2009 - Correction to judgment - Paragraph(s) [68], [82], [97]

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Citations

AAMAC Warehousing and Transport Pty Limited v Fairfax Media Publications Pty Limited [2009] NSWSC 970

Most Recent Citation

Meadows v Moyle [2010] QDC 202

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AAMAC Warehousing & Transport Pty Limited v Fairfax Media Publications Pty Ltd [2009] NSWCA 316

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Statutory Material Cited

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Thomas A Edison Ltd v Bullock [1912] HCA 72

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CITATION:	AAMAC Warehousing & Transport Pty Limited & Ors v Fairfax Media Publications Pty Limited & Ors [2009] NSWSC 970 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	24, 25, 26, 29 and 30 June 2009
JUDGMENT DATE :	21 September 2009
JURISDICTION:	Equity
JUDGMENT OF:	Slattery J at 1
DECISION:	ORDERS: (1) Orders 1 and 2 made on 24 June 2009 are discharged; (2) The operation of this order is stayed until 5.00pm on Thursday 24 September 2009; (3) Liberty to apply is granted; (4) Reserve the question of costs; and (5) Direct the parties to contact my associate by 5.00pm on Thursday 24 September 2009 with a view to fixing a date to argue any questions of costs; (6) Exhibits may be returned after 28 days.
CATCHWORDS:	EQUITY - equitable remedies - injunctions against publication - party seeking an injunction ex parte - duty of candour to make disclosure of material matters - issue of what are material matters - matters not disclosed are material - discretion to discharge orders obtained through non disclosure - non disclosures deliberate and serious - injunction discharged.
LEGISLATION CITED:	Fair Trading Act 1987
CATEGORY:	Principal judgment
CASES CITED:	ABC v Lenah Meats (2001) 208 CLR 199 Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 Ellinger v Guinness Mahon & Co [1939] 4 All ER 16 Garrand v Email Furniture Pty Limited (1993) 32 NSWLR 662 Kaplan v Go Daddy Group [2005] NSWSC 636 Kolback Securities Limited v Epoch Mining N L (1987) 8 NSWLR 533 Lazard Brothers & Co v Midland Bank [1933] AC 289 Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213 Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 Victoria Teachers Credit Union Limited v KPMG (a firm) & Anor (2001) 1 VR 654 Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Limited [2005] FCA 955
PARTIES:	First Plaintiff: AAMAC Warehousing & Transport Pty Limited (ACN 100 947 091) Second Plaintiff: Peter Panayi Third Plaintiff: Bruce Clark First Defendant: Fairfax Media Publications Pty Limited (ACN 003 357 720) Second Defendant: Linton Besser Third Defendant: John Fairfax Limited (ACN 008 396 585) Fourth Defendant: Fairfax Media Limited (ACN 008 663 161)
FILE NUMBER(S):	SC 3397/09
COUNSEL:	Plaintiffs: Mr P E King Defendants: Mr A T S Dawson
SOLICITORS:	Plaintiffs: McKell's Solicitors Defendants: Johnson Winter & Slattery