Bateman v Fairfax Media Publications Pty Ltd

[2014] NSWSC 400

Supreme Court

New South Wales

Medium Neutral Citation:	Bateman v Fairfax Media Publications Pty Ltd [2014] NSWSC 400
Decision date:	08 April 2014
Before:	McCallum J
Decision:	Defences of honest opinion of a commentator and comment of a stranger to be struck out unless the defendants provide particulars within 14 days identifying the persons whose honest opinion or comment is relied upon; application to have defence of fair report struck out refused
Catchwords:	DEFAMATION - defences - whether statutory defence of honest opinion of a commentator and common law defence of comment of a stranger liable to be struck out - where newspaper refusing to provide particulars identifying the commentator - application of the newspaper rule
Legislation Cited:	Defamation Act 2005 Defamation Act 1974 Uniform Civil Procedure Rules 2005
Cases Cited:	John Fairfax & Sons Ltd v Cojuangco [1988] HCA 54; (1988) 165 CLR 346 Liu v The Age Company Ltd [2012] NSWSC 12 McGuinness v Attorney General (Vic) (1940) 63 CLR 73 Sims v Wran [1984] 1 NSWLR 317 The Age v Liu [2013] NSWCA 26
Category:	Interlocutory applications
Parties:	Edmund Thomas Gregory Bateman (Plaintiff) Fairfax Media Publications Pty Limited (First Defendant) Fairfax Digital Australia & New Zealand Pty Limited (Second Defendant)
File Number(s):	2013/203163
Publication restriction:	None

JUDGMENT

1. HER HONOUR: These are proceedings for defamation and injurious falsehood arising out of the publication of a number of articles in The Sydney Morning Herald in October 2010. The only plaintiff in the defamation action is Dr Edmund Bateman. Dr Bateman is described in the articles as "Australia's richest doctor" and is credited with having pioneered the corporatisation of general medical practice in this country. The articles discuss the advent of large, seven-day medical centres and report allegations complaining of Dr Bateman's treatment of general practitioners engaged to work in such centres, his frequent and aggressive resort to litigation in the case of dispute and the adverse impact of the income-driven practices of such centres on the quality of the medical care they provide.

1. There are four matters complained of in the proceedings. The first is an article published in the print edition of the paper on 7 October 2010. The second is a digital version of that article in substantially the same terms. The third matter complained of is a collection of three articles published in the print edition of the paper the following day, on 8 October 2010. The fourth is the digital version of the third, again in what appears to be substantially the same terms.

1. Dr Bateman has pleaded a large number of defamatory imputations allegedly conveyed by those articles.

1. The defendants have pleaded defences of justification, contextual truth, honest opinion, comment and fair report (see amended defence filed 16 August 2013). Dr Bateman objects to parts of the amended defence and has applied to have those parts struck out pursuant to rule 14.28 of the Uniform Civil Procedure Rules 2005.

1. The hearing of the application exceeded the parties' estimate and did not conclude within the time available. This judgment determines objections to the pleading of the defences of honest opinion, comment and fair report. It remains to determine the plaintiff's objections to the defendants' reliance upon "Hore-Lacy" meanings as an aspect of the defence of justification and objections to the defence of contextual truth (as to which the proceedings are listed for further argument).

Honest opinion and comment

1. Dr Bateman's objection to the defences of honest opinion and comment raises an interesting question as to the application of the newspaper rule.

1. As noted by Hunt J in Sims v Wran [1984] 1 NSWLR 317 at 322, the defence of comment is available in relation to comment published by the defendant in three different situations - where it is his own comment, where it is the comment of his servant or agent and where it is neither (referred to as comment of a stranger). His Honour was referring to the defence under the Defamation Act 1974 (now repealed) but the same three categories exist at common law and under s 31 of the Defamation Act 2005 (where the third situation is referred to as honest opinion of a commentator).

1. Whereas the Defamation Act 1974 modified and otherwise excluded the defence of comment at common law, the defence under the 2005 Act preserves and is additional to the defence at common law (see s 29 of the 1974 Act; cf s 24 of the 2005 Act). The defence in the present case is pleaded comprehensively so as to rely upon each of the three situations referred to by Hunt J and so as to invoke both the statutory defence (paragraphs 23 to 26 of the amended defence) and the defence at common law (paragraphs 27 to 30 of the amended defence).

1. Dr Bateman objects to those defences only to the extent that they rest on honest opinion of a commentator or comment of a stranger. The objection arises from the fact that the defendants have (with one exception) refused to provide particulars identifying the persons whose honest opinion or comment the matter complained of is alleged to be, invoking the newspaper rule.

1. The newspaper rule operates as a judicial practice of refusing to compel discovery by a journalist of his or her confidential sources. However, as comfortingly acknowledged by the High Court in John Fairfax & Sons Ltd v Cojuangco [1988] HCA 54; (1988) 165 CLR 346 (at [9], 351), the precise area of operation of the rule "is shrouded in uncertainty, as might be expected of a principle erected on shifting foundations".

1. The Court explained in Cojuangco (at [9], 352) that the practice of refusing to compel disclosure of the identity of a confidential source appears initially to have been based on the view that it was not relevant to any issue in a defamation action against the newspaper. The practice nonetheless survived the later recognition that the identity of the source could be relevant to the issue of malice. The authorities thus acknowledge that the newspaper rule can provide a basis for refusing to compel the production of relevant information, according to the interests of justice.

1. The present application raises a slightly different issue. The issue is not whether the interests of justice require disclosure of the source but what should be the consequence of the newspaper's decision to withhold that information where its relevance arises from the newspaper's reliance on a particular defence. The defendants contend, in effect, that the newspaper rule should excuse them, at least for the time being, from complying with the undoubted requirement to provide proper particulars of their defence. Dr Bateman does not seek an order compelling the defendants to provide those particulars (by naming the sources), but submits that the sanction for their choosing not to do so should be to strike out the relevant parts of the defence.

1. The statutory defence of honest opinion is contained in s 31(3) of the Defamation Act 2005. Relevantly for present purposes, the section provides a defence to the publication of defamatory matter if it is proved that the matter was an expression of opinion of a person other than the defendant or an employee or agent of the defendant. That person is referred to in the section as the commentator. (There are other elements of the defence but they are not relevant for present purposes.)

1. It is an express requirement of the rules that a defendant who relies upon s 31(3) provide particulars identifying the commentator whose opinion it is alleged to be: see r 15.28(2)(d).

1. A defence established under s 31(3) is defeated if and only if the defendant had reasonable grounds to believe that the opinion was not honestly held by the commentator at the time the defamatory matter was published: see s 31(4). That is a matter required to be pleaded by way of reply: see r 15.31 UCPR. Plainly, Dr Bateman cannot be in a position to determine whether he has any basis for so contending if he does not know the identity of the commentator.

1. Perhaps curiously, in the case of the defence of fair comment at common law, there is no express requirement in the rules to provide particulars identifying the person whose opinion it is alleged to be: see r 15.28(3). In my view, however, the identity of the person is no less relevant under the common law defence, which requires proof that the comment was made honestly and which is arguably defeated if the comment was actuated by malice.

1. Accordingly, the identity of the person whose opinion is relied upon in support of the defence is plainly a relevant fact in the determination of both the statutory defence and the defence at common law. The defendants do not suggest otherwise. The critical question is whether the important principle reflected in the newspaper rule is sufficient warrant for depriving the plaintiff, at least during the interlocutory phase of the proceedings, of a fact relevant to the determination of positive defences pleaded against him.

1. Mr McClintock SC, who appears with Ms Chrysanthou for Dr Bateman, submitted that the operation of the newspaper rule must always bend to the interests of justice. He relied upon my statement in Liu v The Age Company Ltd [2012] NSWSC 12 at [42] (upheld in The Age v Liu [2013] NSWCA 26, see particularly [69] and [91]). In that passage of the judgment, I said:

the newspaper rule operates as a judicial practice of refusing to compel discovery by a journalist of his or her confidential sources. It does not amount to a privilege or immunity, and it has always been the case that disclosure of a source will be compelled when it is necessary in the interests of justice: see McGuinness v Attorney General(Vic) (1940) 63 CLR 73 at 104-105 per Dixon J; British Steel Corp v Granada Television Limited [1981] AC 1096 at 1169 per Lord Wilberforce.

1. Liu was an application for preliminary discovery, as was Cojuangco. In each case it was held, in the absence of an effective remedy against the newspaper, that the interests of justice required disclosure of the source. In each case, the newspaper's decision whether to relinquish the defence of qualified privilege was a relevant consideration: see Cojuangco at [23], 357.6; Liu at [128] to [132].

1. In Cojuangco, the High Court said (at [26], 358):

For our part we much doubt whether the newspaper rule would be applied to a case such as the present if the question were to arise in the context of an interlocutory application in a defamation action against the appellants in which malice was in issue. It may be that the rule has no application when the newspaper identifies its source in a general way and relies on that source to point up the authenticity of the imputations. But this is by the way.

1. Interestingly, the consideration of the newspaper rule in McGuinness also assumed that the adequacy of a remedy against the newspaper was a relevant consideration and arguably a premise of the entitlement to invoke the rule. Frank McGuinness was the editor of the Truth newspaper. He had written and published articles suggesting that certain persons were "collecting funds for the purpose of bribing members of the Victorian Parliament" to prevent the passing of certain bills. A Royal Commissioner was appointed to inquire into those allegations. McGuinness was summoned to the Commission to give evidence. He was asked whether, in writing the articles, he had any other source of information than the witnesses who had already appeared and given evidence at the Commission. He replied "Yes". He was then asked "What was that source?" He refused to answer the question and was found guilty of an offence of having done so without lawful excuse. He was fined the sum of fifteen pounds.

1. McGuinness appealed to the High Court against the finding of guilt. One of the grounds on which he contended he had lawful excuse to refuse to answer the question was that the editor of a newspaper can never be compelled to disclose his confidential sources used in writing articles in the newspaper. The submission (put by Gorman KC at 76.2) was that the cases showed "that if the newspaper is one that is well able to pay damages to the plaintiff for the libel, then the publisher or editor is not bound on interrogation to disclose his informants". The fullest discussion of the point is found in the judgment of Dixon J, who said (at 104, emphasis added):

By a long line of cases a practice is recognized of refusing to compel such a defendant to disclose the name of the writer of an article complained of as a libel or of the sources of information he has relied upon. The foundation of the rule is the special position of those publishing and conducting newspapers, who accept responsibility for and are liable in respect of the matter contained in their journals, and the desirability of protecting those who contribute to their columns from the consequences of unnecessary disclosure of their identity. The cases are collected in Lyle-Samuels v Odhams Ltd and South Suburban Co-operative Society Ltd v Orum, which are the latest authorities upon the application of the rule. The appellant stands upon these decisions and says that they disclose a development which, in reason and logic, should not stop at discovery, but should supply a general justification for withholding the names of contributors and the sources of information at all stages of any legal proceeding. The answer is that it is not a rule of evidence but a practice of refusing in an action of libel against the publisher, &c., of a newspaper to compel discovery of the name of his informants. It "rests not on a principle of privilege but on the limitations of discovery", to quote the comment of Professor Wigmore, who expresses himself somewhat strongly against the pretensions to a privilege on the part of journalists (Treatise on Evidence, 2nd ed., vol. 5, sec. 2286, n. 7).

1. It may be seen from those remarks that the newspaper rule developed as a practice of refusing to compel an editor or journalist to disclose his sources on the premise that such disclosure was not necessary, at least so long as the editor would "accept responsibility" for what was written. I appreciate that is not a reference to accepting liability for the defamation. But the rule allowed the editor the freedom to hide the source behind the editor's shield only so long as the editor himself was prepared and able to stand in battle.

1. The defendants' position in the present case brings those principles under a measure of strain. It is difficult to reconcile reliance upon the defences of honest opinion of a commentator and comment of a stranger with an acceptance of responsibility for the matters complained of. By those defences, the defendants seek to deflect responsibility, defending the alleged defamation as the comment of the very person whose position the newspaper rule was designed to protect.

1. In my view, it would be inimical to the interests of justice in the present case to allow that course. The defendants should not be compelled to disclose the identity of the sources so long as such disclosure is unnecessary. In my view, disclosure of the sources is made necessary by the defendants' decision to deploy defences raising the issue. I have not been taken to any authority in which the practice of refusing to compel discovery of a source was condoned in a context where the identity of the source was so central to the issues of fact to be determined at trial.

1. As already noted, the defendants have not suggested that the identity of the sources is not a relevant fact raised by the defences. In effect what is proposed is that, contrary to the usual procedure, they should be permitted to hold back proper particulars until closer to the trial. There is an obvious tension between the practice reflected in the newspaper rule, developed in England over a century ago, and the overriding purpose of the procedural law in this State (to which I am bound to seek to give effect) of facilitating the just, quick and cheap resolution of the real issues in the proceedings: s 56 of the Civil Procedure Act 2005. That is not to say that the newspaper rule has no application in the modern world. But where, as here, it is acknowledged that the identity of the sources is a fact relevant to positive defences raised at the choice of the newspaper, I think it would derogate from the overriding purpose to allow the provision of necessary particulars to be deferred.

1. For those reasons, I have concluded that the defendants should be put to an election whether to provide the particulars required under the rules (identifying the persons whose opinion or comment the relevant matter is alleged to be), failing which there should be an order striking out the relevant parts of the defence.

1. The precise strike-out order sought by Dr Bateman is confusing and may require reconsideration by him. As to the defence of honest opinion under s 31(3) of the Defamation Act 2005, the order sought is that paragraphs 23(d), 24(d), 25(d) and 26(d) of the amended defence be struck out. Those paragraphs plead the statutory defence to each of the four articles respectively.

1. The defence of comment at common law is pleaded in paragraphs 27, 28, 29 and 30. In each case, subparagraph (e) pleads the common law defence commonly referred to as comment of a stranger. Curiously, the order sought by Dr Bateman seeks only to have paragraphs 27(e) and 28(e) (relating to the first and second matters complained of) struck out.

1. The omission of paragraphs 29(e) and 30(e) (relating to the defence at common law in respect of the third and fourth matters complained of) from the relief sought duplicates what appears to be an error in the defendants' correspondence. In a letter dated 24 October 2013, the defendants said (as to the foreshadowed application to have parts of the pleading struck out if the commentator was not identified):

the commentator for the purposes of paragraphs 29(e) and 30(e) of the Amended Defence is John Marchione. As to the identity of the commentators for the balance of the defence, we are not at liberty to reveal the relevant names by reason of confidentiality arrangements that are in place, and we decline to provide the requested particulars at this stage in reliance upon the Newspaper Rule.

1. The letter suggests that Mr John Marchione is the only person whose comment as a stranger is relied upon in defence of the third and fourth matters complained of. It also implicitly excludes him from the statutory defence pleaded in paragraphs 23 to 26 of the amended defence. There does not appear to be any reason why his opinion would not be invoked in support of both defences. Further, it is clear from the evidence on the present application that the defence to the third and fourth matters complained of is also intended to be based upon the comments of two other persons, whom the defendants refuse to name. In an affidavit affirmed on 4 December 2013, Ms Natalie Buck identifies the following opinions relied upon in support of the defence:

(a)   As to the first and second matters complained of, the statement, "A lawyer representing one of the GPs called the medical centres 'sweat shops' and a 'debtors' prison' and said some of the doctors were so afraid of being sued that they agreed to work longer, up to six months more";

(b)   As to the third and fourth matters complained of, the statement, "A doctor who worked for Primary and who did not want to be named said: "It's a factory, and numbers are what counts";

(c)   As to the third and fourth matters complained of, the statement, "There's not a lot of mercy shown to his [doctors]," a health analyst who does not want to be named says.

1. In case I have misunderstood the position, I propose to hear the parties as to the precise form of order that should be made. The effect of the order I propose is that, unless the defendants provide particulars within 14 days identifying the persons whose honest opinion or comment is relied upon in support of the defences of honest opinion of a commentator and comment of a stranger, the relevant parts of the amended defence be struck out.

Fair report

1. Dr Bateman's objection to the defence of fair report may be disposed of briefly. Section 29(1) of the Defamation Act 2005 provides:

It is a defence to the publication of defamatory matter if the defendant proves that the matter was, or was contained in, a fair report of any proceedings of public concern.

1. In paragraph 31 of the amended defence, the defendants say (my emphasis) "the first matter complained of, or that part of it found to have conveyed first plaintiff's imputations 8(b) and/or 8(c), was, or was contained in, a fair report of proceedings of public concern." A defence is pleaded in the same terms in paragraph 32 of the amended defence in response to the second matter complained of and imputations 10(b) and 10(c).

1. The objection relates to the words underlined. Dr Bateman submits that those words raise a false issue, since it will form no part of any function of either the judge or the jury at the trial to make a finding as to which part of any matter complained of conveyed any individual imputation. Mr McClintock submitted that paragraphs 31 and 32 of the amended defence should be struck out on that basis and that the defence should be "pleaded properly".

1. Mr Dawson, who appears for the defendants, explained that what was intended by those words was to defend the matter complained of as fair report to the extent that it conveys the specified imputations. He noted at least the theoretical possibility that those may be the only imputations which stand to be defended at the conclusion of the hearing. Whilst the wording is perhaps infelicitous, the position is now tolerably clear. I do not think it is necessary or appropriate to require the defendants to replead that part of the defence.

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Decision last updated: 11 April 2014