Cheung v Fairfax Media Publications Pty Ltd
[2014] NSWSC 28
•04 February 2014
Supreme Court
New South Wales
Case Title: Cheung v Fairfax Media Publications Pty Ltd Medium Neutral Citation: [2014] NSWSC 28 Hearing Date(s): 4 February 2014 Decision Date: 04 February 2014 Jurisdiction: Common Law Before: Beech-Jones J Decision: 1. Order that imputations (a) and (b) in paragraphs 3, 5, 7 and 9 of the Statement of Claim be struck out.
2. Direct the Plaintiff to file and serve an Amended Statement of Claim on or before 18 February 2014.
3. The proceedings are stood over to 25 February 2014 at 9:00am before the Registrar for directions.
4. No order as to the costs of 4 February 2014.
Catchwords: DEFAMATION - form of imputations - whether capable of being conveyed - no question of principle. Category: Interlocutory applications Parties: Chris Cheung (Plaintiff)
Fairfax Media Publications Pty Ltd (Defendant)Representation - Counsel: Counsel:
B. McClintock SC (Plaintiff)
D.R. Sibtain (Defendant)- Solicitors: Solicitors:
Johnson Winter & Slattery (Plaintiff)
Banki Haddock Fiora (Defendant)File Number(s): 2013/344465 Publication Restriction: nil
EX TEMPORE JUDGMENT
On 13 November 2013 an article was published in the Sydney Morning Herald ("the Herald") and by various electronic means entitled "Revealed: Obeid links to Circular Quay bar". The article refers to the plaintiff in these proceedings, Mr Chris Cheung. Mr Cheung has commenced proceedings against the proprietor of the Herald, Fairfax Media Publications Pty Ltd ("Fairfax") for defamation. He has pleaded that six imputations arise out of the article.
Fairfax has moved to strike out a number of the imputations on various bases. In particular it seeks to strike out imputations (a), (b), (c) and (f). During the course of argument senior counsel for Mr Cheung, Mr McClintock SC, indicated that he would not press imputation (b), but would seek leave to replead.
In respect of imputation (a) Mr McClintock SC reformulated that imputation so that it would now read:
"The plaintiff knowingly entered into a secret business association with the Obeid family to assist that family's corrupt activities."
The balance of the argument concerned imputation (a) as reformulated, imputation (c) and imputation (f). The remaining complaint by Fairfax concerning imputations (a) and (c) was that they are in substance alleging the same matter and that Mr Cheung should be forced to elect which one he wishes to adopt. Imputation (c) reads as follows:
"The plaintiff had acquired the lease of the Cruise Bar at Circular Quay as a front for the notoriously corrupt Obeid family in order to conceal dishonestly the fact that the Obeids were the true owners of the bar."
To address that contention it is necessary to briefly describe some parts of the article in more detail. The opening statement in the article is as follows:
"The son of corrupt former Labor MP Eddie Obeid installed an associate in the Cruise Bar at Circular Quay 'to keep an eye on things', claiming his family had a secret interest in the venue."
The article then states:
"The bar is owned by Ferrari-driving publican Chris Cheung, 47, a big ALP donor and a long-term friend of Mr Obeid's son Moses."
The article then quotes Mr Cheung as denying that the Obeids had any involvement in the Cruise Bar. The next paragraph alleges that a previous leaseholder, said to be an associate of the Obeids: "... offered a bribe in an attempt to get a favourable outcome during lease negotiations." It then states:
"The Independent Commission Against Corruption is investigating attempts by Eddie Obeid, 70, to get officials, including former ministers, to grant lucrative concessions that benefit the Obeid family's secret business ventures at Circular Quay."
The article then recites Mr Obeid as having spent money to take control of three waterfront cafe leases and that the fourth of the leases was acquired for $1.5 million by Mr Cheung. Curiously the article then refers to another person said to be a close associate of Mr Obeid's son, who recounts being told by Mr Obeid's son that he just bought a bar and restaurant at the overseas passenger terminal and that that associate was being asked to "keep an eye on things to make sure his interests were being served by Cheungie", being apparently a reference to Mr Cheung.
The article cites a source saying it was common knowledge Mr Obeid used his influence to secure retail spots for his own and his son's interests at Circular Quay.
The difference on its face in substance between the two imputations is that imputation (a) refers to Mr Cheung as "having assisted the Obeid family's corrupt activities", whereas imputation (c) refers to the actions of Mr Cheung in acquiring the lease of the Cruise Bar as a front for the notoriously corrupt Obeid family. Imputation (a) does appear to travel wider than imputation (c) in that the reference to activities appears to be broader than the mere conduct of someone simply acquiring a lease as a front for another person.
It is in my view doubtful whether the article in substance is saying that Mr Cheung did anything more than acquire the lease as a front for the Obeids. Mr McClintock SC for Mr Cheung pointed to the paragraph in which the source is quoted as saying that Mr Obeid's son had said that that source was being placed down on the quay to "make sure his (being Mr Obeid's son's) interests were being served" by Mr Cheung. The essence of what Mr McClintock was contending was that that quote suggests that Mr Cheung has some wider responsibilities than simply fronting for ownership of a property at Circular Quay.
Although the matter is a fine one I am not persuaded to the requisite standard that imputation (a) as reformulated and imputation (c) as drafted are not substantially different such that at this stage they should be struck out.
To reiterate, read literally imputation (a) does suggest a wider set of activities that are said to be corrupt and engaged in by the Obeid family and in which the plaintiff is assisting them than those the subject of imputation (c). Further, although it is somewhat of a close call, I consider the article is capable of supporting the suggestion that there is some wider set of activities than the mere acquisition of the lease that the plaintiff is assisting the Obeid family in their business activities at Circular Quay. Accordingly I decline to grant any order in relation to imputation (a) as reformulated and imputation (c).
The remaining imputation which is challenged is imputation (f) which reads as follows:
"The plaintiff bribed the former Planning Minister Tony Kelly to remove his $150 million proposed development of the Coogee Bay Hotel from the control of the local council."
I have already summarised what was in effect the first third of the article. The middle part of the article recounts various matters involving properties at Circular Quay. It is unnecessary to set them out in detail, but one matter referred to is an alleged bribery of some property managers who were letting properties at Circular Quay. It was correctly submitted by Mr McClintock SC, that the article is replete with suggestions of bribery.
The relevant part of the article for imputation (f) reads as follows:
"Mr Cheung and his companies have donated more than $135,000 to the Labor Party since 1998. He said his donations reflected his 'belief in people' and were not for approvals.
Mr Cheung is also a business partner of solicitor John Gerathy, who is a business partner of corrupt former minister Ian Macdonald.
Mr Gerathy was to be a crucial witness at the ICAC's investigation into how Mr Macdonald's actions over a coal licence led to a $30 million windfall for the Obeid family.
The inquiry heard that Mr Gerathy, who has a business called Bagman Properties, lent Mr Macdonald more than $450,000. Mr Macdonald denied the money was to tide him over until he received a $4 million payment as his share of the crooked coal deal.
Unfortunately, Mr Gerathy was admitted to a mental hospital and was unable to give evidence. He has since been discharged.
When former planning minister Tony Kelly was grilled at the ICAC in 2011, he was represented by Mr Gerathy. Mr Kelly was found to have acted corruptly when he backdated a letter enabling the government to purchase the union-owned workers cottages at Currawong.
Mr Kelly also removed Mr Cheung's controversial $150 million proposed development of the Coogee Bay Hotel from the control of the local council..
The Obeids declined to comment."
Mr McClintock SC also pointed to the last statement in the article which reads, "Do you know more?"
Counsel for Fairfax, Mr Sibtain, submits imputation (f) is simply not capable of being conveyed by this article. In particular, he submits the article is simply not capable of conveying the suggestion that Mr Cheung bribed the former planning minister, Mr Kelly. It seems to be common ground that imputation (f) is to be taken as a reference to the making of some direct payment or inducement to Mr Kelly.
Both parties accepted the very high standard that Fairfax must overcome to warrant the striking out of an imputation. It is unnecessary to recount those principles as well as the principles as to which these type of articles may be read by the form of hypothetical observer which is the focus of the test in defamation. Two matters I note are that such body of persons are said to be allowed some latitude for "loose thinking" and also a capacity to read between the lines.
In relation to this article I note the following. Firstly, part of this passage clearly suggests or is capable of suggesting that Mr Kelly is corrupt. Hence the reference to his allegedly backdating a letter.
Secondly, apropos of just about nothing else, the other piece of conduct engaged by Mr Kelly referred to in the article is his act in removing Mr Cheung's supposedly "controversial development" from the control of the local council. The manner in which that is described suggests that it was a decision extremely favourable to Mr Cheung.
Thirdly, the article raises, at least as a spectre, the possibility that Mr Cheung is a person prepared to make donations to obtain approvals to further his business interests. The particular donee referred to is the Labor Party. The article does not expressly state that he has ever given any such donations directly to a minister.
Fourthly, as I have already stated, the article is simply replete with suggestions of bribery.
The reference to the decision by Mr Kelly finds itself at the very end of an article which is a damning indictment of the Obeids and, in effect, anyone who has had any association with them. It also comes at the end of a series of facts that are recounted which note that Mr Cheung makes donations, and raises the spectre that he does so to obtain approvals. It also points to his association with Mr Gerathy, refers to a corrupt minister who is said to have received money in his own right, and then it identifies the person who supposedly conferred on Mr Cheung a benefit as also being corrupt, namely Mr Kelly.
In my view when all of those matters are noted and, bearing in mind the high threshold that Fairfax must reach to strike out this imputation, I am not persuaded that that imputation is not capable of being conveyed. I decline to strike out imputation (f).
Accordingly:
(1)I order that imputations (a) and (b) in paragraphs 3, 5, 7 and 9 of the Statement of Claim be struck out.
(2)I direct the plaintiff to file and serve an amended Statement of Claim on or before 18 February, 2014.
(3)I will stand the proceedings over for further directions before a Registrar on Tuesday 25 February, 2014 at 9 am.
(4)I will make no order as to the costs of 4 February 2014.
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