Crisp v Fairfax Media Ltd
[2012] VSC 615
•19 December 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
S CI 2012 06465
| GLENN ANTHONY CRISP | Plaintiff |
| v | |
| FAIRFAX MEDIA LTD (ACN 008 663 161), THE AGE COMPANY PTY LTD and ADELE FERGUSON | Defendants |
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JUDGE: | WARREN CJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 November 2012 |
DATE OF JUDGMENT: | 19 December 2012 |
CASE MAY BE CITED AS: | Crisp v Fairfax Media Ltd & Ors |
MEDIUM NEUTRAL CITATION: | [2012] VSC 615 (1st revision, 20 December 2012) |
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DEFAMATION – Interlocutory injunction to restrain publication of allegations made in a statement of claim – Statement of claim leaked to The Age newspaper before service – Statement of claim publically available on County Court file – Application refused – Defamation Act 2005 ss 28, 30.
PRACTICE AND PROCEDURE – Application for discovery to identify defendant – Putative defendant alleged to heave leaked statement of claim to The Age newspaper – Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr SK Wilson QC with Mr DP Gilbertson and Mr LP Wirth | Rothwell Lawyers |
| For the Defendants | Dr MJ Collins SC and Mr S Mukerjea | Minter Ellison Lawyers |
HER HONOUR:
The plaintiff, Mr Crisp, is a chartered accountant and an official and registered liquidator under s 1282 of the Corporations Act 2001 (Cth). He was formally an equity partner of RSM Bird Cameron (‘Bird’). Mr Crisp retired from Bird on 16 August 2012 in a way he describes as ‘not amicable’. There was a confidential deed of settlement and terms of release between those parties. He is now a partner of another firm, Jirsch Sutherland, which he says is a ‘rival insolvency practice’ to Bird.
On 16 November 2012 Mr Crisp was alerted by one of his current partners that a writ may have been issued against him in the County Court by Bird. The writ was issued on 8 November 2012. A statement claim was filed on 16 November 2012. However, Mr Crisp alleges that the statement of claim was not physically available on the County Court file until 20 November 2012, when his lawyers obtained a copy. Earlier, on 24 October 2012, Mr Crisp’s lawyers informed the lawyers for Bird that they had instructions to accept service in the event of proceedings being issued.
The generally indorsed writ alleges that Mr Crisp breached his fiduciary duties to Bird by appropriating, for his personal use and benefit, liquidation fees properly owed to Bird under Mr Crisp’s partnership agreement. The misappropriated amount is alleged to be $514 313.00 (‘the sum’). The relevant liquidation commenced in August 2002 (before Mr Crisp joined Bird) and continued until September 2008. Bird seeks damages and other relief. The statement of claim expands on the allegations in the generally endorsed writ to allege that Mr Crisp paid the money into his personal bank account and used it to meet personal debts, fraudulently concealing the payments from Bird.
On 20 November 2012, at approximately 4.41pm, a journalist from The Age newspaper (owned by the defendant Fairfax) emailed Mr Crisp:
Dear Glenn,
I have a copy of the statement of claim filed by RSM Bird Cameron relating to you. I was hoping to talk to you about this as I plan to write something for tomorrow’s papers. My deadline is 6pm. Have you filed a defence? If so can I get a copy? The allegations in the statement of claim are serious and I would appreciate putting some of them to you. Can you tell me when you left RSM Bird and joined Jirsch? Has ASIC been in touch with you relating to this? I have other questions that I would like to talk to you about. If you could call me on my landline or mobile I would appreciate it.
The defendants admit, in an affidavit, that the journalist was provided with a copy of the statement of claim. A lawyer for Fairfax, Mr Peter Bartlett, deposed that The Age journalist had not disclosed the identity of the source of the statement of claim, relying on ethical practices and principles.[1] Furthermore, the journalist had given an undertaking to her informant that the identity not be disclosed. The journalist had an ongoing reporting interest in the conduct of insolvencies and insolvency practitioners.
[1]See cl 3 of the Media Alliance Code of Ethics of the Media, Entertainment and Arts Alliance; cl 10 of The Age Code of Conduct.
As at 21 November 2012 (the day after the filing of the statement of claim) Mr Crisp had not been served with either the generally endorsed writ or the statement of claim. Mr Crisp’s counsel informed me from the Bar table that the statement of claim was served on 22 November 2012.
Fairfax has not, to date, published the fact of the statement of claim or its contents.
Mr Crisp seeks an interlocutory injunction restraining Fairfax from publishing the allegations contained in the statement of claim. Mr Crisp also seeks an order for preliminary discovery pursuant to r 32.04 of the Supreme Court Rules for Fairfax to disclose the identity of the source of the statement of claim. Mr Crisp’s counsel asserted that Mr Crisp intends to issue defamation proceedings against the defendants should they publish the allegations.
Mr Crisp asserts that he will be defamed if the publication occurs. He further asserts that the publication would constitute a contempt of court or an abuse of process of the County Court.
Relevantly, Bird, as the plaintiff in the County Court proceedings, has not been joined to these proceedings. When the court made enquiries about this fact, counsel for Mr Crisp responded that it was unnecessary.
Curiously, no application has been made to the County Court to restrain publication. In this Court there was no application to have the proceeding heard in camera or the publication of any matters suppressed. However, on 30 November, several days after the hearing of this application, Mr Crisp applied to the County Court for an order that the writ and all other documents in the proceeding remain confidential. The County Court ordered that the documents remain confidential until 19 December 2012 (apparently pending the determination of this application).
Mr Crisp needs to establish a prima facie case of defamation, that damages would be an inadequate remedy and that the balance of convenience favours the granting of the injunction.[2] Furthermore, in defamation law, exceptional caution is exercised before injunctive relief restraining publication is granted: see Australian Broadcasting Commission v O’Neill.[3] In essence, Gleeson CJ and Crennan J reached the position on the basis of four factors: first, the public interest in free speech; secondly, the legal uncertainty that prevails until the defence of justification is resolved; thirdly, a defence of justification is ordinarily a matter for the jury rather than a judge; and fourthly, the general character of a plaintiff may be important at trial.[4]Significantly for present purposes Gleeson CJ and Crennan J held:
It is one thing for the law to impose consequences, civil or criminal, in the case of an abuse of the right of free speech. It is another matter for a court to interfere with the right of free speech by prior restraint. In working out the consequences of abuse of such freedom, the law strikes a balance between competing interests, which include an individual's interest in his or her reputation. When, however, a court is asked to intervene in advance of publication wider considerations are involved. This is the main reason for the ‘exceptional caution’ with which the power to grant an interlocutory injunction in a case of defamation is approached. [5]
[2]Ibid; O’Neill (2006) 227 CLR 57.
[3](2006) 227 CLR 57 [32], [34] and [73]–[83].
[4]Ibid [16].
[5]Ibid [32] (footnote omitted).
Relevantly, in O’Neill, Heydon J held:
In truth, only one proposition of any importance flows from the appeal. That is that as a practical matter no plaintiff is ever likely to succeed in an application against a mass media defendant for an interlocutory injunction to restrain publication of defamatory material on a matter of public interest, however strong that plaintiff's case, however feeble the defences, and however damaging the defamation. [6]
[6]Ibid [170].
The starting point is whether the need for exceptional caution has been overcome by Mr Crisp. It is a factor to be taken into account in determining whether there is a prima facie case and where the balance of convenience lies: Bradto Pty Ltd v State of Victoria.[7]
[7](2006) 15 VR 65.
The question arises as to whether it is in the public interest to interfere in the publication. Primarily, there is the public interest in free speech. More widely, there is the public interest in the role and conduct of an official liquidator who may act as an officer of the court when so appointed. Next, the defence of justification could not be determined in this matter until evidence is called and asserted at trial. In the ordinary course, justification would be a matter for a jury. In the County Court writ Bird has sought trial by judge alone. However, the mode of trial of any defamation action is unknown at this stage. Lastly, given the nature of the allegations in the writ, there must be a prospect of Mr Crisp’s character being in issue at trial in any defamation proceeding.
On the basis of the caution directed in O’Neill and the principles upon which the caution is based, I am not persuaded that Mr Crisp has overcome the exceptional caution obstacle. I would refuse the application for an interlocutory injunction on that basis.
However, I apply the strict principles of whether there is a prima facie case and in assessing where the balance of convenience lies. In answering whether Mr Crisp has an arguable case in defamation if publication occurs it is important that any report should not go so far as to impute that Mr Crisp has committed the acts that Bird is alleging or is not a fit and proper person to be a liquidator or chartered accountant. It is accepted in criminal proceedings that merely reporting allegations of misconduct is not defamatory because a reasonable person would understand that no offence had been proved: Mirror Newspapers Limited v Harrison.[8] The allegations made in this matter are of such a nature that, should the report should be of no further extent than the fact of the proceedings by Bird and the allegations in the statement of claim against Mr Crisp, the ordinary reasonable reader of The Age newspaper would simply be alert to the fact that the claim is made by Bird and that the claim has to be determined by the court.[9] As such, the report should be of no further extent than the fact of the proceedings by Bird and the allegations in the statement of claim against Mr Crisp. There is no reason to believe that the intended report would go any further than those matters.
[8](1982) 149 CLR 293, 300–301.
[9]Ibid. Cf Cummings v Fairfax Digital Australia & New Zealand Pty Ltd [2011] ACTSC 188 but see discussion at [57]-[74] of Ross McConnel Kitchen & Co Pty Ltd v John Fairfax & Sons Ltd [1980] 2 NSWLR 845 [10]-[25], Coull v Nationwide News Pty Ltd [2008] NTCA 10 [114], Dunsec Pty Ltd v Nationwide News Pty Ltd [2000] NSWCA 155 [15], John Fairfax Publications Pty Ltd v Obeid (2005) 64 NSWLR 485 [75], Independent Newspapers Holding Ltd and Ors v Suliman [2004] ZASCA 57 [76], Patrick Milmo QC, WVH Rogers, Gatley on Libel and Slander (11th ed, 2010) 327.
Furthermore, there is the question of the lack of secrecy of the County Court file. Counsel for Mr Crisp conceded in argument that there was nothing at that time to stop another media organisation from examining the County Court file and then publishing information from it, providing the reporting was reasonable and balanced.
In deciding whether there is a prima facie case there is also the matter of any defence open to Fairfax. Section 28(1)(b) of the Defamation Act 2008 (‘the Act’) provides a defence to the publication of defamatory matter if the defendant proves that the matter was contained in a fair summary of a public document.[10] Any contemplated report of the County Court file, in particular the writ and the statement of claim, involves publication of public documents as provided by s 28(1)(b) of the Act. Further, ss 30(1)(a) and (c) of the Act provide for the defence of qualified privilege where the recipient has an interest in the information and the conduct of the publishing is reasonable in the circumstances.[11]
[10]Section 28(1):
It is a defence to the publication of defamatory matter if the defendant proves that the matter was contained in-
(a) a public document or a fair copy of a public document; or
(b)a fair summary of, or a fair extract from, a public document.
[11]Section 30(1):
There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that-
(a) the recipient has an interest or apparent interest in having information on some subject; and
(b) the matter is published to the recipient in the course of giving to the recipient information on that subject; and
(c) the conduct of the defendant in publishing that matter is reasonable in the circumstances.
Mr Crisp submitted that Fairfax cannot rely on the s 28(1) defence due to s 28(3), which provides:
A defence established under subsection (1) is defeated if, and only if, the plaintiff proves that the defamatory matter was not published honestly for the information of the public or the advancement of education.
Mr Crisp submitted that whoever leaked the statement of claim must have done so for the improper motive of damaging Mr Crisp’s reputation and not for the purpose of informing the public. Mr Crisp submitted that Fairfax now knows about the purpose of the source and the source’s purpose therefore ‘infects’ the purpose of Fairfax in publishing the information.
I reject this submission. The motives of the source are irrelevant. What matters is the subjective purpose of the defendants. I see no reason to doubt that if the defendants were to publish the information, it would be so for the purpose of informing the public irrespective of whatever the motives of the source might have been.
Fairfax, and with it The Age newspaper, has a general and specific interest in the information on the County Court file, in particular the statement of claim. The general interest lies in reporting on matters of public interest, namely, the conduct of an official liquidator who may be called upon to exercise public functions on behalf of the courts.
A liquidator is an authorised insolvency practitioner with the primary function of collecting and realising the assets of an insolvent corporation and then of distributing the assets in accordance with the priorities set by statute.[12] Goode states:[13]
In a compulsory winding up, the liquidator is an officer of the court. As such he is required to act with scrupulous fairness and impartiality, avoiding ‘dirty tricks’ that might be open to an ordinary person and his status as an officer of the court is relevant to the propriety of contracts into which he enters. (emphasis added)
[12]R Goode, Principles of Corporate Insolvency Law (Sweet & Maxwell, Thomson Reuters, 4th ed. 2011) 150, [5-02]. See also R P Austin and I M Ramsay, Ford’s Principles of Corporations Law (14th ed, 2010) [25.150], [28.190].
[13]Ibid.
There is then the specific interest of the Fairfax journalist pursuing and reporting as she has upon corporate insolvencies and the conduct of those persons involved in insolvencies and the disposition of property by them. It seems to me as matters stand, and of course it is the early stage of matters, if defamation proceedings ensue then the defendants would have a defence of qualified privilege open under the Act. Given matters stand at the anterior stage of an asserted potential defamation it is not easy to predetermine the conduct of the defendants under s 30(1)(c) of the Act. So far the conduct of the defendants has been reasonable. The publication has not occurred and the journalist contacted Mr Crisp initially on 20 November 2012 seeking to ascertain his comments and effectively providing an opportunity to put his side of the story or to answer the allegations if he wished.
Section 30(2) of the Act provides that a defendant must believe on reasonable grounds that the recipient has the relevant interest. The sub-section was not the subject of contention or submission in argument, hence, I will not address it. Furthermore, s 30(3) is relevant. The sub-section provides a list of matters a court may take into account in determining whether the conduct of the publication is reasonable in the circumstances. The matters cover public interest, performance of public functions, the seriousness of any defamatory imputation, the extent of proven facts, the nature of the defendant’s business, the integrity of sources of information, whether a reasonable attempt was made by the defendant to obtain and publish a response, verification of the information and any other circumstances that the court considers relevant. Nothing arises under the list of matters in s 30(3) at this stage that would cause hesitation about the prospect of the defence of qualified privilege being open to the defendants.
I note that Mr Crisp, while expressly denying the allegations in the statement of claim, did not do other than globally deny them. The statement of claim sets out particulars relating to an individual liquidation conducted by Mr Crisp whilst with Bird. The matters in the particulars are not expressly rebutted. Mr Crisp in an affidavit states:
I say the funds the subject of the County Court Proceedings are funds properly belonging to me. The allegations contained in the Statement of Claim are denied.
Mr Crisp also deposes that he personally bore particular costs for the relevant liquidation and was not indemnified by Bird. He deposes that the documents referred to in the statement of claim were improperly obtained. He further deposes that the deed of settlement he entered into with Bird was in full and final settlement of all claims by Bird. In separate correspondence, Mr Crisp’s lawyers asserted to Bird that their claim, relating to a liquidation commenced in 2002 was, in 2012, statute barred.
Of itself the lack of a detailed rebuttal is not necessarily a criticism. However, whilst there may be forensic reasons for so doing, the Court is left without the detailed response of Mr Crisp. For the purposes of the interlocutory injunction he carries the onus.
Weighing these matters up I am not satisfied that there is a prima facie case. The proposed publication is sourced from a document that is publically available. For all these intents and purposes there is a public interest in reporting on matters relating to an official liquidator. The conduct of the defendants has so far been reasonable and there is no suggestion that it will not continue. Finally, if publication occurs and defamation proceedings are issued there is a prospect, as matters presently stand, of the defendants relying on defences.
For completion, I mention that Mr Crisp relied upon Gaskell & Chambers, Limited v Hudson, Dodsworth & Co,[14] per Goddard J, for the proposition that the court will not permit its processes to be made the vehicle of a libel upon other persons and will treat such activity as a contempt of court. In that case the defendant had circulated copies of a statement of claim with a covering letter. Here no such action is contemplated and quite different circumstances prevail.
[14](1936) 2KB 595.
So far as is necessary, I consider the matter of where the balance of convenience lies. As Doyle CJ explained in Jakudo Pty Ltd v South Australian Telecasters Ltd:[15]
The reason why interlocutory injunctions are rarely granted in respect of defamatory material is, as Ormiston J pointed out in [National Mutual Life Association of Australasia Limited v GTV Corporation Pty Ltd [1989] VR 747], that the courts have recognised the substantial public interest in the free discussion of matters of public or general interest. That means that when the balance of convenience comes to be weighed, the public interest in free discussion of matters of public or general interest weighs heavily against the grant of an injunction. Particularly will this be so if the defendant puts forward material which shows that there are reasonable grounds to think that a defence of justification may succeed. … When the real issue is not whether the words are defamatory, but that of justification, the plaintiff will have shown that there is a serious question to be tried as to the plaintiff's entitlement to relief. But, if there are reasonable grounds to suppose that a defence of justification may succeed that, coupled with the substantial public interest in the free discussion of matters of public and general interest, will usually mean that the balance of convenience is in favour of the refusal of a grant of an injunction. Of course, that assures that damages will be an adequate remedy.
[15](1997) 69 SASR 440, 440.
Taking into account the principle that the courts will generally be hesitant to restrain a publication, combined with the fact that the statement of claim may be inspected by any person and any media organisation now, without qualification, the balance of convenience does not favour Mr Crisp. However, it remains that Mr Crisp has the remedy of damages available to him. Counsel for Mr Crisp was at pains to focus upon the potential damage to Mr Crisp’s reputation as an official liquidator and which could not necessary be compensated for. He submitted that the cap on damages for non-economic loss under s 35(3) of the Act[16] means Mr Crisp will be left without an effective remedy if publication is not restrained. Parliament’s decision to cap damages does not necessarily make damages an inadequate remedy, even if, but for the cap, higher damages would have been awarded. That is the law of defamation and the way in which it operates I am not persuaded that the balance of convenience lies with Mr Crisp.
[16]35. Damages for non-economic loss limited
(1)Unless the court orders otherwise under subsection (2), the maximum amount of damages for non-economic loss that may be awarded in defamation proceedings is $250 000 or any other amount adjusted in accordance with this section from time to time (the maximum damages amount) that is applicable at the time damages are awarded.
(2)A court may order a defendant in defamation proceedings to pay damages for non-economic loss that exceed the maximum damages amount applicable at the time the order is made if, and only if, the court is satisfied that the circumstances of the publication of the defamatory matter to which the proceedings relate are such as to warrant an award of aggravated damages.
…
For these reasons I refuse to grant the interlocutory injunction.
I turn next to the application for disclosure of the identity of the person who provided The Age journalist with the statement of claim. The application is made pursuant to r 32.04 of the Supreme Court Rules.[17] It was submitted by Mr Crisp’s counsel that the identification was needed to join that individual as a party to defamation proceedings in the Supreme Court. It was submitted that the County Court process was being used to disseminate a libel against Mr Crisp. I have rejected that submission.[18] It was submitted that the identity was needed to:
[17]32.03. Discovery to identify a defendant
(1) The Court may make an order under paragraph (2) where-
(a) an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person (in this Rule called the person concerned); and
(b)it appears that some person has or is likely to have knowledge of facts, or has or is likely to have or has had or is likely to have had in that person's possession any document or thing, tending to assist in such ascertainment.
(2)The Court may order that the person, and in the case of a corporation, the corporation by an appropriate officer, shall-
(a)attend before the Court to be orally examined in relation to the description of the person concerned;
(b)make discovery to the applicant of all documents which are or have been in his, her or its possession relating to the description of the person concerned.
…
32.04. Party an applicant
Rule 32.03, with any necessary modification, shall apply where the applicant is a party to a proceeding and wishes to make in the proceeding against a person who is not a party a claim which the applicant could properly have made in the proceeding had the person been a party.
[18]See [31].
(a) enable Mr Crisp to seek an injunction against that source to prevent further publications;
(b) claim damages, including aggravated damages, against the source; and
(c) commence contempt proceedings against the source.
As matters presently stand it is difficult to see that a contempt proceeding against such person would lie. Further, publication to other media organisations is largely irrelevant as anyone could have inspected the County Court file and the statement of claim.
Mr Crisp has not disclosed a cause of action against the source other than defamation. In that respect the application contains an element of fishing. Ultimately, the ‘newspaper rule’ applies in this case: John Fairfax and Sons Limited v Cojuangco.[19] It is a rule of practice which, in the context of an interlocutory proceeding in a libel case against a newspaper or journalist, operates to protect the journalist’s confidential sources from discovery unless it is in the interests of justice to do otherwise. Reference was also made to Evidence Amendment (Journalist Privilege) Act 2012. However, this Act is yet to come into operation.
[19](1988) 165 CLR 346.
The reasons submitted by Mr Crisp to exercise the discretion are not persuasive. The court will not exercise the discretion so that a party may ascertain a speculative proceeding. An order will not be made if the party does not have a cause of action against the person whose identity is sought to be established: see Hordern House Proprietary Limited v Arnold.[20] The newspaper rule can be displaced if the party seeking disclosure is unable to obtain the relief to which he or she is entitled unless that disclosure is made. However, that position does not arise here.
[20][1989] VR 402.
In all the circumstances as presently before the court, therefore, I would refuse the application for preliminary discovery. The summons will be dismissed.
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