Di Girolamo v Fairfax Media Publications Pty Ltd (No 2)

[2015] NSWSC 568

Supreme Court

New South Wales

Medium Neutral Citation:	Di Girolamo v Fairfax Media Publications Pty Ltd (No 2) [2015] NSWSC 568
Hearing dates:	1 April 2015
Date of orders:	02 April 2015
Decision date:	02 April 2015
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Rulings on imputations
Catchwords:	DEFAMATION – procedure – imputations – whether imputations capable of arising – whether precise defamatory act or condition identified – significance of context
Cases Cited:	Di Girolamo v Fairfax Media Publications Pty Limited [2014] NSWSC 1594 Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Category:	Procedural and other rulings
Parties:	Nicholas Anthony Di Girolamo (Plaintiff) Fairfax Media Publications Pty Ltd (Defendant)
Representation:	Counsel: S Chrysanthou (Plaintiff) T Blackburn SC (Defendant) Solicitors: Dibbs Barker Lawyers (Plaintiff) Banki Haddock Fiora (Defendant)
File Number(s):	2013/375294
Publication restriction:	None

Judgment

1. HER HONOUR: These are proceedings for defamation arising from the publication of a series of articles in the Sydney Morning Herald in its printed edition and online. The defendants objected to every imputation pleaded by the plaintiff in the original pleading. I determined those objections on 30 October 2014: see Di Girolamo v Fairfax Media Publications Pty Limited [2014] NSWSC 1594.

2. In accordance with leave granted as foreshadowed in those reasons, the plaintiff filed an amended statement of claim on 17 November 2014. The defendant has taken a number of objections to the amended pleading. This judgment determines those objections.

3. The first objection relates to new imputation 6(a). In my earlier judgment, I held that the earlier iteration of that imputation was liable to be struck out for ambiguity. The specific ambiguity identified in the judgment at [8] was as follows:

“The imputation accordingly suffers, in my view, from a temporal difficulty or complexity in that it fails to specify when corruption crept into the dealings referred to. There are two possibilities. One is that the plaintiff is imputed with having conceived of the relevant corruption at the time the public tender was blocked. An alternative is that his alleged procuring of the issue of the shares some three years later was conceived in effect to be by way of reward for Mr Costa's earlier decision on the tender.”

4. The plaintiff now pleads two alternative imputations to address that issue. They are:

6(a):

“The plaintiff, as boss of Australian Water Holdings Pty Ltd, engaged in corrupt conduct by promising Michael Costa valuable shares in Australian Water Holdings in exchange for Mr Costa using his position as Treasurer to block a public tender.”

6(b):

“The plaintiff, as boss of Australian Water Holdings Pty Ltd, corruptly procured the issue of shares worth $3.75 million to Michael Costa for only one dollar as reward for Mr Costa using his position as Treasurer to block a public tender.”

5. The defendant submitted that imputation 6(a) does not overcome the temporal difficulty identified in my judgment. It was submitted that it is still not clear whether the imputation asserts that a promise was made to Mr Costa in advance of his blocking the public tender. I do not accept that submission. In my view, the imputation plainly asserts the giving of a promise in exchange for something to be done.

6. Separately, the defendant renewed an objection that the imputation is incapable of arising. Ms Chrysanthou, who appears for the plaintiff, submitted that the issue of capacity was determined in the earlier judgment. It is not entirely clear from the terms of my judgment whether I have recorded a ruling on capacity in respect of that issue, but in case there is any doubt about the matter, I now record my view that the matter complained of is reasonably capable of conveying each of imputations 6(a) and (b).

7. It was submitted that the imputation is not capable of arising because the matter complained of makes plain that before taking the steps attributed to him in the article, Mr Costa obtained two legal advices, the latter advice expressing the view that a court would be more likely to find for Australian Water Holdings. In my view, however, some regard must be had to the careful structure of the article and, in particular, the close juxtaposition of Mr Di Girolamo's meeting with Mr Costa recorded in para 29 of the online article; the reference that Mr Costa, as the treasurer, had ultimate responsibility for Sydney Water; the references to the legal advices and, closely following the statement, "the tender never proceeded", the next paragraph, "three years later Mr Costa was appointed chairman of AWH". Mr Blackburn submitted that the passage of time of three years was a factor which militated against any conclusion that a promise was given to Mr Costa in the earlier meeting. I do not think the mere passage of time obviates the clear insinuation of those four paragraphs that the appointment of Mr Costa three years later was something that had been discussed in the earlier meeting with Mr Di Girolamo.

8. Accordingly, the rulings in respect of imputations 6(a) and (b) are that they will go to the jury, noting that they are pleaded as alternatives. The application to have them struck out for ambiguity is rejected.

9. The next objection relates to imputations pleaded as arising from the third and fourth matters complained of. In my earlier judgment, at [17] to [19], I said:

“Imputation (a) specified by the plaintiff as arising from that article is:

“the plaintiff engaged in corrupt conduct in that he secretly represented an interest in the Balmain Tigers development on behalf of the Obeid family at a time when Mr Eddy Obeid was a member of Parliament who lobbied Frank Sartor, the Planning Minister, to approve that development.”

The objection was taken to an earlier form of that imputation that it was incapable of arising. The earlier imputation had the word "held" where the word "represented" now appears.

In light of the proposed amendment, Mr Blackburn submitted that the imputation is now bad in form. He submitted that this is not a difficulty of the kind identified by the Court of Appeal in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 but rather a question of failure to distil precisely what it is that the plaintiff is said to have done. In other words, it is a failure to distil the act or condition attributed to him.”

10. As indicated in [19] of the judgment, the vice of the imputation, as I saw it, was a failure to distil any precise act or condition attributed to the plaintiff. The imputation merely described the capacity in which he was alleged to have done something.

11. New imputation 10(a) is as follows:

“The plaintiff acted improperly as a board member while Chairman of the West Tigers, by secretly representing the Obeid family’s interest in the Balmain Tigers development on the Board, at a time when Mr Eddie Obeid was a Member of Parliament who lobbied Frank Sartor the Planning Minister to approve that development.”

12. Mr Blackburn submitted that the new imputation still fails to identify the precise defamatory act or condition contended for by the plaintiff. He submitted that there is no clear allegation in the imputation that the plaintiff was not acting in the interests of the company.

13. In my view, the imputation does now identify with adequate specificity what is attributed to the plaintiff. The imputation focuses on the allegation that, in discharging his role as chairman of the board, the plaintiff was secretly representing an interest other than his own. The imputation explains, in terms, why secrecy was improper in the circumstances. Had the Obeid family wished or sought openly to have a representative on the board, that is something that would have to have been dealt with openly. The imputation makes plain why the secret representation of their interest by the chairman of the board was improper. Accordingly, the ruling in respect of imputation 10(a) is that it will go to the jury.

14. Imputation 10(b) is:

“The plaintiff was party to the corrupt conduct of Mr Eddie Obeid in that while Chairman of the West Tigers, he was aware that the Obeid family had a secret interest in the Balmain Tigers development at a time when Mr Obeid was a member of Parliament who lobbied Frank Sartor the Planning Minister to approve that development.”

15. The objection to that imputation was that the only act or condition attributed to the plaintiff by it is that he was aware of something. Mr Blackburn submitted that it is unclear how it could be defamatory of the plaintiff in that circumstance.

16. The imputation must, however, be considered in the context of the matter complained of. The matter complained of makes plain its criticism of Mr Obeid. In particular, it makes plain the criticism of his having concealed an interest held in the Balmain Tigers at a time when he was lobbying the Planning Minister for approval of a development. It is plain that the matter complained of treats that as a corrupt approach to the development by remaining silent. The suggestion is the plaintiff facilitated that corrupt approach. In my view, it is a circumstance in which mere silence, coupled with the awareness attributed to the plaintiff, does have a defamatory colour. The ruling in respect of imputation 10(b) is that the imputation will go to the jury.

17. A separate objection was that the nature of Mr Obeid's wrongdoing is unclear and, accordingly, if his wrongdoing is unclear, then the conclusion that the plaintiff was party to that corrupt conduct must equally be unclear. In my view, however, the conduct attributed to Mr Obeid, read in the context of the matter complained of as a whole and the basis on which it is described as corrupt conduct, is sufficiently clear in the circumstances.

18. The next objection is to imputation 14(b) which is as follows:

“The plaintiff was party to the corrupt conduct of Mr Eddie Obeid in that he lied about the Obeid family’s $3 million stake in Australian Water Holdings in order to conceal the Obeid family’s corrupt involvement in Australian Water Holdings.”

19. Mr Blackburn submitted that the imputation is bad in form because of the reference to the concealment of "the Obeid family's 'corrupt' involvement in Australian Water Holdings". The objection was sought to be sustained by reliance upon the well-known decision of the Court of Appeal in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135.

20. Ms Chrysanthou submitted with some force that the entire article focuses on the Obeid family's corrupt involvement in Australian Water Holdings. Specifically, the article reports that Mr Obeid, at a time when he was a member of parliament, had not disclosed the interest he or his family held in Australian Water Holdings on his pecuniary interest forms. That is reported in the context of the further reporting that Australian Water Holdings had been granted an exclusive agreement by the government in respect of the management of infrastructure. The argument went some way to elucidating what is captured in the phrase "the Obeid family's corrupt involvement".

21. I confess some sympathy with the pleader in this context because it is not easy to distil precisely the conduct attributed to the Obeids in the article. I accept that the entire focus of the article is corrupt conduct of the Obeid family in the circumstances referred to. I have, however, concluded that the imputation remains unclear and I think it has the capacity to occasion embarrassment in the legal sense for the trial. I do think the plaintiff should be given a further opportunity to distil the corruption in the manner in which it was better distilled in Ms Chrysanthou's submissions.

22. The next objection is to imputations alleged to arise from the seventh and eighth matters complained of. New imputation 18(a) is:

“The plaintiff was involved in corrupt coal deals in that he met with members of Parliament Mr O’Farrell and Mr Hartcher, in order to convince them to enable his client’s mining proposal to avoid a merit-based assessment”.

23. The previous imputation was addressed at [41] of my earlier judgment, where I said:

“In my view there is a difficulty with the form of imputation (a) in that the explanation of meeting in order to avoid a merit-based assessment does not sustain the sting that the plaintiff was involved in corrupt coal deals. However, in my view, imputation (b) is clear and is capable of being conveyed by the material to which I have referred.”

24. The pleader has addressed that issue by making plain that the allegation is that the matter complained of imputes to the plaintiff the specific purpose of intending to convince Mr O'Farrell and Mr Hartcher to allow the mining proposal to proceed without a merit-based assessment.

25. Mr Blackburn submitted that the imputation is incapable of arising and was the product of "an absurdly strained, wholly unavailable reading of the matter complained of". With great respect to Mr Blackburn, I disagree. The submission overlooks the subtlety and careful construction of the matter complained of, which conveys a clear hint that the Premier may have been prevailed upon to change his mind on the matter referred to. Why else, one asks rhetorically, is so much emphasis placed upon the secrecy of the discussions in question and the fact that the Premier remained "tight-lipped" as to his dealings with Mr Di Girolamo. The plain insinuation, in my view, is that Mr Di Girolamo was trying to persuade him to avoid or not to embark upon a merit-based assessment of the proposal in question. In my view, the defendant's objections to imputation 18(a) must be rejected and the imputation will go to the jury.

26. The next objections relate to the ninth and tenth matters complained of. Imputation 22(a) is:

“The plaintiff caused a cash donation of $10,000 to be made to Nationals MP Katrina Hodgkinson, in order to influence future decisions made by her as a Member of Parliament.”

27. Mr Blackburn submitted that this is an imputation of bribery or attempted bribery. In the earlier judgment, I rejected an allegation of direct bribery based on that matter complained of. I said that the suggestion that the plaintiff bribed Katrina Hodgkinson by making a donation to her in order to secure his appointment to the position in question could only be conveyed by a strained, forced or unreasonable reading of the matter complained of. Having reached that conclusion, I recorded my view that a less serious suggestion in the matter complained of may arise "such as that he sought to influence a politician by making a political donation".

28. In my view, the imputation now captures what I considered to be the defamatory act or condition attributed to the plaintiff by the matter complained of. I do not think the making of a donation for the purpose of influencing the decisions of a politician is the same thing as bribery. I do think, as I recorded in my earlier judgment, it is something less. Further, I think the act attributed to the plaintiff is one that is capable of being defamatory. Imputation 22(a) will go to the jury.

29. Imputation 22(c) is that the plaintiff did not deserve his appointment to the board of the State Water Corporation. Mr Blackburn accepted that that imputation had been the subject of argument in the earlier judgment and had already been ruled on by the Court, at [57]. In that paragraph, I suggested that the plaintiff may see fit to formulate a clearer imputation, but the imputation remains in the form in which it was in the original statement of claim.

30. Mr Blackburn submitted, however, that there was a point that he had intended to take at the earlier hearing which was overlooked, namely that the imputation does not sufficiently identify the defamatory sting contended for. He expressed doubt as to whether it is defamatory or capable of being defamatory of a person to say that he or she does not deserve a particular appointment. During argument in the second round, a number of examples were offered as to circumstances in which that could be a defamatory imputation. It would not be defamatory of a person with no medical qualifications to say that that person did not deserve appointment as the head of surgery of a major hospital. Conversely, however, it might be defamatory of a person to say that he or she had accepted an appointment for which he or she plainly had no qualification.

31. Implicit in the present imputation is the fact that the plaintiff accepted the appointment referred to. That, coupled with the assertion that he did not deserve it, in my view, is capable of being defamatory in the circumstances. In my view, imputation 22(c) is in proper form and is capable of arising.

32. Imputation 22(d) is:

“In the alternative to (c) above the plaintiff lacked the merit to be appointed to the board of the State Water Corporation and was only appointed to that position by reason of the cash donation of $10,000 to Ms Hodkinson.”

33. The objection to that imputation was substantially the same as in respect to imputation 22(c), namely it was contended that the precise defamatory act or condition sought to be attributed to the plaintiff is unclear which, it was submitted, is liable to cause mischief at trial. Mr Blackburn submitted in particular that it is not clear whether the reference to a cash donation is intended to impute bribery or something less. I have effectively dealt with that argument in my determination in respect of imputation 22(a). I do not see any difficulty with imputation 22(d) and it will go to the jury.

34. The next objections relate to imputations pleaded as arising from the eleventh and twelfth matters complained of. New imputation 26(b) is:

“The plaintiff lied about the Obeid family’s $3 million investment in Australian Water Holdings, in order to help hide the Obeids’ profit from a corrupt coal deal.”

35. Mr Blackburn submitted that the imputation is incapable of arising. He further submitted that it is bad in form because of the undefined use of the word "corrupt". As submitted by Ms Chrysanthou, however, the reference to corruption is not the part of the imputation which captures the defamatory sting alleged, which is one of lying in order to assist the Obeids. In my view, the imputation is sufficiently clear and, further, is plainly capable of arising from a consideration of the matter complained of as a whole.

36. Finally, there is a new imputation 26(c) as follows:

“The plaintiff is corrupt in that he concealed the Obeid family’s secret interest in Australian Water Holdings at a time when Mr Eddie Obeid was a Member of Parliament.”

37. The defendant objects to that imputation on the ground that it is ambiguous in that it brands the plaintiff with corruption in circumstances where the reason for conduct alleged to be corrupt is concealment of an interest. It is not clear that the plaintiff was under any duty not to conceal. Mr Blackburn submitted, in that circumstance, the nature of the discreditable nature or condition sought to be attributable to the plaintiff is unclear.

38. In this instance, I would accept the defendant's submission. The imputation must, of course, take its colour from a consideration of the matter complained of as a whole. However, in my view, that does not cure the difficulty that, in terms, the imputation alleges something to be corrupt which is not, on its face, corrupt. In my view, the imputation is embarrassing, broadly for the reasons considered by the Court of Appeal in Drummoyne and particularly in the circumstance that there is nothing to explain why mere concealment amounted to corruption in that particular circumstance. Imputation 26(c) will be struck out.

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Decision last updated: 15 May 2015