Duma v Fairfax Media Publications Pty Ltd (No 3)
[2023] FCA 47
•7 February 2023
FEDERAL COURT OF AUSTRALIA
Duma v Fairfax Media Publications Pty Limited (No 3) [2023] FCA 47
File number: NSD 420 of 2020 Judgment of: KATZMANN J Date of judgment: 7 February 2023 Catchwords: DEFAMATION – series of feature articles by two journalists about corruption in Papua New Guinea (PNG) – where articles related to grant of petroleum licence, activities of an ASX-listed company and PNG cabinet minister – where Minister alleged articles conveyed imputations that he had acted corruptly and illegally in several respects – whether one or more of the pleaded imputations were conveyed
DEFAMATION – defence of statutory qualified privilege – whether conduct of respondents in publishing the matters complained of was reasonable in the circumstances, having regard to the considerations in s 30(3) of the uniform defamation legislation – where no defence of justification or contextual truth was pleaded, whether “the objective truth” was relevant to the reasonableness of the respondents’ conduct
DEFAMATION – damages – extent of damages for non-economic loss – whether aggravated damages should be awarded – whether material relied on by publisher constitutes “directly relevant background context” which would mitigate damages in accordance with the principle in Burstein v Times Newspapers Ltd [2000] EWCA Civ 338; [2001] 1 WLR 579 and, if so, to what extent – whether, even if the material could mitigate damages, it was open to respondents to rely on it for that purpose in the light of their pleading
PRIVATE INTERNATIONAL LAW – where, in defamation proceeding, publication occurred in both Australia and PNG, whether s 11 of the Defamation Act 2005 (NSW) precludes recovery of damages for harm occasioned in PNG or requires applicant to sue in PNG
EVIDENCE – where documents provided to respondents by confidential source were tendered for all purposes, whether, in light of respondents’ pleading and cross-examination and where source was not called to give
evidence, the use to which the documents could be put should be limited to proof of reasonableness of respondents’ conduct for purposes of qualified privilege defenceLegislation: Evidence Act 1995 (Cth) ss 136, 140
Federal Court of Australia Act 1976 (Cth) s 51A(1)
Federal Court Rules 2011 (Cth) rr 16.02(1)(d), 16.03(1)(b), 16.08(b), 16.41(1), 16.43(2)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 9(3)
Defamation Act 2005 (NSW) ss 4, 11, 30, 34, 35
Defamation Act 1974 (NSW) s 22
Cases cited: Ainsworth Nominees Pty Ltd v Hanrahan [1982] 2 NSWLR 823
Aldridge v John Fairfax & Sons Ltd [1984] 2 NSWLR 544
Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158
Armstrong v McIntosh (No 4) [2020] WASC 31
Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30
Austin v Mirror Newspapers Ltd [1986] 1 AC 299
Australian Broadcasting Corporation v Chau Chak Wing (2019) 271 FCR 632
Australian Broadcasting Corporation v Waterhouse (1991) 25 NSWLR 519
Bailey v WIN Television NSW Pty Ltd (2020) 104 NSWLR 541
Banque Commercial SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30
Bazzi v Dutton [2022] FCAFC 84; 402 ALR 219
Berezovsky v Michaels [2000] UKHL 25; [2000] 2 All ER 986; [2000] 1 WLR 1004
Bleyer v Google [2014] 88 NSWLR 670
Briginshaw v Briginshaw (1938) 60 CLR 336
Bristow v Adams [2012] NSWCA 166
Broome v Cassell & Co [1972] AC 1027
Browne v Dunn (1893) 6 R 67
Burstein v Times Newspapers Ltd [2001] 1 WLR 579
Cairns v Modi [2012] EWCA Civ 1382; [2013] 1 WLR 1015
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44
Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335
Chau v Australian Broadcasting Corporation (No 3) [2021] FCA 44; 386 ALR 36
Chau v Fairfax Media Publications [2019] FCA 185
Coyne v Citizen Finance Ltd (1991) 172 CLR 211
Crampton v Nugawela (1996) 41 NSWLR 176
Crosby v Kelly (2012) 203 FCR 451
Davis v Nationwide News Pty Ltd (2008) 71 NSWLR 606
DowJones & Co Inc v Gutnick (2002) 210 CLR 575
Dow Jones & Co Inc v Jameel [2005] QB 946, [2005] 2 WLR 1614, EWCA Civ 75
Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Evatt v Nationwide News Pty Ltd [1999] NSWCA 99
Farquhar v Bottom [1980] 2 NSWLR 380
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; 221 ALR 186; 79 ALJR 1716
Flood v Times Newspapers Ltd [2012] 2 AC 273
Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486
GKR Karate (UK) Ltd v Yorkshire Post Newspapers Ltd [2000] 1 WLR 2571
Goody v Odhams Press Ltd [1967] 1 QB 333
Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490
Greek Herald Pty Ltd v Nikolopoulos (2002) 54 NSWLR 165
Hanson-Young v Leyonhjelm (No 5) [2020] FCA 34
Herald and Weekly Times Ltd v McGregor (1928) 41 CLR 254
Herron v HarperCollins Publishers Australia Pty Ltd [2022] FCAFC 68
Hockey v Fairfax Media Publications Pty Ltd (2015) 237 FCR 33
Jeynes v News Magazines Ltd [2008] EWCA Civ 130
John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131
John Fairfax Publications Pty Limited v Obeid [2005] NSWCA 60
John Fairfax Publications Pty Ltd v O’Shane (No 2) [2005] NSWCA 291
John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; 77 ALJR 1657; 201 ALR 77
John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227
Jones v Dunkel (1959) 101 CLR 298
Jones v John Fairfax Publications Pty Ltd [2002] NSWSC 1210
Jones v Skelton [1963] 1 WLR 1362 at 1370; SR (NSW) 644
Kumova v Davison (No 2) [2023] FCA 1
Lange v Australian Broadcasting Corporation (1997) 189 CLR 520
Lewis v Daily Telegraph [1964] AC 234
Makim v John Fairfax & Sons Ltd (Supreme Court of New South Wales, 15 June 1990, unreported)
MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657
McCarey v Associated Newspapers Ltd (No 2) [1965] 2 QB 86
McLean v David Syme & Co Ltd (1970) 72 SR (NSW) 513
Meckiff v Simpson [1968] VR 62
Meckiffv Simpson [1968] VR 69
Mirror Newspapers Limited v Harrison (1982) 149 CLR 293
Morgan v John Fairfax & Sons Ltd (No 2) (1991) 23 NSWLR 374
Nationwide News Pty Limited v Rush [2020] FCAFC 115; 380 ALR 432
Noko No. 96 Ltd v Temu [2013] PGNC 365
Oliver v Nine Network Australia Pty Ltd [2019] FCA 583
Pamplin v Express Newspapers Ltd [1988] 1 WLR 116
Plato Films Ltd v Speidel [1961] AC 1090
Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460
Rana v Google Inc. (2017) 254 FCR 1
Rayney v State of Western Australia (No 2) [2009] WASC 133
Rayney v The State of Western Australia (No 4) [2022] WASCA 44
Rayney v State of Western Australia (No 9) [2017] WASCA 367
Redmond v Uebergang [1984] 1 NSWLR 311
Roberts v Bass (2002) 212 CLR 1
Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327
Rufus v Elliott [2015] EWCA Civ 121; [2015] 2 WLUK 646; [2015] EMLR 17; [2015] CL. 690
Rush v Nationwide News Pty Ltd (No 2) [2018] FCA 550
Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496
Rush v Nationwide News Pty Ltd [2018] FCA 357; 359 ALR 473
Schiff v Nine Network Australia Pty Ltd [2022] FCA 1120
Scott v Sampson (1882) 8 QBD 491
Sewell v National Australia Bank Ltd (Supreme Court of New South Wales, 12 June 1997, unreported)
Stocker v Stocker [2020] AC 593
Three Rivers District Council v Bank of England (No. 3) [2003] 2 AC 1
Triggell v Pheeney (1951) 82 CLR 497
Trkulja v Google LLC (2018) 263 CLR 149
Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118
Wagner v Harbour Radio Pty Ltd [2018] QSC 201; Aust Torts Reports ¶82-405
Warren v The Random House Group Ltd [2009] QB 600
Waterhouse v Broadcasting Station 2GB Pty Ltd [1985] 1 NSWLR 58
Watts v Rake (1960) 108 CLR 158
Wenkart v Pitman (1998) 46 NSWLR 502
Wilson v Bauer Media Pty Ltd [2017] VSC 521
Collins, L (ed), Dicey, Morris & Collins on The Conflict of Laws (15th ed, Sweet & Maxwell, 2012)
Collins L (ed), Dicey, Morris & Collins on the Conflict of Laws (16th ed, Sweet & Maxwell, 2022)
Luntz H, Assessment of Damages for Personal Injury and Death (4th ed, Butterworths, 2002)
Macquarie Dictionary (8th ed, Macquarie Dictionary Publishers, 2020)
Division: General Division Registry: New South Wales National Practice Area: Other Federal Jurisdiction Number of paragraphs: 610 Date of last submissions 11 November 2021 Date of hearing: 29 March – 9 April 2021, 21 April, 31 August 2021, 7-8 October 2021, 11-14 October 2021, 27 October 2021 Counsel for the Applicant: Mr P Gray SC with Mr N Olson Solicitor for the Applicant: Mark O’Brien Legal Counsel for the Respondents: Mr D R Sibtain with Mr M Lewis Solicitor for the Respondents: Banki Haddock Fiora ORDERS
NSD 420 of 2020 BETWEEN: WILLIAM MARRA DUMA
Applicant
AND: FAIRFAX MEDIA PUBLICATIONS PTY LIMITED (ACN 003 357 720)
First Respondent
ANGUS GRIGG
Second Respondent
JEMIMA WHYTE
Third Respondent
ORDER MADE BY:
KATZMANN J
DATE OF ORDER:
7 FEBRUARY 2023
THE COURT ORDERS THAT:
1.Pursuant to s 136 of the Evidence Act 1995 (Cth), the use to be made of the evidence in exhibits 1 to 84 inclusive be limited to the question of the reasonableness of the respondents’ conduct in publishing the matters complained of for the purpose of their defence of qualified privilege.
2.There be judgment for the applicant in the sum of $545,000.
3.In the event that the respondents do not agree to remove the matters complained of (or publications in substantially the same form) from any and all of the websites on which they currently appear, by 7 March 2023:
(a)the respondent file and serve any submissions they may care to make against the order for injunctive relief the applicant seeks and any affidavit evidence; and
(b)within 14 days thereafter the applicant file any affidavit(s) and submissions in reply.
4.The respondents pay the applicant’s costs.
5.The question of the basis upon which those costs are to be paid be reserved.
6.By 28 February 2023 the applicant file and serve any evidence and submissions in support of their application for indemnity costs.
7.Within 14 days thereafter the respondents file and serve any evidence and submissions in response.
8.Within 7 days after receipt of the respondents’ submissions the applicant file and serve any evidence and submissions in reply.
9.Any application for injunctive relief and the application for indemnity costs be listed on a date to be fixed.
10.No submissions on either issue may exceed 5 pages without the leave of the Court.
11.There be liberty to apply on 2 days’ notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
Introduction
[1]
Background
[6]
Publication
[26]
The issues
[35]
Determining defamatory meaning
[38]
Were any of the pleaded imputations conveyed and, if so, which?
[40]
The nature of the dispute and the respondents’ arguments
[40]
The first and second matters complained of
[56]
The third and fourth matters complained of
[120]
The fifth and sixth matters complained of
[144]
The seventh and eighth matters complained of
[160]
The ninth and tenth matters complained of
[174]
Conclusions
[207]
The defence
[211]
The law
[211]
The pleaded case
[226]
The scope of the dispute
[234]
The respondents’ argument
[235]
Are “the true facts of the Elevala transaction” relevant?
[239]
Should an order be made limiting the use to which the leaked documents can be put?
[277]
Was the conduct of the publisher reasonable in the circumstances?
[296]
Did the respondents proceed with reasonable care before publishing the matters complained of? Did the respondents provide fair and accurate reports? Did they believe the matters set out in the matters complained of to be true?
[309]
Was a reasonable attempt made to obtain and publish Mr Duma’s response? Did the respondents include the substance of Mr Duma’s side of his story?
[385]
What other steps were taken to verify the information in the publications?
[414]
Was the information derived from a source of integrity with direct knowledge of the transaction?
[417]
The respondents’ intentions
[421]
Conclusion
[429]
Were the respondents actuated by malice?
[430]
Damages
[431]
General principles
[433]
What matters may be taken into account in mitigation of damages?
[440]
The respondents’ pleaded case
[440]
Mr Duma’s response
[446]
The case the respondents propounded in final submissions
[449]
Consideration
[452]
Extent of publication
[469]
Mr Duma
[508]
Mr Duma’s reputation
[518]
Hurt to feelings
[539]
Vindication
[549]
Has Mr Duma established an entitlement to aggravated damages?
[555]
General principles
[555]
The claim
[556]
Consideration
[560]
In what amount should damages be awarded?
[587]
Conclusions
[600]
Injunctive relief
[608]
Costs
[610]
KATZMANN J:
INTRODUCTION
The Hon William Duma is a lawyer and member of the National Parliament of Papua New Guinea (PNG). He was first elected in July 2002. Since November 2006 he has held various ministerial portfolios. Between July 2007 and February 2014 he was the Minister for Petroleum and Energy in the government of Sir Michael Somare. At the time of the trial he was the Minister for Public Enterprise and State Investment in the government of James Marape.
In early 2020 the Australian Financial Review (AFR) published a number of articles, written by Angus Grigg and Jemima Whyte, in which Mr Duma considers he was defamed. Ten articles were published over five days in a single week in February 2020 (the February publications) and two in April 2020 (the April publications). On 9 April 2020 Mr Duma filed actions against the AFR and the journalists who wrote the articles over the February publications (NSD 420 of 2020) (the first proceeding) and a month later he sued the AFR and the journalists over the April publications (NSD 514 of 2020) (the second proceeding).
The second proceeding settled after judgment was reserved. By consent, judgment was entered in Mr Duma’s favour, plus costs in an agreed sum, for an amount which the parties agreed to keep confidential. This judgment is therefore only concerned with the first proceeding.
Mr Duma contended that each of the February publications conveyed serious defamatory imputations, as separately particularised (the pleaded imputations). Broadly speaking, the pleaded imputations are to the effect that Mr Duma engaged in corrupt conduct; accepted a bribe from an oil company; conspired with another lawyer, Simon Ketan, to use a shell company as a vehicle for the payment of bribes to himself; conspired with Mr Ketan to defraud tribal landowners of compensation; and acted corruptly by trying to move a naval base inland.
The respondents denied liability and refused to remove the publications when requested to do so. If the pleaded imputations are found to have been conveyed by the matters complained of, they rely on the defence of qualified privilege conferred by s 30 of the Defamation Act 2005 (NSW) (Defamation Act or 2005 Act) and its counterpart in the other States and Territories.
BACKGROUND
All the articles concern the attempts by Horizon Oil (Papua) Ltd (referred to variously as either “Horizon Oil” or “Horizon”), a subsidiary of an ASX-listed Australian company, to obtain an extension of a petroleum retention licence (PRL 5). The licence covered the Elevala and Ketu Gas Fields in the Western Province of PNG. PRL 5 was initially granted on 15 February 2000 for a five-year term to a joint venture led by Santos Niugini Exploration Limited. Horizon was one of the joint venture partners. On 15 February 2005 the licence was extended by the then Minister for Petroleum and Energy, Sir Moi Avei, for a second five-year term. The joint venture partners at this time were Santos (50.353%), Horizon (39.288%) and a related company, Horizon Oil (Kanu) Limited (10.359%). This means that the combined interest of the Horizon companies was 49.65%.
Before the end of the second five-year term, Santos applied for a second and final extension of the licence. While the application was pending, Santos entered into an agreement to sell its interest in PRL 5 to Talisman Niugini Pty Limited a subsidiary of a Canadian company, Talisman Energy Inc. (Talisman), for $20 million.
As the then Minister for Petroleum and Energy, it was Mr Duma’s responsibility to determine whether to grant or refuse Santos’s application. On 5 November 2010, on the recommendation of the Petroleum Advisory Board (PAB), Mr Duma declined to grant the extension and called for tenders for a new licence.
His reasons for decision were contained in a 21-page document. They included the failure of the licence holders to comply with some of the licence conditions, particularly the statutory requirement to lodge six-monthly reports; their failure to lodge any technical reports indicating the work that had been carried out or was being carried out or to lodge reports of work proposed to be carried out during the period of the licence; and their failure to commercialise the gas fields in the decade since the licence had been granted or to carry out “contingent work”, highlighting the fact that they were “yet to drill an appraisal well”. Noting that Santos had already signed an agreement with Talisman “to sell out and exit PRL 5”, Mr Duma expressed the firm view that Santos was not committed to developing the gas fields and was only applying for the extension to enable it to dispose of its interests in PRL 5 to Talisman.
On 12 November 2010 Mr Duma issued a statutory notice inviting applications from a number of petroleum exploration companies to tender for a petroleum retention licence in respect of the area covered by the recently expired PRL 5. On 19 November 2010 the Registrar of the Department of Petroleum and Energy (Department), in his capacity as delegate of the Director, Oil & Gas Act, wrote to a number of companies inviting them to lodge applications. A number of applications were lodged in response to the public invitation.
On 24 November 2010 Horizon wrote to Mr Duma arguing that the licence was in good standing and the request by the licensees for its extension should have been granted. Horizon advised that it had instructed its lawyers to commence judicial review proceedings to quash the decision and require him to extend the licence, foreshadowed seeking an injunction to restrain the grant of any licence over the blocks the subject of PRL 5 pending the hearing of those proceedings, and invited Mr Duma to instruct the Director to withdraw the invitations issued by the Registrar. The letter, signed by Brent Emmett, then Chief Executive Officer of Horizon, concluded in the following way:
Minister, we very much regret that this issue has led to the current situation, which we do not choose to be in. This letter is an attempt to be open with you about the situation and the action that we will be compelled to take to protect the interests of our shareholders.
As always, we remain open to any suggestion from you as to how the current tension might be defused. I can always be contacted by email [email protected] or mobile phone … Do contact me if you wish to discuss a solution – I would welcome the opportunity.
On 26 November 2010 Mr Duma replied by email to Mr Emmett. He wrote:
As you will appreciate, the reasons for refusing to extend PRL 5 are contained in my decision of 5 November, which I note were received by your company.
Whilst your company as an aggrieved licensee is entitled to seek a judicial review of a Ministerial decision, it must be mindful of the fact that under section 6 of the Oil and Gas Act, until such time oil and or gas are extracted and brought to the surface, they remain the property of the Government and people of PNG.
I must also remind you that any injunctive relief application must be supported by an undertaking as to damages lodged by your company so that in the event the Court were to find that my decision was correct and fair, the delay in the reciept [sic] of and the loss of potential income to Government and landowners in terms of 22.5 %equity and taxes in connection with an early commercialization of PRL 5, caused by such legal proceedings, would be provided for by your company.
I have been advised by my Department that your company was informed of the availability for tender for the blocks in PRL 5 on Tuesday 23 November and that your company was invited to apply for those blocks. I would like to encourage your company to apply given its knowledge of these blocks.
My Department has invited all members of the oil and gas industry in PNG to apply, and I am informed that the response has been good. It would be surprising to see a company which was given the opportunity by the Government of PNG to commercialise PRL 5 for more than 10 years to now seek to prevent the PNG Government from giving other companies the chance to commercialise it.
The reasons for my refusal have been set out in detail, and clearly the Petroleum Advisory Board took relevant factors into account before recommending that I should refuse to extend PRL 5.
Please do inform me in advance particularly under the Claims by and Against the State Act, if and when your company issues legal proceedings so that we may take steps to protect the interests of the State.
A letter in the same terms was also hand delivered to Horizon on 9 December 2010.
True to its word, on 3 December 2010 Horizon filed an originating summons in the National Court of Justice of Papua New Guinea seeking judicial review of the Minister’s decision to refuse to extend PRL 5 for a third term. The respondents to the summons were Mr Duma, in his capacity as the responsible Minister; Kepsey Puye, Acting Director of the Department; the individual members of the PAB, and The Independent State of Papua New Guinea. Ten days later, Injia CJ summarily dismissed the summons on the ground that he was not satisfied that Horizon had an arguable case.
On 16 December 2010 Horizon lodged an appeal to the Supreme Court of Justice of Papua New Guinea (Supreme Court) and applied for an interim injunction to restrain the Minister and his Department from causing to be entered on the Register any application, grant, extension, transfer, dealing or instrument pertaining or in relation to the blocks covered by PRL 5”.
On 20 December 2010 Kavani J granted an ex parte injunction enjoining the Minister, the Department and the PAB from dealing with any applications for the new licence or granting a new licence.
The following day, 21 December 2010, Posman Kua Aisi (in association with Mallesons Stephen Jacques), a firm of lawyers, wrote to Blake Dawson Waldron (BDW) (now Ashurst), Horizon’s lawyers. They referred to “recent discussions” and confirmed that they were “yet to be formally engaged by the Attorney General’s office to act for the Respondents” but advised that they had been instructed by the Minister that the terms of the injunction should be varied. They indicated that the variation was necessary because the Department and the Minister do not grant applications; “[t]hey only consider applications and grant licences to successful applicants”. Posman Kua Aisi also required that BDW “confirm in writing that the PAB is not restrained from considering applications for PRL 5”. They explained that “[t]his must be clear so that PAB’s mandate to consider applications is not affected whereas the registration of successful applicant can be temporarily restrained pending further discussions between the parties”.
On 24 February 2011 Mr Rimua wrote to Mr Duma, expressing concern about the impact of the litigation on the exploitation of the resource and the ramifications for the national economy. He recommended that the litigation be settled on terms contained in a deed of settlement and release, subject to “clearance by Posman Kua & Aisi Lawyers”. Mr Rimua wrote:
As you will recall, in December 2010, the PAB was restrained by the Supreme Court from considering applications for the former PRL 5 as a result of an application by Horizon Oil on 20 December 2010.
Both yourself and the PAB have now been effectively stopped from dealing with PRL 5 until the outcome of the appeal by Horizon Oil Ltd to Supreme Court.
The Appeal to the Supreme Court is likely to be heard towards the end of the year, due to many outstanding Supreme Court appeals yet to be dealt with by the Court.
As a result of the injunction, the gas resources at Elevala and Ketu will not be commercialized this year or even next year.
There are likely to be significant delays in commercializing the gas/condensate resources at Elevala and Ketu. Consequently, PNG will not be earning any revenue from these resources.
I am of the view that an early settlement of the court action by Horizon Oil Ltd will enable the Elevala and Ketu discoveries to be commercialized earlier, and generate more revenues and employment for PNG.
It would be prudent for the State to settle this case, and allow Horizon Oil Ltd (being one of the joint ventures in the original PRL 5 and being very familiar with PRL 5 licence history and geology), Dabajodi Energy International Ltd and Elevala Energy Ltd (for local content) to carry out a more aggressive work program, as outlined in their bid documents. The work programmed proposed by these 3 companies is very aggressive, and incorporates 2D seismic (phase 1 & 2), and drilling and logging of appraisal wells on the Ketu and Elevala structures.
I have review[ed] the proposed terns of settlement contained in the Deed of Settlement and Release, and confirm that subject to clearance by Posma[n] Kua & Aisi Lawyers, it is in order for you to execute the document.
On 11 March 2011 the Supreme Court made an order by consent in Horizon’s appeal requiring the Minister, the Department and the PAB to take all necessary steps to award a licence in respect of the blocks and acreage covered by the former PRL 5 to Horizon (as to 70%), Dabajodi (as to 20%) and Elevala (as to 10%) and providing for the injunction to be dissolved once the licence was issued.
The PAB met on the morning of 17 March 2011. The application by Horizon, Dabajodi and Elevala (APRL 21) was the first item on the agenda. The minutes of the meeting reveal the following matters. APRL 21 was one of the applications received in November 2010 in response to the public invitation notice, was “entered in” the PAB meeting of 22 December 2010, and the interests of the companies involved were thereby registered, but the PAB had never considered APRL 21 because of the Supreme Court injunction. The PAB noted that the companies mentioned in the Court order were joint applicants in APRL 21 and the terms of the Supreme Court order of 11 March 2011, which prevented the PAB from considering other applications, and therefore resolved that the application fees lodged by the other applicants be refunded. The PAB also noted that it was open to it to deliberate upon, and recommend, the imposition of conditions on the licence “to be part of licence commitment”. The PAB proceeded to deliberate upon, and lay down a “work program” and resolved to recommend to the Minister that he grant APRL 21 in accordance with the Court order “with the … work program” and, at the same time, to refuse the other applications. It also directed the PAB Secretariat to remind the licensees of PRL 21 of the statutory “Petroleum Cost Reporting requirements”.
The next day, 18 March 2011, in accordance with the PAB recommendation, Mr Duma approved the grant of the licence to the Horizon, Dabajodi, Elevala consortium. Mr Duma testified that at all times he had acted appropriately and on the advice of the PAB.
Although the respondents did not raise any defence of justification (truth), they submitted that “in truth and in fact” Mr Duma did not act on the PAB’s advice. Rather, they submitted, he acted unilaterally to award PRL 21 to a consortium that included a shell company (Elevala) proposed by Mr Duma, knowing that Elevala would sell its interest to Horizon, and that his conduct was “highly improper”. The sole director and shareholder of Elevala was Mr Ketan, said to be “a close associate” of Mr Duma.
In May 2017 allegations were made against Mr Duma (the then Minister for Public Enterprises and State Investments), the Minister for Defence, and a number of other public servants in relation to attempts to relocate a naval base to a block of land some distance from Port Moresby. An administrative inquiry was established by the cabinet, led by a Brisbane QC, and later a police investigation, which found that there was no merit in the allegations and exonerated both Mr Duma and the Minister for Defence.
Sometime in 2019 a market contact of Ms Whyte (CS-1) offered to introduce Mr Grigg and Ms Whyte to an associate (CS-2), who was then an employee of Horizon. In early December 2019 CS-1 and CS-2 met the two journalists at a hotel bar. They had a conversation about the 2011 transaction involving Horizon and Elevala which sparked the journalists’ interest. CS-2 said that he might have some documents. Mr Grigg set up a group chat on the Signal encrypted messaging platform and CS-2 sent a link to the journalists to a Dropbox folder containing a tranche of documents, which Mr Grigg read through, printed and saved on a thumb drive. At a second meeting in a café in Darlinghurst, CS-2 downloaded additional documents from a laptop onto another thumb drive which he then handed to Mr Grigg. Those documents were later uploaded onto a computer at the AFR offices. These documents provided the source material for the matters complained of. Upon reviewing the documents, the respondents concluded that they emanated from an email archive of Mr Emmett.
The respondents refused to identify either CS-1 or CS-2 because of promises made to them that their identities would not be disclosed.
PUBLICATION
The matters complained of were published on Monday, Tuesday, Wednesday and Thursday of the week commencing 10 February 2020 and also in the weekend edition.
The first matter complained of was an article in the print edition of the AFR published on 10 February 2020. 31,847 copies of the newspaper were sold in Australia. The second matter complained of was a version of the same article published on the AFR website the same day. By 26 May 2020 it had been accessed by 14,116 unique visitors across Australia. By 16 September that same year it had been accessed by 2,902 unique visitors in PNG.
The third matter complained of was an article published in the print edition of the AFR on 11 February 2020. 31,676 copies of the newspaper were sold in Australia. The fourth matter complained of was the version published on the AFR website the same day. By 26 May 2020 it had been accessed by 3,083 unique visitors nationally. By 16 September 2020 it had been accessed by 134 unique visitors from PNG.
The fifth matter complained of was an article published in the print edition of the AFR on 12 February 2020. 32,821 copies of the newspaper were sold in Australia. The sixth matter complained of was the version published that day on the AFR website. By 26 May 2020 it had been accessed by 2,070 unique visitors in Australia and by 16 September 2020 it had been accessed by 619 unique visitors from PNG.
The seventh matter complained of was an article published in the print edition of the AFR on 13 February 2020. 32,599 copies of the newspaper were sold in Australia. The eighth matter complained of was the version published that day on the AFR website. By 26 May 2020 it had been accessed by 10,158 unique visitors in Australia and by 16 September 2020 it had been accessed by 4,823 unique visitors from PNG.
The ninth and tenth matters complained of were published on 15 February 2020. The ninth was the article in the print edition of the AFR, 38,343 copies of which were sold in Australia. The tenth was the version of the article published on the AFR website. By 26 May 2020 it had been accessed by 4,096 unique visitors in Australia and by 16 September that year it had been accessed by 741 unique visitors from PNG.
The average readership of the weekday print editions was estimated to be 316,000. The average of the weekend edition was estimated at 114,000.
These figures were either agreed (in the case of the number of copies of the print editions sold) or not in dispute (as in the case of the average readership). The figures were either provided to Mr Duma’s lawyers by the respondents’ lawyers or based on figures they provided.
In addition, unchallenged evidence was given by a number of witnesses about the publication of the articles on social media. Mr Duma’s son, Mahoney, first saw the articles on Facebook. Sir Ano Pala, a member of the National Parliament of PNG and a former Minister, was sent at least one of the articles by a friend on WhatsApp. Sam Akoitai, another PNG parliamentarian, testified that the matters complained of were widely published in social media. He added that they were circulated by a number of WhatsApp groups of professionals, politicians, businessmen, university students, and members of the general public.
THE ISSUES
The respondents admitted that each of the matters complained of concerned Mr Duma. As I have already indicated, responsibility for publication and scope of publication were admitted.
In their closing written submissions, the respondents asserted that they had “never shied away from the propositions that the articles are defamatory of [Mr Duma]”. That was an astonishing submission since, in their defence, they denied that any of them was capable of being, or was in fact, defamatory of Mr Duma. The truth is that, notwithstanding their denials which were never formally withdrawn, they accepted that, if any of the imputations were conveyed, the only remaining issue on liability was whether they had made out their defence of qualified privilege and the only issue in relation to qualified privilege was the reasonableness of the respondents’ conduct. Moreover, although they did not accept that any of the imputations were conveyed, they accepted that all the matters complained of defamed Mr Duma.
The following questions arise for determination:
(1)Giving each matter complained of its natural and ordinary meaning were any of the pleaded imputations conveyed to the ordinary reasonable reader and, if so, which?
(2)If any of the matters conveyed one or more of the pleaded imputations, have the respondents made out their defence?
(3)If the respondents have made out their defence, were they actuated by malice?
(4)Has Mr Duma made out his claim for aggravated damages?
(5)What matters may be taken into account in mitigation of damages?
(6)In what amount should damages be awarded?
DETERMINING DEFAMATORY MEANING
It is uncontroversial that a publication is defamatory if it tends to cause ordinary, right-thinking members of the community to think less of a person.
The principles for determining whether a publication conveys defamatory meanings are settled. The parties were content to rely on the summary of the principles contained in the judgment of Wigney J in Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 (Rush (No 7)) at [72] and following, which substantially reproduces the summary given by Hunt CJ at CL (with whom Mason P and Handley JA agreed) in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 164–165. In short, those principles are:
(1)The question of whether a pleaded imputation is conveyed by a publication is a question of fact upon which the applicant carries the burden of proof (at [72]–[73]).
(2)The question is determined from the perspective of “an ordinary reasonable reader”, who is taken to be a person of “fair to average intelligence, experience and education” and not perverse, morbid, suspicious or “avid for scandal” but “fair-minded” (at [74]‑[75]). That person does not live in an ivory tower but can and does read between the lines, drawing on their general knowledge and experience of worldly affairs (at [77]).
(3)Since ordinary men and women have different temperaments, outlooks, life experiences and levels of education, some are unusually suspicious, some unusually naïve, some unusually well-educated and sophisticated, others not. Consequently, the exercise of determining meaning involves “attempting to envisage a mean or midpoint of temperaments and abilities and on that basis to decide the most damaging meaning that ordinary reasonable people at the midpoint could put on the impugned words or images considering the publication as a whole” (Trkulja v Google LLC (2018) 263 CLR 149 at [31]) (at [75]).
(4)The determination of meaning is often a matter of impression (at [82]).
(5)While the publication must be considered as a whole, each part need not be given equal significance. The contents of an article must be considered in the light of the headline (at [128]).
(6)A headline might assume particular importance because it might give the reader “a predisposition about what follows” and contrary statements will not necessarily negate the effect of defamatory statements in the same article (John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; 77 ALJR 1657; 201 ALR 77 at [187] (Callinan J), Gleeson CJ and Heydon J agreeing at [1] and [219] respectively; and at [26] (McHugh J).
(7)The natural and ordinary meaning of the words used includes a meaning which the ordinary reasonable reader may draw from general knowledge including matters which any intelligent reader may be expected to know (at [81]).
(8)The mode or manner of publication can affect the meaning that is conveyed to the ordinary reasonable reader. The ordinary reasonable reader of a book, for example, is likely to read it with more care than they would a newspaper article, particularly if the article is sensational, where the ordinary reasonable reader is “more prone to engage in loose thinking”, especially if the words used are “imprecise, ambiguous, loose, fanciful or unusual” (at [78]).
(9)The meaning an ordinary reasonable reader attributes to an article may also be influenced by its overall tone, for example if the article is “tinged with, or even pregnant with, insinuation or suggestion” or implicitly invites the reader to adopt a suspicious approach (at [80]).
(10)Even if the words in question may reasonably be capable of bearing more than one meaning, the judge must decide whether the alleged defamatory meaning was the one and only meaning conveyed or the single meaning (at [83]).
(11)The meaning intended by the publisher is irrelevant (at [84]) and so is the manner in which the publication was actually understood (at [85]).
(12)If in one part of a publication something disreputable is said of the plaintiff/applicant (“the bane”), but it is removed by the conclusion (“the antidote”), both must be taken into account (at [90]). But since the reader is entitled to give some parts of the article more weight than other parts, contrary statements or conclusions in a particular publication will not necessarily remove or undo the effect of the disreputable part(s) (at [91]).
WERE ANY OF THE PLEADED IMPUTATIONS CONVEYED AND, IF SO, WHICH?
The nature of the dispute and the respondents’ arguments
Mr Duma submitted that the pleaded imputations merely reflect the plain meaning of the respective matters about which he complains. In each case, that is to say with respect to each of the matters complained of, he alleged that the articles carried the meaning that he in fact engaged in the conduct the subject of the pleaded imputations.
The respondents, on the other hand, contended that the pleaded imputations are pitched too high. They claimed that the imputations are contrived. At their highest, they maintained, the meaning conveyed by the articles was no more than that there were reasonable grounds to suspect that, or investigate whether, Mr Duma “engaged in the kind of conduct he complains of in his pleaded imputations”. Paradoxically, however, they submitted that the articles “advert” to conduct on the part of Mr Duma which they variously described as “improper” or “corrupt”.
The respondents submitted that all the articles were capable of conveying the meaning that there are reasonable grounds to suspect Mr Duma acted corruptly and/or that he received a bribe from Horizon. But they argued that a publication cannot convey both reasonable suspicion of guilt and guilt. They contended “it must be one or the other”.
The respondents’ approach is far too rigid. It ignores the way the mind reasons and fails to recognise that defamatory meanings are formed by broad impression.
In a case like the present, the oft-quoted words of Lord Devlin in Lewis v Daily Telegraph [1964] AC 234 at 285 have special resonance. In that case, his Lordship observed that it is not correct as a matter of law that a statement of suspicion imputes guilt; suspicion of guilt is different from proof of guilt. Yet, his Lordship acknowledged that “as a matter of practice” suspicion very often imputes guilt He explained:
[I]t is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that. They can convey a meaning of suspicion short of guilt; but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded.
(Emphasis added.)
Similarly, in Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; 221 ALR 186; 79 ALJR 1716 at [14], the plurality (Gleeson CJ, McHugh, Gummow and Heydon JJ) observed that:
[A]n article which is capable of conveying the meaning that there are reasonable grounds for suspicion of arson, and which also states and elaborates those grounds, taking as the introduction to an account of the fire the existence of the controversial development proposal, and developing the story by giving the neighbours’ point of view, could reasonably be found by a jury to convey that the suspicion is well-founded and that the suspects are guilty. An article which gives otherwise irrelevant prominence to the existence of smoke may be found to suggest the existence of fire.
The ordinary reasonable reader is not a lawyer and has a much greater capacity for implication than a lawyer: Farquhar v Bottom [1980] 2 NSWLR 380 at 386 (Hunt J).
The respondents also submitted that the question of whether the imputations were conveyed should be determined through the prism of the reasonable reader of the AFR who, they argued, are “more analytical and prone to sober analysis and less likely to engage in ‘loose thinking”.
It may be accepted that the AFR’s readership is narrower than the readership of a tabloid newspaper like The Daily Telegraph or The Daily Mail. After all, the focus of the newspaper is on financial news and matters likely to be of interest to people in business. It may also be accepted that the AFR is a serious newspaper and not a gossip magazine. Nevertheless, the way in which the ordinary reasonable reader interprets an article it publishes will inevitably be influenced by the way in which its subject matter is presented, that is, what counsel for Mr Duma called its “overall tenor and tone”.
In Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137 Gleeson CJ said:
Defamation may come in the form of snide insinuation or robust denunciation, or something in between those two extremes. The attribution to a person of an act or condition may be done with a high degree of particularity or it may take the form of the most generalised and non-specific abuse. It is a feature of certain forms of defamation that one can read or hear matter published concerning a person and be left with the powerful impression that the person is a scoundrel, but find it very difficult to discern exactly what it is that the person is said or suggested to have done wrong.
As Mr Duma submitted, consistent with the case law:
[A] sensational front page “exposé”, which “reveals” high political involvement in corruption and bribery and “graft”, by “bad guys”, with attention-grabbing graphics and seemingly damning quotes, is different from a piece of studious economic analysis. A publication which is conspiratorial in tone and indulges in innuendo or speculation will convey a defamatory imputation more readily than one which is more neutral in tone.
The respondents contended that where a publication is capable of being understood as conveying different meanings, such as different degrees of culpability associated with a person’s conduct, the task of the Court is not just to determine the meaning. They argued:
The task is not to jump to the worst possible meaning that might be open, but instead “to find an approximate centre-point in the range of possible meanings”, or the single meaning that that is “the (or a) dominant one”. In this way, the law shifts “the preferred meaning to the middle ground”, and strikes a balance between the different ways in which the relevant words are capable of being understood, thereby protecting the balance between freedom of expression and protection of reputation.
I accept, of course, that the Court must determine “the single meaning” of allegedly defamatory material. But I do not accept that in doing so the Court is required to find “an approximate centre point in the range of possible meanings”. The proposition for which the respondents contended, apparently drawn from an observation of McHugh J in Rivkin at [26], is simply incorrect. It confuses the characteristics of the reasonable reader, to which his Honour was referring, with the approach to the determination of meaning. In Rivkin at [26] McHugh J said that “a [reasonable] reader tries to strike a balance between the most extreme meaning that the words could have and the most innocent meaning”. His Honour cited Lewis at 259–60 for the proposition. In Lewis at 259 Lord Reid explained, in a passage cited with approval in Favell at [17] :
Ordinary men and women have different temperaments and outlooks. Some are unusually suspicious and some are unusually naïve. One must try to envisage people between these two extremes and see what is the most damaging meaning they would put on the words in question.
It is true that the ordinary reasonable reader has been described as a person “who does not, and should not, select one bad meaning where other non-defamatory meanings are available”: see, for example, Jeynes v News Magazines Ltd [2008] EWCA Civ 130 at [14] per Clarke MR. But the characteristics of the hypothetical reasonable reader are one thing. The meaning of the words is another. As Sharp LJ explained in Rufus v Elliott [2015] EWCA Civ 121; [2015] 2 WLUK 646; [2015] EMLR 17; [2015] CL. 690 at [11], referring to what Clarke MR said in Jeynes at [14]:
[T]he words “should not select one bad meaning where other non-defamatory meanings are available” are apt to be misleading without fuller explanation. They obviously do not mean in a case such as this one, where it is open to a defendant to contend either on a capability application or indeed at trial that the words complained of are not defamatory of the claimant, that the tribunal adjudicating on the question must then select the non-defamatory meaning for which the defendant contends. Instead, those words are “part of the description of the hypothetical reasonable reader, rather than . . . a prescription of how such a reader should attribute meanings to words complained of as defamatory”: see McAlpine v Bercow [2013] EWHC 1342 (QB) at [63]–[66].
These remarks were endorsed by the Supreme Court of the United Kingdom in a unanimous judgment in Stocker v Stocker [2020] AC 593 at [37]. There, after referring to Sharp LJ’s remarks (at [36]) and, contrary to the submission put by the respondents in the present case, Lord Kerr of Tonaghmore JSC (with whom Lord Reed, Lady Black, Lord Briggs and Lord Kitchin agreed) said it was clear that:
[W]here a range of meanings is available and where it is possible to light on one meaning which is not defamatory among a series of meanings which are, the court is not obliged to select the non-defamatory meaning. The touchstone remains what would the ordinary reasonable reader consider the words to mean. Simply because it is theoretically possible to come up with a meaning which is not defamatory, the court is not impelled to select that meaning.
(Emphasis added.)
There is no reason to think that the law in Australia is any different in this respect. See, for example, Armstrong v McIntosh (No 4) [2020] WASC 31 at [90]–[91] (Le Miere J); Herron v HarperCollins Publishers Australia Pty Ltd [2022] FCAFC 68 at [29] (Rares J); at [242] (Wigney J); and at [305] (Lee J); Bazzi v Dutton [2022] FCAFC 84; 402 ALR 219 at [4] (Rares and Rangiah JJ). The remarks of Sharp LJ in Rufus and those of Lord Kerr in Stocker are consistent with the adoption by the High Court in a number of judgments, including Favell at [11] and Trkulja at [32], of the observation by Lord Devlin in Lewis at 277 that the ordinary reasonable person draws implications, especially derogatory ones, much more freely than a lawyer.
The first and second matters complained of
The first matter complained of is an article published on pages 1, 36 and 37 of the print edition of the AFR on 10 February 2020. In their submissions the respondents argued that this article is “in the tradition of the AFR newspaper”. They described it as “a thorough and careful article presented by an authoritative and responsible news service”, not written as a gossip column, but as “important news” for “a specialised audience”, the kind of audience who would engage in sober analysis and read the entire article with “a cautious, critical eye”.
While the article was certainly lengthy, the evidence reveals that it was neither thorough nor careful and, while it was certainly not written as a gossip column, it encouraged its “audience” to read between the lines.
The article was billed as an exclusive story. It was the first article on the front page. It also occupied the whole of p 36 and the first column of p 37. It was accompanied by photographs and graphics designed to attract the reader’s attention.
The headline was both intriguing and seductive. It read:
‘The bad guys want 30%!!!!’: Horizon slips on PNG oil slick
The front page also carried a dinkus featuring a map of PNG beside which the words “PNG pay-off” appeared.
Immediately under the headline on the left was a breakout box that contained a photograph of Mr Emmett and the following statement in quotation marks (taken from “internal email 2010”):
I hesitate to put this in an email but it smells like someone is setting the scene for a handout for a problem that doesn’t exist.
The second matter complained of was published the same day on the AFR website. Its headline was different:
ASX oil firm mired in $15m PNG bribery scandal
Mr Emmett’s photograph appeared later in the article and was not accompanied by the break‑out text. It also featured a photograph of Michael Sheridan, Horizon’s then CEO, which was not included in the print version of the article. “PNG pay-off” appeared as a link at the top and bottom of the article as did “corruption” at the end. Otherwise the article was substantially the same as the first matter complained of.
The first matter complained of (the print version) began with the following text:
A nine-year-old payment in Papua New Guinea threatens to derail Australian-listed Horizon Oil after the firm repeatedly ignored corruption warnings and paid $US10.3 million ($15.4 million) to an unknown shell company.
Lawyers working on the 2011 deal flagged links to PNG’s then petroleum minister William Duma and warned an investigation by the US Department of Justice or Securities Exchange Commission was “likely” if details of the transaction were scrutinised.
The payment was made just 10 weeks after Sydney-based Horizon was issued a lucrative development licence in the Pacific nation and followed the settlement of a protracted legal dispute with Mr Duma, who is now PNG’s Minister for Commerce and Industry.
The payment is revealed in a cache of documents obtained by The Australian Financial Review that raises concerns about “illicit payments” and “bribes” and describes the potential transaction as “fruit of the poison tree”.
“The bad guys want 30%!!!,” the documents reveal one lawyer exclaiming, describing how the new licence would be allocated by PNG authorities.
…
The revelations come at a sensitive time for the Morrison government, which in November agreed to lend $US300 million to PNG in direct budget support.
The loan has raised concerns about graft as PNG consistently has been ranked “highly corrupt” by non-government anti-corruption group Transparency International.
There were slight differences in the website version but the differences are inconsequential.
In the first column on p 36 of the print version, about a third of the way down the page, Mr Duma’s denials of impropriety appeared:
Mr Duma said any suggestion he had acted improperly “amounts to political witch-hunting with malicious intent to make me look bad”.
“As far as I can recall, no such concerns were brought to my attention either formally or informally by my department or the industry. This is the first time I have been made aware of such concerns. It is odd and unusual,” he said in an email to The Australian Financial Review.
Mr Duma said he had always acted on the advice of PNG’s Petroleum Advisory Board, as was required by law.
These denials were immediately followed by a comment or pull quote attributed to Mr Emmett: “Smells like someone is setting the scene for a handout …”.
Thereafter the article gave an account of events beginning with the loss of the PRL 5 licence. But it was not an accurate account.
According to the story, Horizon “found itself under pressure in PNG in 2010” when Mr Duma “deemed it to have breached the conditions of its licence and threatened to revoke [it]”. This was inaccurate because first, Mr Duma’s decision related to all the holders of PRL 5, not just Horizon; second, while Mr Duma did consider the licensees to have been in breach of the conditions of the licence, he did not threaten to revoke the licence. Rather, he notified the licensees that he intended to refuse to grant them a second extension of the licence. But I digress.
At this point reference was made again to the potential for a bribe and the pull-out quote appeared again:
As early as February that year, Horizon’s then chief executive, Mr Emmett, flagged the possibility of a payment being required.
“I hesitate to put this in an email but it smells like someone is setting the scene for a handout for a problem that doesn’t exist,” he said in an internal email seen by the Financial Review.
It is by no means clear from the documents in evidence that Mr Emmett had Mr Duma in mind but that is the impression given by the article.
The article then reported:
By November 2010, Horizon and Mr Duma were locked in an acrimonious court battle.
At the same time, Mr Duma had opened a tender process for others to develop the gas field. Horizon, concerned it would lose an asset worth more than $100 million at the time, wrote to Mr Duma saying it was “open to any suggestion” on how the “current tension might be defused”.
That was the trigger for a settlement.
Even as the legal action continued in the background, negotiations also were under way to determine what stake in the new licence Horizon would be granted by the minister.
This was a false narrative. The chronology, in particular, was false.
First, Horizon and Mr Duma were not involved in litigation “by November” of 2010. Horizon did not institute legal proceedings until December and Mr Duma was one of a number of respondents. Horizon was threatening legal proceedings when it wrote to Mr Duma. The comment that it was “open to any suggestion”, which was made in its letter of 24 November 2010, was being made in order to avoid legal proceedings.
Second, far from being “the trigger for a settlement”, Horizon’s letter fell on deaf ears. In his reply, Mr Duma respected Horizon’s right “as an aggrieved licensee” to seek judicial review of his decision. He reminded Horizon that any application for injunctive relief had to be supported by an undertaking as to damages. He encouraged Horizon to tender for the blocks in PRL 5. He noted the detailed reasons he had provided for refusing to extend the licence and the role of the PAB. And he requested that Horizon inform him in advance if and when it was proposing to commence legal proceedings so that “steps to protect the interests of the State” could be taken.
Both the print and the website versions of the article incorporated attention-grabbing graphics. Indeed, the central features of p 36 of the print version were the graphics. The second graphic was anodyne. It merely depicted a map of PNG showing the location of Horizon’s oil and gas assets. The first is the most eye-catching and the greater in size. It occupied half the page. It appeared under the heading “Cash for gas”. It provided an abbreviated chronology of “the deal”, encased in a pipeline, linked to “THE PLAYERS”, the first of whom is said to be Mr Duma under the heading “THE MINISTER”. Particularly significant was the description of Mr Duma’s involvement in a “2017 corruption case involving landlocked naval base” and the reference to Mr Ketan as “THE MIDDLEMAN”. From now on I shall refer to this graphic as “the pipeline graphic”.
The narrative continued by referring to Mr Duma having “signed off on issuing the licence” and asserted that Mr Emmett and other Horizon representatives met with Mr Duma on multiple occasions “to discuss the matter”, the matter being Horizon’s stake in the new licence which the Minister “would” grant. This part of the article appeared directly under the graphic in the website version of the article. Shortly after this passage the narrative turned to an email from Tim Glenn, a lawyer at BDW. Mr Glenn was said to have noted “the likely dilution of Horizon’s stake” and to have “urged the company to push back against the minister”, citing the headline quote “[t]he bad guys want 30%!!!”. By March 2011, the article reported, “the parties had settled their legal case and Horizon’s stake had indeed been reduced [the print version reads “cut”] to 70 per cent in the new licence, PRL 21”.
The article pointed out that Dabajodi (now Kina Petroleum) received 20% and Elevala, described as “a hastily restructured shell company”, the remaining 10%. It then referred to comments by a spokesperson for Ashurst that searches the firm had conducted of Dabajodi and Elevala “[a]s part of the settlement process” had revealed “nothing corrupt, illegal or anything in breach of bribery laws”.
The article proceeded to undermine those comments. It pointed to Mr Ketan becoming sole director and shareholder of Elevala “just four days before the licence was granted”. It stated that “[l]awyers on the deal, fearing Mr Ketan had ‘close connections’ with government officials flagged a link with Mr Duma”. It reported that “[g]overnment sources in Port Moresby” described the pair as “associates” and another unnamed source said that they “knew each other well” and were seen having coffee together in the capital in early February. It noted that Mr Duma confirmed he knew Mr Ketan and said that they worked in the same law firm 15 years ago.
The article quoted Mr Duma’s remarks to the AFR that “Port Moresby is, compared to Sydney, a very small place with a small legal profession and lawyers would invariably know each other” and that he “did not understand the basis for the assertion that [he and Mr Ketan] are close and that [they] are politically connected”. The article then referred to Mr Ketan’s comments to the newspaper including his statement that he did not recall being aware that anyone was concerned about the transaction.
At this point the article emphasised that Elevala is a shell company with no apparent ability to raise the millions of dollars required to fund a major oil and gas development and no record of “ever housing an operating business, providing grants, dispersing dividends or employing staff”.
The article reported Horizon’s announcement to the ASX on 31 March 2011 but stated that the company was “vague about its stake being reduced to 70 per cent” and did not mention its new partner, Elevala, or its sole director and shareholder, Mr Ketan. It is not clear what was meant by the statement that the company was “vague about its stake being reduced to 70%” as Horizon’s stake in PRL 5 was less than 50%.
The article went on to say that “the plan was for Talisman’s deep pockets to help fund further exploration and development”, adding:
But with an enterprise value above $US10 billion came additional compliance as the company had operations in the US, where the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) had a long record of aggressively pursuing foreign bribery.
So when Talisman’s lawyers learned that Elevala wanted to sell its 10 per cent stake in the gas field just 10 weeks after the licence had been granted, they began asking questions.
The article reported that Mr Emmett had couched the Elevala deal to the board as “a move to ‘pre-empt’ other offers and put the figure of $US10 million on the table”. It also reported that Mr Emmett had recommended it to the board “as a good opportunity”. It asserted that there was “no indication any other parties had made an offer for the Elevala stake”. It claimed that Mr Emmett was pressuring Talisman to move more quickly. It noted that Talisman had signed a draft deed to participate in the buy-out but had had second thoughts and “set about unwinding its commitment”. It mentioned one Talisman lawyer, Amelia Jallah, who is said to have noted that Mr Ketan had been charged with perjury nearly 20 years earlier but mentions that the charges had been “dropped”. It also mentioned that Ms Jallah had “flagged a news clipping indicating a link between Mr Ketan and Mr Duma amid allegations of tribal landholders being defrauded of government compensation”. It noted that she questioned whether that was sufficient for the purposes of the Foreign Corrupt Practices Act for Talisman not to go ahead with acquiring an interest from Elevala in PRL 21.
The article then referred to Mr Duma’s statement (made in an email to the AFR) that he and Mr Ketan were never involved in an alleged scam to defraud landowners and his contention that such a suggestion was “absolutely false and defamatory”. At this point the AFR reported that “other records show Mr Ketan and Mr Duma were both from the Western Highlands Province and grew up in nearby villages”, at the same time acknowledging Mr Duma’s statement that they did not speak the same language.
The article went on to refer to the contents of emails from “Talisman’s senior legal counsel”, Patrick Colwell. In particular, it reported that Mr Colwell “noted there were a series of ‘red flags’ around the transaction”. One of the “red flags” was said to be Mr Ketan being a lawyer with “[apparently] close connections to government officials”. Another was said to be that “a ‘quick flip … for $US10 million’ would not appear to meet the [M]inister’s desire for local companies to be involved in the sector”. Then came the assertion that Mr Colwell had said “it could be assumed ‘there was some corrupt behaviour on the part of Elevala in the acquisition of their interest in PRL 21’” and this made the transaction “fruit of the poison tree”, flagging “the possibility” of payments by Elevala to some government officials from the sale price to be paid by Talisman and Horizon. As will be seen, this was a misrepresentation of Mr Colwell’s advice.
The article noted that Mr Colwell had sought further advice from a Washington lawyer Douglas Greenburg, and provided a summary of the advice. It reported that Mr Greenburg had raised further questions about the acquisition, had concluded that “the legitimate role of Elevala is not clear”, and had said that, “if Talisman wished to proceed with the acquisition, it must have a ‘good faith belief, after reasonable diligence, that Elevala had not paid, and will not pay bribes’”. It also reported him saying: “The question will be, can Talisman get comfortable that this is legitimate?” In the website version, a large subheading – “Talisman pulls out” – appeared and both articles recorded that, although the documents (presumably in the cache given to the AFR) did not answer the question, Talisman did not proceed with the acquisition. It followed up that observation with Mr Duma’s comment that “[i]t seems to me that Talisman’s in-house lawyer formed his views based not upon facts, but assumptions, more likely out of personal animosity towards me and with malice”.
The article reported that Talisman’s withdrawal left Horizon to buy Elevala’s entire 10 per cent stake for $10.3 million, although Mr Greenburg’s “concerns around corruption” had been forwarded to Mr Emmett, and that Horizon had not disclosed to the ASX how much it paid for Elevala’s interest. It noted Mr Greenburg’s advice that an investigation was likely “if the DOJ or SEC get wind of an allegation from any source that Elevala was a vehicle for bribes or paid bribes” and that “[i]f Elevala turns out to be a problem and Horizon buys out their interest there can be questions about what Talisman knew about that”. In the middle of these remarks in the website version of the article was a link which read:
RELATED
PNG gets serious about corruption
The article noted that Mr Ketan had resigned as a director of Elevala in August and the company had since changed its name. It concluded with the following observations:
Mr Duma has been a key player in PNG politics over the years, despite regular brushes with controversy.
In 2017 he was suspended from cabinet over his role in a corruption scandal and efforts to move a PNG naval base 10 kilometres inland.
Mr Duma pleaded that the first and second matters complained of conveyed the following defamatory imputations:
(a)Mr Duma as the Minister for Petroleum in PNG acted corruptly by granting a 10% interest in a lucrative petroleum licence to Elevala, a company owned and controlled by his close associate, Mr Simon Ketan.
(b)Mr Duma as the Minister for Petroleum in PNG accepted a bribe from Horizon.
(c)Mr Duma conspired with Mr Ketan to use a shell company known as Elevala as a vehicle for the payment of bribes to Mr Duma.
(d)Mr Duma conspired with Mr Ketan to defraud tribal landowners of compensation.
(e)Mr Duma as the Minister for Petroleum in PNG acted corruptly in 2017 in relation to his efforts to move a naval base 10 kilometres inland.
The respondents submitted that none of these imputations were conveyed. They contended that the only person who would read the articles in this way is a person who is avid for scandal, who leaps to conclusions based on their own prejudices, or who looks for hidden meanings. They pointed to the references in the article to “concerns” raised by the cache of documents obtained by the AFR, “concerns” about political corruption in PNG, and the prospect that the leaked documents will force Horizon to conduct an internal investigation about the payment of the $10.3 million. They placed great store in the reference in [21]–[23] to Mr Duma’s denials of wrongdoing. They submitted that this reference was not “ungracious” or “offhand”. They claimed that the reader would understand that the rest of the article was devoted to a chronological summary of the way in which “the transaction” occurred by reference to the leaked documents. They submitted that ordinary reasonable readers would know that, if the respondents were seeking to convey that Mr Duma was knowingly involved in corrupt conduct of any kind or had received a bribe, they would have said so directly. They also submitted (at [240] of their closing submissions) that if those readers understood that the payment by Horizon to Elevala was a bribe, then they would have understood that the sole beneficiary of the bribe was Mr Ketan, not Mr Duma.
I cannot accept these submissions. Moreover, I have no doubt that the first two imputations were conveyed.
Ordinary reasonable readers draw implications from text much more readily than lawyers, especially when they are derogatory: Lewis at 277 (Lord Devlin).
Further, as the High Court said in Favell at [12], after referring to Lord Devlin’s remarks in Lewis:
A mere statement that a person is under investigation, or that a person has been charged, may not be enough to impute guilt. If, however, it is accompanied by an account of the suspicious circumstances that have aroused the interest of the authorities, and that points towards a likelihood of guilt, then the position may be otherwise. There is an overlap between providing information and entertainment, and the publishing of information coupled with a derogatory implication may fall into both categories. It may be that a bare, factual, report that a house has burned down is less entertaining than a report spiced with an account of a suspicious circumstance.
(Original emphasis.)
Favell was concerned with a newspaper report of a fire which burned down a multi-million dollar home subject to “a controversial development application” to build a block of units on the land. The report noted that police investigations were continuing and quoted a police source as saying that “[a]ll fires are treated as suspicious until otherwise disproved”. The High Court unanimously held that the article was capable of conveying the imputation that the appellant had in fact committed the crime of arson. Gleeson CJ, McHugh, Gummow and Heydon JJ explained at [14]:
[A]n article which is capable of conveying the meaning that there are reasonable grounds for suspicion of arson, and which also states and elaborates those grounds, taking as the introduction to an account of the fire the existence of the controversial development proposal, and developing the story by giving the neighbours’ point of view, could reasonably be found by a jury to convey that the suspicion is well-founded and that the suspects are guilty. An article which gives otherwise irrelevant prominence to the existence of smoke may be found to suggest the existence of fire.
Here, the AFR did not present a bare, factual report about the purchase by one company of another company’s interest in their joint venture. It was a report spiced with an account of suspicious circumstances.
Similarly, while it has often been said that the mere report of the making of an arrest and the laying of a charge does not convey an imputation of guilt because the ordinary reasonable reader is alive to the presumption of innocence (see, for example, Mirror Newspapers Limited v Harrison (1982) 149 CLR 293 at 300 per Mason J), that principle has a limited operation. As McColl JA opined in John Fairfax Publications Pty Limited v Obeid [2005] NSWCA 60 at [70] (Sheller JA agreeing at [1] and McClellan AJ at [130]) “it is … a pious presumption to conclude that the ordinary reasonable reader is mindful of the presumption of innocence whenever accusations or allegations are made particularly when the defamatory statements are made in circumstances unrelated to, or remote from, the operation of the criminal justice system”.
It is true, as the respondents submitted, that nowhere in the article was it asserted that Mr Duma actually received a bribe or acted corruptly in the transaction. But the absence of such an assertion is scarcely decisive. Indeed, it is of no moment. After all, “[t]he ordinary and natural meaning of words may be either the literal meaning or it may be an implied or inferred or an indirect meaning”: Jones v Skelton [1963] 1 WLR 1362 at 1370; SR (NSW) 644 at 650 (PC) (Lord Morris of Borth-y-Gest). Consequently, as his Lordship pointed out, the ordinary and natural meaning may include “any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words”. The ordinary reasonable reader is prone to loose thinking and reads between the lines. And that is precisely what the respondents encouraged them to do. This article was awash with innuendo.
The timeline in the pipeline graphic drew a link between the supposed revocation of PRL 5; the commencement of litigation, the overture to Mr Duma by Horizon that it was “open to any suggestion” as to how the “current situation might be defused”; Mr Ketan becoming the sole director and shareholder of Elevala; Horizon apparently concealing Elevala’s interest from the ASX, the “red flags” around corruption raised by lawyers; the reference to the possibility of the Elevala stake being “fruit of the poison tree”; and the sale of Elevala’s interest to Horizon. The graphic also invited the reader to conclude that Mr Duma was the recipient of the $US10.3 million payment.
As Mr Duma submitted, the matters the respondents chose to emphasise at the beginning of the article set the tone for what followed and would shape the way in which the ordinary reasonable reader would interpret the article. Those matters were the revelation of corruption, pay-offs, handouts, illicit payments, and bribes. The reader was informed that such matters were not only endemic to PNG but were manifested in the “exclusive story” related by the article. The headline used in the website article is emphatic. There could only be “a bribery scandal” if bribery occurred. The reader was led to believe that Mr Duma was the person who was bribed and, what is more, the architect of the whole corrupt transaction.
As Mr Duma put it, a “pay-off” or a “bribe” is something paid to a person in a position of power or influence such as a government minister, not to an “unknown shell company”. The sole person of power or influence who was mentioned by the AFR in this context is Mr Duma. He was the only person to whom the ordinary reasonable reader would understand these references applied. The insinuation was that he was one of the “bad guys”, as Ms Whyte conceded in cross-examination. It is ludicrous to suggest that the ordinary reasonable reader would not understand that the proceeds of the sale were paid through Mr Ketan and/or his company to Mr Duma. It is as plain as the proverbial pikestaff that this was the meaning conveyed by the articles.
Mr Ketan was not said to have received any money from the transaction. He was depicted both in words and images as “the middleman” between Mr Duma and “the oil men” from Horizon. Since it was Horizon who paid the money, the only person who the ordinary reasonable reader would understand to have received it is Mr Duma. The proposition advanced by the respondents at [256] of their closing submissions, to which I referred at [89] above (that, if ordinary reasonable readers understood that the payment by Horizon to Elevala was a bribe, then they would have understood that the sole beneficiary of the bribe was Mr Ketan, not Mr Duma) is absurd. And it was disavowed by the respondents themselves at [419] of the very same submissions. There, they asserted that the description of Mr Ketan as “the middleman” was “equally accurate” and went on to say that “plainly, Mr Ketan … was not the ultimate beneficiary of the deal”. While they do not say so in so many words, the articles unquestionably insinuated that Mr Duma was the recipient of the money. The words used in, and the tone of, the articles, together with the way in which the report was presented invited the ordinary reasonable reader to conclude that the money was paid as a bribe. No other conclusion is reasonably open.
I also accept Mr Duma’s submission that the articles insinuated that Mr Duma came up with specious reasons to “cancel” the licence, in order to apply pressure to Horizon with a view to extracting a bribe. That was the clear implication of the remark that “someone is setting the scene for a handout for a problem that doesn’t exist”. That implication was reinforced by the reference to the letter from Horizon (erroneously said to have been made during “an acrimonious court battle”) that the company was “open to any suggestion” as to how “the current tension might be defused.”
The first meaning of “bribe” in the Macquarie Dictionary (8th ed, Macquarie Dictionary Publishers, 2020) is “anything of value, as money or preferential treatment, privilege, etc., given or promised for corrupt behaviour in the performance of official or public duty”. One of the meanings of “corrupt” is “dishonest; without integrity; guilty of dishonesty, especially involving bribery”. That is the first meaning given in the Macquarie Dictionary. In Drummoyne Municipal Council at 138, Gleeson CJ observed that “the word ‘corrupt’ can have significantly different shades of meaning” and that, depending on the context, it can mean that a person takes bribes, abuses his power or improperly obtains private benefits from a public position. Thus, in the present context, the imputation that the applicant has accepted a bribe is also an imputation that he acted corruptly. The obverse is also true.
The ordinary reasonable reader would infer from the articles that Mr Duma, the only public official mentioned in them, was the person who had already set the scene for a handout and that in its letter Horizon was making it clear to Mr Duma that it was “open to any suggestion”, including the payment of money, to regain the licence. The reader was told that numerous meetings with Mr Duma took place after Horizon made its overture and that within weeks after the licence was granted Horizon made the payment to Elevala and that Elevala was a shell company. The reader was also told that the director and shareholder of this shell company was a “close associate” of Mr Duma and was seen associating with him (having coffee) the month before the licence was granted. The ordinary reasonable reader would recall the statements made in the articles that “PNG has been consistently ranked ‘highly corrupt” by Transparency International” and that Mr Duma has been involved in other “corruption scandal[s]”, including one with which Mr Ketan was also associated. In other words, the innuendo was that he has “form”. As Mr Duma put it in submissions, the ordinary reasonable reader was invited to put two and two together and would inevitably do so.
Thus, although they do not say so directly, the articles implied that Mr Duma acted corruptly by granting a 10% interest in PRL 21 to Elevala and that he accepted a bribe from Horizon. These were meanings the ordinary reasonable reader would draw from the articles.
The references to Mr Duma’s denials of wrongdoing do not assist the respondents. The mere presence of a denial does not make the publication as a whole incapable of conveying the defamatory imputation. The references in the articles to Mr Duma’s denials must be read in the context of the publication as a whole. As I have already observed, the ordinary reasonable reader need not give equal weight to every part of the publication. Readers legitimately take into account the emphasis that the publisher supplies by the use of such things as “conspicuous headlines, headings and captions”. See, Rivkin at [26] per McHugh J, for example, and the cases referred to there.
Moreover, in these articles Mr Duma’s denials were undercut by the respondents.
In the print version, immediately after the denials were reported the narrative was interrupted by the pull quote attributed to Mr Emmett, which invited the reader to treat the denials with a grain of salt. For good measure, no doubt to ensure that the reader understood the subtext, this comment appeared in boldface type and a font size several points greater than the font size used for the text of the article. Having regard to the context in which the phrase appeared, the hypothetical reasonable reader would infer that the “someone looking for a handout”, to whom Mr Emmett was referring in the pull quote, was Mr Duma.
Further, immediately after the appearance of the pull quote in the print version and immediately after the report of Mr Duma’s denials in the website version, the reader was informed that “[i]n Australia, bribing a foreign official carries a maximum jail term of 10 years for individuals and fines of up to $18 million for a company” but that the offence is “notoriously difficult to prosecute”. To illustrate this point, the reader was told that the Australian Federal Police (AFP) has spent the last two years investigating a “payment made by mining giant Rio Tinto to a middleman in Guinea, after damaging emails about the deal leaked online”. The suggestion here was that this was not the first case in which a mining company had paid money through a “middleman”.
I am also persuaded that the third imputation (that Mr Duma conspired with Mr Ketan to use a shell company known as Elevala as a vehicle for the payment of bribes) was conveyed. The graphic is the key to understanding how it is made out. Mr Ketan was depicted as the middleman between Horizon, “who brokered” the purchase of Elevala’s stake with him “after meetings with Mr Duma”, and Mr Duma, who was said to have been “named in 2017 corruption case”. The implication was that Mr Ketan worked closely with Horizon and Mr Duma. He was described as the sole director and shareholder of Elevala and the person who negotiated the payment of the $US10.3 million to Horizon. As I have already observed, the clear implication was that the ultimate beneficiary of the payment was Mr Duma.
In the print version, immediately to the left of the description of Mr Duma in the graphic was the pull-out quote from Mr Emmett about “someone setting the scene for a handout” and the reference to the penalties for bribing a foreign official. The inference was that Mr Duma had arranged with Mr Ketan, with whom he was said to be closely associated, including in more than one “corruption case”, that the Horizon payment be made through Elevala in order to disguise the true beneficiary.
Immediately following the graphic in the website version, reference was made to Mr Duma meeting with Horizon on multiple occasions, implying that Mr Duma was working on a solution with Horizon in circumstances where Horizon had said it was “open to any suggestions” to “defuse” “the current tension” (at [33] and [36]). Later, at [51] and following, the article reported that Ashurst, the lawyers for Horizon, found nothing in their settlement searches but only worked on the legal settlement of the licence, not the buyout of Elevala’s 10% holding, implying that the searches did not cover Elevala or Mr Ketan. The reader was also told that Horizon did not mention Elevala in the ASX announcement, implying it was a secret component of the deal (at [65]).
The response came from the Executive Counsel of Nine Publishing, the owner of the AFR. It was sent by email on 3 March 2020. It read:
The Australian Financial Review declines your client’s requests.
I have instructions to accept service.
Mr Duma was shocked by the response. He said he could not believe it and thought that the respondents were being “very arrogant”. As his counsel submitted, to respond in this way without engaging with the contents of the letter and Mr Duma’s statement to Parliament was high-handed.
Mr Duma argued that in circumstances in which the respondents did not allege in their defence that the pleaded imputations were substantially true, their failure to apologise and their persistence in keeping the matters online should be regarded as improper and unjustifiable.
I do not accept this argument.
First, the mere failure to apologise is not sufficient to warrant an award of aggravated damages. In Carson at 66 Mason CJ, Deane, Dawson and Gaudron JJ said:
Whereas publication of an apology may mitigate damage, thereby reducing the harm suffered by a plaintiff in a defamation case, and so reduce the damages awarded, the failure to publish an apology does not increase the plaintiff’s hurt or widen the area of publication. No doubt want of apology may be a relevant factor in establishing that a defendant is motivated by a desire to injure the plaintiff but that does not mean that want of apology itself aggravates the plaintiff’s injury.
It is true that Mr Duma did not merely rely on the lack of an apology. Nevertheless, I am not persuaded that the respondents’ failure to raise a justification defence means that their failure to apologise and/or the continued publication of the matters on the AFR website was improper or unjustifiable and lacking in bona fides. While I rejected the respondents’ argument that the pleaded imputations were not conveyed, I do not consider the respondents’ conduct was of this order: compare Chau v Fairfax Media Publications at [366]. “Mere persistence, or even vigorous persistence, in a bona fide defence, in the absence of improper or unjustifiable conduct, cannot be used to aggravate compensatory damages”: Coyne v Citizen Finance Ltd (1991) 172 CLR 211 at 237 (Toohey J with whom Dawson and McHugh JJ agreed at 222 and 239 respectively). But the assertions made in the respondents’ submissions that the pleaded imputations were true are of an altogether different order. I will come to them shortly. Moreover, the failure to correct the record with respect to the naval base allegations was admittedly unjustifiable and lacking in bona fides.
There is also force in the respondents’ submissions that the articles concerned matters of legitimate public interest “going beyond the references to [Mr Duma]”. I do not consider that it was improper or unjustifiable and lacking in bona fides for Fairfax not to remove the publications from the AFR website. On the other hand, I do consider that it was improper, unjustifiable and lacking in bona fides for Fairfax not to correct the errors when they were pointed out to the respondents. Some amendments were made after the proceeding was commenced in April 2020, sometime between 7 September 2021 and 7 October 2021. Notably, Mr Grigg’s evidence was completed in April 2021. No evidence was given about why the amendments were made at this time. Ms Whyte testified that she was not consulted about the changes. Mr Grigg was not recalled. And no other person who might have been involved in the exercise was called to give evidence. To the extent that Fairfax may have been prompted to make the changes as a result of concessions Mr Grigg made in cross-examination, the five to six months delay is wholly unexplained.
The amendments made to the article first published on 10 February 2020 were:
(1)the substitution of “Papua New Guinea” for the “PNG Payoff” link at [1A];
(2)the replacement of the words “threatened to revoke it” at [28] by the words “refused to extend it”;
(3)the substitution of “December” for “November” at [31];
(4)the substitution of “That was the trigger for beginning general negotiations between Horizon and Duma” for “That was the trigger for a settlement” at [33];
(5)the removal of the pipeline graphic at [35]–[40], depicting Mr Ketan as the “middleman” between the Horizon executives and Mr Duma;
(6)the insertion of the words “in the emails that” between “indication” and “any other parties” and, “had actually made” between “any other parties” and “an offer” in the statement at [73] that “There is no indication any other parties had made an offer for the Elevala stake and Mr Emmett would later write about getting ‘the right result with the board’”;
(7)the substitution of “a letter confirming its intention” for “a draft deed” in the sentence at [78] that “Talisman had initially signed a draft deed to participate in the buy-out but began to have second thoughts”;
(8)the reformulation of the statements attributed to Mr Colwell at [89]–[90] to conform to what he actually said in his email so that they now read (with the corrections emphasised);
Mr Colwell said if it could be assumed “there was some corrupt behaviour on the part of Elevala in the acquisition of their interest in PRL 21” it would be “fruit of the poison tree”. He flagged “the possibility” of payments from “Elevala back to some government officials from the sale price to be paid by Talisman and Horizon”.
(9)The removal from [113], which retains the statement that “[i]n 2017 [Mr Duma] was suspended from cabinet over his role in a corruption scandal and efforts to relocate a PNG naval base”, but removes the words “10 kilometres inland” and adds the following sentence:
Mr Duma was later cleared by the PNG Police and the Ombudsman inquiry;
and
(10)the removal from the last page of the “PNG Payoff” and “Horizon Oil” links.
The amendments to the second article, published on 11 February 2020, were these:
(1)the removal of the word “repeatedly between “lawyers” and “raised corruption concerns” in the opening paragraph of the article ([4]);
(2)the removal of “Department,” and the substitution of the phrase “if allegations of bribery were ever made to regulators” for the phrase “if the transaction was ever examined by regulators” at [9];
(3)the removal of the pipeline graphic originally appearing at [12]–[17];
(4)the substitution of the words “application to extend the licence” for “its licence” and “refused” for “revoked” at [32];
(5)the omission of the words “[a]fter an aborted legal battle” at the beginning of the sentence at [33]; and
(6)the replacement of “beginning negotiations between [H]orizon and Duma” for “a settlement” after the words “trigger for” at [34].
The amendments to the third article, published on 12 February 2020, were:
(1)the substitution of “Papua New Guinea” for the “PNG Payoff” links at [1] and [32];
(2)the removal of the pipeline graphic originally appearing at [13]–[18];
(3)the replacement of the phrase “after the same licence was cancelled by the minister” with the phrase “after the minister refused to extend the same licence” at [21];
(4)the insertion of the word “his” between “and” and “apparent links” in the sentence “Lawyers working for Talisman raised concerns about Mr Ketan’s ‘political connections’ and apparent links to Mr Duma” at [22]; and
(5)the removal of the “Horizon” link at [32].
The amendments to the fourth article, published on 13 February 2020, were:
(1)the substitution of “Mining” for “PNG Payoff” in the link at [1];
(2)the removal of the word “repeatedly” in the phrase “after an investigation by The Australian Financial Review found the company had repeatedly ignored corruption warnings” at [6];
(3)the replacement of the word “retract” by the phrase “refused [sic] to extend” before the words “the previous licence” at [11]; and
(4)the removal of the pipeline graphic originally appearing at [16]–[21].
The amendments to the final article, published on 15 February 2020, were:
(1)the substitution of “Mining” for “PNG Payoff” in the link at [1] and [72];
(2)the replacement of the words “resist ‘the bad guys’, as one of its lawyers put it” with “push back” at [11];
(3)the removal of the word “repeatedly” before “ignored corruption warnings” at [13];
(4)the removal of the graphics at [16]-[17], being the chronology about “[h]ow the deal happened” and the clip from the print version of the first story on 10 February 2020, showing the headline “‘The bad guys want 30%!!!’: Horizon slips on PNG oil slick” and the PNG pay-off dinkus, among other things;
(5)the insertion immediately after [23] of the following statement:
Mr Duma denies all allegations and says that he always acted on the advice of the Petroleum Advisory Board.
(6)the insertion of the words “would not be reviewed” in lieu of “was to be cancelled” in [64] (presumably “reviewed” should have read “renewed”);
(7)the deletion of “emailed” after “Sir Moi” at [65] and its replacement with “said on learning that the licence wasn’t going to be renewed”;
(8)the removal of the word “repeated” between “ignore” and “corruption warnings” at [71]; and
The fifth factor — the publication of more articles concerning Mr Duma conveying substantially the same imputations as those conveyed by the matters complained of “as part of a smear campaign against him” — was not the subject of any submission. In these circumstances, I do not propose to address it. I assume it was no pressed.
The sixth and final factor was the respondents’ “improper and craven attempt to assert the factual truth of the matters complained of without a plea in justification”.
The maintenance of a defence of justification in circumstances where it is improper, unjustifiable or not bona fide to do so may be a matter which aggravates damages: Coyne at 237–238 per Toohey J (Dawson and McHugh JJ agreeing). McHugh J observed at 241 that the jury in that case was entitled to find that the hurt to the plaintiff and the harm he suffered were increased by the defence, persisted in until the end, that the defamatory imputations made against him were true in substance and in fact.
In the present case, while the respondents did not plead justification, in final submissions they sought to establish the “objective truth” of the imputations both in support of their defence of qualified privilege and in mitigation of damages. Conducting their defence in this way vastly increased the length of the proceeding and its cost.
Mr Duma testified that he found it “very insulting” to be asked questions in cross-examination, in the absence of a defence of justification, about whether he had engaged in meetings or discussions with Mr Emmett in an unofficial or secretive way, whether he was the person who had introduced the idea of giving Elevala a 10% share of PRL 21, and whether the PAB had merely acted as a rubber-stamp for an agreement which he had personally negotiated.
In the light of the way the defence was pleaded and their failure to squarely put such matters to Mr Duma in cross-examination, the repeated assertions the respondents made in closing submissions of corruption, dishonesty and the like on his part were audacious, improper and unjustifiable. Those assertions included that:
·the “transaction” by which Elevala acquired a 10% interest in PRL 21, a “transaction” to which Mr Duma was a “party”, was “corrupt”: RCS [2], [6], [109], [179(c)], [193], [314], [328];
·it was Mr Duma who “wanted” and proposed the inclusion of Elevala as part of his “plan”: RCS [13], [93], [115], [132]. [187], [192](d), [192](e);
·Mr Duma was the “promoter” of the sale by Elevala of its 10% interest to Horizon for $US 10 million: RCS [192](a) and (f), [365];
·Mr Duma “knew that he was sanctioning a corrupt transaction”: RCS [192](g), [193];
·Mr Duma’s own conduct in relation to those matters was “corrupt”: RCS [395];
·Mr Duma refused to renew PRL 5 despite the view of his Department that it should be renewed: RCS [27]; [32];
·Mr Duma did not act on the advice of the PAB, only that of its chairman, Mr Rimua: RCS [13], [127]; [330], and he procured a “spurious letter” from Mr Rimua merely to give him “cover”, for his own “protection”, as a “contrivance”: RCS [129], [138], [192](b); [318].
The allegations of bad reputation based on the so-called “Paga Hill affair” and “Manu Manu affair” were also unjustifiable and lacking in bona fides for the reasons already discussed.
In what amount should damages be awarded?
Section 34 of the Defamation Act requires the Court to ensure that there is an appropriate and rational relationship between the harm sustained to the plaintiff and the amount of damages awarded.
Mr Duma submitted that, the question of aggravated damages apart, the appropriate award of damages would be “one that would be close to the upper end of the capped limit” and suggested that aggravated damages should take the award above that limit.
The respondents submitted that the imputations are “not at the most serious end of the spectrum”, contrasting this case with awards of general damages in other cases such as Wagner v Harbour Radio Pty Ltd [2018] QSC 201; Aust Torts Reports ¶82-405 (in which each of the four plaintiffs was awarded $850,000, including aggravated damages), Rush (No 7) (where an award of $850,000 was made, which included aggravated damages) and Rayney v State of Western Australia (No 9) [2017] WASC 367 (in which Chaney J awarded $600,000 including aggravated damages).
In Wagner, the imputations included that the plaintiffs caused the deaths of 13 people by illegally constructing a dam wall which collapsed causing a catastrophic flood that devastated a township, were knowingly involved in a massive cover-up, and were involved in “disgusting bullying and intimidation of witnesses” at the inquiry into the Queensland floods in order to protect themselves from being held to account for the deaths. The imputations were conveyed in 27 broadcasts which aired over an extended period between October 2014 and August 2015. In Rayney, remarks at a media conference by a detective senior sergeant of police were found to convey the imputation that the plaintiff murdered his wife. The plaintiff was “mortified” and greatly distressed by the remarks and vilified as a murderer in the community. In Rush (No 7), Wigney J found that the publishers had conveyed imputations that Mr Rush had engaged in scandalously inappropriate behaviour in the theatre.
These cases were obviously different from the present case and are easily distinguishable. That said, the imputations I have found to have been conveyed in the present case are unquestionably grave, especially for a lawyer, elected official and cabinet minister. For a person in Mr Duma’s position, it might well be said that his reputation is “his whole life”: Crampton v Nugawela at 193 (Mahoney ACJ). As his counsel so eloquently put it, “[t]he matters complained of effectively allege that Mr Duma abused his high office and treated the resources of his country, of which he was the steward, as a vehicle for his personal profit”. The publication of imputations of this kind more likely than not would cause substantial damage to Mr Duma’s reputation. And the evidence indicates that more likely than not it was very damaging to him. Mr Pala gave evidence to that effect and he was not challenged. Mahoney Duma referred to the vilification of his father on social media. Mr Duma felt compelled to make a lengthy statement to Parliament. The day before, the deputy opposition leader asked the Prime Minister whether he intended to sack him. Media reporting of his intention to sue for defamation generated mixed responses, some supportive, some not. They included calls for him to resign; comments that he was tainting the image of the government; that he was a criminal; that he was corrupt, that he was “the most corrupt member in parliament”; that “they should try him in Australia”; that he was “the witch, hunting the people of PNG’s money”; that he was the “face” of corruption; that he was the “definition of corruption”; and that he was a “crook”.
In Hockey White J awarded a total of $200,000 to the then Australian Treasurer arising out of the publication of a poster and two tweets after finding that the statements “Treasurer for Sale” and “Treasurer Hockey for Sale” were defamatory of him. A claim for aggravated damages was rejected.
In Chau v ABC Rares J awarded $515,000 to an applicant in relation to a televised and internet broadcast and an online article which his Honour found conveyed imputations of bribery and corruption, including the payment of a $200,000 bribe to the President of the United Nations General Assembly and, in effect, bribes disguised as donations to political parties in order to have them make decisions that advanced the interests of the People’s Republic of China and its government and ruling party. But for the fact that Dr Chau had received damages from other court cases for similar defamatory publications, his Honour would have awarded him $550,000: see Chau v ABC at [166].
In the present case, Mr Duma is entitled to a substantial sum to compensate him for the injury to his feelings, the damage to his reputation and as vindication. Taking all relevant matters into account, including the extent and duration of publication and, of course, his entitlement to aggravated damages, I assess his damages at $500,000 to which pre-judgment interest should be added. Mr Duma applied for interest in his originating application. Section 51A(1) of the Federal Court of Australia Act 1976 (Cth) requires the Court to include “upon application” interest in the sum for which judgment is given unless good cause is shown to the contrary and none was shown here.
In John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 (Fairfax v Kelly) at 142D–143A (McHugh JA, with whom Kirby P agreed) held that the damage (at least for non-economic loss) is ordinarily taken to have occurred before the judgment and therefore, absent special circumstances, interest is payable on the whole of the sum. Later (at 143G), his Honour said that “[s]peaking generally, the best approach is to treat the award as though the damages represent a loss spread over the period from the date of publication to trial”. In that case the trial judge was found to have erred by declining to award interest and on the cross-appeal interest was calculated over three years at a commercial rate of 15 per cent (at 144B–D).
In Chau v ABC at [167]–[171] Rares J applied the reasoning in Fairfax v Kelly. His Honour calculated that the amount of pre-judgment interest on the whole of the award of $515,000 at the Court’s usual rates (as provided in the Interest on Judgments Practice Note (GPN-INT), which is 4% above the cash rates published by the Reserve Bank of Australia) was about $97,400. He then determined that it would be fair and just to award $75,000 in pre-judgment interest apparently because the injury to Dr Chau’s feelings and to his reputation was ongoing and perhaps to account for the possibility of continuing damage from the availability of the published material on the internet.
In Hanson-Young v Leyonhjelm (No 5) [2020] FCA 34 at [8]–[16], however, White J accepted a submission that interest on economic loss is commonly awarded in defamation cases at the rate of 3–3.5% and awarded a lump sum of $5,000 as interest on damages of $120,000. In that case, neither party submitted that the rate of interest should be determined by reference to GPN‑INT. Ms Hanson-Young sought interest at the rate of 3%. Recently, in Kumova v Davison (No 2) [2023] FCA 1 at [347], Lee J settled on a 3% rate, citing Hanson-Young at [8]–[16]. In neither case, however, was reference made to Fairfax v Kelly.
In Hanson-Young White J referred to MBP (SA) Pty Ltd v Gogic(1991) 171 CLR 657 in which the Full Court of the High Court held (at 663–4) that damages for pre-judgment non-economic loss should not be calculated at commercial rates because to do so would over-compensate the plaintiff as damages for pre-trial non-economic loss are assessed in accordance with the value of money at the time of the award. In Gogic a rate of 4% per annum, which had been applied by the court below, was considered “somewhat arbitrary” but nonetheless representative of what the Supreme Court of South Australia considered was “fair and reasonable compensation for a plaintiff in that State for being deprived of the use of his or her money after taking into account that, from time to time, the real rate of interest will rise above or fall below that figure” (at 666). Since then, it is the rate that has been applied by most State Supreme Courts in personal injuries cases (see Luntz H, Assessment of Damages for Personal Injury and Death, 4th ed, LexisNexis Butterworths, 2002, at [11.3.15]), except to the extent to which statutes have provided otherwise, and appears to be the foundation for the 3–3.5% rate in the defamation cases to which White J referred in Hanson-Young. Further, as White J noted in Hanson‑Young at [8], “the cases recognise that the harm suffered by an applicant is usually greatest at, and shortly after, the time of publication, so that the harm should not be regarded as having accrued at a constant rate over that period”. That accounts for the adoption of the figure of 3% or 3.5%.
In Fairfax v Kelly McHugh J provided no reasons for adopting a commercial rate of interest. Gogic was decided after Fairfax v Kelly. In Chau v ABC Rares J did not refer to Gogic. It seems to me that I am obliged to apply Gogic. There is no apparent reason to distinguish it. The fact that the damages were awarded for personal injuries had no bearing on the High Court’s reasoning. In these circumstances, I propose to take the same approach as Lee J in Kumova. Damages should be awarded on the whole of the award at the rate of 3% per annum from the date of the publication of the first and second matters complained of to the date of judgment. That works out to $44,876, which I will round up to $45,000, resulting in a total award of $545,000.
Conclusions
In summary, I have reached the following conclusions concerning the issues raised for consideration.
First, all the matters complained of conveyed the imputations that:
·Mr Duma as the Minister for Petroleum in PNG acted corruptly by granting a 10% interest in a lucrative petroleum licence to Elevala, a company owned and controlled by his close associate, Mr Simon Ketan; and
·Mr Duma as the Minister for Petroleum in PNG accepted a bribe from Horizon Oil.
The first, second, fourth, sixth, eighth, ninth and 10th matters complained of also conveyed the imputation that Mr Duma conspired with Mr Ketan to use a shell company known as Elevala as a vehicle for the payment of bribes to Mr Duma.
In addition, the first and second matters complained of conveyed the imputation that: Mr Duma as the Minister for Petroleum in PNG acted corruptly in 2017 in relation to his efforts to move a naval base 10 kilometres inland.
Second, the defence of qualified privilege is not made out. Consequently, the third issue (malice) does not arise.
Third, Mr Duma is entitled to aggravated damages.
Fourth, the “objective truth” of the imputations may not be taken into account in mitigation of damages.
Fifth, damages should be awarded in the sum of $545,000 including pre-judgment interest.
INJUNCTIVE RELIEF
Mr Duma applied for an order that the matters complained of (as defined in his pleading) or any matter in substantially the same form, be removed from the AFR’s website, any archive and/or other website(s) associated with it and any other website operated or controlled by the AFR.
The respondents indicated that they wished to reserve their position on this question until after judgment is published. Mr Duma did not object to this course. It is a reasonable approach. The respondents should have the opportunity to consider whether they will voluntarily remove the articles from their website and undertake not to publish matter in substantially the same form in the future before any order is made. If they do not agree to do so within a reasonable period of time after the delivery of judgment, I will hear and determine Mr Duma’s application.
COSTS
Costs should follow the event. Mr Duma asked to be heard after the delivery of judgment in relation to an order that his costs should be paid on an indemnity basis. I will make orders to facilitate this course.
I certify that the preceding six hundred and ten (610) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Katzmann. Associate:
Dated: 7 February 2023
7
18
6