Liu v The Age Company Ltd

This matter concerned an appeal and cross-appeal from an order of a single judge of the Supreme Court of New South Wales. The appellant, Ms. Liu, had sought preliminary discovery against The Age Company Ltd (the newspaper) and its sources in contemplation of defamation proceedings. An order was made compelling the identification of the newspaper's sources, which was unsuccessfully appealed by the newspaper. Following these appellate steps, the newspaper sought a stay of the preliminary discovery order, undertaking not to rely on qualified privilege defences as a condition of the stay. This stay was granted after a second contested hearing. The appeal concerned whether the judge erred in granting this stay.

The central legal issues before the Court of Appeal were whether the judge had erred in granting the stay of the preliminary discovery order, particularly in light of the newspaper's prior unsuccessful attempts to resist discovery and its concession that the undertaking could have been given earlier. The court also considered whether the stay application should have been entertained at all, given the procedural history. Further issues related to the "newspaper rule" and whether the undertaking provided an "effective remedy" in the interests of justice, as well as the appropriate costs orders for the preliminary discovery proceedings and the stay application, including whether the newspaper's conduct warranted an indemnity basis for costs.

The Court of Appeal allowed the appeal in part, setting aside the stay order. The court reasoned that the newspaper's conduct in seeking the stay after a series of unsuccessful challenges to the preliminary discovery order, without a satisfactory explanation for the delay in providing the undertaking, demonstrated an error in the exercise of the judge's discretion. The court found that the undertaking, while relevant, did not sufficiently justify the granting of a stay in these circumstances, particularly given the prior adversarial approach taken by the newspaper. The cross-appeal was dismissed.