Packer v Australian Broadcasting Corporation

[2002] NSWSC 1030

CITATION:	Packer v Australian Broadcasting Corporation [2002] NSWSC 1030
FILE NUMBER(S):	SC 20350/97
HEARING DATE(S):	10/10/02, 11/10/02
JUDGMENT DATE:	5 November 2002
PARTIES :	Kerry Francis Bullmore PACKER v AUSTRALIAN BROADCASTING CORPORATION
JUDGMENT OF:	Cripps AJ

COUNSEL :	Plaintiff- Mr B McClintock SC Defendant - Mr T K Tobin QC & Mr N A Nichols
SOLICITORS:	Plaintiff- Gilbert & Tobin Solicitors Defendant- Mr Stephen Collins, ABC Legal
CATCHWORDS:	Defamation - contextual imputations - whether capable of arising - if so whether capable of attracting the defence under s16 of the Defamation Act 1974
LEGISLATION CITED:	Casino Control Act 1992 Defamation Act 1974 Listing Rules of the Australian Stock Exchange.
CASES CITED:	Robinson v Laws & Anor (Unreported, QLDCA, 6 April 2001) David Syme & Co v Blake (2001) 53 NSWLR 541 General Steel Industry Inc v Commissioner for Railways 112 CLR 125
DECISION:	Defences 9(a), 10(a), 11(a) and 12(a) be struck out. The application is otherwise dismissed. The plaintiff to pay the defendant's costs of the Motion.

- 12 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

CRIPPS AJ

5 NOVEMBER 2002

20350/97

Kerry Francis Bullmore PACKER –v –AUSTRALIAN BROADCASTING CORPORATION
JUDGMENT

1 HIS HONOUR: On the 7 April 1997, the Australian Broadcasting Commission (ABC) (the defendant), published a “Four Corners” television broadcast entitled “The Power of Packer”. The broadcast was repeated on 8 April 1997.

2 The program lasted approximately forty minutes. It was presented in three segments directed to three separate topics. Each segment focused on the conduct of the plaintiff and/or the Consolidated Press Holdings (CPH) a company he was said to control and persons over whom it was said he exerted influence with respect to those topics.

3 I have seen the “Four Corners” program and for self-evident reasons I do not propose to set out verbatim a transcript. The first segment, which lasted approximately thirty minutes, dealt with, inter alia, attempts by the plaintiff to obtain a licence under the Casino ControlAct 1992, for the Darling Harbour Casino. There were allegations concerning the influence the plaintiff had over certain politicians and, of relevance to the present application, there were allegations concerning the production in New South Wales of a confidential file kept by the Louisiana Police.

4 There were two syndicates competing for the licence – CPH and Circus Circus (an American Company having gambling interests throughout US) and Leighton Holding Limited and Showboat (a Louisiana company having gambling interests in that state). The file contained allegations of a suspicious connection between Showboat and the mafia. It was stated that its removal from a safe in Louisiana amounted to a serious breach of confidentiality. The segment also referred to other efforts by the plaintiff and/or CPH directed to ensuring that the Showboat-Leighton syndicate would not succeed in obtaining a licence. Included in it was a statement that the plaintiff and CPH had employed investigators to “dig up the dirt” on Showboat. Reference was made to a television interview given by Mr James Packer concerning a conversation he had with a Minister of the Crown of New South Wales directed to the application of CPH-Circus Circus.

5 The second segment lasted for approximately ten minutes and was concerned with the commercial relationship between CPH and ANI, in the context of the acquisition by a European company owned by CPH by a company half owned by ANI. Of relevance is the circumstance that reference was made to payments of money “agreed to by Kerry Packer” to members of the ANI board prior to the board’s decision to authorise the purchase of the company owned by CPH, which ultimately resulted in ANI loosing a large sum of money.

6 The third segment, which lasted a little over five minutes, was concerned with attempts by the plaintiff and/or CPH to gain control of the Fairfax group of companies. The program included the plaintiff arguing vigorously with members of a Senate Inquiry.

7 Shortly after publication, the plaintiff commenced proceedings, alleging the program conveyed certain imputations, each of which were defamatory of him.

8 The imputations alleged were:

a. that the plaintiff had permitted employees of a company, which he controlled to commit a serious breach of the criminal law of Louisiana by illegally obtaining a confidential report from Louisiana police;

` b . that the plaintiff behaved in so dishonest a manner as to warrant the Casino Control Authority to refuse his Company’s acquisition of an interest in the Sydney Harbour Casino;


c. that the plaintiff had behaved in such a manner as to warrant an investigation by the Casino Control Authority to determine whether his dishonest conduct warranted refusing him permission to acquire an interest in the Sydney Harbour Casino;

d. that the plaintiff defrauded ANI by getting it to purchase a European environmental engineering firm from Consolidated Press Holdings when that firm was in such a desperate financial position that its acquisition would cripple ANI;

e. that the plaintiff agreed to pay $2 million to each of the directors of ANI so that those directors dishonestly and in breach of their duty to that company caused it to make a disastrously bad decision to buy a European Environmental Engineer Firm.

9 In January 2001, a jury, in a 7A trial, returned a verdict and found that imputations (a), (d) and (e) were conveyed by the matter complained of and were defamatory of the plaintiff.

10 In May 2000, a further amended defence was filed which included a defence of contextual truth within the meaning of s16 of the Defamation Act 1974 (the Act).

11 It identified six contextual imputations which, it alleged, were matters of substantial truth and each one separately or in combination with any of the others so operated that any one of the imputations found by the jury did not further injure the plaintiff.

12 On 22 May 2002, by Notice of Motion the plaintiff sought orders that a separate trial pursuant to part 31 rule 2 of SCR as to:

(a) whether contextual imputations pleaded in the Defendants Further Amended Defence in the proceedings herein are capable of arising from the matter complained of;
(b) whether the Defendants said contextual imputations are capable of overcoming the defamatory effect of the imputations found to be conveyed and defamatory of the Plaintiff by the jury in the proceedings herein; and
(c) whether the particulars of truth relied upon by the Defendant in support of its contextual imputations should be struck out.

13 Although not claimed in the Notice of Motion, at the hearing the plaintiff also sought an order that at what were described as the “Polly Peck” defences to publications in other states and Territories be struck out. The defendant no longer relies on these defences and, accordingly defences 9(a), 10(a), 11(a) and 12(a) are struck out.

14 Finally the plaintiff has submitted in argument that, at least two of the contextual imputations were bad as to form.

15 There is no plea of justification. The contextual imputations pleaded by the defendant are as follows:

(i) the Plaintiff through his company, Consolidated Press Holdings, exposed some of the directors of Australian National Industries to a conflict of interest by arranging substantial payments for them, although they were required to advise ANI on its purchase of the corporation and by the Plaintiff’s Company;
(ii) the Plaintiff, through his Company Consolidated Press Holdings, encouraged some of the directors of ANI industries to place the interests of Consolidated Press Holdings over those of ANI, in contravention of their duties as directors of ANI, by their approving of the purchase of a corporation which was owned by Consolidated Press Holdings and whose purchase carried serious financial risks for ANI.
(iii) the Plaintiff allowed his company, Consolidated Press Holdings to exert its influence on some of the directors of ANI to have them act in contravention of ANI by their approving the purchase of a Corporation which was owned by Consolidated Press Holdings and whose purchase carried serious financial risks for ANI.
(IV) the Plaintiff was prepared to publicly smear his rivals for the control of the Sydney casino;
(v) the Plaintiff was prepared to pay for damaging information on his rivals for control of the Sydney casino;
(vi) the Plaintiff ordered his son to threaten a Minister of the Crown in an effort to win control of the Sydney Casino.

16 Under the “Particulars of Contextual Truth” the defendant said it repeated the particulars provided in an answer to the plaintiff’s request for further and better particulars which were as follows:

(1) As to contextual imputation (i);
The directors to whom payments were made were Mr Paul Reading and Mr Evan Reece and that each was paid $1 million in or about July 1991 by ANI with the approval of the plaintiff.
(2) As to contextual imputation (ii),
In or about 1989 CPH acquired 47% of the shareholding in ANI. At that time CPH was the owner of ABT, a waste industry company doing business in Europe. In 1991, the accountants for CPH advised it to sell ABT.
In June 1991, ANI acquired 50% of the shares in HIB, a German company and at about the same time CPH reduced its shareholding in ANI to 30%. In July 1991, CPH offered to sell ATB to HIB at a time when CPH was aware that ATB was incurring substantial losses.
In September 1991, of the eight directors of ANI, four were appointees or associated with CPH and another two, Mr Reading and Mr Reece were directors being persons who were “the beneficiaries of the remuneration agreement with ANI” referred to above. The monies were paid to Mr Reading and Mr Reece by ANI and had the “the approval of Kerry Packer”.
In September 1991, the plaintiff told Mr Dunlop (a director of ANI and Managing director of CPH), that directors who refused to implement certain “policies” for ANI approved by him, would be removed from the board. On 19 September 1991, Mr Reading had said that ANI would not undertake liabilities of CPH arising out of the affairs of ABT.
On 4 October 1991, ANI was told by HIB that it would only agree to acquire ABT if ANI indemnified it in respect of risks and losses and that ATB (and associated companies) would need recapitalisation.
On 28 October 1991, HIB acquired the issued shares of ABT for $2 million. ANI did not seek shareholder approval for the acquisition pursuant to Rule (3)(J) and (3)(A)(1) of the Listing Rules of the Australian Stock Exchange.
In October 1991, ANI agreed to indemnify HIB for risk, loss or liability that HIB might incur in connection with the acquisition of ABT. The indemnity agreement was not disclosed in ANI’s financial statement for the years ending 30 June 1992, 1993, 1994 and 1995.
On or about 13 November 1991, CPH sold its remaining shares in ANI. In a financial statement issued by ANI for 1995/6 year there was recorded losses of approximately $40 million attributed to ANI’s acquisition of ABT.
(3) As to imputation (iii).
The defendant relied the facts, matters and circumstances set out in the preceding paragraph.
(4) As to imputation (iv)
It was alleged that the plaintiff instructed his legal team to make a series of allegations to the Casino Control Authority about Leighton-Showboat’s application. These included matters relating to Showboat’s gambling licence in Louisiana and Chicago and referred to fines imposed on Showboat by the Nevada Gaming Commission and the links between Showboat and allegedly corrupt individuals.
It was said that in September 1994, the plaintiff instructed counsel for Darling Casino Limited to make allegations of dishonest conduct and commercial immorality against Leighton.
In September 1994, it was said that Mr Powers and Mr James Packer of Consolidated Press stated that Leighton was not a suitable applicant for the Sydney Casino licence and there was a significant doubt about its honesty and its integrity. Mr James Packer referred to Showboat’s organised crime links.
In a submission to the Casino Control Authority on 24 November 1994, it was contended that Leighton was not of good repute because of evidence concerning false invoices and unsuccessful tender fee arrangements and that a number of its executive directors had been dishonest. The submission also claimed that Showboat was not of good repute because of questionable business associations and practices of one of its directors, its long term relationship with a company found by the New South Wales Police to be of bad repute and its association in Louisiana and its partnership with the Leighton Group.
(5) Contextual Imputation (v);
It was said that the plaintiff and/or CPH engaged Mr Charles Shields and authorised him to travel to the United States, to obtain and assemble material that could be used to injure the reputation of Showboat which, at the time, had been named by the Casino Control Authority as the preferred operator. Mr Shield was paid fifteen thousand dollars for the Report which he provided to the plaintiff and/or CHP.
(6) Imputation (vi):
In an interview Mr James Packer was reported as saying that he had spoken to a Minister of the Crown and used words to the effect:
“If we don’t win the Casino you guys are fucked”.

17 The case for the plaintiff is not that the defendant has engaged in what in this area of the law appears to be called “backtracking” – that is raising as a contextual imputation the same as that found by the jury (unless some extended meaning is to be suggested by the word “encouraged” in contextual imputation (ii)). It is the plaintiff’s contention that even if the contextual imputations were capable of arising (which it disputes) and did arise and were found to be substantially true they (being anyone or any combination of them) were incapable of being rationally considered by a judge as so effecting the plaintiff’s reputation that the plaintiff’s imputation to which they are pleaded did not further injure him.

18 I have not been asked (and would not if asked) determine in interlocutory proceedings whether the contextual imputations, if capable of arising, in fact rose out of the published matter. Nor am I asked to determine if they did and if they were substantially true, whether they had the effect of overwhelming the imputations found by the jury. It is essentially a capacity argument and the practice would appear to derive from a time when juries were required to determine these issues.

19 It would seem to me, with respect to those who may have different views that ordinarily these matters should be left to the trial judge. After all a trial judge does not determine first whether the defamatory meanings are open and then determine that meanings that were open were in fact conveyed. The judge would simply determine whether the defamatory meaning was conveyed. For self-evident reasons if it wasn’t capable of being conveyed, it would not be found to have been conveyed. Similarly, a judge would not determine whether a contextual imputation, which is substantially true was capable of overcoming the defamatory imputation found by the jury and then determine whether, in fact, it had that effect. That being so, one might ask the question rhetorically why are not these questions left for the trial judge. Ordinarily it might be thought that a defendant would be inhibited in raising baseless contextual imputations by the prospect of the possibility of aggravated damages and/or adverse cost orders. In the present case, however, it has not been submitted that the capacity argument should not be dealt with although it has been submitted by Mr Tobin QC that the contextual imputations should not be struck out.

20 In David Syme & Co Limited v Blake (2001) 53 NSWLR 541, there was a difference of opinion concerning the test to be applied for the purpose of determining whether a contextual imputation operates to obliterate the damage done by the imputation established by the plaintiff. Spigelman CJ took the view that the matter was not determined by “weighing one imputation against another imputation”. The Chief Justice was of the view that the court must focus on the “facts, matters and circumstances” said to establish the truth of the contextual imputation rather than the terms of the contextual imputation itself. That view was shared by Rolfe AJA. Hodgson JA took the view that the reputation of the plaintiff was damaged by the publication of the imputation itself and that although facts, matters and circumstances were relevant to the question of substantial truth the task of the Court was to weigh one imputation against another.

21 In my opinion, the particulars of contextual truth should be struck out as incapable of supporting the contextual imputations. It was said, for example, that in imputation (i) reference is made to the plaintiff “arranging” substantial payments to directors of ANI when, in fact, the material refers to the fact that the plaintiff “approved” the payments. It would seem to me, with respect to Mr McClintock SC, that this is really a matter for the trial judge. Mr McClintock SC also submits that similarly there are no particulars of any “encouragement”. As I have said there is reference to the payment of money to the directors and the threat of removal if the directors of ANI did not implement policies approved by the plaintiff. Moreover I reject the submission that it would not be open to a judge to conclude, as matters now stand, that the activities to which contextual imputation (iv) were directed were not capable of being described as “public smear”.

22 It is accepted by both parties that the principles, which apply to imputations, pleaded by the plaintiff, apply equally to contextual imputations pleaded by the defendant. That is to say when considering matters relating to form and capacity regard must be had to the context in which words and pictures are published as well as, of course, the actual words themselves.

23 In the present case the plaintiff has objected to the form of the contextual imputations (ii) and (iii). In (ii) because of the ambiguity resulting from the use of the word “encouraged” and in (iii) because of the use of the word “allowed”. To my way of thinking there is some substance in the plaintiff’s objection as to form and I would have thought that at some time and before a judge decides this matter he or she would wish to understand with greater precision what it is the defendant alleges the words mean. However I do not propose to strike these imputations out on that account because I have come to the conclusion that the particulars of matters alleged as truth leave it open to a judge to conclude that there was “encouragement” or that things were “allowed”. Whether that “encouragement”, for example, was benign or malignant may depend upon the facts as found. This, I think, conforms with the view of the Chief Justice in Blake.

24 In my opinion, all of the contextual imputations are capable of being found to arise out the defamatory matter. Some, of course, are plainer than others as for example contextual imputation (vi) being the most obvious. It has been submitted that contextual imputation (v) is not capable of being inflammatory because it is not defamatory to say of a person that he is paying money for damaging information on a rival unless it is associated with stated impropriety. There is some force in this submission but I think that it is essentially what years ago would have been called a “jury question” in the context of the published matter. Moreover, once I have concluded that these meanings are capable of arising I do not intend to express any view as to what I would decide if I were the trial judge other than to record a concession by the plaintiff that the sixth contextual imputations is clearly capable of a defamatory meaning.

25 But are these contextual imputations either separately or each one in combination with any of the others capable of leading a judge to the view that they so effect a plaintiff’s reputation that each one of the imputations found by the jury and to which they are pleaded does not further injure the plaintiff?

26 The plaintiff is, in effect, asking the court to strike out a defence. The Court would not do that unless, conformably with General Steel Industry Inc v Commissioner for Railways 112 CLR 125, it was of the opinion that the argument sought to be advanced by the defendant is so manifestly untenable that it cannot succeed or it is so manifestly faulty that it does not even admit an argument. Without in any way intending to trespass upon the functions of the trial judge I will confine myself to the question of whether the contextual imputations, or any combination of them, are capable of overwhelming any one of the imputations found by the jury because, as it would seem to me, that unless the arguments in support of the proposition are untenable, it would be inappropriate for me to determine in interlocutory proceedings that the contextual imputations could be a defence to one imputation but not the others.

27 Imputation (ii) is that the plaintiff defrauded ANI by organising for ANI to acquire from CPH a company that was in such desperate financial position that its acquisition would cripple ANI. Imputation (III) is that the plaintiff in effect bribed two directors of ANI so that they would dishonestly and in breach of their duties to that company cause it to make a disastrously bad decision to buy a European environmental engineering firm. If these were the only two imputations relied on by the plaintiff there would be strong grounds for contending that the contextual imputations or any combination of them would not be capable of overcoming the defamatory effect of either one of them. I have not overlooked the circumstance that the word “encouraged” in imputation (ii) could, on one view of the matter, be elevated to a meaning akin to bribery but if that were so it would seem, on the authorities, the trial judge would not have regard to it because it would be, in effect, simply a rehash of the imputation found by the jury.

28 However, in my opinion, a more forceful argument could be advanced to the effect that the contextual imputations (or any one or any one in combination with others) are capable of operating on the effect of the first imputation found by the jury so as not to damage the plaintiff’s reputation further. Accordingly I decline to strike the contextual imputations out.

29 Formal order of the Court is that defences 9(a), 10(a), 11(a) and 12(a) are struck out. The application is otherwise dismissed.

30 No attempt was made by the defendant to defend the defences set out in 9(a), 10(a), 11(a) and 12(a) and they were struck out, it being acknowledged that by reason of the decision of the Queensland Court of Appeal in Robinson v Laws (Unreported, QLDCA, 6 April 2001) and the subsequent refusal of the High Court to grant special leave to appeal, they are no longer arguable. The defendant has been successful on the matters, which were in dispute before me and accordingly the appropriate order is for the plaintiff to pay the defendant’s costs of the Motion.

oOo

Last Modified: 11/07/2002