Peek v Channel Seven Adelaide Pty Ltd

[2006] SASC 301

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

PEEK v CHANNEL SEVEN ADELAIDE PTY LTD

[2006] SASC 301

Reasons of Judge Burley a Master of the Supreme Court

11 October 2006

PROCEDURE

Application for further and better discovery - in the alternative for discovery of indirectly relevant documentation - whether issues defined by the pleadings required discovery sought.

SCR 58.04(e), 58A.04, referred to.
Mulley v Manifold (1959) 103 CLR 341; Andrews v John Fairfax & Song (1980) 2 NSWLR 225; Scott v Fourth Estate Newspapers [1096] 1 NZLR 336, considered.

PEEK v CHANNEL SEVEN ADELAIDE PTY LTD
[2006] SASC 301

1. JUDGE BURLEY:            By application dated 4 August 2006 for further and better discovery (FDN 30), the plaintiff seeks further and better discovery of documents which it says are directly relevant to the issues in the proceedings.  The plaintiff also contends that if the documents or any of them are held to be only indirectly relevant, they should nevertheless be discovered pursuant to Rule 58A.04(1) because, it was argued, it is in the interests of justice to do so.

2. At the hearing on 14 August 2006 Mr Whitington QC appeared with Mr M Sykes for the plaintiff and Mr Blackburn SC with Mr S Doyle for the defendant.  The plaintiff relied upon the affidavit of Mr Sykes sworn on 4 August 2006 (FDN 31).

3. This matter has already been before the Full Court on a pleading point relating to the extended defence of qualified privilege. It is convenient to borrow from the judgment of Besanko J to describe the background to the action. At paragraph 28 of judgment No [2006] SASC 63, his Honour said:

   The plaintiff is as legal practitioner and one of Her Majesty’s counsel.  The defendant is the proprietor of a commercial television station which broadcasts a program called “Today Tonight”.  On 10 June 2002 the defendant broadcast a story in the course of the Today Tonight program.  The plaintiff claims that he was defamed in the course of the story.

4. Having referred to the transcript of the television program, a copy of which is annexed to the Statement of Claim, Besanko J said at paragraphs [32] and [33]:

   The plaintiff alleges that the publication and the words and pictures in the publication referred to, and were understood to refer to, him.  He alleges that he appeared as senior counsel representing Mr Liddy in proceedings in the Supreme Court, including the Court of Criminal Appeal, on 18 occasions between 21 August 2001 and 4 June 2002.  Mr Liddy was charged on 13 July 1999 with serious sexual offences and the plaintiff alleges that, as at 12 August 2002, the proceedings against Mr Liddy had received, and would continue to receive, extensive publicity, including on many occasions the publication of newspaper articles and the broadcasting of radio and television programmes.  The plaintiff alleges that, by reason of other publicity, he has been identified and referred to as one of Mr Liddy’s lawyers … The plaintiff alleges that the words and pictures in the publication were defamatory  of him in that in their natural and ordinary meaning they meant, and were understood to mean, that Mr Liddy’s lawyers, including the plaintiff, and I quote from paragraph 6 of the plaintiff's statement of claim:

   6.1procured and presented to the District Court a valuation of Mr Liddy’s property that was false or misleading or manifestly inadequate;

   6.2in the alternative, negligently procured and presented to the District Court a valuation of Mr Liddy’s property that was false or misleading or manifestly inadequate;

   6.3conspired with lawyers acting for some of the victims of his offending to vary the injunction so that Mr Liddy’s property could be sold to pay his lawyer’s fees;

   6.4conspired with or knowingly assisted Mr Liddy to deprive the victims of his offending of their compensation by disposing of his assets at a gross undervalue for a sum sufficient to pay the lawyers’ fees but so as to leave nothing over for the victims;

   6.5conspired with or knowingly assisted Mr Liddy in a vindictive scheme to deny the victims of his offending their due compensation;

   6.6acted unscrupulously and unethically in their own interests and to the detriment of Mr Liddy’s victims to procure payment of their fees;

   6.7acted unscrupulously and unethically in their own interests to procure payment of fees that were exorbitant;

   6.8conspired with or knowingly assisted Mr Liddy to connive with a person of ill-repute, one Terry Stevens [sic], to put his assets beyond the reach of the victims of his offending.

   The plaintiff alleges that certain conduct by the defendant aggravated the damage he has suffered and he claims exemplary damages from the defendant.

5. The initial request for further and better discovery was by letter dated 15 October 2002 from the plaintiff’s solicitors to the defendant’s solicitors, a copy of which is Exhibit MJS1 to the affidavit of Mr Sykes.  In that letter he sought discovery of the following material:

   1.The entire footage of all film and the complete unedited and uncut originals of all recordings of images and sounds from whatever source that the defendant used or relied upon in anyway in the making of the items broadcast in its Today Tonight program concerning Mr Liddy and the disposition of his assets (the broadcasts) including but not limited to its programs on 10 June 2002, on 22 July 2002 and on 16 August 2002.

   2.All production and other notes memoranda and directions in respect of the production of the broadcasts including scripts chronologies and itineraries.

   3.All recordings transcripts and notes of interviews and conversations and correspondence with persons interviewed in connection with the broadcasts whether or not included depicted or referred to in the broadcasts.

   4.All raw footage created or gathered in respect of the production of the broadcasts.

   5.All schedules for production and shooting of the broadcasts.

   6.All material relating to the topics to be canvassed and questions to be asked of persons interviewed in connection with the broadcasts.

   7.Notes and memoranda of enquiries made of any source in obtaining or attempting to obtain information for the production of the broadcasts.

   8.Transcript of the broadcasts.

   9.Video “dub” of the broadcasts.

   10.All notes, memoranda, correspondence and other documents of the defendant supplied or made available to the Solicitor General in connection with his enquiry pertaining to Terry Stevens, the Honourable Peter Lewis, the sale of Mr Liddy’s assets, the lifting of the District Court injunction, the role of the Court and Mr Liddy’s lawyers.

6. Mr Sykes deposed, at para.4 of his affidavit, to additional broadcasts subsequent to 10 June 2002, namely broadcasts on 22 July 2002, 13 August 2002, 16 August 2002, 25 April 2005, 26 April 2005, 2 may 2005 and 14 November 2005.  At paragraph 6 of his affidavit he stated that the “defendant should have camera tapes of the broadcasts referred to in paragraph 4.  Camera tapes comprise the unedited film footage of the story before it is broadcast.”  At paragraph 7 he said that it was “reasonable to infer that in the preparation of the broadcasts there would have been notes and scripts for the story, notes and records of interviews and of conversations with persons contributing to the story, and records of interview held in connection with the broadcast.”

7. At paragraph 8 of the affidavit Mr Sykes referred to the broadcast on 10 June 2002 which included in “at least one instance, excerpts from file footage of an interview with Mr Terry Stephens”. He said that “the camera tape for that interview is sought to understand the context of his comments.”

8. Further, at paragraph 9 of his affidavit, Mr Sykes refers to an investigation carried out by the Solicitor-General.  At paragraph 10 of his affidavit he stated that the plaintiff sought “discovery of the material referred to in paragraphs 6, 7 and 8 and the material provided by the defendant to the Solicitor General referred to in paragraph 9”.  There is no evidence in Mr Sykes’ affidavit establishing that the defendant supplied material to the Solicitor-General.

9. The original application for further and better discovery was filed on  25 February 2003.  The application before me was filed on 4 August 2006. Mr Sykes has referred to another letter requesting discovery which was sent three years after the original application, namely on 16 May 2006.  A copy of the letter is Exhibit MJS2 to Mr Sykes’ affidavit.  The relevant parts of the letter of 16 May 2006 are as follows:

   Application for further and better discovery

   Our client will press his application for further and better discovery filed on 25 February 2003.

   Our client will amend that application and will also file a further affidavit in support of that Application to put beyond doubt that the documents sought are directly relevant to the issue of damages – particularly the exemplary damages referred to in paragraph 9 of the Statement of Claim.  Our client will vigorously pursue both his claim for exemplary damages and this application for further and better discovery.

   As to the availability of exemplary damages, there are obviously many decisions.  For the moment, I simply refer you to Whitfield v De Lauret 7 Co (1920) 29 CLR 71; Lamb v Cotogno (1987) 164 CLR 1 at 13; and Uren v John Fairfax (1966) 117 CLR 118. Conduct of the defendant that will give rise to exemplary damages is not confined to cases of the kind referred to.

   As to the relevance of the material sought on the application for further and better discovery to such damages, we will formulate our full argument in due course.  However, you are already well aware that it is our position that the defendant has consistently gone to great lengths to present the original and subsequent programs in a provocative and sensational manner for the commercial purpose of attracting ratings and with little regard for accurate or balanced reporting or the adverse effect on the reputations of persons such as our client who are identified by the public as being a subject of such reporting.

   As one example only, the “raw footage” and other material to be sought in the amended application will demonstrate that the defendant used small snippets of much longer conversations in order to present a different or stronger impression to the viewer than would be the case if a balanced and complete presentation had been made.  It will demonstrate that conscious decisions were made to omit other statements – either by the same or a different speaker – which:

   ·    were inconsistent or cut away from those snippets that were chosen to be included

   ·    were so unlikely, vague or significantly qualified such as to cast doubt on the reliability of that which was included

   ·    gave reasons which could  be seen to be flawed

   ·    generally demonstrated a lack of credibility or reliability

   ·    generally demonstrated a motive to fabricate or exaggerate

   The person Stephens is a good example (but not the only one) of the above process.  Thus, short definite statements by Stephens were culled from much longer statements and interviews so as to present in a definite and unqualified way the impression that they constituted reliable evidence in support of the allegations being made by the defendant.  Other material in the possession of the defendant, including contradictory statements by Stephens himself and other persons, and information as to his criminal history and lack of credibility or reliability, would, if presented to the defendant’s viewers, have presented a quite different picture.

   All of this is to be viewed against the background of a very deliberate decision by the defendant to proceed with showing the program without contacting any of Mr Liddy’s lawyers or affording any of them the opportunity to correct any of the patent errors in the program prior to its broadcast.  As you know, this is a very important aspect in relation to exemplary damages and we will be seeking all documentation in relation to what consideration was given to this issue and why the defendant decided to proceed in the manner it did.

10. Mr Whitington submitted that the application should be viewed against the imputations contended for in paragraph 6.1 to 6.8 referred to at para [4] above.

11. It is clear from Mr Whitington’s submissions and the correspondence, particularly the letter of 16 May 2006, that the plaintiff contends that the documentation sought is directly relevant to the issues raised in paragraphs 8 and 9 of the Statement of Claim where the plaintiff pleaded respectively circumstances of aggravation and an entitlement to exemplary damages.  Paragraph 8 is as follows:

    8.Further the damage suffered by the plaintiff has been aggravated by the conduct of the defendant.

    8.1     The defendant broadcast and published the broadcast and the said words and pictures in a malicious insulting and sensational manner.

    8.1.1The said words were insulting and sensational in the following cases:

    “But how can that be right when it was Liddy’s own lawyers who beat the injunction and worked hard to set up the deal?”

    “And as the victims feared, the lawyers pocketed almost all of it leaving them little to gain from court action”.

    “And for the victims there was even more bad news last week.  According to Liddy’s lawyers…his very generous superannuation pay-out has also disappeared on legal fees”.

    8.1.2The words in subsequent broadcasts were also insulting and sensational in the following cases:

    “If you’ve been shocked so far by the Liddy guns and money saga, stand by.  We’re about to lift the lid off the whole rotten mess”.

    “And when Liddy’s lawyers came looking for more case, the District Court lifted the injunction on the only remaining assets, the Kapunda mansion and contents, with little resistance from the victims’ own lawyers”.

    “I guess that’s what, maybe, the monster’s lawyers are banking on, is that we'll eventually just give  up because it’s just been an ongoing saga.  And you can understand why people just walk away from these Court cases, ‘cause they just take too long”.

    8.1.3The fact that the defendant was malicious may be inferred from:

    (a)the tone of the defendant’s words as particularised in sub-paragraphs 8.1.1 and 8.1.2 hereof; and

    (b)the failure to make any enquiry of the plaintiff or of the other lawyers involved; and

    (c)the reliance on the claims of Terry Stephens a notorious fraudster.

    8.2The said words and pictures bearing the imputations referred to in paragraph 6 of and concerning the plaintiff were false.

    8.3The defendant was activated by spite or ill will and malice towards Liddy’s lawyers.

    8.3.1The plaintiff repeats the particulars in 8.1 above.

    8.3.2The failure of the defendant to justify or retract the said words, or words uttered in the broadcasts following, after the defendant became aware of the contents of the report of the Solicitor-General referred to in paragraph 8.10.

    8.4The defendant was grossly negligent in publishing the broadcast in terms defamatory of the plaintiff in circumstances where appropriate inquiry would have quickly shown that the plaintiff had no connection with the events referred to in the broadcast.

    8.5The defendant failed to make appropriate inquiries that would have clearly demonstrated the utter falsity of the broadcast insofar as it referred to the conduct or any conduct on the part of the plaintiff.

    8.6Prior to the broadcast the plaintiff enjoyed the reputation and standing for independence, integrity and ability commensurate with the office of Queen’s Counsel.

    8.7By letter from the plaintiff’s solicitor dated 17 June 2002 the plaintiff apprised the defendant of the defamatory nature of and serious inaccuracies in the broadcast insofar as it bore on his conduct and the conduct of Mr Liddy’s lawyers generally.  The plaintiff by that letter sought a retraction and apology.  By letter dated 19 June 2002 from the defendant’s solicitors the defendant denied any defamation or inaccuracies in the broadcast and failed to offer any retraction or apology.

    8.8In a subsequent broadcast at about 6.30pm on 22 July 2002 in its Today Tonight program the defendant broadcast and published, or caused to be broadcast and published, a further segment concerning the sale of Mr Liddy’s property at a gross undervalue thereby reinforcing in the minds of viewers the original broadcast referred to in paragraph 5 hereof and exciting further comment in television and radio broadcasts and in newspaper articles published in this State on the day following and subsequently.

    8.9On the dates following the defendant broadcast and published, or caused to be broadcast and published, further segments concerning issues raised in the broadcast thereby reinforcing in the minds of viewers the broadcast and exciting further comment:

    13 August 2002, 16 August 2002, 25 April 2005, 26 April 2005, 2 may 2005, 14 November 2005.

    8.10Further, following the broadcast, the Solicitor-General investigated the defendant’s allegations regarding the sale of Liddy’s assets at the instigation of the Attorney-General and reported on 12 August 2002 in writing concluding that the defendant’s allegations against Liddy’s lawyers were false and were not substantiated by material provided by the defendant which report the defendant inspected on or about 11 march 2004 but the defendant has persisted with its defence in this action and has made the further publications referred to in subparagraph 8.9.

    The law relating to applications for further and better discovery

12. The application is made pursuant to Rule 58.04(e) which applies by virtue of Rule 58A.10.  Consequently, such authorities as Mulley v Manifold (1959) 103 CLR 341 apply, except that the test of discoverability is the “directly relevant” test provided for in rule 58A.03. To the extent that the plaintiff claims, in the alternative, discovery of indirectly relevant documents pursuant to Rule 58A.04(1), that is a discrete application not dependent upon the provisions of Rule 58.04(e), although some of the requirements of such application may also properly be requirements in respect of an application pursuant to Rule 58A.04. For example, there must be some evidence before the court which either directly proves the existence of the required documentation or which gives rise to the inference that such documentation exists. The evidence also needs to deal with the question of whether or not such documentation is or has been in the custody, possession or power of the respondent to the application.

13. I am satisfied that it is proper to infer that documentation of the type sought exists and either was or remains in the custody, possession or power of the defendant. Mr Blackburn did not suggest to the contrary.

14. The directly relevant test was discussed by Bleby J in Harris Scarfe Ltd v Ernst & Young & Ors (No 4) (2005) 93 SASR 300. In that case the point at issue was whether all of a receiver’s file should be discovered in respect of a disputed claim for damages including the costs of the receiver. At [22] et seq Bleby J reviewed the cases including the decisions of the Chief Justice in Quency Crusta Sales Pty Ltd v Logi-Tech Pty Ltd (2002) 223 LSJS 266 and Rehn v Australian Football League & Ors (2003) 225 LSJ 378.  Bleby J said (at page 4 of his reasons):

    It can be seen that the phrase “directly relevant” is to be given a relatively narrow meanings.  Its application to particular classes of documents will be governed by the pleadings.  A document will be directly relevant if it tends to prove or disprove a matter which is in issue.  It is not directly relevant if it merely tends to prove or disprove something that may be relevant to a matter in issue, or there is merely a chance that the document will prove or disprove a matter in issue.

    His Honour then went on to discuss Rule 58.04(e).  Having referred to the “uncompromising ethical obligation” that a legal practitioner has in relation to discovery, he said (at 5):

    What acceptance of the assertion of the plaintiff’s solicitor does mean, however, is that if the defendant is to succeed in its application, it must point to some evidence to raise the necessary belief required by Rule 58.04(e).  It requires more than merely an assumption or speculation that such documents may exist.  The necessary belief may be formed from the examination of the pleadings.  Common experience may dictate that there must have been a particular relevant document in the custody, possession or power of a party concerning a particular transaction.  The existence of a relevant document may be properly inferred from the contents of another document.  Alternatively, the description of a document or class of documents by the respondent party may be so vague and uncertain as to require more particularity.  There may be other circumstances which induce the necessary belief.  However, the Court will not act on speculation.

    His Honour came to the view that further and better discovery of documentation relating to the calculation of the receiver’s costs should be provided because it was directly relevant to the issues in the action even though the evidence thereby obtained might only be circumstantial.

    The claim for aggravated damages

1. Mr Whitington referred me to The Law of Defamation in Australia and New Zealand, M. Gillooly, the Federal Press 1998 where, at page 281 et seq the learned author dealt with the question of aggravated damages.  In particular, my attention was drawn to the requirement that “the aggravating conduct of the defendant must be improper, unjustifiable or lacking in bona fides”. At footnote 102 the learned author cites Triggell v Phenney (1951) 82 CLR 497 at 514”. Reference is also made in the footnote to malice. It is not necessary that malice on the part of the defendant be established: Andrews v John Fairfax & Sons [1980] 2 NSW LR 225 at 250, 265 and the other cases cited at footnote 102.

2. This principle ties in with the examples of alleged misconduct on the part of the defendant referred to in the letter from the plaintiff’s solicitors of 16 May 2006.

3. To the extent that the plaintiff relies on subsequent publications in support of his claim for aggravated damages, this is a permissible course: Scott v Fourth Estate Newspapers [1986] 1 NZLR 336 at 340. As I understand the plaintiff’s case, subsequent publication is relied upon not only by reference to the fact of subsequent publication but also as to the manner of that subsequent publication.

4. I turn now to paragraph 8 of the Statement of Claim which is set out at para [11] above.  This is the paragraph which sets out the aggravating conduct alleged against the defendant.  The plaintiff relies upon this paragraph to justify the further and better discovery sought. 

5. Mr Blackburn submitted that in relation to aggravated damages, the aggravating conduct must add to the plaintiff’s damages in the sense that it must give rise to additional injury to the plaintiff.  If the plaintiff was unaware of the conduct, it does not give rise to additional injury and therefore to aggravated damages.  From this he argued that the suggestions as to the plaintiff’s conduct, particularly that which was set out in paragraph 8, could not have been known by the plaintiff, in which event they could not be particulars which support a claim for aggravated damages.  The answer to this submission is that that is a matter for the trial Judge.  Those matters relied upon by the plaintiff in the pleading will be found by the trial Judge either to support or not to support the claim for aggravated damages.  It is not for the court at this stage to second guess what the trial Judge’s opinion may be.  Whilst paragraphs 8 and 9 remain part of the pleading, they specify issues which have to be taken into account on an application such as this.

6. Having carefully perused paragraph 8, I can see nothing in the allegations that are made therein which support the plaintiff’s application. Each of the sub-paragraphs of paragraph 8 are self-contained and do not give rise to assertions of the type made in the correspondence, particularly in the letter of 16 May 2006.    I have formed this view, both in relation to the contention that the documentation is directly relevant and to the contention that the documentation is, in the alternative, indirectly relevant.

   The claim for exemplary damages

7. I turn now to the question of exemplary damages and whether what has been pleaded in relation thereto supports the application for discovery.  Paragraph 9 is as follows:

   Further the plaintiff is entitled to exemplary damages on the following grounds.

   9.1The defendant was reckless as to the truth of the allegations involving Mr Liddy’s lawyers published in the broadcast and so published or caused to be published the allegations in wilful disregard of the plaintiff’s standing, reputation and professional duty.

   9.2The defendant published or caused to be published the broadcast without first contacting the plaintiff (or any other of Mr Liddy’s lawyers) to check the accuracy thereof.

   9.3The defendant published or caused to be published the broadcast with a view to exciting prejudice against Mr Liddy and his lawyers and to increase its ratings and thereby its profits.

8. Paragraph 9.2 clearly does not give rise to the requirement to give discovery of all of the documentation sought. Some of the documentation sought may be discoverable by reference to paragraph 9.2, but the plaintiff’s argument does not enable me to isolate any particular documentation.

9. As to paragraphs 9.1 and 9.3, in general terms, an argument might be mounted that some of the discovery sought may be directly relevant to some of the issues that may come within the umbrella of 9.1 and 9.3, but this is all too speculative.  Paragraphs 9.1 and 9.3, by their very generality raise the concept of what was referred to by the Chief Justice in both the Quenchy Crusta Sales case and Rehn v Australian Football League & Ors  and by Bleby J in Harris Scarfe v Ernst & Youn,g as a mere chance that the document will prove or disprove a matter in issue.  Consequently, I do not think that the plaintiff has established to the required degree that the documentation is directly relevant to matters in issue. Nor do I consider that it is in the interests of justice that such documentation, if it is indirectly relevant, be discovered. The generality of paragraph 9 renders the request for discovery a fishing expedition as contended by Mr Blackburn.

10. For the above reasons, the plaintiff’s application is refused. I will hear the parties as to costs.