Reading v Australian Broadcasting Corporation

[2003] NSWSC 716

CITATION:	Paul George Reading v ABC [2003] NSWSC 716
HEARING DATE(S):	23/07/03; 24/07/03; 25/07/03
JUDGMENT DATE:	7 August 2003
JUDGMENT OF:	Shaw J
DECISION:	Interlocutory orders made during the trial are confirmed.
CATCHWORDS:	Practice and procedure - Interlocutory issues in trial - whether plaintiff can amend statement of claim - whether plaintiff can tender transcript of broadcast - whether jury should be discharged
LEGISLATION CITED:	Defamation Act 1974 s 7A; Evidence Act 1995 ss 55, 56, 135; Jury Act 1977 s 55E; Supreme Court Rules 1970 Pt 34, 67
CASES CITED:	Australian Iron and Steel Ltd v Greenwood (1961) 107 CLR 308; Butera v DPP (Vic) (1987) 164 CLR 180; Doe d' Lewis v Baster (1836) 5 Ad & El 129; 111 ER 1115; Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135; Eve v Wright (1627) Cro Car 75; 79 ER 667; Griffith & Ors v ABC [2003] NSWSC 486; Hepburn v TCN Channel 9 Pty Limited [1984] 1 NSWLR 386; Loveday's Case (1608) 8 Co Rep 65b; 77 ER 573; Papakosmas v The Queen (1999) 196 CLR 297 at 322; Parker v Laws [2002] NSWSC 311; Purcell v Cruising Yacht Club of Australia [2001] NSWSC 926; R v Russell (Unreported, Court of Appeal (Criminal Division), Dunn LJ, Michael Davies and Popplewell JJ, 20 March 1984; [1984] Crim LR 425); Weber v Birkett [1925] 2 KB 152; Whelan v John Fairfax and Sons Limited (1988) 12 NSWLR 148;
PARTIES :	Paul George Reading - Plaintiff Australian Broadcasting Corporation - Defendant
FILE NUMBER(S):	SC 20206/02
COUNSEL:	B McClintock, SC with M Richardson - Plaintiff B Walker, SC with R Francois - Defendant
SOLICITORS:	Corrs Chambers Westgarth Lawyers - Plaintiff ABC Legal - Defendant

- 15 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Shaw J

7 August 2003

20206 of 2002


Paul George Reading (Plaintiff)

v

Australian Broadcasting Corporation (Defendant)
JUDGMENT

1 Shaw J: This is a matter pursuant to s 7A of the Defamation Act 1974 (NSW) which is concerned with whether imputations (or meanings) arise from a publication. It arises from a broadcast of the Four Corners program by the Australian Broadcasting Corporation (“the ABC”) in April 1997 which named and referred to the plaintiff, Mr Reading, though in the context of a piece of investigatory journalism into the business dealings of Mr Kerry Packer, a significant figure in Australian business and publishing, and particularly, in relation to Mr Packer’s dealing or involvement with one of Australia’s oldest engineering companies, Australian National Industries (ANI).

Background

2 The Four Corners program reported that, in 1989, Mr Packer’s family company, Consolidated Press Holdings (CPH), bought a controlling stake in ANI which was then apparently sold two years later at a profit of $180 million.

3 It was suggested that there were subsequent losses for ANI since Mr Packer had ‘off loaded’ onto ANI an environmental engineering firm based in Europe, called, ABT.

4 The plaintiff was a financial director of ANI and was reportedly paid $1 million, in an agreement subject to the approval of Mr Packer, before and after ANI agreed to take control over ABT and the liabilities owed in relation to ABT by CPH.

5 The plaintiff sues in defamation alleging that the broadcast carried imputations that he was corruptly bribed by Mr Packer and dishonest in his role as a director of ANI.

6 Some issues arose in the course of the trial that required determination. The parties were content for reasons to be delivered at a later date.

Three interlocutory issues

7 The issues include:

(a) whether the plaintiff should be allowed to amend the statement of claim;
(b) whether the plaintiff may tender a transcript of the broadcast; and
(c) whether the jury should be discharged.

8 On the first day of the trial I allowed the plaintiff to amend his statement of claim, over objection by the defendant. On the second day of the trial I rejected the tender of the transcript by the plaintiff. On the third day of the trial I acceded to an application by the plaintiff to discharge the jury and stand the matter over for a new trial. I now give reasons for those decisions.

Plaintiff’s application to amend

9 The matter has been the subject of interlocutory proceedings before Cripps AJ who decided on 5 November 2002 that the statement of claim could then be amended and also that the whole of the Four Corners program should be pleaded rather than just those portions of the broadcast relating specifically to the plaintiff.

10 Accordingly, on 18 February 2003 the plaintiff filed an amended statement of claim without amending any of the imputations that were pleaded.

11 However, on the first day of the trial, on 23 July 2003, the plaintiff sought to further amend the statement of claim. It should be recorded that the defendant was put on notice on 17 June 2003 by facsimile that there would be an application to amend the imputations pleaded. One imputation is proposed to be deleted and obviously there is no objection to that on the part of the defendant, but five new imputations are sought to be added.

12 Given that degree of notice it is not suggested by the defendant that they are surprised about the amendments or that they seek an adjournment to deal with them. Hence, it seems to me that there is no procedural unfairness involved if the amendments are granted, and prima facie, it is desirable that the whole of the issues that the plaintiff desires to agitate should be put to the jury rather than circumscribing the case on the basis of pleading points.

13 In my opinion, it would have been desirable for these substantial procedural issues to be dealt with prior to the trial date. However, the plaintiff resisted that suggestion by explanation that by the time the matter came before this Court in its listing procedures, the application for preliminary determination was seen as too close to the assigned trial date.

14 Initially, Mr Walker, SC for the defendant, resisted an application contained in [4] of the amended statement of claim which urges as relevant to the determination of this dispute that the Four Corners program was re-broadcast, in addition to the ordinary Monday programming, on 8 April 1997. As I understand the concessions made by Mr Walker, SC, there was such a re-broadcast on the next day and the defendant is not prejudiced by that proposition being put to the jury as a matter of formal pleading. The defendant does object to other additional pleadings on two bases.

15 First, it is said that, contrary to Part 67 r 11(3) of the Supreme Court Rules 1970 the pleadings allege two or more imputations by means of the same publication and that there is a prohibition against such reliance unless the imputations ‘differ in substance’;

16 In my opinion the amended imputations do amount to a qualitative and substantive difference in the matters that are pleaded. The primary allegation is that it is said there was an imputation that Mr Reading corruptly accepted a bribe of $2 million.

17 There was always an allegation of dishonesty contained in the amended proceedings. However, the plaintiff desires to rely upon broader grounds. In particular, the imputation which arises from the publication that the plaintiff breached duties as a director of ANI in entering the transaction with Mr Packer, that he ‘dishonestly’ cast a vote to buy ABT because Mr Packer had agreed to pay him $2 million. It is further said that the plaintiff committed a serious breach of his duties as a director of ANI by agreeing that ANI take over the substantial liabilities owed by CPH even though he knew that taking on such a burden was ‘clearly incorrect’.

18 In my view, the allegation of dishonesty is clearly distinguishable from the allegation of breach of duty as a company director. A company director may fail to comply with his or her fiduciary duty by negligence, inadvertence, inattention or other actuating factors that may not constitute dishonesty. It is my view that there are differences in substance between the imputations pleaded.

19 As Kirby J said in Parker v Laws [2002] NSWSC 311 at [12]:

…it will often be appropriate for the plaintiff to plead different gradations of seriousness in separate imputations, so that the jury may select the way in which the matters would have been understood by the ordinary reasonable reader…the same evidence may prove the truth of each imputation and yet they will differ in substance. That simply is a reminder that one must attend to the wording of the imputation, as well as the issues raised by it.

20 His Honour continued at [13]:

A further illustration may assist. People can and do draw more than one conclusion from the one statement of fact. Assume that it was reported that a barrister had deliberately insulted a judge. That report may carry a number of imputations. It may suggest that the barrister was guilty of boorish behaviour. It may also suggest incompetence, it being the barrister’s function to persuade the judge to his or her point of view. The same facts could prove each imputation, even though each differs in substance.

21 So, as Kirby J has said, the test formulated by Hunt J (see Hepburn v TCN Channel 9 Pty Limited [1984] 1 NSWLR 386 at 398) is useful but not always determinative.

22 The second point taken by Mr Walker, SC, for the ABC is that the imputations pleaded in the amendment are imprecise and offend the test formulated by Hunt J in Whelan v John Fairfax and Sons Limited (1988) 12 NSWLR 148 at 155 where his Honour said:

…the issue which has to be decided in a particular case is whether there is likely to be confusion either at the pleading stage or at the trial in relation to the meaning for which the plaintiff contends.

23 This passage was cited with approval by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 138.

24 It seems to me that the proposed amendments are sufficiently clear and specific to meet the tests articulated by the authorities. In relation to any English word, such as ‘incorrect’ or ‘corrupt’ there can be arguable ambiguities. As counsel for the defendant has indicated the ‘correctness’ of a decision can be a matter of objective truth or a matter of propriety. The word be can used in either context. Nonetheless, in the circumstances of this case, the use of the terminology employed by the broadcaster is reasonable and does not deny justice to the defendant in terms of having an opportunity to support what has been published as non defamatory, and, if the matter gets that far, true.

25 In all of these circumstances the amendment is procedurally appropriate in terms of putting all relevant questions to the jury and involving no tangible or real prejudice to the defendant.

Transcript

26 The plaintiff sought to tender the transcript of the broadcast in the proceedings. I rejected that tender and will now give my reasons for doing so.

27 Pursuant to s 56 of the Evidence Act 1995 (NSW) only relevant evidence is admissible. Pursuant to s 55 of the Act evidence is relevant if it can ‘rationally affect’ the ‘assessment of the probability’ of a ‘fact in issue in the proceeding’. The test of relevance is therefore a compound phrase taking up many conceptual references. The test is an assessment of logical relevance unconcerned with issues of reliability. As was noted by McHugh J in Papakosmas v The Queen (1999) 196 CLR 297 at 322:

The [NSW Law Reform] Commission thought that, as a threshold test, relevance should require only a logical connection between evidence and a fact in issue. To the extent that other policies of evidence law, such as procedural fairness and reliability, required the strict logic of the relevance rule to be modified, that could best be done by the exclusionary rules — such as the hearsay rule and the credibility rule — and by conferring discretions on the court as in ss 135-137 [Australian Law Reform Commission, Evidence, Report No 26 (Interim) (1985), vol 1, pars 638-644]. The terms of s 55 indicate that it was intended to give effect to the Commission's view as to the proper approach for determining the relevance of evidence.

28 A transcription of the words said in a broadcast may go to an assessment of whether something was, or was not, said in the broadcast – if that was an issue of contention between the parties – though the trier of fact would need to be reminded that the best evidence of what was said is the broadcast itself. For this reason, a transcription may also be relevant to assist a trier of fact understand the evidence of an unclear or inaudible recording, or where a translation between languages was needed: Butera v DPP(Vic) (1987) 164 CLR 180.

29 However, the issue between the parties in this matter was whether the broadcast conveyed the imputations asserted by the plaintiff and whether, if conveyed, those imputations were defamatory of him. These were issues to be resolved by a civil jury by assessing the response of the ordinary reasonable viewer to the broadcast. I cannot see how the jury can perform this function by use of a written transcript. The jury saw the video in open court, more than once, and were told that they could view it in the jury room.

30 The assessment of the probability of whether the imputations were conveyed or defamatory requires that the jury assess the broadcast – that is, the tone of voice; the visible actions of the actors; and the captions and images displayed. These elements may be lost or detracted from in a transcript which merely presents the words spoken.

31 For these reasons I am satisfied that the written transcript does not meet the statutory test prescribed by s 55 of the Evidence Act and is therefore inadmissible pursuant to s 56 of the Act: see also Griffith & Ors v ABC [2003] NSWSC 486 per Levine J.

32 If I am wrong in this assessment, I am satisfied that there is a danger of unfair prejudice to the defendant and this outweighs the probative value of the jury having the transcript. I would exclude the evidence pursuant to s 135 of the Act.

33 As has been noted by Levine J in Purcell v Cruising Yacht Club of Australia [2001] NSWSC 926 at [11]:

There is a real risk in this case, which is one step removed from the normal kind of case involving video evidence, that the jury will be distracted, to the prejudice of both parties, and thus the administration of justice by the temptation unduly to concentrate on a written record when there happens to be video evidence of the spoken words, which founds the essence of the plaintiff's claim.

Discharge of jury

34 At the close of my summing up to the jury the jury there was no request by counsel for any further directions and the jury then retired to consider their answers to the questions given to them for consideration.

35 The imputations said to arise, and in relation to which the jury were required to reach answers, were:

(a) The plaintiff accepted a bribe of $2 million;
(b) The plaintiff, in breach of his duties as a director of ANI, voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT, agreed to pay him $2 million;
or
(c) The plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer;
(d) The plaintiff, as a director of ANI, dishonestly voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT, agreed to pay him $2 million;
(e) The Plaintiff committed a serious breach of his duties as a director of ANI by agreeing that ANI take over substantial liabilities owed by Consolidated Press even though he knew taking on such a burden was clearly incorrect;
(f) The plaintiff, as a director of ANI, dishonestly changed calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders;
(g) The plaintiff breached his duties as a director of ANI by changing calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders;
(h) The plaintiff, as a director of ANI, acted contrary to shareholders’ interests by deliberately concealing from shareholders key aspects of the deal for ANI to purchase ABT.

36 Imputations (b) and (c) were put in the alternative.

37 After some deliberation the jury indicated that they had answers to the questions asked of them and I reconvened the court to take those answers. The jury answered that imputations (a), (b), (e), (f), (g) and (h) were not conveyed.

38 The jury answered ‘yes’ to the question of whether imputation (c) was conveyed but ‘no’ to the question of whether it was defamatory.

39 The jury answered ‘not applicable because of the wording’ to imputation (d).

40 Such answer was clearly not an answer available to the jury. After seeking the assistance of counsel, I requested them to return to the jury room for further deliberation of whether they had a unanimous answer to the questions asked in relation to imputation (d).

41 The jury then notified me by note saying:

‘We have reached agreement in respect of matters 1(d) and 3(d). The jury’s apologies for mis-reading the instructions’.

42 The Court was reconvened and at that time the defendant made an application to discharge the jury. The application was on the bases that:

(a) the jury had demonstrated a lack of understanding of what was required of them;
(b) unfairness to the defendant since the jury would not reach a fair decision on imputation (d);
(c) uncertainty as to whether the confusion over imputation (d) ‘infected’ the other answers and the lack of power in the Court to question to jury to determine this controversy; and
(d) an apparent perversity in relation to the jury answering ‘Yes’ to imputation (c) being carried but ‘no’ to it being defamatory.

43 This final ground in the application was on the basis that neither the plaintiff nor the defendant – nor myself in the summing up – had put to the jury that if any of the imputations were conveyed they would not be defamatory.

44 Indeed, Mr Walker, SC, for the defendant had said to the jury:

So that is questions 3 and 4 looked after. They will double up. What about question 2? Mr McClintock is not known for his timidity as an advocate. I would probably not say a lot if they are defamatory. If is not a bad profit [sic]. I am not going to waste your time suggesting that if any of these things were conveyed they would not have intended [sic – damaged] Mr Reading and [sic] in the estimation of the ordinary decent members of the community. There are some you might wonder about and discuss amongst yourselves. There is really nothing a barrister can add to that question.
Some of them are really obviously. Ones Mr McClintock emphasised correctly, from his point of view, accepting a bribe. I can’t think of any way that could be anything other than bad about anybody. You might think that all of them are pretty much in the same category. It is very difficult to see any worth spending time on. You might think H would be worth thinking about because you might think some things about company law that I will speak to you about later that shareholders aren’t entitled to know everything.

45 Of course, the question of whether something is conveyed, or whether it is defamatory once conveyed, is a question solely for the jury. So much is mandated by s 7A(2) of the Defamation Act 1974. However, the apparent inconsistency in the answers, once these submissions had been put to the jury, did raise a concern over whether the jury had properly understood their function. This concern was compounded by their answer to questions relating to imputation (d).

46 I was satisfied that the plaintiff’s submissions were persuasive and so acceded to the plaintiff’s application. The defendant submitted that I should receive the jury’s answer to questions relating to imputation (d) and I acceded to that application. The jury returned the answer ‘no’ to whether the imputation was conveyed. I then discharged them.

47 In the extraordinary circumstances of the jury seeming to misunderstand their function I also ordered that the matter be stood over for a fresh hearing.

48 This was not simply perversity but involved contradictory, inexplicable conclusions contrary to the common ground of the parties represented by experienced counsel. There seems to be an argument of common sense and efficiency that these controversies should be resolved at a trial level rather than requiring the parties to seek appellate relief with attendant costs and delay.

49 I am conscious that s 55E of the Jury Act 1977 states that a jury is automatically discharged after returning a verdict. However, I also note Part 34 r 8A of the Supreme Court Rules (which applies to proceedings commenced by statement of claim pursuant to Pt 34 r 2(1) of the Rules) provides:

Where, at a trial with a jury, a verdict is given or a finding or assessment is made, the Court may, on the motion of any party or of its own motion, give judgment as it thinks fit notwithstanding the verdict.

50 I am therefore satisfied that I have power to reject the answer given by the jury in these extraordinary circumstances where they seem to have misdirected their minds to the questions asked of them in such a fundamental way as to amount to no clear answer of the questions asked of them and where it seems they have misapplied the directions of law given to them in submissions by the parties and in summing up. The cure for such a breach of the jury function is, in my view, and pursuant to Pt 34 r 8A, either a redirection or, if that will not cure the apparent defect, a discharge.

51 The Court of Appeal has approved judges using this Rule to take a verdict but enter judgment different to that verdict in Turner v Ku-Ring-Gai Municipal Council (1990) 72 LGRA 60 at 70.

52 There is little case law to guide the discretion to exercise such power. However, I note that in Australian Iron and Steel Ltd v Greenwood (1961) 107 CLR 308 Windeyer J said at 327:

The validity of [the jury] verdict does not depend upon whether a court approves it, but on whether it is the result of an honest performance of their duty.

Of course there is no question here to suggest anything other than an earnest attempt by the jury to grapple with the difficult question posed.

53 I also note the case of Weber v Birkett [1925] 2 KB 152. In that case the Court of Appeal upheld a decision of Lord Hewart CJ to declare a mistrial after the jury in that case refused to answer, or could not answer, whether they could apportion an amount paid into court by the defendant, between the two causes of action in libel and slander. Bankes LJ said at 156:

Under those circumstances it was necessary for the jury to give a separate verdict upon each issue. Instead of doing so they found a verdict for 200 l , and when asked to appropriate it, and say how much they gave in respect of the libel, insisted that they were unable to do so. In my opinion that was no verdict at all, and the Chief Justice was quite right in treating the trial as a mistrial, and refusing to enter judgment for either party.

54 As long ago as 1627 it had been held that any additional comments of the jury beyond a direct verdict on the issue should be rejected as surplusage: Eve v Wright (1627) Cro Car 75; 79 ER 667. The jury’s answer that an imputation was ‘not applicable because of the wording’ was, in my opinion, surplusage of this character. It was, in effect, no answer to the question asked of them.

55 In Doe d’ Lewis v Baster (1836) 5 Ad & El 129; 111 ER 1115 Lord Denman CJ held that a jury verdict could not stand that was against the directions given by the trial judge (there, himself). The Chief Justice had directed the jury that a particular finding of fact would result in a verdict for the plaintiff. The jury notified the Associate that they had reached agreement on that fact and the Associate entered the verdict for the plaintiff. The jury expressed disagreement with this verdict and provided affidavit evidence to this effect. The Court rejected the affidavits and discharged a rule nisi to show cause why the verdict should not be set aside and a new trial ordered on the basis that the finding, in light of the direction, could only amount to a verdict for the plaintiff. The jury in this matter were entitled to find that a imputation carried was not defamatory, but with directions to the contrary, the issue was clearly raised whether the jury had ‘honestly performed their duty’ in accordance with what was said by Windeyer J in Greenwood.

56 In Loveday’s Case (1608) 8 Co Rep 65b; 77 ER 573 it was held that an imperfect verdict is best resolved by new trial because the jury will be discharged upon the giving of any verdict, perfect or imperfect (see further R v Russell (Unreported, Court of Appeal (Criminal Division), Dunn LJ, Michael Davies and Popplewell JJ, 20 March 1984; [1984] Crim LR 425) for authority that a jury, once discharged, are functus officio and any subsequent proceeding involving their deliberation is a nullity).

57 I am therefore satisfied that, since I am of the opinion that I could not enter the answers of the jury because of concern over whether they have properly performed their function according to law, I could order that there be a new trial in this matter.

58 The difficulties which faced the jury are understandable. They arise from the 1994 legislative reforms to the statutory regime governing defamation law in this State.

59 With the benefit of hindsight it may be questionable whether issues of imputation arising from a publication should be dealt with by the jury. Whether they are strictly questions of law or fact, there is an arguable case that a judge could more expeditiously determine whether an imputation arose from a text, and the jury might be better occupied with the subsequent issue as to whether the imputation was true. The question of whether a judge or jury should determine quantum of damages is problematic, and I make no comments about it.

60 Whether the legislation in 1994 got the divisions between the functions of judge and jury the wrong way round is a matter of Parliamentary consideration. Plainly, this Court must apply the statute as it exists.

61 I note that the NSW Law Reform Commission suggested (in Report 75: Defamation) a more suitable remedy for defamation actions in declarations of falsity, instead of damages, which may be awarded years after publication. It was the opinion of the Commission that damages were ‘inadequate’ because a trial may ‘revive the imputation rather than extinguish it’. Further, the Commission said that large awards of damages had a ‘chilling effect’ on freedom of speech (see, ‘Executive Summary’ in Report 75: Defamation at pp xii – xiii).

62 This radical proposal did not attract broad support and was not pursued by the Parliament despite the eminence and expertise of the Law Reform Commission which formulated it, and notwithstanding the attention paid by the Commission to the liberal free speech norms which should underlie the law of defamation. Perhaps the time has come for these ideas to be reconsidered.

63 For the reasons I have expressed in this judgment I made the orders I have expressed earlier.

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Last Modified: 08/12/2003