HARKIANAKIS v SKALKOS and ORS (No 2) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, POWELL and BEAZLEY JJA 23 September 1997, 15 October 1997 [1997] NSWCA 137 Contempt of Court — penalty — publication of article relating to pending defamation proceedings — nature and seriousness of contempt — relevance of absence of intent to interfere with the course of justice — objective circumstances — relevance of opponent's apology — appropriate costs order where claimant partly successful Mason P On 25 June 1997 the Court made orders:- 1. dismissing the claimant's application in relation to the article published in the "New Country" newspaper of 20 July 1996; and 2. declaring that the first and third opponents were guilty of contempt in relation to the article published in the "Greek Herald" newspaper of 22 July 1996. The Court held that the article dated 22 July 1996 had not been published with intent to subject the claimant to improper pressure. However, the majority concluded that the article had a tendency to deter the claimant in his prosecution of the defamation proceedings between the parties, and to deter a person in the situation of the claimant from continuing to prosecute similar proceedings. The gravamen of the contempt was the public vilification of the claimant because he was a litigant. The Court also held that the claimant had not established his alternative claims that the two publications had, as a matter of practical reality, a tendency to deflect potential witnesses or jurors from their duties in relation to the principal proceedings. On 23 September the matter came before the Court to deal with the outstanding issues of penalty and costs. Evidence was led on behalf of the opponents addressing inter alia the circumstances in which the publication came to be made. Reference will be made to the detail of this evidence in its proper context. Senior counsel for the opponents also offered to the Court an apology on behalf of the opponents concerned. It will be unnecessary to repeat the facts or the reasoning which led Beazley JA and myself to conclude that a contempt had been committed. This judgment should be read in conjunction with that delivered on 25 June. The publication represented improper pressure, albeit unintended, that had the prohibited tendency to deter the claimant and litigants generally in the prosecution of the main proceedings or similar proceedings. Senior counsel for the opponents argued that this was a mere technical contempt. He took the Court to two cases where this expression was used in the context of a decision not to punish: see R v Blumenfeld (1912) 28 TLR 308 and Sunday Times Newspaper Co Ltd v Sun Newspaper Ltd (1919) 19 SR(NSW) 145. I do not find such a label to be of much assistance in this context. There is more than an element of circularity involved. Sometimes the expression "technical contempt" is used in relation to breach of an apparently "bright line rule" such as breach of the implied undertaking to the court discussed in Harman v Secretary of State for the Home 2 UNREPORTED JUDGMENTS Department [1983] 1 AC 280: see Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 168. This is not such a case. Rather it is one in which the claimant has demonstrated to the criminal standard that the publication has the proscribed tendency. This is an actual contempt although not necessarily one that attracts punishment. To point to absence of intent to interfere with the course of justice does not establish a (non-punishable) "technical contempt", as many in the media have found to their cost. More importantly, the very distinction between technical and actual contempt has been questioned, if not rejected, in recent years: see Attorney General (NSW) v John Fairfax & Sons Ltd (1986) 6 NSWLR 695 at 708; Hinch v Attorney General (Vic) (1987) 164 CLR 15 at 24, 47, 68-70. Cf Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 169, 175. Nor is it conclusive that there was no evidence or finding that the claimant had been deterred by the offending publication. This too is the almost invariable position encountered in cases relating to contempt by the media, where findings of contempt and imposition of punishment do not require evidence that jurors or witnesses were diverted from their duties. The absence of actual interference is relevant as to penalty, but is not determinative. I would also reject the opponents' reliance upon continuing public discussion, indeed controversy, within the Greek Orthodox community in Australia relating to the episcopate of the claimant. I do not see the relevance of this to the objective circumstances of the offence that has been proved, at least in a way that might favour the opponents. Also irrelevant to the present issue is the progress, or lack of progress, of the claimant in relation to the defamation proceedings. The Court rejected affidavit evidence tendered by the opponents seeking to ventilate this issue at this stage of the proceedings. The opponents have their remedy in the Common Law Division. Any dilatoriness on the part of the claimant in prosecuting his long outstanding defamation proceedings has no bearing upon the objective circumstances of the contempt established. As to subjective matters, the Court must take into account the fact that there is no suggestion of any earlier offence of this nature touching either of the opponents. It is also relevant to reiterate in this context that the opponents did not act with intent to put improper pressure on the claimant or otherwise to interfere with the course of justice. I would also make some allowance, in the opponents' favour, for the fact that the publication occurred in the context of strident debate within the relevant sector of the public. To some degree the offending parts of the publication can be seen as a rash (though nevertheless still excessive and improper) attempt to denounce perceived wrongs seen to be deserving of censure by the opponents. I reiterate that this is relevant only as providing some mitigation by reference to circumstances personal to the opponents: the objective seriousness of the offence is not thereby lessened. The opponents played with fire (cf Ex parte McCay; Re Consolidated Press Ltd (1936) 36 SR(NSW) 592 at 594) and they got burnt. Or, to change the metaphor, "if a newspaper likes to... skate upon thin ice, then it must be prepared to get wet if the ice breaks" (Ex parte Mijnssen; Re Truth & Sportsman Ltd (1956) 73 WN(NSW) 263 at 266 per Street CJ). There was debate as to the relevance of the opponents' apology to the Court and the circumstances in which it was made. Great care must be taken to ensure that the opponents are not punished for having exercised their right to put the claimant to proof, even vigorously. The opponents' conduct in the present URJ HARKIANAKIS v SKALKOS and ORS (No 2) (Mason P) 3 proceedings cannot be used to exacerbate the circumstances of the proven offence, although it would deprive them of the credit associated with a timely plea of guilty. Ultimately senior counsel for the claimant accepted that the proffered apology was properly to be taken into account as relevant on the issue of particular deterrence. I would record in this context that there is no material that would indicate any threat on the part of the opponents to re-offend either generally or in relation to the claimant in particular. It is convenient at this stage to address the opponents' evidence as to the circumstances in which the material came to be published, as well as the evidence tendered in an endeavour to show the unlikelihood of repetition. This evidence was very unimpressive and largely failed in its mitigatory purpose. The opponents already have in their favour a finding of absence of intent to interfere with the course of justice. The opponents' solicitor Mr Lazaropoulos gave evidence that he is the in-house solicitor for the third opponent, the publisher of the "Greek Herald" and "New Country" newspapers. In this role he provides advice to the publisher on the potential legal liability of articles in these and other publications of the third opponent. Mr Lazaropoulos stated that it has been the policy of the third opponent, since at least early 1995, that the editor of the relevant publication should refer "potentially contentious articles" to himself for urgent legal advice in advance of publication. That advice is then provided. In appropriate cases the opinion of senior counsel is sought. The article of 20 July 1996 was referred to Mr Lazaropoulos and was corrected in certain respects before publication. However the offending article of 22 July 1996 was not. The editor of the two newspapers at all material times has been Mr Mystakidis. He gave evidence that he was overseas between 13 and 26 July 1996. During this period the role of editor was assumed by a sub-editor, Costa Potiris. Mr Potiris gave no evidence and his absence was not explained. Mr Mystakidis also said that it has been his standard practice as editor to read all articles prior to publication, and to edit those articles which he believed may otherwise create any liability for his employer. In the case of uncertainty he would refer the matter to the company's in-house solicitor for advice. He said that he is aware of the defamation action brought by the claimant and that it is his practice personally to check articles written about him whenever possible. This procedure was not followed because he was overseas at the time the two articles were published. It is perhaps relevant that the sub-editor referred one article for legal advice but not the other. This corroborates the other evidence about a system, while confirming the clear impression in my mind that it was only as good as the knowledge and diligence of the agents involved. I am prepared to infer that the editor and the in-house solicitor have at least some knowledge of the law of contempt. But there is nothing to indicate how extensive that knowledge is. The whole system in place in 1996 depended upon the editor, or in his absence the sub-editor, knowing enough to revise copy or at least seek the advice of the in-house solicitor or senior counsel in relation to it. This still appears to be the situation. The opponents put into evidence a memorandum dated 28 July 1997 addressed to "All Staff Journalists" of the third opponent. Under the hand of the General Manager, the memorandum relevantly stated: "Tf you suspect that anything in copy you submit to the Editor may contain anything defamatory or in contempt of court, you must draw his or her attention to it. 4 UNREPORTED JUDGMENTS If you are acting as Editor and you have a potential legal problem with copy brought to your attention, or if you suspect from your own reading of copy that it may be legally contentious, it is your duty to check it before publication with the in-house solicitor, Tony Lazaropoulos." In my view this is evidence of a continuing poor system. Unless there were evidence that the persons to whom the publication is addressed have a certain level of understanding of the law of contempt, then a memorandum such as this amounts to no more than advice to avoid danger when it is recognised. In my view this is a case where a penalty should be imposed upon the publisher designed to mark the seriousness of the contempt established. The suggestion that the claimant has his remedy in the right to claim aggravated damages (cf Blumenfeld at 311; Sunday Times at 147) misses the point that this is a case of contempt involving a publication with a proven tendency to deter. A penalty is necessary to mark the disapproval of the Court and to deter generally. Taken to its logical conclusion, the submission that a right to seek aggravated damages is an adequate remedy would mean that a litigant could be deterred by a contempt yet see no penalty imposed because of his or her "right" to vindication in the proceedings which have been burked. The claimant sought an order for costs, recognising that some offset was appropriate having regard to its limited success in the proceedings. In my view there should be no order as to costs. This is a case where the claimant established that one publication was contemptuous while failing with respect to the other. As to the publication found to be in contempt the claimant failed in his assertion that the publication had a tendency to deter witnesses or jurors from their proper task in the defamation proceedings. The charge that the opponents had committed the contempts with the intent to put improper pressure on the claimant was also unsuccessful. Part of the hearing time was taken up in dealing with evidentiary matters referable entirely to the factual issues upon which the claimant failed. And the substantial portion of the hearing involved in debating the complex legal issues was referable equally to the publication in which the claimant was successful as to the publication in which he was unsuccessful. Having regard to these offsets I consider the proper order to be as indicated. I propose the following orders: 1. The first opponent is fined $2,000 2. The third opponent is fined $10,000 3. No order as to costs. Powell JA I have read the Judgment which has been prepared by Mason P, with which Beazley JA agrees. As I remain of the view that the Motion ought to have been dismissed with costs, there seems to be little purpose to be served, in the circumstances, by my offering any view as to the appropriateness, or otherwise, of the Orders which Mason P has proposed, and I therefore refrain from doing so. Beazley JA I agree with Mason P 1. First opponent fined $2,000. 2. Third opponent fined $10,000. 3. No order as to costs. Counsel for the Claimant: T E F Hughes QC/T D F Hughes Solicitors for the Claimant: Nicholas G Pappas & Co URJ HARKIANAKIS v SKALKOS and ORS (No 2) (Beazley JA) Counsel for the Opponents: S M Littlemore QC/J C Gibson Solicitors for the Opponents: Tony Lazaropoulos