Supreme Court New South Wales Medium Neutral Citation: McMahon v John Fairfax Publications Pty Ltd (No. 2) [2011] NSWSC 1373 Hearing dates: 14 September 2011 Decision date: 15 September 2011 Before: McCallum J Decision: Parties directed to bring in short minutes to reflect these reasons. Costs of the argument to be costs in the cause. Catchwords: DEFAMATION - interrogatories Cases Cited: Howard v Nationwide Publishing Services, unreported, 26 February 1987 Nugawela v Crampton, unreported, 23 June 1995 Winterbottom v Vardon (1921) SASR 364 Category: Interlocutory applications Parties: Brian Francis McMahon (plaintiff) John Fairfax Publications (first defendant) Marcus Priest (second defendant) Rachell Nickless (third defendant) Representation: B McMahon (self represented) A Dawson (defendants) Ardent Legal (plaintiff) Banki Haddock Fiora Lawyers (defendant) File Number(s): 2008/289210 Publication restriction: None Judgment 1HER HONOUR: These are proceedings for defamation commenced by Mr Brian McMahon against John Fairfax publications Pty Limited. 2The plaintiff has pleaded four imputations arising from the first matter complained of. It is convenient to consider the present argument by reference to those. They are: (a) that the plaintiff so failed to meet his tax obligations that he was a major scalp in a crack down on unpaid tax by the Australian Tax Office; (b) that the plaintiff behaved in a dishonourable way by permitting his old firm to go into administration and on the same day opening a new firm; (c) that the plaintiff cheated the staff of his firm by failing to pay the superannuation moneys which they were owed, and (d) the plaintiff had behaved in a devious and underhand way by concealing the true financial position of his firm from its staff. 3The plaintiff relies on a second publication, but I do not think it necessary for present purposes to record the imputations pleaded in respect of that publication. 4The defendants are the company that owns the relevant newspaper and two of its journalists. Defences of qualified privilege have been pleaded at common law and relevantly include a defence under section 30 of the Defamation Act 2005 . Accordingly, an issue in the proceedings is the reasonableness of the conduct of the defendants in publishing the matters complained of. 5The applications before the Court are the applications of each party for an order compelling the other to answer interrogatories which have been administered and which it is contended have not been properly answered. 6It is convenient first to consider the defendants' application for further answers from the plaintiff. The first category of interrogatories as to which an order is sought relates broadly to the structure under which the plaintiff, a solicitor, conducted his legal practice. In respect of the second matter complained of, the imputations relied upon by the plaintiff include an imputation that he deliberately set up a complicated structure for his firm so as to avoid paying employee entitlements. That imputation is the subject of a truth defence and it is sufficient for present purposes to consider this issue by reference to that imputation, although it is not the only one that raises the question of the structure to which I have referred. 7In that context the defendants have directed a series of interrogatories to the plaintiff as to aspects of the partnership in question. The interrogatories directed to that issue are numbered 70, 71, 73, 75 to 76 and 90. In response to each of those interrogatories the plaintiff has given the answer that the rights and attributes of the partners were governed by the limited partnership agreement. 8The defendant presses for a further answer to those interrogatories on the premise that the plaintiff was the architect of the structure in question and ought to be able to give answers directed to the import of the agreement. Mr Dawson, who appeared for the defendant, submitted that it would be an unnecessary waste of hearing time were the defendants required at the hearing to spend time explaining the import of the agreement to the jury and that a more convenient approach is to compel the plaintiff to give answers to those questions. 9Mr McMahon, who appears for himself, submitted that the questions seek answers directed to the proper construction of a legal agreement and that they are accordingly impermissible, since the agreement speaks for itself. He relied on the decision of the Supreme Court of South Australia in Winterbottom v Vardon (1921) SASR 364 at 366, which stands as authority for the unexceptionable proposition that interrogatories may not be directed to the contents of a document that speaks for itself. 10The document in question in that case was a copy of the newspaper in which the alleged matter complained of was published, but the principle appears to me to be equally applicable in the present case. I test the proposition by considering that, were Mr McMahon to endeavour to give evidence-in-chief as to the import of the partnership agreement, proper objection could be taken to his doing so on the very ground on which he objects to answering those questions. I am not persuaded that it is appropriate to direct Mr McMahon to answer those questions. 11The next interrogatory as to which a direction is sought is interrogatory 110, which asks Mr McMahon to quantify and pinpoint as to time superannuation payments not made on time during the 2006 financial year in respect of Mr McMahon's previous legal practice, McMahon's National Lawyers. Mr McMahon has answered two of those questions stating that he is unable to say without access to relevant account records. 12A difficulty in determining that issue is that I am unable to judge, on the strength of the material before me, the reasonableness of expecting Mr McMahon to find the answers to those questions. A number of the documents of his former practice are no longer held by him, but there does not appear to be any doubt that he still has access to them. 13In my view, having regard to the difficulty for the defendant of ascertaining the amounts in question and the overwhelming likelihood that the plaintiff would have more information on that subject than the defendants, I think the plaintiff should be directed to give the best answer he is able to those questions. That order relates to questions 110(a) and (d). 14The final series of questions as to which an order is sought by the defendant relates to questions 158 to 160. Those interrogatories are directed to obtaining answers specifying all credit facilities used in the conduct of Mr McMahon's practice as a sole trader trading as McMahon's National Lawyers. 15Mr McMahon swore an affidavit in which he explained that to respond to those questions would, in his estimation, take about 40 hours. He explained that over the period from March 1997 to October 2007 he entered into approximately eight separate commercial leases; that he was required in respect of each of the relevant premises to "fit out" the premises and that he obtained finance for that purpose; that he financed the purchase of office equipment and that over the period he had used numerous finance brokers and other contacts to obtain such finance, searching always for the "best deal" available at the time. Mr McMahon also deposed to having regularly entered into credit agreements with trade suppliers and other entities amounting to possibly up to 200 such agreements. Further detail of that kind is provided in the affidavit. 16In my view the contents of Mr McMahon's affidavit only serve to highlight the appropriateness of directing him to answer those interrogatories. It must be recalled that the test as to whether a party should be directed to answer interrogatories is the test of necessity: see rule 22.1(4). However, it is accepted that the test of necessity can extend to rendering it proper for the Court to order answers to interrogatories directed to explaining the contents of complex documents so as to reduce the length or cost of the proceedings. 17It seems to me that if Mr McMahon does not answer the interrogatories weaving a complex path through his financial arrangements over a relevant period, it is likely that the legal representatives for the defendants will spend substantially more than 40 hours and incur substantially larger costs in doing so. Further, I think there is a substantial risk that a great deal of hearing time will be spent cross-examining Mr McMahon so as to elicit the very information he might have provided by answering the interrogatories. 18I do think, however, that the interrogatories are unduly broad as to the period of time in respect of which answers are sought. In my view each question should be confined to the period from 1 July 2005, which appears to approximate the earliest time from which the defendant's truth defence will be directed to inappropriate or lavish spending, up to the end of 2007, Mr McMahon's previous practice having collapsed financially on 4 October 2007. 19I turn to consider the plaintiff's application for further answers from the defendants. There are three separate documents for the three separate defendants, but it is convenient to determine the issues raised by reference to the interrogatories directed to the second defendant, since it was to that document that argument was addressed. The parties should be able to formulate the appropriate orders as to the other two defendants by reference to my determination of those issues. 20The first interrogatory as to which further answer was sought was interrogatory 4, directed to the consideration given by the journalist to the possibility that the first matter complained of conveyed any of the imputations pleaded by the plaintiff. 21In order to explain the problem with the present form of the interrogatories it is necessary to go back to the decision of Hunt J in Howard v Nationwide Publishing Services , unreported, 26 February 1987. There his Honour explained that, where the defence of statutory qualified privilege is pleaded by a defendant so as to raise the issue of the reasonableness of his conduct, interrogatories may be directed to whether a defendant accepts that he intended to convey an imputation. Upon reading his Honour's judgment it is clear that that is logically the first question. 22His Honour then explained that where a defendant accepts that he did intend to convey an imputation, he may then be interrogated as to whether or not he believed such imputation to be true. However, where a defendant does not accept that he intended to convey such an imputation, his belief as to the truth of the imputation is not necessary to the defence of statutory qualified privilege, unless the imputation was reasonably foreseeable as being conveyed. In such a case the defendant may be interrogated (as going to the reasonableness of his conduct) as to whether he gave any consideration to the possibility that the imputation was conveyed. 23It is perhaps not surprising that the jurisprudence on this issue has given rise to some confusion. In fairness to Mr McMahon, it might be observed that the form of interrogatories he has asked ostensibly directed to those principles appears to derive some support from the judgment of Levine J in Nugawela v Crampton, unreported, 23 June 1995. I think the vice of the formulation there evidently approved derives from the fact that the critical first question of whether the defendant intended to convey the imputation was not posed or, if it was, it is not clearly addressed in the decision. 24Once one returns to the principles stated by Hunt J in Howard it may be seen, in my view, that interrogatory 4 is not necessary and that no order should be made that it be answered. The reason is that the second defendant has said in a later question that he intended to convey imputations (a) and (b). It follows that, as to imputations (c) and (d), the plaintiff is entitled to answers as to whether any consideration was given to the possibility that those imputations were conveyed. However, in answer to interrogatory 3, the second defendant has effectively answered that question, saying that he did turn his mind to the possibility but was not of the opinion that the article conveyed those imputations. Although the reasoning is thus complex, it may be seen upon analysis that interrogatory 4 is not necessary. 25Interrogatory 7 is the subject of the next application for an order. It asks, following on from interrogatory 6: 6. Interrogatory: If the answer to Interrogatory 5 above is "yes" in whole or in part, in respect of each such imputation, did you believe it was: (a) true? (b) false? (answering yes or no in each case) at the time of publication of the First Matter Complained of. Answer: The second defendant believed that imputations (a) and (b) were true at the time of publication of the First Matter Complained of. 7. Interrogatory: If the answer to Interrogatory 6 is "yes" in whole or in part, in respect of each such imputation: (a) set out the facts, matters and circumstances on which that belief was based; and (b) what was the source of each item of information on which the belief was based? Answer: The second defendant objects to answering this interrogatory on the basis that it is vexatious, oppressive and does not relate to any matter in issue between the parties. 26In my view, having regard to the fact that the second defendant has answered interrogatory 8, which is the standard interrogatory directed to the information held by the journalist, the further information sought in answer to interrogatory 7 is not necessary. The critical thing is for the plaintiff to know whether the journalist held the belief or not, having acknowledged an intention to convey the imputation in question. The reasonableness of that belief is to be measured objectively and that is to be assessed by reference to the kind of information sought in interrogatory 8. 27The next interrogatory as to which an order is sought is interrogatory 11, which asks whether the journalist made certain enquiries before publishing the matter complained of and seeks details of those enquiries. The defendants complain that that interrogatory is not necessary since it is the same as 8. Interrogatory 8 was directed, however, to information whereas interrogatory 11 is directed to enquiries. In my view there is a difference and the plaintiff is entitled to an answer to that interrogatory. 28The next interrogatory to be considered is interrogatory 14 which, following on from interrogatory 13, asks in respect of each source of information whether the defendant had a view as to the veracity or reliability of the information. The answer to that question is yes. Interrogatory 14 seeks further detail on that premise as to the basis for the view. In my view the question is repetitive, having regard to the answers that have been given to questions 8, 10 and 12, as submitted by Mr Dawson. 29The final interrogatory to be considered is interrogatory 16, which asks whether any alterations were made to the matter complained of before publication. Mr Dawson objected that the question is directed to obtaining legal advice. Mr McMahon responded that it seeks more than that but, if it does, I do not see that an answer to the question is necessary in the relevant sense. The reasonableness of the conduct of the defendants in publishing the matter complained of is to be measured by reference to what was published, not by reference to what was not. Orders 1. I direct the parties to bring in short minutes ti reflect these reasons. 2. I order that costs of the argument be costs in the cause. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 November 2011