Di Girolamo v Fairfax Media Publications Pty Ltd [2014] NSWSC 1594

Supreme Court New South Wales

Medium Neutral Citation: Di Girolamo v Fairfax Media Publications Pty Ltd [2014] NSWSC 1594 Hearing dates: 30 October 2014 Decision date: 30 October 2014 Before: McCallum J Decision: Rulings given as to imputations Catchwords: DEFAMATION - pleading - objections to imputations - objections to particulars of aggravated damages Cases Cited: Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227 Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 Jones v John Fairfax Publications [2002] NSWSC 1210 Category: Interlocutory applications Parties: Nicholas Di Girolamo (plaintiff) Fairfax Media Publications Pty Ltd (defendant) Representation: Counsel: S Chrysanthou (plaintiff) T Blackburn SC (defendant) Solicitors: Dibbs Barker Lawyers (plaintiff) Banki Haddock Fiora (defendant) File Number(s): 2013/375294 Publication restriction: None

Judgment 1HER HONOUR: These are proceedings for defamation arising out of the publication of a series of articles in The Sydney Morning Herald in its printed edition and on-line. The proceedings were commenced by statement of claim filed on 13 December 2013. The defendants have taken a series of objections to the imputations specified by the plaintiff in that pleading. This judgment determines those objections. 2Some of the objections are that the relevant matter complained of is not reasonably capable of conveying a specified imputation. As to those objections, the determination of the application will serve as a ruling on a separate question in the proceedings. 3Some of the objections were as to form. In respect of those objections, the application was brought forward as one to have the relevant part of the pleading struck out as embarrassing, presumably under r 14.28 of the UCPR. There were also two objections to the matters relied upon by the plaintiff as particulars of aggravated damages, which will also be treated as a strike-out application. 4The first matter complained of is an article published in The Sydney Morning Herald on 15 and 16 December 2012 headed, "Costa, Obeid and the water firm". The second matter complained of is the same article as it appeared on line. The parties agreed that my rulings in respect of each printed article would serve to determine the application in respect of the articles on-line, notwithstanding minor differences in presentation in the two forms of publication. 5The first imputation specified by the plaintiff as arising from the first matter complained of is imputation (a): "The plaintiff, as boss of Australian Water Holdings Pty Limited, corruptly procured the issue of shares worth 3.75 million dollars to Michael Costa in return for Michael Costa using his position to block a public tender." 6The objection was that the imputation is incapable of arising. However, during the course of argument, the submissions of Mr Blackburn SC, who appears for the defendants, revealed different understandings on the part of the parties as to the precise meaning of the imputation. 7The difficulty arises from the fact that the article makes plain that it is accusing Mr Costa of having stopped the public tender three years earlier than he is said to have been given the shares. 8The imputation accordingly suffers, in my view, from a temporal difficulty or complexity in that it fails to specify when corruption crept into the dealings referred to. There are two possibilities. One is that the plaintiff is imputed with having conceived of the relevant corruption at the time the public tender was blocked. An alternative is that his alleged procuring of the issue of the shares some three years later was conceived in effect to be by way of reward for Mr Costa's earlier decision on the tender. 9Following submissions on that issue Ms Chrysanthou, who appears for the plaintiff, suggested that it might be possible to formulate alternative imputations to address the perceived ambiguity. In my view the imputation in its present form is ambiguous and is liable to be struck out. However I would accept, based on the submissions put by Ms Chrysanthou, that the passages in question may be capable of conveying some defamatory sense concerning the plaintiff and accordingly, there should be leave to replead. 10Imputation (b) is: "The plaintiff falsely denied that he had been nominated to act as a front man for the Obeid family in a corrupt coal deal in the Bylong Valley." 11The objection was that the imputation is incapable of being conveyed. The matter complained of reports that ICAC: "has heard evidence that before a coal tender was announced for the Bylong Valley, where the Obeids had bought a farm, the Obeids nominated Mr Di Girolamo at a meeting to act as a front for their stake in a company designated to win the tender. Mr Di Girolamo said he had never been asked to act in this way by the family. In the end it was another Collins Biggers and Paisley lawyer, Greg Skehan, who acted as a front for the family in a coal company that won an exploration licence." 12It may be accepted that, by focusing on those words alone, the suggestion that Mr Di Girolamo lied in denying his nomination is barely there. However I would accept, as submitted by Ms Chrysanthou, that the tenor of the whole article gives that passage a different significance. It is pitched as a revelation, being about the exposure of impropriety. There are three separate parts of the matter complained of in which statements are attributed to the plaintiff but contradicted by material from other sources which could be thought to be reliable. 13Ms Chrysanthou submitted that the article poses the rhetorical question: "Who are you going to believe?" It exposes the plaintiff by aligning him with a corrupt family, thereby suggesting that he is lying in his denial. In my view the article is reasonably capable of conveying that imputation. 14Imputation (c) is: "The plaintiff falsely denied that Moses Obeid had been associated with Australian Water Holdings." 15For essentially the same reasons as I have expressed in respect of imputation (b), that imputation is also reasonably capable of being conveyed, in my view. 16The third matter complained of is an article headed "Obeid link to Tigers under the spot light". 17Imputation (a) specified by the plaintiff as arising from that article is: "the plaintiff engaged in corrupt conduct in that he secretly represented an interest in the Balmain Tigers development on behalf of the Obeid family at a time when Mr Eddy Obeid was a member of Parliament who lobbied Frank Sartor, the Planning Minister, to approve that development." 18The objection was taken to an earlier form of that imputation that it was incapable of arising. The earlier imputation had the word "held" where the word "represented" now appears. 19In light of the proposed amendment, Mr Blackburn submitted that the imputation is now bad in form. He submitted that this is not a difficulty of the kind identified by the Court of Appeal in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 but rather a question of failure to distil precisely what it is that the plaintiff is said to have done. In other words, it is a failure to distil the act or condition attributed to him. 20In my view there is force in that submission. The opening words of the imputation assert corrupt conduct but the detail in the balance of the imputation merely describes a capacity in which the plaintiff is alleged to have done something, without saying what it is that he is alleged to have done. 21The imputation should be struck out in its present form. However, there should, in my view, be leave to re-plead. The article is, in my view, susceptible of a defamatory meaning, albeit one that requires a clearer identification of the conduct in question. In particular the printed article, which contains a flow chart apparently omitted in the on-line article, draws a series of connections pointing inexorably to the proposition that the plaintiff's role as Chairman of the Balmain Tigers may be one to which he would not bring to bear the independence required of a person involved in corporate governance by membership of a board. 22Even though the on-line article does not contain that diagram, in my view it is capable of some defamatory sense, but the present imputation is bad in form. 23Imputation (b) is: "That the plaintiff is a liar in that he falsely denied that the Obeids had any interest in Australian Water Holdings." 24Mr Blackburn submitted that the essence of the defamatory sting is that the plaintiff is said to be a liar because he falsely denied the interest in question where there is nothing in the article to convey that the plaintiff knew of the Obeids' interest. I do not accept that submission. 25As submitted by Ms Chrysanthou, as with the first matter complained of, this article primarily focuses on revelations. There is the reference in the headline to the transactions being "under the spotlight". The plaintiff is referred to as being a close friend of the Obeids and indeed a borrower from Eddie Obeid junior, who is reported to be pushing for a controversial agenda. 26In my view the imputation is reasonably capable of being conveyed. 27The fifth matter complained of is an article headed "Revealed: Obeids' 3 million dollar water stake". Imputation (a) specified in respect of that article is: "The plaintiff is a liar in that he falsely denied that the Obeids were involved in Australian Water Holdings." 28Mr Blackburn put a similar submission as with the third matter complained of, submitting that there is missing from the article the necessary link of any knowledge on the part of the plaintiff of Mr Obeid's alleged secret investment. 29I would accept that the references to the plaintiff in this article are capable of a benign reading, that is, one which focuses rather on the dishonesty of the Obeids than any dishonesty on the part of the plaintiff. However, I do not think that is the only possible reading. 30As with the earlier articles, this article is replete with insinuation. It is capable, in my view, of pointing to the plaintiff having lied on that issue. 31Imputation (b) is: "The plaintiff is corrupt in that he covered up the Obeid family's 3 million dollar investment in Australian Water Holdings." 32The objection to that imputation is that it is bad in form. On this issue Mr Blackburn did invoke the principles stated in Drummoyne, which are well-known. In my view the imputation in its present form fails to specify the precise corruption or corrupt attribution to the plaintiff and is liable to be struck out. 33Again, I consider it appropriate that there be leave to replead. In my view the article is clearly capable of some defamatory sense based on corruption but I do not think it is adequately distilled in the present imputation. 34The seventh matter complained of is an article headed, "O'Farrell stays silent on mine and its Liberal champion". 35This is an article focusing primarily on the conduct of the Premier, Mr Barry O'Farrell, who is reported to be refusing to disclose his dealings with the plaintiff over a proposed coal mine. 36Imputation (a) relied upon by the plaintiff in respect of that article is: "The plaintiff was involved in corrupt coal deals in that he met with Mr O'Farrell and Mr Hartcher in order to avoid a merit based assessment of his client's mining proposal." 37Ms Chrysanthou submitted that, although the conduct reported in the article is of a meeting where the discussions that occurred at that meeting are not disclosed (since Mr O'Farrell refused to disclose them), the ordinary reasonable reader reads between the lines. She submitted that the article focuses primarily on Mr O'Farrell's refusal to say what was said at what would be understood by the reader to be in effect "secret squirrel meetings", the clear implication being that the reason Mr O'Farrell would not say what had happened at the meetings was because it was "quite dodgy". 38The gist of the article, so it was submitted, is that the plaintiff and Mr O'Farrell had in some way managed to circumvent the merit-based approval scheme. 39She noted that the plaintiff must necessarily deal with the words on the page and that, since the whole tenor of the article is innuendo of some discreditable conduct, it was defamatory in the sense specified. 40I should note that there is a second imputation pleaded in respect of that matter focusing on the same issue which is imputation (b): "the plaintiff was involved in corrupt dealings with the Premier, Barry O'Farrell, in relation to a controversial 800 million dollar coal mine in that he sought to subvert the Government's approval process for mines." 41In my view there is a difficulty with the form of imputation (a) in that the explanation of meeting in order to avoid a merit-based assessment does not sustain the sting that the plaintiff was involved in corrupt coal deals. However, in my view, imputation (b) is clear and is capable of being conveyed by the material to which I have referred. 42It will be a matter for the plaintiff to consider whether he wishes to endeavour to re-plead imputation (a), which must be struck out as being bad in form. The ruling in respect of imputation (b) is that it is capable of arising. Mr Blackburn will correct me if I am wrong but I do not think there was a discrete objection as to the form of that imputation. If there was, I will indicate my view that it is sufficiently clear. 43The third imputation specified in respect of that article is: "The plaintiff, in return for 3 million dollars lent by the Obeid family to him, has been involved with the Obeid family in corrupt deals." 44Mr Blackburn objected to that imputation on the grounds of both form and capacity. Ms Chrysanthou did not put any positive submissions to support it and I would accept it is not capable of being conveyed. 45The ninth matter complained of is an article headed, "Water company donated cash to Nationals MP". 46Before turning to the particular imputation specified by the plaintiff in respect of that article, I note that Ms Chrysanthou submitted that it conveys broadly two allegations defamatory of the plaintiff: one of bribery, that is, that he bribed a member of Parliament for his appointment to the board of a statutory corporation and secondly one of lack of merit or incompetence. 47The first is sought to be captured by the plaintiff in alternative imputations as follows: (a) The plaintiff bribed Nationals MP Katrina Hodgkinson in order to secure his appointment to the board of a state owned corporation overseen by her as a Minister; (b) In the alternative, the plaintiff procured his appointment to the board of the State Water Corporation by making a cash donation of $10,000 to Nationals MP Katrina Hodgkinson. 48Even acknowledging the high test for striking out an imputation on the grounds that it is incapable of arising, in my view the allegation of bribery is not reasonably capable of being conveyed to the ordinary reasonable reader. The principles are well-known and were not in dispute in the present case. 49Ms Chrysanthou did remind me of the recent decision of the Court of Appeal in Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227, which serves as a reminder to trial judges of the high test a defendant must meet on a capacity argument. 50However, as submitted by Mr Blackburn, that decision does not pose a new test. It merely serves to emphasise the care with which the long-standing tests established in the authorities must be applied. In particular, the decision reminds the court that a decision to strike out an imputation on the grounds that it is not reasonably capable of being conveyed deprives a plaintiff of the opportunity to have that issue determined by a jury, as is ordinarily his or her right. 51Acknowledging the force and importance of those principles, in my view the suggestion that the plaintiff bribed Katrina Hodgkinson by making a donation to her in order to secure his appointment to the position referred to could only be conveyed by a strained or forced or unreasonable reading of the matter complained of. 52It may be that there is some less serious suggestion in the matter complained of, such as that he sought to influence a politician by making a political donation, but that is not the sense captured in the present imputation. 53The alternative imputation (b) suffers from a different vice. As submitted by Mr Blackburn, I accept that that imputation is bad in form by reason of the inclusion of the word "procured". That could be understood merely to describe a result, that is, that the plaintiff achieved the result of securing his appointment. Alternatively, it could mean that he sought to achieve that result or in some way sought to influence the MP in question. 54Imputation (b) should be struck out for ambiguity, but I think there should be leave to re-plead in respect of that imputation. 55Imputations (c) and (d) were also relied upon in the alternative as follows: (a) The plaintiff did not deserve his appointment to the Board of State Water Corporation. (b) In the alternative, the plaintiff was appointed to the Board of the State Water Corporation by reason of his cash donation of $10,000 to Ms Hodgkinson. 56In each case the objection was to the form of the imputation. There was no objection based on capacity. Ms Chrysanthou submitted that, if it was just a form question, there should be leave to re-plead. 57In my view, imputation (c) is sufficiently clear to withstand a strike-out application. However, having regard to the fact that the plaintiff will probably re-plead other imputations, I would include it within the leave to re-plead in case the plaintiff sees fit to formulate a clearer imputation, distilling the proposition debated in submissions that what the article really says is that the plaintiff accepted an appointment for which he had no relevant or adequate qualification. 58I think imputation (d), the alternative, does entail a measure of difficulty. It is not quite clear to me precisely what defamatory sting is sought to be distilled by it and I would strike that imputation out. 59Finally, the 11th matter complained of is an article headed "Investigators turn attention to three former ministers". Imputation (b) specified by the plaintiff in respect of that article is: "the plaintiff engaged in secret financial arrangements on behalf of the corrupt Obeid family when in charge of Australian Water Holdings." 60The objection was that the imputation is bad in form. Specifically, Mr Blackburn submitted that the phrase "engaged in secret financial arrangements on behalf of the corrupt Obeid family" imputes no precise defamatory reflection upon the plaintiff. He added reliance upon the recognised difficulty with the use of the word "corrupt". 61Ms Chrysanthou submitted, with considerable force, that the article conveys a sense of corrupt association on the part of the plaintiff, with the corruption clearly attributed to the Obeids. 62Paragraph 8 of the article refers to the fact that ICAC investigators are focusing "on a secret interest negotiated by the Obeid family in Australian Water Holdings, a project management firm that manages hundreds of millions of dollars worth of work for Sydney Water". Later, the article refers to the Obeid family standing to gain a windfall in the order of $100 million from "a plot to have part of Sydney Water privatised and sold to Australian Water Holdings, a company formerly run by Mr Di Girolamo". The article refers to his having "suddenly departed the company" after a Herald investigation revealed damning evidence of his secret negotiations with the Obeids. Towards the end of the last column of the first page of the article, there is a reference to Senator Sinodinos having been "shocked and disappointed" to discover AWH was financially linked to the Obeid family. 63There can be no doubt from the whole of the article, including the material to which I have referred, that it imputes to Mr Di Girolamo some corrupt association with the secret investment referred to. The reason for the investment being kept secret is clear. It is that, as a member of Parliament, Mr Obeid did not wish to have that connection publicly known. The article plainly attributes or at least is capable of attributing to Mr Di Girolamo some role in facilitating the secrecy. 64I think the present imputation does fail in a clear sense to capture the gist of all of that material. In reaching that conclusion, as I have in respect of a number of the imputations in this case, I mean no criticism of Ms Chrysanthou. To a degree, the difficulty of distilling the imputations is a direct result of the careful complexity and subtlety of the language adopted in the matters complained of, which renders their precise defamatory sense elusive. But I think the present imputation fails adequately to distil with the precision required the defamatory sense attributed to Mr Di Girolamo. 65Imputation (c) is: "the plaintiff is involved in corrupt dealings with the Obeid family in that he facilitated investment of $3 million of the Obeid's corrupt coal deal moneys into Australian Water Holdings." 66For substantially the same reasons, I regard that imputation as presently being bad in form. The phrase "facilitated investment" is difficult, and perhaps more importantly, I do not think it is clear what is meant by "corrupt coal deal moneys". The primary focus of the matter complained of, in my view, as I have endeavoured to explain, is the notion that the Obeid family's investment in AWH was carefully kept secret for obvious political and legal reasons. 67Finally, there was an objection to some of the plaintiff's particulars of aggravated damages. First, the plaintiff relies, by way of aggravation, on the contention that the fifth and sixth matters complained of were "promoted" by the second defendant. That is a reference to the participation of one of the journalists, Ms Kate McClymont, in an interview with a radio commentator Ray Hadley shortly after publication of those matters. The plaintiff's contention is that the defendants promoted the matters complained of and repeated portions of their content during that interview. 68Mr Blackburn dealt specifically, and with precision, with the particular passages relied upon, arguing that they were not capable of amounting to repetition of the identified portions of the matter complained of. 69Upon reflection, however, I think Ms Chrysanthou is right in submitting that this is an issue best left to trial. The plaintiff will at trial have to establish that the matters referred to in the particulars of aggravation increased the hurt and harm suffered by him. An aspect of his evidence on that issue will presumably be the way in which he perceived the remarks made by Ms McClymont in her interview with Mr Hadley and whether he perceived those remarks as amounting to a repetition of the matter complained of. Indeed, it may be enough if he says that he perceived those remarks as effectively rubbing his nose in the allegations made in the printed articles. A separate issue no doubt will be whether his evidence on that issue should be accepted and, even if his perception was genuinely held, whether it was held reasonably so as to sound in an award of aggravated damages. But I do not think this is a strike-out point. 70The second objection to the particulars of aggravated damage was to the plaintiff's contention that the defendants have engaged in a "campaign" against him. Mr Blackburn complained that this is an allegation of serious misconduct and that it should be particularised in the manner requested by the defendants in the correspondence contained in exhibit 1 on the present application. He relied on the decision of Levine J in Jones v John Fairfax Publications [2002] NSWSC 1210 as at least recognising in principle that such a particular of aggravation - namely, that the defendants have published the matters complained of as part of a campaign against the plaintiff - is liable to be particularised or properly the subject of the best particulars a plaintiff can provide. 71I understand the argument, but I do not read the passages from Jones v John Fairfax relied upon by Mr Blackburn as warranting being elevated to an inflexible principle. In the present case, for my part, I would think that the defendants know the case they have to meet on this issue on the strength of the material that has been provided to them to date by the plaintiff. It is ultimately, in my view, a relatively straightforward proposition, one the merit of which can be tested at trial. I do not think there is any aspect of it which is likely to take the defendants by surprise based on the particulars provided to date. (Short minutes of order by consent handed up.) 72I make orders 1 to 4 in the Short Minutes of Order.