Supreme Court New South Wales Medium Neutral Citation: Carolan v Fairfax Media Publications Pty Ltd (No 5) [2015] NSWSC 1560 Hearing dates: 19, 20 October 2015 Date of orders: 27 October 2015 Decision date: 27 October 2015 Jurisdiction: Common Law Before: McCallum J Decision: Application to amend defence refused. Catchwords: DEFAMATION – defences – application on first day of trial to amend particulars of truth defence – where plaintiff claiming prejudice – whether proof required – whether defendants should be permitted to call the plaintiff to disprove the alleged prejudice – whether prejudice manifest Legislation Cited: Defamation Act 2005 (NSW), s 31 Evidence Act 1995 (NSW), s 38 Uniform Civil Procedure Rules 2005 (NSW),r 33.4 Cases Cited: Carolan v Fairfax Media Publications Pty Ltd (No 3) [2015] NSWSC 1344 Carolan v Fairfax Media Publications Pty Ltd (No 4) [2015] NSWSC 1399 Category: Procedural and other rulings Parties: Sean Carolan (plaintiff) Fairfax Media Publications Pty Ltd (first defendant) Peter FitzSimons (second defendant) Representation: Counsel: K Smark SC with S Chrysanthou (plaintiff) ATS Dawson with C Amato (defendants) Solicitors: Kalantzis Lawyers (plaintiff) Bank Haddock Fiora (defendants) File Number(s): 2014/245957 Publication restriction: None Judgment 1. HER HONOUR: Sean Carolan is suing the publisher of the Sydney Morning Herald and a journalist for defamation in respect of four articles published in September 2013. On the first day of the hearing (19 October 2015), the defendants sought leave to amend their defence. I refused the application, reserving my reasons so as not to interrupt Mr Carolan's evidence (T126.46 and see T127.28). These are my reasons for refusing the application. Circumstances in which the application was brought 1. The circumstances in which the application was brought may be summarised as follows. The defence was filed on 9 December 2014. A defence of truth is pleaded to two imputations sued on by Mr Carolan, as follows: (a) The plaintiff, who runs a sports nutrition company, conducted tests on football players' blood without their consent. (b) The plaintiff, who runs a sports nutrition company, had so conducted himself as to warrant being terminated by the Sydney Roosters Football Club. 1. Mr Carolan sues on two further imputations as to which there is no truth defence, as follows: (c) The plaintiff, a personal trainer, injected Sydney Roosters football players with the banned substance HGH. (d) The plaintiff gave results of blood tests he conducted on Sydney Roosters football players to an organised crime figure. 1. In addition to the truth defence, the newspaper has pleaded a defence of honest opinion under s 31 of the Defamation Act 2005 (NSW). That defence is pleaded to only two of the four matters complained of by Mr Carolan. The defence gives particulars of 12 matters relied upon as the alleged proper material for comment. 2. Those defences have remained in that form since the date on which the original defence was filed, surviving interlocutory applications by both parties: see Carolan v Fairfax Media Publications Pty Ltd (No 3) [2015] NSWSC 1344 and Carolan v Fairfax Media Publications Pty Ltd (No 4) [2015] NSWSC 1399. 3. The decision in Carolan (No 4) determined a previous application by the defendants to amend the defence. The proposed amendment refused in that judgment sought to amend the defence in three ways. 4. First, the defendants sought to add a defence of contextual truth. The proposed defence specified a single contextual imputation, as follows: There are reasonable grounds to suspect that the plaintiff gave the results of blood tests he conducted on Sydney Roosters football players to an organised crime figure. 1. The proposed contextual imputation was supported by lengthy particulars ranging over a variety of topics. 2. Secondly, the proposed amendment sought to expand the particulars of truth in support of the existing truth defence by adding the particulars of contextual truth as further particulars in support of the truth defence as to imputation (b). 3. Thirdly, the proposed amendment expanded the particulars of the facts, matters and circumstances relied upon to prove the substantial truth of one of the particulars of proper material for comment, namely particular (xii) as follows: That the result of the tests referred to at paragraphs (viii) and (ix) above were found on the mobile phone of an organised crime figure, which was seized by law enforcement officers. 1. I held that leave to amend to add the defence of contextual truth and to expand the particulars of the existing truth defence should be refused. I noted, however, that some of the new particulars were relevant to the existing defence of honest opinion and indicated that the defendants would not be precluded from relying on those particulars for that purpose. The proposed amendment 1. The newly-propounded amendment accordingly represents a second attempt to expand the particulars of truth in respect of imputation (b) (that the plaintiff had so conducted himself as to warrant being terminated by the Club). In the existing defence, the only particulars of truth pleaded as to that imputation are a repetition of the particulars pleaded as to imputation (a). The scope of those particulars is confined to the circumstances in which it is alleged Mr Carolan tested players' blood without their consent. That is the only allegation relied upon to prove the alleged truth of the imputation that Mr Carolan so conducted himself as to warrant being terminated by the Club. That is the case the plaintiff came to court to meet. 2. As explained in my judgment in Carolan (No 4), the defendants' decision to seek leave to amend the defence was precipitated by their obtaining what their legal advisors considered to be two critical pieces of information. As to one, I did not consider that it provided the support for the proposed defence apprehended by those advising the defendants: at [19] to [20]. As to the other, I accepted that it was a significant piece of information: at [18]. The information in question was the fact that a person referred to in the matters complained of as "an organised crime figure" (and referred to in particular (xii) set out above) was a client of Mr Carolan. For ease of reference (and so as to avoid collateral reputational damage), that person has been referred to in the proceedings as Mr X. 3. In the newly-propounded amendment, the defendants seek to rely upon that information in a more narrow way than was proposed in the ambitious earlier iteration of the amended defence. Specifically, the defence of truth now sought to be made in response to imputation (b) is that the plaintiff so conducted himself as to warrant being terminated by the Sydney Roosters Football Club by reference to two new matters: 1. the fact that the results of the blood tests were found on the mobile phone of Mr X; 2. the fact that Mr X was a client of Mr Carolan. 1. As already indicated, the fact that the results of the blood tests were found on Mr X's mobile phone has been included in the defence as a particular of proper material for comment since the filing of the original defence was on 9 December 2014. On its own, it was evidently not considered a basis for sustaining the plea of truth to imputation (b). The defendants contend, however, that in combination with the new particular (that Mr X was a client of Mr Carolan), that fact is capable of establishing the truth of the imputation that the plaintiff so conducted himself as to warrant being terminated by the Club. 2. Mr Dawson, who appears with Ms Amato for the defendants, submitted that the new particulars represented a narrow and limited amendment which would cause no prejudice to the plaintiff. He explained that the case was not put on the basis that the plaintiff knew Mr X was an organised crime figure but simply on the basis of Mr X's status, as an objective matter. He submitted that, having regard to the importance of questions of integrity in the sports world, the bare fact of a connection with Mr X would be a sufficient basis for the Club to terminate its association with the plaintiff. 3. Mr Smark SC, who appears with Ms Chrysanthou for Mr Carolan, emphasised that the case the plaintiff came to meet was the allegation (which he disputes) that he carried out unauthorised tests on the players' blood and should have been sacked on that basis. 4. By way of "theoretical objection", Mr Smark submitted that the new case sought to be put was inherently irrational. He submitted that the normative proposition that Mr Carolan deserved to be terminated regardless of how the information found its way on to the phone of his client the organised crime figure was "risible". 5. Separately, Mr Smark submitted that there was a practical or forensic justification for refusing the application, which was that the plaintiff had not, so long as the matter stood simply as one of the particulars of proper material for comment, had to concern himself with the accuracy, testability or refutability of the matters particularised in support of the contention that Mr X is an organised crime figure since it simply didn't matter. The introduction of those particulars in support of the evaluative judgment whether the plaintiff had so conducted himself as to warrant being terminated would accordingly place the plaintiff at a disadvantage. The prejudice identified was "the investigations and the reflections by the lawyers and the arguments not prepared" (T76.29). Defendants' proposal to call the plaintiff as their witness 1. Mr Dawson contended that it beggared belief that the connection between the plaintiff and Mr X would not have been investigated by those representing the plaintiff. He submitted that the bare claim of prejudice, without any evidence to support it, should be rejected. Mr Dawson said, "if necessary, I will call Mr Carolan on the amendment application and ask him the questions myself" (T80.36). 2. I determined to consider overnight whether the defendants should be entitled to call the plaintiff on the amendment application and otherwise reserved my decision on the application, indicating that I would rule on it the following morning. 3. The plaintiff then commenced his evidence, at 3.00pm. He was still in evidence-in-chief at the end of the day. 4. At the outset of the hearing the following day, Mr Dawson repeated that he wished to call the plaintiff on the amendment application. That course was opposed by Mr Smark. It was common ground that the plaintiff was a compellable witness. Mr Smark submitted, however, that the Court has an overriding power to regulate its own processes (a proposition I think also accepted by Mr Dawson at T112.35). 5. Mr Dawson accepted that, if called by him, the plaintiff would be the defendants' witness on the application but foreshadowed the possibility that the process would "end up in section 38 territory", a reference to the Court's authority under s 38 of the Evidence Act 1995 (NSW) to allow a party to question his own witness, as though the party were cross-examining the witness. The application thus openly contemplated the interruption of the hearing of the plaintiff's action so as to enable the defendants to cross-examine him before (or, as events transpired, during) his evidence-in-chief. Mr Dawson submitted that he should be permitted to call the plaintiff so as to rebut the proposition put from the bar table that the plaintiff would be prejudiced by the application. 6. I determined not to allow that course. My determination was informed by the following considerations. As already noted, the defendants acknowledged that there was no reason for the plaintiff's lawyers to have investigated the new particulars as deployed for the purpose of the proposed amendment (T118.44-50). No evidence was required on that issue because it was accepted by the defendants. The basis for calling the plaintiff was to test the inference contended for by Mr Dawson that the lawyers had investigated those issues incidentally. The principal basis for that contention, as I understood it, was that the issues would have been investigated in the context of advising the plaintiff as to whether to bring the action at all or in some other context (T119.10-20). 7. Against that speculative contention, it was submitted (in effect) that it would be unfair to determine the amendment application without allowing the defendants to adduce evidence from the plaintiff, presumably as to the steps taken by his lawyers in anticipation of the commencement of legal proceedings, or during the proceedings, on his instructions. Plainly, much if not all of the relevant field of inquiry would be protected by client legal privilege. 8. Mr Smark submitted that the evidence the plaintiff could be expected to give would in all probability be irrelevant to the inquiry. That may be putting the matter too high. It is conceivable, although perhaps unlikely, that the plaintiff might know the extent to which the issues raised by the proposed defence had been investigated and evaluated by his legal representatives. As submitted by Mr Smark, that issue might more pertinently have been addressed by the solicitor on the record for the plaintiff (Mr Kalantzis) but I accept that is not determinative of the defendants' application. 9. More importantly, I accepted, as submitted by Mr Smark, that the entire exercise would have been disproportionate to the matter raised for the Court's consideration; that is, the speculative inquiry as to whether issues raised by the proposed amendment had been investigated and evaluated incidentally although not raised on the pleadings). 10. Further, I accepted that considerations of fairness militated against the course proposed by Mr Dawson. As submitted by Mr Smark, the suggestion that the plaintiff should be required to give evidence against himself as a witness for the defendants on their amendment application certainly raised questions of fairness in terms of costs and stress. Further, in my view, the course proposed carried a substantial risk of forensic advantage to the defendants, or at the very least, forensic disadvantage to the plaintiff in the orderly presentation of his case. Amendment application 1. My reasons for rejecting the principal application (the amendment application) were as follows. 2. First and perhaps most importantly, I accepted Mr Smark's submission that there was a degree of irrationality inherent in the proposed defence. The imputation sought to be justified focuses on an evaluative judgment of the plaintiff's conduct ("so conducted himself as to warrant" etc). Pressed as to the "conduct" sought to be attributed to the plaintiff (having regard to the narrow way in which the defence is sought to be put), the defendants identified the conduct of having "that man" (the alleged organised crime figure) as a client. 3. That bare fact could scarcely sustain the truth of the imputation or at least not without inquiry into the nature of the man (contrary to the narrow way in which the defence was put). In the course of argument, Mr Dawson noted more than once, that if the amendment were allowed, he would not be precluded from pressing the plaintiff as to the extent of his knowledge of the nature of the man. The prejudice of such an organic process is, dare I say, "manifest": cf Carolan (No 4) at [26]. 4. As in the earlier amendment application, the defendants emphasised that they had only recently come into possession of the information that the organised crime figure was a client of Mr Carolan. For the reasons explained in Carolan (No 4), I do not think that event was so recent as to warrant an amendment application on the first day of the hearing. The critical document is one the defendants could have obtained earlier had they inspected the discovered documents in a more timely way. 5. I accept that this issue is of perceived importance to the defendants. In all the circumstances, however, I did not consider that it would be fair to the plaintiff to allow the amendment. Subpoena to Mr Tim Unsworth 1. On the third day of the hearing, the plaintiff moved under r 33.4 of the Uniform Civil Procedure Rules 2005 (NSW) to have set aside a subpoena dated 13 October 2015 issued at the request of the defendants to Mr Tim Unsworth of Unsworth Legal. The defendants accepted that on the face of the subpoena there was no obvious connection between the documents sought and the issues in these proceedings (T320). However, the defendants sought to make good the connection by reference to extraneous material. The argument was heard in part but, the following morning, Mr Dawson indicated that he would withdraw the subpoena and did not wish to be heard further as to the determination of the application to have it set aside (T328). In the circumstances, I considered it appropriate to order that the subpoena be set aside and that the documents produced to the Registry in answer to the subpoena be returned to Mr Unsworth. 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: 28 October 2015