Bailey v Australian Broadcasting Corporation & Anor [1994] QSC 279

IN THE SUPREME COURT OF QUEENSLAND No. 1303 of 1993 Brisbane Before Mr Justice Mackenzie [A.H.Bailey v. The A.B.C.] BETWEEN ANTHONY HAROLD HYDE BAILEY Plaintiff and THE AUSTRALIAN BROADCASTING CORPORATION First Defendant and CHRISTOPHER MASTERS Second Defendant JUDGMENT - MACKENZIE J. Judgment delivered 26 October 1994 CATCHWORDS: PRACTICE - DEFENCE - Striking out - Defamation action - defence truth and public benefit - whether necessary for whole transcript of television program to be pleaded - whether pleas and particulars calculated to embarrass plaintiff at trial - whether facts sufficiently pleaded. COUNSEL: A. Morris Q.C. for applicant P. Dutney Q.C. & D. Boddice for respondent SOLICITORS: Russell and Company for applicant Biggs & Biggs Francis & McGregor for respondent HEARING DATE: 6 October 1994 -- 1 of 12 -- IN THE SUPREME COURT OF QUEENSLAND No. 1303 of 1993 BETWEEN ANTHONY HAROLD HYDE BAILEY Plaintiff and THE AUSTRALIAN BROADCASTING CORPORATION First Defendant and CHRISTOPHER MASTERS Second Defendant JUDGMENT - MACKENZIE J. Judgment Delivered 26 October 1994 This is an application for an order that sub-paragraph 3(b) and paragraph 5A of the defendant's amended defence be struck out and for consequential orders. The action itself arises from a "Four Corners" program in which aspects of the prosecution of charges against a number of persons including Richard Shierk Leeth and Paul Joseph Donovan for offences related to the importation into Australia of large quantities of illicit narcotic drugs were examined. Leeth and Donovan were represented by the plaintiff's firm, Bailey and Bailey. Amongst other things the program contained statements made by Leeth and Donovan concerning the conduct of the defence. It is from some of those statements that the action arises. Paragraph 3 of the amended defence is responsive to paragraphs in the Statement of Claim alleging that the interviews of Leeth and Donovan contained defamatory statements of and concerning the plaintiff. There are 10 allegedly defamatory statements attributed to Leeth and one -- 2 of 12 -- 2 to Donovan. These are set out verbatim in the statement of claim. As to the allegations, paragraph 3(a) of the amended defence admits that on 29 March 1993, the first respondent broadcast an edition of the television program "Four Corners". Paragraph 3(b) responds that the defendants "say that the said broadcast contained the words set out in Schedule A hereto". Schedule A purports to be a transcript of the whole program. The complaint about this aspect of the matter is that the pleading of what purports to be a complete transcript of the program is irrelevant. Paragraph 5A of the defence alleges that if the words complained of in certain specified paragraphs were defamatory, the defamatory matter was true and it was for the public benefit that the publication complained of should have been made. The complaint in this respect is that the pleas and the particulars which have been furnished in relation to them are of a nature which is calculated to embarrass the plaintiff at the trial. With respect to subparagraph 3(b), Mr Morris went through the exercise of exploring possible bases on which the whole of the transcript might be pleaded and submitted that there was no apparent reason why it was necessary for the transcript of the whole of the program to be annexed to the defence. He conceded that if there was any demonstratable reason the objection could not be sustained. The only justification advanced by Mr Dutney was that the defendant was entitled to have the whole publication before the jury. He referred in this connection to paragraph 1299 of Gatley on Libel and Slander 8th ed. as stating the relevant principle. That passage, is concerned not with pleading but with the trial itself. Obiter dicta in Plato Films Ltd v. Speidel (1961) 1 All E.R. 876, suggest that in any event it is a matter for the trial Judge to decide how much of a film and, one would imagine, a video tape should be played to the jury. The fact that it is the combined effect of the words and images which is important in the case of a television program is emphasised in Comalco Ltd v. A.B.C. (1985) A. Tort. R. 80744. Comalco Ltd v. A.B.C. also provides an example where the whole of the transcript of the program was not reflected in the pleadings while the whole of the video tape was in evidence. -- 3 of 12 -- 3 I do not intend to lay down any general principle in this ruling. I simply observe that a purpose of pleadings being to expose material facts, some regard must be had to the question of materiality of what is pleaded. The defendants have raised qualified protection under s.377(3),(5) and (8), (paragraph 5 of the defence) and truth and public benefit (paragraph 5A). It was not suggested in argument that the program had to be looked at in its entirety to provide a context which influenced the question whether the matter complained of was unlawfully defamatory or not. The transcript of the program focuses on the particular case but contains comment by the presenter, reporter and people other than the two men whose comments are said to be defamatory. The case is not one where there is a dispute as to what was said. Objection has been taken to the whole transcript being pleaded and on the basis upon which it has been put to me by Mr Dutney, I am not persuaded the whole of the transcript, is a material fact. In the circumstances I will strike out paragraph 3(b) and give leave to re-plead. Dealing now with the objections to paragraph 5A, Paragraph 12 of the statement of claim alleges the natural and ordinary meaning of the various defamatory statements. The plea of truth and public benefit is confined to some only of these. I will deal with the matters by reference to the paragraph of the statement of claim and the paragraph in the Request for Further and Better Particulars, the numbering of which is mirrored in the Further and Better Particulars. -- 4 of 12 -- 4 Statement of Claim: Paragraphs 12(a)(iii) and 12(b)(ii) (Paragraph 1: Request for Further and Better Particulars) The allegation is that the plaintiff sacrificed or subjugated the interests of Leeth and Donovan to his own interest in obtaining money. The particulars sought were of "all of the facts, matters and circumstances relied on in support of" the allegation. The particulars given set out a number of propositions commencing with the arrest of Leeth and Donovan and others for importing cannabis resin into Australia and the receipt of instructions by the plaintiff to act in the matter on 22 September 1987. Next there is reference to a transfer arranged by the "brother and partner" of the plaintiff of over $1 million from Resorts Pacific Limited (a company of which Leeth and another co-accused were beneficial owners), to Vanguard Ltd of which the plaintiff's brother and partner was a beneficial owner on or about 24 or 25 September 1987. Then there were orders made on 25 and 28 September 1987 placing all property in which any of the accused persons had a beneficial interest in Australia or elsewhere under the Official Trustee in Bankruptcy. On or about 28 or 29 September 1987, the plaintiff arranged the sale of shares owned by Leeth but sold them on account of Mr J. Delaney and deposited the proceeds in his firm's general account. On 6 October 1987 the plaintiff's brother and partner arranged the transfer of funds from Development Industries Ltd, of which one of the co-accused was a beneficial owner, to Vanguard. On 8 October 1987, a written agreement to pay $1.2 million for legal costs to the plaintiff's firm was made by Leeth, Donovan and three of their co-accused. On 15 October 1987, an order was made releasing some funds held by the Official Trustee for legal fees for the criminal proceedings. On 16 November 1987, the plaintiff's firm sent instructions for the two amounts of funds transferred to Vanguard to be transferred to the firm's general account. On 18 November 1987, a bill for legal fees was sent to the Official Trustee and in November, the Official Trustee obtained an injunction in Vanuatu preventing the transfer of funds from Vanguard. On 1 December 1987, those funds were transferred to the Official Trustee pending proceedings for a -- 5 of 12 -- 5 declaration that they were covered by the orders of 25 and 28 September 1987, which declaration was made on 24 December 1987. On 29 December 1987, an amount of over $1 million was paid to the Official Trustee. In June 1988, Leeth, Donovan and their co-accused were committed for trial after a four and a half month hearing. All accused pleaded guilty on 3 April 1989 to various offences and were sentenced on 7 April 1989. It was alleged in the particulars that $1.3 million had been expended on legal costs, including applications to the Federal Court for monies for representation of Leeth, Donovan and their co-accused. Statement of Claim: Paragraph 12(c)(i) (Paragraph 2: Request for Further and Better Particulars) The allegation is that the plaintiff knew or ought to have suspected that the money was the proceeds of crime. Particulars were not sought in respect of the allegation of knowledge, but in respect of the facts matters and circumstances relied on to support the allegation that he ought to have suspected that the money was the proceeds of crime. In the particulars given, paragraphs (a) to (g) set out allegations with respect to the importation and sale of the drug, the depositing of the monies in Resorts Pacific and Development Investments in Vanuatu, the charges of participation in the importation of drugs, and the giving of a false identity and occupation and source of assets by Leeth. Paragraphs (h) to (u) set out the events recited under the previous heading subsequent to instructions being given. Paragraph (v) alleges that the plaintiff had considerable experience in acting as solicitor in criminal proceedings concerning the importation of narcotics. -- 6 of 12 -- 6 Statement of Claim: Paragraph 12(c)(iii) (Paragraph 3: Request for Further and Better Particulars The allegation is that because the plaintiff knew or ought to have suspected that the money was the proceeds of crime, and deliberately refrained from making inquiries as to the source of the money, he acted unlawfully and immorally in participating in laundering money obtained from the sale of illicit drugs. The particulars sought were:- (a) the facts, matters and circumstances relied on in support of the allegation that the plaintiff acted unlawfully including the identity of the statutory provision allegedly contravened and that the plaintiff had acted immorally; (b) the acts of laundering and the date; (c) the facts, matters and circumstances relied on in support of the allegation that each sum laundered was from the sale of drugs (including the date of sale and the nature and quantity of the drug). The particulars given as to acting unlawfully and immorally were the same as those for paragraph 12(c)(i). The statutory provisions were identified as ss.81 and 82 of the Proceeds of Crime Act. The acts and dates of laundering were particularised as:- (a) the transfer of monies from Resorts Pacific Limited to Vanguard on 25 September 1987; (b) the sale of shares and the banking of the proceeds into the general account; (c) the transfer from Development Industries to Vanguard on 7 October 1987; (d) the giving of instructions to transfer funds to the general account on 16 November 1987. The facts, matters and circumstances with respect to the allegation that each sum was from the sale of drugs were:- (a) that Leeth and Donovan engaged in 1985 and 1986 in arranging the importation of commercial quantities of cannabis resin into Australia; -- 7 of 12 -- 7 (b) all but 87kg of that imported in 1986 was sold between 1985 and 1987 at a wholesale price of $8,500 per kilogram; (c) the money transactions previously referred to; (d) that Leeth pleaded guilty to possessing more than $3 million the proceeds of the 1986 importation, having laundered more than $1 million through Vanuatu; (e) the order to pay $1.6 million pecuniary penalty including the amount expended on legal costs. Statement of Claim: Paragraph 12(e)(ii) (Paragraph 4: Request Further and Better Particulars) The allegation was that the plaintiff was engaged in concealment of the proceeds of crime from Australian authorities. The particulars requested were:- (a) each act of concealment and the date; (b) the sum concealed; (c) the crime, its date and the participants; (d) the authority from whom the proceeds were concealed. The particulars given of the plaintiff's acts were:- (a) the transfer from Resorts Pacific to Vanguard; (b) the sale of shares; (c) the transfer of funds from Development Industries to Vanguard; (d) the giving of instructions to pay monies to the firm's general account. The particulars of the crimes were a number of specified drug related offences involving the various offenders. The particulars of the authorities from whom the proceeds were concealed were the Australian Federal Police, the Director of Public Prosecutions and the Official Trustee. -- 8 of 12 -- 8 Statement of Claim: Paragraph 12(e)(iii) (Paragraph 5: Request for Further and Better Particulars The allegation was that the plaintiff engaged in concealment of the proceeds of crime for his own pecuniary advantage. The particulars requested were the facts, matters and circumstances establishing that that was the plaintiff's purpose. The particulars given were the fact of the arrests, the receipt of instructions to act in the criminal proceedings the transfer by Resorts Pacific to Vanguard, the sale of shares, the transfer from Development Industries to Vanguard, the payment of the $1.2 million retainer, the seeking of funds for legal expenses on 15 October 1987 in the Federal Court without revealing the retainer, the instruction to send Vanguard funds to the firm's general account and that the plaintiff had subsequently deposed that the firm had agreed to act only on the basis of a retainer for a set fee which became the property of the firm. Statement of Claim: Paragraph 12(l)(i), (ii) and (iii) (Paragraphs 6, 7 and 8: Request for Further and Better Particulars) The allegations were respectively that the plaintiff was a dishonest and untrustworthy person, that he was not a fit and proper person to be a solicitor and that he was not a fit and proper person to be entrusted as a solicitor with the defence of a fee paying client in criminal proceedings. The particulars requested the facts, matters and circumstances supporting the allegations. The particulars given relied on all matters in the previous particulars. Statement of Claim Paragraph 12(l)(iv) (Paragraph 9: Request for Further and Better Particulars) The allegation is that the plaintiff acted and is prepared to act in a manner constituting professional misconduct or unprofessional conduct as a solicitor and contrary to accepted standards of ethical propriety of solicitors. The particulars requested were each act, its date and place, whether it was professional misconduct or unprofessional conduct, the facts, matters and circumstances -- 9 of 12 -- 9 relied on to establish the plaintiff is prepared to so act and the standards of ethical propriety contravened. The particulars given were the allegations in paragraphs 1 to 4 and the dates and places particularised in paragraphs 1, 2, 3(c) and 4(a) of the Further and Better Particulars. Each act was alleged to constitute both professional misconduct and unprofessional conduct. The fact that he had so acted was evidence that he is prepared to so act and the standard of ethical propriety contravened was the standard of professional conduct observed or approved by solicitors of good repute and competency. Mr Morris submitted that the particulars given in paragraph 1 of the Further and Better Particulars did not allege that the interests of the Leeth and Donovan were sacrificed or subjugated. They did not allege that the committal proceedings or any of the Federal Court proceedings were conducted other than in strict accordance with the instructions of Leeth and Donovan or in any other improper manner. It was not alleged that it was improper or irresponsible to allow the committal proceedings to run for four and a half months or that the plaintiff had any control over the length of the proceedings which he could or should have exercised in order to reduce their length. There was no allegation that the sentences received by Leeth and Donovan exceeded those which would have been imposed if committal proceedings had been conducted differently or that their interests were prejudiced in any way. Nor was there any allegation that the plaintiff at any time or in any way preferred his own interest in obtaining money over the interests of his professional clients. He submitted that even if every part of the particulars was proved to be true those particulars could not establish that truth of the innuendo meaning which the defendants sought to justify. Mr Dutney pointed out that it was literally true that the particulars did not make such allegations. However, he submitted that it was not necessary for the particulars to do so because paragraph 5A itself pleaded that the interests had been subjugated or sacrificed by virtue of the allegation that if the words bore that meaning as alleged by the plaintiff they were true. -- 10 of 12 -- 10 Mr Dutney also pointed out that the case was essentially circumstantial. He submitted that it was open on the pleadings for an inference to be drawn that it was true that the interests of Leeth and Donovan had been sacrificed or subjugated to the plaintiff's own interest in obtaining money. He submitted that it was wrong in a circumstantial case to take each of the facts relied on separately with a view to seeing whether it could be established. (Shepherd v. The Queen (1990) 170 CLR 513). The particulars commence only upon the arrest of Leeth, Donovan and the other persons. In my opinion, facts are sufficiently pleaded to invite a tribunal of fact to consider drawing an inference, as opposed to speculating, that the interests of Leeth and Donovan had been sacrificed or subjugated to the plaintiff's interests. There is no basis for striking out. To the extent that there is a complaint about paragraph 2 that there is nothing to show that the plaintiff knew of a number of these facts at the material time, it would be incumbent upon the defendants to prove at trial that the money was in fact the proceeds of crime. Therefore facts which tend to prove that fact are relevant whether the plaintiff knew of them or not. The commission of a crime has to be proved as an objective fact. There is no basis for striking out. The same applies to paragraph 3 of the Further and Better Particulars. So far as paragraph 4 is concerned, once again objective proof that monies were the proceeds of crime has to be given. That is independent of the question whether the plaintiff knew of facts relied on to prove that. The aspect of concealment is once again a matter for inference and in my view there is no basis for striking out. So far as paragraph 5 is concerned the fact that monies were the proceeds of crime must be proved objectively. Whether the plaintiff's purpose was to gain a pecuniary advantage is a matter of inference from the facts. There is no basis for striking out. Paragraphs 6, 7, 8 and 9 depend on proof of earlier allegations and as those have not been struck out neither should these be. In the result I conclude that there is no basis for striking out paragraph 5B. The formal orders are:- -- 11 of 12 -- 11 (1) that sub-paragraph 3(b) of the defence be struck out; (2) that leave be given to the defendants to re-plead within 14 days hereof; (3) otherwise the application is dismissed; (4) costs reserved. -- 12 of 12 --