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  • Unreported Judgment

Kennedy v Nine Network Australia Pty Ltd

 

[2008] QSC 134

 

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

DELIVERED ON:

16 June 2008

DELIVERED AT:

Brisbane 

HEARING DATE:

5 June 2008

JUDGE:

Dutney J

ORDER:

  1. That the Plaintiff provide security for the Defendant’s costs in the sum of $150,000.00
  2. That Messrs Thynne & Macartney be at liberty to peruse and make a copy of the two affidavits of Mr Kennedy sworn on 3 November 2003 and 4 November 2003 respectively (documents 2 and 3 on file 9981/03) and the affidavit of Mr Coulthart sworn 4 November 2003 (document 5 on file 9981/03) subject to paying the normal fees charged by the registry
  3. Paragraphs 28, 44 and 64 of the further amended statement of claim be struck out
  4. That the applications otherwise be dismissed
  5. Each parties costs are costs in the proceedings
  6. That the matter be placed on the Supervised Case List.

CATCHWORDS:

PROCEDURE – COSTS – SECURITY FOR COSTS – RESIDENCE OUT OF JURISDICTION – where plaintiff started proceedings against defendant for defamation in 2004 – where plaintiff ceased to reside in Australia and took up residence in Singapore in 2005 – where defendant was not aware that plaintiff was no longer resident in Australia until October 2007 – where defendant has no identifiable assets in the jurisdiction – where proceedings for defamation are genuine – whether security for costs should be ordered

PROCEDURE – COSTS – SECURITY FOR COSTS – OTHER REASONS FOR SECURITY – where defendant did not give notice of intention to apply for security for costs until April 2008 – where high proportion of costs incurred by defendant since notice was first given of an intention to apply for security for costs – where the obligation to pay the other party’s costs if the action is discontinued becomes a positive obstacle to settlement

PROCEDURE – DISCOVERY  AND INTERROGATORIES  – DISCOVERY  AND INSPECTION OF DOCUMENTS  – PRODUCTION AND INSPECTION – GROUNDS FOR RESISTING PRODUCTION – LEGAL PROFESSIONAL PRIVILEGE – WAIVER OF PRIVILEGE – where defendant broadcast stories on “A Current Affair” in relation to the plaintiff and in relation to World Games Inc System, the business run by the plaintiff – where prior to the stories being broadcast the plaintiff  sent a letter to defendant concerning the legality of the World Games Inc System – where the letter forms a claim for aggravated and exemplary damages – whether the letter should be disclosed – whether the letter is subject to legal professional privilege – whether legal professional privilege has been waived

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – PLEADING – STATEMENT OF CLAIM – where application by defendant to strike out imputation in further amended statement of claim

Uniform Civil Procedure Rules 1999 (Qld) rr 160, 161, 162

Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475, cited

Bayliss v Cassidy (no 2) [2000] 1 Qd R 464, distinguished

Cardinia Pty Ltd v Yu Feng Pty Limited [1999] QSC 102, affirmed

Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 248, distinguished

Emanuel Management Pty Ltd (in liq) v Foster’s Brewing Group Ltd & Ors[2003] QCA 552, cited

Lilypond Constructions Pty Ltd v Homann [2006] 1 Qd R 411, cited

Programmed Solutions Pty Ltd v Dectar Pty Ltd [2007] QCA 385, affirmed

Robson v Robson [2008] QCA 36, discussed

Rhyse Holdings Pty Ltd & Ors v McLaughlins (A firm) & Anor. [2002] QCA 122, distinguished

COUNSEL:

Mr P Flanagan S.C. with Ms C Klease for the Applicant

Mr P Applegarth S.C. for the Respondent

SOLICITORS:

Thynne & Macartney for the Applicant

Hopgood Ganim for the Respondent

[1] The primary action by the Plaintiff against the Defendant is for damages for defamation.

[2] This application has been brought by the Defendant.  The Defendant seeks a number of orders including security for its costs of the action and disclosure of legal opinions referred to in a letter from the Plaintiff’s solicitors to the Defendant’s solicitors dated 19 March 2004.  The other matters in relation to which orders are sought can be identified by the various sub-headings.

Background

[3] The Plaintiff/Respondent (“Mr Kennedy”) is a director of Pacific Delta Investments Ltd (“PDIL”) which operates an internet based virtual casino under the name, World Games Inc (“WGI”).

[4] The Defendant/Applicant is a commercial television network (“Channel 9”). Channel 9 televises a well known nightly programme called “A Current Affair.”

[5] On 31 March, 1 April, 29 April and 6 September 2004, the programme included stories relating to WGI and the plaintiff/respondent, Mr Kennedy (“the stories”).

[6] On 13 April 2004, Mr Kennedy issued proceedings against Channel 9 alleging that the stories were defamatory of him.

Security for costs

[7] A defence was filed on 13 May 2004.

[8] On 18 May 2004 Mr Kennedy foreshadowed a need to amend the statement of claim.  In correspondence, Channel 9 objected to the amendments arguing, inter alia, that imputations in paragraphs 9(a) and 9(e) of the proposed amended pleading did not arise from the stories.

[9] Issue was also taken with Mr Kennedy’s failure to produce the legal opinions to which reference was made in a letter from Mr Kennedy’s solicitors to Channel 9 dated 19 March 2004.  The substance of the letter (including the asserted existence of the legal opinions) was set out in paragraph 22 of the statement of claim.

[10] An application for leave to amend was brought before Atkinson J in this court on 20 July 2004.  Imputation 9(a) was argued, as was imputation 9(e), although on a slightly different ground to that argued before me and to which I shall shortly come.

[11] Although it had been raised in the correspondence preceding the application for leave to amend, the issue of disclosure of the legal opinions was not argued before Atkinson J.

[12] Mr Kennedy’s amended statement of claim was filed on 22 July 2004 and an amended defence was filed on 23 August 2004.

[13] A further amended statement of claim was filed on 15 December 2004.  By this time all the relevant stories had been broadcast.

[14] A further amended defence was filed on 24 December 2004.  A second further amended defence was filed on 4 January 2005 and an amended reply on 21 January 2005.

[15] Some time during January 2005 Mr Kennedy ceased to reside in Australia and took up residence in Singapore.

[16] Disclosure took place during 2005. On 9 December 2005, in a supplementary list of documents, Mr Kennedy disclosed a register of directors of PDIL which showed his address being in Singapore.

[17] This document was apparently inspected by Channel 9’s solicitor on 29 December 2005. 

[18] Early in 2006, the solicitors for Channel 9 changed. On 12 April 2006, the new solicitor again inspected the documents including the document noting the change of the Plaintiff’s address. 

[19] The action then appears to have gone into abeyance until revived by a letter from the Case Flow Manager of this court in about June 2007.

[20] In November 2006, Channel 9 again changed solicitors and the present solicitors began representing that party.

[21] On 18 June 2007, Mr Kennedy’s solicitors wrote to Channel 9’s solicitors informing them of the letter from the Case Flow Manager and suggested a timetable to bring the matter to trial.  Despite suggesting a timetable which would have resulted in the action being ready for trial in September 2007, the next active step appears to have been the delivery of a request for further and better particulars of Mr Kennedy’s further amended statement of claim of December 2004 and the amended reply of 21 January 2005.  This was sent on 21 September 2007.

[22] The particulars requested were supplied on 26 October 2007.

[23] On 18 December 2007 Channel 9 filed another defence seeking to justify the defamation together with lengthy set of particulars of truth.

[24] In the meantime, there had been exchanges of correspondence between the parties in which disclosure was pursued and the issue of the legal opinions referred to above was re-agitated.

[25] The particulars of the statement of claim provided on 26 October 2007 disclosed that Mr Kennedy had left Australia in January 2005 and had thereafter been a resident of Singapore.

[26] In a letter dated 4 March 2008, Channel 9’s solicitors first raised the issue of security for costs.  The copy of the letter exhibited to the affidavit of the solicitor for the Defendant, Mr Beattie, does not disclose what amount was sought for security, whether such amount was realistic and whether it bore any relationship to the amount now claimed.  It is thus not possible to say whether demand for security was realistic.

[27] Property searches conducted by Channel 9’s solicitors in were carried out in May 2006.  These searches disclosed four properties in Mr Kennedy’s name.  Subsequent inquiries revealed that two of those properties were in fact registered in the name of a different person with the same name as Mr Kennedy. 

[28] The two properties that were shown as being registered in Mr Kennedy’s name in May 2006 have both been disposed of.  A property at Bonogin registered in Mr Kennedy’s name solely was sold for $385,000 on 17 July 2006.  The other property was located on Russell Island.  Mr Kennedy was registered as a joint tenant with Leigh Rosemary Kennedy.  The Russell Island property was sold in December 2007 for $45,000.

[29] Mr Beattie deposes that he had conducted property searches in relation to Mr Kennedy as early as 3 September 2007.  He was thus aware that the Bonogin property had been sold before he received the particulars confirming Mr Kennedy’s residence in Singapore.

[30] Channel 9’s pleading filed on 24 August 2004 does not admit Mr Kennedy’s allegation that he was resident in Queensland, residing at Robina on the basis of electoral roll and White Pages searches.  Presumably he was not registered to vote and did not have a listed telephone number.

[31] Costs incurred by Channel 9 from the commencement of the proceedings to 11 April 2008 are estimated at $396,984.  Mr Bloom, a legal costs assessor, estimates costs from 11 April 2008 to the first day of trial at $411,653.

[32] On 27 August 2007, the Deputy Commissioner of Taxation commenced proceedings against Mr Kennedy claiming an amount of $4,275,025.52 for tax, penalties and interest in relation to the 2004 financial year.  No defence has been filed.  It is not disclosed whether those proceedings have been served.

[33] The principles relating to whether or not security for costs will be ordered are not controversial.

[34] Rule 670 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) provides a source of power.  Rule 671 of the UCPR sets out the circumstances in which security can be ordered.  Rule 672 sets out a non exhaustive list of matters that can be taken into account when such an order is being considered.

[35] Relevantly rule 672 provides;

“In deciding whether to make an order, the court may have regard to any of the following matters—

(a) the means of those standing behind the proceeding;

(b) the prospects of success or merits of the proceeding;

(c) the genuineness of the proceeding;

(d) for rule 671(a)—the impecuniosity of a corporation;

(e) whether the plaintiff’s impecuniosity is attributable to the defendant’s conduct;

(f) whether the plaintiff is effectively in the position of a defendant;

(g) whether an order for security for costs would be oppressive;

(h) whether an order for security for costs would stifle the proceeding;

(i) whether the proceeding involves a matter of public importance;

(j) whether there has been an admission or payment into court;

(k) whether delay by the plaintiff in starting the proceeding has prejudiced the defendant;

(l) whether an order for costs made against the plaintiff would be enforceable within the jurisdiction;

(m) the costs of the proceeding”.

[36] The jurisdiction to order security for costs is enlivened by Mr Kennedy being ordinarily resident outside Australia.

[37] In this case it seems to me that the critical features bearing on the jurisdiction are the lateness of the application and the difficulties likely to be experienced by Channel 9 in enforcing an order for costs against Mr Kennedy.

[38] Notwithstanding that delay in applying for security for costs is not one of the factors listed in rule 672, it has always been regarded as an important discretionary consideration.[1]

[39] There is some debate about the delay in this case.  The jurisdiction to award security for costs did not arise until Mr Kennedy ceased to reside in Australia.  Senior Counsel for Mr Kennedy submitted that the relevant delay was from December 2005 when it should have been apparent to Channel 9’s solicitors that Mr Kennedy was resident offshore.

[40] Senior Counsel for Channel 9 submitted that the delay should only be taken as being since October 2007.

[41] Having regard to the fact that until October 2007 Mr Kennedy pleaded that his place of residence was Robina on the Gold Coast, it seems to me to be placing too heavy a burden on Channel 9’s solicitors to expect them to have appreciated that a document disclosed two years earlier for another purpose should have been recognised as showing that Mr Kennedy had ceased to reside in Australia.  This is a different case from Corby v Channel Seven Sydney Pty Ltd[2] where constructive notice of the plaintiff’s address overseas was found.   I am therefore satisfied that until October 2007, the fact that Mr Kennedy was resident in a foreign country was not known to Channel 9.

[42] Upon becoming aware of Mr Kennedy’s foreign domicile, Channel 9’s solicitors took no immediate action.

[43] Mr Beattie explains in his first affidavit that he believed Mr Kennedy owned property in Queensland against which his client could enforce any costs order.

[44] This belief does not, however, withstand scrutiny.  When it was decided to make the application it was a simple matter for Mr Beattie to ascertain that two of the four properties to which he pointed did not belong to this Mr Kennedy.  The third was sold more than a year before the question of security arose.

[45] The remaining property was on Russell Island and was one in which Mr Kennedy held his interest as tenant in common.  Had thought been given to the question of security for costs, it could not have been believed, even for a moment, that this property would be sufficient security even for the costs incurred prior to the present solicitors commencing to act.  As appears from the above chronology, between 26 November 2006 when the present solicitors took over and 26 October 2007, the only step in the proceedings was a request for further and better particulars.  It seems to me to follow that almost all of the $242,208 in costs and disbursements incurred by Channel 9 in the November 2006 to April 2008 period must have been incurred in the period between 26 October 2007 and 4 March 2008 when notice was first given of an intention to apply for security for costs. 

[46] While Mr Kennedy does not assert an inability to provide security for Channel 9’s costs, the rapid escalation of costs between 26 October 2007 and 4 March 2008 cannot be said to be without prejudicial effect on him.  The assessment of whether the possible benefits of the action justify the risk associated with continuing to pursue it is directly affected by the amount already risked at the time the assessment is made.  There can be a point in any large litigation where the necessity for a plaintiff to protect an existing exposure to the costs of the other side becomes at least as important as the benefit the plaintiff hopes to achieve by continuing the litigation.  In other words, at a certain point, the obligation to pay the other party’s costs if the action is discontinued becomes a positive obstacle to settlement.  This may well be the type of prejudice McMeekin J had in mind when in Robson v Robson [2008] QCA 36 he said:

“The long standing rule in seeking orders of this type is that they be made promptly once the defendant becomes aware of the facts on which the application is based.  If it is not made promptly, it is almost inevitable that there will be some prejudice to the respondent.”[3]

[47] The point at which costs drive the action in any individual case depends on many factors; but awards of damages for defamation in Queensland have not usually been particularly generous, particularly when compared with some other jurisdictions.

[48] Against this, there is no doubt Channel 9 will experience difficulty in enforcing any costs order against Mr Kennedy.  He has no identifiable assets in Queensland although a company incorporated in the British Virgin Islands and which he appears to control owns property in Queensland.  An order for costs against Mr Kennedy would not, however, allow Channel 9 direct access to that property.

[49] Channel 9 does have the capacity to pursue any orders against Mr Kennedy despite difficulties.  In Corby v Channel Seven Sydney Pty Limited[4] the strong financial position of the defendant was an important factor in discounting the difficulty of enforcing a costs order in a foreign country.  In that case, however, the impecuniosity of the plaintiff and her inability to provide security at a late stage of the proceedings was considered important.

[50] It is possible to dispose of the other discretionary factors quickly.

[51] Mr Kennedy has not disclosed his financial position.  At least at one point he appeared to be a man of considerable substance.  More recently he has been sued by the Deputy Commissioner of Taxation for a substantial amount.  Whether this signifies a change in his fortunes or merely a dispute with the Australian Taxation Office is unclear. On the other hand, Channel 9 appears to be a substantial entity.

[52] The prospects of success of either party at this stage of the proceedings are purely speculative.  The publications made against Mr Kennedy appear to be prima facie defamatory.  On the other hand, they appear, prima facie, to be in the public interest if true.  Whether they were made on an occasion of qualified protection is a matter for evidence.

[53] I have no doubt the proceedings are genuine.

[54] The substantial part of this action will be carried by Channel 9.  A plaintiff in a defamation action rarely is required to do more than prove publication and adduce evidence of reputation.  The claim for economic loss has been abandoned.  Overwhelmingly, the costs of the action will be related to proof of the defence.

[55] The action does not appear to concern a matter of public importance.  It is purely private litigation between private litigants each pursuing private interests.

[56] The other matters listed in Rule 672 have either been dealt with or are irrelevant in the circumstances of this case.

[57] Balancing the competing factors in this case, I am satisfied that an order for security for costs should be made.  The absence of any submission of specific prejudice on the part of Mr Kennedy ultimately tips the balance in favour of such an order. 

[58] Despite deciding to make such an order, the delay in giving notice of its intention to apply for the order by Channel 9 is relevant to the amount which should be ordered.  It seems to me that Channel 9 should not be entitled to security for costs incurred by it prior to notice being given.

[59] Until 4 March 2008, Channel 9 permitted costs to be incurred without Mr Kennedy having the early opportunity to consider whether the risk of such costs was justified on the basis I have discussed.

[60] For the future, Channel 9’s costs have been estimated by a legal costs assessor, Mr Bloom.  Mr Bloom estimates those costs in the amount $411,653 up to and including the first day of the trial.

[61] In Emanuel Management Pty Ltd (in liq) v Foster’s Brewing Group Ltd & Ors[5], I noted the traditionally conservative approach of courts to such orders.[6]

[62] In this case the costs are estimated on what seems to me to be a generous approach.  The requirement that Senior Counsel spend three full days attending to case management mentions appears excessive.  Likewise, in a case where the evidence of all witnesses will be given orally, I can see no justification for having counsel settle the witness statements in addition to normal pre-trial conferences.

[63] A significant part of the estimated costs relates to the Plaintiff’s claim for economic loss which has now been abandoned.

[64] Another large component of the costs relates to what appear to be gratuitous amendment to the Defendants pleadings.  By gratuitous, I mean amendments made at the discretion of the Defendant and not as a result of any action on the part of the Plaintiff. 

[65] It seems to me that security should not be required for a mediation as well as for a subsequent trial.  If the parties elect to mediate, it should not be assumed that the mediation will be unsuccessful.  In this case, there is no evidence either party has sought or would agree to a mediation.  If a mediation were likely, one approach might be to award security up to the conclusion of the mediation with liberty to apply for an increase if the mediation was unsuccessful.  That is not appropriate in this case.

[66] Discounting with these factors in mind as well as the factors to which I referred in Emanuel, I will order security in the sum of $150,000 for costs from 11 April 2008 only.

[67] Mr Kennedy has offered security over two properties held in the name of PDIL on the Gold Coast. I would accept this as adequate providing that the Plaintiff, can produce and/or provide the following;

 

1. evidence that PDIL’s equity in the two properties referred to above is at least equal to the amount of $150,000 and;

2. a document executed by PDIL undertaking to be responsible for the Defendant’s costs of the action up to the amount of $150,000 and;

3. an undertaking not to further encumber the two properties without the consent of the Defendant or the leave of the Court and;

4. a caveat by consent to secure the Defendant’s contingent interest in the properties.

 

Otherwise security should be provided in the form of cash or bank guarantee to the satisfaction of the registrar.  I will hear further submissions on the precise form of order.

Legal Professional Privilege

[68] The next contested issue concerns the privilege attaching to the legal advice referred to in the letter of 19 March 2004 sent by the Plaintiff to the Defendant.

[69] The letter of 19 March 2004, was sent prior to the first story of 31 March 2004 and with a view to discouraging its broadcast.  Relevantly, it read as follows:

“We also urge you to allow our clients to provide considered answers to any criticisms that you intend to raise and so we ask, again, for a list of questions to be sent to us by email urgently.

In the meantime, in relation to the queries you very briefly raised yesterday, we are instructed that:

1.You asked our client Mr Kennedy why he believes the World Games Inc system is not a pyramid scheme when you assert (incorrectly, we might add) that the Norwegian, Canadian and Australian governments think it is.  First, PDIL does not on our instructions conduct any business in Australia at all so the Australian position is irrelevant.  However, to our and our client’s knowledge, there has been no finding at all anywhere in the world (including in Australia) that the World Games Inc System is a ‘pyramid scheme’ and the legal advices our client has obtained in the various jurisdictions in which it operates (including Norway and Canada) do not conclude that the World Games Inc System is a pyramid scheme.” (Italics added)

[70] Notwithstanding the written submissions of Senior Counsel for Mr Kennedy, I have no doubt that the italicised passage means and was intended to mean that Mr Kennedy had obtained legal advice concerning the legality of the World Games Inc System and that that advice concluded that the system was not an unlawful pyramid scheme. 

[71] Paragraphs 22 to 25 of the further amended statement of claim plead, relevantly:

22 By his solicitor’s letter dated 19 March 2004 the Plaintiff informed the Defendant:

(d) that legal advice obtained in various jurisdictions in which WGI operated (including Norway and Canada) did not conclude that WGI is a pyramid system …

23 the Defendant omitted to include in the 31 March broadcast each or any of the matters referred to in the previous paragraph.

24 The Defendant’s omission to refer to these matters was unreasonable.

25 The Defendant’s omission to refer to these matters was deliberate and suggested that the Plaintiff’s only response to the allegations made in the broadcast were those depicted in the broadcast, and that the Plaintiff unreasonably refused to respond to those allegations.”

[72] These paragraphs then found a claim for aggravated and exemplary damages.

[73] Channel 9’s solicitors sought production of the legal advices referred to pursuant to rule 222 of the UCPR.

[74] Rule 222 entitles a party to request production of a document mentioned in a pleading. 

[75] In this case, it seems to me that the document relied on by Mr Kennedy is the letter.  The reference to the legal advice is only by way of setting out the contents of the letter.  Whether or not such legal advice exists is irrelevant to the allegation and to the paragraphs which follow.  Mr Kennedy’s case as pleaded is that despite being told certain things in the letter, Channel 9 chose not to include those things in the stories.  Even though Channel 9 had no means of knowing whether or not the assertions made had any factual basis, Channel 9’s failure to include those assertions in the stories is alleged to justify an award of aggravated or exemplary damages.

[76] Looked at in this way, the existence or content of the advice is not in issue.  The reference to it is incidental to setting out the terms of Mr Kennedy’s response to the anticipated stories.  Put more succinctly, the actual advice is irrelevant to the action.  All that is relied on is the failure to publish the assertion of legal advice.  Mr Kennedy does not claim by way of pleading that he in fact had such legal advice.  While this might provide a flimsy foundation for the claim for aggravated or exemplary damages and a jury might infer from the failure to produce the legal opinions that they do not exist, that is the way the case is constructed.  Refusal to order disclosure of the document on this basis is consistent with the remarks of Helman J in Cardinia Pty Ltd v Yu Feng Pty Limited.[7]

[77] Production might also be refused on the grounds that the advice referred to is not sufficiently specific.[8]

[78] Having regard to all the circumstances, I regard the power to order production as being subject to a residual discretion which in this case, should be exercised against production unless the reference to the advice is sufficient to amount to a waiver of legal professional privilege.  Where a document is subject to legal professional privilege, such privilege ought not to be set aside unless the use to which the document is put renders the continued maintenance of the privilege unfair to the other party.[9]

[79] The question is thus reduced to whether or not the reference to the undisclosed legal opinions in the letter and the subsequent pleading of the letter constitutes a waiver of privilege.

[80] In my view there is nothing inconsistent between relying on the failure to publish all or part of the contents of a letter in response to the allegations to be made in the first story and the reference to legal advice as contained in the letter of 19 March 2004.  Mr Kennedy is not seeking to rely on the advice as justification of his position.  Rather he relies on selective publication of his responses to the allegations as a justification for aggravated and exemplary damages.  In particular, he complains that his unprepared and no doubt unhelpful responses when confronted unannounced by the journalist were published while the more considered responses of his solicitor were not.  I do not see the allegations in the parts of the further amended statement of claim to which I have referred going further than that.[10]

[81] In those circumstances I am not satisfied that the mere reference to the advice is sufficient to constitute a waiver of privilege and disclosure of any legal advice will be refused.

Imputation 9(e)

[82] Channel 9 seeks to strike out the imputation pleaded in paragraph 9(e) of the further amended statement of claim.  This imputation is in the following terms:

“…the Plaintiff is the top member of an illegal pyramid scheme”

[83] Channel 9 contends that by reason of the inclusion of the word, “the” rather than, for example “a”, it is not open to the jury to conclude that the imputation arises.

[84] I disagree.  In the course of the stories the following appears

Ray Martin: “…World Games is a scam as Paul Barry reveals.  It is the promoters who make millions at other people’s expense.”

[85] This is immediately followed by footage of Mr Kennedy being approached by the journalist with a view to questioning him concerning the affairs of World Games Inc.  After an exchange this follows:

Paul Barry: “It’s no wonder Greg Kennedy is embarrassed.  He’s got rich by selling a dream to thousands of suckers around the world …”

[86] Later this exchange takes place between the journalist and Richard Lead, a person identified as an expert on pyramid selling:

Paul Barry: “So, who makes money out of these schemes?”

Richard Lead: “People who start it, the promoters because they’re at the top of the pyramid.  They can make a very large amount of money.  This is why the schemes are illegal.”

[87] There is then further footage of Mr Kennedy promoting WGI and the wealth to be made from it.

[88] Then there is reference to the top people behind WGI being Australians followed a little later by a reference to the Canadian police trying to apprehend a person described as the “head of World Games worldwide operations.”  The person referred to is a MR George.  In the next sentence Mr Kennedy is described as Mr George’s boss.

[89] Even allowing for the transitory nature of television broadcasts and the lack of attention to detail of most viewers, it is clear that the focus of the programme is on Mr Kennedy and that he is generally portrayed as the person ultimately behind the operation.  In those circumstances I am satisfied that a properly directed jury may conclude that the impugned imputation arose from the programme.

Economic loss claim

[90] Mr Kennedy abandoned the economic loss claim and I order that paragraphs 28, 44 and 64 of the further amended statement of claim be struck out.

Imputation 9(a)

[91] Channel 9 accepts that imputation 9(a) was the subject of express argument before Atkinson J in earlier interlocutory proceedings and as a result no longer seeks to strike this imputation out.

Affidavits in S9981/03

[92] Disclosure is sought of a number of affidavits filed in proceedings between Worldplay Services Pty Ltd and Quentin George (9981/03).  Those affidavits have been sealed by order of this court.  To determine relevance I have looked at the affidavits.  The two affidavits of Mr Kennedy sworn respectively on 3 November 2003 and 4 November 2003 (documents 2 and 3 on file 9981/03) may be relevant.  The affidavit of Mr Coulthart sworn 4 November 2003 (document 5) may also be relevant.

[93] Mr Kennedy claims not to have copies of these affidavits but has no objection to the copies on the court’s file being made available for copying and inspection.

[94] Accordingly, I order that Messrs Thynne & Macartney be at liberty to peruse and make a copy of those affidavits subject to paying the normal fees charged by the registry.

Further & Better Disclosure

[95] The final matter concerns disclosure of some material the subject of Federal Court proceedings in 2004 and itemised in paragraph 15 of the application.  A request has been made for copies of the material from the Federal Court.  Mr Kennedy’s solicitors have agreed to provide the material to Channel 9’s solicitors once it is received from the Federal Court.  It is unnecessary in those circumstances for any order to be made.

Orders

[96] I will hear argument in relation to the final form of the orders and costs.

Footnotes

[1] I do not resile from my remarks in Programmed Solutions Pty Ltd v Dectar Pty Ltd [2007] QCA 385

at paragraph [28].

[2] [2008] NSWSC 248 at [38]

[3] at paragraph [68].

[4] [2008] NSWSC 245 at [39].

[5] [2003] QCA 552

[6] See paragraph [16].

[7] [1999] QSC 102 at [10]

[8] See Lilypond Constructions Pty Ltd v Homann [2006] 1 Qd R 411 at 414 (para [14]) per Mackenzie J.

[9] Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 at 492-493 (per Deane J).

[10] Cf Bayliss v Cassidy (no 2) [2000] 1 Qd R 464; Rhyse Holdings Pty Ltd & Ors v McLaughlins (A

firm) & Anor. [2002] QCA 122 where reliance on the content of the advice was central to the case

being mounted.

Close

Editorial Notes

  • Published Case Name:

    Kennedy v Nine Network Australia P/L

  • Shortened Case Name:

    Kennedy v Nine Network Australia Pty Ltd

  • MNC:

    [2008] QSC 134

  • Court:

    QSC

  • Judge(s):

    Dutney J

  • Date:

    16 Jun 2008

Litigation History

No Litigation History

Appeal Status

No Status