Three journalists from The Age involved in a long-running defamation action brought by Chinese-Australian businesswoman Helen Liu have abandoned a potentially case-winning defence to the claims against them in order to protect their confidential sources.
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NSW Supreme Court Justice Lucy McCallum on Monday agreed to stay a previous order requiring Fairfax newspaper The Age and its journalists Richard Baker, Philip Dorling and Nick McKenzie to reveal the identity of three sources in a series of stories about Ms Liu and Labor MP Joel Fitzgibbon.
In February 2010, The Age published two articles alleging Ms Liu paid Mr Fitzgibbon $150,000 as part of "a campaign to cultivate him as an agent of political and business influence".
The articles were supported by quotes from 135 pages of documents said to be her personal and business records, including a list of "money paid" for unstated purposes to 22 people, including Mr Fitzgibbon.
Mr Fitzgibbon denies receiving the $150,000 payment.
Ms Liu claims the documents are forged or falsely attributed to her by a person or people with a vendetta against her, and asked the court to compel the journalists to reveal the identity of the sources so she can launch defamation proceedings against them.
Over the past two years, The Age and its journalists sought to protect the sources by arguing in the NSW Supreme Court, the Court of Appeal and the High Court that they should not be required to hand over documents which would identify them. They were unsuccessful on each occasion.
However on Monday The Age was granted a stay of the orders after they agreed to not to use the statutory defence of qualified privilege.
Under this defence, the newspaper could have argued that it was not liable for the information provided by the sources as long as its conduct when publishing that material was "reasonable in the circumstances".
Justice McCallum had previously found that using such a defence would leave Ms Liu without any effective remedy in her defamation action if she was prevented from suing the sources themselves because of the journalist's refusal to identify them.
By agreeing not to use the qualified privilege defence, the journalists and The Age effectively opened the door for Ms Liu to pursue them instead of their sources.
"I place a high value on the gravity of the decision to abandon an apparently good defence," Justice McCallum said in her reasons for the decision.
"As a result of the undertakings, the plaintiff will not be faced with any defence in addition to those that would also be available to the sources if they were sued."
"It is true that she will not have the opportunity to confront her accusers but, upon reflection, I do not think that deprives her of an effective remedy. Rather, the absence of the sources from the litigation is a factor that is likely to preclude the newspaper from succeeding in any truth defence."
The Age may now be ordered to pay the costs of the proceedings which have been undertaken to determine the confidentiality issue.
The matter returns to court on April 10.
