Duma Bid to Block Discovery in Australian Defamation Case Fails

Last year it was reported that State Enterprises Minister, William Duma, had initiated legal proceedings against Fairfax Media, including two of its journalists Angus Grigg and Jemima Whyte. This followed a series of articles published in Fairfax newspaper, the Australian Financial Review (AFR).

The articles document a US$10.3 million payment made by Horizon Oil in 2011 to a shell company owned by a close associate of the then Petroleum Minister William Duma, shortly after the company was granted a lucrative petroleum license.

Duma  initiated a defamation action in response. Duma contends that the AFR article implies he received a bribe as a Minister in the O’Neill government. He claims this statement is false.

To support his argument, Duma has acknowledged to the Australian Courts he will rely in part on a public statement issue by Horizon Oil. The statement notes  that after an internal investigation was conducted by Horizon Oil, the company concluded it did not make a bribe payment to Duma under Australian law. Horizon Oil did not disclose the internal report publicly.

Fairfax Media has defended itself against Duma’s defamation action by mounting the statutory defence of qualified privilege. Fairfax are arguing that the articles were published responsibly, in the public interest. Duma is attempting to disqualify that defence by arguing the journalists were in fact motivated by malice.

To help mount its defence and cross-examine the testimony of William Duma, Fairfax Media successfully applied to the Australian Federal Court for subpoenas to access documentation from the Australian Federal Police and Horizon Oil. Specifically, Fairfax are seeking records relating to Australian Federal Police investigations conducted into the US$10.3 million payment, and documents pertaining to the internal Horizon Oil investigation, which Duma in part relies upon for his case.

While Duma is arguing that he in no way accepted a bribe, he has challenged both subpoenas in an attempt to prevent Fairfax Media gaining access to these  records.

Fairfax has justified its subpoenas arguing these documents have a legitimate forensic purposes – namely, that they may help evidence there was no malice involved, because the AFR published a series of articles that were in fact true. Second, Duma cannot claim aggravated damages on the grounds the article’s imputations were false, if they were in fact true.

Fairfax have also questioned the internal Horizon Oil investigation which Duma in part relies on to testify to his innocence in regards to bribery. According to the Australian Federal Court Fairfax Media assert ‘that they are not confined to what they effectively submitted is a carefully phrased whitewash of Horizon Oil’s conduct, relied upon by Mr Duma, noting that the report of the Horizon Oil investigation to the ASX does not in any event purport to exonerate Mr Duma’. The court adds, Fairfax  ‘asserted that the material sought may have a bearing on the assessment of Mr Duma’s credit, including, implicitly, by revealing further details of what he did and did not do in relation to his decisions affecting Horizon Oil’.

However, particular importance is laid by Fairfax on an Australian Federal Police investigation into the US$10.3 million payment made by Horizon, which they argue will include key documents critical to evaluating Duma’s credibility.

These arguments were looked upon favourably by the presiding judge, Justice Bromwich.

In rejecting Duma’s petition to the courts, Justice Bromwich observed that Mr Duma was in effect trying to prevent Fairfax Media from accessing records that would allow it to make a full and robust defence, without himself being subject to the same restrictions:

Mr Duma has chosen to plead and thereby rely upon the correctness of the outcome of the Horizon Oil investigation, namely that no breach of Australian foreign bribery laws had been established, to assist in making good both his assertion and belief that the imputation of him accepting a bribe is false, and to advance his case for aggravated damages and in aid of defeating the defence of qualified privilege. Through his counsel he asserted that he intends to rely upon the contents of the ASX announcement (including the conclusion reached in the investigation conducted on behalf of Horizon Oil) and his press release. He contended that the respondents were not entitled to go behind either even in relation to his pleaded case of falsity and belief as to falsity. Notwithstanding that apparent self-imposed limitation, it seems clear that he will be entitled to seek to bolster that investigation outcome by way of any evidence that he may be able to give to like effect.

Bromwich J notes: ‘The respondents are entitled to meet Mr Duma’s case of falsity, and belief as to falsity, without going so far as to plead and prove a defence of truth. They are entitled to challenge, by appropriate documentary material and by way of cross-examination assisted by such material, the assertion that the imputation that Mr Duma had accepted a bribe was false, and that he believed that to be so. That conclusion applies to both subpoenas’.

Justice Bromwich also argued that Fairfax Media were within their rights to scrutinise the internal Horizon investigation which Duma seeks to rely on, using relevant evidence that will permit a thorough scrutiny of the facts: ‘Contrary to the submissions for both Mr Duma and Horizon Oil, the respondents are not obliged to accept the outcome of that investigation for either forensic purpose, nor to confine themselves to asking Mr Duma rote questions to challenge his account in only a formal or perfunctory way so as to permit a closing submission to the effect that his stance is challenged’.

As a result Duma’s attempt to block Fairfax Media’s access to key internal records was struck out by the court.

Now Fairfax Media will potentially be able to access key records on the US$10.3 million payment collated by the Australian Federal Police and Horizon Oil, tabling them as evidence to support their statutory defence of qualified privilege. As a  court hearing, this information will in turn become a matter of public record.

If the current State Enterprises Minister Willian Duma is innocent as he claims, these documents will presumably only serve to vindicate the embattled Minister. If the imputations contained in the Australian Financial Review’s series of articles are accurate, these documents will potentially deal a decisive blow to Duma’s claim of innocence.

Either way, reporters in Australia and Papua New Guinea will likely take a great interest in any new documents tabled on the US$10.3 million payment.