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Around The Firms
24 November, 2005  
Another Balls up

“Your Honour at the end of the day what we are dealing with is the delivery of a phone number. Everything else essentially was serendipitous.” Well not quite, Mr Hutley

What – not more strife for the House of Allens and specifically for the firm’s “top analytical mind” Michael Ball?

I can’t bear it. As if the finding by David Jackson in the James Hardie inquiry that the firm had breached its duty to Justice Santow wasn’t dreadful enough. See: James Hardie Commission of Inquiry.

Then we had the embarrassing abandonment of claims of privilege over certain News Ltd documents being sought by Channel Seven just after Ball, for News, was told he would be required for cross-examination. See: No explanation from Allens’ ‘top analytical mind’ in wonky privilege claim.

And who can forget the fiasco in September when the firm fired two secretaries over a silly email exchange that went public, while a fee earner who contributed the most personally nasty comments in the entire episode was allowed to stay. See: Allens fired the wrong people.

That is just the last 12 months or so from the Allens Arthur Robinson shame file.

imageJustice Ronnie Sackville (seen here) was less than amused last Friday, Nov. 18, about the circumstances in which an article written by Murdoch reptile John Lehmann came to be published in The Weekend Australian on November 5.

The article reported that a former Channel Seven executive, Julian Mounter, disputed the evidence given by Kerry Stokes in the C7 conspiracy case.

Stokes had told the court that Mounter had failed to inform him about the details of negotiations with Austar and Foxtel to carry Seven’s pay-TV sports channel C7.

Mounter told the Murdoch organ that he had briefed Stokes on “every aspect of what was being done” including the fact that the fees being negotiated were significantly lower than Stokes wanted.

“Mr Stokes was informed at all stages of everything material, and if he does not recall this is the fault of his memory, not a failure in action by any of his executives.”

Oh dear. This evidence is important because it goes to the level of revenue lost and the damages potentially payable – yet Mounter refused to give evidence in the case.

That his remarks auspiciously appeared in the News Ltd paper, two days after Justice Sackville ordered a week-long adjournment so that the parties might explore the possibility of a compromise, is doubly telling.

Here’s one of Murdoch’s blatantly ideological propaganda sheets with a ready supply of indentured attack dogs directly entering the fray in an attempt to discredit the evidence of Murdoch’s opponent in court.

Should we be so surprised at such a naked abuse of power from one of the most unscrupulous and aggressive organisations on the face of the planet?

The fact that the top analytical mind was the man who allowed Mounter’s phone number to go through to Lehmann and then failed to caution about the publication of any of his remarks, was the issue that exercised Sackville.

The potential for the article to apply pressure on the Stokes camp at a crucial stage was something that Sackville did not underestimate.

Where was the solicitor’s duty to the court, pressed the judge?

The article was published one month after Mounter spoke to the reporter and after Blake Dawson Waldron had advised the newspaper. The initial advice was that to publish at that stage might amount to a contempt.

Counsel for News, Noel Hutley, came fully armed with a statement from Allens (variously described as being between three and five pages) that was handed up.

Allens won’t let your reporter have a copy – maybe News Ltd hacks will be more fortunate. Nonetheless, some of it was read out in court.

Sackville thought that it might be surprising if the solicitor didn’t anticipate, when approached for Mounter’s phone number, “that a realistic possible purpose of contacting Mr Mounter was to get his response to Mr Stokes’ evidence with a view to publishing it. I would have thought that was … a fairly obvious conclusion to reach.”

Not at all, said Hutley – there was a whole range of possibilities: the journalist might want to confirm facts or to start a chain of inquiry, he said.

What about the distinct possibility that the newspaper wanted to do precisely what it achieved – to get Mounter to bash-up on Stokes? After all, that’s the usual way things happen in grubsville.

The other faintly hysterical idea put by Allens was that there is a wall of editorial independence between News Ltd, its client, and Nationwide News Pty Ltd, the subsidiary that publishes The Australian – and that it would be inappropriate for a News Ltd legal adviser to suggest what one of Nationwide’s papers should or shouldn’t do.

I can just imagined gnarled hacks down at Holt Street falling sideways off their bar stools when they heard that one.

Here’s how the exchange in court proceeded, with Sackville reading from parts of Allens’ statement:

HIS HONOUR: Allens, Mr Ball, understood it was unlikely that The Australian would publish Mr Mounter’s statement if Blake Dawson Waldron advised against doing so, but otherwise did not consider requesting that The Australian refrain from publishing an article using Mr Mounter’s statement.


HIS HONOUR: Such a request would have been contrary to the policy of editorial independence that exists between News Limited and The Australian. That is the point. Why does Mr Ball act in accordance with a policy of editorial independence as distinct from considering his responsibilities to the court in relation to pending litigation? That, I think, is the question…


HUTLEY: But, your Honour, would the position be different, with respect, had it been the Herald?

HIS HONOUR: Yes, because what was open to Mr Ball, I assume, was to say to his client, News Limited, ‘I should advise you that whatever the law of contempt, there are real issues here about the conduct of this litigation and whether an article should be published in a newspaper that you effectively control’, if you wish, or at least can give advice to in relation to a subsidiary. ‘Even though it may not be contempt or there may be doubt about it, it is not something that ought to be done. Whether you do it, it is a matter for you, but I am obliged as an officer of the court to give you that advice. It is now a matter for you.’ Why is that not an appropriate course of conduct?


HIS HONOUR: No. The Law Society I know has – well, as far as I am aware – their ethics committee has refrained from putting out specific ethical requirements, save for what I understand is a rule which provides that a practitioner must not in any communication with another person on behalf of a client represent to that person that anything is true which the practitioner knows or reasonably believes is untrue, or make any statement that is calculated to mislead or intimidate the other person and which grossly exceeds the legitimate assertion of the rights and entitlement of the practitioner’s client. I’m not sure whether that is still the rule. I assume it is.

HUTLEY: With respect, if one is then merely concentrating upon a duty by Mr Ball to this court, with respect nothing has been identified which could conceivably amount to a derogation from that duty…

On and on it went. You can read the full transcript of the day’s proceedings here – the relevant bits are to be found between pages 54 and 65.

One curiosity was the argument put by Allens that at the time the hack asked for Mounter’s phone number Ball was under the impression that the former Seven executive might come back to Australia to give evidence. A mistaken belief as it turned out.

However, subsequently “sources close to Allens”, as we are required to say in the murky world of nudge-nudge information sharing, told us that Mounter didn’t want to come back to Australia because he thought Stokes might harass him.

That strange piece of information doesn’t quite jell with what Hutley told the court – just one of a number of disjunctures in this whole unhappy tale.

Sackville is not proposing to do anything about it for the moment. “If I do intend to say anything I will let you know. All right.”

By the way, did you catch the ancient Dirty Digger on the telly with his stringy, died hair moulded into a henna-halo? Among other duties in Adelaide he was doling out gongs and cash to News Ltd organs and reptiles. The Australian won “newspaper of the year”, as judged by no less an independent authority than News Ltd.

How’s that for a magnificent editorial Chinese wall?

Finally, if there’s any lingering doubt about the ferociousness of Rupert’s ideological commitment, have a look at this article in The American Conservative, about how Murdoch’s privately funded neo-con magazine The Weekly Standard has been at the forefront of providing the administration with the necessary justification (spurious as it turned out) to get into the Iraq war.

“It should go down in history as Rupert Murdoch’s War … and thus become far the most significant historical event ever to be shaped by the Murdoch media.”