Judicial Criticism Of The Murdoch Machine

GUTHRIE v NEWS LTD. [2010] VSC 196 (14 May 2010)

From the Judgment:

[References are to paragraph numbers in the judgment]

75. ...Two days later, the plaintiff met with Mr Julian Clarke, who was then the managing director of the Herald and Weekly Times Limited. Mr Clarke told the plaintiff that he considered that the plaintiff was an ideal candidate for the position, because of his background in newspapers and magazines. He told the plaintiff that he did not wish the newspaper to continue in the same direction as it had under Mr Blunden, but rather that it should become a "more intelligent" paper. In particular, Mr Clarke stated that he felt that the opinion pages were not "intelligent" enough. Mr Guthrie expressed the view that he felt that the most serious pages of the newspaper - the opinion pages - should not have followed immediately after the least serious pages (the confidential gossip column). Guthrie and Clarke both agreed that the principal "drivers" of the Herald Sun circulations had been news and sport.

77. ...In his evidence, the plaintiff stated that Hartigan said he thought that the newspaper had gone "too far down market", and he felt that the feature section of the paper needed work. Hartigan agreed with Clarke's assessment that the paper needed to be more intelligent. Mr Guthrie mentioned his suggestion that the gossip column be moved away from the opinion pages, and Hartigan encouraged him to work on that concept.

80. ...The plaintiff, in his evidence, then stated that Hartigan said to him: "Bruce, I give you one word of warning, never go up against Peter Blunden".

81 In the meantime, the plaintiff had been involved in altering the format of the Herald Sun, so as to include the non-news section of it into a "News Extra" section, which was to be placed separate to the opinion pages of the newspaper. The "News Extra" section was launched in June 2008. According to the plaintiff, Mr Hartigan telephoned him after that, and commended him on the launch of the new section of the newspaper.

82. ...Melbourne Storm Football Club, in order to cover that club's trip to London. I have already referred to the nature of the emails, in which that disagreement developed[28]. The plaintiff stated that on the following Monday (18 February 2008) Mr Blunden apologised to him for the emails. Mr Guthrie stated that he considered that the argument constituted a debate between the managing director, who was upholding the corporate interests, and an editor upholding the principle of the editorial independence against corporate interests.

83. ...The plaintiff stated that at about that time he had had a conversation with a "prominent Melburnian" ( who was later identified as the radio commentator, Mr Neil Mitchell), who told the plaintiff that Mr Blunden had been critical to him about the newspaper. As a consequence of that conversation, Mr Guthrie telephoned the editorial director of News Limited, who advised the plaintiff to speak to Mr Hartigan about it.

85. ...On 23 October 2008, the Herald Sun published a front page story with the headline "Beverley Hills Cop", which was critical of the trip made by the then Chief Commissioner of Police, Ms Nixon, to Los Angeles. The plaintiff stated that on that day Mr Blunden spoke to him, and told him that Mrs Janet Calvert-Jones (the chairperson of the Herald and Weekly Times Limited) was not happy with the story, and considered that the paper had been too hard on Ms Nixon. According to the plaintiff, Mr Blunden stated that "Janet Calvert-Jones and Christine Nixon are mates". The plaintiff further gave evidence that subsequently, after he and Blunden flew to Sydney, Blunden, at Sydney Airport, said to him "I'm not sure we got it right on Christine Nixon".

86 In cross-examination, Mr Guthrie was questioned about some promotions, which featured in the Herald Sun in the latter part of 2008. He agreed that at a weekly management meeting on Thursday 9 October 2008, Blunden had criticised him for failing to publicise the National Geographic DVD promotion, which was to take place in the Herald Sun for a period of two weeks commencing the following Monday 13 October. Mr Guthrie stated to Blunden that he had developed the program with the marketing department, and that there were newspaper "blurbs" beginning the next day (Friday) and also in the Saturday and Sunday editions of the newspaper. He said there would also be a big page one "blurb" on Monday. Blunden questioned why no promotion had taken place in the newspaper that day, and he complained that the promotion had commenced too late. Mr Guthrie responded that the timetable had been developed in coordination with the marketing department. He asked Mr Blunden why he did not raise the issue of the timetable at the previous week's management meeting.

87 Mr Guthrie was also cross-examined about the coverage given by the Herald Sun to the Australian Football League final series in September 2008, and in particular to the prominence given to the forthcoming preliminary finals (featuring four Victorian AFL clubs) in the edition of the Herald Sun on Friday 19 September and on Saturday 20 September. In this respect, it is significant that the cross-examination included a criticism of the treatment by Mr Guthrie of the forthcoming Hawthorn versus St Kilda final in the edition of 20 September 2008. I shall return to that matter later. However, in cross-examination Mr Guthrie denied that Blunden criticised either edition of the newspaper in relation to that matter. He also denied that he had been criticised for failing to give sufficient coverage to the visit to Melbourne of Princess Mary of Denmark in the edition of the newspaper of 30 August 2008.

88. ...On the same day, Mr Blunden telephoned Mr Guthrie at about 7.00 pm. Mr Guthrie said that Blunden opened the conversation by saying "I am sick to my stomach about what's happened today". Guthrie replied "Why Peter? I gather it's all your idea". Blunden said "No, I am not driving this". Guthrie replied "That's not what John Hartigan tells me". Blunden responded "I have told Hartigan there is no problem between you and me". Guthrie then said "So what is this all about?" Blunden stated "It's complicated and confidential, but essentially a third party got involved. That person said something to someone else, and then that person said something to someone else, and it went from there". Guthrie replied "So I am out of a job because apparently we don't get on". Blunden stated "I am terribly sorry". Guthrie said "This could not have come at a worse time for me and my family, we have just bought a house". Blunden said "I know, I told them to err on the side of generosity".

89 Mr Guthrie was cross-examined in some detail by Mr Houghton on behalf of the defendant. Notwithstanding the rigour with which that cross-examination was conducted, in my view Mr Guthrie was, by and large, an impressive witness. He had a good memory of the incidents, which he recalled in his evidence. In evidence in chief, and in cross-examination, he gave direct answers to questions. I did not detect any attempt by him to evade difficult questions in cross-examination, or to prevaricate.

91 The next matter relied on by Mr Houghton is a matter of greater significance. In the series of emails, which passed between Mr Blunden and the plaintiff in February 2008 concerning the proposed trip of the Herald Sun photographer to London, Mr Blunden took issue with Mr Guthrie taking the moral high ground, in light of an article published in that day's Herald Sun newspaper. That article, in my view, clearly represented that the circulation of the newspaper, including the weekday edition of the newspaper, had increased in the past twelve months. In fact, the sales, for the Monday to Saturday edition, had decreased by an average of 5,000 copies per day. In cross-examination, Mr Guthrie did not accept that the article was deceptive, because it was accurate in respect of the Saturday and Sunday sales. I reject that explanation of the article. In my view, it is clear, on its face, that the article did, without qualification, represent to the reader that the sales of the Monday to Friday, the Saturday and the Sunday editions of the newspaper were all "up". That representation was made by the prominent graphic above the article, and by the headline to the article "biggest and still the best". The publication of the article, and the failure to correct it, does not reflect well on Mr Guthrie in that regard. Nor does his failure to acknowledge the deficiency, when he was cross-examined about it by Mr Houghton.

92 The matter, to which I have just referred, has caused me to give careful consideration as to my assessment of the credibility of Mr Guthrie as a witness, and as to the reliability of his evidence. Nevertheless, taking that matter into account, I consider that Mr Guthrie was, a credible witness. I did consider that he tended to understate the seriousness of some of the differences which he had with Mr Blunden. In large part, that may have been due to Mr Guthrie's failure to perceive, at the time, the significance of some of the differences which he had with Mr Blunden. However, I do not consider that he endeavoured to mislead me as to his perception as to the nature of his relationship with Mr Blunden, or as to his interactions with him, during his term of office as editor-in-chief of the Herald Sun.

94 Mr Hartigan commenced by giving evidence as to the circumstances in which Mr Guthrie was retained as the editor-in-chief of the Herald Sun in early 2007. He stated that when he first spoke to Mr Guthrie, in early December 2006, he told Mr Guthrie that the three success "buttons" for editorship of the newspaper were the capacity to break news, coverage of sport, and promotions. Mr Hartigan then stated that after making the initial proposal to Mr Guthrie, there were protracted negotiations with him, during which Mr Guthrie went on holidays to Mexico. Mr Guthrie told Mr Hartigan from the outset that the biggest difficulty he had in coming to Victoria was relocating his family, and in particular his daughter. As I have already indicated, Mr Hartigan, in his evidence, maintained that the plaintiff told him it was critical that he had a three year appointment in his contract , so that he could "dangle it" in front of his wife so that she could see it as a "get out card" to return to live in their Cremorne home. He also maintained in his evidence that the plaintiff insisted on being called the "editor-in-chief" (and not just the "editor") of the newspaper, because he wanted the status that went with the role. Mr Hartigan maintained that that topic was the subject of a "very laborious and hard driven series of negotiations" on which Mr Hartigan ultimately gave in. For reasons which I have already stated, I reject the evidence given by Mr Hartigan both in relation to the reason which Mr Guthrie gave for wishing to have a three year term in his contract, and also as to Mr Guthrie maintaining that he wished to be called "the editor-in-chief", and not just the editor of the newspaper.

102 Accordingly, Mr Hartigan decided that he should terminate the position of Guthrie as editor-in-chief of the Herald Sun. He stated that that view was based on five considerations: first, the lack of any relationship between Blunden and Guthrie; secondly, a "sense of despair" within the senior editorial ranks of the Herald Sun, because Hartigan had picked up a "real sense over a long period of time" that Guthrie used to isolate himself from those staff; thirdly, the Herald Sun had lost its news breaking ability; fourthly, sport had been relegated to the sports page, despite the keen interest of Victorians in sport; and, fifthly, Guthrie appeared to be unable or unwilling to support promotions, which had been the lifeblood of stimulating the circulation of the Herald Sun.

112 More importantly, Mr Hartigan specifically gave evidence that Blunden had criticised Guthrie to him about the failure of Guthrie, on Saturday 20 September, to make any reference "whatsoever" on the front page of the newspaper to the Hawthorn versus St Kilda preliminary final which was to take place later that day.[35] Mr Hartigan stated, in the same passage of his evidence, that in his office he had a rack of newspapers, produced by News Limited and other organisations, to which he had ready resort if an issue was raised in relation to any of them. Thus he stated "... if someone says there's an accusation (about a newspaper), you can make up your own judgment very quickly".[36] In cross-examination, Mr Hartigan had placed before him a copy of the front page of the newspaper of Saturday 20 September. Notwithstanding that that document was before him, he persisted with his criticism of Guthrie for failing to make any reference, on it, to the Hawthorn versus St Kilda game. In fact, the newspaper, on its front page, made two express references to that game. That error, in the evidence of Mr Hartigan, not only revealed a clear error in his memory, but, more importantly, an evident lack of care exercised by him in giving his evidence before me.

117 Mr Clarke gave evidence as to two incidents, which occurred shortly after Mr Guthrie commenced in his position as editor-in-chief on 19 February 2007. The first incident was an "altercation" in which (according to Mr Clarke) the plaintiff had a conversation with Mr Bolt, a journalist of the Herald Sun, and which concluded with Mr Guthrie making an inappropriate gesture to Bolt. When Mr Clarke learnt of that incident, he told Guthrie that he should not be making such gestures to the journalist, and Guthrie dismissed it as a light hearted matter. Mr Clarke stated that that matter concerned him substantially. ...

124 In my view, Mr Clarke was basically truthful in the evidence which he gave in the Court. However, as I have already noted, I did detect an inclination by him to find criticisms of Mr Guthrie in retrospect, which may not have in fact been entertained by him at the time. In saying that, I do not consider that Mr Clarke intended to mislead the Court. However, I do consider that there was an element of exaggeration and unconscious embellishment by him about his perception of Mr Guthrie. ...

143 In common with the other witnesses in the case, it became evident that Mr Blunden's memory and recounting of the events, which occurred during and immediately after Mr Guthrie's editorship of the Herald Sun, was affected by the dispute which had arisen between the plaintiff and the defendant, and in particular by the central role which Mr Blunden had played in the decision to terminate Guthrie's appointment, which led to that dispute. It became evident that Mr Blunden, in his evidence, endeavoured to portray his own conduct in the affair in a favourable light, and, in particular he endeavoured to downplay the significant role which he had had in the termination of Mr Guthrie's appointment as editor-in-chief of the Herald Sun. His conduct in doing so is consistent with his behaviour in failing to reveal to Mr Guthrie, both while he was editor and shortly after his termination, the true fact that Mr Blunden had been working, for some time, to achieve his dismissal. I also consider that the explanations given by Mr Blunden in evidence, for not revealing to Mr Guthrie, at the time, that he was advocating his removal as editor-in-chief of the Herald Sun, do not survive scrutiny. In my view, Mr Blunden's consciousness that it was he who was critical in Hartigan's decision to terminate Guthrie's appointment, and his consciousness that he had not been candid with Guthrie about that role, led him to exaggerate flaws, which he perceived Guthrie to have as an editor-in-chief of the Herald Sun. While I accept Mr Blunden's evidence that, from a reasonably early stage after Guthrie's appointment, he became convinced that Mr Guthrie was not the right man for the job, nevertheless I detected, in his evidence, a tendency to exaggerate the flaws, which he had found in Guthrie's conduct, and his recollection and recounting of a number of the central incidents, which were the subject of the his evidence. A number of features in Mr Blunden's evidence led me to that conclusion. It is sufficient for me to mention some of them, and I shall do so, so far as possible, in chronological order.

144 ... The issue is only minor, but it was manifestation of a pattern which I discerned in Mr Blunden's evidence, namely, to minimise the role which he did in fact play in both the selection and later termination of the appointment of Mr Guthrie as the editor-in-chief of the Herald Sun.

147 ... In cross-examination, Mr Blunden stated that there was no particular meeting, which he had with Mr Mitchell, but rather that he ran into Mr Mitchell around town quite often, because he was an acquaintance. He then said that he did see Mr Mitchell on social occasions, once a month, in a group of friends, for a lunch. When pressed further about what he said to Mitchell, he said that the conversation commenced with Mitchell making comments about the paper which were not positive, but that he simply responded to them, and that he could not recall what he said, but "You know being media people who have worked side by side, he's an employee of the paper as well, he writes a column, and we would talk about these issues, but I did not initiate any discussion".

155 In cross-examination, Mr Blunden also accepted that, notwithstanding that he had been repeatedly pressing Hartigan to sack Guthrie, he never once told Guthrie that he had been giving that advice to Hartigan. Mr Blunden gave conflicting and differing reasons for not doing so, none of which were satisfactory. When first asked why he did not tell Guthrie what he was stating to Hartigan, he said "Well I didn't think it was his - he didn't need to know what I was talking to Mr Hartigan about ... I don't make the final decision on Mr Guthrie's appointment, Mr Hartigan does. It's not appropriate for me to pre-empt to Mr Guthrie what Mr Hartigan might decide". He then attempted to side step the issue by stating that "I told Bruce what I thought", but when pressed further, he said that he did not tell Guthrie that he was trying to persuade Hartigan to remove him. When further questioned about the matter, he said: "I didn't tell him I was talking to Mr Hartigan no, because I knew Mr Guthrie was actually talking to Mr Hartigan himself, about our differences". Pausing there, that answer is clearly incorrect. As I have already found, Mr Guthrie only spoke to Mr Hartigan on a handful of occasions.

156 Shortly after those exchanges, the luncheon adjournment occurred. After that adjournment, Mr O'Bryan questioned Mr Blunden generally about the issue. Mr Blunden then gave what, to my perception, was clearly a pre-rehearsed speech, that he considered it would have been improper for him to tell Guthrie about his dealings with Hartigan, because if Hartigan did not decide to terminate Guthrie's contract, Blunden could not have gone back to the office and worked with Guthrie. The answer which Mr Blunden gave, and the manner in which he gave it, showed that it was the product of thought over lunch. It is flawed. At that time, according to Blunden, Guthrie was not listening to his advice anyway. It would not have undermined his authority with Guthrie to have told him the truth, namely, that he was pressing Hartigan to remove him. Rather, if anything, it would have enhanced Blunden's position, by impressing on Guthrie the gravity of what Mr Blunden considered to be the situation. I do not accept Mr Blunden's proffered explanation in his cross-examination, which, as I have stated, bears all the hallmarks of ex post facto rationalisation.

157 ... The salient part of that email is as follows: "As I said last night, I sincerely regret that it ends this way. Despite the reports this morning, there is no way that any personal tension (real or perceived) is responsible for this. I've made that clear to John Hartigan and anyone who asks. I won't dignify Andrew Rule's rubbish this morning with comment. Of course I do not harbour any ill feeling whatsoever towards you. On the contrary I wish you every happiness and success in the future. When the company decides to move in another direction, it simply happens. I imagine it will happen to me one day too ... ."[Andrew Rule wrote an article about the sacking in "The Age" on 11/11/2008]

197 In determining the applicable period of notice, I do not consider that much guidance is obtained from the Fair Work Act 2009, upon which Mr Attiwell relied. Section 123(1) provides that Division 11, in which s 117 is located, does not apply to an employee who is employed for a specified period of time. Thus, s 117 would not have applied to Mr Guthrie's contract, in February 2010. Further, and in any event, s 117(3) only provides for the "minimum period of notice" to be provided to an employee. The Fair Work Act applies to a wide variety of employees. By prescribing the minimum period of notice, the Act does not, it seems to me, cast light on the appropriate period of notice, which should be given to an employee in Mr Guthrie's position. In such a case, the minimum period provided by the Act, namely five weeks, would have been wholly inadequate, in light of the factors which are involved in the assessment at common law.

211 ... Accordingly, in my view, the plaintiff is entitled to damages calculated, in that way, in the sum of $580,808.