The Federal Court has thrown out a truth defence pleaded by the ABC and Fairfax Media in a defamation case brought by Chinese-Australian businessman Chau Chak Wing.
Mr Chau, one of Australia's most generous political donors, filed defamation proceedings in June last year against the national broadcaster, the newspaper group and Fairfax journalist Nick McKenzie over a joint investigation.
Chau Chak Wing leaves the Federal Court in June.Credit: Peter Rae
The ABC's Four Corners program and an accompanying online article painted Mr Chau as a spy who "betrayed his country" to serve the interests of the Chinese Communist Party, his barrister Bruce McClintock, SC, has told the court.
The stories also alleged Dr Chau funded a $200,000 bribe for a senior United Nations official, a claim the ABC and Fairfax Media claimed was true by drawing in part on a parliamentary speech given by federal Liberal MP Andrew Hastie in May.
The media outlets and McKenzie were defending the case on a range of bases, including that all the claims were substantially true.
On Friday, Federal Court Justice Stephen Rares threw out the truth defence, leaving intact a technical defence of qualified privilege and an argument about whether the meanings pleaded by Mr Chau were conveyed to the ordinary reasonable reader and viewer.
Justice Rares said the particulars pleaded by the media outlets "cannot reasonably support their plea of truth" and "do not disclose any reasonable defence or basis for such a defence and are embarrassing".
He said the ABC and Fairfax could not rely on what Mr Hastie said in Parliament because the Parliamentary Privileges Act 1987 prevented his statements being used to support a defence of truth.
Justice Rares added that even if Mr Hastie had made the comments outside Parliament, "it would have been hearsay and incapable of being evidence of the truth of the assertion".
He struck out the truth defence in its entirety and refused the media outlets leave to file an amended defence.
Mr Chau is also suing Fairfax separately over an article by former Asia-Pacific editor John Garnaut. That case has already been heard and Justice Michael Wigney reserved his decision in June.