Seven Network chair Kerry Stokes’s private company, ACE, stood to benefit financially if Ben Roberts-Smith won his war crimes defamation trial, in line to claim 15% of any damages the former soldier was awarded, a court has heard.
The details emerged in a judgment handed down in a Sydney court during a legal dispute over who will bear the costs – expected to run to tens of millions of dollars – of the long-running defamation action.
The agreement was ultimately moot. Roberts-Smith, a recipient of the Victoria Cross and Australia’s most decorated living soldier, lost his defamation action against three Australian newspapers, with a federal court judge finding he murdered unarmed civilians while serving in the SAS in Afghanistan.
Justice Anthony Besanko said, on the balance of probabilities, Roberts-Smith was complicit in four murders, and was “not an honest and reliable witness” who had “motives to lie” to the court.
The Age, the Sydney Morning Herald and the Canberra Times published a series of reports in 2018 that alleged Roberts-Smith was involved in murdering civilians, including kicking a handcuffed man off a cliff, ordering subordinate soldiers to kill prisoners, and placing weapons on the bodies of murdered people in order to fake combat deaths.
Roberts-Smith sued for defamation.
Judgment in the landmark defamation case was handed down last month, dismissing Roberts-Smith’s claim. The former soldier has agreed to pay costs on an indemnity basis.
The newspapers are also seeking a third party costs order against Stokes’s Seven Network, and his private company ACE, which funded Roberts-Smith’s case.
The newspapers have issued subpoenas to Seven and ACE, and to law firms Herbert Smith Freehills, and Addisons. The subpoenas seek invoices sent to Seven and ACE from the law firms, detailing their involvement in the Roberts-Smith action.
The four companies sought to have the subpoenas set aside, but on Wednesday, Besanko ruled in favour of the newspapers, ordering that the invoices and other related documents sought be handed over.
The newspapers argue the invoices will demonstrate the level of involvement of lawyers for Seven and ACE in the lead-up to, and during, the 110-day defamation trial. Seven and ACE argued – unsuccessfully – the documents would demonstrate only how often their lawyers sat in on the hearings and would not show that the firms had any control or management of how the war veteran ran his suit.
In his judgment, justice Besanko detailed loan agreements between Seven, a publicly listed company, and Roberts-Smith, later superseded by a loan arrangement with ACE.
The loan agreement with Seven stated the company was “prepared to make available funding of legal costs” to Roberts-Smith, then the general manager of the network’s Queensland operations.
“We recognise that part of you being a target by our opposition (Nine/ Fairfax) in the stories the subject of the actions, arises out of your employment by Seven,” the loan agreement said.
The defamation trial also heard that Seven paid for the legal fees of several of Roberts-Smith’s witnesses in the defamation case. The network claimed this was “not correct” but later conceded that it was.
The agreement with Seven was superseded by a loan from Stokes’s private company ACE. Justice Besanko’s judgment detailed that loan agreement:
“The Company [ACE] understands there is a strong case to defend your reputation and the unfairness of your treatment by the defendants and in the inquiry proceedings,” the agreement said. “The Company is therefore willing to make this funding available to you in the belief there is a strong case for a successful outcome to the proceedings.”
ACE stood to claim 15% of any damages, over and above the loan repayment, won by Roberts-Smith if his defamation claim was successful.
“In addition to repayment of the loan balance comprising Legal Costs and capitalised interest, the Company will be entitled to additional proceeds if your court actions are successful and you are awarded … damages or other proceeds in relation to your claim. In this event, the Company will be entitled to an additional payment equal to 15% of the proceeds that exceed the amount owing on the loan balance”.
Ultimately, Roberts-Smith’s action was dismissed by the judge, so there were no damages.
Roberts-Smith has not appealed against the Besanko’s judgment. He has until 12 July to lodge an appeal to the full bench of the federal court.
No criminal charges have been laid against Roberts-Smith, and he maintains his innocence of all allegations.
He remains under investigation by the government’s Office of the Special Investigator, established to investigate allegations of war crimes committed by Australian soldiers in Afghanistan.
