But on to weightier matters - in particular, the recent decision by a judge of the Supreme Court of New South Wales that relates to this story, first published in The Age and the Sydney Morning Herald over two years ago...:

Fitzgibbon's $150,000 from Chinese developer Private records of a Chinese-Australian businesswoman close to former defence minister Joel Fitzgibbon indicate he received substantial payments as part of a campaign to cultivate him as an agent of political and business influence. — The Age, 3rdFebruary, 2010

Joel Fitzgibbon denies that he's received any money, other than declared campaign contributions, from property developer and family friend Helen Liu.

Ms Liu denies paying him - and says that the documents on which The Age's investigative unit based its story have been forged.

She says she wants to sue The Age's sources for defamation. The Age has refused to reveal who its sources are. They battled it out in court last February. The week before last, after a year's cogitation, Justice Lucy McCallum ordered -

in the interests of justice — Supreme Court of NSW, Liu v The Age Co Ltd, 1st February, 2012

Read the full judgement of Liu v The Age

that The Age and three of its journalists:

give discovery to the plaintiff of all documents...which relate to the identity or whereabouts of the sources. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

It's a decision that has divided the legal and journalistic worlds. For example, here's The Australian's Media Diarist, Nick Leys...

Every journalist, editor and member of the public who believes in freedom of the press should feel outraged for The Age's investigative journalists...and the sources they seek to protect. — The Australian, 2nd February, 2010

But in the same paper on the same day, The Australian's Legal Affairs editor, Chris Merritt, took a very different tack:

Before anyone works themselves up into a moral outrage over the Helen Liu case, just consider how The Age handled itself throughout the affair. — The Australian, 2nd February, 2010

As Merritt indicated, the case isn't simple. It raises some important questions - not just about the legal protection afforded to journalists and their sources, but about journalistic ethics. We're going to spend a bit of time on it tonight.

First, a declaration. One of the three Age journalists involved, Nick McKenzie, is a former ABC colleague of mine. I have no connection with the other two, Philip Dorling and Richard Baker.

So, why is the judge's decision controversial? Well, because there's a substantial body of law urging judges to be very cautious about forcing journalists to reveal their sources - especially when the matter concerns politics and government.

Indeed, Justice McCallum lists some of the reasons for that caution in her judgment, among them that...

the public has a right to access... information which is of public concern ... information is more readily supplied to journalists when they undertake to preserve confidentiality in relation to their sources of information. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

And yet Justice McCallum decided to order the journalists to reveal their sources anyway. Why? Well, it's a long, complex judgment, and I'm no lawyer. But some of Her Honour's reasoning strikes me as concerning.

She says that in her view journalists have no absolute right to protect their sources, even when dealing with political matters, because that would...

expose politicians and others involved in government and politics to the risk of false and malicious attack from their detractors without recourse or remedy. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

Without recourse or remedy? But hang on, if a politician is defamed by a newspaper, he or she can sue the paper. Happens all the time. To justify the defamation, the paper has to prove that what it has reported is true - and if it is simply relaying false and malicious information from a source it won't identify, that would be hard to do.

Ah, the courts argue, but newspapers don't always have to prove truth. There's another kind of defence available, in the Defamation Acts and in common law, called 'qualified privilege'. It allows the publication of defamatory matter, even if the media can't prove it's true, providing it's of sufficient public interest - and especially if it deals with politics or government.

But - and it's a big but - only if, in the words of the New South Wales Defamation Act...

the conduct of the defendant in publishing that matter is reasonable in the circumstances. — NSW Defamation Act, 2005

Now, over the years, the courts have set a very high bar for what is "reasonable in the circumstances". Among the factors they can take into account, the Act says, are:

the sources of the information in the matter published and the integrity of those sources... — NSW Defamation Act, 2005

and

any other steps taken to verify the information in the matter published... — NSW Defamation Act, 2005

So if Helen Liu sues The Age, and it tries to plead the qualified privilege defence, it can expect a vigorous going over about how it came by the documents it relied on, whether they could have been forged, and what steps it took to satisfy itself that they weren't.

Because it has promised them confidentiality, it would not be able to call its sources to give evidence.

So it seems to me that The Age would have quite a job showing its behaviour was reasonable.

But, argued Justice McCallum, quoting a 1988 High Court case...

the question is not whether the qualified privilege defences will succeed. It is whether...the defences are open to be pleaded and appear to be such as might well succeed. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

And why does that matter? Because of a glorious Catch 22. The Age might persuade a court that it had a reasonable belief that the documents were genuine, even if they weren't; in that case, argued the judge, Helen Liu had a right to

pursue a remedy that would see the issue of the alleged forgery fully litigated and determined. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

In other words, in the interests of justice, she has a right to sue the sources directly, and to do that she needs to know who they are.

It seems to me a wonderfully circular argument. The right to protect their sources is designed to make it easier for journalists to discover matters of public interest; the qualified privilege defence is designed to make publication of those matters more possible; but if journalists make use of the second, they risk losing the first.

But Justice McCallum was swayed by another important factor, one that raises ethical issues as well as legal ones.

In the words of Chris Merritt of The Australian...

It is now clear The Age's reporter Richard Baker treated his source rather shabbily - so shabbily, in fact, that the source was angered by what appeared in that newspaper. — The Australian, 2nd February, 2012

Well, is that true? The Age journalists' dealings with their sources - entirely by email - stretched over ten months. At one stage, the sources wanted a lot of money - $120,000. The Age refused. Eventually, Richard Baker received seven emails with a hundred and thirty five pages of documents attached. Among them was one which appeared to be pure gold. It was the one in which, as The Age's original story put it...

... Ms Liu recorded her 1997-98 payment of 850,000 Chinese yuan - approximately $150,000 at the then current values - to Joel Fitzgibbon under the heading "money paid including expenses and gifts". — The Age, 3rd February, 2010

Let's repeat that Joel Fitzgibbon denies ever having received that money, and Helen Liu denies ever having paid it. She claims that the document is forged.

What The Age story didn't reveal is that that particular document was handwritten, purportedly by Ms Liu. Two other crucial documents bore what the sources claimed was Ms Liu's handwriting on them. But just two days after he'd received them - after ten months of negotiations, remember - Richard Baker received another email from his contact. As the judge put it:

the contact informed Mr Baker that "Helen's handwritten papers" should not have been included among the documents sent to the defendants. In a separate email, he requested the newspaper not to publish "Helen's handwritten", evidently expressing fear as to the consequences for at least one of the sources if that were to occur. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

Richard Baker now tells Media Watch that he believes The Age honoured his sources' request:

We worked on the basis we were asked not to show in print the Chinese hand-written documents included among the 135 pages of Ms Liu's papers, and, we did not. — Richard Baker, Investigative Reporter, The Age, 10th February, 2012

Read The Age response to Media Watch's question

That interpretation frankly doesn't square with the email Baker sent his contact on the night the story went to press. The Age, he wrote, had:

not referred to any documents being handwritten. I understand your friend will be concerned but the fact is the public interest in the dishonesty being exposed is paramount. The identities of you and your friend have not been disclosed to anyone. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

That sounds as if Baker knew that his source didn't want the documents used at all. That's certainly what the judge thought:

I am satisfied that, as submitted on behalf of the plaintiff, the correspondence reveals that Mr Baker disobeyed a specific request made to him by the contact on behalf of the sources. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

And that decision by Baker and The Age's editors...

had the tendency, in my view, to undermine the very protection sought to be achieved by the practice of not requiring journalists to disclose their sources — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

Why? Well, because The Age had

unilaterally determined...that the interests of the sources must yield to what the defendants claimed was a paramount public interest. — Supreme Court of NSW, Liu V The Age Co Ltd, 1st February, 2012

So they couldn't complain if she decided the interests of the sources must yield to another public interest - Helen Liu's right to justice.

To my mind, that's a bizarre piece of reasoning. Of course, the very best way to protect a source's identity is not to publish a story at all. And without those particular documents, The Age didn't have a story.

They provided the basis for The Age's claim that a Federal MP who rose to become Defence Minister had received large undeclared sums of money from a foreign national. And, says Richard Baker...

We are satisfied, after extensive research and checking, that the documents are authentic — Richard Baker, Investigative Reporter, The Age, 10th February, 2012

Whether they can satisfy a court of that is, of course, a different matter.

But should journalists refrain from publishing a crucial story, just because their source said "oops, sorry, we didn't mean to send those documents?"

I don't think so.

What they should do is honour their commitment to protect their sources' identities - if necessary, by defying the courts.

But then, I'm a journo. It's one more example, I'm afraid, of the yawning gulf between the way journalists see the world, and the way lawyers and judges do. Let us know what you think.

Justice McCallum's full judgment, The Age's response to our questions and more, will be on our website later tonight. Until next week, goodnight.