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Memories could be tested once again

Sydney Morning Herald

Wednesday February 16, 2011

Elisabeth Sexton

THE memories of James Packer and Lachlan Murdoch about the death throes of One.Tel in 2001 were so poor when they appeared in the witness box in 2005 that they cannot complain about facing proceedings this year, the NSW Supreme Court heard yesterday."They say 'it's unfair to us 10 years down the track because our recollections must be affected'," said John Karkar, QC, for One.Tel's special purpose liquidator, Paul Weston. "That assumes of course that they had a recollection to speak of," Mr Karkar said.The non-executive directors of the telephone company are seeking a permanent stay of a $244 million damages suit served by Mr Weston in August.At the heart of the case is One.Tel's 11th-hour abandonment of a $132 million rights issue which companies associated with the Packer and Murdoch families, One.Tel's largest shareholders, had agreed to underwrite.The court granted Mr Weston six six-month extensions to the deadline to file his suit between November 2007 and May 2010, at hearings in which lawyers for Mr Packer and Mr Murdoch were not entitled to participate.The service of the suit six months ago gave them the opportunity to argue the extensions should not have been granted, for which Justice Julie Ward has set aside four days.The significance of the stay application was apparent yesterday in a top-heavy bar table, where seven of the 10 barristers were silks. MrWeston has retainedMrKarkarand Ian Jackman, SC. Mr Packer and his companies have Tom Bathurst, QC, and James Elliott, SC, while Mr Murdoch and News Ltd have Noel Hutley, SC, and James ockhart, SC. The former chief executive of the Packer family‚„s Publishing and Broadcasting, Peter Yates, who chaired One.Tel‚„s last board meeting,has Neil Young, QC. Mr Karkar quoted statistics from Justice Robert Austin‚„s judgment in November 2009 dismissing the Australian Securities and Investments Commission‚„s case against One.Tel‚„s founder Jodee Rich and former finance director Mark Silbermann.Called as ASIC witnesses, Mr Packer had said ‚œ‚œI can‚„t recall‚„‚„ in response to 1951 questions and Mr Murdoch 881 times. Mr Packer had conceded under cross-examination that it was ‚œ‚œrelatively fair‚„‚„ to say that after One.Tel went into administration, he deliberately tried to forget about the events of the preceding six months. Mr Karkar said this meant ‚œ‚œany prejudice by reason of lack of memory on the part of Mr Packer is really self-inflicted‚„‚„. ‚œ‚œHow does one deliberately try and forget?‚„‚„ asked Justice Ward, provoking a discourse on philosophy and psychology from Mr Karkar.PBL and News had ‚œ‚œcomplete knowledge‚„‚„ that Mr Weston would wait for Justice Austin‚„s judgment before serving his suit, Mr Karkar said. They had ample warning of the likely case against them from publicly available reports to creditors by Mr Weston and One.Tel‚„s general purpose liquidator, Steve Sherman, and had notified their insurance companies.PBL and News ‚œ‚œwent to great lengths‚„‚„ to gather evidence immediately after One.Tel‚„s collapse, which they had passed to ASIC.Mr Murdoch had sworn six affidavits for the case between 2001 and 2005 and Mr Packer also six, between 2002 and 2004.‚œ‚œThe case was called ASIC against Rich but it may as well have been called Packer and Murdoch against Rich,‚„‚„ Mr Karkar said.

© 2011 Sydney Morning Herald

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