In February 2010 The Age published two articles alleging Liu paid federal MP Joel Fitzgibbon $150,000 as part of ''a campaign to cultivate him as an agent of political and business influence''. The articles were supported by quotes from 135 pages of documents said to be her personal and business records, including a list of ''money paid'' for unstated purposes to 22 people, including Fitzgibbon.
Fitzgibbon denies receiving the $150,000 payment and launched defamation proceedings. Liu claims the documents are forged or falsely attributed to her by a person or people with a vendetta against her. She asked the court to compel the journalists to reveal the identity of the sources as the basis for initiating defamation proceedings against the sources.
In Liu v The Age Company Limited  NSWSC 12 McCallum J commented that
the protection of sources from disclosure of their identity is not a right or an end in itself. The rationale for the protection lies in the public interest in cultivating trust between sources and journalists as a boon to free speech and, in particular, free political discussion. The defendants unilaterally determined in the present case that the interests of the sources must yield to what the defendants claimed was a paramount public interest. It was that decision which exposed the sources to the risk of disclosure of their identity. Having invoked the relativity of competing interests as the basis for that decision, the defendants can hardly maintain that interests competing with the public interest in protecting confidentiality of journalists' sources must be set to one side in the determination of the present application. In my assessment, the force of the considerations underlying the newspaper rule is substantially lessened in the present circumstances.An undertaking by journalists to keep a source confidential could be overridden "in the interests of justice".
McCallum J stated that
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. It was clearly indicated, so far as at least one of the sources was concerned, that the handwritten papers had been included inadvertently among the documents sent. A request was made on that basis not to publish those papers. Contrary to that request, The Age published details of the handwritten papers on its front page.
The newspaper's decision to use the handwritten documents in the face of requests from the contact not to do so 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 unless such disclosure is necessary in the interests of justice.The Court went on to find that
... the defendants submitted that the interests of the sources should be taken into account in determining whether to exercise the discretion to grant the relief sought by the plaintiff. The evidence as to that issue comes primarily from the contents of the email correspondence (Exhibits N and 2). That correspondence reveals that the sources initially contacted the defendants with a view to selling information. They sought payment in the order of $120,000. The defendants responded by offering up to $10,000. A suggestion that one of the sources might lose his employment upon providing the information was plainly tied to attempts to negotiate a higher payment in that context.
As submitted on behalf of the plaintiff, the early correspondence did not include any explicit request that the defendants not disclose the identity of the sources. Rather, the focus of the correspondence was upon obtaining reassurances that the defendants would not sell the information to any third party without consulting the sources.
A consideration of the emails in chronological order reveals that it was in fact the defendants who first volunteered that they would not disclose the identity of the sources.
After considering the contents of the relevant correspondence before me (Exhibits N and 2), I am not persuaded that there is any tangible risk of adverse consequences to the sources in the event that their identity is revealed beyond the risk of their being sued for defamation and the consequential impact upon their relationship (if any) with the plaintiff.High Court found there were no grounds for special leave.