from the Mayne Report .....

There's nothing quite like a big court case between powerful media personalities so I've really enjoyed spending 9 hours over the last two days soaking up the damages action that sacked Herald Sun editor-in-chief Bruce Guthrie has brought against News Ltd in the Victorian Supreme Court.

Herald & Weekly Times managing director Peter Blunden spent all of Friday in the box and at the end of it Justice Stephen Kaye sent his legal team a very strong message to settle, warning that there was substantial contested facts and he would be making judgments on people's credit which could have implications well beyond the court.

Crikey's Andrew Crook and I sat together through most of the morning action which resulted in this long piece for today's edition. The key point of contention was explained as follows:

Blunden, under oath, flatly contradicted his former editor-in-chief Bruce Guthrie over a now-infamous front page that pilloried former police chief Christine Nixon for taking a junket to Los Angeles, claiming it "was a good front page" and that he "supported the story".

It's at odds with Guthrie's version of events. Guthrie said Blunden had confronted him in his office before a lunch date to air objections to the story from Rupert Murdoch's sister, and then-News chairwoman, Janet Calvert-Jones. But Blunden denied ever uttering the phrases attributed to him by Guthrie that "Janet's not happy" and "Janet thinks we've been too hard on Christine".

In a similar exchange two weeks later on a flight to Sydney, the News Limited hard man was equally blunt, denying all knowledge of the conversation. When asked by Will Houghton, SC, for News over whether they discussed the front page at any time on the trip, Blunden responded with a simple "nah".

Blunden has admitted that he ran a sustained lobbying campaign with News Ltd executive chairman John Hartigan to get Guthrie sacked ever since a simultaneous blow-up over in February 2008 over a Melbourne Storm trip to England and how circulation figures were reported in the paper.

However, Guthrie's counsel Norman O'Bryan SC produced a long list of emails during 2008 suggesting that Blunden was presenting a far more friendly and supportive picture when dealing directly with Guthrie.

He contended that Blunden at least had a moral duty to inform Guthrie of his sacking campaign when he knew he was about to spend seven figures buying a house in Hawthorn.

Blunden shrugged this one off suggesting that his only concern was the direction of the newspaper and at that stage "Harto" was still backing Guthrie.

O'Bryan finished the day suggesting that these lines about other people being involved were just cover for the fact that he had run a deceitful campaign behind Guthrie's back.

And that is where the involvement of Rupert's older sister gets messy. If Blunden has used her name inappropriately then he could be in strife with the Murdoch family. Equally, he could have been told to not have the family dragged into the court proceedings. The Herald Sun has been relentlessly slaughtering Christine Nixon over recent weeks so any apparent protection to be provided courtesy of a relationship with Janet is clearly no more.

Blunden is effectively alleging the whole thing is a Guthrie concoction, but you then have to ask how Guthrie would have even known Nixon was tight with Calvert-Jones.

There is no doubt that Blunden was throwing everything into his campaign to have Guthrie sacked, but it was surprising that O'Bryan didn't ask precisely who were the mysterious other parties who also prevailed on John Hartigan to fire that bullet. The obvious question is whether it was on Rupert's orders as well, especially given Melbourne is his home town and his father made his name building up The Herald.

Blunden admitted that his email to Guthrie on the morning after he was sacked was primarily motivated by this story byThe Age's Andrew Rule, especially the following two lines:

News Limited insiders said last night that their chief executive, John Hartigan, had privately expressed mixed feelings about the decision to replace Guthrie, but that his hand had been forced to end a difficult situation.

"You could say it's a personality issue," a News Limited executive told The Age.

He is trying to make a distinction between a personality clash and professional differences but now says he shouldn't have claimed in his email so strongly that others were involved in the sacking decision.

There were plenty of other contradictions in the evidence.

On Thursday Julian Clarke described 2007-08, Guthrie's only full financial year as editor-in-chief, as "a very lean year" because "the relationship was damaging the business". Clarke claimed 2006-07 and 2008-09 were both much better financially for the company than 2007-08.

Today's Herald Sun coverage (see tear out in Crikey long piece) really drove this point, but then Blunden completely contradicted it today when talking about a difficult week of trading in August 2008 when he was $1 million down on budget.

"It turned out to be an aberration. It was one bad week. We had just reported a record year."

If that's the case, why on earth would you sack the editor-in-chief three months later?

Both Julian Clarke and Peter Blunden made a big deal about Blunden not getting behind a $2 million promotion for the 14-part National Geographic DVD giveaway in October 2008. This was described as "the last straw", although Blunden happily admitted that it ended up being a fantastic promotion - but only because he intervened aggressively to force Guthrie to give it much more editorial attention than was being planned.

Guthrie strongly contested this view and claimed that his deputy editor Damon Johnson, now editor of The Sunday Herald Sun, was in charge of liaising with marketing.

If I'm to make a prediction it is that the parties will heed the judge's advice and reach a confidential settlement over the weekend. News will pick up Guthrie's legals and give him a useful six figure sum to make the whole messy saga go away.

If not, we'll be back in court on Monday for the summing up with the case certain to finish some time on Tuesday.