The defamation lawsuit centres on an interview on Nine Network's 60 Minutes program about the CFMEU.
Geoffrey Watson SC discussed his CFMEU-focused report entitled Rotting from the Top in which he alleged Mr Gatto controlled M Group labour hire companies through "dummy directors" and received special treatment from the union and lucrative returns.
Mr Gatto sought to file an amended statement of claim for reputational damage in the NSW Supreme Court on Tuesday.
Lawyer Barry Dean alleged imputations in the 60 Minutes interview that his client was implicated in murders during Melbourne's gangland wars, and in one imputation committed a murder himself.Â
Mr Dean quoted Mr Watson saying he was "a little bit sick and tired, and this includes members of the press, treating Mick Gatto like he's some lovable rogue", and that had to stop.
"Mr Gatto was sitting right at the top of those gangland wars which devastated Victoria for around a decade," Mr Watson was quoted as saying.
The integrity champion's reference to Mr Gatto's past conduct was a bid to prove he was not a "lovable rogue", Mr Dean said,
"The ordinary, reasonable visitor to this interview ... would understand that Mr Watson was making an accusation that my client was responsible for those killings," he said.
Mr Watson's imputation was that Mr Gatto was "a murderous member of the mafia".
The 60 Minutes program was primarily about Mr Gatto's business practices and his conduct in the building industry, the court was told.
But Mr Dean said the "defamatory effect" of the past murder and building industry corruption imputations was substantially the same.
"It's never been the case that you can prove bad reputation by newspaper articles," he said.
Justice Campbell noted the corruption allegations involved Mr Gatto manufacturing industrial disputes in order to then settle them and get paid for it.
Defence lawyer Tim Senior said there was no longer a presumption of good reputation and he argued a person's previous reputation should be taken into account in deciding a defamation case.
He pointed to Mr Gatto's autobiography which stated Mr Gatto was a member of the underworld who survived Melbourne's gangland wars, showing the plaintiff "knew his reputation".
"We would say we need to know the extent of his previous reputation," Mr Senior said.
"The issue of his prior pre-publication reputation is a live issue of these proceedings."
Mr Senior accepted the integrity champion had conveyed on 60 Minutes that Mr Gatto was a survivor of the gangland wars.
But "it's a stretch" to say it conveyed he headed a criminal gang and "caused many people to be killed", the lawyer said.
Justice Campbell adjourned the matter to September 25.
Before investigating the CFMEU in Victoria and Queensland, Mr Watson was a prominent advocate of a federal anti-corruption commission and acted as counsel assisting the NSW anti-corruption commission in its investigation into corrupt NSW ministers Eddie Obeid and Ian Macdonald.
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