Ahmed v Harbour Radio Pty Ltd

CATCHWORDS : PROCEDURE - Supreme Court procedure - New South Wales - rules of court - extension of time to sue party - joinder of party to proceedings after expiration of limitation period - s 54A Limitation Act test - whether not reasonable in the circumstances to have commenced action against defendant within time - s 64(1)(b) Civil Procedure Act - s 65(2)(c) Civil Procedure Act - DEFAMATION - defence of honest opinion, s 31 Defamation Act - whether s 31(4)(b) available to a plaintiff, who has sued employer, but not employee, where employer has raised defence under s 31(2)

Civil Procedure Act 2005 LEGISLATION CITED : Defamation Act 2005 Defamation Amendment Act 2002 Limitation Act 1969

Greenwood v Papademetri [2007] NSWCA 221 Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; 54 NSWLR 207 CASES CITED : Le Busque v ACP Publishing Pty Ltd [2005] ACTSC 138; 195 FLR 198 Noonan v MacLennan [2010] QCA 50 Rayney v Western Australia (No 3) [2010] WASC 83 Rodgers v Nine Network Australia Pty Ltd (No 2) [2008] NSWDC 275

PARTIES : Kim Anne Ahmed (Plaintiff) Harbour Radio Pty Ltd (Defendant)

COUNSEL : R Rasmussen (Plaintiff) A T S Dawson (Defendant)

SOLICITORS : Turner Freeman (Plaintiff) Banki Haddock Fiora (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

JUDGMENT 1 HER HONOUR: By amended notice of motion filed 14 May 2010 (the original of which was filed 10 May 2010) the plaintiff, Kim Anne Ahmed, seeks, in the alternative, three orders. They are:

● Pursuant to s 56A of the Limitation Act 1969, an extension of time in which to institute proceedings in defamation against Mr Ray Hadley;

● Pursuant to s 64(1)(b) of the Civil Procedure Act 2005, leave to file a second further amended statement of claim (the substance of the amendment sought being to add Mr Ray Hadley to existing proceedings as an additional defendant);

● Pursuant to s 65(2)(c) of the Civil Procedure Act , leave to add a cause of action (to existing proceedings), the additional cause of action being against Mr Ray Hadley. 2 If the third alternative order were to be made, the plaintiff also seeks, pursuant to s 65(3) of the Civil Procedure Act, an order that the amendment adding Mr Ray Hadley as a defendant be taken to have had effect as and from 21 September 2008.

The history 3 The proceedings already commenced arise out of a broadcast said to have been made on Radio 2GB on 21 May 2008, and which, the plaintiff claims, conveyed a number of imputations defamatory of her. 4 Section 14B of the Limitation Act 1969 prescribes, in respect of a cause of action in defamation, a limitation period of one year from the date of publication of the matter complained of. Time to bring defamation proceedings in respect of the broadcast thus expired on 21 May 2009. It is possible for that time to be extended. 5 Section 56A of the Limitation Act obliges a court, in the circumstances there specified, to extend the limitation period prescribed in s 14B for a further two years. It will be necessary, in due course, to have regard to the precise terms of s 56A. 6 The plaintiff initially commenced proceedings in the Federal Court of Australia. Those proceedings named Harbour Radio Pty Ltd ("Harbour Radio", said to be the owner and proprietor of Radio 2GB) as the sole defendant. The proceedings pleaded a cause of action under the Trade Practices Act 1974. It seems that a claim in defamation was also made. 7 On 1 October 2009 Foster J of the Federal Court struck out the cause of action under the Trade Practices Act and transferred the balance of the proceedings to this Court. The current originating process is a Further Amended Statement of Claim filed on 11 March 2010. It names only Harbour Radio Pty Ltd as a defendant. It pleads a cause of action in defamation. It is important to be precise about what the plaintiff asserts in the further amended statement of claim. 8 In paragraph 2 she pleads that, on or about 21 May 2008 the defendant (Harbour Radio) transmitted for general reception certain defamatory material annexed to the statement of claim at schedule A. 9 Schedule A purports to be a transcript, headed: " 2GB INTERVIEW BETWEEN RAY HADLEY AND GLEN, 21 MAY 2008." 10 There follows what purports to be a transcript of some introductory remarks attributed to Ray Hadley, followed by what may be discerned to be the transcript of a conversation between Mr Hadley and a caller who identified himself as "Glen". The content of the discussion is not material for present purposes. 11 On 13 April 2010 Harbour Radio filed a defence to the further amended statement of claim. The defence appears to plead defences of qualified privilege, both at common law and pursuant to s 30 of the Defamation Act 2005. It may be that it is intended to raise other statutory defences as well, but this is not clear and does not, at this stage, matter. Most importantly, the defence pleaded the defence of honest opinion as provided in s 31 of the Defamation Act 2005. 12 In order to take advantage of the defence, the publisher of a defamatory statement must prove: ● that the defamatory statement was not a statement of fact, but the expression of opinion;

● that the opinion related to a matter of public interest;

● that the opinion was based on "proper material" (as defined in sub-s (5)). 13 It is also essential to proof of the defence that the defendant identify the source, or the holder, of the opinion: it may establish the defence by proving that the opinion was that of:

● an employee or agent of the defendant (sub-s (2));

● another person (called "the commentator") (sub-s 3)). 14 Sub-section (4) provides an avenue by which a plaintiff may defeat a defence of honest opinion. What the plaintiff must prove depends upon which of the three alternatives (as to the holder of the opinion) is invoked by the defendant. Where the defendant proves that the opinion was that of the defendant (sub-s (1)), the plaintiff may defeat the defence by proving that the opinion was not honestly held by the defendant at the time of publication (sub-s (4)(a)); where the defendant proves that the opinion was that of an employee or agent (sub-s (2)), the plaintiff may defeat the defence by proving that the defendant did not honestly believe that the opinion was held by the employee or agent nominated by the defendant (sub-4(b)); where the defendant proves that the opinion was that of a third person ("the commentator) (sub-s (3)), the plaintiff may defeat the defence by proving that the defendant had reasonable grounds to believe that the opinion was not honestly held by the commentator at the time of publication (sub-s (4)(c)). 15 In its defence the defendant raised s 31 in all three variants. That is, it pleaded that the statements of which the plaintiff complains related to matters of public interest, were based upon proper material (as defined in sub-s (5)), and were expressions of opinion, of, alternatively (or cumulatively):

● a third person. 16 It was said to be the pleading under s 31(2) that promoted the plaintiff to seek to join Mr Hadley as a defendant. That is, it was the defendant's plea that the defamatory statements in the broadcast represented the expression of opinion of an employee or agent of the defendant (who, it might be supposed, was Mr Hadley) that caused the plaintiff to make the present application. 17 Just why that should be so requires some explanation. 18 The 2005 Defamation Act is still in relative infancy. The defence of honest opinion is one of those areas of defamation law in which a significant change was wrought to the pre-existing law (Defamation Act 1974, ss 29-35). Section 31 has not been the subject of a great deal of judicial examination, certainly not at appellate level. However, it seems that a spectre has emerged concerning certain implications of the manner in which s 31(2) and s 31(4)(c) are worded. The spectre, as I understand it, raises this question: where a defendant raises s 31(2) as a defence, can a plaintiff, who has sued the employer but not the employee, succeed in defeating the s 31(2) defence? Put more specifically: where an employer defendant asserts that a defamatory statement represented the expression of opinion of an employee, can the plaintiff succeed in proving (in terms of s 31(4)(b)) that the defendant employer did not believe that the opinion was honestly held by the employee, if the plaintiff has not sued the employee as well as the employer? 19 There is, apparently, a perception that the present Chief Judge of the Common Law Division has expressed the view that the answer to that question is in the negative. That is, that unless a plaintiff sues the employee as well as the employer, he or she cannot prove that the defendant (employer) did not believe that the opinion expressed was honestly held by the employee. 20 Just why that should be so is a mystery to me. No decision of this or any other court was cited to support the proposition. 21 Counsel for the plaintiff produced a judgment of the District Court in which an application similar to the present was made, and, apparently, for similar reasons: Rodgers v Nine Network Australia Pty Ltd (No 2) [2008] NSWDC 275. There, Gibson DCJ said: "3. This application raises a number of problems which may be relevant to other defamation proceedings … concerning the interaction between the Limitation Act 1969 (NSW) and the Civil Procedure Act 2005 (NSW) and the impact of an apparent significant change in the statutory defence of comment which was discussed (but not the subject of any judgment) by McClellan CJ at CL in the course of the defamation proceedings brought by the actress Judy Davis in May 2008 ( Davis v Nationwide News Pty Ltd [2008] NSWSC 699). In the course of submissions, McClellan CJ at CL expressed the view that it was necessary for the journalists to be joined as parties (a step rarely taken in the past by plaintiffs, for reasons set out in more detail below) for the plaintiffs to be able to succeed in defeating the defence of comment.

5. There the matter rested until discussion of the comment defences during the defamation proceedings commenced by Judy Davis identified what could be a significant change to comment defences under the Defamation Act 2005 (NSW), namely an assertion that the defence of comment under the new Act could not succeed unless the journalist in those proceedings had also been joined by the plaintiff … There is no judgment available on this issue, as the parties tell me McClellan CJ at CL made an order (after hearing from the parties) to which both parties consented. The jury findings of fact in Davis meant that the defence of comment failed in any event so there is effectively no finding of fact or law in this trial in relation to this interpretation of the statutory comment defence under the new Act." 22 In an affidavit filed in support of the application, the solicitor for the plaintiff deposed that, following receipt of the defence (13 April 2010), he was advised by counsel of the decision in Rodgers, that the "point of interpretation" of s 31 mentioned in Rodgers had been raised in the case there referred to, but was not the subject of a judgment, and that, subsequently, McClellan CJ at CL had, at a seminar, expressed the view that it would be difficult, if not impossible, to establish a defeasance pursuant to s 31(4)(b) or (c). It is of some interest that it is not suggested that the view of the Chief Judge said to have been expressed at the seminar was that the defeasance could not be established where the plaintiff had not sued the employee (or the commentator) - it is (as reported to the plaintiff's solicitor) that a plaintiff could not prove the facts required by s 31(4)(b) or s 31(4)(c). Even if an opinion expressed at a seminar could otherwise have had a bearing on the issues for present determination, the opinion attributed to the Chief Judge does not assist the plaintiff - the whole point of this exercise is to seek an extension of time to sue Mr Hadley, in order to defeat a s 31(2) defence. 23 The position thus far, put simply, is this:

● within 12 months of the broadcast by Mr Hadley on 21 May 2008 the plaintiff sued Mr Hadley's employer (or principal) in defamation in respect of that broadcast;

● the time in which the plaintiff was able, pursuant to s 14B of the Limitation Act , to sue Mr Hadley, expired on 21 May 2009;

● at some unspecified time, the Chief Judge at Common Law is alleged to have expressed views about the (un)availability of s 31(4)(b) to a plaintiff, who has sued an employer, but not an employee, where the employer has raised a defence under s 31(2);

● on 28 November 2008, in a published judgment, Gibson DCJ recounted those asserted views;

● on 13 April 2010, the defendant filed a defence to the plaintiff's claim, pleading, inter alia , a defence under s 31(2);

● the plaintiff's advisors perceived a potential problem by reason of the interpretation of s 31(4)(b) attributed to McClellan CJ at CL. 24 In these circumstances, the plaintiff seeks an extension of time in which to sue Mr Hadley.

The extension application 25 As mentioned above, by s 14B of the Limitation Act, in respect of a defamation claim, a one year limitation period is prescribed. 26 Section 56A of the Limitation Act makes provision for an extension of that time. It was inserted into the Limitation Act in 2002 by the Defamation Amendment Act 2002. It was then in different terms, to which I will later refer. It was the subject of amendment, as part of a package of amendments effected by the Defamation Act 2005 ("the 2005 Act"), one notable feature of which is that they were adopted as part of a uniform national approach to the law of defamation. Most (if not all) States and Territories have similar or identical provisions. It is necessary to set out the terms of sub-s (2), which is the substantive provision. They are: "(2) A court must, if satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period mentioned in section 14B to a period of up to 3 years running from the date of the publication." 27 The provision is in somewhat unusual terms, and it is worth taking a moment to paraphrase, and to note what it does not do. It does not, as is usual with limitation extension provisions, confer a discretion on a court to extend a limitation period where, for example, it is just and reasonable to do so, or where it was reasonable for the plaintiff not to have commenced proceedings within the prescribed time. 28 It differs from such provisions in two respects. Firstly, it requires the plaintiff to prove that it was not reasonable to commence proceedings within time; secondly, far from conferring a discretion on the court to extend time if the plaintiff proves that fact, it obliges the court to extend time. Extension, in those circumstances, is mandatory. 29 By sub-s (3) a court may not order extension of the limitation period other than in the circumstances specified in sub-s (2). 30 The notice of motion was filed on 10 May 2010. The application for extension of time is therefore within the three year period envisaged by s 56A(2). 31 Counsel for the plaintiff again relied upon the decision in Rodgers. As I have mentioned above, the application there was similar to the present. 32 What were said to have been defamatory imputations were telecast in October and November 2006. Proceedings against the operator of the television station were commenced within the one year period. After the expiration of that period, the plaintiff sought to amend the statement of claim by adding the journalists involved in the telecast (and sought other orders it is not here necessary to mention). Whether the application in that case was inspired by what is attributed to McClellan CJ at CL or not does not appear from the judgment, but her Honour certainly devoted some attention to the interpretation question which is supposed to have arisen. 33 Her Honour granted the extension of time. It is urged upon me that, having regard to that judgment, I should adopt the same course. However, in my opinion, it is clear that her reasoning towards that result is, in a number of respects, flawed. What follows is an explanation for that view. At [20] her Honour set out s 14B; at [21], she said: "It is against this background that the current provisions for limitation periods in relation to defamation actions need to be seen. In introducing the new legislation to Parliament the Attorney General, Mr Debus MLA, said: 'The relevant limitation period provisions have also been updated, but are essentially unchanged. The limitation period will continue to be one year from the date of publication, extendable to 3 years if the court considers it was not reasonable in the circumstances for the plaintiff to have commenced their [sic] action in time.'" 34 Her Honour then turned to submissions made on behalf of the defendants in that case (to the effect that the 2005 Act imposes a stricter test). She referred to a decision of Master Harper of the Supreme Court of the Australian Capital Territory, (Le Busque v ACP Publishing Pty Ltd [2005] ACTSC 138; 195 FLR 198) and set out the there applicable limitation and extension provision, the latter of which was, relevantly: "(2) … the court shall, if satisfied that it was not reasonable for the plaintiff to have known about the publication of the matter complained of within 1 year from the date of the first publication, extend the limitation period …" (italics added) 35 She noted the distinction between that provision, and s 56A. But she then said: "26. I reject the defendants' interpretation of the new provisions. The intention of the legislature was to have the same or similar provisions. I see nothing in the use of the word 'action' or the reformulation of the test to impose additional restrictions. The defendants do not submit that there was any such restriction under the repealed legislation and I cannot see any reason for accepting this very narrow reading of the new provision." 36 It is not clear to me what her Honour meant when she said "the intention of the legislature was to have the same or similar provisions". The same or similar provisions to what? One construction is that she was referring to the quote from the Attorney General at [26] of her judgment. But what the Attorney General said were "essentially unchanged" were the limitation periods. He did not say that the extension provisions were unchanged. Indeed, they were not. The extension provisions (for defamation claims) prior to the amendment made by the 2005 Act were those contained in the version of s 56A that was repealed by the 2005 Act; sub-s (4), which contained the operative provision, was in the following terms: "(4) … the court may, if it decides that it is just and reasonable to do so , order that the limitation period for the cause of action be extended for such period as it determines …" (italics added)

That is a very different test to that imposed by the present s 56A(2). As continues to be the case, an overall three year limitation was prescribed. 37 If, by saying that the intention of the legislature was to have "the same or similar extension provisions", her Honour referred to the extension provision that immediately preceded the introduction of the 2005 Act, then the language of the two provisions speaks clearly to the contrary. The test was markedly changed when s 56A took on its present form. 38 At [32] her Honour set out three arguments put by the plaintiffs in Rodgers in support of the application. She introduced this by saying: "32. The matters put forward by the plaintiffs to show that it was reasonable for the plaintiffs not to commence against or to join the journalists … are …" 39 This misstates the test imposed by s 56A. That test is, not whether it was reasonable for the plaintiff not to have commenced within time, but whether it would not have been reasonable for the plaintiff to have commenced in the time specified. In other words, the test has been inverted. Of course, what appears in the opening of [32] is merely introductory, and would not ordinarily be taken as the posing of a test. However, what appears later in the judgment shows clearly that her Honour did misapprehend what s 56A required. 40 At [35] her Honour held that: "As the language of s 56A is similar to the language of s 60G(2) Limitation Act concerning the extension of time of an action for negligence, nuisance, breach of duty or personal injury, judges … have generally obtained guidance from decisions of the Court of Appeal brought pursuant to s 60G." 41 A glance at s 60G(2) shows that that, too, is incorrect. Section 60G(2) relevantly provides: "(2) … the court … may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period as it determines." 42 Following that, her Honour drew assistance from a decision of the Court of Appeal: Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; 54 NSWLR 207. She said that, in that case, Ipp AJA explained: "… the very broad nature of the discretion and the need for the test to be a flexible one with regard to the particular circumstances of the case." 43 She then identified the question as: "… whether a sufficient explanation has been given for the failure to commence proceedings in time and if so whether, having regard to all of the circumstances of the case, it is fair and just to grant (or refuse) the application." 44 But Itek concerned a limitation provision in the Workers Compensation Act 1987, which specified that proceedings under that Act were not to be commenced outside a specified time frame: "… except with the leave of the court …" 45 It was that provision that Ipp AJA, with the concurrence of Spigelman CJ and Sheller JA, described as conferring "a broad discretion": [65], [72]. Those remarks have no bearing upon the construction of s 56A. As I have pointed out above, one thing that is notable about s 56A is that, if the court reaches the conclusion that it would not have been reasonable for the plaintiff to have commenced proceedings within one year of publication of the defamatory matter, the court is obliged to grant an extension of time. No element of discretion arises. 46 Reliance on Itek was misconceived. 47 Her Honour then turned to matters essentially concerned to the exercise of discretion which, as I have said, in regard to s 56A, is irrelevant. 48 At [44] she declared herself satisfied: "… that the plaintiffs have a reasonable explanation for not commencing proceedings within the one-year limitation period against the journalists." 49 Here, she was, apparently, applying the test she had (erroneously) adopted in the context of her consideration of Itek (although a test to that effect does not appear in the judgment of Ipp AJA, and is, indeed, contrary to the overall tenor of his judgment, which did not confine the exercise of the discretion arising under the relevant section to considering whether a reasonable explanation had been provided). 50 Finally, at [52] her Honour said: "Accordingly I am satisfied that the plaintiffs' decision not to sue the journalists was not the deliberate permitting of a period of limitation to expire, but the belief that their cause of action effectively laid (sic) against the broadcaster. I also note the plaintiffs did not know the identity of the persons who held the opinion until after the expiry of the limitation period."

This also ignores the language of s 56A(2). 51 Contrary to the submission put on behalf of the plaintiff, the approach taken in Rodgers can not assist in the resolution of the present application. In fact, the present application can be determined simply by examination and application of the plain words of s 56A. 52 Section 56A entitles the plaintiff to an extension of time if it was not reasonable, in the circumstances that existed, to have commenced proceedings within one year of the publication of the broadcast. One can envisage circumstances in which it would not be reasonable for a plaintiff to commence proceedings within that time. One is where the plaintiff is unaware of the publication. Another is where the plaintiff is unable to identify the publisher or prove publication. (In this regard the obligations of legal practitioners under s 347 of the Legal Profession Act 2004 and the provisions of s 348 thereof are to be borne in mind.) Another circumstance may be where the plaintiff is engaged in non-litigious processes to vindicate his or her rights: see Noonan v MacLennan [2010] QCA 50 at [17]. 53 Here, it is not and could not be suggested that the plaintiff did not know the identity of Mr Hadley, or that he was the broadcaster who spoke at least some of the words she claims defamed her. Annexure A to the Statement of Claim makes it quite clear that she had actual knowledge of that fact. The only basis on which it is suggested that she did not commence proceedings against him within the time limit is that she was unaware of the nature of the defence that the defendant would file and eventually did file, and that it was not until receipt of that defence that the implication of the views attributed to the Chief Judge at Common Law, and canvassed in Rodgers, struck her legal advisors. 54 The test posed by s 56A was described by Malcolm CJ in Rayney v Western Australia (No 3) [2010] WASC 83 as: "… a difficult hurdle for a plaintiff to overcome unless there are some unusual circumstances …"

and: "… not a burden which is discharged by showing that it was not unreasonable to have not commenced within one year." (at [41]) 55 The plaintiff falls far short of establishing that it was not reasonable in the circumstances for her to have commenced an action against Mr Hadley within the time specified in s 14B of the Limitation Act. 56 The application pursuant to s 56A is refused.

The Civil Procedure Act 57 As an alternative to an extension of time, the plaintiff seeks orders under either s 64(1)(b) of the Civil Procedure Act, or s 65(2)(c) thereof. 58 Section 64(1)(b) is relevantly in the following terms: "64(1) At any stage of proceedings, the court may order: (a) … (b) that leave be granted to a party to amend any document in the proceedings." 59 Section 65(2)(c) is in the following terms: "65(2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64(1)(b), amend the originating process so as: (a) … or (b) … or (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process."

Section 64(1)(b) 60 The amendment here sought is for the addition of Mr Hadley to the existing statement of claim in such a way as to make him a defendant. 61 Counsel identified no case in which leave has been granted to amend a statement of claim in such a way as to add an additional defendant in circumstances where that defendant would otherwise have had the benefit of a limitation provision. 62 In my opinion, s 64(1)(b) was never intended to reach so far. Such an order would override entirely a relevant statutory limitation provision. 63 It is of some interest that s 65, to which I will shortly come, does, in one respect have: "… the practical effect of an amendment to the Limitation Act 1969."

(see Greenwood v Papademetri [2007] NSWCA 221 at [27])

That, however, is the subject of explicit statutory provision: s 65(5). 64 I am quite satisfied that s 64(1)(b) is not available as a source of power to permit the joinder of Mr Hadley to these proceedings. 65 Even if the section could be read as extending so far, an order remains discretionary, and it would rarely be a proper exercise of discretion to eliminate the right of the proposed defendant given to him or her by a limitation statute. 66 I refuse to grant relief under s 64(1)(b).

Section 65(2)(c) 67 The plain language of s 65(2)(c) does not support the plaintiff's claim. It permits the addition or substitution of a new cause of action arising from the same or substantially the same facts as those giving rise to an existing cause of action. What is implicit and clearly intended is that the additional cause of action permitted is a cause of action against an existing defendant, and not a new defendant. 68 As mentioned above, s 65(2)(c) does incorporate a provision which, to an extent, is capable of overriding a limitation period provided for in the Limitation Act. That suggests to me that all that was intended by s 65(2)(c) was to permit the formulation of causes of action arising out of facts already pleaded so that the defendant is not deprived of any right otherwise conferred. 69 In any case, as with s 64(1)(b), the power is discretionary, and for reasons already given, it would rarely be exercised in such a way as to deprive a person who was not already party to the proceedings of a right conferred to a limitation statute. 70 I refuse relief under s 65(2)(c). 71 The orders I make are:

(ii) The plaintiff is to pay the costs of Mr Hadley incurred by reason of the notice of motion. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.