Australian Bureau Monitoring Pty Ltd v Rufford

The motions

1. Mr Glenn Rufford also opposed some orders sought by Mr Smith in two motions which are dealt with in this judgment.
2. The first seeking leave to discontinue the proceedings brought by the two companies in circumstances where Mr Smith has fallen seriously ill and, on his case, cannot afford to pursue the litigation and the second, seeking the adjournment of the hearing fixed to commence on 31 January 2023 for seven days.
3. Mr Rufford did not, however, have any objections to the proposed amendments to Mr Smith's defence to his cross-claim, which significantly reduced what lay in issue between them. Leave to rely on that amended defence should accordingly be granted.
4. Mr Rufford appeared unrepresented on 19 December 2022, at a time when Mr Smith had been hospitalised and the first motion came before Chen J as duty judge. His Honour stood the motion, which was supported by an affidavit Mr Smith had sworn on 15 December, over to 31 January 2023.
5. On 24 January Yehia J also stood the second motion, which was supported by an affidavit sworn by Mr Wang, Mr Smith's solicitor, over to that day, taking the view that it had to be considered together with the first. But her Honour noted that Mr Smith's health was such that orders which had been made by Chen J for preparation of the matters for hearing could not be complied with.
6. Further evidence about Mr Smith's undoubted ill health was served, but still the motions were opposed by Mr Rufford in circumstances where his trustee in bankruptcy had indicated that there was no objection to orders discontinuing the proceedings being made and Mr Rufford was concerned that the proceedings were preventing his bankruptcy being brought to an end. The bankruptcy had by then been extended to 2028.
7. Mr Smith had foreshadowed, however, that the companies proposed to pursue claims in the bankruptcy proceedings, rather than pursuing this litigation.

Conclusion on the motions

1. In issue on the motions was whether leave to discontinue the proceedings the companies had brought against Mr Rufford and the adjournment of his cross-claim could justly be ordered.
2. After hearing the parties I concluded that leave to discontinue had to be given and the cross-claim adjourned for further directions in July 2023. These are the reasons for my conclusions.

Why leave to discontinue was granted

1. The matter was listed for hearing by Kavanagh J in August 2022, orders for the filing and service of evidence in relation to the companies' claims having been complied with. All that the companies there claimed was put in issue.
2. Further orders made by Chen J as to other steps to be taken before the hearing were not complied with by the companies, for reasons explained in the evidence. Mr Rufford, who appeared unrepresented, had also not complied with all those orders. But he had served an affidavit, filed court books and written submissions, as had Mr Smith.
3. In his December affidavit Mr Smith explained how the motion seeking leave to discontinue came to be filed, he having learned in September 2022 that Mr Rufford's bankruptcy was to be extended to 2028; that the trustee had commenced proceedings against Mrs Rufford, in relation to the family home in which Mr Rufford held only a 1% interest, which were likely to produce funds for distribution to creditors; that the defendants had no other assets likely to be able to satisfy any judgment obtained against them in these proceedings; and that the best prospect of recovery of any of the losses pursued by the companies required proof of debts to be submitted in the bankruptcy.
4. Mr Smith having already spent at least $253,026 and being highly pessimistic that he would ever be able to recover damages if the claims succeeded after trial, had also concluded that with the further costs he had been advised the seven day hearing would involve, he did not have the capacity to fund the ongoing litigation without selling the companies' business premises or his family home. In all the circumstances he had made a commercial decision to discontinue the proceedings, pursue the companies' claims through the trustee in bankruptcy and to limit his defence of the cross-claim to arguments about harm and loss.
5. As a result Mr Smith had participated in a mediation and had made an open offer to settle the litigation for $40,000 exclusive of costs. That had not been accepted, with the result that the first motion was then filed.

Mr Smith's ill health

1. Despite the medical evidence, Mr Rufford put in issue Mr Smith's ill health, which was relied on by the companies both in seeking leave to discontinue and the adjournment of the cross claim. That was despite before Chen J, Mr Rufford having himself referred to his understanding of Mr Smith's declining health since 2015, which he also referred to in his written and oral submissions at the hearing of the motions.
2. That Mr Smith was in such ill health that he could not participate in the listed hearing in January was established by his own December 2022 affidavit, those of Mr Wang and by medical reports.
3. Mr Smith deposed in December that in recent weeks his health, which had long been poor, had deteriorated. He was suffering what had been diagnosed to be micro strokes up to six or seven times a day and was having problems controlling his motor functions, suffering severe pain and finding physical exertion difficult. He was then pessimistic about being able to attend the seven day hearing.
4. Mr Wang explained in his affidavits his observations of Mr Smith's worsening health, ability to communicate and give his instructions from September 2022. He had also observed a further deterioration since Mr Smith had sworn his December affidavit.
5. That was supported by a 12 January 2023 letter from the neurologist, Dr Borire, who advised that Mr Smith had been admitted to Liverpool Hospital suffering a stroke, which had been complicated by post-stroke epilepsy. He also explained the treatment Mr Smith was receiving and the physical and mental effects he had suffered. His opinion was that Mr Smith was not neurologically fit to attend court for the trial, or to participate in extensive litigation. His risk of seizure and stroke recurrence were high, especially within the first six months and so he recommended that Mr Smith be excused from any circumstances that would create significant stress.

Mr Rufford's position

1. The case Mr Rufford advanced in his written submission was that Mr Smith's case against him had been frivolous and vexatious from the outset; turned on the evidence of only he and Mr Smith; had resulted in him incurring such significant costs in the early stages of the litigation that he could not attend to another unidentified matter; that had resulted in him being declared bankrupt; he would otherwise have satisfied his underlying debt; his cross-claim had been poorly drafted by his previous lawyers; that it needed to be amended; that he wanted to prove that Mr Smith's motive in bringing the proceedings had been to destroy his life; and that the plaintiffs could not prove their claims against him, despite the records on which they relied, which were referred to in Mr Smith's affidavits, their case depending as it did on Mr Smith's evidence, that he had not approved or known of payments on which the companies' case was advanced.
2. Mr Rufford contended that by way of contrast, his affidavits showed the volume and quality of the work he had done, which had led to the agreement to pay him as a consultant to Suretek, while remaining an employee of ABM. This was evidenced by invoices and reimbursements which Mr Smith had approved and signed, as well as email correspondence and text messages, including about an accusation of forgery in relation to his last dealings with a third party, which had been dealt with by an Adelaide Court.
3. Mr Rufford also submitted that his bankruptcy was not the result of the defamation, but of having diverted funds to defend the companies' proceedings. Further, that Mr Smith, a longstanding former close friend, had used his knowledge of their financial position to embark on the companies' claims, which had no prospects of success.
4. Mr Rufford also complained of steps pursued after his bankruptcy, when a caveat had been filed over his share in a property and about Mr Smith's claimed relationship with his trustee in bankruptcy. He claimed that it had resulted in consent given in the Federal Circuit Court for leave to pursue these proceedings, the trustee having been advised that the claims constituted provable debts in his estate, despite not having asked him about the substance of those claims.
5. Mr Rufford also relied on a counter offer he had made, to have his life put back to where it was before the matter was commenced, "including the exemplary damages of the Bankruptcy and dealing with the Trustee, as a result of this matter, as well as costs". It had been declined.
6. Mr Rufford also submitted that he had obtained no advantage in the litigation. Rather, he had suffered four years and in excess of 750 man hours wasted, defending the claim. As well as bankruptcy, separation of his marriage, unidentified medical conditions he had never experienced before and the loss of his standing as a justice of the peace. He could thus not accept an offer of discontinuance, leaving the companies free to pursue him in the bankruptcy proceedings.
7. He also argued that given that only Mr Smith was to be called and he estimated that his cross-examination would only take between two to three hours, the hearing would not take seven days. Further, while the matter was complicated, it had been pursued to assassinate his character. Having progressed thus far Mr Rufford considered that it could not justly be abandoned, so that the false claims on which it was premised could be pursued before the trustee.
8. Mr Rufford also claimed knowledge of Mr Smith's considerable resources and ability to fund the litigation and argued that its abandonment in the circumstances would amount to an abuse of the Court's system, consistent with his understanding of Mr Smith's prior conduct. While his ill health was unfortunate, he claimed that he had witnessed Mr Smith fabricating illness in the past and contended that he should be required to pursue his case and give evidence on the long listed dates.
9. I was well satisfied that these submissions could not be accepted.

Justice required the leave sought to be granted

1. Rule 12.1(1) of the Uniform Civil Procedure Rules 2005 (NSW) permits proceedings to be discontinued with the consent of the other active parties, or with the Court's leave. Such leave is ordinarily accompanied by an order for costs against the discontinuing party: r 42.19. The effect of a discontinuance is that it does not prevent a plaintiff from pursuing similar relief in fresh proceedings: r 12.3.
2. The grant of such leave must be approached in light of the requirements of the Civil Procedure Act 2005 (NSW), which in s 56 specifies the overriding purpose of the legislative scheme to be the just, quick and cheap resolution of the real issues in the proceedings.
3. Leave to discontinue will ordinarily be granted, unless that would cause injustice to the opposing party, it being accepted that it is generally undesirable to compel a party to litigate against its will: GPO Atrium Café Pty Ltd v Martin Heritage Management Pty Ltd [2017] NSWSC 670.
4. Chen J considered that the circumstances on which Mr Smith relied would ordinarily establish an appropriate case to grant the leave sought. But his Honour took the view that he could not assess the merits or strength of any defence which Mr Rufford might have to the companies' claims, on which he relied to resist the discontinuance, claiming that his defence was strong and that he wished the Court to determine it: at [9]-[11].
5. This accorded with the approach of Bergin J, as her Honour then was, in Greaves v CGU Insurance Ltd [2004] NSWSC 912 at [5]-[8]. There by reference to earlier authority, her Honour noted that:

• In granting leave the Court "should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved": Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at 879.
• Leave should be granted "unless to do so will cause manifest injustice to his opponent … [b]ut the starting point for the discussion of it is the Court's greater ability to do justice to both parties if the central question is upon what terms leave to discontinue should be granted": SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 at 182.
• Consideration must be given to the need to refrain from compelling a party to litigate against its will, but the extent to which the proceedings have developed and whether discontinuance against one respondent may impose injustice on another respondent by removing an advantage that respondent may otherwise enjoy in the proceedings or by imposing a disadvantage, must also be considered. It is thus "relevant to have regard to whether the discontinuance would make any difference to the burden of litigation undertaken by the applicant and whether the application to discontinue results from a conclusion that the litigation cannot succeed against that respondent or is inspired by other reasons": Trade Practices Commission v Manfal Pty Ltd (No 3) (1991) 33 FCR 382 at 383-384.

1. Mr Rufford's position was that he had not obtained any advantage in the proceedings. In those circumstances there did not appear to be any just basis for refusing leave to discontinue, on the basis that a costs order would be made in his favour, as the companies accepted.
2. Mr Rufford did not serve further evidence in respect of either motion, but at the hearing relied on evidence he had served in the proceedings, as well as that served by the companies: affidavits sworn by Mr Smith, Mr Wang and Mr Sterling, a director and company secretary of Suretek, which corroborated aspects of Mr Smith's evidence.
3. The injustice Mr Rufford pointed to in his written submissions was that on his evidence he considered that he had a good defence against the claims which had wrongly been brought against him. But as was also his case, that depended not only on the evidence which had been served, but also on what both Mr Smith and he would say in cross-examination about the matters in issue.
4. On the evidence I was satisfied that it was not possible to conclude that justice required the application for leave to discontinue to be refused, in order that Mr Rufford could pursue his defence, despite how sound he believed it to be.
5. Indeed, that Mr Rufford's prospects of defending the claim were as good as he viewed them to be, was not apparent. That depended not only on an assessment of the competing evidence he and Mr Smith would give, but also on what contemporaneous documents revealed and on the evidence of Mr Sterling.
6. Mr Rufford plainly believed that the claims which the companies pursued were false and vexatious, reflective of a serious falling out between he and Mr Smith who had deliberately pursued a course intended to wrongly injure him and push him into bankruptcy. To make good that case he gave an account in his affidavit of claimed behaviour by Mr Smith, some of it clearly irrelevant to what has to be decided in this case, some of it scurrilous.
7. But curiously, he also relied on Mr Sterling's affidavit. Mr Sterling not only there gave evidence which supported the companies' claims, but also described behaviour by Mr Rufford which does not support his case. In the result I was unable to conclude that Mr Rufford's defence of the companies' claims had the strength which he believed that it did.
8. What Mr Rufford did not take issue with was the advice which Mr Smith had been given, that it was unlikely that he would be able to pay any sum which the Court might order against him in these proceedings, or what the medical evidence established.
9. In circumstances where the companies were content to pay the costs which Mr Rufford had incurred in defending the proceedings they had brought, I was thus not able to conclude that there would be any injustice in giving them leave to discontinue. That left both them and Mr Rufford free to exercise whatever statutory rights they might have in the bankruptcy proceedings, in the event that the companies pursued their foreshadowed claims.

Why the adjournment of the cross claim was granted

1. On the case Mr Rufford advanced in his written submissions, he had been ordered to file and serve the evidentiary statements on which he relied in January 2023. Other than his own, none have been served even though in his written submissions against the discontinuance motion, he claimed that he had identified three people prepared to give evidence of having read the posts he relied on.
2. Even given all that Mr Rufford had served, that Mr Smith would not have been able to serve his evidence within the time ordered, even if he was well, was also apparent.
3. In the written submissions advanced for Mr Smith both the difficulties Mr Rufford faced in proving his case, even if the adjournment was refused and the injustice of refusing it, in all the circumstances were explained.
4. Publication of the two Facebook posts on which Mr Rufford relied is not in issue, but the extent of publication is, as is the question of triviality. In the circumstances Mr Smith has to establish that the posts he complained about had been read by others, with the resulting damage which he claimed.
5. It follows that on the evidence Mr Rufford has served, there must be a real doubt that the extent of publication and the existence of a chance that he was harmed as a result, as he claims, will be established. He would require leave to lead further evidence, which he had neither sought nor been granted. If he did pursue such leave, that might also have necessitated an adjournment.
6. In all those circumstances and given Mr Smith's ill health, I was satisfied that the adjournment he sought had to be granted.
7. As well as the January 2023 letter from Mr Smith's neurologist, also in evidence was a 27 January letter from the GP Dr Keritam which Yehia J suggested should be obtained. It confirmed that Mr Smith had suffered a stroke on 9 January, by which he was still physically and mentally affected and that he was suffering subsequent epilepsy, with the result that he was unable to attend court for the hearing, or to participate in extensive litigation.
8. Given Mr Smith's ongoing illness and the risks to which the hearing put him, of exacerbation of his serious condition, I was well satisfied that justice required that the adjournment be granted.
9. Unfortunately people do fall ill at times which are inconvenient for other parties. But one person's pursuit of litigation should not be at the cost of another's health or life. Especially not when the case being pursued against them seems to be a weak one, unless steps are successfully pursued to lead further evidence.
10. In the result the matter will be adjourned to 7 July before Chen J for further directions.

Orders

1. For these reasons I order that: 1. Mr Smith have leave to amend his defence of the cross-claim; 2. the companies be given leave to withdraw the proceedings which they brought against Mr Rufford; 3. the companies bear Mr Rufford's costs of those proceedings, as agreed or assessed; 4. the cross-claim be listed for further directions before Chen J on 7 July at 9.30 am.

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