Solicitors:
Stewart Cuddy & Mokkler (Plaintiff)
Otto Stichter & Associates (Defendant)
File Number(s): 2017/86708
[2]
EX-TEMPORE Judgment - Revised
This case did not have, but is rapidly acquiring, an unfortunate history. The matter was set down for trial for two days over 12 months ago. It is a defamation action involving the publication of oral statements which are, if I may say so, within a narrow compass. The matter complained of, involving each of the first and second defendants, seems to be a conversation consisting of five lines in the pleadings and about six short sentences. At the time the matter was set down the defendants had different representation and in an affidavit previously read in interlocutory proceedings before McCallum J, the defendants' present solicitor, Mr Otto Stichter, explained the difficulty he had experienced in obtaining the file from the previous solicitor. Although he received instructions to act in June of 2018, his predecessor, in exercise of his lien in respect of unpaid costs, was not satisfied that proper arrangements had been made until early August 2018. At that time there still remained almost exactly four months prior to the hearing.
Because of what seems to be the inherent simplicity of the case, I assume, no detailed directions for its management were thought necessary previously. The matter consisted of that short slander that I have described, which was denied by the defendants. No more elaborate or special defence was raised, although, as McCallum J pointed out in her interlocutory judgment of November, aspects of truth were necessarily implicit in the traversals of the averments by the defendants. In her November judgment her Honour rejected an application to amend, including an application to raise a defence of qualified privilege, for reasons her Honour then gave, which I need not rehearse. It is accepted by Mr Kirby of counsel, who appears for the defendants, that her Honour's judgment was unimpeachable, a consideration which is unsurprising to me.
The next chapter in the story was written last week when the Registrar, at the behest of the civil list judge, wrote to the legal representatives of the parties asking whether the case had resolved, and if not, whether it was still anticipated that the case would take the two days originally estimated. The purpose of the Registrar's inquiry was to confer with the list judge as to the allocation of the matter to a judge for hearing. That judge turned out to be me.
Mr Kirby responded to the Registrar's inquiry by informing him that the defendants intended to call 11 witnesses, and "that being so ... the matter is not able to be accommodated in two days next week." Mr Rasmussen of counsel, who appears for the plaintiff, had responded that for abundant caution, the two days might stretch to a third to accommodate addresses. He also said that until he saw Mr Kirby's email he had not known that the defendants intended to call 11 witnesses and that if that were so it was difficult to see how even four days would suffice.
As it happened, in accordance with the Common Law Division's usual practice the matter had been allocated to me early in the week on 3 December. As it also transpired no other hearing work was allocated to me this week so I have five full days to hear the case. I made that clear to the parties this morning when the question of the estimate was raised with me by Mr Kirby. He candidly informed me that he had set aside only the two days estimated in his diary and had other professional commitments from Wednesday on and into next week, including commitments interstate. At the time this was raised with me I did indicate that I was unsympathetic to his predicament which I regarded that as an incidence of the fortunes of war in practice at the Bar.
Perhaps before that discussion was fully complete Mr Kirby also indicated to me that there was a matter that had come to his attention last night that he needed to get instructions on and I allowed an adjournment of about half an hour for that purpose. When I resumed Mr Kirby told me, and properly without objection from his opponent, that he had a professional difficulty with appearing for both defendants. That difficulty arose in this way. One of the witnesses whose name was given but I need not mention it now, apparently a legal practitioner, had been interviewed by Mr Kirby's instructing solicitor and also by him in conference and had given a version of events which differed from the second defendant's recollection.
This witness is one of the nine lay witnesses proposed to be called in addition to the two defendants. As it transpires the evidence of that witness if accepted, as it was outlined to me by Mr Kirby, entirely exonerates, if I can put it that way, the first defendant, Ms Passas, but may not entirely exonerate the second defendant, Mr Raciti, except to the extent to which it potentially gives rise to a different ground of qualified privilege from that presented to McCallum J in November.
Although I have always conceived the question of whether witnesses are to be called as a matter within the discretion of counsel as captain of the ship of the case, I understand that Mr Kirby's instructions are conflicting. Obviously Ms Passas wants the witness called and that is entirely understandable. Mr Raciti apparently, at this time, does not want the witness called because he is concerned about the apparent conflict between his recall and the witness's recall and the effect that might have upon the acceptability of his evidence in the trial. I did discuss with Mr Kirby during the course of argument that it is permissible for counsel to contradict his or her client but not to discredit the client. It is also no doubt understandable that witnesses differ in their recollection of the same events. Those differences very frequently are for genuine and bona fide reasons.
I was also informed, I think by implication, that Mr Raciti has some health difficulties which have made it hard for him to provide the instructions. In any event it is clear that counsel may not serve two masters and Mr Rasmussen does not doubt that proposition. I accept that Mr Kirby has, on the basis of his present instructions, an obvious conflict and that he can appear for neither.
Without requiring evidence about this I am prepared to accept that it would be impossible for two counsel, experienced in the field, to be retained at no notice to take over the conduct of the matter. This is particularly so where nine lay witnesses have been interviewed and no proof of evidence apparently obtained from any of them so that counsel would need, one would have thought, at least a day or two to prepare. I think it fair to say even if new counsel could be retained the matter would be unlikely to complete this week.
Although Mr Kirby did not in terms ask for relief other than leave to withdraw I took it as going without saying that, for reasons of the type I have rehearsed the defendants would necessarily need to apply for an adjournment. The first thing that would happen when Mr Kirby withdrew was that Mr Stichter would make such an application.
Understandably, the application for an adjournment is opposed. As I have said Mr Rasmussen commendably and fairly does not take issue with Mr Kirby's difficulty, but his case is fully prepared from the plaintiff's stand-point and ready to proceed on the pleadings as they presently stand. As McCallum J observed in November the case is an exquisitely straightforward one which ought to have easily concluded in the time allocated, especially given that, as it happens, the judge has extra time if necessary.
I need to say that there are a number of unsatisfactory features of this. As I have already remarked the current legal team for the defendants was apparently in a position to start preparations in August. I accept that counsel has a busy practice but it seems to me that it is, I will say, unsatisfactory, that preparation by way of proofing these witnesses was apparently undertaken only on Sunday, 2 December and Sunday, 9 December 2018, notwithstanding the fact that Mr Stichter had been attempting for some time to identify, and obtain the cooperation of, relevant lay witnesses as he deposed to in his affidavit of 8 November 2018.
Part of the explanation for the delayed preparation might be the absence of intensive directions for case management. I do not criticise anyone for that because, as I have said, this seemed like an exceedingly simple case. Directions were made for the administration of interrogatories which occurred some time ago and in the absence of any mention of nine lay witnesses it would hardly occur to anyone to consider whether directions the exchange of witnesses' statements at an early time were required.
For the reasons I have given so far I feel I am in a position where I need to allow an adjournment. Nothing I have said so far should be taken as suggesting that I have an understanding that the plaintiff did not strenuously oppose this adjournment. I fully accept that the adjournment was strenuously opposed. However, there may have been a sense of inevitability about it given the real ground for the adjournment was counsel's conflict of interest, but much focus has been upon the question of the costs thrown away.
Mr Kirby has submitted that those costs should be reserved. It is only when preparation is complete, the matter comes on for trial and the evidence of the witnesses is heard that a Court would be in a position to make a decision about where the interests of justice lie in relation to the awarding of costs. With respect, I am not persuaded by that argument. It seems to me that the difficulty has arisen at the very last minute because of what I have said about the circumstance of the late preparation.
I repeat that Mr Rasmussen knew nothing of nine independent lay witnesses until he saw Mr Kirby's email to the Registrar late last week. And, in any event, that could have been accommodated, as I have already indicated, because of the extra time that the Court had to hear the case. It seems to me that counsel's difficulty could have been anticipated had this preparation taken place when it should have, which is at least many weeks if not months ago.
There are a number of unsatisfactory things about this, as I have said. Another unsatisfactory matter is, of course, that once it was appreciated that there was a need to interview as many as nine if not more persons who were present on the occasion when the slander is said to have been uttered, the defendants, with respect, should have informed the plaintiff's representatives that the estimate looked insufficient. And should have, of course, approached the Court to inform it of the difficulty. I must say I would have thought that at the latest it would have been reasonable to have drawn this matter to the attention of the defamation list judge when the matter was before her Honour on 8 November. It may well be that at that stage further directions could have been made along with other arrangements to overcome the difficulty that has arisen today.
It seems to me that in all of the circumstances there can be no question where justice lies in terms of an award of costs. And, in my judgment, the plaintiff must have the costs thrown away by reason of this adjournment.
Mr Rasmussen asks for those costs, contrary to the general rule, forthwith. Mr Kirby has frankly told me that a requirement that the defendants pay the costs forthwith would put them in a difficult financial position. The costs of litigation of this type are not cheap, notwithstanding the aspirations of the overriding purpose of the Civil Procedure Act 2005 (NSW). I am concerned that a departure from the general rule, that interlocutory costs order abide the completion of the litigation, may stultify the ability of the defendants to mount a defence. And, whereas it might be said such matters should lie where they fall, I am not convinced that the interests of justice require that, in all the circumstances of this case. I do not propose to visit such an order on the defendants.
However, it seems to me, as I have discussed with counsel, that notwithstanding my concerns about proportionality to which I have already adverted, that the way forward in this case really requires the provision of witness statements, which should stand as the witness's evidence‑in‑chief in the case. This will better refine the issues and save time at the ultimate hearing, even if it will impose an increased measure of costs on the parties in the further preparation of the matter.
I also acknowledge that there is a real chance that not only Mr Kirby but his instructing solicitor will be forced out of the case, which is likely to prolong the time necessary for preparation. Of course I am familiar with the phenomenon that a change of lawyers delays the outcome. However, it does seem to me that the plaintiff should have liberty to obtain a date for further hearing forthwith, and that a strict timetable should be put in place for further preparation.
Controversial amongst the directions that have been discussed with counsel is the submission of Mr Rasmussen, that given the history which I have recounted in probably overly long detail, the defendant should be required to serve their evidence first. Mr Kirby strenuously opposes such an order and he rightly says it would be somewhat extraordinary that the responding parties should serve their written evidence first. It should also be pointed out that some of the evidence will not be relevant unless the defendants get leave to amend their defences, at least the second defendant, to raise this issue of qualified privilege. Given the history of the matter, including its recent history, it seems to me essential, as Mr Rasmussen submits, that if leave was to be granted, it would be necessary for a very persuasive case to be put forward, including the provision of this late obtained evidence, to justify the late amendment.
I am satisfied that the confluence of all these circumstances does justify the extraordinary order sought by Mr Rasmussen, and I propose to make such a direction.
The orders which I make are as follows:
1. Adjourn the hearing of the action on the ground of conflict of interest on the part of counsel for the defendants.
2. List the matter before the Common Law case management Registrar at 9:00am on 11 December 2018 to fix a fresh hearing date with an estimate of one week.
3. The defendants are to serve witness statements intended to stand as witnesses' evidence‑in‑chief by 1 February 2019.
4. Plaintiff to serve witness statements intended to stand as the witnesses' evidence‑in‑chief by 15 February 2019.
5. If any witness refuses to provide a signed statement, a précis of their expected evidence signed by the solicitor for the party is to be provided in accordance with the times fixed by this timetable.
6. Leave to the plaintiff to serve a notice to produce on the defendants.
7. List the matter for directions before me on Monday, 18 February 2019 at 9:30am.
8. The defendants pay the plaintiff's costs thrown away by reason of the adjournment.
[3]
Amendments
02 September 2020 - Orders: Order 8 updated to reflect orders made on 10 December 2018
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Decision last updated: 02 September 2020