Born Brands Pty Ltd v Nine Network Australia Pty Ltd

Judgment 1The background to these proceedings, being a claim for damages for defamation and injurious falsehood, appears sufficiently from my reasons for judgment: Born Brands Pty Ltd v Nine-Network Australia Pty Ltd (No. 6) [2013] NSWSC 1651. 2After the luncheon adjournment on the sixth day of the trial, after the defendants' had provided a copy of their comprehensive written submissions to the plaintiffs, Mr Evatt who appeared on behalf of the plaintiffs, sought leave to re-open the case for the first plaintiff, Born Brands Pty Limited (Born Brands), to adduce evidence to discharge the onus of proof that Born Brands was an excluded corporation within the meaning of s 9 of the Defamation Act 2005. 3I refused the plaintiffs' application but, in order not to delay the conclusion of the proceedings, I informed the parties that I would publish my reasons later. My reasons for the refusal follow. 4Mr Evatt's application was a response to [2] of the defendants' written submissions to the effect that the plaintiffs had adduced no evidence to establish that Born Brands was an excluded corporation and that therefore it had no cause of action in defamation. 5Section 9 of the Act relevantly provides: Certain corporations do not have cause of action for defamation (1) A corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of the publication. (2) A corporation is an excluded corporation if: (a) the objects for which it is formed do not include obtaining financial gain for its members or corporators, or (b) it employs fewer than 10 persons and is not related to another corporation, and the corporation is not a public body. (3) In counting employees for the purposes of subsection (2) (b), part-time employees are to be taken into account as an appropriate fraction of a full-time equivalent. 6Mr Evatt submitted that the plaintiffs' legal advisers had overlooked the need to prove that Born Brands had fewer than 10 persons and was not related to another corporation and that the deficiency could be remedied by calling either the second plaintiff, Hayley Birtles-Eades, or the third plaintiff, Sally Birtles, who were present in court and could give the evidence without further delay. 7Mr Blackburn SC, who appeared for the defendants, objected to the grant of leave. He submitted that whether the onus could be discharged was not a simple matter, by reason of the way in which s 9(2) has been construed. In Redeemer Baptist School Limited v Glossop [2006] NSWSC 1201 (Redeemer Baptist) Nicholas J at [22] construed the word "employs" in the statutory predecessor to s 9(2)(b) to mean "to use the services of a person" or "to make use of a person". His Honour said at [23]: It follows, in my opinion, that the nature of the arrangement or understanding under which a person provides services, and whether or not the arrangement or understanding is legally enforceable, and whether or not the person is paid for the services or is a volunteer, are irrelevant considerations. The only relevant issue is whether or not, as a matter of fact, the number of persons whose services the corporation used in its business at the time of publication is fewer than 10. 8In Heartcheck Australia Pty Limited v Channel 7 Sydney Pty Limited [2007] NSWSC 555 Grove J said, obiter, at [7]: Were it necessary to express a conclusion, I would be of the same view as Nicholas J in Redeemer Baptist School v Glossop [2006] NSWSC 1201 that the relevant issue is whether or not, as a matter of fact, the number of persons whose services the corporation used in its business were fewer than ten. 9Mr Blackburn submitted that the determination of whether Born Brands had fewer than 10 employees was not a matter that could be determined by reference to the company records, the BAS statements, or the tax returns since it was a question of fact that did not depend on whether the persons who provided services to the corporation were paid. He contended that, were Born Brands granted leave to re-open, this would inevitably lead to the matter being adjourned to provide the defendants with an opportunity to obtain discovery and issue notices to produce or subpoenas in order to test the evidence adduced by Born Brands on this issue. 10Mr Blackburn submitted that, since orders were made by this Court for statements of evidence to be served, and since the statements served did not address this question, the defendants were entitled not to make such further enquiries on the footing that Born Brands would not be able to discharge the onus under s 9(2) of the Act in any event. 11In response, Mr Evatt submitted that he did not accept that the defendants would suffer any prejudice were the application to re-open granted. He contended further that the defendants were not entitled to ignore the allegation in the pleading that the first plaintiff was an excluded corporation and ought to have investigated the matter in any event, notwithstanding that the plaintiffs' evidentiary statements were not directed to proving the allegation.