Buckley v The Herald & Weekly Times Pty Ltd & Anor [2009] VSCA 118

2 Generally speaking, applications for the consolidation of proceedings are governed by two principles. First, as Young CJ said in Bolwell Fibreglass Pty Ltd v Foley,[1] consolidating orders should very rarely be made; speaking generally, it is better to confine them to cases where several actions have been brought which might have been joined in one writ. Secondly, as was recognised by Herring CJ in Cameron v McBain[2], where a consolidation order is likely to expose a plaintiff to a substantial risk of real prejudice, the order should not be made.[3]

3 In this case, the consolidation order appears to expose the applicant to a substantial risk of real prejudice. It arises because s 35 of the Defamation Act 2005 provides, in sub-s (1), that:

unless the court orders otherwise under sub-s (2), the maximum amount of damages for non-economic loss that may be awarded in defamation proceedings is $250,000 or any other amount adjusted in accordance with this section from time to time that is applicable at the time damages are awarded.

4 Section 35 has been construed in New South Wales to mean that the limit of $250,000, indexed as I have indicated, applies to a proceeding regardless of the number of causes of action that are pleaded or upheld in the proceeding.[4] If that is correct, and as at present advised I am respectfully inclined to agree that it is, the effect of the consolidating order is to impose a cap of $250,000 as indexed on the damages, apart from aggravated damages, recoverable by the applicant.

5 If, however, the consolidation order had not been made, it is at least arguable that the cap would have been twice that amount.

6 The judge held that he did not consider that the reduction from $500,000 to $250,000 constituted prejudice of the kind which should inhibit the order being made because, in his Honour's view, the question of prejudice cut each way: in the sense that, whichever decision he made, one party's potential detriment would be the other party's potential advantage.[5]

7 With respect, I think that to be an erroneous way of approaching the matter. Prima facie, the applicant had the right to bring two separate proceedings. The judge had previously upheld the applicant's right to bring the second proceeding without obtaining leave under s 23 of the Act. His Honour did so on the basis that the article the subject of the second proceeding was not 'like' any of the articles the subject of the first proceeding but rather had a significantly different subject matter and focus.

8 As I apprehend the operation of the Act, it is intended that, if a plaintiff satisfies the requirements under s 23, and so is permitted to bring a separate proceeding, the plaintiff is prima facie entitled to the benefit of a further limit of $250,000 in respect of that proceeding. In effect, the Act provides in itself for the circumstances in which proceedings will and will not be brought as one. The effect of the consolidation order is to cut across that intention.

9 Counsel for the respondents advanced two principal submissions in opposition to that view. First, he contended that, even if the effect of the consolidation order were to halve the limit for compensatory damages from $500,000 to $250,000, the answer was in the potential for an award of aggravated damages, which he submitted would be at large. More precisely, he argued that, regardless of whether the two proceedings continued in existence as such or were consolidated, as

9 a matter of principle and in practical reality, it was overwhelmingly probable that when the judge came to assess damages including aggravated damages in accordance with s 22, his Honour would end up at the same point.

10 I am not persuaded that is so. It appears to me that any amount of aggravated damages awarded would to some extent be informed by the base level of any compensatory damages awarded; for, in principle, aggravated damages are damages to compensate for the aggravation of loss to the plaintiff.[6] In any event, the judge may not award aggravated damages. At this point it is impossible to say.

11 Counsel's second argument was that, despite having passed the hurdle of s 23, the applicant's right to bring two separate proceedings was not at large but was subject (as has always been the right of a plaintiff to bring separate proceedings) to the controls constituted of a common law consolidation order, with the benefits which that will deliver to the defendant.

12 In my view that argument is not persuasive. If I am correct about the way in which ss 23 and 35 are intended to operate, under the substantive law which now governs the rights and obligations of parties in respect of defamation publications the applicant had a substantive right to seek to recover up to $500,000 in damages, and the respondent had a substantive correlative contingent liability in the same amount. In those circumstances, to make a mere procedural consolidation order which halved the potential value of the applicant's substantive rights and halved the respondent's correlative substantive contingent liabilities worked a radical re-ordering of the parties' substantive rights and obligations, with the risk of substantial prejudice to the applicant. And, if I am right about that, it would follow that the judge's error was also productive of substantial injustice.

13 I do not overlook that the applicant would have a right of appeal from any judgment following trial and that it would be open to the applicant then to argue as one of his grounds of appeal that the consolidation order was productive of a miscarriage of justice. To that extent, it might be said that any damage resulting from the consolidation order could be set right on final appeal. But counsel for the respondent has not suggested that anything more can be said in support of the consolidation order than has already been advanced. The point seems to me to be one of limited compass which, if disposed of now, may be put behind the parties for the remainder of the proceeding. In those circumstances, I consider that it is better to dispose of it here and now.

14 In the result, I would allow the application for leave to appeal, treat the appeal as instituted and heard instanter, and allow the appeal.

15 I agree. I would only add this. According to the argument for the respondent, it would have suffered prejudice if the consolidation order had not been made. The prejudice was said to be the loss of a common law right to consolidation. But consolidation at common law could not be ordered, as the learned presiding judge has made clear, if there was risk of real prejudice to the plaintiff. Further, the common law position has been affected by statute, and in particular the operations of ss 23 and 35 of the Defamation Act 2005.

16 I agree with the presiding judge and with Ashley JA.

The appeal is treated as instituted and heard instanter and is allowed.

The orders made below are set aside and in lieu thereof the Court contemplates making orders that, subject to any further order of the judge in charge of the Major Torts List, the two proceedings be heard at the same time and before the same judge.

18 The Court is of the view that the applicant should have the costs of the first day of the summons and that the costs of the second day of the summons should be costs in each of the proceedings.

19 If you gentlemen would have minutes drafted along those lines and bring them in. Shall we say 12.30?

20 Further to the prohibition order I made earlier on, I withdraw what I previously said and the Court will make a new order in these terms:

Until further order of the judge in charge of the Major Torts List of the Trial Division of the Supreme Court of Victoria or a judge of this Court, it is prohibited to publish any report of this proceeding which refers to 'X' by name or which would otherwise enable him to be identified as the person referred to in statements of claim herein as 'the drug baron, 'X'.

COUNSEL: If the Court pleases, we have provided to your associate some minutes of orders which we hope reflect the intent of the Court and they are in a form which both parties are content with.

NETTLE JA: Yes, thank you. I will delete paragraph 5, the suppression order, and I will do so for the reason that I revoke the order I previously made, since it is now covered by what I am told is a blanket order made by Kaye J on 15 April 2009 which covers all of these proceedings in relation to 'X'.

I shall make orders in the terms of the minutes which have been provided to the Court, deleting therefrom paragraph 5.

[1] [1984] VicRp 8; [1984] VR 97.

[2] [1948] VicLawRp 41; [1948] VLR 245.

[3] See also Goninan & Co v Atlas Steels [2003] NSWSC 956, [29].

[4] See Davis v Nationwide News Pty Ltd [2008] NSWSC 693, [8] and [10].

[5] Buckley v The Herald & Weekly Times Pty Ltd (No. 3) [2009] VSC 59, [18].

[6] See Uren v John Fairfax Ltd [1966] HCA 40; (1966) 117 CLR 118, 149 and also Giller v Procopets [2008] VSCA 236, [212] and [499].