239 CLR 75
Phillips Electronics Australia Pty Ltd v Matthews [2002] NSWCA 157
Source
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Catchwords
239 CLR 75
Phillips Electronics Australia Pty Ltd v Matthews [2002] NSWCA 157
Judgment (2 paragraphs)
[1]
Judgment
HER HONOUR: These are proceedings for defamation brought by Mr Stephen Dank against Nine Network Australia Pty Limited arising out of the publication of items on Channel 9 television. There are two sets of proceedings which have been ordered to be heard together owing to the related issues in the proceedings.
Before the Court is an application by the defendant for security for costs from the plaintiff. The application was brought by a notice of motion filed on 1 June 2016 seeking, first, an order that the plaintiff give security for the defendant's costs in an amount to be determined by the Court and, secondly, an order that until the security referred to in that order is provided, the proceedings be stayed. However, the application was honed in argument this morning as one for a stay invoking the Court's authority under s 67 of the Civil Procedure Act 2005 (NSW) unless security in the nominated sum is paid.
As explained by Pembroke J in Bagnato v Bagnato, [1] as a matter of a juridical analysis, the defendant's revised approach is the correct approach in the present case, since it is acknowledged by the defendant that the application cannot be brought within the terms of r 42.21 of the Uniform Civil Procedure Rules. The application is based, rather, on what the defendant termed "the plaintiff's recent comprehensive loss" in proceedings for defamation brought by him against a different defendant, Nationwide News Pty Ltd.
I presided over the trial of those proceedings, with a jury. They related to publications in The Daily Telegraph and The Sunday Telegraph. In a judgment published on 18 March 2016, I determined that the amount of damages to which Mr Dank was entitled was zero. [2]
The present application was filed on 1 June 2016. It is relevant to have regard to the timing of the application. On the one hand, the application was brought relatively promptly after the event that precipitated it, namely, the publication of my judgment. Conversely, however, its determination at this point runs close to the hearing date fixed for these proceedings, which is 28 November 2016.
Mr Dank is no longer legally represented in the proceedings, the lawyers who were previously acting for him having filed a notice of ceasing to act on 27 July 2016. That circumstance prompted me last week to adjourn the determination of the present application. Today Mr Dank represents himself. He again sought an adjournment but, owing to the closeness of the hearing date and the need for this application to be determined promptly, I refused to adjourn the application again.
The principal focus of the submissions put by the defendant in support of the application was the commonality of issues between the Nationwide News proceedings determined in March and these proceedings. The defendant submits that there is a close identity of issues and, in the circumstances, that it is unreasonable and unjust for the defendant to be obliged to "re-run more or less the same expensive litigation against an impecunious plaintiff".
Mr McClintock SC, who appears with Mr Richardson for the defendant, drew my attention to three decisions in which an application for security for costs has been determined in similar circumstances (by which I mean, where the application does not fall within the terms of r 42.21 but is based on other grounds). The first observation that may be made in respect of those authorities is that it is plain, and evidently uncontroversial, that the Court has authority to make an order of the kind sought orally this morning. That was determined in Phillips Electronics Australia Pty Ltd v Matthews, [3] cited more recently in Hassoun v Wesfarmers General Insurance Limited t/a Lumley General. [4] Wesfarmers was an appeal against a decision of a District Court judge ordering a plaintiff to pay security for costs in circumstances where the plaintiff had brought an insurance claim against the defendant and the defendant had refused indemnity on the grounds of alleged fraud on behalf of the plaintiff, there evidently being a suggestion that he had started the fire which burnt down his home himself.
The decision was unanimous. Gleeson JA wrote the first judgment; McColl JA and Beech-Jones J agreed. There is one aspect of the judgment, however, as to which I should record a concern. As with the present application, the application was brought on the grounds of the plaintiff's alleged impecuniosity. There is a relatively long and well-established line of authority that, as a general proposition, poverty is no bar to a litigant. The provenance of that general rule was considered by Heydon J in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd, [5] albeit in the context of consideration of a different issue, namely, the liability of a litigation funder for the costs of unsuccessful litigation.
A passage from that judgment was cited by Pembroke J in the decision in Bagnato to which I have already referred, with emphasis on the qualifications to the general principle articulated by Heydon J. However, the qualifications must be understood as such; they are matters of qualification to a principle of general application (albeit one described by Heydon J as severely qualified). That general principle does not appear to have been referred to in terms by the Court of Appeal in Hassoun. I say "does not appear to" in case I have overlooked something; I have considered the authorities relied upon by Mr McClintock only during the luncheon adjournment.
The matter of concern to me is that, in Hassoun, Gleeson J referred at [53] to certain contentions being put:
in the context where Mr Hassoun had the onus of establishing both the adequacy of his financial position before the fire and that Wesfarmers' actions have caused or at least materially contributed to his inability to meet an order for security for costs.
Three authorities are cited for the proposition that Mr Hassoun bore such an onus. The first is Fiduciary Ltd v Morningstar Research Pty Ltd, [6] a decision in which Austin J (with respect, correctly) referred to the onus as an evidentiary one. The issue arose in the context of an application for security for costs against a company. The company's response to the application, in circumstances where prima facie under the rules there was a basis for seeking security that was well established, was that the impecuniosity was caused by the conduct sued on. The two further authorities cited by Gleeson JA each simply cite what Austin J said in Morningstar but without the word "evidentiary".
Lest it be apprehended otherwise, the decision in Morningstar is not authority for the proposition that, in an application of the present kind, where the application does not fall within the terms of the rules but is one which invoking the Court's broader discretion, the respondent to the application bears an onus of proof to establish, in response to a suggestion of impecuniosity, that his financial position was caused by the conduct sued on.
The second decision relied upon by Mr McClintock was the decision in Byrnes v John Fairfax Pty Ltd. [7] Again, that was a case in which the plaintiff did not come within any of the categories set out in the rule. The basis for the application had some resonance with the present application. The proceedings were for defamation. The plaintiff had previously brought proceedings against the same defendant in another jurisdiction and had lost. He had not paid the costs of those proceedings which had resulted in a debt owed by him to the defendant in the order of $234,000.
Acknowledging that the Court had authority to make the order sought and in the circumstances of that debt being owed by the plaintiff to the same defendant, Simpson J ordered that the proceedings be stayed until the costs of the earlier proceedings were paid. Her Honour expressly declined to order security for the costs of the future proceedings, considering rather that the stay should be attached conditionally to the payment of the past costs.
Finally, Mr McClintock relied on the decision of Pembroke J to which I have referred. That was a case in which a son sued his parents. The events leading up to his claiming a proprietary interest in the family property had involved the son persuading the parents to discharge a cheaper mortgage for one which was for his benefit. Those events had resulted in their being worse off by about $134,000. The plaintiff put no evidence before the Court as to the merits of his claim; Pembroke J could see nothing to satisfy his Honour that the plaintiff had "any sort of case in which he is reasonably likely to succeed".
As already explained, the premise of the present application is that Mr Dank is impecunious. It is difficult to form a confident view as to the precise position he is in. The defendant served a notice to produce seeking the usual kinds of documents that would be sought to support an application such as the present. That notice was not complied with, probably owing to the circumstance of the solicitors being in the process of going off the record at the time. There was ultimately no evidence as to Mr Dank's financial position. Mr McClintock relied, not unreasonably, on the inference that can be drawn from the fact that Mr Dank was unsuccessful in the March proceedings and has been ordered to pay the defendant's costs of those proceedings; he submitted that Mr Dank would probably have difficulty meeting the costs order against him in these proceedings and would probably also have difficulty meeting an order for security for costs. I have some equivocation about reaching a concluded view on this issue in light of the lack of evidence on the question but it is prudent to determine the application on the premise that Mr Dank is probably impecunious in the sense in which that term is used in the context of applications such as the present.
As already noted, that consideration cuts in two directions in the context of the present application, the primary consideration being the fact that poverty should not ordinarily be a bar to a plaintiff's prosecuting his claim, with the qualification that there are many well-recognised exceptions to that general proposition.
I have had regard to the fact that the claim brought in the present proceedings is an entirely separate cause of action relating to a different publication and that the proceedings are brought against a different defendant. It is not a case, as in Byrnes, where the plaintiff owes the liability for the costs ordered in March to the defendant in the present proceedings.
The defendants provided a helpful schedule comparing the particulars of truth relied upon in the March proceedings with the particulars which will be relied upon in these proceedings. I accept, as submitted by Mr McClintock, that there is close identity as between those particulars. There are additional allegations in these proceedings which were not litigated in the March proceedings. The March proceedings were concerned primarily with the alleged administration of substances to Cronulla players. These proceedings will also, in addition to those same allegations, raise allegations as to the administration of substances to a Manly player, Essendon players and in relation to a Penrith player.
The difficulty at this stage, however, is to assess the likely commonality in the evidence. Mr Dank noted that, in the March proceedings, the defendant's expert evidence was not met by him with any expert evidence. He said that, in these proceedings, experts will be qualified to contest any expert evidence relied upon by the defendants. Although that was a statement made from the bar table, I should record (in fairness to Mr Dank) my recollection from presiding over the March trial that it was clear enough, in the period leading up to the trial, that the plaintiff's legal advisers, for whatever reason, had simply not been able to get themselves in a position of serving any expert evidence and had to rest on cross-examination of the defendant's experts. As recorded in my judgment, those experts were impressive but there has never been a contest as to the matters they addressed. I do not mean to express any doubt as to what I wrote in the judgment but simply to observe that what might happen in the future might be a different case, determined in a different forensic landscape.
Separately, the evidence that will be relied upon by the defendant in these proceedings is of broad scope in response to relatively narrow imputations. The burden of Mr McClintock's submission is that I could at this stage predict that the outcome is likely to be the same as in the March proceedings, that is, if Mr Dank is successful on some imputations and unsuccessful on others, the damage of the true imputations would be such as to reduce his damages to zero, in accordance with the principles considered in my earlier judgment. I think that is a very difficult judgment to make at this stage. There may be a real question as to the admissibility of some of what I might call the collateral allegations, such as the Johnny Mannah allegations. I do not think I can conclude in this case, as Pembroke J was able to in Bagnato, that the case is effectively hopeless.
Certainly, it is not suggested that the case meets the test for summary dismissal and it is not said to be an abuse of process. In all the circumstances, the defendant's submissions have not persuaded me that I should exercise the discretion in favour of granting a stay in the terms sought in the peculiar circumstances of the present case.
For those reasons, the application is dismissed
[2]
Endnotes
[2011] NSWSC 1035
Dank v Nationwide News Pty Ltd [2016] NSWSC 295
[2002] NSWCA 157; 54 NSWLR 598
[2015] NSWCA 33
[2009] HCA 43; 239 CLR 75 at [91]
[2004] NSWSC 664; 208 ALR 564
[2006] NSWSC 251
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Decision last updated: 25 August 2016