HER HONOUR: This case raises a difficult question as to the impact of an "evidentiary certificate" clause on a party's entitlement to interlocutory discovery. The proceeding is an action for defamation brought by two trainers in the harness racing industry against the authority that governs that industry in this State, Harness Racing New South Wales. The allegedly defamatory publications are two press releases in May 2014 announcing that the trainers' licences had been suspended following the detection of cobalt above the permissible threshold in urine samples taken from horses trained by them after those horses won races. The use of cobalt in horses is regulated in the harness racing industry because the authority has concluded that it has a performance-enhancing effect.
Each plaintiff contends that the press releases conveyed the following imputations defamatory of him:
1. that as a trainer he is a danger to the integrity of the harness racing industry.
2. that as a trainer he achieved victory for a horse in a race by administering a substance to it above the legal limit.
3. that as a trainer he is a cheat in harness racing.
By way of defence, Harness Racing New South Wales alleges (among other things) that each of those imputations is substantially true. An assumed premise of the truth defence is that the horses trained by the plaintiffs in fact presented with cobalt above the permissible threshold in their urine on the race days in question.
The plaintiffs also sue for negligent misstatement. That claim is based on an earlier press release published by Harness Racing New South Wales on 12 September 2013. That press release provided clarification following the introduction of the rules regulating the use of cobalt. It included the following statement under the heading "Cobalt Chloride":
"the use of proprietary supplements and pre-mix feeds containing cobalt chloride in accordance with the manufacturer's guidelines will not result in a contravention of the applicable harness racing rules".
The plaintiffs contend that, acting on the faith of that statement and induced thereby, they "administered proprietary supplements and pre-mix feeds containing cobalt chloride in accordance with the manufacturer's guidelines on the understanding that doing so would not result in their horses presenting to race with any prohibited substance as defined under the applicable harness racing rules".
The element of causation in the negligent misstatement claim is pleaded in terms that hedge the forensic risk that the authority will be successful in proving elevated levels of cobalt in the horses concerned. The pleading concludes, "in the event the said test results are accurate, the defendant's negligent misstatement caused each plaintiff to suffer loss and damage".
The accuracy of the analysis of the urine samples is accordingly a premise of both the truth defence (on which the defendant bears the onus of proof) and the conditionally pleaded negligent misstatement claim (on which the plaintiffs bear the onus of proof).
[2]
Interlocutory steps sought in relation to the urine samples
The plaintiffs seek discovery of documents relating to the accuracy of the reported analysis of the urine samples taken from their horses (categories 1 to 5) and, more broadly, the accuracy of the scientific premises underlying the introduction of the rules regulating the use of cobalt (categories 6 to 8). Interrogatories 16, 29, 30 and 31 are also directed to those issues.
The defendant objects to being required to give discovery of those documents or answering those interrogatories. The defendant accepts that the amount of cobalt detected in the horses concerned is relevant to the issues raised by the truth defence but submits that the investigation of the correctness of the analysis at the interlocutory stage is foreclosed by the Australian Harness Racing Rules, which bind the plaintiffs.
The rules include an evidentiary certificate clause in the following terms:
(1) A certificate from a person or drug testing laboratory approved by the Controlling Body which certifies the presence of a prohibited substance in or on a horse at, or approximately at, a particular time, or in blood, urine, saliva or other matter or sample or specimen tested, or that a prohibited substance had at some time been administered to a horse is prima face evidence of the matters certified.
(2) If another person or drug testing laboratory approved by the Controlling Body analyses a portion of the sample or specimen referred to in sub rule (1) and certifies the presence of a prohibited substance in the sample or specimen that certification together with the certification referred to in sub rule (1) is conclusive evidence of the presence of a prohibited substance.
(3) A certificate furnished under this rule which relates to blood, urine, saliva, or other matter or sample or specimen taken from a horse at a meeting shall be prima face evidence if sub rule (1) only applies, and conclusive evidence if both sub rules (1) and (2) apply, that the horse was presented for a race not free of prohibited substances.
(4) A certificate furnished under this rule which relates to blood, urine, saliva, or other matter or sample or specimen taken from a horse shall be prima face evidence if sub rule (1) only applies, and conclusive evidence if both sub rules (1) and (2) apply, that the prohibited substance was present in or on the horse at the time the blood, urine, saliva, or other matter or sample or specimen was taken from the horse.
(5) Sub rules (1) and (2) do not preclude the presence of a prohibited substance in or on a horse, or in blood, urine, saliva, or other matter or sample or specimen, or the fact that a prohibited substance had at some time been administered to a hose, being established in other ways.
(6) Sub rule (3) does not preclude the fact that a horse was presented for a race not free of prohibited substances being established in other ways.
(7) Notwithstanding the provisions of this rule, certificates do not possess evidentiary value nor establish an offence, where it is proved that the certification procedure or any act or omission forming part of or relevant to the process resulting in the issue of a certificate, was materially flawed.
Mr Dawson, who appears with Ms Tucker for the defendant, accepted that, in accordance with subrule (7), it is open to the plaintiffs to prove that the certification procedure was materially flawed so as to deprive the certificates of their evidentiary value under the Harness Racing Rules. He submitted, however, that the plaintiffs cannot have discovery on that issue unless there is some basis for apprehending that the certification process was "materially flawed", absent which the present application should be rejected on the grounds that it amounts to "fishing".
Mr Molomby SC, who appears with Mr Miles for the plaintiffs, submitted that it is enough to say that it is known that there is a process which is not in the control of the plaintiffs. He submitted that the plaintiffs need, in their interests, "to test the integrity of that process". Mr Molomby submitted that, if the plaintiffs are not able to do that, subrule (7) is of no value and has no role to play.
An order for discovery may not be made in respect of a document unless it is relevant to a fact in issue: 21.2(4) of the Uniform Civil Procedure Rules 2005 (NSW). The question of relevance is ordinarily determined by reference to the pleadings. The rule holds that, if a document is not relevant to any fact in issue, a discovery order cannot be made; if it is relevant, the power to order discovery is discretionary. That power is to be exercised having regard to the mandatory considerations under the Civil Procedure Act 2005 (NSW).
Regard should also be had in this context to the terms of the practice note that governs proceedings in the Defamation List, SC CL 4. The practice note makes plain that, after the pleadings are closed, it will not be assumed that further interlocutory steps are appropriate in every case. Clause 16(b) of the practice note provides that, at the second listing of the proceedings, parties will be afforded an opportunity "to demonstrate the need" for any further interlocutory steps. The practice note contemplates that the need for such steps will ordinarily be supported by affidavit.
The object of those provisions is to quell rather than to excite interlocutory disputes. That object was not achieved in the present case. The parties opened argument at the second listing with little agreement as to the further interlocutory steps each sought from the other. The hearing of the application took a whole day (against an estimate of two hours).
The provisions of the practice note governing interlocutory steps were intended to focus the minds of parties and their legal representatives on the obvious proposition that, particularly in proceedings for defamation in this Court, the risk of disproportion between the cost of interlocutory steps and the importance and complexity of the issues to which they are directed is high: cf s 60 of the Civil Procedure Act.
In the present case, the task of assessing the need for any further interlocutory steps is complicated by the equivocality of the pleading. There is an obvious tension between the defamation action, in which it appears the plaintiffs will resist the contention that the analysis of the urine samples was accurate, and the negligent misstatement claim, the premise of which is that the analysis was accurate. While it is open to a party to plead alternative, inconsistent cases, it is unusual to see a pleading which contemplates proof of both parts of a factual dichotomy.
Considerable time was spent in argument on the question of the operation of the evidentiary certificates clause in the Harness Racing Rules but ultimately there did not appear to be any real dispute that those rules bind the plaintiffs. The focus of the plaintiffs' argument for discovery was on the application of subrule (7) and the alleged need "to test the integrity of the process" to determine whether there is a basis for contending that it was "materially flawed". However, it is by no means clear that that is an issue raised on the pleadings. At least three possibilities exist as to the cobalt levels in the horses concerned. The horses may have presented with prohibited levels of cobalt due to the deliberate, prohibited use of that substance (the premise of the defendant's truth defence). Alternatively, the horses may have presented with prohibited levels of cobalt due to the administration of supplements in accordance with the "Cobalt Chloride" press release, revealing error in the scientific premise of that press release. Finally, the horses may not in fact have presented with prohibited levels of cobalt, in which event the certificates must be wrong.
The third possibility is not raised as an issue according to the pleadings. No attempt was made on the present application to identify any basis, beyond speculation, for concluding that it might be the case. Specifically, the plaintiffs do not, according to the pleadings or any affidavit filed in support of the present application, assert that the horses concerned were only given proprietary supplements and pre-mix feeds containing cobalt chloride in accordance with the manufacturer's guidelines and, accordingly, that the certificates must be wrong.
Categories 6 and 7 seek laboratory reports of the analysis of samples other than the samples taken from the three horses concerned, presumably for the purpose of obtaining information as to the scientific premise for the regulation of the use of cobalt in the harness racing industry. Category 8 seeks documents setting out the selection criteria for such samples. For the reasons stated in respect of categories 1 to 5, the extent to which there is a real issue in the proceedings as to the integrity of the scientific premise for the regulation of cobalt in the harness racing industry is by no means clear on the pleadings. It is an issue pleaded by the defendants, as discussed below. However, in all the circumstances, having regard to the mandatory considerations under the Civil Procedure Act, I am not persuaded that the need for discovery on the issues to which categories 1 to 8 and interrogatories 16, 29, 30 and 31 relate has been demonstrated.
[3]
Remaining disputes as to discovery sought from the defendant
There were many other disputes raised by the parties as to further interlocutory steps. This judgment determines the plaintiffs' applications. The defendant's applications are determined in a separate judgment.
By categories 9 and 10, the plaintiffs seek discovery of documents showing the number of people who had access to or downloaded the first and fifth matters complained of (the two allegedly defamatory press releases). The defendant submits that it is not necessary to give discovery of such documents in light of two proposed interrogatories which ask, to the extent not provided as part of the defendant's discovery, were any estimates made of the number of people who downloaded the first and fifth matters complained of (interrogatories 6 and 17).
Mr Molomby submitted that both steps are important, since discovery is sought of actual downloads whereas the interrogatories are directed to estimates. This is not an issue which ought to have taken up court time. An obvious solution is to grant leave to the plaintiffs to interrogate as to both actual and estimated downloads. The practice note contemplates that, where there is no real dispute as to the element of publication (as there should not be in the case of a press release issued by an authority such as the defendant), the defendant should be forthcoming as to the scope of publication. If that issue is not addressed in open court by way of admission at the first listing (as contemplated by clause 13(b) of the practice note), the court will ordinarily order the defendant to answer a comprehensive interrogatory and will not ordinarily order discovery.
Discovery categories 11 and 12 seek documents recording communications from any person who appeared to have read or otherwise become aware of the contents of the two matters complained of. Interogatories 9 and 20 are directed to the same issue, to the extent not provided in a document supplied as part of the defendant's discovery. Mr Dawson noted that I rejected an application for interrogatories of that kind in Cheikho v Nationwide News Pty Ltd (No 4) [2015] NSWSC 193. However, that was a case concerning the publication of four articles in the Daily Telegraph, a newspaper with a wide readership throughout New South Wales. I accept, as submitted by Mr Molomby, that the issue of reader reaction is more important in the present case where the matters complained of are press releases relating to matters of specific concern to people within a specialised industry. I propose to allow both the categories of discovery and the interrogatories (categories 11 and 12, interrogatories 9 and 20).
Categories 13 and 14 seek discovery of documents evidencing the correctness of allegations in the defendant's particulars of truth that "the level of cobalt improved the performance" of the horses and that "such levels of cobalt could not be achieved by administration of permissible cobalt-containing feed and/or supplements to the horse prior to race day".
Mr Dawson submitted that the scope of material likely to be required to be discovered in response to those categories would be "rooms full" and that the cost of that exercise would be disproportionate. Although there was no evidence to that effect, the nature of the issue suggests that there is likely to be some force in that concern. The circumstances in which the new rules regulating cobalt were introduced are addressed at length in the judgment of Adamson J in Day v Harness Racing New South Wales [2014] NSWSC 1402, a copy of which was handed up during argument in the present case.
I accept that the correctness of the propositions as to which discovery is sought is raised by the defendant as an issue in the proceedings. In my view, however, there is a substantial risk of disproportionate cost if broad discovery is ordered on those issues. In my view, those issues could be addressed adequately and more efficiently by making directions for the service of expert evidence and making appropriate directions in that context for the service of documents relied upon by the expert.
The remaining categories were agreed (categories 15 and 16).
[4]
Plaintiffs' proposed interrogatories to the defendant
Interrogatories 7 and 18 ask whether the defendant sent each matter complained of to any other person. The defendant objects to answering those interrogatories on the basis that they seek evidence as to other publications not sued on by the plaintiffs. Mr Dawson submitted that those interrogatories are not properly characterised as being directed to the issue of the extent of publication. That is true. Strictly speaking, in order to ascertain whether the same defendant (a statutory authority) published the same matter on different occasions (apart from posting it as a press release on its website), the plaintiffs should bring separate proceedings by way of application for preliminary discovery. In my view, that is a triumph of procedural form over practical fairness. It is an arcane technicality of the law of defamation, the importance of which, in the words of Lord Hoffman in a different context, would be taken seriously only by a lawyer: see Berezovsky v Michaels [2000] 1 WLR 1004 at 1023.
I do not think it is too far a stretch of the overriding purpose of the Civil Procedure Act to allow the plaintiffs to obtain that evidence by interrogation in the proceedings already commenced. Those interrogatories will be allowed.
Interrogatories 8 and 19 ask what are the grounds of the defendant's belief that those recipients had an interest or apparent interest in the relevant matter complained of. In my view, those questions are misconceived and are in any event matters for particulars, not interrogation.
The remaining interrogatories were agreed (interrogatories 10, 11, 12, 13, 21, 22, 23 and 24).
[5]
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Decision last updated: 07 October 2015