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[2014] NSWDC 92
District Court of NSW
2014-07-11
Original judgment source is linked above.
Judgment 1The plaintiff seeks the following orders: (a)An extension of time for service of the statement of claim filed on 7 April 2014; (b)Leave to amend the statement of claim to withdraw his claim for defamation and to amend the pleading to claim, on the basis of the same publication, a claim for injurious falsehood and misleading and deceptive conduct pursuant to Part 2-1 of the Australian Consumer Law (Cth); and (c)Transfer of these proceedings to the Local Court of NSW, on the basis that the damages claimed are "now wholly within the Small Debts jurisdiction of the Local Court" (affidavit of M Foley, Exhibit A). 2In the statement of claim filed on 7 April 2014, the plaintiff, a solicitor, sought damages for defamation for three publications by the defendant, his former client, to the Legal Services Commissioner dated 13 December 2012 and 30 January 2013. This pleading is deficient. Particulars "pursuant to DCR Part 49 r 11 (d)" of "malice and spite", injury to health and special damages are pleaded, but these District Court Rules were repealed when the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") were enacted in 2005. Contrary to the provisions of UCPR r 15.19, the matters complained of are not attached. The three matters complained of were published on dates more than twelve months before these proceedings were commenced, and therefore would require leave to proceed: s 14B Limitation Act 1969 (NSW). This statement of claim, in addition to these defects, was not served within the one-month service period: r 6.2(4)(b)(i) UCPR. In addition, as the plaintiff has now acknowledged, s 27 and Schedule 1 clause 18 Defamation Act 2005 (NSW) ("the Act") extend a defence of absolute privilege to the occasion of the making of a complaint to the Office of the Legal Services Commissioner: Lucire v Parmegiani [2012] NSWCA 86 at [38], distinguishing between clauses 15(1)(a) and 18 of the Act. 3The plaintiff's claim came before Bozic SC DCJ on 16 May 2014. It is clear from the notation on the file that the plaintiff made an application for an extension of time for service, and that Bozic SC DCJ was not prepared to hear this application in the absence of evidence: "Noted by HH that statement of claim was stale. Oral application made to extend the time for service. Application [sic] declined to deal with the application in the absence of evidence." 4The proceedings were stood over to 20 June 2014. The plaintiff, in support of his application for an extension of time, and in accordance with Bozic SC DCJ's orders, provided an affidavit he had sworn (Exhibit "A"). He sets out, in that affidavit, his explanation for not serving the statement of claim earlier. This explanation is that he had served a Concerns Notice bearing the same date as the statement of claim on the defendant, but had withheld serving the statement of claim, on the basis that he was waiting to see her reply, and because of correspondence he received from the Officer of the Legal Services Commissioner. 5The circumstances in which the plaintiff received a letter from the Legal Services Commissioner, according to the plaintiff's affidavit, were as follows. On receipt of the Concerns Notice dated 7 April 2014, the defendant had made a fresh complaint to the Office of the Legal Services Commissioner. The Office of the Legal Services Commissioner wrote to the plaintiff on 7 May 2014, drawing his attention, inter alia, to occasion of absolute privilege afforded to such publications under s 27(2) of the Act. 6This was the material before me on 20 June 2014, when the plaintiff renewed his oral application, originally made before Bozic SC DCJ, for an extension of time to serve the defendant. He sought two additional orders. These were for leave to withdraw the defamation claim and replace it with claims for the publications not based on defamation as a cause of action, and for a transfer to the Local Court. 7As the Office of the Legal Services Commissioner had already, in correspondence with the plaintiff, drawn his attention to the provisions of the Act concerning defamation proceedings, and the issue was one of potential importance to the legal profession, I stood the proceedings over to 11 July 2014, so that the Officer of the Legal Services Commissioner would have the opportunity, if so advised, to intervene in the same manner as the NSW Medical Board had done in Lucire v Parmegiani (2010) 10 DCLR (NSW) 364. The Legal Services Commissioner has advised the court that he does not wish to be joined as a party, but his letter of 9 July 2014 (Exhibit 1 in these proceedings) provides extensive and careful submissions to the court, which have been of great assistance in the determination of the applications made by the plaintiff. 8I shall first consider the plaintiff's application for extension of time, as this application turns on principles enunciated in Part 6 UCPR and ss 56 - 62, 64 and 65 Civil Procedure Act 2005 (NSW) and not upon the issues discussed by the Office of the Legal Services Commissioner in its letter of 9 July 2014.
Extension of time for service 9Rule 6.2(4)(b)(i) UCPR provides that a statement of claim remains valid for service for one month after the filing of the statement of claim. Rule 1.2 UCPR provides that the time for service of a statement of claim may be extended. The relevant principles are set out by the New South Wales Court of Appeal in Weston (in Capacity as Special Purpose Liquidator of One.Tel Ltd (in liq)) v Publishing & Broadcasting Ltd (2012) 88 ACSR 80 ("Weston") at [20] as follows: "[20] The principles governing the exercise of the power conferred by r 12.11(1)(e) of the UCPR can be summarised as follows: (1) The principles relevant to an application to extend time for service under r 1.12 also apply to a motion pursuant to r 12.11(1)(e) to discharge orders for extension: Kirk, at [58], per Tobias JA (with whom Macfarlan JA and Sackville AJA agreed). (2) In exercising the discretion conferred by r 12.11(1)(e), the court should consider: "the attempts that have been made at service, the length of the delay, the reasons for the delay, whether the delay was deliberate, whether notice was given to the defendant, the conduct of the parties generally and the hardship or prejudice caused to the plaintiff by [discharging the orders] or to the defendant [by refusing to discharge the order]." Buzzle (at [43]) per Ipp JA (with whom Tobias and McColl JJA agreed) cited with approval in Kirk (at [94]): (3) The discretion is to be exercised in the context of, and by reference to, the statute by which it is conferred: Buzzle, at [28]. Consequently, in New South Wales, ss 56-59 of the Civil Procedure Act 2005 (the CP Act) require a judge exercising the discretion to have regard to whether the relevant party has: (a) diligently pursued the object of disposing of the proceedings in a timely way; (b) used, or could reasonably have used, available opportunities under the rules or otherwise, to avoid delay; and (c) reasonably implemented the practice and procedure of the court with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination: Buzzle, at [36]. (4) The court must take into account the policy considerations underlying the relevant limitations statute. Thus, defendants or potential defendants should be made aware of claims against them within a reasonable time and liquidators who do not commence proceedings until just before expiry of the limitation period should be especially diligent in pursuing prompt service: Buzzle, at [37]-[39]; cited with approval in Kirk, at [98]-[99]. (5) It is for the court and not one of the litigants to determine whether there should effectively be a stay of proceedings. Accordingly, it is generally: "inappropriate to allow an extension of time for the service of a ... statement of claim where a significant cause of the delay has been the willingness of the plaintiff to do nothing about service while awaiting a decision from a litigation funder as to whether or not to provide the necessary funds. Were that to be regarded as a good reason to extend time, the Court would be allowing plaintiffs to arrogate to non-parties the right to decide the period by which the time for service of a writ should be extended. That would be fundamentally in conflict with the Court's duty to exercise, alone, the discretion conferred upon it." Buzzle, at [82] cited with approval in Kirk, at [101]. (6) Ordinarily, it is not a good reason for delay that a plaintiff wishes to hold up proceedings while some other case is tried: Buzzle, at [90]. However, this is not an inflexible rule: Kirk, at [102]. (7) If a defendant knows that claims have been made against him or her and understands the nature of the claims that have been made, that may mitigate the prejudice the defendant might otherwise suffer by reason of a delay in service: Kirk, at [123]." 10I have carefully considered the relevant factors to take into account as set out in Weston, supra. The plaintiff does not satisfy most of them. He provides no evidence of any attempts that have been made at service. His explanations, namely that he did not know the length of time for service and that he was waiting to see how the defendant would respond to the Concerns Notice, are inconsistent. I am satisfied that the reasons for the delay are deliberate, rather than due to any uncertainty as to the defendant's whereabouts. No notice of this application was given to the defendant. While this is not uncommon, it means that there is no evidence before the court of any hardship for the defendant. 11While the period of delay is not long (two months), it is significant that the reasons for delay, in circumstances where the plaintiff served the Concerns Notice but not the statement of claim, are unacceptable. The letter the plaintiff received on 7 May 2014 from the Office of the Legal Services Commissioner cannot have been the cause, as the time for service of the statement of claim had already expired by that date. 12I also note that, when he appeared before Bozic SC DCJ on 16 May 2014, the plaintiff did not tell his Honour that the Office of the Legal Services Commissioner had advised him on 7 May 2014 that the cause of action upon which he was seeking an extension of time for service was without any legal basis, or refer to the expiry of the limitation period. Bozic SC DCJ's orders noted only that the statement of claim was stale, and the application would not be heard without evidence, not that there was any application to amend. 13It is also of relevance that the limitation period had expired when these proceedings were commenced. As Young CJ in Eq stated in Weston, supra, there are three different categories for applications for extensions of time where the limitation period and/or time for service has expired, of which the third category - the expiry of both periods - was the most serious. The plaintiff's statement of claim is in this third category, in that both the limitation period has expired and the initiating process is no longer valid for service: Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337. No extension of time could be given for the statement of claim currently on the file, as the cause of action is acknowledged to be hopeless, and the statement of claim is both outside the limitation period and stale. 14Where the limitation period has expired, applications for leave to amend must have regard to ss 64 and 65 Civil Procedure Act. In addition to the powers of amendment conferred under ss 64 and 65, pursuant to UCPR r 19.1 a plaintiff may, without leave, amend a statement of claim once within 28 days after the date on which it was filed, but, unless the court otherwise orders, may not amend it after a date has been fixed for trial. The 28-day period after the statement of claim was filed had already expired, and r 19.1 is of no assistance. No extension can be granted in relation to the statement of claim currently on the court file.
Leave to amend and for transfer to the Local Court 15For the reasons set out above, the plaintiff first requires leave to amend before being granted an extension of time: Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676 at [60] - [66]. Would either s 64 or s 65 permit the replacement of the time-barred cause of action where the original cause of action (as opposed to the new claim) was outside the parameters of the new claim? 16There are two observations to make. The first is that it would be a simple matter for the plaintiff to commence these proceedings all over again in the Local Court, thereby avoiding the need for any application for leave to amend and for transfer. Whether the plaintiff's wish is only to save a second filing fee, or there are other reasons (such as the benefits of transfer under ss 148 and 149 Civil Procedure Act 2005), the applications for amendment and transfer are unnecessary and a drain on court resources. 17The second is that, as Simpson J explains in Ahmed, supra, orders made under ss 64 and 65 include a discretionary element, as do orders made under s 146(2). This brings me to what I see as the vice in the application: if I permit the amendment and transfer to the Local Court, the defendant in these proceedings, who may prefer to conduct these complex causes of action in another court, will not have been heard on the issue of which court is the preferred forum, in circumstances where I am required by s 146(2) Civil Procedure Act to have regard to a number of factors, only one of which is the quantum of damages involved. 18The plaintiff seeks the transfer on the basis that the damages claimed are within the jurisdictional limit. That is not the test. The quantum of damages awarded in complex causes of action of this kind can be out of proportion with the damages awarded. A transfer of these proceedings to the Local Court under s 146(2) Civil Procedure Act is not the automatic consequence of the damages awarded falling within the jurisdiction of that court, but to be based upon a consideration of a wide range of factor of a discretionary nature to demonstrate "sufficient cause" for the transfer: Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [3]-[4]. 19Additionally, although it is not necessary for me to determine the point here, there must be doubt as to whether a complaint made to the Office of the Legal Services Commissioner is made in the course of trade or commerce. This issue has been noted in summary judgment applications, notably Merman Pty Ltd v Cockburn Cement Ltd (1988) 84 ALR 521 and in Lucire v Parmegiani, supra, where the unusual factual circumstances of a complaint by one medical practitioner against another (in circumstances where professional rivalry was the explanation for the "trade and commerce" element) meant that the claim survived a summary judgment application. In Energetech Australia Pty Ltd v Sides Engineering Pty Ltd [2005] NSWSC 1143 at [52] - [57], Campbell J held that the submission of a payment claim to an adjudicator was not made in trade and commerce. Those statements apparently to the contrary in Merman Pty Ltd v Cockburn Cement Ltd, supra, were not the ratio of that case. Additionally, the issue had been whether summary judgment should be entered, whereas the proceedings before his Honour were a final hearing. 20The complexities of claims for injurious falsehood (see Ballina Shire Council v Ringland (1994) 33 NSWLR 680) are similarly matters requiring careful pleading and particularisation. As the publications in question are still not attached to the proposed amended pleading, it is not possible to comment on the merits of the claims. The calculation of damages would be complex. Special damages may require expert evidence, and any entitlement of the plaintiff for exemplary damages would require careful analysis. The proceedings would require case management and interlocutory rulings. It is hard to see how they could be suitable for the Local Court in those circumstances. 21Finally, it would be prejudicial to the interests of the defendant, who knows nothing of this application, for these issues to be determined in her absence. The granting of leave to amend and transfer of proceedings should not be permitted in such circumstances. If the plaintiff wishes to continue proceedings against her, he can commence fresh proceedings in the Local, District or Supreme Court. 22The practice of filing but not serving proceedings for complex causes of action such as defamation and injurious falsehood (see Flanagan v Urban Publishing Pty Ltd [2012] NSWDC 238; Sleeman v Tuloch Pty Ltd [2013] NSWDC 43; Crux - Southern Cross University Post Graduate Association Inc v Watts & Ors [2013] NSWDC 254; Munn v Tunks [2013] NSWSC 1263) should not be encouraged. The requirement under ss 56 - 62 Civil Procedure Act for proceedings to be "just, quick and cheap" cannot be satisfied in circumstances where a party has elected, for forensic benefit, not to serve the opponent with pleadings. 23As the unserved claim for defamation is conceded to relate to publications made on occasions protected under s 27(2) and which fall outside the limitation period, the proceedings should be dismissed with no order as to costs.
Orders (1)Plaintiff's applications for extension of time to serve the statement of claim, leave to amend and for transfer to the Local Court refused. (2)Statement of claim dismissed. (3)No order as to costs.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 July 2014
Foley
Rosier
(1994) 33 NSWLR 680
(1988) 84 ALR 521
(1981) 180 CLR 337