Freeburn v The Cake Decorators Association of NSW Inc.

The matter complained of 12The matter complained of, in the first draft of the statement of claim, was a motion moved by the second defendant, published on page 17 of Pipeline. The parties agreed, in earlier orders, to "striking in" the whole of the Pipeline newsletter as being the matter complained of, with the result that the ten motions moved by the plaintiff in relation to the first and third defendants appear between pages 5 - 10 as motions 5 - 15, immediately preceding the 8-line motion the parties agree was put forward by the second defendant. The matter complained of therefore consists principally of criticisms and disparaging remarks made by the plaintiff about the defendants and, to a lesser degree, by the third defendant about the first defendant. 13While this may have been an unusual course for the parties to take (it was done by consent), it means that, unlike the matter complained of in Cush (where the other statements made by the defendant about Ms Cush and Mr Dillon were not included); the factual matrix and context of the matter complained of is therefore not in dispute, a relevant factor in this application. 14The imputations pleaded as arising, and the costs orders made following argument as to their form and capacity, are set out later in this judgment.

Circumstances leading to the publication 15The background to the matter complained of is as follows. It is not in dispute that the plaintiff is a member of what has been referred to as an "alternative association" (defendants' submissions, paragraph 10), namely the Cake Decorators Guild, as well as being a member of the first defendant. According to the plaintiff's own chronology, she became dissatisfied with the conduct of the first and second defendant in 2007. A mediation at Hornsby Local Court failed to resolve the issues. A series of motions were brought by the plaintiff, second and third defendants against each other in 2012. The plaintiff complained to the Department of Fair Trading in August 2012, the same month during which the first defendant published the second defendant's motion for the plaintiff to be the subject of a lifetime membership ban. On 16 September 2012 the plaintiff sent a letter to the second defendant "on legal advice" (Exhibit 2, p. 2), demanding an apology and that the word "INVALID" be placed beside all records of the first defendant and all correspondence of the third defendant. Other committee members also sought apologies. 16The plaintiff requisitioned a Special General Meeting on 10 November 2012, according to documents provided to me on 20 October 2014 (and marked by me as Exhibit C), at which she moved four motions. The first two were to amend the Constitution to provide that if the first defendant was wound up, any surplus funds could be paid to a like minded Association, and that local branches would not have to return those surplus funds but could send them direct to this like-minded Association. The remaining two motions were for the first defendant to "cease operation, be dissolved and wound up" within one month of these changes to the Constitution, to permit them to take effect, and that a committee of administration (of which the plaintiff would be a member) be appointed to wind up the first defendant's affairs. The information given to the members (using the same underlining and bold text as appears in this document) and the end of these motions is as follows: "Background information: Successive Management Committees (or parts thereof) have brought the Association into disrepute. Many years have been fraught with unrest, reprehensible conflict and mismanagement, culminating in the bogus formation of the present "Management Committee". The Cake Decorator's Association of NSW is operating contrary to the Association Incorporations Act of NSW 2009 No 7 [sic] and the Constitution of the Cake Decorator's Association of NSW Inc. with no resolution forthcoming. Threats of past and pending legal actions - and divisive factions within - have forced the Association into an untenable position directly as a result of the lack of proper management. All efforts to advise successive "Management Committee" factions to uphold the Constitution and the Law have failed. The noble aspirations of the Association at formation have been abused and succumbed [sic]. Now, the onerous decision is in the hands of the membership - flounder on or put the CDA to rest. The above motions clear the way for us to move into the future in the knowledge that not all has been lost from the fruitful and happier 30 years of the Association." 17The notice of meeting for 10 November 2012 (Exhibit C) states that the organisers were endeavouring to arrange for a Community Justice Facilitator of the Attorney General's Department to attend. However, the members voted against the resolutions, and the first defendant was not wound up, nor were its assets given to the "like minded Association" referred to in the motions. 18The plaintiff and her faction continued to seek publication of an apology for the second defendant's motion for a lifetime ban of the plaintiff, as published in Pipeline. By 30 December 2012, Mrs Howlett, a member clearly in the plaintiff's camp, had drafted an apology acceptable to the plaintiff. According to an email of 3 January 2013, "Eileen [the second defendant] has been removed as president" (Exhibit 2). The parties have informed me that the motion the second defendant brought for the expulsion of the plaintiff (which is the matter complained of) was withdrawn at the February 2013 meeting. 19On 10 January 2013, Mrs Howlett had sent the agreed apology to Pipeline for publication, but this was not published at that time, because the third defendant objected to it. By this stage there were three apologies to be published. While some of the problems arose from the typing (Exhibit 2, p. 36), the third defendant considered the apology too abject. The first defendant recorded a Minute on 7 March 2013 requiring apologies in Pipeline to five persons in addition to the plaintiff, and the text of those apologies had now been agreed. 20On 22 March 2013 a Mrs Webster, the editor of Pipeline wrote to Mrs Howlett, who was coordinating the apology correspondence, advising that the deadline for Pipeline was approaching, and that she needed a copy of the apology on letterhead, dated and signed "as per the National letter of apology which was printed in Pipeline" (Exhibit 2, p. 39). Mrs Howlett wrote querying this, and Mrs Webster replied on 25 March 2013: "Lorraine, I need a copy of something on letterhead, signed. If you recall when the National apology was printed, it was on letterhead, dated and signed. I am unable to give Pipeline copies of letters that so far don't seem to exist. At this stage we are unaware of the dates of these letters of apology nor [sic] who signed them. I am following instructions as to what is to go in Pipeline." (Exhibit 2, p. 38). 21This step was, however, never taken by the plaintiff or by anyone on her behalf. No further requests were made by the plaintiff, or anyone, for an apology, or for publication of any apology by Pipeline. There was only what Ms Rao called "complete radio silence" from that time onwards. Eight months later, without a Concerns notice having been issued beforehand, the plaintiff commenced proceedings for defamation on the last day prior to the limitation period commencing. That statement of claim was served just before Christmas 2013.

The matter complained of 22The matter complained of, as attached to the current pleading, first sets out some unrelated motions, followed by the text of the plaintiff's motions (which counsel for the plaintiff agrees consists of an attack on all the defendants), appearing on pages 5 - 10 of "Pipeline". As was the case with the motions to wind up the first defendant (set out above), much of the text is underlined, in italics, in bold, or in a combination of these, suggestive of the possibility that these documents had the same authorship. 23The text is as follows: "I, Kay Freeburn, of Southern Suburbs Branch Give notice that I will move the following motions at the Annual General Meeting to be held on 23rd February 2012. Motion 5. That by Special Resolution the "Term' [sic] of office for the State Committee of the CDA of N.S.W. Inc. must begin at the conclusion of the AGM in 2014, henceforth, and in accordance with the Constitution, the Term of office shall be two (2) years from the AGM 2014 and elections held, in accordance with the Constitution, every even numbered year for all State Committee positions. This change to be permanent and registered with the Department of Fair Trading until and/or unless lawfully changed by means of a Special Resolution at a General meeting of the Association in accordance with the Constitution of the CDA of N.S.W. Inc. and the Associations Incorporation Act. Background information: The "extension" of the Term of office by an ordinary Motion put in 2008 was not legal. The Association is in a dire legal predicament because of the "extension" that did not change the Constitution of the CDA of N.S.W. Inc. (Clause 49.2) and was never registered (see CDA Clause 75.3) as per the Incorporations Act, which requires registration within 28 days of the Special Resolution being passed to change the Constitution and acknowledgment in writing from the DFT before any such change can take effect. The amended 'Term' of office will allow Committee to be legally established between National conference years. Motion 6. That by Special Resolution as once only event, ALL POSITIONS ON THE STATE COMMITTEE BE DECLARED VACANT at the next AGM to be held in 2013. A caretaker Committee of Management be elected by a show of hands from written submission/s signed by the nominating member/s and/or nominations taken from the floor at the postponed (2012) AGM (set to be held in 2013) to serve until the 2014 AGM and oversee the proper process for the 2014 State Committee elections, to conduct the business of the Association and to carry out such duties as prescribed by the Constitution. Such service on the caretaker Committee to be deemed as 'non-consecutive' for the 2014 elections. This once only event must be registered within 28 days of the AGM with the Department of Fair Trading until and/or unless lawfully changed by means of a Special Resolution at a General meeting of the Association in accordance with the Constitution of the CDA of N.S.W. Inc. and the Associations Incorporations Act. Background information: The "extension" of the Term of office by an ordinary Motion put in 2008 was not legal. The Association is in a dire legal predicament because of the "extension" that did not change the Constitution of the CDA of N.S.W. Inc. (Clause 49.2) and was never registered (see CDA Clause 75.3) as per the Incorporations Act, which requires registration within 28 days of the Special Resolution being passed to change the Constitution and acknowledgement in writing from the DFT before any such change can take effect. The amended 'Term' of office will allow Committee to be legally established between National conference years and bring all positions into proper step with the Constitution. Motion 7. That by Special Resolution Clause 48 of the Constitution of the CDA of N.S.W. Inc. be changed to read "The Chairperson of an Annual General Meeting must accept motions for which no notice of motion has been received provided:" Background information: No Chairperson should disallow or arbitrate on matters the nature of which may be otherwise prejudicial to the Association's interest. Clauses 48.1, 48.2 and 48.3 to remain unchanged. Motion 8. That by Special Resolution the Constitution specifically prescribe the agenda for all meetings of the Cake Decorator's Association of N.S.W. Inc. to include 'General Business' and 'Any other Business'. Background information: To permit free and open dialogue between the Membership and Committee on matters of importance to the Association be it at any level of management. Motion 9. That by Special Resolution Clause 39.1 be amended to read: "the Secretary shall prepare a ballot paper on the form prescribed by the By-Laws for these positions that are contested. The order of the names appearing on the ballot paper shall be decided by lot conducted by the Secretary, assisted by the Registrar, at a State Committee meeting." Background information: The lot must be open to scrutiny and conducted by accountable members to provide every possible assurance regarding the validity of the lot. Motion 10. That by Special Resolution: The Constitution Clause 39.4 be amended or incorporated to read "Clause 39.4.1 'The Ballot Paper' shall consist of one or more sheets of paper officially printed with positions contested and nominees names with corresponding boxes to be numbered by the voter. 39.4.2 A vote shall be exercised by placing a sequential number in the box against the name of each and every nominee in order of preference beginning with number one (1) for most preferred candidate in each position contested. 39.4.3 Each position contested will have a separate set of boxes, one against each nominee for that position and preference will again begin with number one (1) (most preferred) ending with the highest number for the candidate least preferred for that position. 39.4.4 Any error in the numbering sequence for any position contested will VOID THE ENTIRE BALLOT PAPER and no vote or preference for any candidate in any position contested will be recorded for that voter. A mistake can be corrected by a cross (X) through the box and the desired number clearly written beside the box. 39.4.5 Instructions on HOW TO VOTE and HOW VOTES WILL BE COUNTED are to be printed with the Ballot Paper in Pipeline giving specific instructions and an example of 'How to vote'." Background: Treatment of votes in the 2010 election was different from any other year. Members were not informed of that different method - which still is not clear. Members need to know how to vote and how their votes are counted to have confidence in the election process and avoid uncertainty regarding the validity of the system. Motion 11. That by Special Resolution: The Membership of the CDA of N.S.W. Inc. instruct the State Committee to advise Mrs. Eileen Manning, Mrs. Pauline Simpson and Ms. Wendy Simpson that they must show reason why they should not be censured/disciplined as per Clauses 17, 17.1 & 17.2 at the next General Meeting of the Association. Reasons: The CDA of N.S.W. Inc. has been brought into disrepute because... 1. Mesdames Manning and Simpson and Ms. Simpson refused, without notice, to attend a property convened State Committee Meeting called by Mrs. Manning, of which due notice had been given to all State Committee members. At this meeting NO BUSINESS could be conducted with the exception of appointing Mrs. Lyn Hammond to a vacant State Committee position as per Clause 59.1. 2. Mesdames Manning and Simpson and Ms. Simpson held three (3) unconstitutional meetings (claiming them to be State Committee meetings) held within two (2) days without the required seven (7) full days notification from the proper Secretary, Mrs. Sylvia Fitch, and without informing all State Committee Members. 3. Mesdames Manning, Simpson and Ms. Simpson, with Mrs. Vivian Heaton's knowledge, WITHOUT A QUORUM then "dismissed" the duly elected and nominated State Committee members. Mrs. Hammond has not been notified of her official and correct appointment, any meetings nor her "dismissal". 4. Ms. Simpson 'usurped' the position of "Secretary" without authority and without the required registration notification to the DFT breaching CDA of N.S.W. Inc. Constitution (14 days) (Clauses 75, 75.1) and the Act (28 days). (The position of Secretary is still in dispute and the circumstances have been resubmitted to, and are under investigation by, the Department of Fair Trading.) 5. Since the 'bogus' State Committee formation until November 2012, Mrs. Lorraine Howlett had not received any notification of State Committee meetings nor had she received, as requested, minutes of any such meetings yet Mrs. Manning has stated that Mrs. Howlett is still a member of the Committee. 6. Letter dated 8th February, 2012, to all CDA Branch Secretaries, with Mrs. Manning and Ms. Simpson named on CDA letterhead, publicly states, without substantiating evidence, emails and letters from State Committee members including Mrs. Howlett "are not only threatening but also trying to blackmail the remaining committee members into resigning or running the association contrary to our constitution.". 7. The 'bogus' State Committee have [sic] unconstitutionally called Mrs. Sylvia Fitch and Mrs. Kay Freeburn to show reason why their memberships should not be rescinded. These actions are without substance, are untra [sic] vires (beyond the power of the 'bogus' State Committee) and therefore leave the CDA open to legal ramifications. 8. Mrs. Manning has threatened Mrs. Fitch with legal action for Mrs. Fitch replying to the allegations printed against her. 9. The 'bogus' State Committee has not addressed the many legal issues still hanging over the Association. 10. Though he does not say he represents her, Mrs. Manning has instructed a solicitor (a "good friend and neighbour") to write letters stating that correspondence in regard to Association business is to be sent to him. She has stated that she has involved a next-door neighbour in matters of the business of our Association. 11. The State Committee, under President Manning, without valid reason refused to accept nor publish nomination/s from financial member/s for positions to be contested in the 2012 elections thus denying the member/s rights and denying the membership a choice of candidate/s thus rendering the whole election unconstitutional and/or the Committee action ultra vires. 12. The State Committee, under President Manning, without valid reason refused to accept nor publish valid Motions to be put to the AGM. 13. Mrs. Manning used obscene language to a member on the telephone -independently witnessed by non members [sic]. Not only is this unbecoming of the position of President, who representing the members, but also brings the Association into disrepute. 14. Mrs. Manning and Mrs. Simpson with Ms. Simpson are in acrimonious conflict and unable to put aside personal differences for the good of the Association. None is acting in the best interests of the membership and the State Committee is crippled and dysfunctional to the point of implosion. The Association has been brought into disrepute and is under constant legal threats. Background: There has been demonstrated self interest, breaches of the Constitution and the Act (2009), unsubstantiated accusations and cringe-worthy correspondence representing the Membership. The membership should be shocked and disappointed in these actions as we were expecting clear, legal amendment of past wrongs and genuine, trustworthy, proficient and open management to promote and progress our craft of cake decorating and our Association. Motion 12. That by Special Resolution the Draft Constitution be amended and the following section be removed: (Clause unknown) "Disciplining of Members. A complaint may be made to the Committee by any person that a member of the Association, is acting in a manner prejudicial to the interest of the Association or its members. The Committee will take such action, as deemed appropriate, including suspension or termination of membership. 8.1 If the Committee expels or suspends a member, the Secretary must, within 7 days after the action is taken, cause written notice to be given to the member of the action taken, of the reasons given by the Committee for having taken that action and of the members' right of appeal under Clause 9." Background information: This section is inherently unfair and unjust, it is ludicrous that any 'person' (including non-members) can cause the expulsion of a Member. That Member will not be informed until AFTER the event and be presumed 'guilty' before being able to defend any accusation. Every Member will be at the mercy of any unscrupulous group or individual of acrimonious character. CDA [sic]. Clause 17 (proposed for amendment) deals with discipline. Motion 13. That the draft Constitution be withheld until a new Constitutional Sub-committee can be formed and the draft re-checked and/or reformulated by that Sub-committee. Each Branch to receive a copy of the adjusted Draft No, 2. All proper amendments received from members or branches are to be incorporated into Draft No. 2 and approved or rejected at the 2013 Delegates meeting. The New Constitution must be ratified by the membership at a General meeting or the 2014 AGM (whichever occurs first) and be registered with the DFT before coming into effect. Background information: The Constitutional Sub-Committee does not exist as it has run the allowable 12 months permitted by the Constitution but has not finalised a workable Constitution. Amendments were proposed as soon as the draft was distributed and many amendments have been put since then. To save money, time and effort, each branch must have the opportunity to input and the Draft Constitution should be clarified as soon as possible to avoid misinterpretation and constant amendment. The New Constitution must be just and fair, as well as being unambiguous, easy to understand and implement, be in the best interests of the membership, protect the membership at all times, represent the Association and conform with the Association's Incorporation Act 2009 (No. 7) and any other legal requirement. Motion 14. That by Special Resolution Clause 39.2 be expanded to read: 'the Secretary shall prepare a list, in alphabetical order, of all candidates for all positions who have supplied a personal resume in accordance with Clause 38 including brief biographical details of the candidates supplied from the personal resume. Each position must have the name of the candidate/s printed next to that position even if the candidate is the only candidate and will be elected unopposed." Background information: Members must know who is running for positions on our State Committee, [sic] Any anonymous candidate declared "Elected unopposed" before, during or after voting is unacceptable. Motion 15. That the State Committee of the CDA of N.S.W. Inc., apologise in writing - unreservedly - to Mrs. Marian Jones, Mrs. Sylvia Fitch and Mrs. Kay Freeburn for the unconstitutional and ultra vires attempts to expel each of them. Background information: The Association is under threat of legal action because of the incorrect manner these expulsion attempts were performed by the State Committee or parts thereof. [I have not set out Motions 16 and 17 are motions to withdraw the life membership of another member, Mrs Marian Jones, for "acting in a manner unbecoming" and failing to produce invoices, misleading the membership and other matters. Counsel for the plaintiff did not know who had moved these motions. Motion 18 is a motion by a Mrs Margaret Vidler for the second defendant to be censured/disciplined on 10 grounds. Motion 19 is a motion by the third defendant for the second defendant to be censured/disciplined on 17 grounds.]" 24The next item on the agenda is the State Committee's motion about the plaintiff, drafted by the second defendant, which is the subject matter relied upon by the plaintiff as giving rise to the imputations. This unnumbered motion, containing many misspellings and grammar errors (unlike the August 2012 motion), is as follows: "I [sic] State Committee of NSW give notice that I will move the following motion to be held on the 23rd February 2013: That Mrs Kay Freeburn be expelled as a member from the Association at teh [sic] 2012 AGM and not allowed to rejoin the Association as a member.Reason For [sic] continually bombarding memebes [sic] with letters for her personal agenda. For committing acts that bring the Association into disrepute - for failure to follow the Constitution. For accusing the State committee of mal-administration and suppling NO proof of this. For causing members distress by her repeated letters to them and brenaches [sic]. Failure to give good reason why the Committee should not rescind her membership."

The imputations 25The parties asked me to rule upon the imputations as arising only from the portion of the matter complained of which consists of the first defendant's motion: [2014] NSWDC 88. The revised statement of claim contained further errors which were corrected by the plaintiff's legal representatives in consultation with the defendants' counsel, Ms Rao. The imputations currently pleaded are: (a)That the plaintiff made allegations of maladministration by committee members of the first defendant when she had no evidence of such allegations. (b)That the plaintiff is a nuisance and a troublemaker who does not provide proof of her allegations of maladministration by committee members of the first defendant. (c)[Deleted] (d)That the plaintiff does not act fairly. (e)That the plaintiff has a personal agenda which is not in the best interests of the first defendant. (f)That the plaintiff has damaged the first defendant's reputation. (g)That the plaintiff has acted outside the bounds of the constitution of the first defendant. (h)That the conduct of the plaintiff was so serious that it deserved a lifetime ban from being a member of the first defendant.

The true innuendo plea 26The plaintiff alternatively brings a true innuendo plea as follows: "10. On or about August 2012 the First Defendant published the August 2012 edition of Pipeline magazine (The August Pipeline). 11. The August Pipeline (on page 8) contained the following: "Motion 4 The State Committee give notice to move the following motion at the Annual General Meeting that: Mrs Kay Freeburn be expelled as a member from the Association at the 2012 AGM and not allowed to join the Association as a member. Reasons: For continually annoying members with letters for her personal agenda for committing acts that bring the Association into disrepute - for failure to follow the constitution. For accusing the State Committee of maladministration and supplying NO proof of this. For causing members distress by her repeated letters to them and branches. For failure to give good reason why the Committee should not rescind her membership" ("the extrinsic facts") 12. The Plaintiff says that the extrinsic facts were known to those whom the matter complained of was published and would lead a reasonable person knowing the facts to conclude that the words in the matter complained of have defamatory meaning." 27The defendants' challenge to this pleading is set out in more detail below.

The aggravated damages claim 28The plaintiff pleaded the following particulars of aggravated damages: (a)The plaintiff's knowledge of the falsity of the imputations; (b)The conduct of the defendants in publishing the matter complained of without giving the plaintiff any opportunity to respond to the allegations being published about her; (c)The defendant's [sic] extravagant and sensational description of the actions of the plaintiff; (d)The plaintiff advised the defendant [sic] by letter dated 16 September 2012 that she considered that matter published by the first defendant in the August 2012 edition of "Pipeline" which matter was substantially the same as the matter complained of to be defamatory and, by way of a written notice invited the defendant [sic] to issue an apology and retraction; (e)The defendant [sic] has failed to make any apology or retraction, or any other form of offer of amends to the plaintiff. (f)The defendant [sic] after receipt of the notice referred to in paragraph e) above substantially repeated the matter published by the first defendant in the August 2012 edition of "Pipeline" being the matter complained of. 29These particulars are deficient. The particulars in relation to the apology are conceded to be incorrect and to require repleading, and the identity of each of the defendants needs to be set out with precision. However, this is a minor matter in these proceedings.

The current state of the pleadings 30After the defendants succeeded in having a number of the imputations struck out in the hearing on 4 July 2014, they were awarded costs. The repleaded statement of claim was challenged and the matter listed for argument on 15 August 2014. 31The argument was resolved on 15 August 2014 by the plaintiff further amending the statement of claim to incorporate the defendants' objections. Ms Rao told the court on that day, in relation both to the true innuendo plea and the proceedings generally, that she was seeking instructions to bring an application for summary dismissal application on proportionality principles, as well as to challenge the true innuendo plea. 32After hearing from both parties in the course of this application as to the costs of 15 August, I made orders on 15 October 2014 that the plaintiff should bear the costs thrown away in relation to the argument which was to take place on that day, indicating that I would give reasons for so doing in this judgment. 33My reasons for doing so are that the redrafted imputations still included rolled-up pleas (such as imputation (b)), imputation (h) has now been repleaded twice and, while imputation (f) (which is new) was not challenged, this was only because it was new, and a party seeking leave to amend a pleading generally pays the costs thrown away by reason of the amendment. The timetable provided for the plaintiff to supply particulars of the true innuendo pleading; this was never done, and the true innuendo plea (discussed in more detail below) is misconceived. 34This was the plaintiff's second attempt, and the correcting of some of these errors (including correction of factual errors in the aggravated damages claim) will require the filing of a further statement of claim. As the first and second defendants (who took carriage of the argument) were substantially successful in their second challenge to the statement of claim, for these reasons, they should be entitled to a second costs order in their favour. 35The first and second defendants have therefore now successfully obtained two costs orders in relation to the statement of claim, and a further pleading will have to be filed. Additionally, as Ms Rao reminds the court, the basis upon which the third defendant is asserted to be liable for the publication has never been stated; this is one of the reasons for Ms Rao and Mr Hogg submitting the claim against her should be struck out. 36The fact that the plaintiff will have to file a fourth pleading and has incurred costs orders is regrettable, but not an issue warranting striking out of proceedings on any proportionality basis. Only in the most extreme cases (of which Ewing is an example) would such a step be taken. The issues relevant to proportionality in these proceedings do not arise from the procedural history but from the issues set out below.

Issues relevant to proportionality 37The parties raised the following issues in relation to proportionality: (a)The real issue in defamation proceedings should be vindication of reputation. Ms Rao submits that the nature of the plaintiff's vindication is apparent from the full text of the matter complained of (including her own motions), and that the subject matter of these proceedings, if set out in a judgment, will do none of the parties anything but harm. Additionally, she submits that the conduct of the plaintiff (as set out in the motions in the matter complained of) indicate that the plaintiff is not motivated by vindication but by vendetta: Wallis v Valentine [2002] EWCA Civ 1034. Mr Dilworth submits his client should have her day in court to vindicate her reputation. Principles of proportionality have no part to play in defamation litigation in Australia, and every litigant, including the plaintiff, has the right to proceed with their claim up to a hearing, no matter how poor those prospects appear. Those few cases where proportionality has been considered relevant in the United Kingdom all relate to publications to very few persons, whereas in Australia many cases of publication to one person only (of which Cush is one) have been the subject of consideration in the High Court and Court of Appeal without any curial comment to the effect that a publication to one person was disproportionate to the costs involved. (b)The costs of hearing this case should be considered. Mr Dilworth submitted that the costs of the hearing would be moderate: he suggested $45,000 - $50,000 (on the basis of a 3-day hearing). Ms Rao advises that the defendants will plead defences of qualified privilege (including reply to an attack), honest opinion and unlikelihood of harm. It is possible that the defendants may bring a cross-claim of some kind against the plaintiff (O'Neill v Foster (2004) 61 NSWLR 499; Green v Schneller (Supreme Court of NSW, Levine J, 18 March 1998)), or seek a jury trial. The separately represented third defendant will need to seek a determination as to liability for publication. Ms Rao estimates that the hearing could exceed three weeks, and the total legal costs for all represented parties (including the separate costs of the third defendant) would be in excess of $300,000, a figure comparable to the hearing costs in Bleyer v Google Inc.By way of comparison, in Bodenstein v Hope Street Urban Compassion [2014] NSWDC 126, the parties told me that the defendants' costs of a three-day hearing on qualified privilege issues for two publications to one person (resulting in judgment for the defendants) were in excess of $100,000. Admittedly those costs were largely incurred in the Supreme Court, where costs are higher, but the informality of the proceedings due to the plaintiff being self-represented and the failure of the second defendant to take any active part should have reduced those costs. As is set out in that judgment, those costs were a very significant burden for a charity providing help to marginalised, homeless and disadvantaged persons. Even ordinary working families in Australia cannot afford legal fees of this magnitude. In the present case, the lack of income and assets of all of the parties to meet legal costs is of particular concern. (c)As to success at the hearing, the case against the first defendant (which is conceded to have an obligation to publish all motions under its Constitution, including the plaintiff's) is submitted to be hopeless, due to the exceptional nature of the content of the matter complained of and the first defendant's obligation to publish motions to its members. The basis upon which the third defendant is sued has never been articulated and the submissions Ms Rao makes (supported by Mr Hogg, for the third defendant) are that this claim should be struck out. These submissions are discussed in more detail below. (d)As to compensation, the parties want orders in relation to apologies which the court cannot, absent their consent, impose. This court can only award damages, which in the present case might be not merely nominal but derisory, given the nature of the matter complained of, the history of offers of apology and the delay in bringing these proceedings. If the defendants breach their undertaking to apologise, an application for specific performance (albeit in another forum) would have to be made (in Summertime Holdings Pty Ltd v Environmental Defender's Office Ltd (Supreme Court of NSW, Young J, 16 October 1998) the application was refused on discretionary grounds and the defendants instead ordered to pay the plaintiff $10,000), but hopefully the defendants will honour their undertaking. The plaintiff could, of course, make a statement in open court, which Kate Winslet did after settling defamation proceedings for an article criticising her exercise regime: Winslet v Associated Newspapers Inc [2009] EWHC 2735. However, the plaintiff does not need to go to a hearing to do so; she can follow Ms Winslet's example and do so after publication of the apology. (e)Ms Rao submits that, if an apology is sufficient, the plaintiff already has that remedy. The defendants have undertaken to the court to publish the open apology they have made in the next issue of Pipeline. The plaintiff is satisfied with receipt of an apology as opposed to seeking damages, but insists the apology should be additionally sent to the home addresses of all former members, and wants a relatively minor change of wording. Assuming the court could make such an order, this is not a basis for the continuation of these proceedings to hearing. (f)As noted above, both sides are seek costs, which are already substantial. Despite her lack of success in the interlocutory proceedings to date, the plaintiff's legal representatives claim their costs are $30,000. The defendants say they have been successful in two costs applications and that they should keep those costs, as they have made a Calderbank offer which was rejected by the plaintiff. Those arguments are set out in more detail below.

The principle of proportionality 38I do not propose to set out a discussion of the case law considered by McCallum J in Bleyer v Google Inc. Her Honour, applying Jameel, held (at [51]) that disproportionality was a species of abuse of process, and that s 67 Civil Procedure Act 2005 (NSW) could properly be exercised to stay or strike out proceedings where the claim involved was vastly disproportionate to the interests at stake and to the resources of the court and the parties. 39Although Bleyer v Google Inc is the first time a court of record has made such an order on Jameel principles, the defendants draw to my attention the obiter remarks of the High Court in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd at [39]: "[39] Speaking of what the case management provisions in the CPR might mean for the conduct of litigation, in Jameel (Yousef) v Dow Jones & Co Inc the Court of Appeal explained that: It is no longer the role of the court simply to provide a level playing field and to referee whatever game the parties choose to play upon it. The court is concerned to ensure that judicial and court resources are appropriately and proportionately used in accordance with the requirements of justice. Earlier, in Biguzzi v Rank Leisure Plc, Lord Woolf MR had doubted that authorities decided under the old procedure could continue to be binding or even persuasive." (Footnotes omitted) 40The issue in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd related to inadvertent disclosure of a privileged document, and not to a dismissal application. The defendants submit that these statements amount to a general judicial indication of the importance of the proportionate use of finite judicial resources in accordance with the requirements of justice. 41Similar principles apply to restrictions imposed by statute on freedom of expression, where a somewhat differently expressed proportionality test may involve consideration of the effects of the purported exercise of that power upon common law rights and freedoms: Tajjour v New South Wales at [29] per French CJ, citing Davis v Commonwealth (1988) 166 CLR 79. However, none of the members of the High Court referred to the particular Jameel proportionality principle and, additionally, care was taken to distinguish Australian tests of legislative proportionality with the categories of scrutiny employed by the Supreme Court in the United States of America (at [131] per Crennan, Kiefel and Bell JJ) and Canada (at [150] per Gageler J). Nevertheless, it is arguable that proportionality issues may be relevant to the exercise of freedom of speech, and thus to the law of defamation generally. 42As the sole issue remaining after the terms of the apology have been agreed would be the appropriate order for legal costs, the defendants also rely upon costs decisions where Jameel principles have been referred to with approval (Grizonic v Suttor [2008] NSWSC 914 and Vizovitis v Ryan [2012] ACTSC 155). The principle of proportionality of costs is set out in s 60 Civil Procedure Act 2005 (NSW): April Fine Paper Macao Commercial Offshore Ltd v Moore Business Systems Australia Ltd (2009) 75 NSWLR 619 at [1]. Proportionality is also relevant to case management of defamation proceedings: Practice Note No SC CL 4, Supreme Court Common Law Division - Defamation List (5 September 2014). However, as I note below, it is hard to see how proportionality of costs can be applied in defamation given the carving out of costs considerations in defamation proceedings in UCPR r 42.34, which appears to be at odds with the Defamation List Practice Note and s 60. Given this apparent conflict, I must be particularly cautious when considering costs issues in relation to a claim of disproportionality in costs for defamation proceedings. 43Most importantly, any application of the principles set out in Jameel to summary judgment applications in Australia is novel. Additionally, for many years prior to Jameel, English courts, including appellate courts, were expressing very different views about proportionality and costs issues (see, for example, Safeway Stores Plc v Tate [2001] QB 1120) and courts in other common law jurisdictions remain reluctant to use summary judgment procedures to strike out defamation actions or defences (see, for example, Casses v Canadian Broadcasting Corp [2012] BCSC 18). Issues of proportionality will inevitably overlap with more traditionally-based reasons for summary dismissal, and where those reasons exist, those reasons for determination should, in my view, be preferred. 44Mr Dilworth submits that these proceedings in no way resemble the facts in Bleyer v Google Inc, as Pipeline has a circulation of several hundred persons in New South Wales, and there is no certainty that any of the proposed defences will succeed. He submitted that proportionality issues could not arise unless the extent of publication was very limited, and referred to Mardas v International Herald Tribune [2008] All ER (D) 184 at [11] - [12], where Eady J noted Gray J's observations that Schellenberg v British Broadcasting Corporation turned on it own "unusual facts". In Mardas, there was publication in print and online to several hundred people, but the crucial point was that the facts were contested (the defendant had pleaded justification) and thus unsuitable for summary dismissal. Where there is no evidence at all as to liability for publication (as is the case with the third defendant) or where the unusual nature of the matter complained of shows the first defendant's obligations to publish all the parties' defamatory motions against each other, the issue of the extent of publication has far less relevance to the summary disposal of proceedings. 45However, a different view was taken in Ewing (see also Ewing v Times Newspapers Ltd [2008] CSOH 169). Mr Ewing's proceedings were in fact struck out as an abuse of process notwithstanding the mass media nature of the publication, with the court referring approvingly to the "robust" case management approach in Schellenberg, stressing the importance of case management rules as set out in Jameel at [55], and approving Wallis v Valentine, the decision principally relied upon by Ms Rao. 46The importance of the application of principles of proportionality in Wallis v Valentine lies in its use of proportionality to curb a claim where the damages were extremely modest, the parties were neighbours, and the purpose of the litigation was not vindication of reputation but a vendetta. Ms Rao submits that all these reasons apply here. The undisputed chronology shows that these parties have been in dispute for some years, and that the plaintiff has given as well as taken criticism; in fact, looking at all the motions set out in the matter complained of, the defendants appear to have come off second-best in the matter complained of. 47Ms Rao also points to the low level of seriousness of imputations relating to the management of a cake-decorating organisation. While the matter complained of may be capable of conveying defamatory imputations, these should be put at the bottom of the range. The imputations are only a little higher, in terms of seriousness, than the imputations of disdaining vegetarianism that were struck out as not being defamatory in Ecclestone v Telegraph Media Group Ltd [2009] EWHC 2779, a decision in part based on observations about the Jameel principle. 48Ms Rao also submits that there are significant parts of the claim which are hopeless; if these were to be struck out, this should be a factor in the dismissal of the case as a whole, on the basis that to permit the claim to go forward would be to try to unscramble the omelette. These pleadings are: (a)The true innuendo plea; (b)The claim for aggravated compensatory damages (with leave to replead); and (c)The claims against the first and third defendants. 49Finally, if the proceedings (or part thereof) were to survive the proportionality argument, the defendants' alternative application for prospective costs-capping orders arises for consideration.

The true innuendo plea 50A "true" innuendo arises solely from facts or circumstances not apparent on the face of the publication, which give the words a special meaning they would not ordinarily have: Yelash v In Print Publishing Co [1972] NZLR 83 at 85 per Richmond J; Grubb v Bristol United Press Ltd [1963] 1 QB 309 at 328 - 9 per Pearce LJ. For example, in Cairns v John Fairfax & Sons Ltd, a newspaper reported that Mr Cairns' "girlfriend" informed a third party that Mr Cairns (the Treasurer at the time) could not see him. The matter complained of was not defamatory on its face, but both Mr Cairns and the "girlfriend" were married. Those facts supported the innuendo that the plaintiff and the "girlfriend" were having an adulterous affair (a jury found the imputation was conveyed but not defamatory). 51The true innuendo pleaded in these proceedings is defective, for a number of reasons: (a)While a defamatory meaning may be drawn both by way of reliance on the natural and ordinary meaning of the words and by way of innuendo (Random House Australia Pty Ltd v Abbott (1999) 167 ALR 224 at 232), if the words complained of are defamatory in their natural and ordinary meaning, no innuendo is necessary. In those circumstances, no innuendo should be pleaded, as "what the ordinary man will infer from those words ...does not require the addition...of an innuendo" (Dougherty v Nationwide News Pty Ltd [1969] 1 NSWR 189 at 192 per Asprey JA). (b)An innuendo is a defamatory meaning arising by inference or implication, and its office is not to add a meaning that is not otherwise there. In particular, the fact that the same publication has been made more than once, with the same imputations pleaded as arising in each, cannot be relied upon to give rise to an imputation which would not otherwise arise. The meanings asserted to arise from the true innuendo pleaded here are exactly the same meanings as already pleaded, on the global basis that any reader who had also read the August 2012 publication would, somehow be more likely to accept that the imputations were all conveyed. Other than in special circumstances (such as book serialisations), imputations may not be pleaded as arising from more than one publication. (c)The plaintiff's claim for defamation arising out of the August 2012 publication was struck out as time-barred, and the true innuendo plea appears to be a way of circumventing this ruling to create a new cause of action; a true innuendo, if established, may give rise to a separate cause of action: Marley's Transport Pty Ltd v West Australian Newspapers Ltd [2001] WASC 31 at [18]. (d)The basis upon which any person who read the same publication in the August 2012 issue would be likely to consider, for some unexplained reason, that the publication in the November 2012 issue therefore conveyed the imputations, is both unparticularised and unexplained. (e)If what is intended is a false innuendo plea, a false innuendo cannot introduce new matter to render certain words which would otherwise have been uncertain (Readers Digest Services Pty ltd v Lamb (1982) 56 ALJR 214 at 216). In Lewis v Daily Telegraph Ltd [1964] AC 234 at 274 Lord Hodson explained: "There is one cause of action based on the words in their natural and ordinary meaning and another based on the words in such meaning as may be alleged in a true innuendo, but not a third cause of action based on the false innuendo." 52Mr Dilworth did not identify the facts, matters and circumstances which could give rise to the true innuendo plea, beyond making the observation that the ordinary reasonable reader would be more likely to believe the imputations were, as a group, conveyed if the matter complained of had been published before. 53The true innuendo plea is misconceived and should be struck out on traditional principles of law. 54Ms Rao further submitted that such a plea should be struck out on proportionality principles, in that the complexity of the plea would add considerable complexity to the trial. It is not necessary for me to do so. The true innuendo plea is hopeless and should be struck out for the reasons set out above. It does not, however, augur well for the cost and duration of the trial that such unnecessarily complicated, and baseless, pleas are included in the statement of claim.

The claims against the first and third defendants 55Paragraph 17 of the first defendant's Constitution requires it to publish all motions. The feature of the matter complained of which is unique to this case is that the first defendant has therefore published everyone's motion about everyone else. The plaintiff's motions call for a "spill", call for the first and third defendants and indeed the whole Board to be removed forthwith, complain of mismanagement by them, refer to the defendants as being under investigation by the Department of Fair Trading, and make a wide range of claims of their having acted ultra vires and irresponsibly. Motions by the third defendant and others call for the second defendant to be removed from office. On what basis could the second defendant's motion not also have been published? 56The real issue, in relation to the first defendant, is whether malice can be sheeted home in relation to qualified privilege at common law and, in relation to s 30 Defamation Act 2005 (NSW), whether publication fulfils some or all of the items in the s 30(3) checklist for reasonableness. Given the obligation of the first defendant to publish all motions, and the content of the matter complained of (in particular the motions of the plaintiff and the third defendant about the first defendant) this must be that rare and exceptional case where the prospects of the plaintiff's success in relation to those defences is very small indeed. The question is whether the smallness of those prospects of success is, on principles of proportionality, so slight that the proceedings are "simply not worth the court time and costs which they entail" (Ewing at [37]). 57On the exceptional facts in this case, it is my view that the claim brought by the plaintiff against the first defendant is not worth the court time and effort, taking into account the factors set out above. Publication in Pipeline of all the motions - not just the plaintiff's motions - was required. Mr Dilworth's submission that this motion should not have been published because it was "more serious" is misconceived. 58As to the second defendant, while I accept Ms Rao's submission that she may have a strong case in terms of reply to attack, disputed issues of fact about malice are not appropriate for summary dismissal, in much the same way that disputed issues of fact about justification should not be determined on such applications other than in exceptional circumstances of the kind that occurred in Schellenberg (Mardas, supra, at [11] - [12]). There is no proportionality basis for striking out the claim brought against the second defendant, although the reduction of the litigation to a claim by the plaintiff against the second defendant only may give rise to other proportionality issues, discussed below. 59This brings me to the third defendant. There is nothing in the statement of claim identifying with precision how she is liable for the publication of the matter complained of, beyond a reference to her being a member of the Board of the first defendant (indeed, paragraph 6 of the current pleading refers only to publication by "the defendant" [sic]). 60The plaintiff has been on notice for some time as to the absence of particulars of publication by the third defendant. No particulars have been forthcoming and the claim against the third defendant should accordingly be struck out. 61If these proceedings go ahead in some revised form, against the second defendant only, what should the position be in relation to costs?

Proportionality and costs-capping orders 62At first blush, an application by a party at the early stages of the litigation to cap or deny an opponent costs may seem precipitate. However, such applications should be brought at an early stage: see the cases discussed in G E Dal Pont, "Law of Costs", (3rd ed., LexisNexis, Australia) at [7.42] - [7.49], although retrospective applications in relation to defamation claims have been successful: Jones v Sutton (No 2) [2005] NSWCA 203. 63The first case to consider an application to cap costs was Re Sherborne Estate (No 2); Vanvalen v Neaves (2005) 65 NSWLR 268, where Palmer J explained the operation of UCPR 42.4 as follows: "[26] I conclude that the Uniform Civil Procedure Rules, r 42.4, is intended as a means whereby the Court may, if the need arises, curb the tendency of one or all parties to engage in disproportionate expenditure on legal costs by making it clear, at an early stage of the proceedings, that beyond a certain limit theparties will have to bear their own costs - win or lose. [27] Parties to disputes which are fuelled by personal animosity - Family Provision Act applications are a prime example - are sometimes carried away by the desire to vindicate their positions publicly in a court of justice. Such parties insist on marshalling every conceivable issue in support of their case and on rebutting with unnecessary particularity every passing suggestion madeby the other side. Unfortunately, legal practitioners are not always resolute enough to rein in those desires on the part of their clients." 64Palmer J went on to note that proportionality of costs was "central to the just and efficient conduct of civil proceedings". His Honour considered earlier decisions apparently to the contrary, such as Jvancich v Kennedy (No 2) [2004] NSWCA 397 (at [6]), were in fact merely underscoring the undesirability of such orders being made at the end of the proceedings; the time for making such orders was "early in case management, whenever it appears that the parties' litigious fervour may be leading them to excessive expenditure of costs", a view endorsed by Sackville A-JA in Nicholls v Michael Wilson & Partners Ltd (No 2) [2013] NSWCA 141 at [24]. 65The balancing process to be undertaken by the court is a difficult one. I note the conflicting views in Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263 by Beazley JA at [134] - [168] and by Basten JA at [216] - [219] (with whom Macfarlan JA concurred, dismissing the appeal from a costs cap of $20,000). 66Other than in Family Provision Act proceedings (see Tchadovitch v Tchadovitch (2010) 79 NSWLR 491 at [88]), such orders are rarely made. Ms Rao referred to Jones v Sutton (No 2), where orders were made retrospectively due to the massive disproportion between the cost (over $1 million) and the remedy ($5,000), and to the denial of trial or appeal costs to a successful plaintiff in Bristow v Adams [2012] NSWCA 166 at [16] - [18]. However, these decisions essentially turn on their own facts, as Dal Pont notes at [17.81]. 67Additionally, proportionality as a basis for costs issues in defamation proceedings may be contrary to UCPR r 42.34, given the carving out of defamation actions from its provisions as long ago as 2003: see Sporting Shooters Association of Australia (NSW) Inc v McGuire [2014] NSWSC 1370 at [15]. Nor can the provisions of UCPR r 42.35 apply, as the Local Court has no jurisdiction to hear defamation proceedings. 68The principal difficulty with a cap on costs is that, as Ms Rao points out, it will not benefit anybody. No cap will help, whether for zero costs or the sum the plaintiff's legal advisers were asking for in earlier negotiations ($30,000); the defendants would have to pay two sets of lawyers for a hearing which Ms Rao estimates at up to four weeks and, even if successful, their chances of recovering any money from the plaintiff are unknown, and would involve a lengthy costs assessment. All that is certain, if costs are capped, is that all parties to the proceedings would be worse off. Accordingly, I do consider an order for the capping of costs should be made.

The balancing exercise 69I am satisfied that there is no evidence of the basis upon which the third defendant is the publisher of the matter complained of, and that the case against the first plaintiff (which is obliged by its Constitution to publish all members' motions) is close to hopeless. The plaintiff's current statement of claim is deficient and the true innuendo claim must be struck out. 70Additionally, in relation to all defendants, these are proceedings where the unusual nature of the matter complained of and the history between the parties fall squarely within the confines of the principles discussed in Wallis v Valentine. The costs of these proceedings, even if only one defendant remains, is grossly disproportionate to the issue of vindication of the plaintiff's reputation. The plaintiff is already at risk as to the two costs orders against her in relation to the statement of claim. 71This brings me to the issue of the costs consequences that will flow from my orders. Whether or not proportionality issues arise, the plaintiff's claims against the first and third defendants must be struck out. It seems likely, given the resourcefulness of the defendants, that their next step will be to seek orders under s 67 Civil Procedure Act 2005 (NSW) for the staying of these proceedings until such time as interlocutory costs (if payable forthwith, as discussed in Ritchie's Uniform Civil Procedure (NSW) (LexisNexis) at [s.67.40]) and/or costs for dismissed proceedings (see [s 67.35]) are paid. Those costs could outweigh damages to be awarded to the plaintiff, and the modest nature of those damages may also put her at risk as to costs of these proceedings, if successful in achieving a damages award. 72These proceedings would also be a burden upon the court. Mr Dilworth has already asked me to make orders for a second court-facilitated mediation, but the free mediation services of this court cannot be burdened by repeat requests of this nature. Nor should other litigants be obliged to wait while these proceedings take valuable court resources and time to deal with issues arising from a dispute which, on the plaintiff's own uncontradicted evidence, demonstrates a vendetta rather than a vindication of reputation. 73What all these parties need is finality of the dispute between them, upon suitable acknowledgments being made by the defendants, and in an atmosphere of compromise. On the one hand, the plaintiff may have a claim of modest proportions against the second defendant (although what that may be in damages terms, after the apology is published, is uncertain); on the other hand, the defendants have obtained some substantial costs orders and may continue to obtain more. 74The simple step to take is to dismiss the claim summarily on the basis that there will be no order as to costs other than the two costs orders made to date to the first and second defendants, on the basis that the defendants will honour the undertaking given to the court on 17 October 2014 to publish the proffered apology at their own expense. No costs would be awarded to any party for the commencement of these proceedings, or for this application. 75If such orders are made, no doubt each party will consider this a defeat; however, each party may also, in time, come to consider that, having regard to Allsop ACJ's carefully explained warning about the dangers of this kind of litigation (see Cush at [3]), they may all in fact have won.

Orders (1)Proceedings dismissed. (2)Save for the costs orders in favour of the first and second defendants of 4 July and 15 August 2014, each party pay its own costs of the proceedings.

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: 22 October 2014