McCallum J, Scott J, MacKenzie J, Einfeld J, Branson J
Catchwords
Ex parte Lai Qin [1997] HCA 6
Source
Original judgment source is linked above.
Catchwords
Ex parte Lai Qin [1997] HCA 6
Judgment (5 paragraphs)
[1]
Judgment
HER HONOUR: Mr Barrie Goldsmith is a solicitor. On 19 May 2015, Mr Goldsmith commenced proceedings for defamation against a former client, Dr Ratna Ghosh. The proceedings have a hearing date early next year. Mr Goldsmith now seeks leave to discontinue the proceedings on terms that there be no order as to costs. Leave is required because Dr Ghosh does not consent to a discontinuance on those terms: see r 12.1 of the Uniform Civil Procedure Rules 2005 (NSW). Dr Ghosh seeks an order for payment of her costs and an order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) quantifying those costs in a specified gross sum.
[2]
Circumstances in which the proceedings were brought
According to the statement of claim, Mr Goldsmith acted for Dr Ghosh between December 2010 and February 2011. In an affidavit sworn in support of an interlocutory application in the proceedings, Mr Goldsmith said that he was retained by Dr Ghosh to act for her in proposed proceedings for defamation in the Supreme Court of Queensland in respect of articles published in the Gold Coast Bulletin newspaper. Proceedings had to be commenced urgently as the limitation period was about to expire. Mr Goldsmith states that he informed Dr Ghosh he required up-front payment of $7000 for fees and disbursements. He states that Dr Ghosh provided her credit card details to his office and that he debited the card in the amount of $7000 with her authority. On 20 January 2011, Mr Goldsmith was contacted by his bank and informed that Dr Ghosh had disputed the debit to her card. Mr Goldsmith did not act for Dr Ghosh from that point and sought leave to withdraw as the solicitor on the record in the Queensland proceedings. Dr Ghosh subsequently complained to the Legal Services Commissioner that the debit had been made without authority. The complaint was dismissed.
In April 2015, Mr Goldsmith was approached to act for defendants in proceedings for defamation in the District Court commenced by Dr Ghosh. He did not perceive any conflict of interest in acting against his former client but contacted her to seek her confirmation that she did not object. She did. An acrimonious exchange followed.
In May 2015, Mr Goldsmith became aware of material posted on the internet in March and April concerning his firm, Goldsmiths Lawyers and Mr Goldsmith himself. He immediately suspected that Dr Ghosh had posted that material. There were five items of concern.
The first had an obvious connection with Dr Ghosh. It was an item posted on a website called "Ripoff Report" ("by consumers, for consumers…"). The report was identified as having been submitted by a person named "Golly Ghosh". It alleged that Goldsmiths Lawyers and, in particular, Mr Goldsmith, had, without authority, debited a credit card for the payment of disputed legal fees.
The second, third, fourth and fifth matters complained of were four articles posted anonymously on a website called "pissedconsumer.com" (presumably the word "pissed" is there used in the American sense, referring to someone who is very annoyed rather than someone who is drunk). The articles reported various complaints about Goldsmiths Lawyers and Mr Goldsmith. One article under the topic "poor customer service" suggested he had bankrupted a client who did not pay the legal fees that were charged. Another suggested that Mr Goldsmith had a long list of matters where he had been the legal representative and the client had been unsuccessful and had been ordered to pay costs and damages. The third suggested that Mr Goldsmith had charged excessive legal fees for "a silly, trivial matter that probably should not be in court". The fourth again suggested overcharging for "unsuccessful legal action".
Mr Goldsmith wrote to Dr Ghosh threatening to write to the DPP "for consent to have [her] charged with criminal defamation"; to commence proceedings for defamation without further notice and to write to the Medical Council to accuse her of professional misconduct and have her registration as a medical practitioner cancelled. She did not reply.
The statement of claim was filed on 19 May 2015 and, on the same day, Mr Goldsmith approached the duty judge ex parte seeking urgent interlocutory injunctions. Justice Hamill made an interim order restraining Dr Ghosh from publishing any statements of or concerning Mr Goldsmith to the effect of those pleaded as imputations in respect of the five matters complained of in the statement of claim: see Goldsmith v Ghosh [2015] NSWSC 631.
The injunction was continued by me after a contested hearing inter partes. At that hearing, Dr Ghosh put on evidence denying that she posted any of the matters complained of on the internet.
Dr Ghosh was represented by Mr Rasmussen of counsel at that hearing. As to the "Ripoff Report", Mr Rasmussen submitted that it was inherently unlikely that Dr Ghosh would post an article under the name "Golly Ghosh", which is so obviously demeaning of her. As to the four "Pissed Consumer" reports, Mr Rasmussen noted that there was nothing in the style of writing or use of language in those items to suggest that they were written by the defendant. He noted that the subject matter of the postings appeared to be taken from publically available material and could have been written by anyone, including "disgruntled clients of Mr Goldsmith or any of his vanquished opponents".
Mr Rasmussen relied on my decision in Allan v The Migration Institute of Australia Ltd [2012] NSWSC 965 (a case in which it may be noted Mr Goldsmith acted for the unsuccessful applicant for an interlocutory injunction to restrain the publication of allegedly defamatory material). As noted by Mr Rasmussen, one of the reasons I refused to grant an injunction in that case was that the plaintiff's entitlement to ultimate relief was uncertain, turning on disputed facts that could not be determined on an interlocutory basis. In that context, I relied upon the principles stated by McLelland J in Kolbach Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535.
In Allan, however, there was no dispute as to the element of publication. The defendant admitted publication but appeared to have the prospect of a good defence of qualified privilege. That weighed powerfully in the balance against granting an injunction, having regard to the importance placed upon freedom of speech in such applications.
In the present case, since the disputed fact related to the question whether the defendant was the publisher of the matters complained of, she professed no interest in exercising any freedom of speech to publish the material in question, which was undoubtedly defamatory of Mr Goldsmith. Accordingly, I was satisfied that the course best calculated to achieve justice between the parties was to continue the injunction granted by Hamill J. The continuation of the injunction did not, in the circumstances, operate to curtail any right sought to be exercised by Dr Ghosh. On the other hand, there appeared to be an arguable case for an inference that she was the publisher of at least one and perhaps all of the matters complained of.
On 26 June 2015, Dr Ghosh filed a defence in which she denied publication of any of the matters complained of and denied defamatory meaning. No other defence was pleaded. However, Dr Ghosh pleaded, by way of mitigation of damages, the plaintiff's "bad reputation prior to publication as a solicitor who overcharges his clients, who unnecessarily prolongs litigation in order to maximise his legal fees and who strings clients along only to abandon them immediately prior to the hearing of a case".
Prior to the commencement of the proceedings, Mr Goldsmith had attempted to have the defamatory material removed from the internet by contacting Google Inc as host of the two websites in question and the proprietor or registrant of each website. The items were not removed.
Following the contested hearing before me on 12 June 2015, Mr Goldsmith again wrote to Google and was on that occasion successful in having the defamatory material taken down. As submitted by Mr Goldsmith, it is likely that the continuation of the injunction was a factor in Google's decision to take the material down. Conversely, however, it does not follow that Mr Goldsmith has established anything more than that the balance of convenience favoured continuing the injunction. He certainly has not established on the balance of probabilities that Dr Ghosh was the publisher of the matters complained of.
[3]
Grounds for seeking an order other than payment of the defendant's costs
Rule 42.19 of the UCPR provides that, where proceedings are discontinued by the plaintiff, the plaintiff must pay the defendant's costs unless the court "orders otherwise" (absent agreement as to costs). Mr Goldsmith submitted that the Court should order otherwise, relying on the decision of the High Court (per McHugh J sitting alone) in Re the Minister for Immigration and Ethic Affairs of the Commonwealth of Australia; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622. In that case, the applicant's proceedings against the Minister for prerogative relief were rendered futile when, before the hearing of the proceedings, the Minister (I think then Phillip Ruddock) granted her a protection visa.
In the passage of the judgment relied upon by Mr Goldsmith, McHugh J said (at [9]):
"If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases."
A footnote cited six decisions to support that statement of principle.
Mr Goldsmith sought to invoke that principle here on the basis that he has acted reasonably in bringing the proceedings. With due respect to Mr Goldsmith, the submission overlooks the circumstances in which the principle was stated. The application in Lai Qin differed from the present application in an important respect; the applicant was seeking an order that the Minister pay the applicant's costs on the basis that it was unreasonable of him not to have informed her that her application for a protection visa was being reconsidered and might be granted (which would have obviated the need to prosecute the application in the High Court). The proposition that she, as the discontinuing party, should pay the Minister's costs does not appear to have been raised (the Minister may well have consented to there being no order as to costs in the circumstances). Further, it is doubtful whether the present case should be regarded as one in which further prosecution of the action has become futile as it did in Lai Qin. There, once a visa had been granted, the validity of an earlier decision refusing a visa was truly moot. Here, the fact that Mr Goldsmith is satisfied with the result he achieved from a stranger to the litigation does not mean that his action against Dr Ghosh for damages and final injunctive relief has become moot.
A consideration of the authorities cited by McHugh J in the footnote has reinforced my view that the principle sought to be invoked by Mr Goldsmith has no application here. His Honour referred to the following authorities: Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194; 116 ALR 523; Seventh Mingcourt Pty Ltd v The Honourable Carmen Lawrence (Federal Court of Australia, Branson J, 1 August 1996, unrep); Coleman v City of Melville (Supreme Court (WA), Scott J, 22 September 1994, unrep); Compadres Australia Pty Ltd v Waterfront Place No 2 Pty Ltd (Supreme Court (Qld), MacKenzie J, 15 August 1995, unrep); Inprint Ltd v K & D Media Pty Ltd (Administrator Appointed) (Federal Court of Australia, Einfeld J, 22 December 1995, unrep); and Australian Securities Commission v Berona Investments Pty Ltd (1995) 18 ACSR 772.
None of those decisions was a case involving a contest as to whether a discontinuing party should be relieved of the usual consequence of discontinuing. Australian Securities Commission v Aust-Home Investments was a case in which an application for the appointment of a receiver succeeded on an interlocutory basis. The proceedings were subsequently resolved by agreement except as to costs; the decision considers the principles that should be applied in such circumstances and provides some useful guidance on that issue. The agreed orders discharged the receivers and the application was dismissed without a trial on the merits. Justice Hill rejected a submission by the respondents that they had "won", expressly noting at 199.2 that it was not a case in which there had been a contest as to whether the ASC should be permitted to withdraw its application.
Each of the other decisions referred to by McHugh J was an instance of the application or consideration of the principles stated by Hill J in Australian Securities Commission v Aust-Home Investments. Each was a case for judicial review or injunctive relief in which the further prosecution of the applicant's claim had been rendered futile as a result of subsequent dealings between the parties or some subsequent decision or action on the part of the relevant decision-maker or other party. None was a case in which a claim for damages was simply abandoned.
I am not persuaded that the present case falls into the category of those decisions.
The plaintiff is an experienced defamation practitioner. It may be assumed that he did not commence the proceedings for the collateral purpose of using the court's interlocutory processes to persuade a stranger to the litigation to take a step it would not otherwise have taken. He commenced an action seeking final injunctive relief and an award of damages against Dr Ghosh. That action has not become futile in the relevant sense. Rather, Mr Goldsmith has decided (for what appear to be sensible commercial reasons) to discontinue it. In the circumstances, it is not enough to point to reasonableness on the part of Mr Goldsmith as a basis for leaving Dr Ghosh to bear her own costs of the action Mr Goldsmith chose to commence against her. Mr Goldsmith is unable to point to any unreasonable conduct (in the sense comprehended in the cases referred to above) on the part of Dr Ghosh. All Dr Ghosh has done is to deny publication; that issue has not been determined on the merits. I am not persuaded that I should make an order other than the default order under the UCPR in the circumstances of the present case.
As to the quantification of Dr Ghosh's costs, she relied upon an affidavit annexing a fee note from her counsel, Mr Rasmussen. On one occasion, Mr Soon appeared for Dr Ghosh and it was Mr Soon who appeared on the present application.
Mr Goldsmith accepted that it would be appropriate to quantify those costs in a specified gross sum but submitted that the amount claimed was excessive. The total amount invoiced by Mr Rasmussen was $20,475. In his customary helpful and observant way, Mr Soon noted that one of the items on Mr Rasmussen's invoice (the sum of $450 for one hour described as "appearance to take directions before McCallum J") related to an occasion on which it was in fact Mr Soon, not Mr Rasmussen, who appeared before me in the Defamation List. It is difficult to understand how such an error could have occurred.
Some of the items are described in brief terms which render it impossible to assess the reasonableness of the amount charged but which appear generous. For example, on 25 June 2015, the item charged was "settle defence. Advise". The amount charged was $1350 for three hours. The content of the defence is set out above; it did no more than to deny the elements of the cause of action and plead a short matter in mitigation. I should note, however, that I have not heard from Mr Rasmussen on those issues. It should also be observed that he evidently accepted instructions on a direct access basis. In that circumstance, he is likely to have spent more time on the tasks identified than would a barrister asked to settle a document drafted by a solicitor.
Some limited assistance may be gleaned in this context from the sum of $7,000 charged by Mr Goldsmith for the preparation, filing and serving of the statement of claim in the proceedings in which he acted for Dr Ghosh (including an allowance of $505 for filing fees). That estimate took the proceedings only to the stage of serving the pleadings with no allowance for appearances; conversely Mr Rasmussen's fees included his appearance on the contested injunction application. Mr Goldsmith noted that, on that occasion, I made no order as to costs, suggesting that the fees relating to that hearing should be carved out of the gross sum. Whilst I accept that I should have regard to the costs outcome on that occasion, I do not think it necessarily follows that no allowance should be made for those costs, which have an obvious overlap with the preparation of the proceedings for final hearing.
In determining an appropriate gross sum, I consider it appropriate to have regards to the objects of the Defamation Act 2005 (NSW) and the general principles applicable to case management specified in ss 56 to 60 of the Civil Procedure Act. I do not mean to suggest that Mr Rasmussen did not in fact spend the time charged on the proceedings but only that, in a claim of this nature, the time spent on individual interlocutory steps should be as lean as the nature of the case permits. That should inform the gross sum allowed.
Doing the best I can, in my view an appropriate award by way of gross sum is $15,000.
For those reasons, I make the following order:
1. That the plaintiff have leave to discontinue the proceedings on terms that he pays the defendant's costs specified as the gross sum of $15,000.
[4]
ADDENDUM
As noted at [28] above, Mr Rasmussen did not appear on the present application and so did not have the opportunity to explain the error in his fee note referred to at [27]. Since the publication of these reasons, Mr Rasmussen has provided a proper and acceptable explanation for that error.
[5]
Amendments
01 December 2015 - Addendum added
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Decision last updated: 01 December 2015