Graham v Powell

Judgment 1HER HONOUR: These are proceedings for defamation commenced by Mr Richard Graham against Mr Allan Powell arising out of a series of items posted on websites allegedly controlled or operated by Mr Powell. 2The plaintiff is represented by an experienced and able solicitor and an experienced and able barrister who is one of the regular practitioners in the specialist defamation list. The defendant is unrepresented. 3On 2 September 2013 I acceded to an application by the plaintiff to have the defence, which had evidently been drawn by Mr Powell himself without the benefit of legal advice, struck out. The order I made was that the defence be struck out with leave to re-plead. I directed the defendant to file and serve any amended defence within 28 days. 4On 30 September 2013 the defendant served an unsealed amended defence which was followed up in verified form by facsimile on 1 October 2013. That document was filed on 2 October 2013. Although it was not served in sealed form on the plaintiff, no point is taken in that respect. 5The plaintiff's solicitors responded to the amended defence with a carefully drawn letter pointing out a number of difficulties that remained with the form of the pleading. The letter contended that the amended defence is embarrassing in form and is liable to be struck out. Specific alleged defects in the form of the pleading were spelled out with helpful clarity. 6Mr Powell responded with a short email thanking the plaintiffs for their attention to his "inadequate pleadings" and stating his intention to amend the defence "ASAP". The plaintiff subsequently consented to an order granting leave to the defendant to file and serve a further amended defence by 22 October 2013. The defendant did not avail himself of the indulgence afforded by that consent order. 7In the meantime the defendant informs me that he has, as a private informant, brought four criminal charges against the plaintiff arising out of the allegations the subject of the matters complained of. In those unhappy circumstances the defendant moves the Court by notice of motion filed 30 October 2013 for orders striking out the amended defence, entering default judgment against the defendant, including judgment for three permanent injunctions sought in the statement of claim, and for damages to be assessed, together with orders for the costs of the proceedings which an affidavit sworn in support of the motion reveals will be substantial. The affidavit states that costs exceed a hundred thousand dollars for the solicitor's professional costs if assessed on an indemnity basis, and a further $26,000 in disbursements, primarily being counsel's fees. 8When the hearing of the motion was called this morning, Mr Powell made what may be construed as an oral application for a stay of the proceedings on the strength of the four private criminal prosecutions to which I have referred. I recently had occasion to consider the principles applicable to determining whether a civil action should be stayed in the circumstance of concurrent criminal proceedings in Wolf v State of New South Wales [2013] NSWSC 1800. The principles governing an application for a stay are set out at [4] of that judgment as follows: The principles governing an application for a stay in such circumstances are conveniently summarised in the judgment of Wootton J in McMahon v Gould (1982) 7 ACLR 202 at 206. They relevantly include the following: (a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court (Rochfort v John Fairfax & Sons Ltd at 19); (b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds (ibid); (c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with (Jefferson v Bhetcha at 905); (d) Neither an accused (ibid) nor the Crown (Rochfort v John Fairfax & Sons Ltd at 21) are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding; (e) The court's task is one of "the balancing of justice between the parties" (Jefferson Ltd v Bhetcha at 904), taking account of all relevant factors (ibidat 905); (f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (ibid at 905); .... 9I explained to Mr Powell, I hope in plainer language than appears in the passage set out above, what he would need to establish in order to persuade me to depart from the prima facie position that a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court. The only basis put forward by Mr Powell in support of a stay of this action, pending the determination of the private criminal proceedings commenced by him, was that the concurrent prosecution of all actions exposes him to an unmanageable workload. That is not in my view an adequate reason to depart from the usual position to which I have referred, noting that it has been acknowledged that it is a grave matter to interfere with a plaintiff's entitlement to have his action tried in the ordinary course. 10Accordingly, accepting the submissions put by the defendant as amounting to the making of an oral application for a stay of the proceedings, I reject that application. 11Turning to the relief sought in the plaintiff's notice of motion, the first order sought is that the amended defence be struck out. As already noted, the difficulties with the pleading are set out in a letter carefully drawn by the plaintiff's solicitor dated 2 October 2013 (annexure B to the affidavit of John Howard sworn 29 October 2013 in support of the motion). I have given careful consideration to the terms of that letter. It is not necessary to descend to the detail of the letter since, both in correspondence and during argument this morning, Mr Powell has, in effect, acknowledged the need further to amend the defence. It is enough to say that my consideration of the letter confirms that the amended defence is embarrassing and in my view is liable to be struck out in its entirety. 12However, a careful reading of the amended defence (in which it appears a truth defence is sought to be raised) causes me to have some apprehension as to the fairness of allowing the plaintiff to proceed to obtain default judgment for damages to be assessed at this stage of the proceedings. I accept that the defendant has already had two goes at pleading a defence and has, by his own choice, allowed a third opportunity to pass. 13What troubles me is that if one attends to the dense and sometimes difficult language of the defence, not with an eye to criticism but with an eye to assessing whether there may be some merit in the substance of the defence nestling within the verbiage of the pleading, and accepting that I cannot determine any issues of fact on an application such as the present, there is a risk in my view that to allow the plaintiff to proceed to obtain default judgment and an assessment of damages on all imputations at this stage of the proceedings may be regarded to be an overly draconian remedy in the face of the conduct of the defendant thus far. 14I accept that this conclusion visits a measure of unfairness on the plaintiff who has prosecuted his claim conscientiously and has been met with a measure of recalcitrance on the part of the defendant. In that circumstance I would indicate that today must very much be regarded as a "last chance" indulgence to the defendant. But I am persuaded that at this stage it would be premature to grant orders two and three of default judgment on both the damages sought and the permanent interlocutory relief sought by the plaintiff. 15The case is one of a number of difficult cases in this list where an unrepresented defendant may be seen to have some points which could be raised by way of defence if assessed by a duly qualified solicitor with appropriate specialist defamation experience, but who appears wholly to fail to appreciate the dire circumstances in which he is in. 16I have recently had occasion to consider the extent to which the Court should assist an unrepresented litigant in such circumstances (see Sporting Shooters Association v Judge [2013] NSWSC 1783). In my view it is appropriate in such a case where, on the one hand a plaintiff has been conscientious and patient in the prosecution of his action and on the other hand an unrepresented defendant is not refusing altogether to engage with the process but is unable by reason of lack of legal training to translate his layman's assessment of his defences into the proper pleading form, for the Court to notify the defendant of the provision in the rules for referral to a barrister or solicitor on the pro bono panel. 17I have this morning sought information from Mr Powell on the strength of which I am satisfied that, having regard to the matters set out in rule 7.36(2), it is in the interests of the administration of justice to refer him to the registrar for referral to a barrister or solicitor on the pro bono panel for legal assistance. The answers Mr Powell has given me to questions I have asked him persuade me that he does not have the means to retain a lawyer and that he has attempted to retain a lawyer on a commercial basis without success. The nature and complexity of the proceedings is such that he plainly requires assistance settling the terms of the defence. 18Having regard to the kinds of assistance for which a referral may be made, set out in rule 7.37 of the Uniform Civil Procedure Rules, in my view it would be appropriate to confine the referral to assistance in settling any further amended defence. That is the task which Mr Powell's inability to undertake is stalling the proceedings. 19The reason I consider it to be in the interests of the administration of justice to make that order should be clear from what I have already said but may be summarised in the proposition that, on the one hand, the form of the defence is forestalling the plaintiff's prosecution of his claim but, on the other hand, I am satisfied that there is some risk, since I am unable to assess the merit of any of the factual allegations set out in the existing defence, that it would be overly draconian to allow the plaintiff to proceed to default judgment at this stage. 20These cases always raise matters of difficulty in which some evaluative judgment has to be made, often on the strength of inadequate information. I would observe, however, that if the defendant does not by one means or another file a defence adequate to put the plaintiff on notice of the real issues sought to be raised by way of defence in this next iteration of the pleading there will surely be a proper basis for considering that the time has come for the plaintiff to move on order two in the notice of motion. 21Finally, Mr Richardson seeks an order that the defendant pay the plaintiff's costs of the motion heard today, and that those costs be assessed and payable forthwith. That the defendant should pay the plaintiff's costs of the motion is clear. The difficulty is in determining whether those costs should be assessed and payable forthwith. 22In addition, in written submissions, although not in the notice of motion, Mr Richardson has submitted that the costs should be assessed on an indemnity basis. As noted in Mr Richardson's submissions, although the usual position is that costs will be payable if ordered on an interlocutory application only at the conclusion of proceedings, and, further, the usual position is that costs are assessed on the ordinary basis, the rules permit a special costs order, and, in particular, permit the Court to order costs to be payable prior to the end of the proceedings. 23The relevant principles are set out in the decision of Fiduciary Ltd v Morningstar Research Pty Ltd [2002] NSWSC 432; (2002) 55 NSWLR 1 at 4-5, principles I recently applied in the matter of Dank v Cronulla-Sutherland District Rugby League Football Club (No 2) [2013] NSWSC 1531. 24So far as indemnity costs are concerned, the principal consideration is the existence of some unreasonable conduct out of the ordinary course of the experience of the Court in determining applications of the present kind. That is always a difficult assessment in the case of an unrepresented litigant. In my view, however, there is some evidence in the present action of a measure of what I might term recalcitrance on Mr Powell's part. I hesitate in choosing that as the term to describe his conduct since, to some extent, his actions have been informed by his own views of the way in which the litigation should proceed, and those views do not have the benefit of the analysis that might be brought to bear by a person with legal training. 25However, I am satisfied from the correspondence I have seen that to some extent Mr Powell has resisted engaging with the process of properly responding to careful correspondence put before him on behalf of the plaintiff. Most recently, in particular, he avoided the task of engaging with the matters raised in the October correspondence, resting on the fact that he had in the meantime commenced criminal proceedings against the plaintiff, which it appears he thought would defeat or at least stay the plaintiff's claim. Those circumstances in my assessment take the matter outside the ordinary case and I am satisfied that an award of indemnity costs is appropriate. 26As to whether the costs should be payable forthwith, the rule provides for a departure from the usual position. As stated in Morningstar Research, the proper approach to an exception of that kind is determined by the demands of justice. Relevant considerations include whether the costs order relates to a self-contained or detached part of the proceedings, the existence of any unreasonable conduct and the likely length of time which will pass before the proceedings are finally resolved. 27I have in one of the earlier decisions in which I have applied these principles expressed the view that pleadings arguments, particularly in the context of the specialised nature of this list, are not in themselves enough to warrant the characterisation of an argument as a self-contained or detached part of the proceedings. There is conduct which I have held is unreasonable, and it may be accepted that some time may pass before the proceedings resolve, although that is not clear having regard to the outstanding prospect of the plaintiff again moving for a default judgment. 28An additional consideration which causes me some concern is the prospect that an order for costs payable forthwith may be relied upon to stymie Mr Powell's defence of the proceedings. I have not found these competing compelling considerations easy to balance. On balance I do not think it is appropriate to allow the plaintiff to have the costs assessed and payable forthwith at this stage. That is an issue, however, which again may be revisited and may be more difficult for the defendant to resist, depending on the outcome of the next round. 29For those reasons, the orders are: (1)That the defendant's application for a stay of the plaintiff's action be rejected. (2)That the amended defence filed 2 October 2013 be struck out pursuant to rule 14.28 of the Uniform Civil Procedure Rules as having a tendency to cause prejudice, embarrassment or delay in the proceedings. (3)That prayer two in the plaintiff's notice of motion filed 30 October 2013 be stood over for further determination in light of any further amended defence filed by the defendant. (4)That the defendant pay the plaintiff's costs of the hearing today. Such costs to be assessed on an indemnity basis, but not to be assessed and payable forthwith. (5)That the defendant be referred to the Registrar for referral to a barrister or solicitor on the pro bono panel for legal assistance in the settling of any further amended defence.