Procedure - Supreme Court Procedure - Tasmania - Procedure under rules of court - Pleadings - Application to strike out part of defence - Plea of immunity based on implied constitutional freedom of speech - Answer to claim for aggravated and exemplary damages in action for trespass - Whether plea frivolous or vexatious.

Procedure - Supreme Court Procedure - Tasmania - Procedure under rules of court - Pleadings - Counterclaim - Application to strike out or exclude counterclaim from action - Action for damages in trespass - Counterclaim for injunctive relief based on Trade Practice Act 1974 (Cth), s52 - Whether inconvenient - Relevant factors - Supreme Court Rules 2000, r198(1).

Judgment Number: [2009] TASSC 45

GUNNS LIMITED (ACN 009 478 148) TASMANIAN PULP & FOREST HOLDINGS LTD (ACN 009 488 733) GUNNS FOREST PRODUCTS PTY LTD (ACN 004 208 904) v SYED ALISHAH, WARRICK JORDAN, PAUL ERIC KIMBELL, NATHAN HARRIS, LEE ANTHONY SARGENT, BRETT THOMPSON, NISHANT ALLAN DANT, URSULA DUBIEL MAJEWSKI, CHRISTOPHER JOSEPH MILLS, BENJAMIN HUW SHARP, MIRANDA KYMALEE GIBSON, WILLIAM HUGH MOONEY, RACHEL ALISON MARGARET LEWANDOWSKY

1 The plaintiffs collectively operate a woodchip processing and export business. The second and third plaintiffs are wholly owned subsidiaries of the first plaintiff. The defendants are individuals who are self-described active and vocal participants in the public debate concerning forestry operations and associated biodiversity, conservation and environmental protection issues and, in particular, woodchipping in Tasmania.

2 The plaintiffs' action relates to protest activities carried out by the defendants on land occupied by the plaintiffs on 16 December 2008. The action is one for damages in trespass.

3 The plaintiffs' statement of claim is dated 23 December 2008. The defendants filed and served a joint defence to the statement of claim and a counterclaim was made by all defendants, with the exception of the first and twelfth defendants. That pleading was dated 3 February 2009. The plaintiffs applied to strike out the substantive part of the defence, and to strike out the counterclaim, or alternatively have the counterclaim disposed of separately, or excluded, from the action. The plaintiffs' application came before me on 25 February 2009 and I reserved my decision after hearing argument.

4 On 3 March 2009, the defendants served a defence and amended counterclaim dated 2 March 2009. The amendments to the counterclaim responded to basic pleading deficiencies which had been identified by the plaintiffs' counsel at the hearing on 25 February 2009. The amendment to the counterclaim was purportedly done pursuant to the Supreme Court Rules 2000, r429(b), which provides that a defendant who pleads a counterclaim may amend it once within 28 days after delivery of the original pleading, if a reply has not been delivered.

5 By further interlocutory application dated 10 March 2009, the plaintiffs applied to strike out the amended counterclaim as an abuse of process. Some differences arose between the parties as to the status of the amended counterclaim and the extent to which the plaintiffs' arguments made at the hearing should be applied to it.

6 At a directions hearing on 22 April 2009, the defendants accepted that the delivery of the amended counterclaim pursuant to r429, meant that the original counterclaim was of no effect. The plaintiffs confirmed that the application in respect of the amended counterclaim was no longer directed to the identified, or any other, pleading deficiencies. I was told that the argument put as to severance was maintained. As a consequence, the plaintiffs' interlocutory application of 10 March 2009, was adjourned sine die, and I agreed to deal with the parties' arguments on that basis as at 22 April 2009.

7 It is alleged in par4 that on 16 December 2008 at approximately 4.50am, each of the defendants, "(a) acting alone; (b) acting together; or (c) acting in various combinations with each other ... entered the land without the consent of any or all of the Plaintiffs and therein variously;

(d) affixed themselves by means of chains, locks or other devices to plant and equipment owned and/or operated by the Plaintiffs on the land;

(e) climbed upon and purported to occupy plant and equipment owner or operated by the Plaintiffs;

(f) erected protest banners styled 'Gunns Limited Climate Criminal' and 'Old Growth Forests'; and/or

(g) remained on the land."

8 It is further alleged that six of the defendants left the land at approximately 7.30am at the request of police officers, whilst seven of the defendants "refused to leave the land and continued to affix themselves by means of chains, locks and other devices to plant and equipment owned or operated by the Plaintiffs situate on the land". It is then further alleged that each of those seven "were required to be physically cut away and/or extracted from the plant and equipment to which they had affixed themselves" by police officers and were subsequently arrested and removed from the land at approximately 11.30am.

"9 As a consequence of the actions of each of the Defendants, alone or in combination;

(a) the business was unable to be conducted by the Plaintiffs between approximately 4.50 am and 11.30 am on 16 December 2008;

(b) approximately 40 independent contractors were unable to fulfil their contractual duties to deliver logs to the land; and

(c) as a consequence the Plaintiffs suffered loss, damage and expense, particulars of which will be subsequently supplied.

10 The actions of the Defendants as pleaded in this statement of claim were calculated and/or likely to;

(a) disrupt the business operations of the Plaintiffs conducted upon the land;

(b) disrupt the lawful business operations of contractors engaged to deliver logs to the Plaintiffs for the purposes of the conduct of the business on the land;

(c) publicize the political beliefs of the Defendants and to thereby gain media publicity for each of them and/or for the beliefs which they hold; and

(d) require members of the Tasmania Police and/or officers of Workplace Standards Tasmania to spend time, trouble and expense in physically removing the Defendants from the land.

11 In respect of each of the matters pleaded at paragraph 10, the actions of each of the Defendants as pleaded in this statement of claim did have each of the consequences pleaded in that paragraph.

(b) aggravated and/or exemplary damages for trespass;

(c) an injunction restraining each of the Defendants, as individuals or in combination with any of the other Defendants or with any other person from entering the land or any other land owned or occupied by any of the Plaintiffs in Tasmania without the express written permission of the Plaintiffs first had and obtained;

10 Save to the extent of an admission that at all material times Gunns Limited is and was a corporation, each of the 11 paragraphs of the statement of claim is denied in pars1 to 11 of the defence. The substantive part of par12 of the defence reads as follows:

"In answer to the whole of the Plaintiffs' Claims, including damages, insofar as and to the extent that it may be found that any of the 1st - 13th defendants ('the defendants') in any of their capacities pleaded at paragraph 4(a), (b) or (c) of the Statement of Claim, entered the land referred to in paragraph 2 of the Statement of Claim, without the consent, and in doing so committed the acts pleaded at paragraph 4(d) - (g) inclusive of the Statement of Claim (all of which is not admitted and is specifically denied), then those acts were engaged in by the defendants in the course of communicating information about government and political matters and was reasonable in all the circumstances by reason of which the conduct was immune from action and/or privileged."

11 Particulars of the government and political matters are provided in four subparagraphs. The particulars refer to:

• the conduct of the defendants referred to in par4 of the statement of claim as being "a protest against the activity of the plaintiffs in the conduct of their forest activities in Tasmania";

•

the plaintiffs' forestry operations as having "a significant impact on the biodiversity contained within the old growth and/or high conservation forests from which the plaintiffs source wood for the conduct of their woodchipping operations, and contribut[ing] to climate change";

•

"forestry operations and associated biodiversity conservation and environment protection issues and, in particular, woodchipping in Tasmania and climate change" as being "the subject of constant public debate within the public sphere and will remain issues at both federal and state government elections" [sic];

•

the defendants, as having been and continuing to be, "active and vocal participants in the said debate concerning forestry and woodchipping, and climate change in Tasmania, [and] conveying their opinions and advice on these subjects to the public and to the elected members of state and federal Parliament" [sic].

12 The plaintiffs' application seeks an order that par12 "... be struck out on one or more of the following grounds:

(i) pursuant to rule 259 if it fails to disclose a reasonable answer or defence

(ii) pursuant to rule 258(1) upon the grounds that it will tend to prejudice or delay the fair trial of this proceedings;

(iii) upon the grounds that it does not comply with rule 227; and/or

(iv) upon the grounds that if fails to plead with precision; specificity and clarity that the defence intended to be relied upon by the defendants" [sic].

13 I will set out the relevant parts of the Supreme Court Rules 2000 referred to:

•

r259 provides that a pleading may be struck out if it (inter alia) does not disclose a reasonable answer or shows that the defence is frivolous or vexatious;

•

r258(1) enables a pleading to be struck out if it may tend to prejudice or delay the fair trial of a proceedings;

•

r227(1) states that a pleading is to be as brief as the nature of the case allows and is to contain only a statement of all the material facts in summary form on which the party relies. Rule 227(3) provides that every pleading is to be expressed so as to give reasonably explicit notice to any other party of all grounds of action or all defences on which the party pleading intends to rely at the trial.

14 The plaintiffs' arguments as to par12 of the defence was primarily directed to the first ground; that of whether a reasonable answer had been shown. On its face, it is clear that in par12, the defendants raise in answer to the whole of the plaintiffs' claims, including damages, an immunity from suit based on the implied constitutional freedom of speech. This implied freedom is that as discussed in Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520 at 559 - 562, Coleman v Power [2004] HCA 39; (2004) 220 CLR 1 and Mulholland v Australian Electoral Commission [2004] HCA 41; (2004) 220 CLR 181. Plainly, par12 of the defence is worded so that the immunity applies to all of the plaintiffs' pleaded causes of action and to their entitlement to the damages claimed.

15 The plaintiffs submit that the implied constitutional freedom is a freedom of communication and not a freedom to communicate, and that the implied freedom does not create personal rights. In particular, the implied freedom does not create a right to trespass for the purposes of communication on a political matter. The plaintiffs rely on Levy v State of Victoria (1997) 189 CLR 579 per McHugh J at 622, 625 - 626, John Fairfax Publications Pty Ltd v Ryde Local Court [2005] NSWCA 101; (2005) 62 NSWLR 512 per Spigelman CJ at 532 [96], Mullholland v Australian Electoral Commission (above) per Callinan J at 223 - 224 [107], Gummow and Hayne JJ at 245 [180], and Hayne J at 290 [337], and Meyerhoff v Darwin City Council [2005] NTCA 8 at [16] - [17].

16 These cases indeed establish the correctness of the proposition put by the plaintiffs; see also Brown v Classification Review Board (1998) 154 ALR 67 per French J at 79. It is correct to say "that the constitutional immunity does not authorise an individual to trespass upon the property of another"; Meyerhoff v Darwin City Council (above) at [17], [27]. Accordingly, the defendants face very substantial difficulties in maintaining the implied constitutional freedom of communication as a defence to an action for damages in trespass, at least to the extent that it is asserted the immunity affords a right to trespass upon the plaintiffs' property. However, notwithstanding the unequivocal introductory words to par12, the defendants say that the immunity is intended to be raised only insofar as it relates to the plaintiffs' claim for aggravated and exemplary damages. The defendants' counsel specifically disavowed any reliance on the implied freedom of communication as an answer to the cause of action in trespass in itself; that is, the defendants did not argue that the implied freedom of communication gave them a right to trespass on the plaintiffs' property.

17 In explanation for the wording of par12, the defendants pointed to the way in which the plaintiffs had pleaded their case, and effectively said that they had been forced to draft the plea as they had, because of the way in which pars4 and 10 of the statement of claim had been framed. Counsel observed that the plea embodied in par12 did not seek to justify the trespass as such, but sought to traverse "additional matters" which arose. Those additional matters pleaded in the statement of claim related to the conduct of the defendants after the initial trespass on the property had occurred, and were essentially those matters pleaded in par4(d), (e) and (f) of the statement of claim. The defendants say that because of the wording of pars10 and 11 of the statement of claim, it is those actions which are included in the overall conduct which forms the basis for aggravated and exemplary damages. (As an aside, senior counsel for the defendants pointed out that it was unclear as to whether by par4(e), a claim for trespass to chattels was being maintained; one in respect of which there is doubt as to its validity being a mere trespass without consequential damage; see Balkin and Davis, Law of Torts, 4th ed at 93 - 94.)

18 As to the points made, I observe that the defendants have made no application to strike out any parts of the statement of claim or for the provision of further particulars. It is true to say that the statement of claim does not plead a claim for aggravated and exemplary damages in what seems to be the customary manner. A plea that the conduct alleged on the part of a defendant was "conscious wrongdoing in contumelious disregard of the plaintiff's rights" is common where exemplary damages are claimed. The phrase was adopted by Knox CJ in Whitfield v De Laurent & Co Ltd (1920) 20 CLR 71 at 77; see Gray v Motor Accident Commission (1998) 196 CLR 1 at 7, 9. Aggravated damages are awarded when the harm done to a plaintiff by a wrongful act is aggravated by the manner in which the act was done. Exemplary damages are intended to punish the defendant and the focus of the inquiry is on the wrongdoer, not upon the position of the party who was wronged; Gray v Motor Accident Commission (above) at 4 - 7.

19 As shown above, pars10 and 11 appear in the statement of claim under the heading "Aggravated and Exemplary Damages". I make no comment as to the merits of these claims but it would seem that the matters pleaded in par10(a) and (b) can be reasonably taken as assertions of matters said to aggravate the wrongful act of trespass. Conceivably, the matters pleaded in par10(c) focus on the wrongdoer and hence, I think, can be reasonably taken as a matter relevant to exemplary damages.

20 In any event, the basic points which the defendants make are that:

•

conduct other than mere trespass to land is pleaded in the statement of claim;

•

that conduct includes communication in the form of protest activity;

•

although the claim for aggravated and exemplary damages is not pleaded in the usual manner, the statement of claim pleads such protest activity as the conduct forming the basis of the claim for aggravated and exemplary damages;

•

the intention of the defendants' pleading is to challenge the plaintiffs' entitlement to aggravated and exemplary damages which may arise from that protest activity;

•

the defendants claim immunity from any liability for such damages, based on the implied freedom of communication.

21 So explained, the defendants' position is that the laws which enable the award of aggravated and exemplary damages are laws which, in the circumstances, are shown to infringe the implied freedom of communication. Those laws are not ones the direct purpose of which is to restrict communication on government and political matters, but are ones which have that incidental effect. The test for whether such a law infringes the constitutional implication, as formulated in Lange v ABC (above) at 567 and modified in Coleman v Power (above), is as follows:

•

does the law effectively burden freedom of communication above government or political matters either in its terms, operation or effect?

•

if so, is the law reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the maintenance of the system of government prescribed by the Constitution?

Where it is a rule of the common law which fails that test, "the common law rule must yield to the constitutional norm", and the law is developed accordingly; Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1 per Gaudron, McHugh and Gummow JJ at 27 [66].

22 For present purposes, it can be assumed that the defendants' conduct as alleged in par4 (d)-(g) of the statement of claim occurred subsequent to, and in the course of, the infringement of the plaintiffs' property rights. It is that conduct which is relied on by the plaintiffs to found the claim for aggravated or exemplary damages. It can also be assumed that the law of damages operates so that it may require the defendants to pay aggravated or exemplary damages for that conduct. On those bases, the defendants would need to demonstrate that the conduct amounted to communications on government and political matters. They would also need to show that, to the extent the law of damages would permit such an award (and given that a liability for that award would follow from the establishment of a plaintiff's cause of action), the law is one which unnecessarily and unreasonably impairs the freedom to make communications of that nature; see Lange v ABC (above) at 568.

23 In the end, the plaintiffs did not specifically argue that this answer to the claim for aggravated and exemplary damages was not a "reasonable answer" in pleading terms, nor so obviously untenable that it could not possibly succeed, that it should be struck out on either of those bases. Irrespective of what tentative view I may have as to the ultimate success of the defendants' plea, I think that I should be slow to do so. Summary dismissal is a step which should only be taken if the case is "very clear"; Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 per Dixon J at 91, General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 per Barwick CJ at 128 - 130 and Cubillo v Commonwealth [1999] FCA 518; (1999) 89 FCR 528 at 549 - 551. Frivolous and vexatious claims are ones which cannot possibly succeed; Pridmore v Magenta Nominees Pty Ltd [1999] FCA 152; (1999) 161 ALR 458 at 462-63. The range of communications protected by the immunity is not defined; Brown v Classification Review Board (above) per French J at 79. The immunity may include non-verbal communications; Levy v State of Victoria (above) per Brennan CJ at 595, Toohey and Gummow JJ at 613, McHugh J at 622-23 and Kirby J at 638. Further, to the extent that the point is a novel one, caution must be exercised not to stifle the development of the law by summarily rejecting a claim; Bridgetown/Greenbushes Friends of the Forest Inc v Executive Director of Conservation and Land Management (1997) 18 WAR 126 per Templeman J at 189; ENT Ltd v McVeigh (1996) 6 Tas R 202 at 213 - 214. For those reasons, I am not persuaded that the defendants should be denied the opportunity to plead the immunity in the way now identified.

24 The result of all of this is as follows. In my view, the present terms of par12 dictate that it be struck out, but leave should be granted to file and serve an amended defence pleading the immunity arising from the implied freedom of communication as an answer to the plaintiffs' claims for aggravated and exemplary damages. In relation to striking out par12, as presently drafted it raises the implied freedom as an "answer to the whole of the Plaintiffs' Claims, including damages ...". That pleading is said to be not what was intended, and accordingly it is inaccurate and misleading. Whilst there are some unusual features about the way in which the statement of claim is drafted, I do not accept that, because of the form of the pleading to which it responds, it was necessary to plead par12 as it is. I take the view that because of the function of particulars, it should be the whole of the paragraph which is struck out, rather than striking out the substantive part, leaving the particulars in place. I am conscious that the particulars provided under par12 were provided in relation to government and political matters about which the defendants say they were communicating when engaged in doing the acts alleged in par4(d) - (g) of the statement of claim. No doubt a re-pleaded defence will again raise the immunity in reliance on the same communications, but I think striking out the whole of the paragraph is a more orderly way of going about things.

25 The plaintiffs submit that in any event, irrespective of the freedom of communication point, par12 should be struck out as failing to comply with basic rules of pleading. They argue that there is little by way of material facts upon which the claimed immunity is based, and say further that there are a number of other substantial pleading deficiencies apparent in the paragraph; mostly in the particulars of government and political matters provided. Because of the view I have taken as to the fate of par12, there is strictly no need for me to consider and determine this alternative submission. However, in the circumstances it is probably appropriate that I say something about the criticisms which were made.

26 It is well established that the functions of particulars are to inform the other party of the nature of the case which it has to meet and so to prevent that party from being taken by surprise at the trial, and enable that party to know what evidence and arguments with which they should be armed. They also serve to limit the generality of the pleadings and to limit and define the questions to be tried and as to which discovery may be required. The adequacy of a pleading "must be assessed by reference to its function in the scheme of litigation, having regard to the type of proceeding in which it is delivered and the nature of the dispute with which it is concerned. Each case must be looked at in the light of its own subject-matter and circumstances"; John Holland Construction & Engineering Pty Ltd v Kvaerner R J Brown Pty Ltd (1996) 8 VR 681 at 691 [19].

27 In many cases where a plea of the implied freedom of communication is raised, the law or the legal control in respect of which the immunity is said to arise will be self-evident from the claim to which the plea of immunity responds. That will be particularly so where the communication is the actual subject of the cause of action. A defamation case is the obvious example and Lange v ABC (above) demonstrates the point. If there be a case in which it is not clearly self-evident, such as where there are multiple causes of action or different aspects of the one claim, there would be a need to identify the law which it is asserted unreasonably burdens or restricts the implied freedom. It seems to me that the way in which the freedom is said to be burdened or restricted would be a matter for argument and comment, although I suppose that it may be necessary in some cases of a law having an indirect restrictive effect, to identify the matters relied on; see Associated Stevedores Pty Ltd v Tasmania (1961) 35 ALJR 71, in which Fullagar J suggested that a claim in respect of a contravention of s92 of the Constitution should "allege with appropriate particulars that the effect of [the relevant provision] is to interfere with the freedom of ...trade and commerce".

28 Similarly, the acts and the substance of the communications themselves may be plainly evident from the claim in respect of which the immunity is raised; if not, they should be specified. No doubt it is generally appropriate to provide particulars of the government and political matters about which it is said the communications were made. Those particulars may or may not, on their face, bring the party concerned within the immunity, but they will be sufficient if they give proper notice of the nature of what is said to be the relevant matter or matters. With all of these things identified, I think that the test as to the validity of the law or legal control can be argued and applied without more; see for example the discussion as to the law of defamation in Lange v ABC (above) at 568 - 575.

29 The counterclaim dated 2 March 2009 pleads (as did its predecessor) a cause of action under the Trade Practices Act 1974 (Cth), s52, against the first plaintiff and a named individual, Mr Frame (the second defendant to the counterclaim). It alleges that Gunns Ltd conducts forestry operations in Tasmania, and was, and continues to be, the proponent of a pulp mill, proposed to be constructed in the Tamar Valley in Tasmania. It is further alleged that if constructed the pulp mill would require 3.2 to 4 million green tonnes of woodchips.

30 Two particular representations are alleged. They are that:

•

on or about 11 May 2007, in a document entitled "Bell Bay Pulp Mill Project - The Facts", Gunns Limited represented that no wood from old growth forests would be used to supply the proposed pulp mill;

•

on 12 January 2009, Gunns Limited by its servant or agent Mr Frame, represented in the Age on-line publication that Gunns Limited would not "ever use old growth logs" in the pulp mill.

31 The common and ordinary meaning of the term "old growth trees" is trees which are more than 120 years old, whilst "old growth forest" means forest which contained old growth trees. It is alleged that properly construed, the first representation meant that no part of the wood requirement would be sourced from forests containing trees more than 120 years old, and that the second representation meant that no part of the wood requirement would be sourced from trees more than 120 years old or forest containing such trees.

•

the first and second representations were made in trade and commerce;

•

the wood requirement for the pulp mill would be met in part from trees from old growth forests and old growth trees;

•

the first and second representations were misleading and deceptive, or likely to mislead (particulars of which were supplied);

•

both representations were made in respect of future matters and without any reasonable grounds for making them;

•

Mr Frame's liability arises by way of the Trade Practices Act, s75B.

1">33 It is further pleaded that Gunns Ltd "has publicly made representations identical or similar to the first representation and/or the second representation on numerous occasions". There follows the identification of 27 instances of alleged publication, including postings on its website, written presentations to community leaders, newspaper advertisements, media releases, announcements to the Australian Stock Exchange, and various other publications.

34 The defendants seek orders in the form of permanent injunctive relief restraining the two defendants to the counterclaim from representing that no wood from old growth forests will be used to supply the proposed pulp mill, and from representing that old growth logs will not ever be used in the proposed pulp mill.

35 The Supreme Court Rules, r192, provides that (subject to subrules which are not presently relevant) a defendant to an action may claim any relief against a plaintiff by counterclaim in that action, and may plead any right or claim by way of set-off against the claim of a plaintiff. Rule 198 provides as follows:

"198 Inconvenient counterclaims and cross-applications

(1) On the application of a party to a counterclaim or cross-application, the Court or a judge may order that the counterclaim or cross-application be -

(a) struck out or disposed of separately if it cannot be conveniently disposed of in the pending action; or

(b) excluded from the proceeding if it ought to be disposed of in a separate action or application.

(2) In either case referred to in subrule (1), the Court or judge may make any appropriate consequential order."

36 The relevant part of the plaintiffs' application seeks orders that the counterclaim:

"(i) be struck out upon the grounds that it cannot be conveniently disposed of in the plaintiffs' action; or

(ii) be excluded from the plaintiffs' claims and disposed of in a separate action, if it is to be pursued."

37 Counsel for the plaintiffs submitted that this rule provided for a general discretion to sever an inconvenient counterclaim. I must say that given the two limbs of r198(1), the nature and extent of the operation of the rule as a whole is a little obscure. If a counterclaim cannot be conveniently disposed of in an action, it may be struck out or an order made that it be disposed of separately. If the counterclaim ought to be disposed of in a separate action, it may be excluded from the proceeding. There are thus two options in one case, and one in the other. The second option in the first case, and what may be done in the second case, appear to be very similar if not identical, in their effect.

38 The predecessor to r198(1)(a) appears to be the Rules of the Supreme Court 1965, O21, r2(2), whilst that to r198(1)(b) seems to be RSC, O21, r17. Order 21, r2(1), was in not dissimilar terms to r192(1) and (3). It enabled a defendant to plead "by way of set-off, or set up by way of a counterclaim, against the claim of the plaintiff, ... any right or claim ... and such set-off or counter-claim shall have the same effect as a cross-action ...". The purpose of such a rule was to make it clear that whether or not a cross-demand was a set-off and gave rise to a defence or was an independent claim, it could be maintained in the same action; McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50 at 58. Order 21, r2(2), enabled the court to strike out a defence by way of set-off or counterclaim if, in the opinion of the court, such set-off or counterclaim could not be conveniently disposed of in the pending action. RSC, O27, r17, simply provided that where a defendant set up a counterclaim, and if it were contended that the claim thereby raised ought not to be disposed of by way of counterclaim but in an independent action, application may be made for the counterclaim to be excluded and the Court "may make such order as shall be just." As will be seen, these two separate old rules appear to cover much common ground and they have been merged into r198(1), although the distinction in language has been maintained.

39 For the purposes of disposing of this application however, I do not need to resolve any question about the operation of r198(1) and the relationship between the two limbs. It seemed that the parties' submissions were made more with an eye to r198(1)(b). The arguments proceeded on the basis of a "severance", and assumed that the counterclaim, if severed, would maintain life as an independent action, but to be pursued separately. As it turns out, the heading to the rule, "Inconvenient counterclaims", is a fair description of the object of its operation, and one in accordance with counsel's submission. Similar rules in other jurisdictions have been considered in a number of cases. In Findall v O'Connell (1885) 52 LC 533, it was argued that the counterclaim had no relation to the relief sought in the claim, and to allow it would embarrass the trial of the action in the sense of delaying it. At 539, Bacon VC said that it was absolutely necessary that the court should have control over the admission of counterclaims "for otherwise it would be putting into the hands of a defendant in an action the power of embarrassing the plaintiff to a very great extent, however clear the case for the plaintiff might be". The counterclaim was struck out as bearing no relation to the claim.

40 Similarly, in Gray v Webb (1882) 21 Ch D 802 at 805, Kay J referred to a number of rules, essentially being the equivalents of rr192, 198 and 258, and concluded that whilst it was expedient to give a wide interpretation to the equivalent of r192, "... by that and the other rules power is reserved to the Court to strike out any counterclaim which may be inconvenient, for example, such counterclaim as might cause an undue delay in the trial of the action.". See also O'Dea v Scott (1912) 14 WALR 198. In Gordon v Allied Meridian Pty Ltd (No 2) [1999] NSWSC 565, Young J said, citing Gray v Webb (above), that the cases on the New South Wales Rules ..."and the corresponding old Rules and the English Rules are that essentially whether a cross-claim should be allowed or the claimant left to pursue a separate action is one of general convenience." It seems that the issue of general inconvenience largely involves considerations of the relationship of the claims, delay to trial, time involved at trial, and cost.

•

the counterclaim would obfuscate, delay and complicate what was a simple action for damages for trespass to land; it would "exponentially escalate the length, cost and complexity" of the action;

•

the issues in the claim are significantly different from those in the counterclaim;

•

the defendants would suffer no prejudice if the counterclaim were litigated separately, and none had been claimed.

42 The defendants respond by saying that the plaintiffs' case is as simple as they would contend. They point to the complicating factor of the number of defendants and that each is said to have acted alone, together, or in various combinations. (I assume the point was that this raises the issues of whether any or all of the defendants are joint tortfeasors or concurrent tortfeasors, and whether there are several tortfeasors causing different damage.) It is said that this would lead to complications in the assessment process. Further, the damages sought by the plaintiffs also do not make this a simple case in trespass. It would seem that damages will be claimed for loss of, or deferred, opportunity for profit. Principally though, the defendants say that in the absence of a defence to the counterclaim, it is premature to consider whether or not the counterclaim should be severed. It was suggested that issues may be raised in that defence which suggest a greater relationship between the claim and the counterclaim. It was suggested, for instance, that the plaintiffs may plead the implied constitutional freedom of communication in answer to the pleaded representations.

43 The view I have reached is that for the following reasons, the counterclaim cannot be conveniently disposed of in the present action, or in any event ought be disposed of in a separate action, and ought be excluded from the proceeding. In short, there is little, if anything in common, in terms of factual and legal issues between the claim and the counterclaim. There is then little, if anything to suggest that it is convenient the two claims be dealt with together, and a great deal to suggest it will be highly inconvenient. Dealing with them in the one action will lead to significant procedural difficulties at trial in terms of splitting cases and associated issues. The nature and scope of the issues raised in the counterclaim are, in my view, likely to unnecessarily prolong both the pre-trial period and the length of the trial.

•

there is a broad theme common to the counterclaim, but no common legal or factual issues - (I leave aside for the moment the argument of what the defence to the counterclaim might bring);

•

the plaintiffs' case is made out if one or more of the defendants are proven to have trespassed on the property alleged;

•

who of the defendants caused what consequential damage in terms of loss of profits or loss of opportunity may have some complications in terms of discovery and proof of trial, but that exercise has no relationship to any issue in the counterclaim;

•

the issue of the forestry activities and other operations of the plaintiffs (including the use of old growth tress and the logging of old growth forests) is relevant only insofar as it goes to whether the defendants were engaged in communication about a government and political matter.

•

one of the defendants is not a claimant, whilst two of the plaintiffs are not defendants to the counterclaim, and there is an additional party who is;

•

it is not, wholly or in part, a set-off against the plaintiffs' claims;

•

the elements of a cause of action arising under the Trade Practices Act, s52, and giving rise to relief under s87, need to be established;

•

in particular, that includes proof that the two representations and one or more of the 27 similar representations pleaded (which relate to the use of old growth trees and the logging of old growth forests), were misleading and deceptive, or likely to mislead or deceive;

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the issue of the reasonable basis or otherwise for the making of the representations will need to be explored;

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discovery is likely to be an extensive and time-consuming exercise.

46 As to whether it is premature to make such a determination, I do not think that there are any realistic prospects of the defence to the counterclaim raising any issues which would significantly alter in any way the outcome of the comparative exercise as between claim and counterclaim. If I am wrong about that, and it ultimately becomes convenient to hear the two actions together, and is timely to do so after the completion of pre-trial matters, application to that effect can be made.

47 Accordingly, I propose making the following orders:

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paragraph 12 of the defendants' defence dated 2 March 2009 be struck out;

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the defendants have leave to file and serve, within 14 days, an amended defence pleading the immunity arising from the implied freedom of communication as an answer to the plaintiffs' claims for aggravated and exemplary damages;

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the counterclaim of the 2nd - 11th and 13th defendants be excluded from the proceeding and disposed of as a separate action;

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those proceedings be listed before the Associate Judge for directions.