The following procedural history of the pleadings demonstrates the degree of inaction resulting from the plaintiff's unsuccessful applications for a change of venue:
1. On 17 February 2016 the defamation proceedings were commenced by the filing of a Statement of Claim (the first pleading) in relation to the claim for defamation against all three defendants.
2. On 19 February 2016 the plaintiff filed an Amended Statement of Claim (the second pleading).
3. On 29 February 2016, I made the following orders:
(1) Plaintiff's ex parte Notice of Motion filed 26 February 2016 to change the return date for these proceedings granted; return date changed from Thursday 10 March 2016 to Thursday 31 March 2016 at 9:00am in the Defamation List.
(2) Plaintiff to notify defendants of the change of date by email by 5pm 1 March 2016.
1. The plaintiff commenced separate proceedings for injurious falsehood on 20 March 2016, but against Fairfax Media Publications Pty Ltd only.
2. On 21 March 2016, the day after filing the proceedings for injurious falsehood, the plaintiff filed a Notice of Motion to transfer both proceedings from the District Court to the Supreme Court.
3. On 27 March 2016, the plaintiff filed a Notice of Motion seeking leave to amend the Amended Statement of Claim in the defamation proceedings. However, no proposed Further Amended Statement of Claim was served.
4. On 31 March 2016, I made orders including that the plaintiff's Notice of Motion for leave to amend the Amended Statement of Claim be deferred pending the outcome of the plaintiff's application to transfer the proceedings to the Supreme Court. The orders made on 31 March were as follows:
(1) Note the plaintiff was contacted on her mobile telephone at 9:40am and, the phone gone to her message bank and the court will contact her again in 5 minutes.
(2) Proceedings 2016/51926 and 2016/86450 are to be case managed together and any application for the proceedings to be heard together may be determined by this Court or any other Court seized with jurisdiction in these proceedings.
(3) Note the plaintiff has been requested to send all correspondence to the solicitors for the defendants and to correspond with the court only in cases of prior direction or emergency, and to provide copies of that correspondence to the parties.
(4) Matter stood over to Thursday 28 April 2016 for further directions in the Defamation List, in the event that these proceedings are not transferred to the Supreme Court.
(5) Liberty to apply to the Court to have the 28 April 2016 date vacated if the matter has been transferred.
(6) Note that the plaintiff's application to amend the statement of claim is deferred pending the resolution of the application to have this matter transferred to the Supreme Court.
(7) Vacate the hearing date of the plaintiff's notices of motion in each proceedings (15 April 2016).
(8) Costs reserved.
1. On 7 April 2016, the application for transfer to the Supreme Court was dismissed by Wilson J: Kostov v Zhang [2016] NSWSC 456.
2. On 28 April 2016, following indications that an appeal was likely, I made orders including an order that the proceedings be placed in the Inactive List, but noting that "these Orders do not prevent the plaintiff from preparing and serving any proposed amended Statement of Claim". The orders on that occasion were as follows:
(1) Plaintiff called 3 times, no appearance.
(2) Noting the plaintiff has served a notice of intention to appeal the judgment of Wilson J and noting the issues raised by Ms Kostov in her correspondence to the parties and the Court, place those proceedings into the Inactive List with a review date of 04.08.16 with liberty to apply.
(3) These Orders do not prevent the plaintiff from preparing and serving any proposed amended Statement of Claim or prejudice her entitlement to raise the issue of trial by jury at a later date.
(4) Costs reserved.
(5) These Orders apply to both proceedings and the defendant/s are to notify the plaintiff of today's Orders.
1. On 12 May 2016, the plaintiff filed a Summons seeking leave to appeal Wilson J's judgment.
2. On 4 August 2016, Mr Goldsmith appeared for the plaintiff before me, and the following orders were made:
(1) Matter stood over to the Defamation List on Thursday 20 October 2016.
(2) The plaintiff is to pay the defendants' costs of and associated with the plaintiff's application (later withdrawn) for leave to file and serve any Amended Statement of Claim on or before 31 August 2016 (see Exhibit A and Exhibit 1).
1. On 9 August 2016, the plaintiff filed, without leave, a Further Amended Statement of Claim (the third pleading).
2. On 15 August 2016, the plaintiff filed, as a written submission, a document entitled "Marked Up Further Amended Statement of Claim", which stated that it would be filed "pursuant to orders of Justice Gibson, 28 April 2016" ("the marked up third pleading").
3. On 19 September 2016, the Court of Appeal refused the appeal: Kostov v Zhang [2016] NSWCA 262.
4. On 14 October 2016, the Court of Appeal ordered the plaintiff to pay the first and third defendants' costs of the appeal in the lump sum of $15,000: Kostov v Zhang (No 2) [2016] NSWCA 279.
5. On 20 October 2016, the following orders were made by me in court after the plaintiff failed to appear:
(1) Plaintiff telephoned at 9:40am - Recorded message left.
(2) Matter stood over for further directions to Thursday 24 November 2016 in the Defamation List.
1. On 9 November 2016, the plaintiff filed a Notice of Motion seeking leave to join a fourth defendant to the defamation proceedings.
2. On 16 November 2016, the plaintiff filed, as a written submission, a proposed Further Amended Statement of Claim in connection with the motion filed on 9 November 2016 ("the fourth pleading").
3. On 18 November 2016, the parties appeared before Assistant Registrar Fukuda-Oddie and the following orders and notations were made:
D1 and D3 Ms T Rafferty and mentions D2 by consent; P no appearance but requests adjournment by email which D1-3 consent to
BC make orders in accordance with paragraphs 1 and 2 of the order filed in court today
(1) The plaintiff's notice of motion dated 9 November 2016 be stood over to the Defamation List on 24 November 2016.
(2) Costs reserved.
1. On 24 November 2016, I made orders for the hearing of outstanding arguments, including that the plaintiff provide any proposed amended pleading and/or an outline of submission under Civil Practice Note 6 in support of her application to amend by Friday 2 December 2016. The orders made on that occasion read as follows:
In relation to the plaintiff's notice of motion filed on 20 November 2016
(1) Make no orders in the plaintiff's notice of motion objecting to the continued representation of the first and third defendants in the defamation proceedings.
(2) Costs reserved in relation to the notice of motion.
In relation to these proceedings generally
(1) Note that the proceedings were removed from the Inactive List on the Call Over date of 4 August 2016.
(2) Plaintiff to provide any proposed amended pleading and/or an outline of submission under Civil Practice Note 6 in support of her application to amend by Friday 2 December 2016.
(3) Defendants' submissions by 23 December 2016.
(4) Matter listed for argument on Thursday 2 February 2017 in the Defamation List (1 hour+).
(5) Costs reserved.
1. The plaintiff did not comply with the direction to file any further amended pleadings. On 7 December 2016, the plaintiff filed written submissions which identified the version of the pleading that she seeks to proceed with as being the third pleading, namely the Further Amended Statement of Claim filed (without leave) on 9 August 2016.
2. On 23 December 2016, the Fairfax media parties in both actions filed written submissions.
3. On 19 January 2017, the solicitors for Ms Zhang and EasyMarkets filed a Notice of Motion and supporting affidavit.
4. Since Monday 23 January 2017, the plaintiff has sent a series of emails to my associate indicating her unavailability to appear on the date set down for argument. In her email of 24 January 2016, she stated that she was unavailable for the hearing and sought an adjournment. Her most recent communication was a set of submissions sent in the early hours of this morning.
There has been confusion caused by the fact that there are two actions and by the service of draft pleadings. In his affidavit sworn on 19 January 2017, Mr Wallman identifies the following pleadings in the defamation action:
1. Amended versions of the Statement of Claim (without leave) on the following dates:
1. 19 February 2016;
2. 26 February 2016;
3. 9 August 2016;
4. 15 August 2016; and
5. 16 November 2016.
1. Affidavits have been filed by the plaintiff on the following dates:
1. 18 February 2016;
2. 20 February 2016;
3. 22 February 2016;
4. 24 February 2016;
5. 26 March 2016;
6. 9 November 2016;
7. 16 November 2016; and
8. 20 November 2016.
The plaintiff has also subsequently filed an affidavit dated 24 January 2017 which was emailed to my associate on the same date.
It can be seen from this list of amended pleadings, affidavits, directions hearings, judgments and appeal that, while there has been a great deal of documentation, the merits of the case have yet to be addressed. This is relevant for two reasons. The first is that conduct of defamation proceedings should be purposive, in the sense of moving forward: Al-Shennag v Woodcock [2013] NSWSC 696. The chronology above suggests that this is not occurring. The second is that the costs already incurred in these proceedings are substantial.
Those costs form the basis of the applications for security for costs and for a stay of proceedings. In addition to the lump sum order for costs in the Court of Appeal of $15,000 (which has not been paid), the first and third defendants incurred costs of $10,641 in relation to the transfer application, as well as fees of $14,000 for costs of the proceedings generally. Mr Wallman estimates the costs of these proceedings if they were to proceed to a final hearing would be approximately $100,000 in addition to these sums (paragraph 47 of his affidavit). On behalf of Fairfax, Ms Norman has sworn an affidavit identifying costs of a similar size.
I first note my reasons for refusing the plaintiff's application for an adjournment and for a stay of proceedings.
[2]
The plaintiff's applications for an adjournment and in relation to costs
When I listed these proceedings on 24 November 2016 for hearing on 2 February 2017, Ms Kostov sought the earliest possible hearing date, taking into account the need for submissions and my explanation of the lack of court time, given this court's very busy timetable. She was present and consented to the date of 2 February as being the earliest date the court could offer, as did her opponents:
"HER HONOUR: I hear what you say but I think, in the circumstances, it's only a week. The matter's going to be listed in February. Can I put it in for hearing on Thursday 2 February? That's the first week of term and that's the first Court date that's available. That's the most expedition I can give you.
PLAINTIFF: Okay, thanks.
HER HONOUR: Is that all right with either of you?"
NORMAN: That's suitable.
VINCENT: Suitable, your Honour.
HER HONOUR: All right, okay.
The other thing I will do is I will reserve costs. Those are the orders I have made in that matter.
I will need to make the same timetable order in relation to matter number 3, which is the injurious falsehood. Is that right? Everybody agrees with that?
VINCENT: Yes. Thank you, your Honour.
HER HONOUR: I will similarly reserve the issue of costs.
Ms Kostov, are there any other orders that you think I need to make today?
PLAINTIFF: Not at this stage. I guess I would have liked things to progress a bit quicker but I guess it's just the timing of, you know, where we're at the moment.
HER HONOUR: I can't work any harder than I'm working at the moment, Ms Kostov.
PLAINTIFF: Yeah, I know, it's okay."
The first notice the court was given that the plaintiff was unavailable on 2 February was the plaintiff's email of 24 January 2017, advising that she had told the parties that this date was inconvenient for her, as she had another appointment. Even so, this would not be such a problem if the plaintiff had complied with the timetable by filing an amended pleading, or answered the defendants' submissions.
The plaintiff sent a 26-page submission this morning, repeating her earlier requests for a stay of proceedings and requesting the defendants stop seeking to strike out her claim and instead apologise, pay damages and pay her costs. She has not answered the Fairfax defendants' submissions as to the inadequacies of her pleadings.
The granting of a stay of proceedings pending an appeal is not automatically done. It is not appropriate for me to comment on the merits of her High Court application beyond noting that she starts from the difficult position of seeking special leave to appeal from a unanimous decision of the Court of Appeal upholding the rulings of the first instance judge on interlocutory procedural issues.
In the present case, even if the plaintiff were successful, all that would change, in relation to her claims against the defendants, is the court in which she conducts her claim. She has the same cause of action in a specialist list, including the same rights of appeal to the same appellate court from any decision of mine.
The errors and omissions set out in Ms Barnett's submissions, and the complaint about the plaintiff's lack of address for service, are matters which must be attended to without further ado.
As the procedural history of these proceedings demonstrates, Ms Kostov has already been granted a series of adjournments, in circumstances where she has failed to comply with timetables, and the litigation is at a standstill. Taking into account the history of these proceedings and the nature of the claims, any further adjournment or stay of these proceedings should not be granted.
I also briefly note my reasons for refusing the plaintiff leave to join a fourth defendant:
1. This court has no jurisdiction to make orders for the joinder of parties who are not within the jurisdiction;
2. As the affidavit of Mr Wallman demonstrates, there is no connection between the proposed fourth defendant and any corporation which employed Ms Zhang;
3. The basis upon which the proposed fourth defendant is to be joined has not been identified with precision: Nyoni v Pharmacy Board of Australia (No 2) [2016] FCA 1397.
I will next set out the basis upon which the second defendant seeks the summary dismissal of parts or the whole of the plaintiff's statement of claim, as this is a helpful way to demonstrate the hopelessness of the plaintiff's pleadings.
[3]
The Fairfax defendants' applications in relation to the pleadings
The Fairfax defendants bring applications to:
1. Strike out portions of the statement of claim which are prolix;
2. Strike out the ACL claim as hopeless;
3. Consolidate the claims of injurious falsehood (or alternatively strike them out); and
4. Rule on the imputations.
[4]
The relevant statutory provisions
The fundamental principles upon which proceedings are case-managed and heard at trial are set out in ss 56 - 62 Civil Procedure Act 2005 (NSW).
As Ms Barnett sets out in her helpful written submissions, r 13.4(a) Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), provides that in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings the proceedings are frivolous or vexatious the court may order that the proceedings be dismissed generally or in relation to that claim.
Rule 14.7 UCPR provides that a party's pleading must contain only a summary of the material facts on which the party relies, and not the evidence by which those facts are to be proved. The plaintiff's pleadings suffer from considerable prolixity in this regard.
Rule 14.8 UCPR provides that a pleading must be as brief as the nature of the case allows.
Rule 14.28(b) UCPR provides that a Court may strike out the whole or part of any pleading if the pleading has a tendency to cause prejudice, embarrassment or delay in the proceedings.
Rule 14.30(1) UCPR provides that a statement of claim seeking relief in relation to the publication of defamatory matter must not include any allegation that the matter or its publication was false, malicious and unlawful.
Rule 14.30(3) UCPR provides that a plaintiff in proceedings for defamation must not rely on two or more imputations alleged to be made by the defendant by means of the same publication of the same matter unless the imputations differ in substance.
Rule 15.1 UCPR provides that a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet.
Rule 15.19(1)(e) UCPR provides that the plaintiff must include in a statement of claim particulars of the part or parts of the matter complained of relied on by the plaintiff in support of each pleaded imputation.
[5]
The objections to the plaintiff's current pleading
The objections to the plaintiff's current pleading are as follows:
1. Paragraphs 5, 7(d), 9, 11, 18, 19, 20, 21, 22 and 23 are embarrassing in that they are either in the nature of submissions or plead facts which are not material to the causes of action that the plaintiff seeks to rely upon, and are liable to be struck out pursuant to rule 14.28(b).
2. Paragraphs 13, 14, 15 and 16, each of which allege that the imputations are false, contravene rule 14.30(1). Further, paragraph 16 appears to allege that the publication was malicious (in that it pleads a reckless disregard of truth or falsity by the defendants).
3. Paragraph 30 purports to provide particulars of the plaintiffs claim for special damages however it is pleaded in extremely general terms and the second defendant is not able to ascertain the case it is called upon to meet in this regard.
4. In relation to almost all of the matters set out in the Further Amended Statement of Claim it is unclear whether the material is provided by way of an allegation of material fact or particulars.
5. All of the annexures to the Further Amended Statement of Claim, with the exception of the matter complained of, are not material to the plaintiff's cause of action and should not be included.
6. Imputation problems are as follows:
1. The matter complained of is essentially Ms Zhang's opinion relating to matters concerning the treatment of women in the financial services sector. It refers to an article published previously which was authored by the plaintiff and contains the plaintiff's opinion on such matters. Essentially, the matter complained of is a continuation of a dialogue on these matters. It is fair to say that the matter complained of conveys that Ms Zhang does not agree with the plaintiff's opinions.
2. It is notable that the plaintiff and her opinions are really only referred to in four of the eleven paragraphs of the matter complained of. Notwithstanding this, the plaintiff has pleaded, in paragraph 12 of the Further Amended Statement of Claim, that the matter complained of conveys 62 imputations which are defamatory of her. The plaintiff has not provided any particulars of the part or parts of the matter complained of relied upon to support each imputation.
3. Each of the imputations set out in (A) allege that the plaintiff espouses a particular point of view. The only thing the matter complained of says about any views held by the plaintiff is that she "implies that women in this industry need to man-up to say no to the bad behaviour of the men around them or get out", that her message seems to be "If you can't take the heat, leave the kitchen, ladies" and that she is wrong that "women can only succeed in the financial sector if they are tough enough to stand up to male chauvinism, sexism and even sexual harassment". The matter complained of says nothing of any further views held by the plaintiff.
4. For the reason set out in the preceding paragraph, with the exception of imputation (A)(a), each of the imputations are not reasonably capable of being conveyed. The imputations pleaded by the plaintiff involve a strained and forced interpretation of the matter complained of.
5. Imputation (A)(a) is not reasonably capable of being defamatory. The ordinary reasonable member of society would not think less of a person for holding such an opinion, even if it were not an opinion they shared.
6. Each of the imputations set out in (B) seek to place a particular interpretation or description on the article authored by the plaintiff. The only interpretations of the plaintiff's article alleged in the matter complained of are those set out in paragraph 16 above. For the same reasons as advanced in relation to the imputations set out in (A), each of the imputations, with the exceptions of (B)(b), (B)(c) and (B)(d), are not reasonably capable of being conveyed.
7. Imputation (B)(b) is not capable of being defamatory. The ordinary reasonable member of society would not think less of a person for holding such an opinion, even if it were not an opinion they shared.
8. Imputation (B)(c) is also not capable of being defamatory. To say that a woman had done "little to advance" the cause for women is meaningless in the absence of any obligation upon her to do so.
9. In any event, each of the imputations set out in (B) is not capable of being conveyed and is bad in form as they seek to append to the end of the imputation "... and as such, the Kostov Article was an ill-advised, unexperienced (sic) and uneducated article that has put back the cause for gender equality globally". Such a description of the plaintiff's article is not reasonably capable of being conveyed, and the appendage of these words to each imputation renders each of them rolled up and embarrassing.
10. Each of the imputations set out in (C) is not reasonably capable of being conveyed. These meanings would only be understood by a reader avid for scandal.
11. Further, many of the imputations are repetitive and do not differ in substance.
1. The injurious falsehood claim: A history of the procedural steps necessary as a result of the problems with the injurious falsehood claim is set out in paragraph 32 of Ms Barnett's written submissions. The orders I made on 24 November 2016 (see the chronology at the beginning of this judgment) included an order for the plaintiff to provide any proposed amended pleading and/or an outline of submissions under District Court Civil Practice Note 6 in support of any application to amend by Friday 2 December 2016. No such application has been made.
2. Of itself, failure to comply with a timetable, without more, would not be grounds for dismissal of a claim. There are, however, significant problems with the pleading in its current form which Ms Barnett has helpfully summarised as follows:
1. The elements of a cause of action for injurious falsehood are:
(a) a false statement of or pertaining to the plaintiffs goods or business;
(b) publication of that statement by the defendant to a third person;
(c) malice on the part of the defendant; and (d) actual damage as a consequence
(Ratcliffe v Evans [1892] 2 QB 524 at 527-528; Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1; Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at 404 [52] (Gummow J), 425 [114] (Kirby J) and AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Limited [2010] NSWSC 1395 at [29]).
1. The matter complained of does not contain any statement, let alone a false one, pertaining to the plaintiff's goods or business. The plaintiff's complaint is only that she has suffered damage to her reputation, and the injurious falsehood proceedings is thus no more than another attempt at proceedings for defamation. The proper cause of action for protection of reputation is defamation, not injurious falsehood: Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [58].
2. Further, the plaintiff's particulars of actual damage are so vague and general that they do not allow the defendant to know the case it is called upon to meet. They relate to damage to the plaintiff's reputation and not any commercial or proprietary loss.
Ms Barnett submits that the injurious falsehood claim does not seek to protect any tangible proprietary or commercial interest of the plaintiff and accordingly, fails to disclose a reasonable cause of action for injurious falsehood.
A claim in similar form was dismissed in Mahon v Mach 1 Financial Services Pty Limited (No 2) [2013] NSWSC 10.
However, the striking out of a claim without leave to replead is a step to be taken only in extreme cases, as opposed to the order generally made, which is to grant leave to replead. That is particularly the case where the inadequacies of the pleading are not such as to indicate that the claim itself is hopeless. This means an examination of the claim is necessary.
[6]
The relevant portions of the injurious falsehood claim
The injurious falsehood claim requires repleading as follows:
1. Paragraphs 1 - 6, 9 - 10 and 14 contain irrelevancies and should be struck out in their present form. The plaintiff should identify the passages which are false and the facts and matters relied upon to state that Fairfax knew these to be false.
2. The plaintiff should particularise the malice referred to in paragraph 15.
3. The plaintiff should particularise her claim for damages with precision, noting carefully the regime for special damages for a claim of this nature.
I next note that the proceedings for injurious falsehood were commenced separately to the proceedings for defamation. If the injurious falsehood claim were to survive a strike out, the second defendant submits that the claims should be consolidated as they seek compensation for the same loss.
I accept this submission. There is no reason for these proceedings to be heard separately, or for the claims to be in separate pleadings. Accordingly, it will be necessary for the plaintiff to replead her injurious falsehood claim in the same document as the defamation claim.
[7]
The defamation claim
District Court Civil Practice Note 6, like its equivalent in the Supreme Court (Practice Note SC CL 4), is designed to encourage the just, quick and cheap disposition of defamation actions. That has not occurred in this case. The plaintiff has asked for a stay of proceedings and for the matter to be adjourned, or put into the Inactive List, on a series of occasions as set out above. At the same time, the matter has not yet even proceeded to an imputations argument.
The statement of claim in its current form is poorly drafted and requires very substantial amendment. The question is how to achieve this where the plaintiff appears unwilling or unable to understand the relevant concepts.
In other litigation I have sought to assist litigants in person by writing a judgment setting out the relevant principles (Michail v Mount Druitt & Area Community Legal Centre (No. 2) [2015] NSWDC 214) or attempting to redraft the document in court (Michail v Mount Druitt & Area Community Legal Centre [2015] NSWDC 145). These are onerous tasks and I doubt that they would be of assistance to any of the parties in this litigation, given the nature of the defendants' applications for a stay and for security for costs. I shall instead leave the rectification of these many pleading errors until such time as the plaintiff has shown her bona fides by complying with the security for costs and stay orders that I have made.
There is, however, one part of the claim which can be struck out now, and that is the ACL claim.
[8]
The claim under the Australian Consumer Law
For reasons which are unclear to me, this claim is brought only against Fairfax.
In paragraphs 31 to 35 of the Further Amended Statement of Claim the plaintiff has pleaded a cause of action based upon an alleged contravention by the second defendant of clause 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) ("ACL")), which prohibits misleading or deceptive conduct.
Clause 19 of the ACL provides that Part 2.1 (which includes clause 18) does not apply to a publication of matter by an information provider if the information provider made the publication in the course of carrying on a business of providing information.
An "information provider" is defined in clause 19(5) as being a person who carries on a business of providing information.
There can be no doubt that the second defendant is an information provider, and that the matter complained of was published in the course of the second defendant carrying on its business of providing information.
Accordingly, the plaintiff's cause of action for contravention of the ACL is manifestly hopeless, and ought be summarily dismissed pursuant to rule 13.4(a) of the UCPR. This part of the claim is struck out.
[9]
The defendants' application for security and stay of proceedings
The first and third defendants bring a series of applications in relation to the plaintiff's pleadings. The defendants make allegations of a most serious nature against the plaintiff in relation to her conduct of these proceedings. First, the defendants provide evidence that the address for service given by the plaintiff is one which is known by her not to be a place with which she has ever been associated. Second, they provide that the plaintiff has not only failed to provide a genuine address for service, but that she has filed and served four affidavits containing the forged name and fictitious address of a solicitor and one affidavit (filed in the High Court of Australia) containing the forged signature of a barrister.
As to the first issue, namely the obligation of a plaintiff to provide a genuine address for service, this is a fundamental requirement for all litigation. Failure to provide a genuine address for service can result in the stay or dismissal of proceedings.
[10]
The plaintiff's failure to provide a genuine address for service
Rule 4.5 UCPR provides:
"4.5 Address for service
(1) Subject to subrule (2), a person's address for service is to be the address of a place in New South Wales (other than a DX address):
(a) at which documents in the proceedings may be left for the person during ordinary business hours, and
(b) to which documents in the proceedings may be posted for the person.
(2) The address for service of a person who has a solicitor on the record is to be:
(a) the office of the solicitor on the record, or
(b) if the solicitor on the record has another solicitor acting as agent, the office of the agent.
(3) Despite subrules (1) and (2):
(a) the address for service of a defendant who is served with originating process outside New South Wales, but in Australia, may be any address in Australia, whether inside or outside New South Wales, and
(b) the address for service of a person who files a notice under section 19(1) of the Mutual Recognition Act 1992 of the Commonwealth (other than a person who is represented by a solicitor) may be any address in Australia, whether inside or outside New South Wales, and
(c) the address for service contained in an application to set aside a subpoena made under section 35 of the Trans-Tasman Proceedings Act 2010 of the Commonwealth (other than a person who is represented by a solicitor) may be:
(i) any address in Australia, whether inside or outside New South Wales, or
(ii) any address in New Zealand, and
(d) the address for service of a person who has entered an appearance under the Service and Execution of Process Act 1992 of the Commonwealth is to be the address for service stated in relation to the appearance."
Mr Wallman sets out at paragraphs 15 and 16 of his affidavit information to the effect that the plaintiff could not have been associated with these premises for at least two and a half years. In addition, the occupant of the premises in question has sworn an affidavit to this effect (Exhibit 3).
In Sheen v Burke [1993] 1 VR 584, Beach J noted that the address a plaintiff is required to endorse on a writ is a residential address, and that this provision was designed to deter persons from making fraudulent or mischievous claims or avoiding orders for costs or security for costs.
In her submissions to the court the plaintiff appears to acknowledge that there is no real association between herself and the address in question. Whether she does or not, her failure to provide a genuine address is a significant one. I particularly note that this false address is the one appearing on the plaintiff's application for special leave to the High Court.
Mr Dawson SC asks me to note that, in documentation provided to the court since the affidavit which is Exhibit 3 was served on the plaintiff, she has not provided any address at all. Nor has she provided any genuine address to the court today.
The failure to provide a genuine address is not a technicality. This of itself would be a reason for the ordering of a stay or of security for costs. There are additional reasons, however, by reason of the substantial outstanding costs orders obtained by the defendants in relation to the proceedings in the Supreme Court, details of which are set out above.
In making orders for security for costs, I take into account that the plaintiff has failed to provide any evidence of her financial means, that her prospects of success (having regard to her hopeless pleadings) are slight and that she has failed to pay the gross sum costs orders of the Court of Appeal. In addition, she has refused to participate in the costs assessments sought by Fairfax, instead insisting that the costs assessment await the outcome of her application for special leave.
I cannot accept the plaintiff's evidence on this and other matters going to credit because her general conduct is such that I can have no confidence in her truthfulness. I also note, in relation to the plaintiff's conduct of these proceedings, her unsatisfactory behaviour in the preparation of affidavit material.
[11]
Forgery of signatures and false addresses for solicitors
As is set out above, the plaintiff has provided affidavits to the court which contain her signature and which purport to be witnessed by solicitors and (in one case) a barrister. The defendants have provided evidence that certain of these persons are fictitious and that others, who are genuine, have stated that they did not witness the document in question. By reason of the seriousness of these allegations I do not propose to identify these persons or refer to these matters further.
There is some acknowledgement by the plaintiff of wrongdoing in that she has reported herself to the Office of the Legal Services Commissioner and, by way of explanation, stated that:
"I asked myself why on earth I was so lazy.
…
I have been running around like a headless chook trying to manage litigation of [sic] which I was attacked in a national publication.
In the process, I rushed the affidavit signing process." (Exhibit 5)
While the relevance of this behaviour to the application is slight, it must cast doubt upon the plaintiff's bona fides that she would conduct herself in such a manner. This means that I should view her claims in relation to her conduct of these proceedings with a greater degree of caution than would otherwise be the case.
Taking all of the above into account, the plaintiff should be required to show her bona fides by not only paying the costs she currently owes but also complying with orders for security for costs.
This history of conduct which is not merely dilatory or combative but also lacking in bona fides means that I should also give more weight to the request by Fairfax for what have been called "McGuirk orders" (McGuirk v University of New South Wales [2010] NSWCA 104) pursuant to s 56 Civil Procedure Act 2005 (NSW). These orders are sought by reason of the plaintiff's angry and abusive correspondence to persons associated with Fairfax, including members of the board of directors. It is of particular concern that the plaintiff is already the subject of such orders not only in relation to the other defendants in these proceedings, but also in separate proceedings.
[12]
Orders already in existence in relation to the plaintiff's conduct
There are already orders in place in relation to Ms Zhang and Easy Market's legal representatives. In paragraphs 22 to 27 of his affidavit, Mr Wallman sets out that the plaintiff made threats of harm to him personally and sent emails to other partners of HWL Ebsworth and other employees in the firm. It appears that she has made contact with up to ten partners or employees of this firm.
This resulted in an application for orders from Bergin CJ in Eq. Her Honour made lengthy orders on 22 November 2016 in Supreme Court proceedings 2016/34596 (Juan Jose Martinez as trustee for the Martinez HWL Practice Trust & Ors trading as HWL Ebsworth Lawyers v Adriana Kostov). The relevant orders were:
The Court orders:
1. It is noted there is no appearance of the defendant.
2. The order in the Short Minutes of Order initialled by Bergin CJ in Equity and dated 22 November 2016.
3. That a transcript of these proceedings be taken out.
4. That the Plaintiff serve on the Defendant a copy of these Orders by no later than 10.00am on 23 November 2016.
5. That the Plaintiff serve on the Defendant a copy of the transcript of these proceedings as soon as it is available.
6. Service may be affected by sending the Orders and a copy of the transcript to the Defendant at email adrianakostov@y7mail.com.
7. List the matter before Bergin CJ in Eq at 10.00am on 30 November 2016.
8. Costs are reserved.
9. These orders are to be entered forthwith.
Short Minutes of Order
1. On the Plaintiffs giving the usual undertaking as to damages by Counsel, an order that until further order, the defendant be restrained without the leave of their Court from publishing:
(a) material in the form of the content of the following emails sent by the Defendant ("the Emails"):
(i) email from the Defendant dated 4 October 2016 at 5:52PM which is confidential annexure "G" to the affidavit of Craig Powell sworn 18 November 2016;
(ii) email from the Defendant dated 4 October 2016 at 11:46PM which is confidential annexure "H" to the Affidavit of Craig Powell sworn 18 November 2016;
(iii) email from the Defendant dated 6 October 2016 at 5:08PM which is confidential annexure "K" to the Affidavit of Craig Powell sworn 18 November 2016
(iv) email from the Defendant dated 17 November 2016 at 10:65AM which is confidential annexure "O" to the Affidavit of Craig Powell sworn 18 November 2016;
(v) emails from the Defendant dated 17 November 2016 which are confidential annexure "P" to the Affidavit of Craig Powell sworn 18 November 2016;
(vi) email from the Defendant dated 17 November 2016 at 1:48PM which is confidential annexure "Q" to the Affidavit of Craig Powell sworn 18 November 2016;
(vii) email from the Defendant dated 17 November 2016 at 3:23PM which is confidential annexure "U" to the Affidavit of Craig Powell sworn 18 November 2016;
(viii) email from the Defendant dated 17 November 2016 at 3:41PM which is confidential annexure "W" to the Affidavit of Craig Powell sworn 18 November 2016;
(ix) email from the Defendant dated 17 November 2016 at 3:47PM which is confidential annexure "X" to the Affidavit of Craig Powell sworn 18 November 2016.
On 30 November 2016, her Honour made the following orders finalising those Supreme Court proceedings:
1. It is noted that the defendant has advised the Court in writing that she wishes to withdraw the Motion that was filed in the District Court and "referred" to this Court seeking the removal of the plaintiff's solicitors.
2. By consent the defendant's Motion is dismissed with no order as to costs.
3. The proceedings are dismissed with no order as to costs.
4. The matter is now finalised.
Similar orders have also been made against the plaintiff in unrelated proceedings: Kostov v YPOL Pty Ltd [2016] NSWSC 1722 (1 December 2016). There is considerable similarity between the correspondence in those proceedings (at [15] - [17]) to the plaintiff's correspondence in these proceedings. There are also threats of violence of a kind similar to the threats made to Mr Wallman.
[13]
The plaintiff's correspondence with Fairfax
There have been similar problems with the plaintiff's correspondence in relation to Fairfax. The plaintiff was asked by Ms Norman, acting for Fairfax, as early as May 2016 to desist from writing to the Fairfax Board.
Despite this request, the plaintiff has continued to send vituperative emails to the solicitor on the record and to Fairfax employees saying "Rot in Hell. I hope you all die a slow and painful death" and "This has only just begun, you are all absolutely hideous" (annexure B to the affidavit of Ms Norman, Exhibit 6). She wrote to the Board accusing the editor of criminal conduct and calling for him to be sacked. There is much more to the same effect. The whole tenor of her correspondence is, to use the words of Bellew J at [14] in relation to her correspondence in those proceedings, "vitriolic and offensive".
The substance of her correspondence is impossible to determine, in that her application at the time was simply to transfer proceedings to another court, and the reasons for this degree of vitriol are unexplainable except as a form of abuse of process. What the plaintiff is doing is creating what American commentator John Stewart, in another context, has recently called "purposeful, vindictive chaos". Her purpose is not the vindication of her reputation, or to proceed with her claim, but to insult and abuse. It is particularly significant that she continues to direct such correspondence to Fairfax when she is already the subject of two restraining orders from judges in the Supreme Court, one of which relates to this litigation.
[14]
The plaintiff's conduct in these proceedings
Reliance is also placed upon the behaviour of the plaintiff in this court. In between these two orders being made by Bergin CJ in Eq, the parties appeared before me on 24 November 2016. After Mr Vincent announced his appearance on behalf of the first and third defendants, I asked the plaintiff:
In the course of the hearing the plaintiff addressed the legal representatives of the first and third defendants as follows:
"PLAINTIFF: Please listen. Please listen. You need to listen, you guys are pigs, you guys are absolute pigs, you need to listen, you need to have some respect for women. I don't think you understand what it's got to get me to this point. You need to have some respect for women, you need to back off, you need to me alone. I have told you, this is the final time I am telling you, your firm needs to back off, need me alone, have some self‑respect. I want to get this case sorted. Far out. So I will just get this case sorted. If I need to deal with these freaks, then so be it. If you think that there should be any order made in the meantime, I don't know, cause I just want to focus on my case cause that's the most important thing. They're trying to drag me round in some circle that I shouldn't be dragged into. I'm obviously upset and I just want Neil to stop.
These guys coming after me now it's like, well, okay, great, just ‑ but I'll deal with it cause that's just what I do. And, yeah, so that's where I think I'm at. The most important thing now, I think, is this case. What I can do about them, I don't know. That's why I just filed that motion, cause I just needed some help. I'm like I don't know what to do with these guys anymore, I really don't. To argue with them to kick them off, I can't even listen to this guy next to me so I just want ‑ I don't even want to talk to him, he's just ‑ and you keep interrupting me; it's so rude, it's so disrespectful, so don't interrupt me. So the answer is, no, I don't even want to argue with this guy next to me. And like, Neil, you're just disgusting, you go to a Court and try to make out as if I have done something wrong. Like seriously, you're just a joke, you're pathetic, you're a joke, the whole lot of youse are, and you're a shambles.
So answer your question, I think focussing on my case is probably the most important thing. This conduct is just disgusting and if I argue, hit back at them, it's probably going to make it worse which is what I've just realised it's probably doing. So I'm probably best off focussing on the case, I'll let that ‑ let them just do whatever they want to do and I don't know, Justice Gibson, I mean, I'm at a loss, I'm really at a loss. I'm just trying to sort my ‑ you know, trying to get this case sorted but then trying to protect myself from these guys that are coming after me out of nowhere as if I've done something wrong. I just ‑ you know, it's one thing at a time."
I shall not set out the rest of the transcript, which consisted of my stating that I would leave the determination of these issues with Bergin J and reminding the plaintiff of the contents of Practice Note 6.
The plaintiff's conduct in court today was similar.
[15]
The circumstances in which restraining orders should be made.
In Kostov v YPOL Pty Ltd, Bellew J set out the relevant principles at [24] - [28]:
"[24] As to the second order sought, the correspondence to which I have referred speaks for itself. In McGuirk v University of New South Wales [2010] NSWCA 104, Sackville AJA observed at [147]:
If a party to litigation persists in sending another party or its legal advisors a large volume of communications that are irrelevant to the issues in dispute, a court may well come to the view that directions curtailing the flow of those communications or restricting the manner of their distribution are appropriate for the speedy determination of the real issues between the parties. That could be the case if the sheer volume of communications is likely to divert the recipients from concentrating on the real issues, thus making the statutory objective of a speedy determination of the real issues which are in dispute more difficult to achieve.
[25] His Honour then said at [162]:
The width of the power conferred by r 2.1 is striking. The court is given the power at any time to give such directions and to make such orders for the conduct of any proceedings, whether or inconsistent with the rules of court. for the just, quick and cheap disposal of the proceedings.
[26] His Honour went on to observe at [163]:
If a party to proceedings repeatedly sends gratuitously offensive or threatening communications to the other party or its legal representative, it will not usually be difficult to conclude that it is convenient for the just, cheap and quick disposal of the proceedings to make directions or orders requiring the party to desist from such conduct.
[27] His Honour's observations are directly apposite to the circumstances of the present case. What is also of significance is that in the present case, the actions of the plaintiff have not been limited to simply sending offensive and threatening correspondence, serious though that may be. Her actions have extended, as I have indicated, to attending the first defendant's premises and engaging in what could properly be described as acts of vandalism.
[28] The conduct of the plaintiff is such that the speedy determination of the real issues between the parties requires that the second order which is sought be made. In the absence of such an order, I am satisfied that the actions of the plaintiff would be likely to continue to divert those to whom they are directed from concentrating on the real issues, thus making the statutory objective of a speedy determination of those issues more difficult to achieve."
Accordingly, for those reasons, I have made the orders set out below.
[16]
Orders
1. The plaintiff's notice of motion filed on 9 November 2016 and her application to join Easy Forex Trading Limited as a fourth defendant to the proceedings be dismissed.
2. Pursuant to rule 28.5 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") proceedings 2016/51926 and proceedings 2016/86450 be consolidated.
3. The Amended Statement of Claim filed on 9 August 2016 in proceedings 2016/51926 be struck out.
4. The Amended Statement of Claim filed on 11 August 2016 in proceedings 2016/86450 be struck out.
5. Subject to orders 7 to 14 below, the plaintiff not be granted leave to file any further Statement of Claim until further order of the Court.
6. The plaintiff is not to include in any further Statement of Claim any cause of action against the second defendant (in proceedings 2016/51926) for breach of the Australian Consumer Law.
7. Pursuant to section 67 of the Civil Procedure Act 2005 (NSW) the proceedings against the first and third defendants be stayed until the plaintiff has paid:
1. the first and third defendants' gross sum costs of $15,000 in Supreme Court of NSW Court of Appeal proceedings 2016/146390; and
2. the first and third defendants' costs as agreed or assessed in Supreme Court of NSW proceedings 2016/87876.
1. Pursuant to section 67 of the Civil Procedure Act 2005 (NSW), the proceedings against the second defendant in proceedings 2016/51926 and the defendant in proceedings 2016/86450 (Fairfax Media) be stayed until the plaintiff has paid:
1. Fairfax Media's costs, as agreed or assessed, pursuant to the cost order made by Justice Wilson on 7 April 2016 in Supreme Court of New South Wales proceedings 2016/87876;
2. Fairfax Media's costs, as agreed or assessed, pursuant to the costs orders made by the Court of Appeal on 23 May 2016 and 19 September 2016 in Supreme Court of New South Wales Court of Appeal proceedings 2016/146390.
1. Pursuant to UCPR Rule 42.21(1) the plaintiff to provide security for the first and third defendants' costs of these proceedings in the amount of $50,000 by paying that sum into court within 28 days.
2. The proceedings against the first and third defendants be stayed until security is given pursuant to order 9 above.
3. Pursuant to UCPR Rule 42.21(3) the proceedings against the first and third defendants be dismissed in the event that the plaintiff does not comply with the order of the Court to provide security for the costs of the first and third defendants pursuant to order 9 above.
4. Pursuant to UCPR Rule 42.21(1) the plaintiff to provide security for the Fairfax Media's costs of these proceedings in the amount of $50,000 by paying that sum into court within 28 days.
5. The proceedings against Fairfax Media be stayed until security is given pursuant to order 12 above.
6. Pursuant to UCPR Rule 42.21(3) the proceedings against Fairfax Media be dismissed in the event that the plaintiff does not comply with the order of the Court to provide security for the costs of Fairfax Media pursuant to order 12 above.
7. Order that the plaintiff refrain from communicating about these proceedings with any director, officer or other employee of Fairfax Media Limited or its related entities.
8. The plaintiff is to pay the defendants' costs of and incidental to:
1. The plaintiff's Notice of Motion filed 9 November 2016;
2. The defendants' objections to the Amended Statement of Claim;
3. The first and third defendants' Notice of Motion filed 19 January 2017;
4. Fairfax Media's Notices of Motion filed 31 January 2017; and
5. The hearing on 2 February 2017.
1. The proceedings be listed for review on 30 March 2017 at 9:00am if not otherwise dismissed.
2. Direct that a Registrar of the Court inform the plaintiff of these orders by 5:00pm on Thursday 2 February 2017 by email at adrianakostov@y7mail.com.
[17]
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: 02 February 2017
sts of and incidental to: (a) The plaintiff's Notice of Motion filed 9 November 2016; (b) The defendants' objections to the Amended Statement of Claim; (c) The first and third defendants' Notice of Motion filed 19 January 2017; (d) Fairfax Media's Notices of Motion filed 31 January 2017; and (e) The hearing on 2 February 2017.
(17) The proceedings be listed for review on 30 March 2017 at 9:00am if not otherwise dismissed.
(18) Direct that a Registrar of the Court inform the plaintiff of these orders by 5:00pm on Thursday 2 February 2017 by email at adrianakostov@y7mail.com.
Catchwords: PRACTICE AND PROCEDURE - stay of proceedings and security for costs - plaintiff fails to pay costs or to conduct litigation with expedition - costs incurred in satellite litigation concerning venue and on appeal - plaintiff refuses to pay gross sum costs and to comply with costs assessment process - application for stay under s 67 Civil Procedure Act and security for costs - applications granted - application under s 56 Civil Procedure Act for orders restraining plaintiff from contacting servants or agents of Fairfax Media Limited - long history of vituperative correspondence from plaintiff to all defendants - restraining orders already in place in relation to the other defendants - restraining orders made
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56 - 62
Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, cl 18 and 19
Uniform Civil Procedure Rules 2005 (NSW), rr 4.5, 13.4, 14.7, 14.8, 14.28, 14.30, 15.1, 15.19
Cases Cited: Al-Shennag v Woodcock [2013] NSWSC 696
AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Limited [2010] NSWSC 1395
Kostov v YPOL Pty Ltd [2016] NSWSC 1722
Kostov v Zhang [2016] NSWSC 456
Kostov v Zhang [2016] NSWCA 262
Kostov v Zhang (No 2) [2016] NSWCA 279
Mahon v Mach 1 Financial Services Pty Limited (No 2) [2013] NSWSC 10
McGuirk v University of New South Wales [2010] NSWCA 104
Michail v Mount Druitt & Area Community Legal Centre [2015] NSWDC 145
Michail v Mount Druitt & Area Community Legal Centre (No. 2) [2015] NSWDC 214
Michail v Mount Druitt & Area Community Legal Centre [2015] NSWCA 396
Nyoni v Pharmacy Board of Australia (No 2) [2016] FCA 1397
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388
Ratcliffe v Evans [1892] 2 QB 524
Sheen v Burke [1993] 1 VR 584
Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1
Category: Procedural and other rulings
Parties: In proceedings 2016/51926:
Plaintiff: Adriana Kostov
First Defendant: Fan Fan Zhang
Second Defendant: Fairfax Media Publications Pty Ltd
Third Defendant: EasyMarkets Pty Ltd
The applications before the court
These are proceedings for damages arising out of the publication, in the Australian Financial Review dated 10 February 2016, entitled "Bad boy behaviour the job of companies to change", written by the first defendant in proceedings 2016/51926. This publication was in part a response to an article written by the plaintiff on 28 January 2016, which was also published in the Australian Financial Review, headed "Career women can say no to blokes' business'".
The plaintiff, by two statements of claim filed on 17 February and 20 March 2016, sought damages for three different causes of action. The first set of proceedings, which consist of claims against Fairfax Media Publications Pty Ltd ("Fairfax") for defamation and for misleading or deceptive conduct under clause 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) ("ACL")), include Ms Zhang and her employer as co-defendants. The second, a claim for injurious falsehood, relates to the same publication, an article in the Australian Financial Review, but is brought against Fairfax only.
Although statements of claim were filed almost a year ago, the proceedings have not advanced in any constructive way since that time. This has been a result of the plaintiff's unsuccessful applications (filed the day after the plaintiff commenced the second set of proceedings in the District Court) to transfer these claims from the District Court to the Supreme Court: Kostov v Zhang [2016] NSWSC 456; Kostov v Zhang [2016] NSWCA 262 and Kostov v Zhang (No 2) [2016] NSWCA 279. While those applications were on foot, the plaintiff sought orders that these proceedings be stayed and they remained for some time in the inactive list.
After the New South Wales Court of Appeal dismissed the plaintiff's appeal, the defendants sought orders to advance the proceedings. This included requiring the plaintiff to address identified defects in her pleadings as well as foreshadowing applications for security for costs. At the same time, the plaintiff sought leave to join a defendant outside the jurisdiction. On 18 November 2016 the hearing of these applications by the parties was fixed for 2 February 2016, this being the first available date for the parties and the court. A timetable for the filing of submissions, amended pleadings and evidence was made.
On 18 January 2017 the plaintiff file an application for special leave to the High Court seeking leave to appeal the Court of Appeal decision.
The defendants complied with the timetable but the plaintiff did not. She did not provide any answers to the challenges to her pleadings or answer the affidavit material filed. Instead, she sought an adjournment of the hearing and a stay until her special leave application to the High Court had been disposed of.
The plaintiff did not notify my associate that she was not available on 2 February 2017 due to another commitment until 24 January 2017. That other commitment, she has now informed the court by telephone today, was to represent a client in criminal proceedings listed in the Local Court. In the course of that telephone call to the court, she sought an adjournment and a stay of these proceedings until her application for special leave was determined.
I refused the plaintiff's application for an adjournment of the hearing or for a stay of proceedings. Following the making of these orders, the terms of which were indicated to her by telephone, the plaintiff came to the court room, where the defendants' application were being heard. She was shown the affidavit material and evidence upon which the defendants relied, and asked to remain in court so that she could assist me to understand the basis of her opposition to the orders sought by the defendants.
The plaintiff, despite these request, declined to remain. This hearing has therefore been continued in her absence. In doing so, I have had regard to the obligations judges have where a litigant in person refuses to remain in the court room (Michail v Mount Druitt & Area Community Legal Centre (No. 2) [2015] NSWDC 214; Michail v Mount Druitt & Area Community Legal Centre [2015] NSWCA 396). What follows are my reasons for refusing the plaintiff's applications for an adjournment, a stay of proceedings and the joinder of the proposed fourth defendant, and for granting the orders sought by the defendants.