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[2015] ACTSC 344
Supreme Court of the ACT
2015-11-05
Mossop AsJ
Original judgment source is linked above.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
CIVIL PROCEDURE - Application to dismiss or permanently stay claim seeking damages for defamation - "proportionality principle" as species of abuse of process - lack of proportionality between court resources and legal costs on one hand and subject matter and likely result of claim on other hand - relevant differences in statutory contexts of New South Wales and Australian Capital Territory - abuse of process not established - application dismissed
Human Rights Act 2004 (ACT) ss 16, 21
Civil Procedure Act 2005 (NSW) ss 56, 60
Court Procedures Rules 2006 (ACT) rr 430, 433
Uniform Civil Procedure Rules 2005 (NSW) r 13.4
Bleyer v Google Inc [2014] NSWSC 897
Cassell & Co Ltd v Broome [1972] UKHL 3; [1972] AC 1027
Dillon v Cush; Dillon v Boland [2010] NSWCA 165
Freeburn v The Cake Decorators Association of New South Wales Inc (No 2) [2014] NSWDC 173
Ghosh v NineMSN Pty Ltd [2015] NSWCA 334
Ghosh v TCN Channel Nine Pty Ltd (No 4) [2014] NSWDC 151
Humphries v TWT Ltd [1993] FCA 577; (1993) 120 ALR 693
Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75; [2005] QB 946
New York Times v Sullivan [1964] USSC 40; 376 US 254 (1964)
Vizovitis v Ryan [2012] ACTSC 155
Mr G Stretton SC and Mr P Hohnen (First, Second, Fourth and Fifth Defendants)
Beazley Boorman Lawyers (First, Second, Fourth and Fifth Defendants)
1. There are two applications before me. The first is an application by the first, second, fourth and fifth defendants dated 17 August 2015 which, relevantly, seeks an order that the plaintiff's action be dismissed or, alternatively, stayed. The second is an application by the plaintiff seeking leave to amend his statement of claim.
2. The principal contentions of the parties relate to the first application. If the first application is successful it is not necessary to address the second application. I will therefore deal first with the application by the defendants to have the proceedings dismissed or permanently stayed.
3. I note that the third defendant has not yet been served with the claim and played no part in the present applications.
4. It is first necessary to say something about the nature of these proceedings. The claim was commenced by originating claim filed on 18 March 2015. The present version of the statement of claim is the amended statement of claim dated 5 June 2015. That claim seeks damages for defamation.
5. In summary, it is alleged that material circulated by the defendants for the purposes of a motion to expel the plaintiff from membership of a political party known as the "ACT Greens" was defamatory of the plaintiff. The motion was debated at a meeting of the ACT Greens on 17 March 2014. The motion to expel the plaintiff was, in fact, unsuccessful. Notwithstanding that, the plaintiff alleges that he has suffered damage by reason of those publications. The various publications asserted in relation to the first, second, fourth and fifth defendants are as follows:
(a) In relation to the first defendant, Maiy Azize, the publication alleged involved a statutory declaration that she had completed on 4 March 2014 and its circulation to members of the ACT Greens at the meeting on 17 March 2014.
(b) In relation to the second defendant, Amanda Bresnan, the publication alleged involved the completion of a statutory declaration on 10 March 2014 and its circulation amongst members of the ACT Greens at the meeting on 17 March 2014.
(c) In relation to the fourth defendant, Indra Esguerra, she is alleged to have made a speech at the meeting on 17 March 2014 defamatory of the plaintiff.
(d) In relation to the fifth defendant, Shane Rattenbury, he is also alleged to have made a speech at that meeting containing imputations defamatory of the plaintiff.
6. It is not necessary to set out the defamatory imputations in any detail. It is sufficient to say that the defamatory imputations involve imputations that at various times since 2009 the plaintiff disclosed information concerning the ACT Greens' internal processes to journalists, a union and an environmental organisation in circumstances which were disloyal and harmful to the ACT Greens.
7. The defendants have not yet filed a defence. However they anticipate filing a defence which raises defences of qualified privilege, honest opinion and consent.
The application to dismiss or permanently stay the proceedings
8. The application in proceeding also raises a pleading point which is not necessary to refer to further because the pleading issues raised would be, if necessary, addressed by the proposed amended pleading for which leave is sought in the second application.
9. The grounds for the defendants' application are set out in the application itself as follows:
The Plaintiff's action should be dismissed on the following bases:
3.1. The Plaintiff's action is an abuse of process.
3.2. The court resources and time necessary to hear this action are disproportionate to any potential damages that could conceivably be awarded bearing in mind the extremely limited publication.
3.3. The potential legal costs of the action are disproportionate to any damages that could conceivably be awarded.
3.4. The defendants have substantial grounds of defence in any event.
10. The affidavit in support of the application was that of the defendants' solicitor Mr Hryce. Mr Hryce is a solicitor who has practised in litigation for over 20 years, primarily in the area of defamation. His affidavit estimates that the defendants' costs of defending the proceedings will be in the order of $300,000 and the basis for that estimate is set out. He estimates that the plaintiff's costs in prosecuting these proceedings would be in the order of $250,000. The affidavit also annexes various documents relevant to the substantive case. Mr Hryce was cross-examined in relation to his estimate of the likely costs of the proceedings. Based on his evidence, which I accept, I find that the defendants' costs of the proceedings if they run to a contested hearing will be in the order of $300,000 and that the costs of the plaintiff will be in the order of $250,000.
11. The plaintiff relied upon the affidavit that he affirmed on 16 September 2015. That affidavit provided some background to his involvement in a non-government organisation called Climate Active Australia established by him in about 2009. It provided evidence about what occurred at the meeting of the ACT Greens on 17 March 2014. It describes the plaintiff's belief as to why the motion to expel him was brought and evidence about the number of people that attended the meeting. It also gives some evidence relevant to damage as to the impact upon him and facts relevant to the extent of impact upon his reputation. I will refer to that evidence when necessary below.
12. The defendants sought an order staying or dismissing the proceedings on the basis of the so-called "proportionality principle". They identified that as a case management principle which permits courts to dismiss or permanently stay actions in circumstances where the amount of court time and resources and potential legal costs far outweigh any sum of damages the plaintiff is likely to receive.
13. They identified that the principle originated in England in the context of defamation proceedings, in particular Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75; [2005] QB 946 ('Jameel'). They particularly relied upon the adoption of that principle in two New South Wales cases, namely, Bleyer v Google Inc [2014] NSWSC 897 ('Bleyer') and Freeburn v The Cake Decorators Association of New South Wales Inc (No 2) [2014] NSWDC 173 ('Freeburn'). They noted that the decision in Jameel was referred to in the decision of Master Harper in Vizovitis v Ryan [2012] ACTSC 155.
14. The principal authority upon which the defendants relied was Bleyer. In that case McCallum J permanently stayed defamation proceedings brought against Google Inc relating to some search results and, in some instances, the content of the web page accessible via hyperlinks provided as part of the search results. The provision in the Uniform Civil Procedure Rules 2005 (NSW) particularly relied upon was the power in r 13.4 of the Court to dismiss proceedings that were an abuse of the process of the Court.
15. It is important to note that for the purposes of that application the search results were only shown, on the evidence then before the Court, to have been published to three people in total and only one person after Google had notice of the plaintiff's complaint. The imputations alleged were, however, serious ones. Google's costs of defending the proceedings were estimated at $370,000. Her Honour referred to Jameel and the cases in New South Wales which had considered it.
16. Her Honour referred to the statement of the overriding purpose of the New South Wales Civil Procedure Act 2005 in s 56 of that Act and the requirement in s 60 that the practice and procedure of the Court be implemented with the object of resolving issues in a way that the cost to the parties is proportionate to the importance and complexity of the subject matter of the dispute.
17. Her Honour then continued (at [57], [59]-[63]):
18. Her Honour also took into account other difficulties with the plaintiff's case which she considered to be relevant to her assessment of the issue of proportionality. First, she considered whether Google would be liable for the publication of its search engine results. Her Honour found (at [85]) that it was "highly unlikely" that the plaintiff would be able to establish that Google was liable for publication of at least the first two alleged downloads of the matter complained of, leaving only one download which occurred after Google received notice of the complaint. Next, her Honour addressed the submission that since the decision of the Supreme Court of the United States in New York Times v Sullivan [1964] USSC 40; 376 US 254 (1964) there has not been a single reported state or federal decision in which a foreign defamation judgment had been recognised and enforced in the United States. Notwithstanding this her Honour recognised that, even if unenforceable, part of the remedy afforded by the tort of defamation was the vindication of the person's reputation by the Court.
20. As a consequence her Honour permanently stayed the proceedings.
21. It is important to note that McCallum J treated the lack of proportionality as involving a species of abuse of process. There are some aspects of the statutory context that were relevant to her Honour's decision which are not present in the Territory. First, there is no statutory (as opposed to rules based) statement of overriding purpose equivalent to that in s 56 of the Civil Procedure Act 2005 (NSW). Second, there is no equivalent to s 60 of that Act relating to proportionality of costs. The absence of those two features makes it harder in my view to reach the conclusion that the lack of proportionality between the costs and resources involved in the determination of the matter and the significance of the subject matter of the dispute is such that the proceedings amounts to an abuse of process. Third, the provisions of the Human Rights Act 2004 (ACT), of which there is no equivalent in New South Wales, may have some relevance to the interpretation of the provisions of the Court Procedures Rules 2006 (ACT) (Rules) insofar as they are applicable. I note, however, that, as is not uncommon, there are competing rights at play: on the one hand the right to freedom of expression (s 16) and on the other the right to a fair trial of rights and obligations recognised by law (s 21).
22. I accept that it is possible to imagine a case in which the cost to the parties and the time and resources of the Court necessary to try the proceedings are so disproportionate to the subject matter and likely result of the proceedings if successful that the maintenance of those proceedings would amount to an abuse of the Court's process. However the undoubted existence of the power of the Court to control an abuse of its processes does not answer the question that arises in the present case, namely, whether or not, because of the disproportion between the cost and resources needed to resolve the proceedings and the likely outcome, the present proceedings involve an abuse of process.
23. In my view, this is not a case in which it is necessary to fully examine the outer boundaries of the concept of an abuse of process in cases involving disproportion between the costs and the matters at stake. That is because even if, notwithstanding the differences in the statutory context in which Bleyer was decided to the statutory context in this case, I adopted the same approach as that adopted by McCallum J in Bleyer, I would not be satisfied that the present case involved an abuse of process. I will explain my reasons for that conclusion below.
24. I have not ignored two other decisions to which the defendants made specific reference, namely, Freeburn and Ghosh v TCN Channel Nine Pty Ltd (No 4) [2014] NSWDC 151 ('Ghosh'). Both were decisions of the New South Wales District Court. While the factual circumstances in Freeburn were, as the defendants submitted, in many respects similar to those in the present case, the ultimate decision to dismiss the proceedings was significantly influenced by the particular circumstances of that case. I have not treated the decision in that case other than as an example of the exercise of a power articulated in Bleyer. The decision in Ghosh involved the application of the principles in Jameel and Bleyer as an alternative basis for dismissing the proceedings. Ghosh was appealed to the Court of Appeal: Ghosh v NineMSN Pty Ltd [2015] NSWCA 334. The Court of Appeal upheld the dismissal of the proceedings that was based upon the plaintiff's failure to prosecute the proceedings with due despatch and did not consider it necessary to express a concluded view on the separate basis, want of proportionality, on which the primary judge relied: [44], [55]. It is notable, however, that Macfarlan JA appeared (at [44]) to specifically anchor the dismissal of proceedings for want of proportionality to s 60 of the Civil Procedure Act 2005 (NSW). As I have indicated, such a clear statement of the requirement for proportionality of costs to subject matter does not exist in the Territory. Finally, his Honour did emphasise the fact that proportionality will only rarely warrant the dismissal of proceedings in the absence of further factors favouring that result, saying (at [44]):
It is sufficient to say that the dismissal of proceedings simply upon the basis of a lack of proportionality, without the presence of further factors in favouring that result, is likely to be justified only rarely.
Reasons why proportionality does not indicate that the present case is an abuse of process
25. The defendants pointed to six factors which they identified as matters which the Court should take into account in determining questions of proportionality in a defamation case:
(a) the amount of court resources and time involved;
(b) the legal costs involved;
(c) the ambit of publication;
(d) the likely award of damages;
(e) the plaintiff's prospects of success;
(f) whether an apology has been offered.
26. I will deal with each of these considerations.
27. Court resources: The evidence of Mr Hryce indicates that the proceedings are likely to involve a trial of at least two weeks. There is also a real likelihood of interlocutory disputes or applications. One in particular that has been foreshadowed is an application for substituted service upon the third defendant. While a two week trial is a considerable devotion of court resources, a trial of this length is not unusual. While the time available for final hearings in civil proceedings is limited, the prospect of a two week trial is not such as to impose a significant burden on the parties to other cases seeking to have their civil proceedings heard or on the overall resources of the Court.
28. Legal costs: As I indicated above, I have accepted Mr Hryce's evidence about the likely costs of the proceedings. The costs of the proceedings overall will exceed half a million dollars. The costs of the defendants alone are likely to be in the order of $300,000. I note that all parties are individuals and there is no evidence that any party has the benefit of insurance. For those not hardened to the realities of defamation litigation, that such sums might be incurred in such a case might be seen as disturbing. The anticipated costs are clearly large enough to warrant an examination of the proportion that they bear to the potential outcome of the proceedings if the plaintiff is successful.
29. The ambit of publication: This was an issue of some dispute. The minutes of the relevant meeting of the ACT Greens disclose 46 attendees apart from the plaintiff and the defendants. The plaintiff's evidence was that he had sat and counted 72 or 73 people at the meeting and that it was not unusual for people to have failed to sign the attendance register and hence not be recorded in the minutes as having attended. Whatever is the ultimate finding of fact, it is clear that the publication was significantly more extensive than, for example, in Bleyer but much less extensive than if the publication had been via a traditional form of media such as radio, television or newspaper.
30. It is also distinct from the situation in Bleyer in that the publication is alleged to have been made to people with whom the plaintiff had some connection through participation in the political party rather than simply being a publication to strangers. That is significant because even a modest ambit of publication may be significant in terms of damages.
31. Likely award of damages: The defendants referred to Lord Hailsham's statement that assessing damages in a defamation action is "essentially a matter of impression and not addition": Cassell & Co Ltd v Broome [1972] UKHL 3; [1972] AC 1027 at 1072; see also Humphries v TWT Ltd [1993] FCA 577; (1993) 120 ALR 693 at 700. They point to s 139E of the Civil Law (Wrongs) Act 2002 (ACT) which requires that any damages awarded have an appropriate and rational relationship to the harm actually suffered. They submit that the ambit of publication is very small, that having regard to the minutes of the meeting at least a third of the recipients did not believe the contents of the matters sued upon because they voted against the plaintiff's expulsion, and note that the plaintiff waited for a year before issuing proceedings which suggested that the plaintiff suffered little damage.
32. I do not accept the submission that it can be inferred that at least one third of the recipients of the publications necessarily did not believe the statements made in the publications. In the context of a political organisation there might be all sorts of reasons why a motion for expulsion might be voted against which are unrelated to acceptance of the truth or otherwise of statements of fact made in support of the motion.
33. The defendants also pointed to comparative verdicts in a variety of cases in which modest awards of damages were made where there were limited publications. Those cases, the numbers of people to whom the publications were made and the awards of damages are summarised in the following table.
Two slanders alleging the plaintiff was a thug and a bully
An email alleging the plaintiff associated with criminals
Two slanders alleging various kinds of criminal conduct
34. Plainly enough, such a comparative exercise is overly simplistic in that it pays no regard to the particular circumstances of each case or whether or not those circumstances are comparable to the circumstances alleged in the present case. However it is clear that the damages awards, while modest, are not trivial.
35. Prospects of success at trial: The defendants submitted that they have a number of substantive defences which will be pleaded. They submitted that the common law defence of qualified privilege appears to have very good prospects of success because all the publications occurred at the ACT Greens meeting on 17 March 2014 in the context of disciplinary proceedings brought against the plaintiff pursuant to the ACT Greens Constitution which is annexed to Mr Hryce's affidavit. There is no allegation of excessive publication. The defendants also submitted that the defence protects material which is defamatory and untrue and that in a political context malice would be difficult to prove in order to defeat that defence.
36. I accept that on the material before me the claim of qualified privilege appears strong. However it is clearly inappropriate to attempt any detailed assessment of that issue at this stage. Notwithstanding the apparent strength of the defence, it cannot be said at this stage of the proceedings and before pleadings are complete that the plaintiff's claim is manifestly hopeless or has such remote prospects of success that its weakness is strongly indicative that it is an abuse of process by reason of the proportionality principle. I consider the position to be distinct from that in Bleyer where her Honour was in a position to reach a firmer view on the plaintiff's prospects.
37. Offer of apology: The defendants have made an open offer to provide the plaintiff with a written apology in mutually agreed terms. The plaintiff has not accepted that offer. In some cases, the offer of an apology may be a significant factor that indicates that the pursuit of proceedings would be an abuse of process because of a lack of proportionality of costs and effort to the subject matter of the action. In this case, where there has been no agreement on the terms of any apology, it is not clear the extent to which an apology would in fact address the issues which are sought to be agitated in the proceedings.
38. Taking these matters into account I do not consider that this case would fall within the rare category of case which it might be appropriate to stay on the grounds that it involves an abuse of process. There is likely to be a substantial disproportion between the costs incurred on both sides in the running of the action and the result of the action if the plaintiff is successful. That disproportion is regrettable and not a matter which reflects well on the legal system as a whole. Actions in defamation are not the only category of action which can be identified as often reflecting this vice. However the circumstances of this case are not so extreme as to enable the maintenance of the proceedings to be characterised as an abuse of process. Further, there are not other factors which indicate the appropriateness of dismissal of the proceedings to which a lack of proportionality can be added. The case is, as I have endeavoured to illustrate, significantly different from the circumstances in Bleyer. In particular the extent of publication is much greater, there is at least an arguable case that the consequences of that publication are significantly greater than in Bleyer and the defences that are available are not able to be as clearly assessed at this stage as those in Bleyer.
39. As a consequence, even if I accepted that, notwithstanding the differences in the statutory provisions and context between New South Wales and the Territory, a similar approach should be adopted to that in Bleyer, I would not have been satisfied that an abuse of process was demonstrated in this case or that it was otherwise appropriate to dismiss or permanently stay the action.
40. Therefore I will dismiss the defendants' application in proceeding dated 17 August 2015.
Application for leave to amend the statement of claim
41. The plaintiff sought leave to amend his statement of claim so as to address some of the pleading issues raised in correspondence by the defendants. He accepts that if leave is granted and the question of costs of his application is dealt with separately to the costs of the defendants' application then the appropriate costs orders would be that the plaintiff pay the costs of the application as well as the costs thrown away by reason of the amendment to the statement of claim. While, in my view, that is the appropriate course if the costs of the application are to be dealt with separately I will hear the parties on that issue.
42. The only remaining issue in relation to the proposed amended statement of claim relates to the proposed amendments to paragraph 6 of the claim. The proposed paragraph is:
43. The point made by the defendants is that insofar as there is now to be an allegation that the motion was circulated "on behalf of" the first defendant, the person or persons who acted as the agent of the first defendant should be identified. The plaintiff contended that if necessary such particulars could be provided by way of letter and that such a course would avoid the need for a further application to be made in relation to an amended draft of the proposed amended pleadings.
44. My view is that the more appropriate course is to grant leave to amend the pleading subject to the condition that particulars are provided in the pleading of the person or persons who acted on behalf of the first defendant in circulating the motion. I take that approach because the primary position adopted in the Rules is that particulars must be provided in a pleading: rr 430, 433(1). I do not think it is appropriate to rely in the first instance upon the alternative rule - r 433(2) - which permits further particulars to subsequently be provided by letter.
1. The application in proceeding dated 17 August 2015 is dismissed.
2. The plaintiff has leave to file a further amended statement of claim in the form of the document which is Annexure A to the affidavit of Basem Seif affirmed 21 October 2015 except that the document so filed must include, in relation to paragraph 6, particulars of the person or persons who circulated the motion on behalf of the first defendant.
46. Although I have indicated the manner in which it would be appropriate to deal with the costs of the second application I will hear the parties as to the costs of both applications. I will also hear the parties as to whether or not I should, at this stage, make any further directions. In that regard the parties will no doubt be aware of the exhortation of Allsop ACJ in Dillon v Cush; Dillon v Boland [2010] NSWCA 165 at [3]:
It is to be hoped that the parties can see the possibility of compromise in an attempt to avoid significant further costs over such small verdicts. Compromise would avoid the risk of financial ruin to one party, or all parties, by the continuation of this litigation and would also avoid the risk of having to recognise, in due course, that all is lost save honour and life, on both sides.
I certify that the preceding forty-six [46] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Associate Justice Mossop.
Lazarus
Azize & Ors [2015] ACTSC 344
(1993) 120 ALR 693