M v Public Guardian

District Court of NSW|2017-08-24|Before: Mr J

The application before the court

These are my reasons for orders granting leave to the plaintiff to discontinue (on terms, including costs) proceedings for defamation commenced on 17 February 2017 concerning a publication or publications asserted to have been made by the defendant on or after 19 February 2016.
The defendant is the Public Guardian. The defendant opposed the granting of leave to discontinue unless appropriate orders were made for costs (by way of a gross sum costs order) and to prevent the bringing of further proceedings by the plaintiff.
By reason of the nature of the allegations of criminal conduct (which appear to relate to some ongoing inquiry), I have taken the precaution of anonymising the surname of the plaintiff and identifying factors other than the asserted commission of a crime and of the appointment of the defendant as guardian of a person under management, that person being the plaintiff's mother.

The parties' submissions

Mr Watts' submissions set out that the defendant, in accordance with the New South Wales Government Model Litigant Policy, has attempted to assist the plaintiff in defining the issues in the proceedings. The defendant had voluntarily provided a copy of a document to the plaintiff's solicitor which appeared to conform to the description of the document dated 19 February 2016 which appeared to be what the plaintiff was seeking to sue upon, but no response was ever received and no amended statement of claim was provided.
The defendant's concern is one commonly shared by defendants in the same situation: proceedings will be discontinued and then simply started again at a later date. Mr Watts set out, in paragraph 17 of the written submissions, his interpretation of the relevant legal principles: "17. It is noteworthy that a discontinuance does not bar subsequent proceedings, nor even an application to revive the proceedings by setting aside the discontinuance, unless the discontinuance was on terms that no new proceedings would be brought: The Kronprinz (1887) 12 App Cas 256 at 262; KBRV Resort Operations Pty Ltd (t/as Kingfisher Bay Resort & Village) v Chilcott (2001) 51 NSWLR 516 at 40; [2001] NSWCA 116 at 40; BC200102124."
Mr Watts submitted that discontinuance would simply result in fresh proceedings for defamation being commenced by the plaintiff at some future date. His concerns were not addressed by the solicitor for the plaintiff, who merely relied upon the provisions in r 12.1 Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and the entitlement of a party to discontinue being an entitlement that was rarely refused. Mr Watts inferred that further proceedings were likely to be commenced and that, if so, his client should be protected by appropriate orders, including costs orders.

Leave to discontinue

UCPR r 12.1 provides: "12.1 Discontinuance of proceedings (1) The plaintiff in any proceedings may, by filing a notice of discontinuance, discontinue the proceedings, either as to all claims for relief or as to all claims for relief so far as they concern a particular defendant: (a) with the consent of each other active party in the proceedings, or (b) with the leave of the court. (2) A notice of discontinuance: (a) must bear a certificate by the plaintiff, or by his or her solicitor, to the effect that the plaintiff does not represent any other person, and (b) except where it is filed with the leave of the court, must be accompanied by a notice from each party whose consent is required by subrule (1) to the effect that the party consents to the proceedings being discontinued in accordance with the notice of discontinuance. (3) If any such consent is given on terms, those terms are to be incorporated in the notice of consent. (4) If any party has not been served with the originating process, the plaintiff must file an affidavit to that effect. (5) For the purposes of this rule, proceedings on a cross-claim are taken to be different proceedings to the proceedings on the originating process and to proceedings on any other cross-claim."
Costs are normally ordered against the discontinuing party unless a defendant has acted unreasonably in the conduct of the proceedings (Cummins v Australian Jockey Club Ltd [2009] NSWSC 254 at [32] - [34]). That cannot be the case here; if anything, the defendant has been too generous to a plaintiff with a hopelessly pleaded case and who has failed to comply with timetables. However, the court will generally grant leave to discontinue unless this would cause an injustice to the defendant. If so, the correct approach is to grant the discontinuance upon terms which will preserve the advantage the defendant has gained in litigation which would otherwise be lost, such as the payment of costs and/or orders preventing the bringing of further proceedings.

Discontinuance of defamation proceedings

However, the entitlement of a plaintiff to commence more than one set of proceedings in defamation means that different principles apply than those applicable to other causes of action. Historically, this has meant that the court, to avoid the problems of the multiple publication rule, has adopted harsher methods of dealing with discontinuance of proceedings than might otherwise be the case. In some early cases, where the proceedings had reached the trial stage, the discontinuance was refused and the plaintiff forced on to trial (Fox v Star Newspaper Co Ltd [1898] 1 QB 636; [1900] AC 19). In proceedings which were commenced and then immediately abandoned (Packer v Meagher [1984] 3 NSWLR 486 at 486-487), indemnity costs could be awarded.
In Packer v Meagher, the plaintiff, who had been the subject of inquiry at a Royal Commission, brought defamation proceedings against the senior counsel assisting the Commission shortly before the Christmas vacation and then filed a Notice of Discontinuance without leave (which was possible under the rules at that time) after the defendant filed an appearance. The whole case was only on foot for a matter of days. Hunt J, referring to the conduct of the plaintiff as an attempt to "poison the fountain of justice" (at 494), awarded indemnity costs.
While courts had long recognised that the concurrent commencement of defamation proceedings in more than one location, the difficulties caused by the multiple publication rule and the lengthy limitation period became starkly apparent as modern technology resulted in multiple publications on a worldwide basis. Although the drafters of the uniform legislation rejected calls for a single publication rule, the limitation period was restricted to one year and s 23 Defamation Act 2005 (NSW) was introduced to require leave to commence proceedings in certain circumstances.
Section 23 Defamation Act 2005 (NSW) ("the Act") provides: "23 Leave required for further proceedings in relation to publication of same defamatory matter If a person has brought defamation proceedings for damages (whether in this jurisdiction or elsewhere) against any person in relation to the publication of any matter, the person cannot bring further defamation proceedings for damages against the same defendant in relation to the same or any other publication of the same or like matter, except with the leave of the court in which the further proceedings are to be brought."
In addition, the limitation period of one year, with a strict test for extension of time was imposed.
Dealing with the latter provision first, in the present case, the time for commencement of proceedings concerning any publications of the kind described in the matter complained of has expired. The plaintiff failed to comply with the orders extending the limitation period and he likelihood of the plaintiff being granted a further extension of time by the court, taking into account the very significant hurdles to such applications (Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175; as to the special principles applying where the matter complained of has not been provided, see Emmerton v University of Sydney [1970] 2 NSWR 633) would be very remote.
Neither party referred to the implications of the expiry of the limitation period or to s 23, so I invited them to consider decisions on these issues handed down by the Supreme Court and Court of Appeal in the course of what I will refer to as "the Ghosh litigation", which are relevant to the following issues before the court: 1. The observations of Basten JA in Ghosh v Nine Digital Pty Ltd [2017] NSWCA 90 concerning s 23; 2. Decisions on gross sum costs orders (Ghosh v Miller [2016] NSWSC 430 and Ghosh v Miller (No 4) [2016] NSWSC 1710), and 3. The order requiring leave for further applications made by Rothman J in Ghosh v Miller (No 2) [2017] NSWSC 791.
The facts in the Ghosh litigation may briefly be summarised as follows. The plaintiff commenced proceedings in 2010 in the Supreme Court of Queensland for Australia-wide broadcasts, which were later struck out for want of prosecution (Ghosh v NBN Ltd and Ors [2014] QCA 53). In 2013 she commenced further proceedings for a total of 54 publications, many of which essentially repeated the same imputations but only 4 of which were actually the broadcasts sued on in Queensland. All those claims were subsequently struck out on the "reluctant gladiator" principle (Ghosh v Ninemsn Pty Ltd [2015] NSWCA 334). However, the plaintiff then sought to commence proceedings against members of the public shown in the 2009 broadcasts (Ghosh v Miller (No 2) [2017] NSWSC 791) as well as to bring a fresh claim against the broadcasters (Ghosh v Nine Digital Pty Ltd [2017] NSWCA 90), both of which applications were refused.
Although the Court of Appeal refused leave to appeal on other grounds in Ghosh v Nine Digital Pty Ltd, considering those proceedings were not an appropriate vehicle for determination of s 23, both Basten JA and Simpson JA made observations about the impact of this provision in relation to claims brought for what were agreed to be later publication of "effectively the same" matter (at [41]). Section 23 was not necessarily framed only to prevent the bringing of concurrent actions concerning what was effectively the same matter (per Basten JA at [22]), but might even extend to publications which, by reason of the multiple publication rule, come into existence after the judgment or discontinuance, these being publications of the kind that Dr Ghosh sought to sue upon (per Simpson JA at [64]).
The observations of Basten JA and Simpson JA, although obiter only, are compelling. However, the law in this are remains undeveloped and courts should err on the side of caution when considering what are the appropriate orders to be made.
As the Ghosh litigation demonstrates, the multiple publication rule, as presently interpreted, means that even obtaining a judgment for the defendant does not provide the finality the defendant seeks. Even where the publication in question may not be electronic, and thus safe from limitation problems, or when only one action for defamation has been commenced (as opposed to the 58 claims brought by Dr Ghosh), this is a genuine and serious issue for concern for any defendant.

What orders should be made for determination of these proceedings?

Both parties agree, for their respective reasons, that these proceedings served no purpose beyond the accumulation of costs, which brings into play the issue of proportionality of costs under s 60 Civil Procedure Act 2005 (NSW). The question was the terms (having regard to UCPR r 12.1) upon which this litigation should be discontinued.
The first of these is the issue of costs. For the reasons set out below, I have made a gross sum costs order in favour of the defendant.
The second is whether I should enter judgment in favour of the defendant, as requested by Mr Watts, or impose other restrictions.
The matters complained of are not attached or identified by date; it is unclear whether there is more than one document and it is possible that the publication or publications may have been oral. It is hard to see how judgment could be entered in favour of the defendant in those circumstances. As to dismissal of proceedings where a discontinuance is sought, this seems contrary to UCPR r 12.1, which mandates that a discontinuance is generally granted where sought, subject only as to costs.
This brings me to the question of whether any other order could be made.
One of the orders sought, in Ghosh v Miller (No 2), was for the plaintiff to be declared a vexatious litigant. Although the plaintiff, in addition to her unsuccessful 58 claims against nine or more defendants arising from similar material, had brought more than a dozen similarly hopeless claims against the seven Miller defendants in the CTTT, Local Court, District Court, Supreme Court and Court of Appeal, Rothman J declined to make such an order (Ghosh v Miller (No 2) at [132] - [133]). While there is no question of these proceedings being vexatious, the alternative, and innovative, step that Rothman J took may be of particular assistance in preventing misuse of the legal process at a lower level.
What Rothman J did was to state that Dr Ghosh's conduct, while not vexatious, nevertheless warranted "some limitation on the commencement of fresh proceedings" (at [133]). He accordingly imposed a restriction on the commencement of further proceedings (apart from any appeal) without leave.
There are three reasons why such an order would be appropriate in the proceedings before me. First, although this defamation action, at first blush, seems very far removed from the excesses of the Ghosh defamation claims, it shares many of its most unfortunate features: 1. The pleadings are hopeless and the matters complained of are missing; 2. There has been complete failure to comply with any of the court orders; 3. The limitation period has been allowed to elapse; 4. The response of the plaintiff and her legal representatives to the concessions of the defendant (which included consenting to an extension of the limitation period, trying to find the matter complained of and spending considerable time trying to resolve the matter) has been to continue to behave in the same fashion.
All of those characteristics were the subject of adverse comment in the Ghosh litigation.
Second, UCPR r 12.1, alive to the possibility of Veratian misuse of the legal process by misuse of the entitlement to discontinue hopeless proceedings, already permits the court to place terms of this kind on leave to discontinue.
Third, the uniform legislation contains many provisions designed to prevent abuse of process, which is acknowledged to be a particular difficulty in defamation litigation and resulted in the development of the Jameel principle at common law (Dow Jones & Co Inc v Jameel [2005] EWCA Civ 75; [2005] QB 46).
In these circumstances, ss 60 or 61 Civil Procedure Act 2005 (NSW), as viewed through the provisions of UCPR r 12.1 permitting the granting of leave to discontinue on terms, would warrant the making of such an order.
I have gratefully borrowed his Honour's wording of the order made in Ghosh v Miller (No 2) in order to apply it to the conditions of discontinuance that I propose to impose. I have widened it to ensure that any reputation-based claim (whether defamation or otherwise) arising from this publication is also caught, although any such attempt may be struck on common law principles relevant to abuse of process in any event.

Costs

The defendant brought an application for a gross sum costs order pursuant to s 98 Civil Procedure Act 2005 (NSW). Applications of this kind are well suited to applications of this kind: Bobb v Wombat Securities Pty Ltd [2013] NSWSC 863 at [6] per Beech-Jones J.
The making of a gross sum costs order is a two-stage process, where the court must first be satisfied that the circumstances of the case warrant the making of a gross sum costs order (Harrison v Schipp (2002) 54 NSWLR 738 at [22]), and only then, as to the quantum of the costs involved, consider that the evidence is sufficient.
As to the first stage of the process, I accept Mr Watts' submission that small claims of this kind are appropriate for gross sum costs orders, particularly where there is a prior history of the kind which is apparent here.
As to the second stage, there is a lengthy affidavit by the solicitor with carriage of the matter set out the relevant rates and time spent. There was no request for the deponent to be cross-examined.
There were two gaps in the affidavit. First, it was clear, from its contents that the costs outlined were not the subject of any deduction for being ordered costs as opposed to indemnity costs (which I was told were not sought). As the defendant did not make any application for indemnity costs, it was necessary to apply a significant discount to the total sum claimed. Figures generally put to the court in this regard are 60 - 70%.
Second, there was no deduction for the possibility of some ordered costs being refused. In written submissions, Mr Watts suggested 20% in his written submissions but, in oral submissions, he put this figure at only 10%.
A number of judgments in the Supreme Court have put this figure as generally being 30%: see, for example, Plassas v Person (No 2) [2016] NSWSC 1515; Aquaqueen International Pty Limited [2015] NSWSC 500 at [30] per Black J. However, this is not a general rule; I note that in Starr-Diamond v Diamond (No 4) [2013] NSWSC 811 there was a 20% reduction, namely 80% of $367,782.96, and in the matter of Re Palladium Consulting Pty Ltd [2013] NSWSC 92 the reduction was 15%.
Although Mr Watts put to me that the Crown Solicitor was particularly successful in costs assessments, I consider that I should err on the side of caution, particularly given the omissions from the Crown's costs affidavit referred to above.
Applying a 20% discount to the gross sum which I consider payable for the reduced figure for ordered (rather than indemnity) costs, I assess the costs payable to be $8,000.

Orders 1. Pursuant to r 12.1 Uniform Civil Procedure Rules 2005 (NSW), grant leave to the plaintiff to discontinue these proceedings upon the following conditions: 1. The plaintiff is to pay the defendant's costs of these proceedings (including this application), which are assessed on a gross sum costs order basis, of $8,000. 2. The plaintiff is precluded from bringing any further proceedings for defamation or actions for similar reputation-based relief based upon the publications identified in the statement of claim as actionable.

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: 15 September 2017

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