Munro v Wheeler

The proceedings and parties

1. The publications the subject of the claim for defamation are two Facebook posts made in June 2020. The claim against the first defendant is for both publications. The claim against the second defendant relates only to the second defendant's Facebook post on her business page.
2. The circumstances leading to the publications were as follows. On Tuesday, 9 June 2020, the plaintiffs, who are friends, were out for a walk in a country town in the area where they lived, when they saw a five-month-old King Charles Cavalier spaniel puppy wandering along the street. Unknown to them, this puppy, Teddy, belonged to the first defendant. Teddy had escaped from the back yard of her home, which was just nearby. They took Teddy with them as they continued their walk.
3. The first defendant quickly discovered that Teddy was missing and immediately posted notices on social media, asking for help to find the puppy, a loved family pet. She later consulted the second defendant, a "pet detective" who ran a business known as "Arthur and Co Pet Concierge" which helped owners of lost animals to find their pets.
4. As a result of enquiries, the defendants learned that the plaintiffs had been seen with the dog in the street by passers-by. The persons who provided this information said that the plaintiffs had told them that they had found the puppy in the street and would be dropping it off at the nearby pound. Other information provided to the defendants included a video, provided by the headmaster of a nearby school, showing the plaintiffs walking alongside the school with a dog that clearly was the first defendant's puppy. However, the defendants also learned that the first plaintiff had revealed that in fact she had taken the puppy to the home of a friend (Mr Loader), a meat inspector who was a mobile micro-chipper. They also learned that the first plaintiff said that, when she opened the car door outside Mr Loader's home, the puppy had jumped out and run away.
5. Under the headings "Bring Teddy Home" and "Name and Shame", the first defendant made a Facebook post containing this information and identifying each of the plaintiffs by name and photograph. A second post of a similar nature was published by the second defendant on her "pet detective" website.
6. Each of the matters complained of is asserted to give rise to the same imputations. These are that the plaintiffs are criminals, dog thieves, remove microchips and re-chip in order to on-sell stolen dogs, are liars, are untrustworthy, cause mental anguish to young children, are prepared to steal a puppy and re-chip it and illegally sell it to members of the public, are of ill repute, are dishonest and are perpetrators of a fraud (paragraphs 11 and 21 of the amended statement of claim).

The procedural history of the claim

1. Defamation proceedings were commenced on 11 June 2021. Defences of qualified privilege were pleaded and, in addition, the second defendant also pleaded a defence of justification to all imputations.
2. Up until a few months before the 2024 trial date, the parties were represented by experienced members of the legal profession, who conducted the case in the "docket" fashion, namely reserving all issues to the hearing. No interlocutory issues were raised in the Defamation List, but a long and careful series of timetable orders were made by the List Judge on 1 February 2023, when the hearing date of 26 February 2024 was allocated. No orders from the court were sought for the whole of 2023 although it is clear, from the subsequent complaints of the defendants, that the plaintiffs had wholly failed to comply with the List Judge's orders.
3. In late 2023 or early 2024, the first defendant's solicitor, although never filing a formal notice, advised her client that she could not continue to represent her. Since that time, the first defendant has represented herself. The second defendant has been represented in 2024 by her husband, Mr O'Callaghan, who is a solicitor; he filed a Notice of Change of Solicitor on 25 January 2024.
4. The first notice the Court had of there being any issues in relation to readiness in these proceedings occurred when Mr O'Callaghan contacted the Court on 7 February 2024, concerning service of a medical report by the plaintiffs without leave and failure of compliance by the plaintiffs with the orders made by Dicker SC DCJ on 1 February 2023. Both these issues were the subject of orders (Munro v Wheeler [2024] NSWDC 23).
5. The commencement of the trial was, however, imminent and the principal question was whether the parties were ready for trial. As all the parties were anxious to retain the hearing date, timetabling orders were made, so as to permit the hearing to get a start. Even when the first defendant advised that she was booked in for urgent surgery on 29 February 2024 and that only three of the five days could be used, the parties still wished to go ahead with the hearing. Accordingly, by agreement, the hearing commenced, on the basis that the plaintiffs and some of their witnesses would give evidence for three of the five days allotted, and the proceedings would then be adjourned part-heard.
6. This adjournment was principally granted to enable the first defendant to undergo surgery, but it was also intended to permit the parties to deal with outstanding discovery issues. The adjourned trial date was later agreed to be 21 October 2024 (this being the earliest convenient date for the parties), with an estimate of a further five days, the original estimate of trial time being agreed to have been insufficient, and a series of timetables were put in place for discovery issues to be resolved.
7. The defendants relisted the matter seeking orders for the plaintiffs continued failure to comply with their discovery obligations. On 2 September 2024, the court made a guillotine order for the production of the phone and social media records to be produced.
8. The key event, according to the second defendant, was that, on 6 September 2024, a further List of Documents was provided for the first plaintiff, asserting, for the first time, that her mobile phone had been irreparably damaged in early 2023 and replaced soon afterwards. This led to the issuing of subpoenae to Telstra, returnable over the previous week, revealing that the plaintiffs and Mr Loader had exchanged many more MMS and SMS than had previously been admitted, none of which had been discovered.

The second defendant's claims of failure to discover and/or destruction of material

1. The second defendant sets out, in submissions prepared by Mr O'Callaghan, that the plaintiffs have failed to give discovery of the following: 1. The first plaintiff has failed to discover 101 SMS and 12 MMS messages sent by her to the second plaintiff, as well as all telephone and social media messages exchanged with Mr Loader. 2. The second plaintiff has failed to discover 123 SMS and 17 MMS messages sent from the second plaintiff to the first plaintiff. 3. Both plaintiffs have failed to comply with their discovery obligations in their first and subsequent Lists of Documents. 4. The circumstances in which it is claimed for the first time in September 2024 that first plaintiff's mobile phone was destroyed in April 2023. This is not simply new information but directly contradictory of earlier discovery affidavits and statements to the court by her legal representatives. 5. The explanation given by the second plaintiff in relation to the replacement of her mobile phone in October 2020.
2. In his affidavit of 17 October 2024 attaching the relevant documentation, Mr O'Callaghan summarises the current situation as follows: 1. The first plaintiff's discovered Telstra records only show one MMS being sent from the first plaintiff to Mr Loader (this is the MMS referred to at line 16,126 of his exhibit on the page numbered 279 of 564), sent at 06:24:08 on 26 June 2020 (UTC), which is 4:24:08 pm on that day (AEST). 2. However, the records produced by Telstra show a total of 61 records of MMS messages being sent from the first plaintiff to Mr Loader, with all but five of the 61 records occurring on days other than 26 June 2020. These 56 records do not relate to the MMS message described in the previous paragraph. 3. The five records occurring on 26 June 2020 in Telstra's subpoenaed records appear at line numbers 4965, 4966, 4967, 4968 and 4971; all five appear to relate to the single SMS referred to in paragraph (a) above and would appear to be duplicates for the reasons given in paragraph (b) above. 4. None of the metadata for the remaining 56 MMS messages sent to Mr Loader as shown in the Telstra subpoena material were discovered or produced by the first plaintiff. 5. None of the content of any of the 61 MMS messages sent to Mr Loader were discovered or produced by the first plaintiff. In fact, for the period from 9 June 2020 to 17 June 2020 (being the period of time between Teddy going missing and the plaintiffs being shown in CCTV footage in posts to Facebook), the first plaintiff's discovered Telstra records showed no MMS messages as being sent by the first plaintiff to Mr Loader at all. However, Telstra's records under subpoena show 23 MMS messages being sent from the first plaintiff to Mr Loader, on what is acknowledged to be the correct mobile phone number.
3. Mr Larkin SC described this as "technical material" which would need to be presented by an expert witness at the hearing. Whether or not that is necessary, it seems clear that what is complained of is that, over the period between the plaintiffs knowing that the first defendant was searching for her lost dog and the publication of the CCTV footage identifying the plaintiffs with the dog, there were many messages exchanged between both plaintiffs and between the first plaintiff and Mr Loader which have not been produced although caught by the terms of the categories of documents sought on discovery.
4. Both plaintiffs have been cross-examined, but leave for further cross-examination was sought before the adjournment, in February 2024. The plaintiffs have not yet completed their case; in particular, Mr Loader has yet to give evidence.
5. Orders had been made on 14 March 2024 for the plaintiffs to give discovery of written and telephone records between the plaintiff and Mr Loader and also between Mr Loader and any person concerning any King Charles Cavalier dogs. They have only now produced a document described as "Telstra telephone records for Greg Loader", dated 16 September 2024. This is a PDF document of metadata of outbound communications presented in tabular format and amounting to 83 pages. According to Mr O'Callaghan's submissions, it does not contain any record of any MMS message sent to him by the first plaintiff, although Telstra's subpoenaed material clearly demonstrates to the contrary, as the summary above shows.
6. It was as a result of this late production of Mr Loader's material that the second defendant issued a second Telstra subpoena seeking Mr Loader's Telstra records. As is set out in paragraph 16 of Mr O'Callaghan's affidavit, the material produced by Telstra in response to this second subpoena shows a total of 45 records of MMS messages being sent from Mr Loader to the first plaintiff. This is directly contrary to the records provided by Mr Loader, which showed no MMS at all. In fact none of the metadata or content of the MMS messages have been discovered or produced by the plaintiffs at all, according to the material put before me by the second defendant.
7. The second defendant submits that: 1. The plaintiffs have continued to fail to comply with court orders from the date on which these proceedings were adjourned up until the present. There have been at least 16 occasions since the commencement of these proceedings where the plaintiffs have failed to comply with court orders, principally in relation to obligations to discover phone and social media records of their communications with each other and with Mr Loader, despite being specifically ordered to provide these documents as long ago as 7 July 2022. 2. The plaintiffs had each served a "Revised List of Documents" on 8 February 2024, providing what purported to be explanations in relation to the proposed production of these documents and mobile phones, and gave explanations in their evidence which the defendants submit are dishonest and contrary to subsequent admissions. 3. It has only been as a result of the issuing of the subpoena to Telstra in the last few weeks and as a result of the revelation, on 6 September 2024, that the first plaintiff had disposed of her mobile phone in April 2023, that the enormity of the failure to discover and produce records has become apparent.
8. This application is fraught with difficulties: 1. First, as noted above, the hearing of these proceedings is set to continue on Monday 21 October 2024. While the application was unable to be heard on its first return date earlier this month for reasons not of the parties' making, the fact remains that this is an application brought at a very late stage of these proceedings, when the parties have had many months to prepare and to continue preparation of the hearing, and one which has been heard in conditions of some difficulty, given the shortness of time and complexity of technical evidence. 2. Second, dismissal of proceedings which are part-heard gives rise to complex legal issues where there is uncertainty as to the relevant principles. That is the case even where the hearing has not yet started, as the strong dissent from McColl JA in Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264 ("Palavi 1") demonstrates. Some of the many problems arising where such an application is made during the trial (both in Australia and other common law jurisdictions) are identified by Camille Cameron and Johnathan Liberman in "Destruction of Documents before Proceedings Commence: What is a Court to Do?" [2003] MelbU LawRw 12; (2003) 27(2) Melbourne University Law Review 273. Professor Cameron's discussion of British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524; [2002] VSCA 197) highlights crucial areas of uncertainty in terms of the onus of proof and the manner in which any cross examination on these issues should be permitted. I provided a copy of this article to the parties and Mr Lazinski specifically drew my attention to the discussion in British American Tobacco Australia Services Ltd v Cowell of the onus as being to the criminal standard. Whether or not that is correct (and Professor Cameron does not consider this to be the case) or whether Briginshaw (Briginshaw v Briginshaw (1938) 60 CLR 336) would apply, Mr Lazinski submitted that I must have regard to Farah Constructions Pty Ltd v Say-Dee Ltd (2007) 230 CLR 89, not an easy task (see Antonia Glover, "What's Plainly Wrong in Australian Law? An Empirical Analysis of the Rule in Farah" [2020] UNSWLawJI 31; (2020) 43(3) UNSW Law Journal 850). 3. Third, the circumstances in which a trial may be interrupted by an application requiring a finding on credit in advance of the finding on other issues may give rise to issues requiring the trial judge to consider recusal (Erincole Building Services Pty Ltd (ACN 075 796 842) v John Holland Pty Ltd (ACN 004 282 268) [2010] ACTSC 77 at [50] - [54]). In Palavi 1 at [78], Allsop P stated that "the greatest caution should be exhibited in embarking on credit findings at an interlocutory stage of proceedings, especially if the issues raised are capable also of being exposed at trial". 4. Fourth, the warnings made by Allsop P in Palavi 1 at [101] about the need for caution in relation to over-enthusiastic discovery are of particular relevance where the documentation sought is considerable and is framed in a request for further and better discovery. 5. Fifth, where these proceedings are already part-heard and, but for this application, would continue to finality next week, there are substantial case management factors to take into account, conformably with s 56 of the Civil Procedure Act 2005 (NSW). 6. Sixth, the parameters of the application are unclear. As noted at the commencement of this judgment, is this an application for the entire case to be dismissed, or is it restricted to the second defendant's defence of justification (in which case the question would be whether one or more of the imputations should be struck out, as was the case in Palavi 1)? It should not be forgotten that Mrs Palavi's claim for the remaining three imputations survived and went to trial before another District Court judge in 2012, where the jury found that the imputations pleaded did not arise (see the trial report in the Gazette of Law and Journalism, 28 March 2012 (subscription required)). If the application goes to the defence of qualified privilege, pleaded by both defendants, what is the position of the first defendant? Mr Lazinski submitted that material would need to be put forward for each plaintiff individually, and with precision. 7. Seventh, and perhaps most importantly, a great deal of what is asserted to be evidence is based on inferences to be drawn from documents which have not yet been tendered. Most of the material put before me is material about which neither plaintiff has been cross-examined. Mr Larkin SC acknowledges as much by noting that leave to further cross-examine the first plaintiffs before the hearing was adjourned had been sought.
9. Individually, each of the above difficulties would have been of concern. It has been necessary for me to exercise great caution in determining this application in such a manner as to avoid derailing the hearing which is to commence on Monday.

The evidence

1. The plaintiffs rely on the following affidavits: 1. Affidavit of Gregory James Loader dated 16 September 2024 2. Affidavit of Timothy Lachlan Knox dated 23 September 2024 3. Affidavit of Vanessa Jane Turner dated 26 September 2024 4. Affidavit of Scott Anthony Foster dated 9 October 2024
2. The second defendant relies on the material in their Courtbook and on the following affidavits: 1. Affidavits of Thomas Alexander O'Callaghan dated 2 and 17 October 2024.
3. Apart from drawing my attention to factual material in Mr O'Callaghan's latest affidavit, Mr Larkin SC did not seek to tender any material. Apart from foreshadowing objections to Mr O'Callaghan's opinions, Mr Lazinski did not seek orders striking out material. I have marked these affidavits, the Court Book provided by the second defendant and the submissions as MFI 2. This material is accordingly not before the court in any formal sense.
4. What I have done, however, is to set out the claims made in relation to the plaintiffs and Mr Loader, as this will make these easier to understand at the hearing. This is, however, a summary of what the second defendant will attempt to prove at the trial, and nothing more.

What is the importance of the documents in question?

1. All of the documents relate to one issue, namely the veracity of the evidence of the plaintiffs and Mr Loader in relation to their interactions on the day of Teddy's disappearance and subsequently, with particular reference to the period of time before and shortly after the CCTV footage showing the plaintiffs with Teddy was published.
2. The plaintiffs each gave evidence, when the hearing commenced in February 2024, that they had picked up the puppy and walked him into town to the Aldi car park with the first plaintiff's car was parked. From there, the first plaintiff says she took the puppy in her car to Mr Loader's home address but, upon arriving there, the puppy jumped out and ran off, never to be seen again.
3. The second plaintiff said she did not go to Mr Loader's home. She did, however, briefly post (at 7:40 pm) an answer to the first defendant's enquiry (of 7:29 pm) about the puppy to say that the puppy had been found, an MMS picture message and the message on Facebook messenger, both of which she deleted soon afterwards.
4. The second defendant has pleaded in her defence that it is to be inferred that the first plaintiff's purpose in taking the puppy to Mr Loader's house rather than to the veterinary surgery or to the nearby council pound was to have the puppy's microchip changed, removed or replaced by him, or alternatively to supply the puppy to him for breeding purposes (the puppy had not been desexed).
5. In addition to the messages on 9 and 12 June 2020, there were further messages on 16 June and 17 June 2020, details of which are set out in chronological order in Mr O'Callaghan's submissions, and which may be summarised as follows: 1. June 9, 2020: The second plaintiff's messages to the first defendant were unsent in unknown circumstances. The degree to which there were exchanges between the first plaintiff and Mr Loader appears also to be an issue. 2. June 12, 2020: Between 9:00 pm and 9:52 pm, after the second defendant had posted on Facebook about the search for Teddy on the first defendant's behalf, the plaintiffs exchanged 9 SMS messages. 3. 16 June 2020: After the second defendant posted a CCTV image of the plaintiffs with a dog matching Teddy's description, there was a further series of MMS posts between the plaintiffs. Between 6:50 am and 1:27 am the following morning, both plaintiffs and Mr Loader exchanged dozens of SMS and MMS messages and voice calls, some lasting for dozens of minutes at a time. 4. 17 June 2020: At 12:13 am, the first plaintiff sent a message to the second defendant requesting the removal of her 16 June post, to which the second defendant responded at about 8:31 am by hiding from public view and then deleting it. There was a further post with no CCTV image. At 10:37 pm the first defendant posted the first matter complained of is defined in the amended statement of claim of 21 October 2021. During this day, the first plaintiff and second plaintiff exchanged 15 MMS messages, 74 SMS messages and 6 voice calls. The first plaintiff also had four calls with Mr Loader.
6. As Mr O'Callaghan sets out at paragraph 9 of his submissions, at no stage during the proceedings have the plaintiffs discovered copies of any of the SMS or MMS messages identified in the previous paragraph, or the Facebook message which the second plaintiff sent but then unsent.
7. The contested issues of fact relevant to the defences pleaded are whether the plaintiffs, or one of them, took Teddy to Mr Loader's home as a step to reunite the puppy with his true owner, or because either of the plaintiffs had another purpose and if so, what that purpose was. The nature and reasons for the electronic communications between the plaintiffs and between the first plaintiff and Mr Loader would likely reveal this information, as well as being of relevance to the circumstances in which the second plaintiff unsent the message she initially sent to the first defendant about the puppy having been found. Mr O'Callaghan submits that if the second defendant proves that one or the other or both of the plaintiffs took Teddy to Mr Loader's residence on 9 June 2020 with such purposes in mind, the defence of justification in relation to the imputations concerning the taking of the puppy will succeed. He submits that the most critical and objective evidence will be the contemporaneous written records and communications going to the plaintiffs' intentions and states of mind for the period 9 to 17 June 2020, including telephone, social media and other records of the plaintiffs' communication between themselves and any communication between either or both of them and Mr Loader for this same period.
8. Mr O'Callaghan submits that a significant factor that the court should take into account is the history of non-compliance with court orders to provide these documents, the inconsistent explanations as to the existence and/or destruction of mobile phones and mobile phone records and the inherent implausibility of failure to discover so many records. He also draws to the court's attention that these proceedings were only commenced at the very end of the limitation period, in circumstances where evanescent records such as text messages and the like would be particularly difficult to trace.

The complaints of delay in discovery

1. The second defendant also complains of the plaintiffs' delay in providing documentation as being evidence of a guilty mind. Mr Larkin SC draws my attention to the following: 1. The orders made for the parties to give discovery by 19 August 2022 made by Levy SC DCJ included an order for production of "all documents evidencing, recording or constituting communications between the first or second plaintiff and Mr Greg Loader between 1 June 2019 and 30 June 2021". The plaintiffs were also to provide all documents evidencing communications between them and any other person concerning the puppy. 2. The List of Documents served on 19 August 2022 did not produce any of the documents referred to above and in addition other documents resulting in a further order for discovery. 3. In the course of raising issues in relation to inadequate answers to interrogatories, the second defendant's former solicitors, in their letter of 10 November 2022, sought production of the plaintiffs' telephone records and written communications in accordance with the categories of discovery referred to in (a) above. The plaintiffs were given an extension of time to do so but failed to comply with this step and in fact gave no reply at all until 8 February 2024, when Mr O'Callaghan came into the matter to represent his wife, the second defendant. 4. There was failure by the plaintiffs to comply with the orders made by the List Judge on 1 February 2023. This included failure to comply with the obligations for discovery. The plaintiffs also failed to reply to a letter sent by Mr O'Callaghan on 25 January 2024 raising these matters and it was only when the matter came before the court as a result of this that the plaintiffs served a revised List of Documents. However, the explanation given by the first plaintiff was different. She referred to being unable to provide clearer copies of screenshots of messages because of a phone upgrade and made no mention of a later allegation that her mobile phone had in fact been destroyed in early 2023. 5. On 12 February 2024, Mr O'Callaghan again wrote to the plaintiffs' solicitors concerning deficiencies in discovery and made a specific request for the messages passing between the first and second plaintiff and the first plaintiff and Mr Loader.
2. As at February 2024, the only such material that the first plaintiff had discovered were two extracts of SMS text message exchanges occurring between 18 and 28 June 2020 between herself and two persons unconnected with the defendants. These two exchanges were extracted using software known as 'iMazing' on 15 November 2022 and related to the issue of extent of publication. The first plaintiff also discovered Telstra metadata for outbound communications between 1 June 2019 to 30 June 2021. However, the messages themselves were not produced.
3. Additional problems arise from the evidence of the second plaintiff in cross examination on 27 February 2024, when she told the court she no longer had the same mobile phone that she had been using in June 2020, and stated that she had upgraded it at some time between June and December 2020, possibly after the release of the new iPhone (which occurred on 23 October 2020). As at that time neither plaintiff had satisfied the calls for their iPhones although these were made from the commencement of the discovery process, which predates the destruction date for the first plaintiff's phone.
4. This pattern of non-compliance has occurred during the period since the hearing was adjourned. On 2 September 2024, at the request of Mr O'Callaghan, I made the following order: "Extend time for compliance with orders made on 14 March 2024, such documents require[ed] to be produced by 5 PM 16 September 2024, this order being a self-executing order, with all of the consequences flowing from this, including, inter-alia, that no further documents may be supplied after that date, and that the plaintiff may be required to show cause why these proceedings should not be dismissed."
5. The asserted failure to comply with this guillotine order (and the orders that followed it), against a backdrop of earlier failures to discover when the contents of many of these documents could have been ascertained, are asserted to amount to conduct warranting the dismissal of the proceedings.

Failure to comply with the September 2024 orders

1. The first plaintiff's further List of Documents was served on 6 September 2024. This was accompanied by an affidavit giving a different explanation for being unable to produce those SMS messages that were on the mobile, namely that this phone was irreparably damaged in early 2023 and then replaced. She produced a receipt from Costco for the purchase of the new phone on 17 April 2023. The first plaintiff said that those messages that had been provided from that phone had been previously screenshotted or extracted, and then provided to her solicitors in 2022 when discovery started. No explanation has been given as to why only those messages and not the other messages had been produced. The first plaintiff said that no messages could be obtained from Dr Evans because of his death on 17 April 2024, which I note occurred after these proceedings were adjourned part-heard.
2. As to the first plaintiff's explanation for the phone being destroyed, I note that at the time that the first plaintiff's initial List of Documents was prepared, namely 19 August 2022, it was still in her possession. The receipt from Costco dated 17 April 2023 gives a likely date for this destruction to have occurred, namely very shortly prior to that date, given the level of dependence parties using mobile phones have on their devices. This means that the explanation proffered for the first time on 6 September 2024 is not merely different to previous explanations but must, Mr Larkin SC submits, give rise to the possibility that the first plaintiff has taken a course the same as, or similar, to that taken by Ms Palavi, whose defamation actions were the subject of the same or similar orders after the Court was satisfied that she had disposed of mobile phones with the intention of frustrating discovery orders.

The relevant authorities

1. By way of a general statement of principles, Australian courts have been reluctant to strike out claims, even at the interlocutory level, on the basis of asserted misconduct by a party, the view being that such an order should be made "sparingly" at best: Clark 2 at [46] - [47]. This is the case in the United Kingdom (Powell v Boladz [2003] All ER 131; Powell v UK (2000) 30 EHRR CD 362 at [52]). In British American Tobacco Australia v Cowell, where there was extensive consideration of authority in both the United Kingdom and the United States of America, the court noted with approval decisions such as Capellupo v FMC Corporation, 126 FRD 545 D Minn (1989), where Rosenbaum J warned that the most severe sanction available to the court is default and dismissal, that this is an extreme measure reserved only for the most egregious offences against an opposing party or the court, and that the court must consider default and dismissal as a last resort if no alternative remedy of a lesser, but equally efficient sanction, is available.
2. The principal authorities relied upon by the parties are Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264 (the decision already identified above as "Palavi 1"), where two of the plaintiff's imputations were struck out but the matter returned to the District Court for jury trial in relation to the other three imputations. The second action brought by Mrs Palavi was struck out in its entirety: Palavi v Queensland Newspapers Pty Ltd & Anor [2012] NSWCA 182 ("Palavi No 2").
3. The other principal authorities of assistance are Clark v State of New South Wales (2006) 66 NSWLR 640 ("Clarke 1"); [2006] NSWSC 673 and Clark v State of New South Wales [2012] NSWCA 139 ("Clarke 2"), where a cassette and CD were destroyed at a time when the proceedings had been adjourned to permit technical analysis of the tape recordings to be undertaken. There is a helpful summary of the issues by Ward CJ in Eq in Mirus Australia Pty Ltd v Gage [2017] NSWSC 1046.
4. What these judgments have in common is not merely the principles of law applicable, but also the strength of the evidence against the respective plaintiffs. Mrs Palavi not only boasted to an ABC journalist about sexual messages on her mobile phone but showed her the photos, which the journalist recoiled from, calling them "pornographic". As Mr Lazinski pointed out in his submissions, Mrs Palavi actually posted a Facebook request for help in removing pictures from her phone.
5. Another significant difference is that Mrs Palavi was cross-examined about all the evidence against her, including the destruction of her phones, before the finding was made. The first instance judge permitted cross examination of the plaintiff on all areas, which could then contribute to an order denying the litigant the right to run the case (Palavi 1 at [90]). Although the Court of Appeal considered there was "some error affecting the exercise of the discretion" (at [91]), the Court exercised the discretion anew and adopted all the findings legitimately made by the primary judge which supported the exercise of the power to strike out the two imputations. Allsop P stated at [94]: "Here, the fairness of the trial was put in jeopardy by the deliberate and abusive destruction of evidence central to the case rendering further proceedings unsatisfactory in that they would be unfair and unjust to the respondent. The fairness of the trial and whether it has been put at risk require an evaluation of the potential consequence of the abusive conduct and all the other circumstances. The extent of the evaluation depends on the circumstances. The trial has to be fair to both parties and the order must be just to both parties. It is hardly fair to the defendant to require it to do its best with the evidence it can otherwise muster, in circumstances where the plaintiff, by conduct that was deliberate and an abuse of the Court's process destroys relevant evidence of real significance to the case knowing of her obligations and knowing of the relevance of the material."
6. A similar issue arose in Palavi 2, where the agreed facts as between the parties consisted of the factual issues as set out in Palavi 1. Basten JA stated at [84] - [85]: "84. At least in the case of deliberate conduct intended to pervert the course of a fair trial, to engage the power to stay proceedings permanently or to strike out a pleading (or proceedings) it is sufficient that the conduct create a real and substantial risk of achieving that effect. The effect is not to be presumed, but neither is the plaintiff to reap the benefit of uncertainty created by absence of the destroyed material. 85. Although it may be more difficult to carry out the necessary evaluations, both of intent and tendency, in respect of conduct occurring before proceedings have commenced, the question will only arise after proceedings have commenced. Accordingly, the dicta in Cowell which suggest that such a test may be difficult to apply should be understood as referring to the evidential basis from which the relevant intention is to be inferred. The objective tendency of the conduct can be ascertained by reference to the circumstances of the proceedings which, ex hypothesi, must have commenced. Indeed, even the objective tendency must be capable of evaluation absent particular proceedings, as is necessary with respect to the crime of attempted perversion of the course of justice. Mason CJ explained in Rogerson at 278: "The necessity of proving that an act has a tendency to pervert the course of justice by frustrating or deflecting a possible criminal prosecution and that the act was intended to have that effect does not require evidence that a prosecution for a particular or identifiable offence was in contemplation either by the accused or by investigating officers."
7. Applications for summary dismissal as an interlocutory application are rare. Applications to strike out proceedings on such a basis during a trial are even rarer. One of the very few examples is Moroney v Zegers [2018] VSC 446, where the defendant had denied publication of the matters complained of. After the hearing commenced and witness evidence began, Dixon J, the trial judge, enquired as to why no earlier step had been taken to inspect the defendant's hard drive. An expert was retained urgently for the purpose of reporting to the court (at [30]). That expert came into the court room, in circumstances of some moment, to report directly to the judge that the hard drive was missing and it later transpired that the defendant then admitted that his sworn evidence was dishonest and untrue. The trial was adjourned as a result, but was nevertheless completed at a later date. Adverse credit findings were made against the defendant, and there was a referral to the Director of Public Prosecutions (at [61]; the sentencing may be found at Director of Public Prosecutions v Zegers [2023] VCC 75). It does not appear from my reading of this judgment that, at any stage, an application was made that the trial should stop and summary judgment be entered. Dixon J noted the decision in Palavi 1, but did not take that step. While I note that the miscreant party in those circumstances was the defendant and not the plaintiff, that would not have made a difference.
8. In addition, I must also have regard to the case management issues arising out of the discovery obligations parties have to each other.

The obligation to discover

1. A helpful summary of the obligation to discover is set out by Hallen J in Hoxton Park Residents Action Group Inc. v Liverpool City Council [2014] NSWSC 372. As was stressed in Palavi 1 by Allsop P at [100], ss 56-58 of the Civil Procedure Act are of paramount importance, adding that this is for the following reasons (at [101]): "…[d]iscovery (and its uncontrolled use) always contains (and contain) the risk of abuse and oppression. Discovery can be a highly expensive exercise … Even when all parties are well resourced, over-enthusiastic and unnecessary use of discovery impedes the due administration of justice and undermines confidence in the court system's ability to resolve disputes justly, quickly and cheaply …"
2. These observations are of even greater relevance where the application in question is one for further and better discovery: Hunter New England Local Health District v Munters Pty Limited [2018] NSWSC 788 at [18], per Bellew J.

Discovery complaints where the documents are electronic records

1. The vast numbers of documents now potentially discoverable as a result of electronic record-keeping can distort the discovery process and create issues which appear to be of concern when in fact there may be no reason for concern. The difficulties created thereby were analysed in Australian Law Reform Commission, "Discovery in Federal Courts" (ALRC CP 2) (Consultation Paper, 15 November 2010) at Part 3: "3.56 Since 1999 the range of material potentially to be discovered has increased exponentially through advancing computer technologies - with an attended and significant increase in discovery costs. Electronic communications can be inherently expensive to discover, in part due to the cost of specialist service providers with expertise in computer technologies. For example, Lord Jackson's Review of Civil Litigation Costs reported that typical service charges for e-discovery include: electronic document processing (extracting metadata, text, attachments etc, for use on a document review system) £250-£1,000 per gigabyte of data, document hosting on a review system at £20-£150 per gigabyte per month and a user access fee between £10-£100 per user. 3.57 E-discovery costs can also include expensive computer software and hardware. For example, the ALRC heard during initial consultations that the discovery of information stored on old back-up tapes can require the reconstruction of outmoded hardware at great expense in order to read the tapes only to discover completely irrelevant information. 3.58 A number of commentators have noted the distorting effect that technology has had on discovery costs. This includes Acting Justice Ronald Sackville of the New South Wales Supreme Court, formerly a judge of the Federal Court of Australia, who has remarked on the discovery process: "It is here that extraordinary and disproportionate costs are frequently incurred by parties to litigation. Far too often the search for the illusory 'smoking gun' leads to squadrons of solicitors, paralegals and clerks compiling vast libraries of materials, much of which is of no significance to the issues in the proceedings. The problem has been compounded, not alleviated, by the exponential growth of electronic communications which can be tracked and often reconstructed after deletion." 3.59 The sheer volume of data that must be managed in modern trade and commerce can blow out the cost of searching through electronic material for the purposes of discovery, resulting in costs disproportionate to the value of the documents discovered - in terms of their use in the litigation. The increasing amount of information which contemporary litigants must deal with was recently highlighted in Betfair v Racing New South Wales. In this case, one source of discoverable documents is 'an electronic data warehouse containing the electronic records of over 2.52 million customers and occupying some 21 terabytes of memory growing at 70 gigabytes per day'. One terabyte is said to be the equivalent of 500 million printed pages." [Citations omitted]
2. Although this report was published more than a decade ago, these concerns about the "distorting effect" of e-discovery are even more relevant today. While claims of tens or hundreds of missing documents may sound significant, such claims need to be seen in terms of technology record-keeping and the degree to which such records must be kept and produced. People in regular contact with each other can easily generate hundreds if not thousands of electronic records of all kinds, even over a short period. These records are not necessarily kept in perpetuity. Mobile phones may be replaced for a number of reasons. That does not mean, however, that all these records, if not produced, should be viewed with such suspicion that the whole of the litigation should be struck out. Courts are well able to draw inferences where it appears such documents have been "curated" or deleted: Lehrmann v Network Ten Pty Limited (Trial Judgment) [2024] FCA 369 at [248] - [254].

Conclusions

1. The principal difficulty faced by this application is that, in the ordinary course of events, Mr O'Callaghan's complaints are matters which should be raised in the course of the hearing, as opposed to an application for what District Judge Rosenbaum (in Capellupo v FMC Corporation) called "an extreme measure reserved only for the most egregious offences". The appropriate course for a party in this position to take is to put the evidence before the court as part of the evidence. If the second defendant is successfully able to tender that material and, where appropriate, cross-examine upon it, the second defendant may then ask the court to make rulings in relation to credit and other issues in the usual way.
2. It is not uncommon for conduct of a party of a potentially criminal nature to come to light in the course of court proceedings. Courts have developed a series of responses to the discovery of such conduct. These range from the issuing of notices pursuant to s 128 of the Evidence Act 1995 (NSW), to the making of findings concerning credit against the party withholding or destroying the evidence (see, for example, Geoffrey Andrew Smith v Robert Gould [2014] VSCA 138), to referral to the appropriate authorities. These remedies sit comfortably with other procedural rules and principles in relation to conduct of less serious comport, such as the rule in Brown v Dunn [1893] R 67, and evidentiary provisions, such as the granting of leave for further cross-examination under s 46 of the Evidence Act or requiring the onus to be discharged in accordance with s 140 of that legislation.
3. Applications for dismissal of proceedings made at an interlocutory level are not determined in the same way as claims destruction of potential evidence or fabrication of evidence occurred after proceedings have commenced: Clark v State of New South Wales at [101] per Johnson J, citing Arrow Nominees Inc v Blackledge [2000] EWCA Civ 200. As Johnson J goes on to explain, in cases where material is intentionally suppressed but is finally produced (Logicrose Ltd v Southend United Football Club Limited (The Times, 5 March 1988), the Court has taken the view that the Court's processes have not been defeated and that the proceedings should be allowed to proceed.
4. What courts do not do, other than in the most compelling of circumstances is to stop the trial from proceeding to finality on all issues once the trial has started. Compelling circumstances did exist in the two judgments concerning Ms Palavi, and the whole of her case was indeed struck out in Palavi 2, but the evidence was overwhelming. In addition, while the trial in Palavi 1 may have technically started, the application was brought before any trial evidence was led. The course that a court should take after a hearing has started is generally that the parties have "stepped in so far" (if I may borrow this Shakespearian phrase) that the proceedings are best left to continue. This was effectively the course taken by Dixon J in Moroney v Zegers, and I could not have a better guide than his Honour on such a difficult issue.
5. Even where there is compelling evidence established at an interlocutory level, the courts have shown a marked reluctance to intervene. For example, in Nitopi v Nitopi [2021] NSWSC 669, the defendant/cross-claimant was unsuccessful in striking out a claim although the plaintiff/cross-respondent had been convicted of breaking into his home and stealing documentation the defendant/cross-claimant had intended to rely on to prove his case. (The same approach is taken in the United Kingdom: Raja v Van Hoogstraten [2004] 4 All ER 793).
6. There is a further difficulty facing the second defendant. Tender of electronic material and evidence as to what it demonstrates are issues which must be put before the relevant witness, rather than addressed in a general fashion as occurred here. Particulars, which must be put forward with the precision of an indictment, have yet to be provided as evidence of justification. I cannot determine issues on documents which are not before the court as evidence and are not the subject of appropriate particularisation.
7. Taking into consideration the relevant principles of law and the difficulties I noted at the commencement of this judgment, the second defendant's application must be dismissed.
8. In coming to any conclusions of fact or law as to this application, I have been careful not to give any consideration to the issue of credit of any of the parties or to draw any conclusion as to matters that are, or will be, in evidence before me at the hearing when it resumes. All parties should assume that I remain neutral on credibility issues for all witnesses, and will continue to do so until such time as all the evidence before the court and submissions have been completed.

Costs

1. The plaintiffs sought orders for costs in their favour. As the hearing is recommencing on Monday, I consider the better approach is for the costs of this application to be determined as part of the costs of the hearing.

Orders

1. The orders I make are as follows: 1. Second defendant's application dismissed. 2. Costs of the application to be determined as part of the costs of the hearing.

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: 28 October 2024