[2004] HCA 61
James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357
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Catchwords
[2004] HCA 61
James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357
Judgment (3 paragraphs)
[1]
EX TEMPORE Judgment (rEVISED)
Over the last day or two, I have heard multiple applications by the parties to two sets of defamation litigation; one of which was commenced in South Australia ("the SA proceedings") and the other is currently before the District Court of New South Wales ("the NSW proceedings"). The present application is an application by Matthew Richard Slater to have the NSW proceedings, in which he is the defendant, transferred to South Australia pursuant to s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) ("the Cross-vesting Act"). Mr Slater is the plaintiff in SA proceedings. The defendant in the SA proceedings is Mr Jeffery Malcolm Smith. Mr Smith is the plaintiff in the NSW proceedings. Mr Smith opposes the application to transfer the NSW proceedings to South Australia.
The matter has been before the Common Law Registrar of this Court on a number of occasions. Certain directions were made, including that the parties file a joint court book. That order was not complied with because the parties were unable to agree on the appropriate documents to be filed with the Court. In fact, they do not seem to agree on anything much.
As a result of the disagreement as to the appropriate documentation, both parties, each of whom appears without legal representation in this Court, filed their own court books. The folder of material filed by Mr Slater was marked as Exhibit A and the folder of material filed by Mr Smith was marked as exhibit 1. Various objections to the material in exhibit 1, were resolved at the commencement of the hearing. The evidence was tendered on all of the applications that came before the Court yesterday.
Yesterday, I determined two (or, more correctly, three) of the applications. First, there were applications by Mr Smith and another interested party, David Bishop, each of whom brought a notice of motion seeking orders that Mr Slater be charged with contempt as a result of his behaviour and conduct of the litigation before this Court. Both of those applications were dismissed. [1]
There was then an application by Mr Bishop to be joined as a party to the present proceedings; that is, the proceedings under the Cross-vesting Act brought by summons ("the Cross-vesting application"). Mr Bishop's application was resolved by a kind of forced agreement in the course of argument. [2]
Mr Bishop's interest arises from his directorship of the company, Ecosol Pty Ltd ("Ecosol"). Mr Smith told me that Ecosol is now a "shell" company following a management buyout ("MBO") but it is a party to the SA proceedings. Its management is at the centre of both sets of defamation proceedings. To understand the present dispute between the parties, it is necessary to set out, in the scantiest of detail, the background to the publications that give rise to each set of defamation proceedings.
Mr Slater, Mr Smith and Mr Bishop were all involved in Ecosol. The company was engaged in the invention, production or supply of technology concerned with stormwater drains. The precise details are not important. Mr Smith is and was the chairman of the company. Mr Bishop is and was the director of the company. Mr Slater is and was a shareholder of the company. At some stage in or around 2018, Mr Slater became dissatisfied with the running of the company. His dissatisfaction, it seems, arose from the proposed MBO, which was being organised by Ecosol's board and in association with certain financial planners and other persons with expertise in the area.
By email dated 11 November 2018, Mr Slater wrote an "open email" to Ecosol's directors (that is as it was styled and described). He copied in a large number of people who were shareholders or have some other interest in the company. Mr Slater sent two further emails to shareholders on 14 and 20 November 2018. The contents of those emails gave rise to the original defamation proceedings in South Australia. On 22 and 23 October 2019 respectively, Mr Bishop commenced proceedings in the Magistrates Court of South Australia alleging that Mr Slater had defamed him, and Mr Smith brought litigation in the New South Wales District Court, making a similar allegation. The substance of the alleged defamatory comments was, as I understand it, the same. Mr Slater filed a defence and counterclaim on 11 November 2019 to Mr Bishop's suit. The counterclaim was an allegation that Mr Bishop had defamed Mr Slater. On the same day, Mr Slater filed a separate summons in the South Australia Magistrates Court naming Mr Smith and Ecosol as first and second defendants. Mr Bishop subsequently discontinued his suit and Mr Slater withdrew his counterclaim against Mr Bishop after he received written confirmation from Ecosol that the publications complained of, and which had been sent to Ecosol shareholders, were in fact published by Mr Smith and Ecosol. [3]
The allegations the subject of the SA proceedings arose out of various communications from Ecosol and Mr Smith, authored by Mr Smith, which were published in the weeks and months after the open emails in November 2018. The first publication was by a letter on 12 November 2018. That is the day after the first allegedly defamatory publication by Mr Slater.
The litigation in both jurisdictions appears to have been conducted inefficiently, with multiple versions of the pleadings (both initiating process and defences) and various interlocutory disputes, accusations and counter-accusations of non-compliance.
It is unnecessary to go into the detail of how and why, but Mr Slater's action in South Australia ultimately found its way before the South Australian Supreme Court. There appears to be no dispute that the case will be heard in that Court and that, although this is somewhat controversial, it is ready to proceed to hearing. It seems that it is subject to a form of case management by a South Australian Supreme Court Judge, Blue J. The transcripts of proceedings before his Honour - or some of them - form part of the voluminous material presented to me on the present application. Similarly, I received transcripts of various interlocutory proceedings in the NSW proceedings.
While the pleadings have been filed and various interlocutory steps have been taken, the NSW proceedings remain at an interlocutory stage. There is some suggestion, I think, that there will be further amendments to the pleadings, but why the matter is not yet ready to be heard remains something of a mystery. Mr Smith's defence in the SA proceedings includes a defence of "justification" or "truth". Mr Slater's defence in New South Wales includes a defence of qualified privilege. There was some suggestion that there may be a defence of truth or justification to be added to that defence, a matter which may turn on the jurisdiction in which the case is ultimately heard and on the preparedness of the court which hears it to allow Mr Slater to amend his defence at this late stage.
Mr Slater's application to have the NSW Proceedings transferred to South Australia is based on the proposition that the parties are common to both cases, that both cases arise out of the same set of circumstances, and that there would be a good deal of duplication of evidence if the matters proceed separately and in two jurisdictions. Mr Slater also asserts that a number of witnesses will be called in both sets of proceedings and that most of these witnesses are residents of South Australia. He relies on the fact that Mr Bishop, Ecosol and he are based in South Australia.
Mr Smith vehemently opposes the application, as does Ecosol. Mr Bishop, acting in the interests of Ecosol, sought to be joined as a party to this application and travelled from South Australia to support Mr Smith in his opposition to the order sought.
Mr Slater submitted that Ecosol's interests are not relevant to the present application and that the only interests that are relevant are the interests of the parties. I reject that submission. The interests of justice are far broader than that. It may encompass the interests of litigants who have nothing to do with this litigation; litigants whose interests might be affected by the delay of their cases because court time set aside to hear this case is ultimately vacated, because of an order such as the one I am asked to make. I reject the submission that the interests of Ecosol are to be disregarded in determining the present application. It is a party to the SA proceedings, and there is at least a risk that transferring the NSW proceedings to South Australia may impact on the hearing date currently set for that litigation. The thrust of one of the submissions made by Mr Smith and Ecosol is that the SA proceedings are ready to proceed and transferring the NSW proceedings may jeopardise the hearing date, currently listed on 27 September 2021.
Mr Smith submitted (although the strength of the submission wavered somewhat when he was questioned directly about it) that Mr Slater's conduct to date suggested he is prone to act in such a way that is calculated to disrupt and delay the proceedings. On my own observations and understanding of the matter, and based on Mr Slater's presentation of the present application, there may be real force in that submission, but it is inappropriate for me to resolve the issue now. Further, once direct questions were asked of him, Mr Smith acknowledged that he may not be ready to proceed with the NSW proceedings if it is transferred to South Australia and set down for a hearing date in September. Meanwhile, the South Australian Supreme Court, and Blue J in particular, is aware of the current Cross-vesting Application, and has provided the tentative indication that the two matters could be heard together during the time set aside in September for the hearing of the SA proceedings. Alternatively, it could be heard sequentially with those proceedings.
Mr Smith submits that the only person to be advantaged by the transfer of the NSW Proceedings to South Australia is Mr Slater, whereas all other interested parties will, or might be, inconvenienced. Mr Smith disputes that the cases have very much in common, or that there will be common evidence. He says, and I am here using my own words, that Mr Slater's contention as to the common witnesses and documentation is contrived.
Mr Smith says that the defamation action in New South Wales is a relatively simple one, involving two serious defamatory imputations. Contrarily, the SA proceedings involve more complex issues concerning the truth of the allegedly defamatory assertions made by Mr Smith (and Ecosol) against Mr Slater. I acknowledge the force in many of Mr Smith's submissions.
One of the difficulties in resolving the current Cross-vesting Application is that it is impossible to predict with any degree of certainty whether the transfer of the NSW proceedings will disrupt the SA proceedings and create inefficiency. In that regard I am reliant on the assertions and cross-assertions made by the self-represented litigants. I regret to say that the conduct of the proceedings before me gives me little confidence that any of the parties are acting in good faith. It is obvious that the animosity that has developed between them has clouded the judgement of all concerned. This makes it difficult to accept assertions made as to when the case will be ready to proceed. However, the parties have said they will do all in their power to conduct the litigation efficiently.
There is no doubting the jurisdiction of this Court to make an order under s 5 of the Cross-vesting Act, and it is clear from the transcript of proceedings before the South Australian Supreme Court that that Court will be in a position to case manage both sets of litigation if the matter is transferred.
The critical legislative provision is in s 5(2) of the Cross-vesting Act:
(2) Where:
(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court (in this subsection referred to as the first court), and
(b) it appears to the first court that:
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court,
(ii) having regard to:
(A) whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory,
(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, and
(C) the interests of justice,
it is more appropriate that the relevant proceeding be determined by that other Supreme Court, or
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory,
the first court shall transfer the relevant proceeding to that other Supreme Court.
The jurisdiction of this Court to make ancillary orders to facilitate an order under s 5 is set out in s 8 of the Cross-vesting Act:
8 Orders by Supreme Court
(1) Where:
(a) a proceeding (in this subsection referred to as the
"relevant proceeding" ) is pending in:
(i) a court, other than the Supreme Court, of the State, or
(ii) a tribunal established by or under an Act, and
(b) it appears to the Supreme Court that:
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court, the Family Court or the Supreme Court of another State or of a Territory and, if an order is made under this subsection in relation to the relevant proceeding, there would be grounds on which that other proceeding could be transferred to the Supreme Court, or
(ii) an order should be made under this subsection in relation to the relevant proceeding so that consideration can be given to whether the relevant proceeding should be transferred to another court,
the Supreme Court may, on the application of a party to the relevant proceeding or of its own motion, make an order removing the relevant proceeding to the Supreme Court.
(2) Where an order is made under subsection (1) in relation to a proceeding, this Act applies in relation to the proceeding as if it were a proceeding pending in the Supreme Court.
(3) Where a proceeding is removed to the Supreme Court in accordance with an order made under subsection (1), the Supreme Court may, if the Supreme Court considers it appropriate to do so, remit the proceeding to the court or tribunal from which the proceeding was removed.
Similar legislation applies in South Australia, and it is on the basis of that legislation that the Supreme Court of South Australia would receive the matter if the New South Wales proceedings are transferred. [4]
There are many cases which set out the kind of considerations which will inform the "interests of justice" as that expression is used in s 5(b)(ii)(C) of the Cross-vesting Act. It is an expression of wide import, used in many statutes and cases. As I have said, I have rejected the restrictive argument made by Mr Slater that the interests of Ecosol, for example, are not relevant to what constitutes as being in the "interests of justice".
Some of the matters which have been held to be relevant to the exercise of the power under s 5 include the place where the parties reside or carry on business, the location of the subject matter of the dispute, the likely hearing date, and the convenience of witnesses and the parties to the proceedings. [5] A number of cases have indicated that there is no onus on the parties seeking the transfer, although it has also been said there is at least a "persuasive onus" on the moving party to show that the transfer of the proceedings is appropriate in all of the circumstances. [6] Similarly, there is no presumption in favour of the existing forum.
Beyond those specific matters, and a number of other specific matters not particularly applicable to the present case, the overriding question concerns fairness and convenience of transferring the litigation to a different state or jurisdiction. The preamble to the Cross-vesting Act makes that abundantly clear:
WHEREAS inconvenience and expense have occasionally been caused to litigants by jurisdictional limitations in federal, State and Territory courts, and whereas it is desirable:
(a) to establish a system of cross-vesting of jurisdiction between those courts, without detracting from the existing jurisdiction of any court,
(b) to structure the system in such a way as to ensure as far as practicable that proceedings concerning matters which, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, would be entirely or substantially within the jurisdiction (other than any accrued jurisdiction) of the Federal Court or the Family Court or the jurisdiction of a Supreme Court of a State or Territory are instituted and determined in that court, whilst providing for the determination by one court of federal and State matters in appropriate cases, and
(c) if a proceeding is instituted in a court that is not the appropriate court, to provide a system under which the proceeding will be transferred to the appropriate court.
In the present case there are factors pushing in both directions. Mr Bishop, who asserts an interest in the litigation in spite of having discontinued his defamation case in South Australia, is a resident of South Australia and has in fact travelled to New South Wales for today and yesterday's hearing. Ecosol has its registered office in South Australia. It seems that most of the shareholders and witnesses are residents in South Australia. Mr Slater is a resident in South Australia. Further, whilst Mr Smith disputes it, in my view the Court that hears either or both cases will need to have some familiarity with the corporate structure of Ecosol, and the circumstances surrounding the proposed MBO. That is because the MBO is the precipitating event to Mr Slater's allegedly defamatory statements, and Mr Smith's (and Ecosol's) allegedly defamatory response. Even accepting Mr Smith's well-formulated submissions, it is impossible to escape the conclusion that the parties will seek to ventilate, and will probably be permitted to ventilate to some degree, the underlying dispute between them arising from the management of Ecosol and the MBO. That is particularly so when issues such as truth, qualified privilege and malice are to be considered by the trial court. Accordingly, there appears to be a commonality of evidence of the subject matter, even though Mr Smith is correct that the defamatory statements arose out of different publications, and that different defences may apply. As I have said, or hinted, in both cases the parties indicate that malice will be an issue.
The matters to which I have just referred all militate in favour of a transfer of the proceedings on the basis that the overall conduct of the litigation would be more efficient if the cases were heard together or sequentially and managed by the same tribunal. On the other hand, the following matters point in the other direction.
Ecosol is a party to the SA proceedings but is not a party to the NSW proceedings. Accordingly, the parties to the two sets of litigation are not identical. The second matter is, while the communications are connected with one another, they are, in fact, separate and independent publications with different imputations and nuances and giving rise to different defences. Third, the application to remove the NSW proceedings from the New South Wales District Court and transfer it to South Australia has been brought fairly late in the day. While Mr Slater contends that he was thwarted in his earlier attempts to have the cases consolidated in South Australia, he provided no real justification - at least none that I am prepared to accept - that he acted expeditiously in having the two cases joined together. Most significantly, as a factor militating against the order sought by Mr Slater, is the fact that the SA proceedings have a hearing date, whereas the NSW case does not appear to be ready to be listed for a hearing at this stage. As I have said earlier, the reason for that is something of a mystery, but with proper case management that is a matter that may soon be rectified, particularly in accordance with the undertakings that I have received from Mr Slater this morning.
In relation to that last matter, and as I have already hinted, there was a fairly bitter dispute between the parties as to who has been responsible for the delays. In his submissions Mr Smith certainly hinted - if not said directly - that Mr Slater was deliberately delaying the proceedings. However, after Mr Smith responded to that assertion, I asked Mr Smith some further questions and he acknowledged that he may not be ready to proceed with the NSW proceedings by September. When asked why not, he said that he is yet to engage in third party discovery and perceives that there may be certain third parties that he would seek to interrogate by the use of pre-trial procedures available to him.
In saying all of this, I do not form any opinion, even a preliminary one, as to the bona fides of either party or make any finding that one party or the other is responsible for the delays in the litigation or the distinct failure of cooperation that seems to have permeated those proceedings. The animosity between the parties is palpable and seems to be the reason that nothing much, if anything, can be agreed between them.
Taking all of the above matters into account and having considered the matter during the overnight adjournment, I formed the view that the balance of justice and convenience favours the litigation being conducted together or sequentially, and in South Australia. However, that tentative view was predicated on receiving certain assurances and undertakings from Mr Slater. I am comforted by the fact that the case will be the subject of efficient case management by Blue J in the South Australian Supreme Court and that his Honour is already aware of the issues and background to the litigation, as well as the concern that Mr Slater may not at all times act with due diligence or comply with orders calculated to ensure the efficient case management of the proceedings.
I am very conscious of the fact that the transfer of the NSW proceedings may create some further delay in South Australia, but that is more of a concern to Mr Slater, who is the plaintiff in those proceedings and who seeks damages.
While I accept that Mr Smith is entirely sceptical of many of the matters raised by Mr Slater, such as the commonality of the documentation and the number of witnesses who will be called in both sets of proceedings, there does appear to be a greater connection to the state of South Australia than there does to the state of New South Wales. That is Mr Bishop, Mr Slater, most of the shareholders and most of the witnesses, as well as the company itself, are domiciled in that state.
I am also satisfied that whatever defences are ultimately pursued, it will be necessary for the Court hearing both matters, whether it be concurrently or sequentially, to receive evidence as to the background of the MBO and the circumstances in which the communications subject to the defamation proceedings were published.
Further, I accept Mr Slater's submission that there is a connection between the communications. I am unable to accept Mr Smith's submission that they are independent entirely of one another. The dates alone suggest that Mr Slater is correct. The first of the allegedly defamatory publications made by Mr Smith occurred on the day after the open email to Ecosol shareholders, which forms the basis of Mr Smith's suit for defamation in New South Wales. On my perusal of the material, it is clear that there is a connection between the publications and the issues, albeit that the communications are different and give rise to different issues, imputations and defences.
Taking all of those matters into account and subject to the undertakings provided by Mr Slater this morning, I propose to make orders along the lines of those sought in the summons and notice of motion filed on 7 December 2020.
Before proceeding to make those orders, I will note and bring to the attention of the South Australian Supreme Court, and Blue J in particular, the following undertakings made in the course of this application by Mr Slater:
1. He has undertaken to conduct proceedings in South Australia expeditiously;
2. He has undertaken not to take any step which will delay the South Australian proceedings or cause the hearing date of 27 September 2021 to be vacated;
3. He has undertaken to take all reasonable steps to ensure the proceedings transferred to South Australia are heard as soon as possible, subject to the convenience and availability of the South Australian Supreme Court, or such other court in which the case may be heard in that state;
4. He has undertaken to take all reasonable steps to ensure the transferred proceedings are heard either concurrently or sequentially with the existing proceedings in South Australia;
5. He has undertaken to provide any expert report to be relied on in either proceedings on or before the 6 August 2021, and if he fails to do so, undertakes not to rely on any such expert report.
I will direct the Supreme Court of NSW registry and my Associate to bring those undertakings to the attention of Blue J and the South Australian Supreme Court, along with a copy of this judgment when it is revised and published, and note that those undertakings may be relevant to questions of costs and applications for adjournment that may be made by Mr Slater in the future.
Subject to those undertakings, I make the following orders:
1. An order that the proceedings instituted in the District Court of New South Wales file no. 2019/00338012 by Jeffery Malcolm Smith as Plaintiff (and the Defendant named in these proceedings) against Matthew Richard Slater as Defendant (and the Plaintiff in these proceedings) ("the District Court Proceedings") be stayed in that Court pursuant to 142(1) of the Civil Procedure Act 2005 (NSW).
2. An order that the District Court Proceedings be transferred to the Supreme Court of New South Wales pursuant to s 8 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW).
3. An order that the District Court Proceedings, having been transferred to this Court, shall be transferred to the Supreme Court of South Australia pursuant to s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW).
[2]
COSTS
Having made the decision in relation to the application put by Mr Smith, that Mr Slater be charged with contempt and the application by Mr Slater for an order under the Cross-vesting Act. [7] And having heard the submissions of both parties, I form the view that Mr Smith should bear the costs, limited to expenses and filing fees, other court fees and travel expenses for this interlocutory hearing.
However, given my lack of knowledge of the precise background of the interlocutory applications and any orders made as to costs in the SA proceedings and NSW proceedings - which I gather so far have been none - I propose that the payment of those costs be delayed until the conclusion of litigation and to be offset against any orders for costs made in favour of the defendant - that is Mr Smith.
So, the order I make as to costs is that:
1. The Defendant, Jeffery Smith, is to pay the Plaintiff, that is Matthew Slater's, costs for this interlocutory hearing. Those costs will be limited to filing fees, other court fees and travel expenses and the payments are to be deferred to the conclusion of the litigation and offset against any order for costs or disbursements made in favour of the Defendant.
[3]
Endnotes
Slater v Smith (No 1) [2021] NSWSC 759.
Slater v Smith (No 2) [2021] NSWSC 762.
Exhibit A, Affidavit of Matthew Slater affirmed 20 January 2021.
Jurisdiction of Courts (Cross-vesting) Act 1987 (SA), s 11.
See, generally, BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61, James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357; [2000] NSWCA 353.
James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 at [100]; [2000] NSWCA 353.
Slater v Smith (No 1) [2021] NSWSC 759.
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Decision last updated: 25 June 2021