Sun v Hojunara International Group

EX TEMPORE Judgment 1CAMPBELL J: By notice of motion filed on 27th May 2013 the plaintiffs seek an order extending the limitation period for commencing proceedings against Duk In Kim, as the second defendant, and Dave Jeon, as the third defendant, in these proceedings. Other ancillary relief is sought. 2The proceedings are proceedings brought in defamation. The plaintiffs operate a restaurant in Chinatown which asserts it was defamed by material published on a website operated by the first defendant, a corporation now in liquidation. The alleged defamatory material was said to have been published on various dates between 5th August 2010 and 9th March 2011. 3The proposed defendants are persons who are said to be "moderators" of the website; that they occupied this role came to the plaintiffs actual knowledge through a verified statement in answer to interrogatories filed on 14th March 2013. 4I should say straight away that the respondents to the motion argue that this information was known to the plaintiffs earlier, and, if not known, was capable of being known before the expiration of the limitation period. Mr Jeon is the person who swore the affidavit verifying the statement in answer to interrogatories. In answer to 3(b) he said that he and Mr Duk In Kim were persons responsible for moderating the forums on the website between 1st August 2010 and 1st March 2011. 5The limitation period in defamation is fixed by s 14B Limitation Act 1969 (NSW) in the following terms: An action on a cause of action for defamation is not maintainable if brought after the end of a limitation period of 1 year running from the date of the publication of the matter complained of. 6By s56A a person claiming to have a cause of action for defamation may apply for an order extending time for bringing the action. The entitlement to such an order depends upon satisfaction of the condition stipulated by s56A(2) in the following terms: A court must, if satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period mentioned in section 14B to a period of up to 3 years running from the date of the publication. 7Section 56A in its present form introduced a stricter requirement than that denoted by the language of its predecessor which proceeded on the familiar just and equitable criterion. Section 56A has been the subject of a number of decisions of this Court and of the Court of Appeal. 8The decision of McCallum J in Carey v The Australian Broadcasting Corporation [2010] NSWSC 709; 77 NSWLR 136 at 143 [40] - 145 [48] was approved by the Court of Appeal in Carey v The Australian Broadcasting Corporation [2012] NSWCA 176; 290 ALR 348 at [55] - [57] per Beazley JA (as her Honour then was), Sackville AJA agreeing. 9In a subsequent case, Cassar v Network Ten Pty Ltd [2012] NSWSC 680, Hislop J summarised the effect of these and other decisions concerning the application of s56A into six principles which I summarise as follows, omitting citations: (1)the burden that must be discharged is to establish that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within one year from the date of the publication; (2)the onus rests with the plaintiff; (3)the test is objective; (4)it is a difficult hurdle for a plaintiff to overcome unless there are some unusual circumstances; (5)if the plaintiff proves the fact then the court is obliged to extend time. Extension in these circumstances is mandatory; (6)section 56A limits the period of extension to an extension "of up to three years running from the date of publication". This has been described as involving the exercise of a discretion in the sense of involving a normative judgment. 10I might say, with great respect, although the test is an objective one, as McCallum J pointed out in Carey at [48], a consideration of the circumstances required by s56A includes an inquiry into the plaintiffs reasons for not commencing proceedings within the limitation period, which may involve a consideration of some subjective aspects of the case. Moreover, I understand Hislop J's reference to a discretion in the sense of involving a normative standard as being a reference to the need to make an evaluative judgment involving the relevant normative standard imposed by s56A itself, that is to say, "it was not reasonable in the circumstances for the plaintiffs to have commenced an action" within the time fixed by the statute (emphasis added). 11The plaintiffs rely upon a number of considerations to satisfy the statutory test. Ms A. Douglas-Baker of counsel, who appeared for the plaintiffs, pointed out that the plaintiffs commenced proceedings within time against a corporation. It is, generally speaking, neither necessary nor desirable to separately sue the directors of a corporation. In this regard both respondents to the motion were, according to company searches that could have been obtained at that time, directors of the company. 12There was no reason to suppose that any other party was a necessary party to the litigation and there was no reason to suppose that the directors had any separate or independent liability for the publication of any defamatory matter. Even if it could be said that one might be expected to know that websites would have moderators or persons responsible for the content published on them, there was nothing about the defendant's website that enabled the persons who had that capacity to be identified by reference to the website itself. After the commencement of proceedings the plaintiffs took all necessary procedural steps with appropriate diligence. It was the defendant which may have been slow in responding to the interrogatories administered in December 2012. It was only when the verified statement and answer to interrogatories were received that the respondents were identified as having what might be referred to as responsibility for the content of the website. Previously it was not reasonable to require the plaintiffs to sue a multiplicity of defendants when there seemed to be a clear legal person responsible for the publication of the matter on the website. 13Mr B. Pierce of counsel for the first named respondent took issue with these matters. He submitted that even if the plaintiffs did not subjectively know who the moderators were, they should have known that there would be people acting in that capacity. This constructive knowledge could be derived from the fact that the plaintiffs were legally represented and that they knew that the first respondent "was important enough in relation to the defendant's company to address their letter of demand to his attention" on 31st January 2011. 14Mr Pierce argued that anyone would have known that there were moderators and administrators of a website. He also pointed out that there was no evidence that the plaintiffs ever asked the defendant during the limitation period to provide the identity of the moderators or administrators and it was unreasonable to wait until interrogatories were administered to ascertain that information. He argued that in truth the plaintiffs should be taken to have changed tack because of their realisation that the corporate defendant sued is not a good common-law defendant because it is now in liquidation, it is no longer legally represented, and the website seems to have come under the control of an organisation which has a corporate name but is not registered in Australia. 15Mr Jeon, who is self represented, essentially adopted the arguments advanced by Mr Pierce, although he made some other submissions in relation to the social utility of the website and the positive aspects of providing a forum in which people could air their views freely about restaurants. 16I accept, as McCallum J has pointed out, that the test provided by s56A is stricter now than it was formally. Essentially there is no occasion for the Court to exercise what might be referred to as a flexible discretion. Rather the norm expressed in the section must be proved to the satisfaction of the Court in the same type of evaluative exercise required for the decision of any contested question of fact. On the other hand, it is not necessary for me to look into considerations such as the viability of the cause of action in a general discretionary way; either the test is satisfied or it is not. If it is satisfied, then the plaintiffs are entitled to the benefit of the extension of time. 17There is a further matter I should refer to in addition to the summary of the argument set out above. Mr Pierce argued that even if I was satisfied that it was not reasonable in the context of the statute for the plaintiffs to have commenced an action against the defendants within time, I should not permit an extension of time to enable the amended statement of claim to be filed at this stage. Learned counsel seemed to submit that it was open for me to decide that even though it was not reasonable to commence the action within one year of publication, it should have been commenced soon after the expiration of the limitation period and it was unreasonable to allow the joinder of additional defendants at this late stage. 18With great respect to the arguments of counsel I do not accept that such a conclusion is open to me. It seems to me that the type of considerations that Mr Pierce has invoked in advancing that argument are general discretionary considerations of a type that are no longer available given the amendments to s56A. 19In my judgment, it is important to bear in mind that the plaintiffs did commence an action in relation to the matter complained of within one year of the date of publication and that action was commenced against the corporate defendant. In my judgment, this is a relevant consideration for me to weigh in applying the objective standard of reasonableness required by the section. 20Having identified the company which owned the website and having commenced an action, I accept Ms Douglas-Baker's argument that it was not incumbent upon the plaintiffs to search around for other potential defendants even if that might be done by other litigants either commonly, or at least from time to time. 21There was no reason, in my view, in the circumstances of this case, for the plaintiffs to cast about finding all the possible defendants against the possibility that the defendant named, who clearly was the corporate identity controlling the website, proved to be not worthy of powder and shot. 22It seems to me that in a sense one can weigh in favour of the plaintiffs that when it did sue, the defendant's appointed solicitors took an active part in the defence of the proceedings. Even if it may be said that the joinder of these individuals is sought after the defendant has gone into liquidation and its solicitors have ceased to act for it, those considerations aid the plaintiffs in showing, from the standpoint of the expiration of the limitation period, that it was not reasonable at that time to join the proposed defendants to the proceedings even if it is both reasonable and necessary to do so now. 23It is not the policy of the law, or of s56A, that plaintiffs in defamation proceedings must necessarily cast about to sue every possible defendant who might in some way be responsible for the publication of the defamatory material complained of. In my judgment, the plaintiffs in the present case have satisfied the test imposed by the statute and I would extend the limitation period to permit a commencement of proceedings against the first and second respondents. 24In coming to this conclusion, I have borne in mind Hislop J's fourth principle. It seems to me that the confluence of circumstances to which I have referred are together somewhat unusual, if that is a necessary requirement. 25So far as his Honour's sixth requirement is concerned, concerning the exercise of a discretion in the sense of involving a normative judgment, I would take into account that, as I have said, this is not a case where a plaintiff allowed a matter to go stale and then came to the Court late to seek an indulgence. As I have said more than once, proceedings were issued against the corporate defendant who, at the time, the plaintiffs had every reason to suppose was a good common law defendant, and until May of this year conducted itself so as to fulfil the expectations of the plaintiffs in that regard. In my judgment, the strict approach that his Honour describes has been satisfied. 26The plaintiffs complain of publication as early as 5 August 2010. That means in respect of this early publication the cause of action may have arisen as early as that date. My hesitation is related to what was said by Hunt J, as his Honour then was, in Urbanchich v Drummoyne Municipal Council (1988) A Def R 50-035; (1991) Aust Torts Reports 81-127, that in the poster cases publication may not occur until the defendant has accepted responsibility for the continued publication of the statement. It may be that there is an apt analogy between these so-called poster cases and website cases. On this view, publication by these additional respondents may not have occurred until at least some reasonable time after the letter of the plaintiffs solicitor of 31 January 2011. 27I have also been informed, as I have referred to above, that the defendant in the extant proceedings has gone into liquidation. By force of the provisions of the Corporations Act 2001 (Cth) the proceedings against that defendant are stayed. Given that those are the only proceedings for damages on foot, difficult questions may arise about whether I can order the taking of an additional step in proceedings which are stayed by force of federal law. 28In these circumstances, I am of the view that the better course is to grant leave to the plaintiffs to commence fresh proceedings against the second and third respondents. I will leave it to the plaintiffs' legal advisers to take any step they consider advisable in relation to the proceedings against the company as a matter of their own judgment. 29I make the following orders: (1)Under section 56A of the Limitation Act 1969 (NSW) I extend the limitation period mentioned in section 14B of that Act to 5 August 2013. (2)I grant leave to the plaintiffs to file a statement of claim naming Duk In Kim and Dave Jeon as defendants, provided a statement of claim is filed in the registry on or prior to 5 August 2013. (3)I order that the costs of this application stand as costs in any proceedings commenced pursuant to order 2 hereof.