HER HONOUR: These are proceedings for injurious falsehood. The proceedings were originally commenced by summons and have continued on pleadings. The summons was filed late last year. Regrettably, the form of the plaintiff's pleading, until today, was not yet finalised.
The proceedings have come before the Court today to determine the defendants' objections to a further amended statement of claim filed 6 September 2017. The scope of the objections was significantly narrowed as a result of sensible discussions between the two counsel at the Bar table before the hearing and through further debate during the course of the hearing this morning. This judgment records the outcome of those exchanges.
The first objection is to par 5 of the further amended statement of claim, which pleads the publication of a statement by the first defendant to a third party, John Holland Group Pty Ltd. The particulars assert that the communication was sent by an employee of the first defendant to an unknown employee of John Holland Group, working at head office, and that the substance of that communication was in turn conveyed to the plaintiff by Mr Nick Katsieris, another employee of John Holland Group.
The defendant previously took objection to a pleading of that same communication. That objection was determined in my earlier judgment in the proceedings in Sydney Security Services v iGuard Australia Pty Ltd (No 3) [2017] NSWSC 633. In that judgment I noted that, in circumstances where the plaintiff does not hold a copy of the email in question, the material pleaded in that earlier version of the pleading was inadequate and that the plaintiff should have leave to issue a subpoena to John Holland Group. That occurred and, unfortunately, did not produce a copy of the email, if it exists. A complication in considering the significance of that fact is that the scope of the subpoena was objected to by John Holland as being too broad, that company evidently having something in the order of 100 employees and the person who received the email or allegedly received it from an employee of the first defendant being unknown.
The defendants have today submitted that, in the circumstances, there being no better specification in the pleading of the content of the alleged communication, and evidently no prospect of obtaining any better specification of its contents, the time has come for that part of the plaintiff's claim to be struck from the pleading.
There is, however, one further step in my view which could appropriately be taken in this case, and that is to allow the matter to proceed further to the interlocutory step of permitting interrogation.
Ms Rao, who appears for the defendants today, drew my attention to two previous decisions of mine in which I have dealt with what were said to be similar circumstances. Of course, each case always turns on its own facts. One was the decision of Bateman v Fairfax Media Publications Pty Ltd (No 5) [2015] NSWSC 830. That was a case in which, but for two particular considerations, I would probably have permitted the pleading to stand at least until the plaintiff had an opportunity to interrogate the alleged author of the unspecified publication, Dr Cumpston. The reason I did not allow that to occur was that the application to amend came a long time after the commencement of the proceedings and a short time before the date fixed for hearing. There were of course other aspects of the circumstances of that case that were different from the present case.
Secondly, Ms Rao reminded me of my decision in Ferrier v McRae (No 2) [2015] NSWSC 1537 where I recorded (at [6]) that the plaintiff, again in respect of a claim based on emails not specifically pleaded, had seen the emails but did not have them. There were features of that litigation that make it very different from the present case. Perhaps most importantly, the conduct of the litigation was such as to give me a measure of scepticism as to the likelihood of that claim being made good.
In the present case, the matter has been pleaded on the strength of instructions provided by the plaintiff to his solicitors as to the specifics of a conversation he had with an identified employee of John Holland Group, Mr Katsieris. Further, although the defendants have put on an affidavit on information and belief as to the attempts that have been made to locate a copy of the email, there has been no interrogatory directed at the individual defendant Mr Clifford, whom the plaintiff suspects of being the author of the representations complained of in the proceedings. In all the circumstances, I am not persuaded that it is appropriate to strike the allegation from the pleading at this stage, pending further interlocutory steps.
The second kind of objection taken today related to individual representations. In large measure, the points taken were resolved more or less with a common approach during argument. It is appropriate to record one aspect of the debate, which is the use in four of the representations of the word "complicit". The defendants objected that that term is ambiguous, possibly connoting a legal meaning and possibly connoting something closer to the concept of participation as in ordinary parlance.
The question of ambiguity of a representation in proceedings of the present kind, as in the case of consideration of an imputation in proceedings for defamation, must always be informed by the context in which the question is asked. In particular, it is necessary to have regard to the terms of the publication said to convey the representation and the degree of specificity allowed by that language. In the present case, the publications sued on convey the representations, if they convey them at all, by insinuation. There is no reference to complicity in either publication, but the import of each publication is that the plaintiff company was - to use the vernacular phrase - "in it together" with the other named entity attributed with various nefarious deeds or conduct. I was not persuaded that there was any ambiguity or at least I was persuaded that the representation reflect a best attempt to distil the meaning of the two publications. It might be added in that context that, in my view, the argument that those representations are conveyed has some force. What was said, if it was said, appears to have been calculated to convey the very sense captured in the representations.
The objections to representations were resolved on that basis and otherwise as reflected in the transcript.
Finally, there was a series of disputes as to costs. In short, those arguments reduced, with one exception, to the proposition that the plaintiff should pay the defendants' costs thrown away by reason of two amendments to the pleading. An attempt to debate the detail or content or scope of such an order was rejected by me as raising matters for the costs assessor. I accept that the plaintiff should pay the costs thrown away by reason of the filing of the amended statement of claim on 30 June 2017 and the further amended statement of claim on 6 September 2017.
Separately, the defendants seek payment of those costs forthwith. Again, Ms Rao reminded me of earlier judgments of mine in this list and of the terms of the Practice Note. The Practice Note in cl 24 reminds parties that costs in proceedings under the Defamation Act 2005 (NSW) are governed by s 40 of that Act, but that provision has no application in these proceedings. That reminder, however, is intended to sharpen focus on the need for parties to have regard to the risk of disproportion between costs incurred and the interest at stake.
Separately, the Practice Note suggests that in the event of opposition or the making of an interlocutory application unreasonably, and subject to hearing from the parties, the Court will consider making an order for costs to be payable forthwith. The two decisions Ms Rao drew my attention to were my decisions in Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2010] NSWSC 962 and Luna v Porter [2016] NSWSC 1727.
It was not, I think, submitted that the plaintiff has acted unreasonably save perhaps in respect of a complaint as to a failure to comply with r 19.5 of the Uniform Civil Procedure Rules 2005 (NSW) when the amended statement of claim was filed. It was submitted on behalf of the plaintiff that the amendments to the pleading have served to clarify rather than obfuscate any issue and that there has been no unreasonable conduct.
Probably the greatest strength of the application in the present case was the contention that the first defendant is a small security company and the second defendant is an individual. In those circumstances, it was submitted that the costs of these proceedings are a substantial burden on them and that payment of costs forthwith will go some way to ameliorating the inconvenience. On behalf of the plaintiff, Ms Hamdan submitted that the plaintiff, too, is a small security company.
It is difficult in circumstances of this kind of dispute between commercial competitors to judge where the merits of such complaints lie. On balance, I am not persuaded that there is any feature of the plaintiff's conduct such as to warrant an order for costs payable forthwith in accordance with the principles summarised in my judgment in Palace Films at [23].
These are proceedings which cry out for early settlement before the costs of the proceedings get completely out of control. I have today asked each party whether they have considered mediation. Neither barrister was armed with instructions to respond to that question, but each agreed with my assessment of the position. I consider it preferable to refer the proceedings to mediation after the defendant has put on a defence. I note that the form of the further amended statement of claim is finalised as a result of the debate today and this judgment.
I direct the defendants to file a defence within 21 days.
Pursuant to s 26 of the Civil Procedure Act 2005 (NSW), I refer the proceedings for mediation by a mediator of the Court.
I direct the parties to use their best endeavours to hold the mediation within six weeks after the filing of the defence. I note the obligation of the parties to participate in good faith in the mediation.
I order the plaintiff to pay the defendants' costs thrown away by reason of the filing and serving of the amended statement of claim filed 30 June 2017 and the further amended statement of claim filed 6 September 2017.
As to the costs of today, I consider the fair outcome is that each party bear its or his own costs of the listing.
[2]
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Decision last updated: 07 December 2017