Webster v Coles Myer Limited; Thompson v Coles Myer Limited

LEGISLATION CITED: Defamation Act 1974 (NSW), s 22

Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 Dempster v Coates (NSW Court of Appeal, 28 March 1988, unreported) Fox v Percy (2003) 214 CLR 118 Maxwell-Smith v Warren [2007] NSWCA 270 CASES CITED: Penrith Whitewater Stadium Ltd & Anor v Lesvos Ltd & Anor [2007] NSWCA 103 Webster v Coles Myer Limited; Thompson v Coles Myer Limited [2009] NSWDC 4 Webster v Coles Myer Limited; Thompson v Coles Myer Limited (No. 2) [2009] NSWDC 128 Vaughan v Dawson [2008] NSWCA 169 Zarth v Williamson (New South Wales Court of Appeal, 12 December 2005, unreported) Zarth v Williamson [2006] NSWCA 246

TEXTS CITED: K Hayne, "The Vanishing Trial" (2008) The Judicial Review 33 Sackville AJ, "Meeting the Challenges of Complex Litigation: Some Further Questions" (2009) The Judicial Review 197

Plaintiff in 1842 of 2006: Karl Webster PARTIES: Plaintiff in 2538 of 2006: Stewart James Thompson Defendant: Coles Myer Limited

COUNSEL: Plaintiffs: Mr R Weaver Defendant: Mr D Caspersonn

SOLICITORS: Plaintiffs: Konstan Lawyers Defendant: McCulloch and Buggy

[1] The plaintiffs brought proceedings for false imprisonment and defamation. The claim for defamation arose from three publications made to the police by a servant of the defendant. On 28 April 2009 I gave judgment in favour of each of the plaintiffs: Webster v Coles Myer Limited; Thompson v Coles Myer Limited [2009] NSWDC 4. I found that the defendant was vicariously liable for the conduct of its servant and accepted the evidence of the plaintiffs and a police officer as to what was said as opposed to the evidence of that servant, who said she could not really remember. I found that the servant had identified each of the plaintiffs for each of the publications, that the publications (which consisted of false allegations of fraud) were not protected by the defences of qualified privilege at common law and/or pursuant to s 22 Defamation Act 1974 (NSW) and that the defendant's servant, in making these publications about each of the plaintiffs which she knew to be false, was motivated by malice.

[2] On 15 May 2009 I awarded interest and costs: Webster v Coles Myer Limited; Thompson v Coles Myer Limited (No. 2) [2009] NSWDC 128.

[3] On 22 May 2009 the defendant filed a holding appeal. The defendant now asks this court for a stay pending the hearing of the appeal.

[4] Mr Caspersonn and Mr Weaver, counsel for the parties, have supplied me with an outline of issues. I am indebted to both of them for their courteous and helpful submissions and for reducing the orders I indicated I would make to short minutes.

[5] I indicated to the parties that I would provide short reasons for making these orders today.

[6] I shall briefly state the principles in relation to the granting of a stay. The applicant bears the onus of showing that a successful party is not, prima facie, entitled to the fruits of his judgment. In Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 695 the Court identified two principles, namely that the courts will normally exercise the discretion to grant a stay where there is a risk that the appeal will prove abortive if one is not granted, and that courts will not generally speculate about the prospects of success apart from considering whether there is an arguable case.

[7] As to the first of these issues, it is not in dispute that Mr Thompson has no assets. Mr Webster has $300,000 in cash assets. I accept that there is a risk that these monies would not be repaid. As Mr Caspersonn notes in his submissions, "there is 'no love lost' between Mr Thompson and the defendant. There has been tough litigation between the parties" (written submissions paragraph 13). Mr Thompson had been a long-term employee with an unblemished reputation in middle management in another store in the defendant's group of companies prior to this incident; Mr Caspersonn submits he holds the defendant to blame for the destruction of his career and long-term serious health problems he has.

[8] As to the second of these issues, the test for a stay is a low one. That is not to say that a stay will be granted as a matter of course. Stays have been refused in a number of cases where the grounds of appeal related more to factual than to legal issues. Mr Weaver submitted that this was the case here, and in his written submissions draws my attention to Vaughan v Dawson [2008] NSWCA 169 where a stay was refused because the judgment involved applying "well-established legal principles to a very complicated fact situation" (at [11]).

[9] The relevant factors to take into account when the appeal grounds seek to canvass issued covered by findings of fact were considered in Zarth v Williamson (New South Wales Court of Appeal, 12 December 2005, unreported) ("Zarth"). McColl JA noted that findings of fact based on credit findings adverse to the claimants would be difficult to challenge on appeal (Fox v Percy (2003) 214 CLR 118) but was unable to say the appeal was unarguable. Undertakings from the respondents, who were solicitors who owned real estate, were accepted. The appeal was in fact unsuccessful: Zarth v Williamson [2006] NSWCA 246. The Court of Appeal made similar observations in Penrith Whitewater Stadium Ltd & Anor v Lesvos Ltd & Anor [2007] NSWCA 103.

[10] The issues noted by McColl JA in Zarth are applicable here. The findings of fact are that a store manager identified the plaintiffs as the perpetrator of credit card scams in stores in a shopping mall because she was angered by Mr Thompson's conduct in asking to return goods he had purchased at the store and she directed the police to the plaintiffs, one of whom was shopping in another store and the other of whom was sitting in the food court. As was the case in Zarth, the defendant in these proceedings proposes to argue on appeal that my finding that the store manager concocted this claim is arguably wrong (written submissions paragraph 8).

[11] In addition, there are difficult issues of law concerning identification of each of the plaintiffs, having regard to the requirements for identification set out in Maxwell-Smith v Warren [2007] NSWCA 270 ("Maxwell-Smith"), which decision the defendant summarises as requiring that "identifying features be true" (written submissions, paragraph 5). Prior to Maxwell-Smith this had never been a requirement and in fact there are decisions in Australia and England to the contrary, as I noted in my judgment. I agree with the submissions of the defendant's counsel that this is a complex and difficult area of the law. There are similar difficult issues in relation to the claim for false imprisonment.

[12] Finally, it should be noted that the test for a stay in an action for personal damages such as defamation may be of a lower standard than the test in commercial proceedings or for breach of contract, for the reasons explained by Clarke JA (concurring with Kirby P) in Dempster v Coates (NSW Court of Appeal, 28 March 1988, unreported).

[13] Two issues were of concern to me concerning this application. The first is that there has been substantial delay in the conduct of this application, including an aborted hearing date due to unreadiness of both parties, and a failure on both sides to seek appropriate case management. I am confident that in Mr Caspersonn's hands the appeal will be conducted expeditiously, but I have required an undertaking to this effect. Delay in litigation is never desirable, but there are special factors in this case, particularly in relation to the ongoing serious state of Mr Thompson's health, that are of very great concern to me.

[14] The second matter to trouble me is that the legal costs of this litigation may become a heavy burden on Mr Weaver and those who instruct him. Where there is significant inequality in the resources between the parties, courts must be careful to ensure that one party does not, by a process that Hayne J calls "forensic manoeuvring" exhaust the resources of a party who might otherwise have won (K Hayne, "The Vanishing Trial" (2008) The Judicial Review 33; see also Sackville AJ, "Meeting the Challenges of Complex Litigation: Some Further Questions" (2009) The Judicial Review 197). Mr Weaver has assured me that, while this is not yet the case, he and those who instruct him would be greatly comforted by an undertaking from the defendant to prosecute the appeal diligently.

[15] It is to highlight these concerns for the benefit of the Court of Appeal that I am providing the parties with these brief reasons for making the orders set out below.

(1) That the execution of the judgment in both these cases (1842 of 2006 and 2538 of 2006) be stayed until further order of this Court, or the Court of Appeal, on the condition that within 21 days the defendant will pay the judgment moneys in both these cases into an interest-bearing deposit to be administered jointly by the solicitors for both parties and to abide the outcome of the appeal. (2) The Court notes that the defendant in both these cases undertakes to file and serve any Notice of Appeal within the next 14 days and to diligently prosecute the appeal, and further the defendant undertakes that it will join with the plaintiffs in any application to the Court of Appeal for expedition of the hearing of the appeals. (3) Costs of this application be costs in the cause. (4) Liberty to apply on 1 days notice.

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.