Ainsworth v Burden - [2002] NSWSC 172

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CITATION: Ainsworth v Burden [2002] NSWSC 172

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): SC 21216 of 1996

HEARING DATE(S): 13 March 2002

JUDGMENT DATE: 14 March 2002

PARTIES :

LEONARD HASTINGS AINSWORTH
(Plaintiff)
v
LESLIE JAMES BURDEN
(Defendant)

JUDGMENT OF: Levine J

COUNSEL :
R Stitt Q.C.
T Blackburn
(Plaintiff)
B Donovan Q.C.
R Rasmussen
(Defendant)

SOLICITORS:
Dibbs Barker Gosling Lawyers
(Plaintiff)
Hunt & Hunt
(Defendant)

CATCHWORDS: Defamation - striking out of defences of truth, contextual truth and comment - estoppel by record - abuse of process - cross-claim struck out - no cause of action pleaded

LEGISLATION CITED: Defamation Act 1974 (as amended)
Liquor Act 1982
Registered Clubs Act 1976

CASES CITED: Ainsworth v Burden [2000] NSWSC 105
Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404
Hanrahan v Ainsworth (1990) 22 NSWLR 73
Hunter v Chief of the West Midlands [1982] AC 529
McIlkenny v Chief constable of the West Midlands [1980] QB 283
Reichel v McGrath (1889) 14 App Cas 665
Reichel v The Bishop of Oxford (1889) 14 App Cas 259
Re Thomas Christy Ltd (In Liq) [1994] 2 BCLC 527
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275
Washington H Soul, Pattinson & Co. Ltd v Ogilvy (1955) 55 S.R. (NSW) 143

DECISION: See paragraph 45

DLJ: 1

[2002] NSWSC 172

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

JUSTICE DAVID LEVINE

THURSDAY 14 MARCH 2002

21216 of 1996

LEONARD HASTINGS AINSWORTH
(Plaintiff)

v

LESLIE JAMES BURDEN
(Defendant)

JUDGMENT

1 By Statement of Claim filed 1 November 1996 the plaintiff sues the defendant for damages for defamation. The publication of which Mr Ainsworth complains is a letter dated 4 June 1993 written by the defendant to the then Minister for Police, Mr J Griffiths. The plaintiff contends that that letter carries the following defamatory imputations:

“(a) That the plaintiff was not a fit and proper person to be involved in the management of a company licensed in relation to poker machines;

(b) That the plaintiff was not a fit and proper person to have a financial interest in a company licensed in relation to poker machines;

(c) That the plaintiff was a not a fit and proper person to have a financial interest in a company licensed to be an approved amusement device dealer”.

2 The imputations were the subject of challenge both as to form and capacity, and the challenge failed: Simpson J Ainsworth v Burden [2000] NSWSC 105, 2 March 2000.

3 On 27 March 1997 a Defence to the Statement of Claim was filed pleading defences under s 13 of the Defamation Act 1974, absolute privilege, comment, justification under s 15 and contextual justification under s 16. An Amended Defence was filed on 5 December 2000 pleading substantially the same defences and purporting to set out particulars in support of the pleas of justification and contextual justification. Those particulars are incorporated in 22 pages of the pleadings. On the same date a cross-claim was filed on behalf of the defendant.

4 By Notice of Motion filed on 28 September 2001 the plaintiff seeks to have struck out the defences of truth, contextual truth and comment and so much of the particulars in mitigation of damages that are dependent thereon and to have struck out the cross-claim.

5 In support of the Notice of Motion, an affidavit of Dennis Neville Vuaran sworn 28 September 2001 was read. It is formal in nature and it is the material exhibited to Mr Vuaran’s affidavit that was the focus of attention during the course of the hearing of the Motion. Of that voluminous material particular attention was devoted to Exhibit DNV14, a letter dated 5 February 2001 (of 110 pages) supplying particulars of the defences; what is described as Exhibit DNV7, the decision of Licensing Magistrate D A Collins on the application by Ainsworth Game Technology Pty Limited for the grant of a poker machine dealers licence (144 pages) the result of which was a grant of the licence sought and the rejection of objections taken by the New South Wales Police Service and by the Director of Liquor and Gaming under s 98(1) and (2) of the Registered Clubs Act 1976.

6 The next document that received attention during the course of the argument before me yesterday was the judgment of the Full Bench of the Licensing Court dismissing the appeal. That judgment was handed down on 25 June 2001 (Exhibit DNV6).

7 The application of the plaintiff to have dismissed the defences of justification rests upon the following general propositions: (a) the imputations carried by the matter complained of concern the question of fitness of the plaintiff in connection with the management of a company licensed in relation to poker machines. (b) the proceedings in the Licensing Court were concerned with “fitness” by reason of the onus being upon Mr Ainsworth whose fitness was challenged in those proceedings to prove that he was a fit and proper person for the purposes of the Registered Clubs Act. (c) the particulars in support of truth canvass conduct over decades to the same substance and purport of conduct examined in the two proceedings in the Licensing Court. (d) the decision of the Licensing Court at first instance and on appeal (which was by way of full re-hearing) constitutes a judgment in rem. (e) it is therefore not open to the defendant in these proceedings in the face of such a judgment good against the world to re-litigate the same issues. It is an instance of estoppel by record.

8 Section 7 of the Liquor Act 1982 states (as to the Licensing Court):

“7 Licensing Court of New South Wales

(1) The Licensing Court of New South Wales is a court of record with the prescribed seal and is constituted as provided by sections 9 and 10.

9 Section 6 of the Registered Clubs Act 1976 states:

“6 Application of Part 2 of Liquor Act 1982 to proceedings under this Act

Liquor Act 1982

(a) the dealing with, hearing and determining of any matter in respect of which jurisdiction is given by that Act to the Licensing Court,

(b) the persons who may deal with, hear and determine any such matter,

(c) the practice and procedure in proceedings on any such matter, and

Liquor Act 1982

10 The Licensing Court is a Court of record.

11 Sections 97 and 98 of the Registered Clubs Act 1982 state:

“97 Who may object

(a) by the Commissioner of Police, or

98 Grounds of objection

(a) that the applicant is not a fit and proper person to be the holder of a gaming-related licence,

(b) except in the case of an application to be licensed as an employee—that a person directly or indirectly interested in the application or in the business, or the profits of the business, to be carried on under the gaming-related licence if the application is granted is not a fit and proper person to be so interested,

12 The plaintiff, as I have said, submits that the decision of the Licensing Court at first instance (and on appeal which was by way of full rehearing) was a judgment in rem good against the world, the applicant being the corporation. I was referred to the decision of the Full Court of the Supreme Court in Washington H Soul, Pattinson & Co. Ltd v Ogilvy (1955) 55 S.R. (NSW) 143 and the statement in the judgment of the Court at 147-8:

Liquor Act

inter alia,

Licensing Court (S.A.) v White

in rem

Clifford v Timms

13 For the defendant it was contended that insofar as the fitness of Mr Ainsworth personally was an issue in common, that is, an issue in the Licensing Court proceedings and will be an issue in the defence case in the defamation action, the findings of the Licensing Court were as-it-were “in personam” and thus collateral to the decision to issue the relevant licence to the applicant corporation. I reject this submission. The granting of the licence is a judgment in rem in which, in my view, it can be taken there to have merged the findings in favour of that person to whom objection was taken under the Registered Clubs Act as a basis for the rejection of the licence, a fortiori when the “person” whose connection with the corporation which would ultimately be granted the licence bore the onus of proving personal fitness.

14 A perusal of the particulars of truth delivered on 5 February 2001, that is, 2 years and five months after the successful ruling by Magistrate Collins on 17 August 1998 (but before the unsuccessful appeal by the objectors) gives the clear impression of the overall commonality of issues concerning the plaintiff’s fitness. In my view no other characterisation can fairly be made.

15 It was also argued for the defendant that the decision of the Licensing Court is not “final” in the sense that the question of fitness can be raised again. This may technically be so, but it is not in fact the case. This Court must give recognition to the finality of those proceedings represented by the judgment at first instance and by the Full Bench of the Licensing Court. Any proceedings based upon allegations of unfitness in Mr Ainsworth to preclude the corporation holding that licence would no doubt involve Mr Ainsworth again having to discharge the onus to prove to the contrary and would have to be considered fresh proceedings.

16 I am persuaded by the arguments for the plaintiff on the first basis to make the orders sought.

17 The second basis of the plaintiff’s attack was under SCR Pt 15 r 26(1)(b) on the basis that the pleading and its particularisation has a tendency to cause prejudice, embarrassment or delay in proceedings. It is to be noted that the publication complained of having taken place in 1993, this will be an all issues jury trial.

18 As the argument developed it was also apparent that the plaintiff was relying upon subrule (1)(c) that the litigation or attempted litigation of the defences of truth and comment being based upon this same material was an abuse of process. Both parties relied upon the decision of Hunt CJ at CL in Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404. The plaintiff relied upon the following passages at 410-414:

Blair v Curran

19 His Honour examined the evolution of authorities commencing with Reichel v The Bishop of Oxford (1889) 14 App Cas 259 citing from Reichel v McGrath (1889) 14 App Cas 665 at 668-669 Lord Halsbury LC statement:

“… a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceeding to set up the same case again. … it surely must be in the jurisdiction of the Court of Justice to prevent the defeated litigant raising the very same question which the Court has decided in a separate action” (at 410F).

20 His Honour referred to McIlkenny v Chief constable of the West Midlands [1980] QB 283 and the appeal to the House of Lords sub. nom Hunter v Chief of the West Midlands [1982] AC 529 and said as follows:

Reichel v Magrath

Stephenson v Garnett

“… the court ought to be slow to strike out a statement of claim or defence, and to dismiss an action as frivolous and vexatious, yet it ought to do so when, as here, it has been shown that the identical question sought to be raised has already been decided by a competent court.”

Agreement was expressed with Goff LJ that evidence which had not been given in the earlier case could be considered in a collateral attack upon the finding of a court of co-ordinate jurisdiction only if it was such as “entirely changes the aspect of the case”. The relevant principle relating to abuse of process was stated by Lord Diplock in this way (at 536):

“My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.”

His Lordship went on to make it clear that the categories of circumstances in which the court has a duty (not merely a discretion) to exercise “this salutary power” were not fixed”.

21 Hunt CJ at CL cited from the judgment of French J in Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279:

“The possible varieties of abuse of process are only limited by human ingenuity and the categories are not closed. … An attempt to litigate in the court a dispute or issue which has been resolved in earlier litigation in this or another court or tribunal may also, according to the circumstances, constitute an abuse of process even if not attracting the doctrines of res judicata or issue estoppel.

Underlying the power that courts have assumed to stay or dismiss proceedings for abuse of process is a policy of preventing waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes. There is, in my opinion, another element to be considered and that is the necessity to maintain confidence in and respect for the authority of the courts.”

22 His Honour considered Re Thomas Christy Ltd (In Liq) [1994] 2 BCLC 527 as follows:

“… the managing director of that company (a man named Manson) sought to prove in the liquidation for a sum representing his claim for wrongful dismissal. Mr Manson had previously been the respondent to an application by the Secretary of State for his disqualification as a director by reason of his conduct as such. A finding had been made against him that he was unfit to be concerned in the management of a company, having acted dishonestly or improperly in various respects. Such findings were held in this action to have both individually and collectively given rise to the right to dismiss him summarily as the managing director (at 530). The liquidator was not a privy of the Secretary of State (at 531). Mr Manson's attempt to re-litigate that issue in his wrongful dismissal claim was held to be an abuse of process, Jacob J saying this (at 537):

“… I formed the clear view that to allow re-litigation of the service contract issue would be an abuse of process. It would in the words of Lord Diplock ‘bring the administration of justice into disrepute amongst right- thinking people’. The Companies Court of the Chancery Division of the High Court has found, after a full trial, Mr Manson guilty of the five wrongful acts specified above. To allow re-litigation of those before the self-same court would seem absurd to Joe Citizen who through his taxes pays for the courts and whose own access to justice is impeded by court congestion. Doing a case twice over would make no sense to him: all the more so if he was told that the costs of this would in all likelihood be borne by innocent creditors of the company which Mr Manson ran. During the hearing I therefore ruled that such re-litigation should not be permitted…” (at 413D-F).

23 His Honour then went on to say (at 414A-D):

Reichel v Magrath

The issue determined in the earlier case which is sought to be litigated in the later case must be one which the party propounding it in the latter lost in the former. The principle does not work in reverse to enable the party who won the issue in the earlier case to prevent it being litigated in the later proceedings by someone who was not a party in the former

24 Reliance is especially placed by the defendant on that part of his Honour’s judgment cited above which states “the principle does not work in reverse order to enable the party who won the issue in the earlier case to prevent it being litigated in the later proceedings by someone who was not a party in the former”. To re-word it to suit the circumstances of this application, “the principle does not work in reverse” to enable Mr Ainsworth who won the issue in the Licensing Court to prevent it being litigated in the defamation proceedings by Mr Burden who was not a party in the Licensing Court proceedings. The principle as I understand to which his Honour is referring as evolving from Reichel v Magrath is that a party’s attempt to re-litigate against another party an issue which he has already lost may amount to an abuse of process.

25 The stark reality of course is that neither Mr Ainsworth nor Mr Burden were parties in the Licensing Court. Mr Ainsworth’s company was the applicant for the licence. However it was fundamental to that litigant (the company) that Mr Ainsworth as the person associated with it establish that he was a fit person and thereby that the company was entitled to the grant of the licence. Further, the issue which is being sought to be litigated in the libel action is one being propounded by Mr Burden who did not “lose it” in the former proceedings before the Licensing Court.

26 Be that as it may the issue, namely Mr Ainsworth’s fitness, was an issue necessarily determined in the Licensing Court proceedings and was one of importance to the final result. It is, in my view, readily apparent from the judgments of the proceedings in the Licensing Court that the tribunal which decided that issue was an appropriate one to do so. It is the more apparent by reason of the statutes and the parties namely the applicant corporation and Mr Ainsworth’s special role under the statute bearing the onus of proving his fitness, the police and the Director were appropriate contradictors and the issue was obviously regarded by them as one of importance in that litigation.

27 The circumstances here compared to the line of authorities reviewed by Hunt CJ at CL are to say the least different as well as curious. One observation fairly can be made is that Mr Ainsworth cannot be described as a party seeking to propound in a later proceedings an issue successfully propounded by him (as he was required by law) in earlier proceedings. The issue is being “propounded” by the defendant Mr Burden.

28 The statement by his Honour “the principle … in the former” if given the meaning the defendant here submits it should be given, would with respect, operate in a way no excepted by the principle to which his Honour was referring but quite contrary to it.

29 Of the authorities cited by his Honour perhaps Re Thomas Christy (In Liq) [1994] 2 BCLC 527 bears the closest but still possibly faint resemblance to the curious situation here.

30 It seems to me that the evolution of the notion of abuse of process in the re-litigation of an issue of the kind with which I am concerned here does permit and indeed should as a matter of principle permit, and indeed, as a matter of policy prevent, a litigant in the position of Mr Burden, whilst a stranger to the proceedings in the Licensing Court, litigating by his forensic stance in these proceedings an issue namely Mr Ainsworth’s fitness, which has been decided in the Licensing Court with all those attendant characteristics I have catalogued above. To permit him to do so would “bring the administration of justice into disrepute amongst right thinking people”. Thus it is I do hold that as a matter of principle the notion of abuse of process can embrace the situation which arises here: by the operation of an Act of Parliament namely, the Licensed Clubs Act, Mr Ainsworth, although not the party to the licence application, had to prove to the satisfaction of the Licensing Court that he was a fit and proper person in the required sense to enable the company to get the licence. The issue as joined on the defences of justification and insofar as it can be ascertained constituting the basis of the plea of comment, is identical but it has been determined by a Court of record and finally. For a person in the position of Mr Burden, namely a stranger as I have described him, by his forensic stance (not the plaintiff’s) to seek to litigate again a matter with a view to obtaining a contrary finding from another tribunal in the circumstances amounts to an abuse of process.

31 Insofar as the defendant has sought to argue that in this Court the question would be whether in 1993 Mr Ainsworth was a fit person in terms of the imputations pleaded is not to the point where the material founding the finding in favour of Mr Ainsworth embraced that time.

32 Further, as I understood it, a submission was sought to be made on behalf of the defendant that the operation of the Licensing Court under the respective statutes reflects and is in fact in pursuance of matters of policy; that policy shortly stated being that relevant licences should not be given to people who are not fit and proper to hold them. If the operation of the Licensing Court as a court of record is to give effect to that social or State policy, the effect relevantly is to reinforce, in my view, the status of that Court’s judgments in the context with which I am concerned. To that extent only is such a consideration relevant in my view.

33 The possibility of “conflicting” decisions on exactly the same issues in different tribunals is one that causes some concern as a matter of policy, the defendant rightly submits. The present structure of this defamation action requires the litigation of the issue of the fitness of Mr Ainsworth. This has been successfully determined after the most thorough examination, twice, in that Court the very existence of which is to examine and determine of a person, fitness, or to put it another way, to determine that a licence is not granted to any entity by reason of the unfitness of a person associated with it.

34 Thus, I am persuaded that on both bases the plaintiff is entitled to have struck out the defences of justification, contextual justification and the particulars in mitigation of damages founded thereon.

35 As to the defence of comment the plaintiff is confronted with a case the particularisation of which, in my respectful view, is hopeless. Insofar as the letter from Messrs Hunt & Hunt, to which I have referred above, purports to particularise matters, again the overall impression (and I insist on using this expression as detail was not descended into by either party in the course of submissions which were oral only and quite brief), it is patent that the matter complained of makes no reference to the body of that material nor to any matters which are otherwise notorious save for public decisions of Courts of justice. I do not see anything in the material provided by the defendant that satisfies the requirement of identifying the material for comment let alone specifying the basis upon which it is said that that material is “proper” material for comment. And accordingly, the defence of comment will be struck out.

36 By reason of my striking out the defences under ss 15 and 16, there is no need formally to consider the contextual imputations pleaded by the defendant. They are:

“(1) the plaintiff so conducted himself as to warrant Mr John Hatton raising in Parliament the issue of his suitability to be involved in a licensed company;

(2) the plaintiff paid Sergeant Hanrahan substantial financial damages rather than continue contesting Sergeant Hanrahan’s claim against him for defamation and abuse of legal process;

(3) the plaintiff’s association with his co-defendant Mr E. P. Vibert should be investigated by the police to determine whether the plaintiff was a party to payment of a bribe by Mr Vibert to Mr Rex Jackson MLA, in that the bribe was aid in exchange for Mr Jackson having proceedings against the plaintiff and Mr Vibert dropped”

37 Were the issue alive I can presently indicate a view that as a matter of law the letter complained of is incapable of carrying contextual imputation (3). I would hold the second contextual imputation to be defective in form and that there is raised a serious question as to whether it is capable of being defamatory of the plaintiff. Similar observations as to form could be made in relation to the first contextual imputation.

38 I turn now to the cross-claim. The first basis for striking out the cross-claim is that whatever precisely the defendant is pleading, he relies upon the particulars of truth and the defence under ss 15 and 16 of the Defamation Act 1974 in the plaintiff’s action.

39 Paragraph 1 of the cross-claim is in the following terms:

“1. From 1987 onwards the cross-defendant has wrongly caused complaints and legal proceedings to be brought in the Supreme Court of New South Wales on his behalf and on behalf of Ainsworth Consolidated Industries Pty Limited claiming damages from the cross-claimant, and further has made frivolous and vexatious complaints against the cross-claimant by lodging these with the New South Wales Ombudsman”.

40 The cross-claimant then purports to particularise certain steps taken by the cross-defendant/plaintiff in making complaints to the Ombudsman, the relevance of which to an abuse of process of the Supreme Court of New South Wales escapes me entirely. Similar observations can be made to what should be understood to be particulars (b) and (c) appended to paragraph 1 of the document. Particular (d) is a rhetorical charge and should be dismissed for that reason.

41 The second matter of substance to which the cross-claimant appears to be referring is the present action for defamation and the pleadings therein. I am not persuaded that anything as alleged in that paragraph constitutes an abuse of process of any Court; if there some defect in the pleadings then, of course, it would be open to the defendant to take the same step in relation to the pleadings under the same set of rules as the plaintiff has taken in relation to the defences.

42 That there is a cause of action for abuse of process is indisputable and, not surprisingly, the leading New South Wales authority in relation thereto involves one of the litigants in the present action: Hanrahan v Ainsworth (1990) 22 NSWLR 73.

43 On my analysis of the cross-claim, if one eliminates what I hold to be the irrelevant references to “frivolous and vexatious” complaints made to the Ombudsman and the reference to the corporation, Ainsworth Consolidated Industries Pty Limited, one is simply left, so it appears to me, with a discontinued set of proceedings by the personal plaintiff in this action and this very action itself.

44 The difficulty with the cross-claim as pleaded is that it is impossible to determine what material allegations are being made for the purposes of the cause of action as discussed by Clarke JA in Hanrahan v Ainsworth (at 107 and following). It is thus embarrassing and I strike it out. This does not preclude the defendant from formally moving by a Notice of Motion for leave (as I think it would be appropriate in this extraordinarily protracted litigation) to file an amended cross-claim.

45 The formal orders are:

(a) Paragraphs 5, 6 and 7 of the Amended Defence filed 28 September 2001 are stuck out.

(b) The Particulars of Truth and comment appended to the Amended Defence are struck out.

(c) Particulars (c) and (d) of the Particulars of Aggravated Damages are struck out.

(d) The Cross-Claim is struck out.

(e) The defendant is to pay the plaintiff’s costs of the Notice of Motion and in relation to the defences, particulars and Cross-Claim struck out.

**********

Last Modified: 03/15/2002

Citations

Ainsworth v Burden [2002] NSWSC 172

Most Recent Citation

Cases Citing This Decision

167

Harrington v Lowe [1996] HCA 8

Calverley v Green [1984] HCA 81

Harrington v Lowe [1996] HCATrans 89

Cases Cited

7

Statutory Material Cited

3

Ainsworth v Burden [2000] NSWSC 105

Harris v 718932 Pty Ltd [2003] NSWCA 38

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CITATION:	Ainsworth v Burden [2002] NSWSC 172
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 21216 of 1996
HEARING DATE(S):	13 March 2002
JUDGMENT DATE:	14 March 2002
PARTIES :	LEONARD HASTINGS AINSWORTH (Plaintiff) v LESLIE JAMES BURDEN (Defendant)
JUDGMENT OF:	Levine J

COUNSEL :	R Stitt Q.C. T Blackburn (Plaintiff) B Donovan Q.C. R Rasmussen (Defendant)
SOLICITORS:	Dibbs Barker Gosling Lawyers (Plaintiff) Hunt & Hunt (Defendant)
CATCHWORDS:	Defamation - striking out of defences of truth, contextual truth and comment - estoppel by record - abuse of process - cross-claim struck out - no cause of action pleaded
LEGISLATION CITED:	Defamation Act 1974 (as amended) Liquor Act 1982 Registered Clubs Act 1976
CASES CITED:	Ainsworth v Burden [2000] NSWSC 105 Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404 Hanrahan v Ainsworth (1990) 22 NSWLR 73 Hunter v Chief of the West Midlands [1982] AC 529 McIlkenny v Chief constable of the West Midlands [1980] QB 283 Reichel v McGrath (1889) 14 App Cas 665 Reichel v The Bishop of Oxford (1889) 14 App Cas 259 Re Thomas Christy Ltd (In Liq) [1994] 2 BCLC 527 Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 Washington H Soul, Pattinson & Co. Ltd v Ogilvy (1955) 55 S.R. (NSW) 143
DECISION:	See paragraph 45