Airways Corporation of NZ Ltd v Pricewaterhouse Coopers Legal

[2002] NSWSC 138

CITATION:	Airways Corporation of NZ Ltd & Anor v Pricewaterhouse Coopers Legal & Anor [2002] NSWSC 138
FILE NUMBER(S):	SC 13787/01
HEARING DATE(S):	04.03.02
JUDGMENT DATE:	8 March 2002
PARTIES :	Airways Corporation of New Zealand Limited & Anor Pricewaterhousecoopers Legal & Anor
JUDGMENT OF:	Simpson J

COUNSEL :	R. Glasson (Plaintiffs) W.H. Nicholas QC with M. Thorley (Defendants)
SOLICITORS:	Neil Scott (Plaintiffs) Mallesons Stephen Jaques (Defendants)
CATCHWORDS:	preliminary discovery - internet publication - where publication takes place
LEGISLATION CITED:	Supreme Court Rules 1970
CASES CITED:	John Fairfax and Sons Ltd v Cojuangco (1988) 165 CLR 346 Gutnick v Dow Jones & Co Inc [2001] VSC 305 (unreported 28 August 2001) Dow Jones & Co v Joseph Gutnick (unreported 21 September 2001)
DECISION:	Order for preliminary discovery. (See para. 15.)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DUTY JUDGE list

SIMPSON J

8 March 2002

13787/01 Airways Corporation of New Zealand Limited & Anor v PricewaterhousCoopers Legal & Anor

JUDGMENT

1 Her Honour: In these proceedings the plaintiffs, Airways Corporation of New Zealand and Craig John Sinclair, seek an order for preliminary discovery pursuant to SCR Part 3 Rule 1(1). That rule is in the following terms:

“3.1. (1) Where, on application by any person, it appears to the Court that:
(a) the applicant, having made reasonable inquiries, is unable to ascertain the identity of a person for the purpose of commencing proceedings against that person or is unable to ascertain the description of any person sufficiently for that purpose; and
(b) some person has or may have knowledge of facts, or has or may have in his possession, custody or power any document or thing, tending to assist in the ascertainment of the identity or description of the person concerned,
the Court may order that person:
(c) to attend before the Court or an officer of the Court and be orally examined on any matter relating to the identity or description of the person concerned; and
(d) to produce any document or thing in his possession, custody or power relating to the identity or description of the person concerned.”

2 The proceedings arise out of the publication, by email, of certain material capable of defaming each of the plaintiffs. The only evidence as to receipt of the material is from two witnesses, each of whom received it in New Zealand. There is, however, evidence that other individuals had received different emails concerning both plaintiffs. This evidence does not significantly advance the plaintiffs’ case on the present application, although it may potentially have some relevance to discretionary considerations.

3 The identity of neither the author(s) nor the transmitter(s) is apparent. The second plaintiff has deposed that both plaintiffs wish to commence proceedings in defamation and injurious falsehood against those responsible for transmitting the material. The plaintiffs have therefore made such inquiries as are available to them in order to ascertain the identity of the transmitter(s), without success. It appears that some one or more of the partners of the first defendant and/or the second defendant may have knowledge of facts, or have within their possession, custody or power, documents or other items that would tend to assist in ascertaining the identity of the person(s) concerned.

4 No issue was raised concerning any of the above. The defendants resist the orders sought on two bases. The first was identified as a jurisdictional issue. Senior Counsel for the defendants argued that the evidence is insufficient to establish that either plaintiff intends to commence proceedings in this Court against any person responsible for the publication. He argued that Part 3 Rule 1(1)(a) should be construed as if it read:

“… for the purpose of commencing proceedings in this Court …”

5 Senior counsel for the defendants argued that the Supreme Court rules are, axiomatically, confined to proceedings taken in this court. Up to a point, that is plainly correct. However, I am satisfied that Part 3 Rule 1(1)(a) should not be so confined.

6 If the rule was construed as suggested by the defendants, then the evidence would fall short of establishing the relevant intent, which, it was argued, is a prerequisite to the making of an order under the rules.

7 In support of this proposition, senior counsel relied on a passage drawn from John Fairfax and Sons Ltd v Cojuangco (1988) 165 CLR 346 at 350. There the High Court was considering matters relevant to the exercise of discretion under Part 3 Rule 1(1). By way of introduction and outline of the facts, the Court said:

“he [meaning the plaintiff] seeks to identify the second appellant’s sources of information so that he may bring proceedings in New South Wales for defamation against the persons who have provided information to the second appellant for the parts of the article of which he complains.”

This was relied upon as authority for the proposition that the rule requires evidence of an intention to commence proceedings in this Court. I do not so read it. The passage does not confine the commencement of proceedings to proceedings in this court, but mentions only “proceedings in New South Wales”. Second, the sentence is not intended to state any necessary prerequisite for the making of an order. No issue arose in Cojuangco as to the jurisdiction of the court or the construction of the rule in this respect. The sentence is no more that a statement of a preliminary, introductory, factual matter.

8 Nor do I accept the defendants’ construction of the rules. In the first place it is, in my opinion, undesirable to insert words which do not appear in the rules, unless it is necessary to do so to make sense of the rules. It is not necessary in this case. Secondly, had the rule makers intended to restrict the power to grant an order for preliminary discovery to applicants who intend to commence proceedings in this court, it would have been a very simple matter so to have drafted the rules. In the third place, the purpose of the power to order preliminary discovery is to put the applicant in possession of information which would enable him, her or it to make a decision as to whether or not to commence proceedings and, if so, against whom. An applicant for such an order cannot properly be required to commit himself, herself or itself to the commencement of proceedings in this or any other court unless and until he, she or it is in possession of the information which is the subject of the application. Fourthly, the Supreme Court rule is to be contrasted with the parallel District Court rule (DCR Part 4 Rule 1) which enables that court to make an order where an applicant, having made reasonable inquiries:

“… is unable to ascertain the identity of a prospective defendant for the purpose of commencing proceedings against that prospective defendant …” (emphasis added)

A “defendant” is defined as including “any person against whom a claim for relief is made”; a “claim for relief” is defined to mean “any claim on which the [District] Court has jurisdiction to determine in an action”.

9 It follows that, for the purposes of the rule as it appears in the District Court rules, it is necessary that there be some evidence that the applicant proposes to commence proceedings in that court. Such is not the case when regard is had to the terminology of the Supreme Court rules.

10 I appreciate that the rule making power of each court is exercised by a rule making committee, and that the principles of statutory construction must be modified to some extent in construing the rules. However, for the reasons I have already given, I am satisfied that Part 3 Rule 1(1)(a) should not be construed in the way contended on behalf of the defendants. I reach that conclusion even without reference to the District Court rule: the terms of the District Court rule to some extent support the view I have taken but that view is not dependent upon the different terms of the two rules. Accordingly, I am satisfied that this court has jurisdiction to make the order sought.

11 The second matter argued on behalf of the defendants was that the order sought should be refused on discretionary grounds.

12 Senior counsel argued that the evidence discloses no connection with NSW, and that the appropriate forum for the commencement of any defamation proceedings is New Zealand. He relied on the decision of Hedigan J in the Supreme Court of Victoria in Gutnick v Dow Jones and Co Inc [2001] VSC 305 (unreported 28 August 2001); and of the Court of Appeal, on an application for leave to appeal (Dow Jones and Co Inc v Joseph Gutnick (unreported 21 September 2001)). In these decisions it was held that internet publications take place in the location where they are read, and not in the location from which they are transmitted. The evidence in this case of delivery being only that the publications were received in New Zealand, it should be concluded that publication took place in New Zealand and not Australia. This would be a compelling circumstance dictating refusal of the order on the basis that an action, if commenced, would be very likely to be transferred by this court to New Zealand. I was told that the defendant in Gutnick has been granted special leave to appeal to the High Court of Australia but that the appeal has not yet been heard. For present purposes, I am prepared to accept the conclusions of the Supreme Court of Victoria and the Court of Appeal of Victoria but bear in mind that these conclusions were reached on the basis of evidence placed before Hedigan J. That evidence was not necessarily identical to the evidence on this issue placed before me. Nevertheless, for present purposes I work on the basis that publication by email takes place where the email is received and that, on the evidence in this case, that was in New Zealand.

13 It is clear that, should proceedings be commenced, there may be available to the defendants an argument that New Zealand is the appropriate forum for their determination. However, in my opinion that cannot be finally determined until the identity of the author(s) and/or transmitter(s) of the material is known. Certainly, on the material available to me, the case for requiring such proceedings to be heard in New Zealand is not so strong as to warrant refusal of the orders sought.

14 To some extent, this argument was tied up with the earlier argument, but it had an independent basis as well. The rule should not be construed to prevent identification of the proper defendant to proceedings, even if the information provided pursuant to the order suggests that proceedings should be commenced in some court other than this court, or some forum other than NSW.

15 I therefore propose to make orders substantially in accordance with those sought in the amended summons. During the course of argument, and having regard to some matters put by senior counsel for the defendant, counsel for the plaintiff sought further to amend the summons by adding a claim for relief under Rule 1(1)(c). I granted leave to make an appropriate amendment, but it was not finally formulated at the conclusion of proceedings. There was some discussion about the proper form of any such order. For reasons mentioned in argument, and not necessary here to repeat, the parties should reach agreement upon the proper form of the order. It is sufficient here to say that I propose to make an order in substance in accordance with that sub-rule.

16 It will be necessary for the parties to bring in short minutes of order. This should include the appropriate order for costs unless the parties are unable to reach agreement in that regard.

Last Modified: 03/11/2002