Bhatia v Gill
[2022] WASC 341
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: BHATIA -v- GILL [2022] WASC 341
CORAM: KENNETH MARTIN J
HEARD: 6 SEPTEMBER 2022
DELIVERED : 13 OCTOBER 2022
FILE NO/S: CIV 1426 of 2021
BETWEEN: SANDEEP BHATIA
Plaintiff
AND
GURINDER GILL
First Defendant
GURWINDER BUTTAR
Second Defendant
HARMANJEET SINGH
Third Defendant
KANWARPAL SINGH
Fourth Defendant
BHUPINDER SINGH
Fifth Defendant
JAGSIR SINGH CHOUHAN
Sixth Defendant
VAKEEL SINGH
Seventh Defendant
Catchwords:
Practice and procedure - Security for costs application - Defamation and injurious falsehood actions against seven defendants across 17 distinct publications
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Security ordered
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr L Allen |
| First Defendant | : | Mr M Goldblatt |
| Second Defendant | : | Mr M Goldblatt |
| Third Defendant | : | Mr M Goldblatt |
| Fourth Defendant | : | Mr M Goldblatt |
| Fifth Defendant | : | Mr M Goldblatt |
| Sixth Defendant | : | Mr M Goldblatt |
| Seventh Defendant | : | Mr M Goldblatt |
Solicitors:
| Plaintiff | : | Tang Law |
| First Defendant | : | Summers Legal |
| Second Defendant | : | Summers Legal |
| Third Defendant | : | Summers Legal |
| Fourth Defendant | : | Summers Legal |
| Fifth Defendant | : | Summers Legal |
| Sixth Defendant | : | Summers Legal |
| Seventh Defendant | : | Summers Legal |
Case(s) referred to in decision(s):
Moran v Schwartz Publishing Pty Ltd [No 2] [2015] WASC 35
KENNETH MARTIN J:
I am dealing with a security for costs application by the defendants under their application to the Court by letter of 12 January 2022. The application for security is opposed by the plaintiff.
Somewhat unusually, the defendants' application for security is made in a defamation action - where the personal nature of such an action, concerning alleged damage to a plaintiff's character or reputation by a wrong by publication, does not often lend itself to the making of a security for costs order. It is well established, of course, that adverse personal financial circumstances of a plaintiff are not of themselves alone a sufficient basis to support the making of such an order for security. Great care must be taken not to 'close the door' unjustly against a plaintiff striving to vindicate their reputation at law in the face of a personal wrong.
Nevertheless, in some circumstances, where factors extending beyond the mere impecuniosity of a plaintiff are established, it is conceptually open to the court as a matter of jurisdiction to issue such a security order against a defamation plaintiff. In Moran v Schwartz Publishing Pty Ltd [No 2] [2015] WASC 35 I discussed the principles concerning a security application in that defamation context, where ultimately, I was persuaded that such an order should be made under those rather exceptional circumstances.
For this security for costs application both sides, in effect, refer me to that decision in support of their rival opposing positions concerning a security order.
It is convenient at the outset to repeat those principles and so I will simply incorporate by reference the Moran [No 2] reasons at between [27] - [37] below, where I observed then:
[27]Order 25 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC) provides that this court may order that security for costs be provided by a plaintiff, but that no order shall be made merely on account of the poverty of the plaintiff, or the likely inability of a plaintiff to pay any costs which may be awarded against the plaintiff.
[28]Order 25 r 2 then sets out a non-exhaustive list of grounds for ordering security for costs, but without detracting from the generality of RSC O 25 r 1.
[29]Order 25 r 3 provides that the power to require the granting of security is discretionary. It lists three factors a court must take into account when exercising that discretion.
3.Court has discretion
The granting of security shall be in the discretion of the Court, and in determining whether an order should be made the Court shall take into consideration -
(a)the prima facie merits of the claim;
(b)what property within the jurisdiction may be available to satisfy any order for costs against the plaintiff;
(c)whether the normal processes of the Court would be available within the jurisdiction for enforcement of any order for costs made against the plaintiff.
[30]The factors specified under O 25 r 3 are also not exhaustive: see Engel Pty Ltd (In Liq) v Leeds (Unreported, WASC Full Court, Library No 940403, 20 July 1994) 3 (Malcolm CJ).
[31]Any exercise by the court of its power to order security is always an order made to serve the interests of justice: Ailakis v Olivero [2013] WASCA 91. While the power has been described as being 'unfettered', it must be exercised judicially: Mann v Dabelstein [2006] WASCA 176 [16]. The circumstances that may bear upon the exercise of the discretionary power are broad.
[32]Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132 dealt with an application for security for costs against a corporation, which raises a somewhat more liberal environment towards ordering security for costs. Nevertheless, Newnes J (as his Honour then was) observed at [57]:
'It is well-established that the discretion to order security for costs is unfettered and depends upon an examination of all the relevant circumstances. The circumstances in which the discretion should be exercised cannot be stated exhaustively. They will vary from case to case and the weight to be given to any circumstance in a particular case will depend not only upon its own intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, 323.'
[33]In Knight v Beyond Properties Pty Ltd [2005] FCA 764 [32] Lindgren J observed upon a disinclination of courts to order a plaintiff who is a natural person to provide security for costs, at least in the absence of some other presenting factor beyond mere impecuniosity, citing numerous case authorities reiterating the policy importance of facilitating the ready access of natural persons to the courts. Relevantly, Lindgren J continued at [33] to observe:
'In the cases in which natural persons have been ordered to provide security, some factor in addition to impecuniosity has been present: cf Barton v Minister for Foreign Affairs (1984) 2 FCR 463 (Morling J) at 594 (impecuniosity and residence outside Australia); Cunningham v Olliver (unreported, Burchett J, 21 November 1994) but for delay, security would have been ordered on ground of impecuniosity and bringing of claim to a significant extent for benefit of others); Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [32] (impecuniosity and lack of prospects of success); Loque v Hanson Technologies Ltd [2003] FCA 81 (Weinberg J) (impecuniosity and residence outside Australia); Morris v Hanley [2000] NSWSC 957 (Young J) at [21], [38] and [39] (but for delay, Young J would have ordered security on grounds of impecuniosity and lack of prospects of success and large costs involved to defendants. Young J's decision was reversed on appeal on the ground that defendants had not adequately explained their delay in moving for security, but the Court of Appeal did not consider other aspects of his Honour's reasons: see Morris v Hanley & Ors [2001] NSWCA 374 at [30] - [31]; Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82 (CA) at [132] (per Heydon JA) (impecuniosity and applicant's failure to show that order would stultify proceeding and sum ordered by primary Judge not oppressive). (original emphasis)
[34]It is necessary to point out that Western Australian RSC O 25 r 1 has been, at least until recently, somewhat unique in Australia among the many rules of different courts governing the power of a court to issue an order for security. This is because RSC O 25 r 1 expressly provides that an order for security for costs cannot be made merely on account of a plaintiff's impecuniosity. However, that position has now been adopted elsewhere. The Uniform Civil Procedure Rules 2005 (NSW) (UCPR) were amended in 2013 to include a new rule, r 42.21(1B), which provides:
'If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity.'
[35]Prior to r 42.21(1B), the impecuniosity of a natural person plaintiff was 'one factor that may be relevant among many', although New South Wales courts looked to usually apply the recognised common law principle that poverty is no bar to a litigant, unless some extra factor was present - see NSW Law Reform Commission, Security for Costs and Associated Orders, Report 137 (2012) [2.65] - [2.69]; Morris v Hanley [2001] NSWCA 374; Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744; Green v CGU Insurance Ltd [2008] NSWCA 148; Viavattene v Morton [2011] NSWSC 1173. I observe that Ritchie's Uniform Civil Procedure NSW currently states, at 42.21.10C:
'... the mere impecuniosity of a 'natural person' plaintiff provides no basis for ordering security for costs: UCPR r 42.21(1B) and Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744; BC 200105623 at [53]; O'Neill v De Leo [1993] 2 Tas R 225 (legal aided plaintiff). However, if the power to order security was authorised on other grounds, the impecuniosity of a natural plaintiff can be a relevant consideration in the exercise of the discretion.'
[36]There is no rule or provision analogous to RSC O 25 r 1, or UCPR r 42.21(1B) in the Federal courts. The comments by Lindgren J in Knight v Beyond Properties Pty Ltd are to be understood in that context.
[37]For the present application it is also relevant to consider and weigh together the principles of case management which are necessarily applicable to matters in the Commercial and Managed Cases (CMC) List (see Trafalgar West Investments Pty Ltd As Trustee For The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 3] [2013] WASC 150 [9] - [10]. All defamation actions commenced in this court are case managed in the CMC List of an allocated CMC judge.
The facts of each case, of course, are necessarily different. They must be viewed and evaluated by reference to their own unique presenting circumstances. The present facts are somewhat usual to say the least.
Background and the present application
The present action was commenced by the plaintiff by writ of summons on 21 May 2021. A statement of claim was then filed by the plaintiff on 9 September 2021 (folio 12).
In all, there are 17 distinct publications complained of by the statement of claim - upon the basis of either the tort of defamation and/or alleged injurious falsehoods. Those 17 publications span across various modern day social media platforms, including over Facebook, TikTok, WhatsApp and Google.
Most of the publications are contended to have occurred on 4 February 2021, save for what are the 14th and 17th publications contended against the seventh defendant. They are said to have taken place on 5 February 2021 and 17 February 2021, respectively.
As an aid to obtaining some better level of insight towards the 17 different publications, multiple causes of action and seven distinct defendants, I attach as a Schedule to these reasons a table which displays a breakdown, in effect, of all those different publications complained about.
Under the security for costs application, the defendants seek pursuant to O 25 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC):
1.an order that the plaintiff provide security for the defendants' costs in the sum of $350,000;
2.an order that the action be stayed until the sum of $350,000 is paid into court as security for the defendants' costs, alternatively, until a bank guarantee for the sum of $350,000 has been lodged with the Court in a form satisfactory to the registrar and a copy has been served upon the solicitors for the defendants; and
3.costs of the application.
To that end, the defendants rely on and read in support of their application for security three affidavits of a member of their solicitors of record, Daniel James Nugawela. His three affidavits are respectively sworn:
(a)27 January 2022 (folio 25);
(b)10 March 2022 (folio 27); and
(c)14 April 2022 (folio 29).
There were no objections taken to any of the material read from these affidavits.
As mentioned, the plaintiff strongly resists the defendants' application for security. The plaintiff contends that any order for any level of security, given his contended circumstances of personal impecuniosity, will carry a consequence, in effect, of stultifying his action. As a result, that would, he says, deprive him of seeking the vindication he pursues against the tortious wrongs which he contends he has been exposed to - by each of the seven defendants across the 17 publications - either as defamatory wrongs or as injurious falsehoods.
The plaintiff relies upon and reads in opposition to the defendants' application for security, his two sworn affidavits. First is his affidavit of 14 February 2022 (folio 26) followed by his further affidavit of 19 April 2022 (folio 31), and which I respectively refer to as the plaintiff's 'first affidavit' and 'second affidavit'.
Again, there were no objections taken to any of the evidentiary material read from the plaintiff's affidavits.
The plaintiff's financial circumstances
The plaintiff deposes that the only substantive asset he owns is a half share in the family home with his wife. At par 8 of his first affidavit he says that half share is valued at $200,000. However, it is unclear, given that the home is a subject of a first registered mortgage to the ANZ Bank, whether he is referring to a net equity position concerning the value of his half share in the family residence. He also refers at par 8 to his position as guarantor of two loans. At par 14 he says the aggregate sum of the two loans is $175,000.
By par 12 of his second affidavit the plaintiff relates that he and his wife have borrowed a further sum of $150,000, which is also subject to mortgage arrangements. The impression created is that this loan is a further borrowing beyond the two loans referred to in his first affidavit.
Within par 4 of his first affidavit the plaintiff says he is a trustee and beneficiary of the Bhatia Family Trust, established in 2011 (the 'Trust'). He attaches a copy of the trust deed and says further that the Trust owns and operates two supermarket businesses located in the suburbs of Allenby (Ellenbrook) and Midland - and which he refers to as the 'Indian supermarkets'. I will also refer to the Trust's two businesses as the 'Indian supermarkets'.
The plaintiff relates that the Indian supermarkets are the only assets of the Trust. He says he works for the Trust as manager of the Indian supermarkets, explaining at par 4.7 of his first affidavit:
4.7I am not paid by the Trust a salary for my role as manager of the Indian Supermarkets but, rather, receive distributions from the Trust. The level of distributions being dictated by the revenue earned by the Trust from the Indian supermarkets.
At par 9 of the first affidavit, the plaintiff relates:
9.Since the publications complained of in the Statement of Claim were published by the Defendants, the income of from [sic] the Indian Supermarkets and thus to the Trust has reduced considerably. As a further direct consequence, the distributions I obtain from the Trust have been severely impacted.
To support this contention, the plaintiff appends to his first affidavit his own personal income tax returns for the financial years ended 30 June 2020 and 30 June 2021. He further appends income tax returns submitted for the Trust in those same financial years.
At par 20 of his first affidavit the plaintiff refers to a GoFundMe campaign that he says raised only $4,562 to help meet his legal fees in this action. He goes on to say:
20.... Given the flow of contributions to the fund slowed down to $0 or near to $0, I closed the fund.
At par 22 of his first affidavit he says further:
22.The only other monies I have received from third parties to assist in funding these proceedings are gifts from anonymous parties or friends and family.
The defendants, through their counsel, Mr Goldblatt, criticises the plaintiff for not identifying anonymous donor parties or, at least, the amount of the 'gifts' received towards the funding of this action. At pars 25 and 26 of his first affidavit the plaintiff says:
25.I do not have the financial capacity to pay security for costs of $350,000 or in any amount. It will be a terrible struggle for me to meet my own costs of progressing these proceedings through to trial and the final judicial determination I am seeking.
26.In the circumstances, if I was ordered to pay $350,000 in security or any amount, even a relatively small amount, such would have the effect of preventing me from progressing these proceedings.
The plaintiff concludes his first affidavit at par 27:
27.Further, if I was ordered to pay security for the Defendants costs [sic], not only would I not be able to do so, but the costs I have incurred to date in seeking by these proceedings to repatriate my reputation and recover the losses suffered, would be lost or wasted.
However, the plaintiff did not say how much he has outlaid to date in respect of his legal costs. At the hearing of the security for costs application, counsel for the plaintiff, Mr Allen, told me that the plaintiff's lawyers were not acting on a pro bono basis.
By par 5 of the plaintiff's second affidavit he denies receiving any financial assistance towards advancing this litigation from a friend, namely a Mr Khullar, or from Mr Khullar's wife or from a property owning corporation said to be controlled by Mr Khullar's wife. That may be accepted.
At par 11 of the second affidavit he relates further circumstances in which he has taken steps to remove a Property Seizure and Sale Order (PSSO) from against the residence of himself and his wife and says:
11.I have been required to remove the PSSO because of the losses which the trust's two supermarkets have sustained to date and continue to suffer as a consequence of the Defendants' conduct the subject of these proceedings.
Arguments
For the purpose of the security for costs application, each side has filed extensive written submissions.
The defendants' submissions as applicant for security orders, were filed on 26 July 2022 (folio 33).
They complain, in effect, of many serious pleading deficiencies in the current statement of claim of the plaintiff - which they say were pointed out in a lengthy conferral with the plaintiff's counsel some time ago. Notwithstanding that, the plaintiff, through his lawyers, has taken no steps to remedy those pleading deficiencies, although a number of them would seem to have at least been implicitly acknowledged.
There are four evident pleading deficiencies. First, the joinder in one action (without leave) of multiple causes of action raised against seven distinct defendants. Those different tortious causes of action in either defamation or injurious falsehood span some 17 distinct publications. This contravenes RSC O 18 r 4(1). That rule reads:
(1)Subject to rule 5(1), 2 or more persons may be joined together in one action as plaintiffs or as defendants with the leave of the Court or where -
(a)if separate actions were brought by or against each of them, as the case may be, some common question of law or fact would arise in all of the actions; and
(b)all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions.
Leave of the court for such joinder has not ever been sought pursuant to RSC O 18 r 4(1). No attempt has been made to justify an engagement with the conjoint criteria seen under RSC 18 O 4(1)(a) and (b).
Even if there was a common question of law or fact presenting in all 17 claims, still the criteria under par 4(1)(b) do not appear to be met.
Second, the plaintiff's statement of claim, by the concluding prayer for relief, seeks as against all seven defendants jointly:
A.Damages for defamation, including special and aggravated damages;
B.Damages for injurious falsehood, including exemplary damages;
...
An observed aggregation by that prayer for relief of a joint claim for damages as expressed, notwithstanding that there are at least 17 discretely asserted causes of action raised against seven distinct defendants - is an obvious misconception. There should be seven discrete claims for damages relief, at minimum.
Third, albeit the plaintiff acknowledges he is a trustee of the Trust, which is the owner and operator of the two Indian supermarkets, the statement of claim as drawn does not explicitly say that the plaintiff is suing as a trustee of a trading trust to recover that loss as economic harm caused to the Trust. Instead, the statement of claim looks to be drawn on a basis of the plaintiff personally, beyond his reputational claim in defamation put against all seven defendants, to also be pursuing at the same time a claim under the tort of injurious falsehood, raised against the first, second, fourth, fifth, sixth and seventh defendants.
Thus, it appears to be the case, upon the face of the wording of the plaintiff's statement of claim, that he is seeking, at least in part, to recover what are contended to be economic losses sustained in the running of the two Indian supermarkets - and thereby the losses to the Trust - on a basis of personal actions for defamation and/or injurious falsehood. This would appear to be another conceptual problem requiring a correction.
Fourth, from a defamation perspective there appear to be numerous pleading deficiencies regarding the statement of claim's formulation of so-called natural and ordinary meaning imputations - as contended in respect of the numerous publications complained of by reference to the alleged defamation of the plaintiff.
Only one example of this type of defect will suffice - by reference to the first matter complained of against the first defendant concerning a contended publication of a statement on his personal Facebook page, on 4 February 2021.
Relevantly, the publication had contained the following words:
#i_boycott_ellenbrookindiangrocer_sandeepbhatia_over_his_hatred_ comments_on_farmers_challenge I nominate … (various 19 person are named).
Paragraph 6 of the statement of claim then pleads in part:
6.In its natural and ordinary meaning the First Matter was defamatory of the Plaintiff and carried the following defamatory imputations (or imputations that do not differ in substance):
6.1the Plaintiff made statements inciting hatred of Indian farmers who participated in the Delhi Protests;
...
Plainly, par 6.1 is not a defamatory meaning on its words alone. More is needed. I emphasise that the present security for costs application is not a pleading strikeout application, de facto or otherwise. Nevertheless, what are contended by the defendants to be obvious pleading deficiencies in the statement of claim have been drawn to the attention of the plaintiff's lawyers in conferral correspondence - but so far these pleading deficiency issues have not been corrected. This is said to be a relevant consideration going to the demerits of the plaintiff's case for security and thus, favouring a grant of security to protect the defendants in the wake of a favourable trial outcome for them against the plaintiff.
During the course of argument, I was bluntly informed by counsel for the plaintiff that the plaintiff's lawyers have taken, and will take, no steps to correct deficiencies in the statement of claim - as that would be, in effect, wasteful given the pendency of the security for costs application. The stance is surprising in the face of what would appear to be numerous prima facie deficiencies in the pleading, none of which have been defended on the present application.
Furthermore, if the plaintiff's lawyers are responsible for the pleading deficiencies, and when they present in a specialist area like defamation, then their frank acceptance of responsibility and their expressed willingness to fix their defective pleading workmanship - ought to be more discernible. The impression I obtained from Mr Allen is that the plaintiff's lawyers are immune to any such insight.
Consequently, the present security for costs application needs to be evaluated in the face of what is a likely problematic statement of claim as pleaded - even prior to the hearing of any arguments over that issue.
The plaintiff's lawyers' failure to earlier fix the obvious pleading problems is a tactical blunder on their part for the purposes of the present security application. I need to remind myself that I ought not to unduly lay at the plaintiff's personal doorstep, the technical pleading deficiencies of his lawyers to date.
The observed attempted natural and ordinary meaning imputation under par 6 of the statement of claim is illustrative of what appears to be an abiding wider structural pleading problem. It presents that the plaintiff's lawyers fail to appreciate the conceptual difference in defamation law of a natural and ordinary meaning of words in a publication (a popular or false innuendo) as opposed to a legal or true innuendo meaning. For the latter, the defamatory repercussion of a publication arises by reason of the reader holding some special knowledge of extra facts or information that enlivens the meanings otherwise obtainable from the words alone.
In the present case, for a reader recipient to appreciate a defamatory sting in the first defendant's Facebook publication, they would first need to know something of matters as referred to in pars 2 and 3 of the statement of claim - relating to protests by Indian farmers in January 2021 outside of the Red Fort in Delhi, India. Those overseas protests were over agricultural reforms proposed by the Indian Prime Minister and his party, which were subsequently passed by the Indian legislature.
These true innuendo meaning imputation deficiencies are evident throughout the current defamation pleas in the statement of claim. Evidently, they would be capable of correction by a more careful pleader. However, I obtained no assurance at all through the course of the security hearing that there was any motivation on the part of the plaintiff's current lawyers to implement amendments to fix the problem. Quite the contrary, in fact.
There are observable similarities as between a Facebook publication which is the subject of the first matter - to later publications as the subject of the fifth matter concerning the first defendant (par 20), sixth matter concerning the second defendant (pars 23 and 24), seventh matter concerning the second defendant (par 27), eighth matter concerning the second defendant (par 32), tenth matter concerning the third defendant (par 38), eleventh matter concerning the fourth defendant (par 41), twelfth matter concerning the fifth defendant (par 47), thirteenth matter concerning the sixth defendant (par 52) and fourteenth matter concerning the seventh defendant (par 58).
Defamatory imputations complained of as natural and ordinary meanings are seen invariably linked back to pleas under par 6 concerning the first matter - as regards contended imputations arising in the natural and ordinary meaning of similarly published words.
To that end, see imputations under the fifth matter concerning the first defendant (par 22), sixth matter concerning the second defendant (par 26), seventh matter concerning the second defendant (par 29), eighth matter concerning the second defendant (par 34), tenth matter concerning the third defendant (par 40), eleventh matter concerning the fourth defendant (par 44.1), twelfth matter concerning the fifth defendant (par 49), thirteenth matter concerning the sixth defendant (par 55) and the fourteenth matter concerning the seventh defendant (par 60).
Hence, a conceptual pleading problem is widespread in the statement of claim.
Considerations beyond mere impecuniosity
As mentioned, the theme of the plaintiff's two affidavits complains of 17 publications, with all but two having been published on 4 February 2021, alleging they have since occasioned significant economic harm to the Indian supermarket businesses as owned and operated by the Trust. However, the affidavit materials as provided to the court by the plaintiff do not contain the usually expected balance sheet or net asset insights towards ascertaining the worth of the two Indian supermarkets, at least on the balance sheet.
What has been provided, however, are only the Trust income tax returns for the financial years ended 30 June 2020 and 30 June 2021.
Fifteen of the 17 publications complained of are alleged to have occurred on 4 February 2021. Therefore, a contended negative economic impact of all those publications as against business turnover revenue of the Indian supermarkets ought to have been discernible to some degree, at least in the total (gross) income position of the Trust in the financial year ended 30 June 2021, by reason of almost five months of trading (ie, over most of February, all of March through June 2021).
However, a careful comparison of the Trust income tax returns for the two financial years as regards revenue, is revealing. In particular, counsel for the defendants took the court to during verbal submissions, to contrast, the total business income position of the Trust for the financial years ended 30 June 2020 and 30 June 2021 (see, respectfully, pages 72 and 86 of the plaintiff's first affidavit).
For the financial year ended 30 June 2020, the total business income was shown as $728,356. After total expenses of $696,389 that year, a net income positive position of $31,967 was evident.
That 2020 pre-publication position may be contrasted with the position 12 months later. For the financial year ended 30 June 2021, the total business income shown was $1,046,602. That is significant as regards what presents as an increase, rather than any decrease in total business income for that financial year. Total expenses in that period are seen identified as $1,041,835, producing a net income position for the financial year ended 30 June 2021 of only $5,233.
Consequently, on the financial materials presented to the court, the gross revenue position of the Indian supermarket businesses of the Trust increased, rather than decreased, in the period to 30 June 2021. That position is not consistent with a picture of causative economic harm - attempted to be portrayed under the plaintiff's two affidavits. That is, that the trading revenue of the two Indian supermarkets reduced considerably after these February 2021 publications.
Likewise, his two affidavits did not disclose affirmatively that in the financial years ended 30 June 2020 and 30 June 2021, that the plaintiff had personally derived a significant amount of income from what is mentioned under his personal income tax returns as his taxi service operation activity (see, respectfully, pages 56 and 65 of the plaintiff's first affidavit).
A consequence of all that is, at the end, I was left highly concerned that the financial materials put before the court on behalf of the plaintiff did not disclose fully or frankly the financial position concerning the plaintiff and the Indian supermarkets operated by the Trust. The plaintiff's affidavits and his submissions sought to portray a negative, indeed ruinous economic impact, by reason of the 17 publications as complained over. However, the evidence presented to the court by the plaintiff's own affidavits, upon careful analysis, suggests to the contrary.
Repercussions
As regards this security for costs application, I should not act merely upon what looks, on the face of it, to be a precarious position for this plaintiff, in terms of him ever meeting the defendants' legal costs of what presents as a suggested three-week trial in the Supreme Court. If the plaintiff fails at trial and ultimately there is a resultant costs exposure in him to the defendants, then the defendants are unlikely, I assess, to be able to recoup from him much of their costs, albeit obtaining the usual order to that effect in a wash-up of such a trial, if they are successful.
As stated, the impecuniosity of the plaintiff as an individual is not enough. But that likely impecuniosity condition needs to be assimilated with what currently presents as not only significant deficiencies evident in the pleaded case of the plaintiff, but as well, what I assess as a recalcitrant attitude on the part of his current lawyers towards fixing those problems - notwithstanding that the problems have been pointed out to them in explicit terms for some time following conferral.
This is also not then a case that I can assess as being one of overwhelming merit for the plaintiff, at least as currently pleaded. Whilst I do allow some potential for some matters to be fixed after a change of attitude on the part of the plaintiff's lawyers, the position is far from a strong case. Additionally, there is likely to be, I fear, an adverse costs order in any event against the plaintiff as a result of any necessary attempt made later to fix his current statement of claim.
Also to be factored into the overall evaluation, however, is what I detect to be the presently inconsistent position of the plaintiff
- concerning a suggested negative financial impact of the 17 publications complained about against the Indian supermarkets, which is not supported by the evidence before the Court.
In the face of these concerns about a less than fulsome explanation of the financial position of the plaintiff as was put to the Court, there are, at the end, further considerations all established going beyond mere impecuniosity. That provides the sufficient platform to support an order for security.
The amount of security
Appended to Mr Nugawela's affidavit of 27 January 2022 is a draft bill of costs (see annexure DJN-8). The projected cost calculations and estimates as seen therein look somewhat broadly estimated. Nevertheless, in a context of a mooted three-week trial in the Supreme Court and in the face of what appears to be a statement of claim currently manifesting multiple pleading difficulties, the legal costs incurred on both sides will be significant.
The amount of the draft bill as identified reaches in aggregate $482,405.
Whilst security in the amount of $350,000 is sought, my view is that the figure needs to be reduced somewhat - to take account of some of the broader estimates seen in the defendants' draft bill of costs.
To that extent, I will work from a lesser costs estimate of $400,000. A reasonable amount for a security payment in these circumstances, I would assess, is $250,000.
The defendants' submissions indicate they are prepared to accept a regime of payment in tranches over time for security provided.
Bearing in mind a relatively still early state of the present action (there is as yet no pleaded defence by the defendants), the security amount should be ordered at an initial amount of $50,000 followed by a second tranche of $100,000 and a final third tranche of $100,000 as the litigation progresses to trial.
Consequently, I will order:
(a)payment into court by the plaintiff of $50,000 within 28 days;
(b)payment of a further $100,000 within 28 days after the completion of discovery on both sides in the action; and
(c)a further payment of $100,000 upon the entry of the matter for trial.
Security could alternatively be provided by way of an acceptable bank guarantee, if the parties mutually agree to that arrangement.
Conclusions
Consequently, the defendants' application for security costs at the end, succeeds. I have not ignored the plaintiff's contention of a likely stultification of his action by such an order. Nevertheless, viewed against other considerations, it should not prevail.
Therefore, I will order that the plaintiff pay into court, alternatively, provide a bank guarantee from a financial institution acceptable to the defendants, an amount of $50,000 within 28 days. In the absence of such a payment, the action will be stayed until that first tranche security sum is met.
Dispositive orders in those terms should issue in due course. Further, the defendants as successful parties upon the present application for security should, prima facie, receive their taxed costs of the present application.
The parties should now confer over dispositive orders, preferably, submit a memorandum of consent orders. But in the absence of any agreement as to orders within seven days from the publication of these reasons, then I will resolve that dispute on the papers by reference to the parties' future written submissions.
SCHEDULE
| Matter | Date | Publication | Publication Platform | Defendant | Cause(s) of Action | |
| Defamation | Injurious Falsehood | |||||
| 1 | 4 February 2021 | Published a statement on personal Facebook page | First | ✓ | ||
| 2 | 4 February 2021 | Republished a third-party Google review for a business operated by the plaintiff accompanied by a statement in a WhatsApp group | First | ✓ | ||
| 3 | 4 February 2021 | Published various statements accompanied by a photograph in the comment section of a post on a third-party’s personal Facebook page | First | ✗ | ||
| 4 | 4 February 2021 | Published an audio recording in a WhatsApp group | First | ✗ | ||
| 5 | 4 February 2021 | Published a statement on personal Facebook page | First | ✓ | ||
| 6 | 4 February 2021 | Republished a third-party statement on personal Facebook page | Second | ✓ | ||
| 7 | 4 February 2021 | Published a video containing verbatim statements on personal TikTok account | TikTok | Second | ✓ | ✗ |
| 8 | 4 February 2021 | Published a screenshot of a third-party statement in a WhatsApp group | Second | ✓ | ||
| 9 | 4 February 2021 | Published a statement accompanied by a photograph of a statement made by the plaintiff in a WhatsApp group | Second | ✓ | ||
| 10 | 4 February 2021 | Published a statement in a Facebook group | Third | ✓ | ||
| 11 | 4 February 2021 | Published a statement in a Facebook group and republished that statement to personal Facebook page | Fourth | ✓ | ✗ | |
| 12 | 4 February 2021 | Published a statement accompanied by a screenshot of a statement made by the plaintiff on personal Facebook page | Fifth | ✓ | ✗ | |
| 13 | 4 February 2021 | Published a statement on personal Facebook page and published same statement accompanied by a screenshot of a statement made by the plaintiff in a Facebook group | Sixth | ✓ | ✗ | |
| 14 | 5 February 2021 | Published a statement accompanied by a screenshot on personal Facebook page | Seventh | ✓ | ||
| 15 | 4 February 2021 | Published a statement accompanied by a screenshot in the comment section of a post on a third-party’s Facebook page | Seventh | ✓ | ✗ | |
| 16 | 4 February 2021 | Published a statement in the comment section of a post on a third-party’s Facebook page | Seventh | ✗ | ||
| 17 | 17 February 2021 | Published a Google review and 1 star rating on a Google business page for a business operated by the plaintiff | Seventh | ✗ | ||
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
PP
Research Associate to the Honourable Justice K Martin
13 OCTOBER 2022
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