BOC v MDL

[2019] NSWSC 278

Supreme Court

New South Wales

Medium Neutral Citation:	BOC v MDL [2019] NSWSC 278
Hearing dates:	14 March 2019
Date of orders:	14 March 2019
Decision date:	18 March 2019
Before:	Hoeben CJ at CL
Decision:	Orders sought in the Summons made on 14 March 2019.
Catchwords:	PRACTICE AND PROCEDURE – application to transfer defamation matter from District Court to Supreme Court – application of Public Interest Disclosure Act 2013 (Cth) – operation of Act not previously considered by the Court – application of Act gives rise to complex issues of law – transfer of proceedings should take place.
Legislation Cited:	Civil Procedure Act 2005 (NSW) – ss 140,144 Court Suppression and Non-Publication Orders Act 2010 (NSW) – s 7 District Court Act 1973 (NSW) – s 134 Public Interest Disclosure Act 2013 (Cth) – ss 10, 11, 23, 26
Cases Cited:	Cai v Guo [2014] NSWSC 380 Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631 Kolavo v Pitsikas (t/as Comino and Pitsikas) & Anor [2003] NSWCA 59 Mahommed v Unicomb [2017] NSWCA 65 Markisic v State of New South Wales & Ors (No 2) [2012] NSWSC 1353 Parry v WGE Engineering Pty Ltd [2003] NSWSC 337 Rajski v Carson (1986) 4 NSWLR 735 Rinbac Pty Ltd v The Owners - Strata Plan No 64972 [2010] NSWSC 656; 77 NSWLR 601 Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924
Category:	Procedural and other rulings
Parties:	BOC – Plaintiff MDL – Defendant
Representation:	Counsel: S Free SC/R Jedrzejczyk – Plaintiff A Munro – Defendant   Solicitors: Clayton Utz – Plaintiff Bradley Allen Love Lawyers – Defendant
File Number(s):	2018/382919
Publication restriction:	Pursuant to s 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) there is to be no publication or other disclosure of the names of the parties; the pleadings; and the affidavit of Douglas James Bishop sworn 12 December 2018.

JUDGMENT

1. HIS HONOUR:

Nature of application

The plaintiff moved by way of Summons for the following orders:

“1 An order pursuant to s 140 of the Civil Procedure Act 2005 (NSW) that District Court proceedings No 2018/306855 be transferred to the Supreme Court of New South Wales.

2   That the costs of the plaintiff's Summons filed 12 December 2018 be costs in the cause (namely the transferred proceedings referred to in order 1).

3 An order pursuant to s 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) that the publication or other disclosure of:

(a)   the names of the parties;

(b)   the pleadings; and

(c)   the affidavit of Douglas James Bishop sworn 12 December 2018,

be prohibited on the grounds that such order is necessary to prevent prejudice to the proper administration of justice, or alternatively that it is otherwise necessary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice.

4   That the matter be listed for directions in the Defamation List of the Supreme Court on 16 August 2019.

5   That the parties have liberty to apply to the Court to relist the matter.”

2. The matter came before the Court on 14 March 2019. The defendant consented to the orders sought being made. Accordingly, the above orders were made on that date with reasons to follow. This judgment sets out those reasons.

Background

3. The proceedings transferred to the Supreme Court were defamation proceedings. The background to those proceedings is set out in the affidavit of Douglas James Bishop, sworn 12 December 2018, (Bishop).

4. The plaintiff in the defamation proceedings was formerly employed by the Commonwealth of Australia (the employer) in a senior position. The plaintiff occupied that position in 2016 and 2017.

5. In October 2017 the employer’s Fraud Control and Investigation Branch (FCIB) commenced an investigation into whether in the course of her work the plaintiff had breached the Australian Public Service Code of Conduct (Code of Conduct).

6. The defendant was interviewed by the FCIB in the course of the investigation. The FCIB ultimately determined that the plaintiff had breached the Code of Conduct and her employment with the employer was terminated in September 2018.

7. By a Statement of Claim filed in October 2018 the plaintiff commenced defamation proceedings against the defendant in the District Court. The plaintiff’s claim in defamation arose from the statements made by the defendant in relation to the FCIB investigation.

8. By letter dated 24 October 2018 the defendant through her solicitors informed the plaintiff that disclosures made by her concerning the plaintiff were “public interest disclosures” for the purpose of the Public Interest Disclosure Act 2013 (Cth) (PID). The defendant stated in substance that pursuant to s 10 of the PID Act, she was not subject to any civil liability for making the relevant disclosures and had absolute privilege in the defamation proceedings in respect of those disclosures.

9. In the course of further correspondence between the parties’ solicitors, the plaintiff stated that in her view the defendant had knowingly made statements to the FCIB that were “false or misleading”, such that, in accordance with s 11 of the PID Act, the defendant was not entitled to the protection and immunity afforded by s 10 of that Act.

10. The parties are therefore in dispute as to whether the relevant disclosures made by the defendant that form the basis of the defamation proceedings were “public interest disclosures” for the purposes of the PID Act and accordingly, whether the immunity from civil liability under s 10 of the Act applies as a complete answer to the plaintiff’s claim for defamation.

11. The relevant sections of the PID Act are:

“10    Protection of disclosers

(1)    If an individual makes a public interest disclosure:

(a)    the individual is not subject to any civil, criminal or administrative liability (including disciplinary action) for making the public interest disclosure; and

(b)    no contractual or other remedy may be enforced, and no contractual or other right may be exercised, against the individual on the basis of the public interest disclosure.

(2)    Without limiting subsection (1):

(a)    the individual has absolute privilege in proceedings for defamation in respect of the public interest disclosure; and

(b)    a contract to which the individual is a party must not be terminated on the basis that the public interest disclosure constitutes a breach of the contract.

11    Liability for false or misleading statements etc. unaffected

(1) Section 10 does not apply to civil, criminal or administrative liability (including disciplinary action) for knowingly making a statement that is false or misleading.

(2) Without limiting subsection (1) of this section, section 10 does not apply to liability for an offence against section 137.1, 137.2, 144.1 or 145.1 of the Criminal Code.

…

23    Claims for protection

(1)    If, in civil or criminal proceedings (the primary proceedings) instituted

against an individual in a court, the individual makes a claim (relevant to the proceedings) that, because of section 10, the individual is not subject to any civil, criminal or administrative liability for making a particular public interest disclosure:

(a)    the individual bears the onus of adducing or pointing to evidence that suggests a reasonable possibility that the claim is made out; and

(b)    if the individual discharges that onus—the party instituting the primary proceedings against the individual bears the onus of proving that the claim is not made out; and

(c)    the court must deal with the claim in separate proceedings; and

(d)    the court must adjourn the primary proceedings until the claim has been dealt with; and

(e)    none of the following:

(i)    any admission made by the individual in the separate proceedings;

(ii)    any information given by the individual in the separate

proceedings;

(iii)    any other evidence adduced by the individual in the separate proceedings;

is admissible in evidence against the individual except in proceedings   in respect of the falsity of the admission, information or evidence; and

(f)    if the individual or another person gives evidence in the separate proceedings in support of the claim – giving that evidence does not amount to a waiver of privilege for the purposes of the primary proceedings or any other proceedings.

(2) To avoid doubt, a right under section 126K of the Evidence Act 1995 not to be compelled to give evidence is a privilege for the purposes of paragraph (1)(f) of this section.”

12. It follows from the above that s 23 of the PID Act provides, relevantly, that where a person who is a party to civil proceedings (defined in the section as the “primary proceedings”) makes a claim that, because of s 10, the person is not subject to any civil liability for making a public interest disclosure:

1. “the court must deal with the claim in separate proceedings” (s 23(1)(c)) (emphasis added); and

2. the court "must adjourn the primary proceedings until the claim has been dealt with" (s 23(1)(d)).

13. The defendant has made a “claim” for the purposes of s 10 of the PID Act, that because of that section she is not subject to any civil liability of the kind alleged in the defamation proceedings. This claim is contained in the defendant’s letter dated 24 October 2018 and a further letter dated 22 November 2018.

14. The defendant seeks by the present application to transfer the defamation proceedings to the Supreme Court. She then intends, in accordance with the procedure contemplated in s 23 of the PID Act, to commence “separate proceedings” in the Supreme Court in which she will seek to have determined her claim for protection under s 10 of the PID Act. In those separate, secondary proceedings she will seek declaratory relief to the effect that the statements which form the basis of the civil lability alleged in the defamation proceedings were “public interest disclosures” for the purposes of the PID Act. She will seek a further declaration that by virtue of s 10 of the PID Act she is not subject to civil liability as alleged in the defamation proceedings.

15. This proposed approach is consistent with s 23 of the PID Act, which contemplates that there will be two separate proceedings conducted within the same court - namely, the primary proceedings and the secondary proceedings as to the application of s 10 of the PID Act. The defendant submitted that it was therefore necessary for the primary proceedings to be transferred to the Supreme Court so that an application might properly be made in the Supreme Court by the defendant to give rise to the secondary proceedings, leading to a determination by the Supreme Court about the application of s 10 of the PID Act.

16. The defendant submitted that in accordance with that procedure, the defamation proceedings should be transferred to the Supreme Court pursuant to s 140 of the Civil Procedure Act2005 (NSW) because:

1. it is necessary, having regard to the terms of s 23 of the PID Act, for the court that is dealing with the secondary proceedings to also be seized of the primary proceedings. The defendant submitted that the Supreme Court is the appropriate court to determine the secondary proceedings;

2. the proceedings (in particular the secondary proceedings to determine the applicability of s 10 of the PID Act) involve complex and important issues of law regarding the proper construction of the PID Act and the correct procedure for determining disputes about the protections afforded by s 10 of that Act;

3. the proper construction of the relevant provisions of the PID Act has not yet been the subject of judicial determination and it is appropriate to be decided by a superior court of record;

4. the proceedings raised issues of public importance concerning the PID Act’s stated objectives of facilitating the disclosure of information by whistle-blowers and the protection of such persons against recrimination or reprisal;

5. there is doubt as to whether the District Court has the power to grant the declaratory relief which she will seek in the secondary proceedings, such that s 144(2) of the Civil Procedure Act would require the proceedings to be transferred to the Supreme Court irrespective of whether the defendant is successful on the present application; and

6. other discretionary factors indicate that the transfer of the proceedings to the Supreme Court at this early stage will not involve undue delay or prejudice to the parties.

Legal principles

17. In exercising the discretion conferred by s 140 of the Civil Procedure Act, it is necessary for the Court to consider all relevant facts and circumstances (Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 at [4], Bryson J; Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631, Campbell J).

18. The applicant for transfer bears the onus of satisfying the Court that there is “sufficient cause”, “sound ground” or “good reason” to transfer the proceedings so that justice is best served between the parties: Sanderson Motors at [3]-[4]; Parry v WGE Engineering Pty Ltd [2003] NSWSC 337 at [3].

19. In Rinbac Pty Ltd v The Owners - Strata Plan No 64972 [2010] NSWSC 656; 77 NSWLR 601 Brereton J (as he then was) said at [11]:

“11   The purpose of the Civil Procedure Act, s 140, is to permit the removal from a lower court to a higher court of proceedings where there is good reason to do so. Typically, that has been where there has been a risk that a jurisdictional limit affecting the lower court would be exceeded, where there are complex and important issues, and where the proceedings involve allegations of significant notoriety or public importance.”

Relevant discretionary matters

The case raises complex issues of law which have not been previously decided

20. There are three issues of particular complexity. First the proper construction and interactions of ss 10 and 11 of the PID Act is a matter of some complexity. Subsection 10(2)(a) provides that an individual who makes a public interest disclosure “has absolute privilege in proceedings for defamation” in respect of that disclosure. At common law, the defence of absolute privilege in defamation proceedings cannot be defeated by a finding of malice (Rajski v Carson (1986) 4 NSWLR 735 at 742 per Hunt J; Markisic v State of New South Wales & Ors (No 2) [2012] NSWSC 1353 at [101] per Price J). However, s 11 of the PID Act provides that s 10 “does not apply” to civil liability for “knowingly making a statement that is false or misleading”. The application of these sections to the present proceedings therefore raises a question as to whether the meaning of the phrase “absolute privilege” in s 10 of the PID Act is informed by common law principles, such that s 11, properly construed, is not capable of defeating the absolute privilege afforded to a discloser in defamation proceedings under s 10(2)(a).

21. Second, the question of whether a disclosure meets the definition of a “public interest disclosure” in s 26 of the PID Act requires a process of characterisation having regard to:

1. whether the disclosure was made by a person who is, or has been, a “public official” (s 26(1)(a));

2. whether the recipient of the disclosure was an “authorised internal recipient”, a “supervisor of the discloser” or a “foreign public official” (s 26(1)(b));

3. the circumstances in which the disclosure was made to the recipient; and

4. whether the discloser “believes on reasonable grounds that the information tends to show one or more instances of disclosable conduct” (s 26(1)(c)).

22. In circumstances where there is a dispute as to whether a disclosure is a “public interest disclosure” within the meaning of s 26, the matters referred to in paragraph [21] above would need to be the subject of evidence in the “separate proceedings” commenced pursuant to s 23 of the Act. Section 23(1)(e) provides that any admission or information given by the discloser in the separate proceedings is not admissible as “evidence against the individual except in proceedings in respect of the falsity of the admission, information or evidence”. Neither the precise operation of that provision nor the procedure more generally has been the subject of judicial consideration.

23. Third, the defamation proceedings may raise an issue as to whether, on the proper construction of s 23 of the PID Act, a person who is unsuccessful in establishing that their “claim” for immunity or protection under s 23 is thereby precluded from pleading or relying upon a defence of absolute privilege in the primary proceedings for defamation.

24. None of these three matters has been the subject of judicial determination. Accordingly, the novelty and complexity of these issues make it appropriate for them to be considered by a superior court of record. This is a factor which strongly favours the transferring the proceedings to the Supreme Court.

The proceedings raise issues of public importance

25. The defamation proceedings and the secondary proceedings that will arise as a result, raise issues of public importance. The objects of the PID Act, as set out in s 6 of that Act, are as follows:

1. to promote the integrity and accountability of the Commonwealth public sector;

2. to encourage and facilitate the making of public interest disclosures by public officials;

3. to ensure that the public officials who make public interest disclosures are supported and are protected from adverse consequences relating to the disclosures; and

4. to ensure that disclosures made by public officials are properly investigated and dealt with.

26. The protection afforded by the PID Act serves to promote these important objectives. The practical working out of those protections, are to be resolved in the present matter by the secondary proceedings to be instituted by the defendant. This has significant implications for the efficacy of the regime for encouraging public interest disclosures created by the PID Act.

Other discretionary factors

27. The following additional factors favour the transferring of the proceedings to the Supreme Court. In exercising the discretion conferred by s 140 of the Civil Procedure Act, the Court must have regard to the overriding purpose and related considerations in s 56 of that Act. (Cai v Guo [2014] NSWSC 380 at [14]-[15] (Fullerton J).)

28. In the present case, the following discretionary factors point strongly in favour of transferring the primary proceedings to the Supreme Court.

29. While it is not necessary to decide the issue on the current application, there is doubt as to whether the District Court has jurisdiction to grant declaratory relief of the nature that the defendant will seek in the “separate proceedings” to be commenced pursuant to s 23 of the PID Act. The District Court is vested with a limited jurisdiction in equity by s 134 of the District Court Act 1973 (NSW) (District Court Act).

30. Section 134(1)(h) of the District Court Act relevantly provides:

“(1)    The Court shall have the same jurisdiction as the Supreme Court, and may exercise all the powers and authority of the Supreme Court, in proceedings for:

…

(h)    any equitable claim or demand for recovery of money or damages, whether liquidated or unliquidated (not being a claim or demand of a kind to which any other paragraph of this subsection applies), in an amount not exceeding the Court's jurisdictional limit.”

31. There is some authority to the effect that, when exercising jurisdiction pursuant to s 134(1)(h), the District Court can in certain circumstances make declarations (Kolavo v Pitsikas (t/as Comino and Pitsikas) & Anor [2003] NSWCA 59 at [12]). However, the primary proceedings being brought in defamation do not involve any “equitable claim or demand for recovery of money or damages” which could enliven the District Court’s jurisdiction under s 134(1)(h) of the District Court Act, nor do these proceedings entail any claim for relief which falls within any of the other subsections of s 134. As a result, there is doubt as to whether the District Court has jurisdiction to grant the relief which will be sought by the defendant for the purposes of resolving the question as to the application of s 10 of the PID Act.

31. Further support for the transfer of the primary proceedings to the Supreme Court is provided by s 144(2) of the Civil Procedure Act. This section provides relevantly:

“144(2)    If, during proceedings to which this section applies, the District Court decides that it lacks, or may lack, jurisdiction to hear and dispose of the proceedings, the District Court must order that the proceedings be transferred to the Supreme Court.”

33. Section 144(1) provides that the section applies to proceedings under subdivision 2 of Division 8 of Part 3 of the District Court Act, which includes s. 134. In Mahommed v Unicomb [2017] NSWCA 65 at [52]-[53], Ward JA (with whom Macfarlan JA and McDougall J agreed) set out the following principles regarding the operation of s 144 of the Civil Procedure Act:

1. section 144 is mandatory in its terms;

2. section 144 encompasses the situation not only where the District Court reaches a decision that it lacks jurisdiction to deal with claims in its equitable jurisdiction but also where there is a doubt as to that matter; and

3. section 144 does not in its terms impose an obligation on the District Court to transfer proceedings only where an application to that effect is made by a plaintiff, and no such limitation should be read into the section.

34. From the above analysis it follows that even if the defendant had not brought the present application, it is likely that the District Court would eventually reach the view that there was sufficient doubt about whether that Court had jurisdiction to deal with the claims raised in the primary proceedings as to require the transfer of the proceedings to the Supreme Court pursuant to s 144. In line with the overriding objective of s 56 of the Civil Procedure Act, the most efficient course would be to transfer the proceedings at this early stage, rather than after the parties have expended time and resources in progressing the matter in the District Court.

35. Importantly, the primary proceedings remain at a preliminary stage in the District Court. The defendant is yet to file a Defence and the parties have not taken any other substantive steps. No interlocutory applications have been determined. No date has been set for the hearing. The transfer of the proceedings to the Supreme Court would not cause any material delay in the progress of the matter. There would be no duplication or incurring of unnecessary costs in relation to the work which has already been done.

36. It follows from the above that I had no difficulty in making the orders sought in the Summons as set out above and I make those orders.

**********

Decision last updated: 21 March 2019