Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No. 5)
[2013] NSWSC 1650
•28 October 2013
Supreme Court
New South Wales
Medium Neutral Citation: Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No. 5) [2013] NSWSC 1650 Hearing dates: 21-25; 28-30 October 2013 Decision date: 28 October 2013 Before: Adamson J Decision: Refuse leave to the first plaintiff to re-open its case to prove that it is an excluded corporation within s 9(2) of the Defamation Act
Catchwords: PRACTICE AND PROCEDURE- application to re-open case- inconsistent with overriding purpose and guiding principles
DEFAMATION- s 9 Defamation Act 2005Legislation Cited: Civil Procedure Act 2005, s56, s 57, s 57(1)(a)-(d), s 58, s 58(1), s 58(2), s 58(2)(b), s 59
Defamation Act 2005, s 9, s 9 (2), s 9(2)(b)Cases Cited: AON Risk Services Australia Ltd v Australian National University [2009] HCA 27, 239 CLR 175
Born Brands Pty Ltd v Nine Network Australia Pty Ltd (No. 6) [2013] NSWSC 1651
Redeemer Baptist School Limited v Glossop [2006] NSWSC 1201
Heartcheck Australia Pty Limited v Channel 7 Sydney Pty Limited [2007] NSWSC 555Category: Interlocutory applications Parties: Born Brands Pty Ltd (First Plaintiff)
Hayley Birtles-Eades (Second Plaintiff)
Sally Birtles (Third Plaintiff)
Nine Network Australia Pty Ltd (First Defendant)
Gabriella Rogers (Second Defendant)
Georgie Gardener (Third Defendant)Representation: Counsel:
CA Evatt and RKM Rasmussen (Plaintiffs)
TD Blackburn SC and ATS Dawson (Defendants)
Solicitors:
Beazley Singleton Lawyers (Plaintiffs)
Johnson Winter and Slattery (Defendants)
File Number(s): 2011/115199 Publication restriction: Nil
Judgment
The background to these proceedings, being a claim for damages for defamation and injurious falsehood, appears sufficiently from my reasons for judgment: Born Brands Pty Ltd v Nine-Network Australia Pty Ltd (No. 6) [2013] NSWSC 1651.
After the luncheon adjournment on the sixth day of the trial, after the defendants' had provided a copy of their comprehensive written submissions to the plaintiffs, Mr Evatt who appeared on behalf of the plaintiffs, sought leave to re-open the case for the first plaintiff, Born Brands Pty Limited (Born Brands), to adduce evidence to discharge the onus of proof that Born Brands was an excluded corporation within the meaning of s 9 of the Defamation Act 2005.
I refused the plaintiffs' application but, in order not to delay the conclusion of the proceedings, I informed the parties that I would publish my reasons later. My reasons for the refusal follow.
Mr Evatt's application was a response to [2] of the defendants' written submissions to the effect that the plaintiffs had adduced no evidence to establish that Born Brands was an excluded corporation and that therefore it had no cause of action in defamation.
Section 9 of the Act relevantly provides:
Certain corporations do not have cause of action for defamation
(1) A corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of the publication.
(2) A corporation is an excluded corporation if:
(a) the objects for which it is formed do not include obtaining financial gain for its members or corporators, or
(b) it employs fewer than 10 persons and is not related to another corporation,
and the corporation is not a public body.
(3) In counting employees for the purposes of subsection (2) (b), part-time employees are to be taken into account as an appropriate fraction of a full-time equivalent.
Mr Evatt submitted that the plaintiffs' legal advisers had overlooked the need to prove that Born Brands had fewer than 10 persons and was not related to another corporation and that the deficiency could be remedied by calling either the second plaintiff, Hayley Birtles-Eades, or the third plaintiff, Sally Birtles, who were present in court and could give the evidence without further delay.
Mr Blackburn SC, who appeared for the defendants, objected to the grant of leave. He submitted that whether the onus could be discharged was not a simple matter, by reason of the way in which s 9(2) has been construed. In Redeemer Baptist School Limited v Glossop [2006] NSWSC 1201 (Redeemer Baptist) Nicholas J at [22] construed the word "employs" in the statutory predecessor to s 9(2)(b) to mean "to use the services of a person" or "to make use of a person". His Honour said at [23]:
It follows, in my opinion, that the nature of the arrangement or understanding under which a person provides services, and whether or not the arrangement or understanding is legally enforceable, and whether or not the person is paid for the services or is a volunteer, are irrelevant considerations. The only relevant issue is whether or not, as a matter of fact, the number of persons whose services the corporation used in its business at the time of publication is fewer than 10.
In Heartcheck Australia Pty Limited v Channel 7 Sydney Pty Limited [2007] NSWSC 555 Grove J said, obiter, at [7]:
Were it necessary to express a conclusion, I would be of the same view as Nicholas J in Redeemer Baptist School v Glossop [2006] NSWSC 1201 that the relevant issue is whether or not, as a matter of fact, the number of persons whose services the corporation used in its business were fewer than ten.
Mr Blackburn submitted that the determination of whether Born Brands had fewer than 10 employees was not a matter that could be determined by reference to the company records, the BAS statements, or the tax returns since it was a question of fact that did not depend on whether the persons who provided services to the corporation were paid. He contended that, were Born Brands granted leave to re-open, this would inevitably lead to the matter being adjourned to provide the defendants with an opportunity to obtain discovery and issue notices to produce or subpoenas in order to test the evidence adduced by Born Brands on this issue.
Mr Blackburn submitted that, since orders were made by this Court for statements of evidence to be served, and since the statements served did not address this question, the defendants were entitled not to make such further enquiries on the footing that Born Brands would not be able to discharge the onus under s 9(2) of the Act in any event.
In response, Mr Evatt submitted that he did not accept that the defendants would suffer any prejudice were the application to re-open granted. He contended further that the defendants were not entitled to ignore the allegation in the pleading that the first plaintiff was an excluded corporation and ought to have investigated the matter in any event, notwithstanding that the plaintiffs' evidentiary statements were not directed to proving the allegation.
Reasons
These proceedings were commenced in the Federal Court on 13 December 2010 and were transferred to this Court on 8 March 2011. The defence to the amended statement of claim was filed on 9 July 2012. From the time of service of this document, the plaintiffs were on notice that they were required to prove that Born Brands was an excluded corporation since the defendants did not admit the allegation. On 23 July 2013 the Court ordered the plaintiffs to serve all statements of oral evidence to be adduced in chief by 28 August 2013. The statements served contained no evidence that was directed at discharging the onus the plaintiffs bore under s 9(2) of the Act.
I accept the defendants' submission that, if I permitted the plaintiffs leave to adduce evidence to prove that Born Brands is an excluded corporation, it would be necessary to adjourn the proceedings to provide the defendants with an opportunity to investigate the evidence in order to test it. I accept that such investigations might require the issuing of notices to produce, subpoenas to third parties and further discovery. Because of the nature of the investigations, the proceedings could not be completed within the ten days allocated for the hearing of this matter and would need to be stood over for a period.
Civil Procedure Act 2005: s 56, s 57, s 58 and s 59
I am obliged by s 58(1) of the Civil Procedure Act 2005 to seek to act in accordance with the dictates of justice in deciding whether to grant the plaintiffs leave to re-open. Section 58(2) of the Civil Procedure Act makes the matters referred to in s 56 and s 57 mandatory relevant considerations for the purposes of determining the dictates of justice.
Section 56 identifies the overriding purpose of the Act and UCPR as being "to facilitate the just, quick and cheap resolution of the real issues in the proceedings." I do not consider that it would be just for leave to re-open to be granted and these proceedings be adjourned. The consequences of a grant of leave would be neither quick nor cheap since the proceedings would be inevitably delayed and additional costs incurred. There are likely to be significant additional costs as a result of an adjournment.
In AON Risk Services Australia Ltd v Australian National University [2009] HCA 27, 239 CLR 175 at [98] and [100] the plurality said, in substance, that an order for costs may not provide sufficient compensation for an adjournment and justice cannot be measured merely in money. I consider there to be prejudice to the defendants which cannot be compensated for in costs by reason of the inevitable delay were leave to be granted.
The matters which I am obliged to take into account under s 57 are listed in s 57(1)(a) - (d). They relate to the just determination of the proceedings, the efficient disposal of the business of the Court, the efficient use of available judicial resources, and the timely disposal of the proceedings. I accept that all but the first of these matters weigh heavily in the balance against the grant of leave. As to the first, I accept that it is a serious matter to deprive a party of an opportunity of proving that it has a cause of action. However, for the reasons that follow, I consider that leave ought not be granted.
In terms of matters which I may, as distinct from must, take into account, they include, as s 58(2)(b) provides, the degree of difficulty or complexity to which the issues in the proceedings give rise. Proof of the material facts relevant to whether Born Brands is an excluded corporation is a relatively straightforward matter, although it is a factual question which involves questions of nuance and degree having regard to the applicable test articulated by Nicholas J in Redeemer Baptist. The plaintiffs' legal representatives must be taken to have realised that it was a matter that needed to be proved since it was alleged in the pleading. The defendants' non-admission of the allegation in the defence notified the plaintiffs that it was in issue.
The next matter is the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective party. I am prepared to assume that the plaintiffs themselves had no part to play in the failure to obtain this evidence. Whilst it may seem at times unjust that forensic decisions taken by the parties' legal representatives have consequences which are visited on the parties themselves, nonetheless, in my view, it can fairly be said that the failure to obtain this evidence was not beyond the control of the plaintiffs because it was well within the control of their legal representatives.
Another matter which is germane to the exercise of my discretion is the use that any party has made or could have made of any opportunity available to the party in the course of the proceedings. The plaintiffs have had ample opportunity in the past to adduce the evidence as to whether Born Brands is an excluded corporation. Indeed their legal representatives were required to address that question before pleading a cause of action in defamation on behalf of Born Brands.
Section 59 of the Act provides that in any proceeding the practice and procedure of the Court should be implemented with the object of eliminating any lapse of time between the commencement of the proceeding and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case.
The principles to which I have referred in s 56, s 57, s 58 and s 59 weigh against the discretion being exercised in the plaintiffs' favour in the circumstances of the present case.
I appreciate that this may seem, from the plaintiffs' point of view, to be a harsh result. Nonetheless for the reasons already given, I consider it to be in the interests of justice that leave to re-open should be refused.
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Decision last updated: 13 November 2013
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