Business and Research Management Limited v Flude

[2002] NSWSC 812

CITATION:

BUSINESS AND RESEARCH MANAGEMENT LIMITED v FLUDE [2002] NSWSC 812 revised - 10/09/2002

FILE NUMBER(S):

SC 20933 OF 2001

HEARING DATE(S):

2 September 2002

JUDGMENT DATE:

2 September 2002

PARTIES :

BUSINESS AND RESEARCH MANAGEMENT LIMITED
(Plaintiff)

v

PETER GORDON FLUDE
(First Defendant)

AUSTRALIAN RURAL GROUP Ltd
(ACN 002 653 501)
(Second Defendant)

GRAHAM JOHN REANEY
(Third Defendant)

GEORGE ARTHUR ASHBY HOOPER
(Fourth Defendant)

ALEXANDER BRIAN McLENNAN
(Fifth Defendant)

KENNETH JOHN BOWEN
(Sixth Defendant)

JUDGMENT OF:

Levine J

COUNSEL :	RA Campbell (Plaintiff) T Blackburn (Defendants)
SOLICITORS:	Cordato Partners (Plaintiff) Teys McMahon (Defendants)
CATCHWORDS:	Application to dispense with jury - Supreme Court Act 1970 s86 - application for indemnity costs
LEGISLATION CITED:	Defamation Act 1974 Supreme Court Act 1970
CASES CITED:	Business and Research Management v Flude [2002] NSWSC 318 Dwyer v IPC Magazines Ltd , Levine J, unreported, 21 April 1993 Moselmane v Jones & Anor, Gibson DCJ, unreported, 14 August 2002 Peck v Email Limited (1987) 8 NSWLR 430
DECISION:	See paragraphs 12-15

DLJ:1

(Ex Tempore - REVISED)

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

JUSTICE DAVID LEVINE

MONDAY 2 SEPTEMBER 2002

20933 OF 2001


BUSINESS AND RESEARCH MANAGEMENT LIMITED
(Plaintiff)

v

PETER GORDON FLUDE
(First Defendant)

AUSTRALIAN RURAL GROUP Ltd
(ACN 002 653 501)
(Second Defendant)

graham john reaney
(Third Defendant)

GEORGE ARTHUR ASHBY HOOPER
(Fourth Defendant)

ALEXANDER BRIAN McLENNAN
(Fifth Defendant)

KENNETH JOHN BOWEN
(Sixth Defendant)
JUDGMENT (Application to dispense with jury – Supreme Court Act 1970 s86 – application for indemnity costs)

1 For the first time in my experience an application has been made to dispense with a jury performing its function under s 7A of the Defamation Act 1974. The application is made under s 86 of the Supreme Court Act 1970.

2 That section states:

86(1) Proceedings on a common law claim in which there are issues of fact on a claim in respect of defamation are to be tried with a jury.
(2) Despite subsection (1), the Court may order that all or any issue of fact be tried without a jury if:
(a) any prolonged examination of documents or scientific or local investigation is required and cannot conveniently be made with a jury; or
(b) all parties consent to the order.

3 This application for an order under 86(2)(a) rests upon the proposition that the 7A jury will be required to embark upon prolonged examination of documents. The documents the jury will have to examine constitute the matter complained of. It is made up of a memorandum to financial advisers and accountants; that is the first document to which is annexed a draft newsletter, the second document. The third document is made up of a letter to the author of the first document enclosing amendments to the newsletter.

4 All of those documents are said to give rise to the imputations pleaded, which imputations are as follows:

(a) BARM has failed to honour its duty to pay the annual fee of the second defendant.
(b) BARM has failed to adequately discharge its obligations to Budplan participants in that it failed to market the intellectual property developed by those Budplans despite having been paid considerable amounts of money in advance to do so.
(c) BARM is in breach of its management agreement with Budplan participants by its failure to carry out its commercialisation responsibilities.
(d) BARM’s failure to perform its duties as to marketing the intellectual property developed on behalf of the various Budplan projects is so serious as to cause concern to the Budplan trustee over a number of years.
(e) BARM has breached its duties to Budplan participants by failing to apply for necessary patents to protect the intellectual property.
(f) BARM’s breach of its obligation to perform its duties to market Budplan intellectual property is so serious that the Budplan trustee was obliged to take over that task to protect the participants.
(g) BARM behaved incompetently in that its breach of its obligation to perform its duties to commercialise Budplan intellectual property was due at least in part to its lack of the required ability.
(h) BARM took advantage of Budplan participants by taking fees in advance and then ignoring its duties to seek to commercialise Budplan intellectual property.

These imputations were found by Kirby J on 22 April this year to be capable of being carried by the matter complained of and to becapable of being defamatory ([2002] NSWSC 318).

5 Mr Campbell has rightly pointed out that a great deal of artificiality attends the s7A jury function. The essential artificiality of course arises from the jury having to consider whether the publication in question carries the claimed imputations by reference to the hypothetical ordinary reasonable reader. Arguably, the artificiality is expanded when the publication sued upon is not a newspaper article or a book, but falls within that category of publication described as “transient”, usually a radio or television broadcast.

6 In this case the task of the jury, in my view, is no more and no less artificial in its nature than applies in any defamation action. It is presented with a series of documents in the English language, constituting the matter complained of. It is presented with a series of meanings and then has the benefit of submissions from counsel and a summing up with directions from the trial judge.

7 The mere technical or complex nature of the documents the jury may have to consider by itself generally and, in my view in this case specifically, does not elevate the “examination” of them for 7A purposes “prolonged” in the sense as is required for the making of an order under s 86(2) of the Supreme Court Act.

8 Earlier decisions relating to the antecedent section of the Supreme Court Act, namely the former s 79, do not with facility lend themselves to application to the peculiar statutory function of the jury under s 7A of the Defamation Act. I had occasion to consider relevant principles in 1993 (prior to the 7A amendments) in Dwyer v IPC Magazines Ltd (Unreported, 21 April 1993) which would have been an all issues jury trial and in which, notwithstanding some recherché ingredients, I did not order that the jury be dispensed with.

9 The observations of Clarke J, as he then was, in Peck v Email Limited (1987) 8 NSWLR 430 at 434F, taking into account the devolution of the jury role in New South Wales, are still otherwise apposite. His Honour said (at 434F):

“It is true to say that juries in this State are asked, almost on a daily basis, to decide relatively complex medical questions. They appear to do so without undue difficulty and it would not be correct to say, in my opinion, that because a scientific question involves competing expert opinions it is not convenient for decision by a jury”.

At 433C his Honour had agreed that “conveniently” in the relevant section was not a reference only to physical inconvenience.

10 When one bears in mind the discrete role of the jury under s 7A I must say it would be with great difficulty that one could envisage the application of s 86(2), though that the situation might arise is always possible.

11 The plaintiff’s application and its unsuccessful resolution highlights what could be perceived to be an unacceptable flaw, exposed by recent legislation in the administration of Defamation law and practice in this State. In one Act, namely the Defamation Act, the legislature enacted that the constitutional tribunal of a civil jury, was still to play a critical role. In other Acts, namely amendments to the Supreme Court Act (ss85-7) and specifically amendments to the District Court Act 1973 (see s76A and the judgment of Gibson DCJ in Moselmane v Jones & Anor, unreported, 14 August 2002) a serious question has arisen as to whether the legislature has unfairly compromised that constitutional component: in this Court there must be a jury in reality, in the District Court there will not be a jury.

12 The plaintiff's application is dismissed.

13 The defendants seek an order for indemnity costs. I decline it.

14 The application was of a kind that hitherto has not been made. The mere fact that it failed, and that there were good reasons for it failing in this instance, is not sufficient to sheet home to the unsuccessful applicant an undue penalty for seeking to explore a novel area of the law.

15 I am of the view that the order for costs should follow the usual course in an application of this kind and the plaintiff should pay the defendants’ costs.

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Last Modified: 09/11/2002