Carter v Scanlon (Ruling No 2)

[2022] VCC 178

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

DEFAMATION LIST

Case No. CI-20-00817

PATRICK CARTER	Plaintiff
v
MICHELLE SCANLON (also known as MICHELLE CHILDS)	Defendant

---

JUDGE:	HER HONOUR JUDGE CLAYTON
WHERE HELD:	Melbourne
DATE OF HEARING:	15 February 2022
DATE OF RULING:	1 March 2022
CASE MAY BE CITED AS:	Carter v Scanlon (Ruling No 2)
MEDIUM NEUTRAL CITATION:	[2022] VCC 178

RULING
---

Subject:PRACTICE AND PROCEDURE

Catchwords:              Pleadings – application to strike out second further amended Statement of Claim – defamation

Cases Cited:Carter v Scanlan (Ruling) [2021] VCC 1472; Dow Jones & Co Inc v Gutnick [2002] HCA 56; 210 CLR 575; Daebo Shipping Company Ltd v The Ship Go Star [2012] FCAFC 156; Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692; De Belin v Australian Rugby League Commission Limited [2019] FCA 688

Ruling:  Application dismissed.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J C Hooper	Marsh & Maher Richmond Bennison Lawyers
For the Defendant	Mr M Stanarevic (Solicitor)	Matrix Legal

HER HONOUR:

1This is an application, brought on summons by the defendant, to strike out the Second Further Amended Statement of Claim filed by the plaintiff.

2This proceeding already has a lengthy history, some of which is detailed in an earlier ruling in this case.[1]  As a result of that ruling, the plaintiff’s pleading was largely struck out with a right to replead.

[1]Carter v Scanlan (Ruling) [2021] VCC 1472

The History of the Pleading

3It is useful to provide a brief summary of the history of the pleading in this matter.

4The plaintiff issued his writ on 27 February 2020.  That writ contained a general endorsement in which he pleaded that the defendant had sent emails to his employer (“the Tatura Statements”), landlord (“Landlord Statements”) and other people (“Other Statements”), and had published a job description on LinkedIn (“LinkedIn Statement”) that carried various defamatory imputations.

5According to the affidavit of Zachery Robert Cleal dated 2 March 2021, the Writ was not served until 5 August 2020.  The defendant filed a Notice of Appearance on 14 August 2020.  The Statement of Claim was not filed until 11 September 2020.  That pleading maintained a claim in defamation in relation to each of the Tatura Statements, Landlord Statements, Other Statements and LinkedIn Statement.  That pleading was not in an appropriate form.  It failed to properly particularise the claim and rolled up the imputations said to arise from the various statements into one paragraph.

6Presumably in order to deal with these deficiencies, the plaintiff was granted leave on 18 November 2020 to file any amended Statement of Claim by 4 December 2020.  By consent, orders were made to extend the date for an amended Statement of Claim to be filed to 18 December 2020.

7Notwithstanding that extension, the amended Statement of Claim was not filed until 22 December 2020.  That pleading maintained the claims in defamation in relation to the Tatura Statements, the Landlord Statements, and the LinkedIn statement but did not press the claim in relation to the Other Statements.

8By 2 March 2021 the defendant had not filed a defence, and the plaintiff obtained an order for interlocutory judgment in default of defence on that date.

9The following day the defendant sought to file a summons seeking to strike out the amended Statement of Claim.  However as judgment had already been entered, that summons was not accepted by Registry for filing.

10On 26 July 2021 orders were made for the judgment entered in default of defence to be set aside.  The defendant was ordered to pay the costs of the plaintiff of and incidental to obtaining the default judgment and the preparation and attendance at the trial assessment, agreed and fixed in the amount of $15,000.

11The plaintiff was given leave to file a further amended Statement of Claim by 18 August 2021.  He filed a further amended Statement of Claim on 19 August 2021.  In that pleading he maintained his claim in defamation only in relation to the LinkedIn Statement.  He pleaded a claim in injurious falsehood arising from emails he alleged were sent by the defendant to Mckeown Marrs (“Mckeown Emails”), a phone call he alleged was made by the defendant to Reventon Investments Pty Ltd (“Reventon Statement”), emails he alleged the defendant sent to employees of Tatura (“Tatura Emails”), and an email he alleged the defendant sent to his Landlord (“Landlord Email”).

12By summons of 10 September 202 the defendant made an application to strike out the further amended Statement of Claim, and summarily dismiss the proceeding. 

13In my ruling of 7 October 2021 noted above, the defendant was successful in having much of the Statement of Claim struck out.  The plaintiff was given leave to replead his injurious falsehood claim in relation to the Mckeown Emails, the Reventon Statement and the Tatura Emails to articulate, if he could, how that cause of action arose.  The claim in relation to the Landlord Email was struck out.  The matter was referred to judicial mediation but did not settle.

14On 23 November 2021 the plaintiff emailed his proposed second further amended Statement of Claim to the defendant.  That draft pleading maintained a claim in defamation in relation to the LinkedIn Statement.  It maintained a claim in injurious falsehood in relation to the Reventon Statement (identified in that pleading as the ‘Reventon Words’).  It abandoned the claims in injurious falsehood in relation to the Mckeown Emails and the Tatura Emails.  It pleaded, for the first time, a new cause of action, being interference with contractual relations.  I will refer to this document as the ‘23 November 2021 draft pleading’.

15On 24 November 2021 the Court made orders that the plaintiff was to provide to the defendant a proposed amended pleading and that the defendant was to advise whether she consented to that pleading by 3 December 2021.  That did not occur, and the matter was listed for further directions on 14 December 2021, at which orders were made providing leave to the plaintiff to file the amended pleading by 23 December 2021, and requiring the defendant to file any strike-out application by 4 February 2022.  It was anticipated by the Court and, I imagine, by the defendant, that the amended pleading that was to be filed was the 23 November 2021 draft pleading.

16As I understand it, instead of filing the 23 November 2021 draft pleading, the plaintiff decided that an extensive re-draft was in order.  He sought agreement from the defendant to extend the time for filing the amended pleading.  The defendant did not agree to extend the timetable.

17Instead of applying to the Court for a variation of the timetable, the plaintiff ‘made the decision not to contact the Court during the Christmas closure period’. 

18Further delays ensued because, amongst other things, counsel contracted COVID-19.  Ultimately the document was not provided to the defendant until 25 January 2022.  I will refer to this document as the ‘21 January 2022 pleading’ as it bears this date, though it was not filed with the Court until 1 February 2022.

19Whilst this application is formally the defendant’s summons to strike out the pleading, the defendant submitted that in fact the purported filing of the ‘second further amended Statement of Claim’ was flawed, and the document should not have been accepted for filing, as it was not filed in accordance with the orders of this Court.

20In tacit acknowledgement of this, counsel for the plaintiff made an oral application for leave to file the pleading at the hearing. 

21The 21 January 2022 pleading abandons all the claims in injurious falsehood, and instead particularises in considerable detail the claim for interference with contractual relations in relation to the plaintiff’s alleged contract with Reventon.

22Including the general endorsement, the plaintiff has now had five attempts to get the pleading right and to plead the correct cause of action.

The Defendant’s submissions

23The defendant says that the pleading should be struck out for the following reasons:

(a)   There is no unambiguous statement that the defendant published the LinkedIn Statement, making it impossible for the defendant to plead to;

(b)   Readers of the LinkedIn Statement would not have known or been expected to know that the statement was published by someone other than the plaintiff.  As it is not possible to defame oneself, no claim in defamation can arise;

(c)   The claim for negligent interference in contractual relations is misconceived and the pleading does not comply with the requirements necessary to make out such a cause of action;

(d)   The plaintiff has had long enough to get his pleading right and no further opportunity ought to be provided;

(e)   There would be real prejudice to the defendant if the plaintiff was afforded a further opportunity to amend his pleading, as the matter has already been on foot for two years and relates to matters that arose many years ago;

(f)    There is little or no prejudice to the plaintiff if the pleading is struck out, as he has already filed a bankruptcy notice against the defendant in relation to the outstanding costs order and she is a woman of limited means who is currently undergoing treatment for cancer.  I infer from this that the defendant is suggesting that the plaintiff would be unlikely to obtain any payment of damages from her, even if he was successful; and

(g)   If the pleading is not struck out, the Court ought to use its powers to summarily dismiss the claim.

The Plaintiff’s submissions

24The plaintiff says that:

(a)   The pleading of publication of the LinkedIn Statement is unambiguous and is pleaded in accordance with the principles enunciated by the High Court in Dow Jones & Co v Gutnick;[2]

(b)   Notwithstanding that negligent interference with contractual relations is not commonly used in a claim that does not involve a business or company, the plaintiff is not precluded from pleading this cause of action, and has appropriately pleaded the necessary elements: that is, the existence of a contract, knowledge by the defendant of the contract, intention to interfere in the contract and actual damage;

(c)   There is no basis for the Court to use its powers to summarily dismiss the claim.

[2][2002] HCA 56; 210 CLR 575

Findings

25Dealing with the defendant’s arguments in turn:

(a)   I am satisfied that the pleading in relation to publication of the LinkedIn Statement is sufficiently particularised.  The pleading alleges that on a date in June 2019 the defendant wrote and uploaded the LinkedIn Statement and that, on a date in June 2019, the LinkedIn Statement was published to a wide and extensive audience.  Because publication is a bilateral act, involving action on behalf of both the person who writes, says or uploads the statement and the person who reads, downloads or hears the statement, publication occurs at the time the publication is comprehended by the reader.  In a case of internet publication, that relates to the date the post was downloaded, not uploaded.[3]

(b)   The test for whether a statement is defamatory is not whether the reader knows who has published it but rather whether that statement would tend to lower the reputation of the plaintiff in the eyes of his peers.  I have already dealt with and dismissed an application that the LinkedIn Statement is incapable of carrying a defamatory imputation because it is ‘mere abuse’.  Whether the plaintiff can establish that it was the defendant who made the LinkedIn Statement is a matter of evidence at trial.  If the plaintiff cannot establish that the defendant published the LinkedIn Statement he will fail in his claim.  This does not mean the claim should be struck out at the pleading stage. 

(c)   The elements of the tort of negligent interference in contractual relations are concisely set out in the case of Daebo Shipping Co Ltd v The Ship Go Star.[4]  They are:

(i)there must be a contract between the plaintiff and a third party;

(ii)the defendant must know that the contract exists;

(iii)the defendant must know that the contract will be breached if the third party does or fails to do some particular act;

(iv)the defendant must induce or procure the third party to breach the contract by doing or failing to do that particular act;

(v)the breach must cause loss or damage to the plaintiff.

[3]Ibid at paragraph [44]

[4][2012] FCAFC 156 at paragraph [88]

The defendant relies on a number of cases which he says demonstrate the inapplicability of this cause of action to the allegations against the defendant.[5]  In particular the defendant says that the pleading lacks sufficient particulars as to how the defendant is said to have induced the breach of contract by the third party and how the contract was in fact breached.  I do not accept this submission.  The plaintiff pleads the existence of the contract at paragraph 11 of the 21 January 2022 pleading He pleads that the defendant was aware of the contract on or about 23 November 2018.  He pleads that the defendant made the defined ‘False Reventon Imputation’ with the intention of persuading, inducing or procuring Reventon to terminate the employment contract and hindering or preventing Reventon from performing its obligations to the plaintiff under the employment contract.  Reventon then terminated the contract.  He then sets out the loss and damage he says resulted from the breach.  As the defendant notes, the onus is on the plaintiff to make out his claim, but so far as the pleading goes, he has set out the elements he relies on sufficiently to enable the defendant to plead.

(d)   The plaintiff has had many attempts to plead an appropriate cause of action and to appropriately particularise his case.  He has now done so in an acceptable form.  I accept that the delays have caused additional costs to the defendant and wasted further time, but consider that this can be addressed by an appropriate costs order.

(e)   I am not persuaded that there is any significant additional prejudice to the defendant as a consequence of the plaintiff being granted leave to file the 21 January 2022 pleading now as opposed to on 23 December 2021, when the orders required the second further amended Statement of Claim to be filed.

(f)    Further, the fact that the plaintiff may not be able to recover any of the damages he is awarded if successful is not a sufficient basis for striking out the pleading, or summarily dismissing the claim.  Proceedings, particularly in defamation, may have utility to a plaintiff beyond the prospect of obtaining compensation, for example the vindication of one’s reputation.  Further, there is insufficient material before the Court to satisfy me that the plaintiff will not be able to recover damages from the defendant.

(g)   It follows from the above that I am also not persuaded that it is otherwise in the interests of justice to exercise my discretion to summarily dismiss the proceeding.

[5]Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 692; De Belin v Australian Rugby League Commission Limited [2019] FCA 688

26Accordingly, the plaintiff is granted leave to file his second further amended Statement of Claim, in substantially the form of the 21 January 2022 pleading.

Costs

27The plaintiff has been successful in obtaining leave to file the second further amended statement.  The usual order is that costs follow the event.

28However, due to the particular circumstances of this case, I am satisfied that the usual costs order should not be made. 

29Rule 63A.17 provides that where a pleading is amended, the costs of and occasioned by the amendment and the costs of any application for leave to make the amendment are the parties’ costs in the proceeding, unless the Court otherwise orders.

30Whilst I have ultimately not been persuaded that the delay in filing the second further amended Statement of Claim has caused sufficient prejudice to the defendant to warrant the pleading being struck out or the proceeding dismissed, I am satisfied that the plaintiff’s conduct, and in particular the significant changes to the plaintiff’s case between the 23 November 2021 draft pleading, provided to the defendant after my ruling of 7 October 2021, and the 21 January 2022 pleading, have caused the defendant to incur unnecessary additional costs which she is entitled to recover from the plaintiff.

31Although the summons was filed by the defendant to strike out the pleading, I accept her argument that it was for the plaintiff to file a summons seeking leave to file the 21 January 2022 pleading, having failed to comply with the Court’s earlier orders. 

32Accordingly the defendant’s costs of and occasioned by the further amendments to the Statement of Claim between 23 November 2021 and 21 January 2022 are to be paid by the plaintiff. 

33The plaintiff is to pay the defendant’s costs of filing the summons. 

34The defendant’s other costs of the application, including the costs of appearing at the application, are costs in the proceeding.

35The plaintiff is to bear his own costs.