Han v Australian Kung Fu (Wu Shu) Federation Inc
[2011] VSC 498
•6 October 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2011 3377
| JIN-SONG HAN | Plaintiff |
| - and - | |
| AUSTRALIAN KUNG FU (WU SHU) FEDERATION INC. | Defendant |
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JUDGE: | Mukhtar AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22, 23 September 2011 | |
DATE OF JUDGMENT: | 6 October 2011 | |
CASE MAY BE CITED AS: | Han v Australian Kung Fu (Wu Shu) Federation Inc | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 498 | |
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LIMITATION OF ACTIONS – Defamation – Limitation of one year from the date of publication – Entitlement to seek statutory extension of limitation period – Necessity to show that it was not reasonable to commence an action within one year – Knowledge of publication – Limitation of Actions Act 1958 (Vic), s 5(1AAA), 23B.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms R Sion | Garland Hawthorn Brahe Lawyers Pty Ltd |
| For the First and Second Defendants | Mr A A Nolan SC with Mr T Mullen | Sports Lawyer |
HIS HONOUR:
This is an application by the first and second defendants to strike out three separate claims of damages for a defamation, on the ground that each claim is out of time under the statute of limitations. Alternatively, they seek to strike out the allegations for each claim on compositional grounds, that is, as having been inadequately or improperly pleaded to the point of vagueness and embarrassment. On the hearing of the application, the plaintiff’s counsel conceded that if the claims were not time barred, the allegations of each defamation would have to be re-pleaded to conform to pleading principles and practice in defamation cases. It was also eventually conceded that the third defamation claim was time barred, and no grounds existed for seeking an extension. Thus, what is left is a question whether the first two defamation claims are statute barred. Before turning to the allegations and the evidence adduced, it is convenient to expose the applicable law.
The Defamation Act 2005 amended the Limitation of Actions Act 1958 to say in section 5(1AAA) that “an action for defamation must not be brought after the expiration of 1 year from the date of the matter complained of.” But, under s 23B(1) an application may be made to the court for an order to extend the limitation period for the cause of action, and, under s 23B(5) such an order can be made even after the limitation period has already expired. The test is stated in s 23B (2) and (3) as being:
(2)A court, on an application under sub-section (1) must, if satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period … to a period of up to three years from the date of the publication.
(3)A court may not order the extension of the limitation period for a cause of action for defamation other than in the circumstances specified in sub-s(2).
The statutory test is an unusual and difficult one for a plaintiff to satisfy. It is unusual because unlike other fields in the law, it does not permit an extension if a court regards it as reasonable to do so according to defined circumstances. But the Act proceeds on the assumption that there may be circumstances which will make it not reasonable for a plaintiff to commence an action within 12 months of the defamatory publication. Questions about the operation of an equivalent section have been before the Queensland Court of Appeal on three occasions: see Noonan v MacLennan[1], Pingel v Toowoomba Newspapers Pty Ltd[2] and Jamieson v Chiropractic Board of Australia.[3] The outcome, faithful to the very language of the statute, is that as an objective matter a plaintiff must demonstrate affirmatively that it would have been unreasonable for him to commence an action within the first year of the publication of the alleged defamation.
[1][2010] QCA 50.
[2][2010] QCA 175.
[3][2011] QCA 56.
The circumstances which might justify an extension are at large. But the authorities recognise that one of the circumstances in which it may not be reasonable for a plaintiff to commence proceedings within a year is where the plaintiff was unaware of the publication or was unable to identify the publisher: see Jamieson;[4] Pingel;[5] Rayney v Western Australia (No 3);[6] and Ahmed v Harbour Radio Pty Ltd.[7] Another situation that comes to mind, not that it is relevant here, is where time passes because an aggrieved person seeks to avoid litigation by pursuing the alternative dispute resolution process under Part 3 of the Act.
[4]At [21] and [22].
[5]At [56].
[6][2010] WASC 83 at [41].
[7][2010] NSWSC 676 at [52].
In this case the writ was filed on 30 June 2011. The statement of claim is 34 pages, and makes 83 allegations. But the defamation case is a relatively small part at the end. The dominating claim concerns the plaintiff’s expulsion as a member and Secretary General of the first defendant, The Australian Kung Fu (Wu Shu) Federation Inc. The second defendant, Walter Missingham, is the Federation’s President. The third defendant, Glen Keith, is a New Zealander who is President of the Oceania Wu Shu Federation and, I am told, has not been served with the writ.
On the non-defamation case the plaintiff alleges in essence that:
(a)he is an exponent of, and an instructor in, the martial art of Wu‑Shu (also known as Kung‑Fu);
(b)he was wrongfully expelled from the Australian Kung-Fu (Wu-Shu) Federation Inc, which is the governing body for Kung-Fu in Australia;
(c)his expulsion followed the lodging of 13 charges against him concerning alleged financial and administrative wrongdoings, which were heard and determined by the Ethics Committee of the Federation;
(d)contrary to the applicable rules of the Federation, he was not served with a complaint, or given particulars of the charges or certain documents, and was denied contact with the Ethics Committee;
(e)the Ethics Committee proceeded to dispute his objections and had regard to the incorrect or inapplicable rules, acted on a report from the Federation president (the second defendant) and another document called the account operations document which were irrelevant and inaccurate;
(f)he was pre‑judged, the Ethics Committee acted on erroneous assumptions on the facts, and took irrelevant considerations into account;
(g)charge number 13 was heard without giving him an opportunity to be heard;
(h)he was denied the opportunity to make submissions on penalty; and
(i)an appeal to the Special General Meeting of the Federation (which he attended) miscarried because of a denial of natural justice, and the proceedings were not in accordance with the applicable rules.
A number of dates concerning those above events are relevant to the facts concerning the alleged defamation. The dates and events are:
(a)on 21 February 2009 the President prepared a report to the Ethics Committee on the plaintiff;
(b)the President’s report was received by the Ethics Committee on 22 February 2009, the day on which the Ethics Committee heard and determined the charges;
(c)a special general meeting of the Federation occurred on 19 April 2009, at which the plaintiff was in attendance. On that day, the Special General Meeting upheld the decision of the Ethics Committee.
His case as against the Federation is that it breached its own rules and failed to accord natural justice, and he has suffered loss and damage. He seeks a declaration that his expulsion was invalid, and an order that he be reinstated as member and Secretary General of the Federation.
What is the alleged defamation? There are three claims.
First, in paragraphs 63 to 69 he alleges that on about 15 October 2008 the President of the Federation and the third defendant sent a separate e-mail to the Technical Committee of International Wu Shu Federation requesting that the plaintiff be suspended from the Technical Committee and stating falsely that the plaintiff had engaged in financial and administrative misconduct. He does not quote the contents of the e-mails as would be required in a defamation pleading. He says the statements in those e-mails were calculated to damage him, were defamatory and that he was seriously injured in his reputation. Bearing in mind the writ was filed on 30 June 2011, this cause of action is well outside the one year limitation period.
The second alleged defamation is to be found in paragraphs 70 to 76. It concerns the report made by the President to the Ethics Committee. In essence, the plaintiff alleges the report made a litany of statements concerning his financial dealings, his conduct of the Federation’s affairs, his honesty, and other unauthorised acts all of which were false. According to the pleading, the President’s report was published to the Ethics Committee which heard the charges against the plaintiff on 22 February 2009. He says the contents of the report were calculated to damage him and were defamatory. On the plaintiff’s own pleading, the publication of the alleged defamation in the President’s report occurred on 22 February 2009, over two years before the writ was filed on 30 June 2011.
The third alleged defamation is alleged in paragraphs 77 to 83 and concern his appeal to the Special General Meeting on 19 April 2009. He alleges in essence that the President defamed him at that meeting by stating that the plaintiff (a married man) had sexual intercourse with one Tara Brayshaw, who I gather is involved with the Federation. He also says that at the meeting the second defendant handed out an account operations document and made statements which were meant and understood to mean that the plaintiff did not operate the Federation’s bank account in accordance with that document. The special general meeting occurred on 19 April 2009. This claim is out of time.
The second defendant, the President, has filed a defence abstaining from pleading to any of the paragraphs alleging a defamation on the grounds that they are vague, confusing and bad in form. More pertinently, he squarely alleges that the cause of action for each of the alleged defamations did not accrue within one year before the action was brought and each claim is time barred.
The second defendant has filed a summons seeking summary judgment on those paragraphs, alternatively, seeking to have them struck out on compositional grounds, that is, that they are defective as a matter of pleading. The evidence shows that on 15 August 2011, that is before the summons was filed (or the defence was filed), the President’s solicitor wrote to the plaintiff’s solicitors in observance of their overarching obligations under the Civil Procedure Act contending that the defamation claims did not have a proper basis because they were time barred. The letter noted that no application had been made under s 23B of the Limitation of Actions Act and no material had been provided to show that it was not reasonable for the plaintiff to have commenced the case within one year of the date of publication. The defendant asked the plaintiff to discontinue the proceeding failing which, the letter said, they would move to strike out the paragraph. That request was followed up by another letter on 18 August 2011. Another letter was sent on 29 August to press the question but it seems nothing came of it. They are the facts which led to the filing of the summons.
The summons for a strike out or dismissal was filed on 31 August 2011, returnable on 16 September 2011. It could not be reached that day and eventually came before me on 22 September. On that last day, the plaintiff filed a summons seeking an extension of time under the s 23B supported by an affidavit of the plaintiff’s solicitor and the plaintiff himself.
At the hearing of the application, counsel for the plaintiff conceded, as I think she had to, that if an extension of time was granted, the plaintiff would have to re‑plead the defamation allegations on all three claims as they were defective. Counsel also conceded that the application for an extension of time concerning the third act of defamation (concerning the account operations document tabled at the Special General Meeting) was unsustainable. That General Meeting, as I have said, occurred on 19 April 2009. According to that concession, paragraphs 77 to 83 will be struck out.
The allegations concerning the e-mails
The case for the plaintiff is that although the two e-mails were allegedly published on about 15 October 2008, the plaintiff did not know that until 18 May 2011. Therefore, it was not reasonable to sue within one year of publication because the plaintiff did not know about the publication before then. Having gained knowledge of the publication of the emails, the plaintiff acted rather quickly in filing his writ on 30 June 2011.
The plaintiff relies on two affidavits in support of the application. First is an affidavit of the plaintiff sworn on 22 September 2011. I have read and re‑read this affidavit. I am afraid to say there is nothing in it that I regard as relevant to this application. One would have expected the plaintiff to state on oath why it was he was not able to sue within 12 months and to state the facts as known to him when he first became aware of the publication of the e-mails. Proof of that fact has been left to his solicitor, Mr John Price. In his affidavit, Mr Price states that he is informed, and believes, that shortly after 18 May 2011 he, the plaintiff, received a letter from the International Wu Shu Federation that summarised the contents of the 15 October e-mails as pleaded. He also says that his client has never received a copy of the 15 October e-mail. He exhibits a letter from the Secretary General of the International Federation to the plaintiff, which is dated 18 May 2011. The letter starts by saying: “I am writing to you to provide details and an explanation of your suspension and subsequent replacement from the IWUF Technical Committee.” The letter goes on to say where relevant:
On 15 October 2008 we received an email from Mr Walt Missingham – President, Australian Kung Fu (Wu Shu) Federation (AKWF) informing us that you had been suspended as the Secretary General AKWF pending the outcome of an Ethics Committee Hearing into your purported financial and administrative misconduct. Furthermore, the email requested that the IWUF replace you with Shao Zhaoming. Glen Keith [the third defendant] in his capacity as the OWF President, sent us a similar email containing the same request. As a consequence of the aforementioned correspondence, the IWUF Executive Committee decided to suspend you from the Technical Committee, IWUF in 2008, and subsequently remove you from the position …
For something as significant as this application, evidence about the plaintiff’s first awareness of the publication of the e-mails really should have been given by the plaintiff. He has seen fit to swear an affidavit on the same day as Mr Price, and it was sworn before a solicitor from the same firm, yet he says nothing about the matter. Despite that, I have decided to receive this hearsay evidence nevertheless. That is because the letter as exhibited by Mr Price has an authenticity about it which is not questioned, and it is address to the plaintiff. To refuse to receive it will only result in an adjournment being granted to enable another affidavit to be sworn which only adds to delay and expense.
Therefore I will proceed on a proven fact that it was not until 18 May 2011 that the plaintiff was told that the International Federation received an e-mail on 15 October 2008 from the second defendant and the third defendant. The letter does not reveal the precise contents of the e-mail. Without seeing the email it is not possible to form a conclusion. But if, as the letter says, the emails did no more than say that the plaintiff had been suspended as Secretary General pending the outcome of an Ethics Committee hearing, then I take leave to say I cannot see how such information could be defamatory. But the exact verbiage of the e-mails has not been pleaded and I am not concerned with the merits of the claim.
In accordance with the authorities in this field, if the plaintiff says he was not aware until 18 May 2011 then I regard that as being a fact which would satisfy me that it was not reasonable therefore for the plaintiff to have commenced an action one year after 15 October 2008. He simply did not know of the publication of the email. So why should I not extend time?
Mr Nolan, Senior Counsel for the President, contends that the Court must look to the circumstances as a whole under s 23B(2) including the conduct of the plaintiff and his solicitors after they became aware of the e-mails. He submits it was wrong for the plaintiff to have first issued the writ. The plaintiff, it was submitted, should first have obtained pre-action discovery to get discovery of the actual e-mails to examine their contents before deciding to sue on them. And, the submission goes, if the contents of the emails were actionable the correct course would have been for the plaintiff to then apply for an extension under s 23B. Instead, what the plaintiff has done is to file the writ with allegations that are now conceded to be improperly pleaded, ignore correspondence from the plaintiff’s solicitors that the action was statute barred and inviting a s 23B application, and ultimately leaving it until the day of hearing of this strike out application before filing a s 23B application.
As I understood the submission, it seemed to connect with s 23B(1). That section says that “A person claiming to have a cause of action for defamation may apply to a court for an order extending the limitation period.” The argument, as I apprehend it, is that the plaintiff could not claim to know if he had a cause of action until such time as he obtained the actual e-mail and examined the ipsissima verba (the very or exact words) to see if he truly did have a cause of action. It is only after ascertaining the actionability of the emails that he ought have applied to a court for extension. Instead, he has sued on what appears to be an innocuous reference to the description of the content of an e-mail and now seeks an extension of time.
I cannot accept this submission. Whilst, as I have said, questions may now arise about the sustainability of this particular claim, I concern myself with the words of s 23B(2) which compels a court to extend the limitation period if satisfied that it was not reasonable in the circumstances for the plaintiff to have sued within one year of the publication. Questions about the sustainability of the claim or the procedural rectitude in the way the plaintiff has conducted itself, should not I think interfere with the statutory test. The fact is proved that the plaintiff did not know about the publication until May 2011. I regard myself as bound to extend the time. The factors that Mr Nolan relies upon do not seem to me to be within the sort of considerations that the authorities regard as going to the question of reasonableness.
But I cannot say the same for the allegations of defamation in paragraphs 70 to 76 of the statement of claim. This concerns the President’s report which went to the Ethics Committee. The Ethics Committee made its determination on 22 February 2009, therefore, at the latest, the alleged defamatory content of the President’s report was published on that date. The evidence of the plaintiff’s solicitor, Mr Price, is plain. He says that on 30 November 2009, the President of the Federation sent him by e-mail a copy of his report which was then on‑forwarded to the plaintiff. The report is in evidence, but its contents need not be considered for present purposes. The fact is that the President’s report which the plaintiff alleges in his statement of claim was defamatory, was brought to his attention on 30 November 2009. As the publication of the alleged defamatory report had occurred on 22 February 2009, the one year time period was due to expire on 22 February 2010. Thus, the plain fact is that the plaintiff had the opportunity to sue within the 12 month period after he received the President’s report. The fact is that the plaintiff did not sue until over 18 months later after receiving the report.
The evidence of Mr Price was used, but to my mind not convincingly, to imply that nothing was done after receiving the report because he and the plaintiff were preoccupied with correspondence with the Federation’s lawyers concerning an allegation that the plaintiff’s signature on another document was a forgery. That document concerns the third defamation claim with which the plaintiff has conceded cannot proceed. At all events, I cannot see any factual basis to conclude that there were some other facts or circumstances impeding the plaintiff or making it reasonable for the plaintiff to abstain from bringing an action based on the President’s report by 22 February 2010 thus staying within the 12 months limitation period.
Counsel for the plaintiff, Ms Sion, submitted that as the matter was an important one (to the client, I think she meant) and as there was no prejudice to the first defendant, the interests of justice ought justify an extension of time. I do not regard those factors as having any force. Of course the interests of justice are always important when it comes to seeing if a litigant ought be shut out from proceeding with litigation if it has been undertaken in good faith. But in this case, the statutory test concentrates on the question whether the plaintiff has shown that it would not have been reasonable for him to sue within 12 months. On the evidence, that has simply not been made out. Accordingly I would refuse an extension of time on these allegations.
Orders
I propose making the following orders to in effect deal with both the plaintiff’s summons filed 22 September 2011 and the summons of the second defendant filed 31 August 2011:
1.Paragraphs 77 to 83 of the plaintiff’s statement of claim be struck out.
2.Paragraphs 70 to 76 of the plaintiff’s statement of claim be struck out.
3.Under s 23B(2) of the Limitation of Actions Act 1958, the plaintiff be granted an extension of the limitation period under s 5(1AAA) of that Act to 30 June 2011 (being the date upon which the writ in this proceeding was filed) to bring the claim in paragraph 63 to 69 of the statement of claim..
4.Without derogating from the order made in paragraph 3, paragraphs 63 to 69 of the statement of claim be struck out, with leave given to re-plead the allegations comprising the alleged cause of action in those paragraphs. An amended statement of claim be filed and served within 14 days of this order.
On the question of costs, Mr Nolan submitted on various grounds that the Court ought make an order for indemnity costs. I would not wish in any detail to go through the procedural history or the correspondence. The essential point is that very soon after the writ was filed, endeavours were made by the first defendant’s solicitors to invite the plaintiff to make an early application for an extension under s 23B. It was not until the morning of the hearing of this application that the summons was eventually filed.
The submission was put on two grounds. First, that the Civil Procedure Act required the plaintiff to be much more conscientious about this case than he has been, and much more responsive and certainly more careful before suing in causes of action that were time barred. Secondly, it was put on the general principle that indemnity costs ought be granted where a litigant brings a case knowingly in the face of an adverse body of facts or body of law.
Much has been written about the circumstances in which the discretion ought be exercised to order indemnity costs. As I said in Sanelli v Sanelli,[8] an order for indemnity costs is a departure from the Court’s usual course, and special circumstances must be shown. An order can be made where proceedings are commenced or continued in wilful disregard of known facts or clearly established law, or where a litigant flouts or abuses rights and privileges. Such an order is difficult to obtain, certainly in borderline cases. Great care must be taken in reaching a conclusion at the urging of a victorious litigant that the losing litigant somehow conducted itself delinquently as litigant so as to attract an indemnity order, as if it were an expression of the Court’s admonition.
[8][2010] VSC 78 at [28] and following.
I can accept that the second defendant has had to force the issue, but that is to be expected seeing as he was the one taking the limitations defence. If the plaintiff could not be energised to bring an extension application, then it naturally fell for the defendant to seek a strike out. To expose a plaintiff has having brought a defamation action in the face of a clear limitation period against it, does not therefore mean the plaintiff has acted in wilful disregard of known facts and law. The best argument is that the plaintiff, presumed to know the law, should never have unthinkingly sued but should have sought an extension first. As it turned out, it sued first and sought an extension later. I cannot carry that to a point of saying that there has been delinquency by the plaintiff to the point justifying indemnity costs.
I think justice should be done in this case by ordering that the plaintiff pay the costs on both summonses even though the plaintiff has been partially successful on an extension of time; but even so, the email allegations will have to be re-pleaded. The first defendant’s litigation conduct has been reasonable. Therefore the fifth order will be:
5. The plaintiff pay the second defendant’s costs of the summons filed 31 August 2011 and the first and second defendants’ costs of the plaintiff’s summons filed 22 September 2011.
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