Hoser v Pelley [No 4]
[2023] VSCA 319
•14 December 2023
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2022 0031 |
| RAYMOND HOSER | First Appellant |
| KOTABI PTY LTD (ACN 007 395 048) | Second Appellant |
| v | |
| MARK DAVID PELLEY [NO 4] | Respondent |
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| JUDGES: | McLEISH and WALKER JJA and ELLIOTT AJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 7 December 2023 |
| DATE OF JUDGMENT: | 14 December 2023 |
| MEDIUM NEUTRAL CITATION: | [2023] VSCA 319 |
| JUDGMENT APPEALED FROM: | [2021] VCC 1425 (Judge Smith) |
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DAMAGES – Appellants succeeded in challenging findings that one publication of ten was defamatory of respondent – Trial judge awarded $150,000 general damages, $15,000 aggravated damages and $14,000 interest – Grounds of success relatively insignificant, modest reduction in damages warranted – Damages reassessed at $140,000 general damages, $10,000 aggravated damages and $21,000 interest.
OPEN COURTS – Whether Court’s reasons to be published – Court mindful to avoid breaches of Family Violence Protection Act 2008, s 166 – Parties made no submissions as to proper construction – Parties did not seek order under s 169 – Court to apply redactions to matters touching on any proceedings under Act to avoid potential breach of s 166 – Redactions applied with view to making public as much of Court’s reasoning as possible.
OPEN COURTS – Trial judge made suppression order under Open Courts Act 2013, s 17 to comply with Family Violence Protection Act, s 166 – Order varied to extent required to permit publication of appellate Court’s reasons.
PRACTICE AND PROCEDURE – Costs – Modest success of appellants – Costs order in favour of respondent for 80 per cent of costs – Appeal and application for leave to appeal not wholly without merit – Respondent not entitled to indemnity costs – Costs awarded on standard basis.
APPLICATION FOR STAY – Exceptional circumstances not established – Damages to be deposited into trust account of respondent’s solicitor pending resolution of any application for special leave to appeal.
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| Counsel | |||
| First Appellant: | In person | ||
| Second Appellant: | Mr R Hoser | ||
| Respondent: | Mr I Robertson, solicitor for the respondent | ||
Solicitors | |||
| First Appellant: | -- | ||
| Second Appellant: | -- | ||
| Respondent: | Ian Robertson Legal | ||
MCLEISH JA
WALKER JA
ELLIOTT AJA:
On 1 November 2023 the Court delivered judgment in an appeal from an order made in the County Court. The Court did not publish its reasons at that time, except to the parties. The reason for taking that course was that the Court was concerned that a person publishing those reasons would risk breaching s 166 of the Family Violence Protection Act 2008 (‘the Act’). That provision prohibits a person from publishing, or causing to be published, a report of a proceeding, or about an order made in a proceeding, under the Act if the report contains certain identifying particulars.
The proceeding in the County Court was a defamation action brought by the present respondent, Mark Pelley, against the appellants Raymond Hoser and Kotabi Pty Ltd. It was not a proceeding under the Act, but proceedings under the Act formed an important part of the background to the case. At trial, Mr Pelley initially alleged that the defendants had defamed him in 17 publications. Of those publications, five were not pressed and the judge dismissed the claims in relation to another two. Mr Pelley succeeded in relation to the remaining ten publications. Damages were awarded in the sum of $179,000, comprising general damages of $150,000 together with $15,000 by way of aggravated damages, plus interest in the sum of $14,000.
The appellants were partially successful in the appeal. They succeeded in an argument that the trial judge erred in finding that one of the publications (publication 11) identified Mr Hoser. They also succeeded in setting aside findings of the trial judge that were relevant to the assessment of damages, namely findings that:
(a)Mr Hoser had submitted that the defamatory imputations were trivial;
(b)some of the publications (publications 2, 3, 4, 5 and 6) included matters derived from the transcript of an appeal under the Act; and
(c)there was no evidence of any arrangements between Mr Pelley and Google to use terms that included words the subject of trade marks owned by Mr Hoser.
In light of that partial success, the Court set aside the trial judge’s order in respect of damages and made an order in its place that there be judgment for the plaintiff with damages to be assessed. We directed the parties to file written submissions as to the orders that should be made as to:
(a)damages;
(b)publications of the Court’s reasons on the internet;
(c)a suppression order made by the trial judge; and
(d)costs.
The parties filed submissions and we heard further oral argument. Mr Hoser also filed submissions, without leave, addressing what he submitted were errors in the Court’s judgment. The appeal having been determined and orders made to that effect, the Court advised the parties that it would not entertain those submissions. They are, however, relevant to a further application made by the appellants for a stay pending a possible application for special leave to the High Court.
Damages
On the question of damages, the appellants submitted that publication 11 had been of critical importance in the trial and the assessment of damages by the trial judge. They therefore submitted that the damages should be heavily reduced as a result of their success in respect of that publication. It was submitted that there is no evidence that the respondent suffered any loss of business as a result of the publications, which it was said were only seen by a very small number of people. They denied that there was a basis for identifying any ‘grapevine’ effect by which the publications reached a wider audience. On that basis, it was said that damages should be kept to a minimum.
As to aggravated damages, the appellants submitted that the publications upon which the claims relied had been the result of ‘provocation’ by the respondent, and could not properly be regarded as deliberate in that context.
The respondent submitted that the imputations proved to have been conveyed by the publications were very serious and went to the heart of his character and standing in the community. He made submissions about the ‘grapevine’ effect, by which it was said that the imputations in publications 1–6, in particular, were more widely spread than the initial audience. The respondent submitted that a damages figure of more than $200,000 would have been appropriate. In the circumstances, he submitted that the Court should assess damages in the same amount as the trial judge. In the alternative, he submitted that any reduction of damages should be very limited.
In relation to aggravated damages, the respondent again submitted that the damages awarded by the trial judge should not be disturbed. It was submitted that the appellants had not apologised or done anything to mitigate the respondent’s loss.
Some of the above arguments travel beyond the assessment of damages consequent on the partial success of the appeal, by seeking to raise issues that should properly have been the subject of grounds of appeal or cross-appeal. This includes the appellants’ argument that the damages awarded by the trial judge were too high in the absence of proof of any economic harm to the respondent, the ‘provocation’ argument which the trial judge rejected and which this Court also rejected on appeal, and the argument as to the ‘grapevine’ effect, in respect of which the judge’s conclusion was upheld. It also includes the argument of the respondent to the effect that a higher damages award would have been appropriate (noting, however, that the respondent did not press for an increased award).
As it stands, the only grounds on which the damages awarded by the judge ought to be modified are those grounds of appeal that we have upheld. In the absence of any appeal against the damages order on wider grounds, we do not consider it appropriate to reassess damages on any more general basis.
We accept that publication 11 was significant because it was the only one which was said to have conveyed the imputation that the respondent had been ‘convicted’ of an offence. On the other hand, other publications conveyed numerous imputations that the respondent had been ‘found guilty’ of serious offences and crimes. We do not accept the appellants’ submission that publication 11 was of special significance to the judge’s assessment of damages. When it came to assessing damages, he treated the imputations alleging criminal behaviour without differentiating whether they were expressed in terms of ‘conviction’ or ‘guilt’. We see no error in that approach. Damages fell to be assessed having regard to the damage to the respondent’s business and personal reputation from publications which conveyed imputations including that he was a ‘thief’ and a ‘court-certified thug’ (among other grave imputations), and that, among other things, he had been found guilty of serious offences and conduct. Some further damage, but not a great deal, could have been added by the further imputation, which we have found did not identify the respondent, that the respondent was convicted of a specific serious offence.
There is some force in the respondent’s submission that the award of damages, including aggravated damages, should not be reduced because the grounds on which the appeal succeeded are relatively insignificant in the overall analysis of damage flowing from all the defamatory publications. On balance, however, we consider that the grounds we have upheld are sufficiently important to the assessment that they should be reflected in a modest reduction in the damages awarded.
On that basis, damages should be re-assessed in the sum of $140,000, and aggravated damages in the sum of $10,000.
The judge fixed damages in the nature of interest pursuant to s 60 of the Supreme Court Act 1986 in the sum of $14,000 (roughly reflecting a period of about 34 months). It appears that the respondent had accepted that an interest rate of 3 per cent was appropriate for this purpose. On that basis, we will award damages in the nature of interest in the sum of $21,000 (for a period of about 56 months).
Publication of this Court’s reasons
As we have said, the Court has not published its reasons for judgment in this matter beyond the parties. We have since had the benefit of the parties’ submissions as to the course that should be taken in respect of wider publication. To assist in resolving that issue, the Court provided the parties with a draft redacted judgment, the redactions being intended to avert a potential breach of s 166 of the Act while making public as much of the Court’s reasoning as possible consistent with that objective.
The respondent proposed a more extensive set of redactions, omitting all reference to any proceedings under the Act. At the risk of oversimplification, the difference between the two sets of draft redacted reasons reflected alternative understandings of what constitutes a ‘report’ of a proceeding within the meaning of s 166.
The appellants’ preferred position was that the reasons be published in full. Reliance was placed on the principle of open justice and the purpose of the Act to ‘promote the accountability of perpetrators of family violence for their actions’: s 1(c). Failing that, the appellants submitted that the whole of the reasons should remain unpublished. This was because it was said that the redactions proposed by the respondent would articulate the defamatory imputations which had been conveyed by the appellants’ publications, without reference to the appellants’ arguments as to the truth of the imputations. This would, in effect, only present one side of the overall dispute. Alternatively, the redactions would render the reasons unintelligible.
The respondent submitted further that, if the Court accepted the argument that the redactions he proposed would make the reasons misleading or unintelligible, then the whole of the reasons should remain unpublished. In oral argument, however, the parties accepted that, if it was possible to redact the parts of the reasons so as to leave intact the treatment of arguments going to infringement of trade marks, they would have no objection to publication on that basis.
As we have said, the practical obstacle we perceive to full publications of our reasons is the potential for republication to constitute a contravention of s 166 of the Act. As the alternative draft forms of redacted reasons to which we have referred demonstrate, there is room for debate as to whether some redaction of those parts of the reasons which concern proceedings under the Act would suffice to ensure that the reasons did not contain a ‘report’ of a proceeding under the Act which contained identifying particulars of relevant persons. The parties made no submissions as to the proper construction of s 166. In the circumstances, we consider that we should err on the side of caution so as not to publish material inconsistent with the purpose of s 166.
Nor did the parties address in any detail the possibility that the Court might make an order under s 169 of the Act, permitting the publication of a report that would otherwise be prohibited under s 166. The respondent did note, however, that a court making such an order may need to hear from third parties. We also observe that there is an argument that ‘the’ court referred to in s 169 and empowered to make such an order is the court in which the relevant proceeding under the Act is heard, rather than a court dealing with an appeal, as we are, from orders made in a different proceeding. At all events, no application was made for us to make an order under s 169.
In the circumstances, notwithstanding the desirability that the Court’s reasons be made public, the constraints of s 166 lead us to conclude that (at least in the absence of an order under s 169) we should not publish any part of our reasons which could be regarded as a report of any proceeding under the Act and identifies the parties to any such proceeding or anything decided or ordered in such a proceeding. We will, however, publish a redacted version of the reasons that explains the arguments and our conclusions in respect of the trade mark issues, together with some other matters that do not touch on any proceedings under the Act.
Trial judge’s suppression order
During the trial in the County Court, the judge made an order on the court’s own motion pursuant to s 17 of the Open Courts Act 2013. By that order, publication was prohibited of any details of the proceeding, including any of the allegations, parties, evidence, document or things involved in the proceeding and other relevant proceedings. The order was expressed to continue indefinitely unless revoked by further order of the County Court. It was stated in the order that this was necessary in order to give effect to s 166 of the Act, among other things.
We invited submissions from the parties as to whether this Court should vary or revoke this order. The Court’s power to do so was confirmed in Chairperson of the Royal Commission into the Management of Police Informants v Director of Public Prosecutions.[1] It is fair to say that the parties largely sought that the Court address this matter consistently with their submissions as to publication of this Court’s reasons. Reference was made in oral argument, however, to the following matters:
(a)Section 12 of the Open Courts Act provides that the period for which a suppression order operates must be determined by the court and specified in the order, and that the court may specify that period by reference to a fixed or ascertainable period or subject to the occurrence of a specified future event. The appellants contended that the trial judge’s order was invalid because it purported to operate indefinitely.
(b)Section 12(3A) provides that, unless the court otherwise orders, a suppression order continues to operate until, relevantly, the determination of an appeal in relation to the proceeding to which the order relates. This raises the question whether an order that purports to operate indefinitely validly ‘otherwise orders’.
(c)Section 8(1A) of the Open Courts Act, read with s 8(2)(g), provides that a court must not make a suppression order that prohibits publication of information which is already prohibited by s 166 of the Act. Section 8(3) provides, however, that a suppression order that does so is not invalid merely because it covers the same prohibition as s 166. The relationship between sub-ss (1A) and (3) and their overall effect is not immediately obvious.
[1](2020) 61 VR 490, 504–6 [52]–[60] (Beach, McLeish and Weinberg JJA).
In the absence of full argument, we do not think it is appropriate to enter into these issues. No party invited us to make a suppression order in light of the possibility that the order of the trial judge might be invalid or might cease to operate upon the determination of the present appeal.
In the circumstances, it is not appropriate to revoke the order of the trial judge. We will, however, order that the order be varied in so far as it may purport to prohibit or restrict the publication of this Court’s redacted reasons for judgment, or these reasons.[2]
[2]For completeness, this order will extend to the reasons of this Court for refusing to order security for costs: Hoser v Pelley [2023] VSCA 1; and our reasons for permitting Mr Hoser to appear for the second appellant, which may now be published in full: Hoser v Pelley [No 2] [2023] VSCA 14.
Costs
As to the costs of the trial, the appellants submitted that these too should be substantially reduced, including on the basis of a Calderbank[3] offer of $20,000. This argument depended on the success of the damages argument. It follows from what we have concluded in that regard that we see no basis for disturbing the order for costs made by the trial judge. We note that the respondent submitted that there should have been an order in his favour for indemnity costs at trial, but since there was no application for leave to cross-appeal on that basis, we indicated at the hearing that we would not entertain that argument.
[3]Calderbank v Calderbank [1976] Fam 93.
In respect of the costs of the appeal, the respondent sought an order for those costs on the indemnity basis. He submitted that, if the appellants were entitled to any costs, they should be limited to one twelfth of the appellants’ costs because they had succeeded in respect of only one of, it was said, 12 publications that went to trial. We pause to observe that, since the judge rejected two of those claims, the relevant proportion is probably one-tenth. In any event, we do not agree that the allocation of costs should be approached on a strict mathematical basis, as we explain below.
In our view, while the appellants have had some success in the appeal, the measure of that success is relatively low. In the end, the award of damages has been reduced by only a modest amount. For that reason, we consider that there should be a costs order in favour of the respondent. In an attempt to recognise the partial success of the appellants, we will order that they pay 80 per cent of the respondent’s costs of the appeal, including reserved costs and the costs of the application for leave to appeal.
We do not consider that the respondent has established a basis for an order for indemnity costs. While the defamation of the respondent was very serious, the issue before the Court was whether the appellants had established the truth of many of the most serious imputations. While we have rejected the appeal, we upheld five out of twenty grounds and granted leave to appeal in respect of two others, thus it was not wholly without merit.
Stay application
In their submissions filed in response to the Court’s directions concerning written submissions, the appellants requested a stay on our final orders to allow for an application for special leave to appeal to be made to the High Court. No formal application was filed, nor any affidavit in support of such an application. The written submissions in support of the requested stated ‘The reasons are self-evident and further detail can be provided as necessary or required’. In his oral submissions, Mr Hoser contended that his proposed application for special leave had good prospects of success, and that if a stay were not granted, the enforcement of any order for damages against him would likely lead to his bankruptcy, which would preclude him from pursuing his application for special leave to appeal. The respondent resisted the grant of a stay.
The principles relevant to this Court’s jurisdiction to grant a stay of its orders pending an application to the High Court for special leave to appeal were set out by this Court in Mann v Paterson Constructions Pty Ltd.[4] Relevantly, those principles may be summarised as follows:
[4][2018] VSCA 313, [17]–[26] (Kyrou, McLeish and Hargrave JJA).
(a)This Court has the power to stay the operation of its orders pending the hearing and determination of an application to the High Court for special leave to appeal,[5] either pursuant to rr 64.39 and 66.16 of the Supreme Court (General Civil Procedure) Rules 2015 or in an exercise of inherent jurisdiction.[6]
[5]Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681, 684 (Brennan J) (‘Jennings’).
[6]R v IBAC (No 2) [2015] VSCA 280 [8] (Priest and Kaye JJA) (‘IBAC’).
(b)The Court may stay the operation of an order wholly or in part and may do so on terms, such as the giving of an undertaking or the provision of security.[7]
[7]Alexander v Cambridge Credit Corporation Ltd (recs apptd) (1985) 2 NSWLR 685, 694–5 (Kirby P, Hope and McHugh JJA).
(c)A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and ‘exceptional circumstances must be shown before its exercise is warranted’, such as the immediate threat of the destruction of the subject matter of the litigation or of grave and irreparable damage being sustained.[8]
[8]Jennings (1986) 161 CLR 681, 684 (Brennan J); Rahme v Commonwealth Bank of Australia (1993) 117 ALR 618, 620 (Deane J); [1993] HCA 62; Edelsten v Ward (No 2) (1988) 63 ALJR 346, 346 (Brennan J); Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220, 222 (Dawson J) (‘Myer’); Petrotimor Companhia de Petroleos SARL v Commonwealth [2003] FCAFC 82, [16]–[24] (Beaumont J, Black CJ and Hill J agreeing at [7]).
(d)The following factors are relevant to this Court’s exercise of the discretion:
(i)whether there is a substantial prospect that special leave to appeal will be granted (although that does not require that the prospects of a grant of special leave be ‘high’);[9]
(ii)whether the grant of a stay will cause loss to the respondent; and
(iii)where the balance of convenience lies.[10]
(e)Many considerations may be relevant to the Court’s assessment of where the balance of convenience lies. They include the following:
(i)whether, if a stay is not granted, there is a real risk that it will not be possible for an ultimately successful appellant to be restored substantially to its former position if the judgment against it is executed;[11]
(ii)whether, if a stay is not granted, there is a real risk that a successful appeal would be rendered nugatory,[12] for example where, due to the respondent’s financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at first instance;[13]
(iii)whether, if a stay is granted and either the application for special leave to appeal or any ensuing appeal is unsuccessful, there is a real risk that the respondent would be deprived of the fruits of its judgment.[14]
[9]Mercanti v Mercanti (2017) 340 ALR 225, 227 [11] (Kiefel J); [2017] HCA 1 (‘Mercanti’).
[10]Jennings (1986) 161 CLR 681, 685 (Brennan J); IBAC [2015] VSCA 280 [7]–[8], [10] (Priest and Kaye JJA); Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79, 85 (Ipp J, Pidgeon J agreeing at 80).
[11]Myer (1986) 160 CLR 220, 223 (Dawson J). This is a factor of ‘central significance’ (CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd (No 3) [2017] WASCA 132 [13] (Buss P, Murphy and Beech JJA), but not an essential prerequisite for the grant of a stay. However, it will be rare for a stay to be granted in a case in which there is no substantial prospect of success: Rinehart v Welker (2012) 83 NSWLR 347, 358 [49] (Bathurst CJ, Beazley and McColl JJA).
[12]Myer (1986) 160 CLR 220, 222 (Dawson J); Jennings (1986) 161 CLR 681, 683 (Brennan J).
[13]Myer (1986) 160 CLR 220, 223–4 (Dawson J).
[14]P Aker Flowerbulbs Pty Ltd v Coulter (2004) 140 FCR 410, 418 [39] (Weinberg J).
We refuse the appellants’ application for a stay of our orders pending any application for special leave to appeal.
First, we are not persuaded that the appellants’ proposed application for special leave to appeal has substantial prospects of success. In that regard, no application for special leave has yet been filed; however, that does not preclude an assessment of its prospects, or the grant of a stay. Mr Hoser accepted that a document he had filed in this Court, headed ‘Obvious Errors in Judgment, “Reasons” of 1 November 2023 and other relevant comments’, provides some indication of the matters the appellants will raise in their proposed application for special leave to appeal. Nothing in that document, and nothing said in oral argument, suggests to us that the proposed application for special leave will raise any matter of public importance. Nor is the case one in which the High Court would be called upon to resolve a difference of opinion between different courts as to the state of the law.[15] These are important factors in the High Court’s decision whether to grant special leave.[16] Nor do we consider that Mr Hoser and Kotabi have any other bases on which the High Court is likely to grant special leave to appeal. In our opinion, any application for special leave to appeal is unlikely to have any real prospects of success.
[15]Mr Hoser suggested that our decision was inconsistent with two decisions of the Magistrates’ Court of Victoria, but that is not a basis upon which special leave would be granted.
[16]Judiciary Act 1903 (Cth) s 35A.
In so far as the balance of convenience is concerned, we observe that no affidavit was filed in support of the application. Many of the facts upon which the appellants sought to rely were the subject of assertion from the Bar table. We have not had regard to those assertions. We are prepared to proceed, however, on the assumption that, if a stay is not granted, there is a risk that Mr Hoser will be made bankrupt. The respondent foreshadowed as much.
Even so, we do not accept that, if this were to happen, any appeal would necessarily be rendered nugatory. If a trustee in bankruptcy considered that an application for special leave had merit, it could be pursued.[17] To the extent that the appellants submitted that they would suffer irreparable prejudice if Mr Hoser were to be made bankrupt, no specific consequence was suggested.[18] The fact that Mr Hoser may be made bankrupt cannot, of itself, provide a proper basis to grant a stay, in circumstances where any proposed application for special leave lacks merit.[19]
[17]Seifert v Chaudhary [2012] VSCA 17 [30] (Weinberg JA, Kyrou JA agreeing at [35]).
[18]See Ribbera v Eagle Fuels Pty Ltd [2014] VSCA 173 [16]–[18], [21] (Garde J, Neave JA agreeing at [37]) concerning the need for transparency of financial details in these circumstances. Cf Narain v Euroasia (Pacific) Pty Ltd [2008] VSCA 195 [21] (Ashley JA, Maxwell P agreeing at [37]); Saville v Hallmarc Construction Pty Ltd [2015] VSCA 144 [21]ff (Tate and McLeish JJA).
[19]Seifert v Chaudhary [2012] VSCA 17 [14] (Weinberg JA, Kyrou JA agreeing at [35]). See also Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 318, 320–1 [8] (Mandie JA and Cavanough AJA).
There is no evidence that, if a stay is not granted, and the appellants pay to the respondent the amount awarded in damages, there is no reasonable prospect of them recovering that amount, should their application for special leave and any appeal be successful. There is no evidence as to the respondent’s current financial position that would permit us to draw that conclusion.
In any event, the respondent proposed that an order be made for damages to be paid into his solicitor’s trust account, or into court, pending any special leave application. Mr Hoser rejected that proposal. Such an order would prevent the dissipation of damages pending resolution of any application to the High Court. In circumstances where the respondent consented to such an order being made, we consider it appropriate to order that any damages paid by the appellants be deposited into the trust account of the respondent’s solicitor and be held in that account until the time for any application for special leave to appeal from the further orders[20] of this Court made on publication of these reasons has lapsed or any such application has been determined or otherwise dealt with.
[20]Noting that orders on questions of liability were made on 1 November 2023.
Ultimately, we do not consider that this case is an exceptional case warranting a stay of this Court’s orders pending an application for special leave to appeal.
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