Hughes v ISPT Pty Ltd (No. 3)

[2010] NSWDC 283

CITATION:	Hughes v ISPT Pty Ltd (No. 3) [2010] NSWDC 283
HEARING DATE(S):	16 December 2010
JUDGMENT DATE:	16 December 2010
JURISDICTION:	Civil
JUDGMENT OF:	Gibson DCJ
DECISION:	(1) Note the parties’ agreement that all disputes concerning answers to interrogatories have been resolved. (2) Plaintiff’s application to file Further Amended Statement of Claim to bring proceedings for defamation, s 42 Fair Trading Act 1987 (NSW) and injurious falsehood against Mr and Mrs Splithof and Mr and Mrs Tritton (currently the cross-defendant in the first and third cross-claims) and against the second defendant (s 75B) dismissed. (3) Grant leave to the second defendant to amend the Defence to the Trade Practices Act claim to plead proportionate liability and correct the typographical errors outlined in paragraph 6 of Mr Potter’s submissions. (4) Grant leave to the cross-defendant to the first cross-claim to file Amended Defence in 28 days giving full particulars of the matters pleaded including but not limited to any denial of contractual liability. (5) Matter stood over for further directions to Friday 28 January 2011 noting the substitution argument has been abandoned and this matter will be listed for directions only. (6) Costs reserved. (7) Time for continuation of informal discussions is continued until further order.
CATCHWORDS:	TORT - defamation - application by plaintiff to amend statement of claim to bring new causes of action and add new parties as defendants - principles in AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 discussed - application dismissed
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW), s 65(2)(c) Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5(1)(c) Trade Practices Act 1974 (Cth), ss 51A and 52
CASES CITED:	Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676 Ajinomoto Sweeteners Europe SAS v ASDA Stores Limited [2010] EWCA 1717 Anderson v Mirror Newspapers Ltd & Anor (1986) 5 NSWLR 735 AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Associated Leisure Ltd v Associated Newspapers Ltd [1970] 2 QB 450 Channel Seven Adelaid Pty Ltd v Manock [2010] SASCFC 59 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 Grant v Rafferty (2001) 34 MVR 136 Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 Hughes v ISPT Pty Ltd [2009] NSWDC 101 Hunter v Chief Constable of West Midlands Police [1982] AC 529; [1981] 3 All ER 727 Ketteman v Hansel Properties Ltd [1987] AC 189 McMahon v John Fairfax Publications Pty Ltd [2010] NSWCA 308 Palavi v Nationwide News Pty Ltd (District Court of NSW, 10 November 2010) Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Queensland v JL Holdings (1997) 189 CLR 146 Reichel v Magrath (1889) 14 App Cas 665 Rogers v R (1994) 181 CLR 251; 123 ALR 417; [1994] HCA 42 Roult v North West Strategic Health Authority [2009] EWCA Civ 44 Tedeschi v Franklins Ltd (Supreme Court of NSW, Levine J, 23 September 1994, unreported) Walton v Gardiner (1993) 177 CLR 378; 112 ALR 289; [1993] HCA 77 Waterhouse v Broadcasting Station 2GB Pty Ltd (Supreme Court of NSW, Hunt J, 20 October 1986)
PARTIES:	Plaintiff: Tanjhena Hughes First Defendant / Cross-Claimant: ISPT Pty Ltd (ACN 064 041 283) Second Defendant: Jones Lang LaSalle (NSW) Pty Ltd (ACN 002 851 925) Third Defendant: Australian Independent Retailers Pty Ltd (ACN 004 678 675) trading as Big W Cross-Defendant: Centauri Security (ABN 56 320 335 442) Second Cross-Defendant: Jones Lang LaSalle (VIC) Pty Ltd (ACN 004 582 423)
FILE NUMBER(S):	3945 of 2008
COUNSEL:	Plaintiff: Mr R Rasmussen First Defendant / Cross-Claimant: Mr A T S Dawson Second Defendant / Second Cross-Defendant: Mr R Potter First Cross-Defendant: Ms T Berberian
SOLICITORS:	Plaintiff: Etheringtons Solicitors First Defendant / Cross-Claimant: Colin Biggers and Paisley Lawyers Second Defendant / Second Cross-Defendant: Marque Lawyers First Cross-Defendant: Wotton + Kearney

Judgment

[1] The plaintiff brings an application for leave to file a “Proposed Third Statement of Claim” which was served on the defendants (including the proposed new defendants) after the 10 December directions hearing. These are my reasons for decision for refusing to grant the plaintiff leave to rely upon this pleading at the hearing on 14 March 2011.

[2] The effect of the amendment would be:

(a) To add claims against the second defendant for conduct that was misleading or deceptive in reliance upon ss 51A and 52 Trade Practices Act 1974 (Cth);

(b) To replace the claim against the third defendant (paragraphs 3, 9 – 15, 23 – 27, 35 – 38, 40(iii) and particulars of special damage) with a claim against Mr and Mrs Splithof and Mr and Mrs Tritton (paragraph 4, 16 – 19, 33 - 34) as the fourth to seventh defendants to the defamation claim pursuant to s 65(2)(c) Civil Procedure Act 2005 (NSW);

(c) To amend the claim for damages (paragraph 39); and

(d) To add particulars of falsity and malice for a count of injurious falsehood on relation to the claim which is sought to be brought against Mr and Mrs Splithof and Mr and Mrs Tritton.

[3] The plaintiff originally proposed only to join the fourth to seventh defendants pursuant to s 65(2)(c) Civil Procedure Act 2005 (NSW). However, the language of s 65(2)(c) makes it clear that what is permitted is the addition or substitution of a new cause of action arising from the same or substantially the same facts against an existing defendant, and not a new defendant: Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676. The plaintiff seeks to overcome this problem by bringing claims for injurious falsehood and for damages pursuant to s 52 Trade Practices Act 1974 (Cth), for which the limitation period has not yet expired. If the court grants leave to the plaintiff to commence proceedings for these causes of action against Mr and Mrs Splithof and Mr and Mrs Tritton, they would then be defendants in the action, which would enliven the provisions of s 65(2)(c).

The principles relevant to late amendment of pleadings

[4] The starting point for an application to make such a substantial change to a cause of action pleaded must be the matters set out by the High Court in AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (“AON”). French CJ noted at [30] that case management principles should not supplant the objective of doing justice between the parties according to law, and (at [31])) that the requirement to make amendments for the purpose of deciding “the real issues in the proceeding”, does not impose an unqualified duty to permit the late addition of any new claim.

[5] Mr Rasmussen conceded that any explanation for the delay could not meet the requirement for an adequate explanation as explained in AON at [106] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. Nor was there any question of an adjournment and the plaintiff paying costs occasioned by any such adjournment; as any hearing of these proceedings, if adjourned, would, by reason for case management difficulties in the defamation list and uncertainties with the defence of contextual truth, be adjourned until 2012 at the earliest, according to Mr Rasmussen. Mr Rasmussen said this case is the only defamation trial (other than three part-heard trials stood over to next year) to have been listed for hearing in 2011, and his client wanted to keep the hearing date at all costs.

The principles relevant to late amendment of defamation actions

[6] In Dennis v Australian Broadcasting Corporation [2008] NSWCA 37, and more recently in McMahon v John Fairfax Publications Pty Ltd [2010] NSWCA 308, the NSW Court of Appeal has warned plaintiffs that they will not be permitted to bring repeated applications for amendments to the pleadings.

[7] Late amendments to defences, usually to plead justification, are a common problem in defamation proceedings. For many years such applications were refused, because they cause the vacating of the hearing date (Associated Leisure Ltd v Associated Newspapers Ltd [1970] 2 QB 450 at 456), and costs orders did not adequately compensate (Ketteman v Hansel Properties Ltd [1987] AC 189 at 220). Independently of the principles in AON, applicants for late amendments in defamation actions were generally required to provide an adequate explanation of the lateness and the provision of full particulars, as well as a broad outline of the evidence (Waterhouse v Broadcasting Station 2GB Pty Ltd (Supreme Court of NSW, Hunt J, 20 October 1986)) or witness statements (Tedeschi v Franklins Ltd (Supreme Court of NSW, Levine J, 23 September 1994, unreported)).

[8] Late or repeated amendments by plaintiffs to imputations have long been regarded by the court as unacceptable: Anderson v Mirror Newspapers Ltd & Anor (1986) 5 NSWLR 735 at 738. The recent statements by the NSW Court of Appeal in Dennis and McMahon reinforce this. Mr Rasmussen noted a recent decision to the contrary: Palavi v Nationwide News Pty Ltd (District Court of NSW, 10 November 2010). Colefax DCJ (the trial judge) made findings, in a judgment striking out two pleaded imputations in the statement of claim on other grounds, that an earlier ruling on the capacity and form of all the remaining imputations was not binding upon him and, subject to submissions from the parties, should be struck out. This is not, however, a precedent entitling plaintiffs or defendants to reframe their pleadings at (or immediately before) the trial, or to revisit earlier rulings on issues of law.

[9] The interaction between the principles in AON and late amendments in defamation proceedings was recently reviewed by the Full Court of the South Australian Supreme Court in Channel Seven Adelaid Pty Ltd v Manock [2010] SASCFC 59, where the Court set out the following checklist of relevant factors at [46]:

“(1) Whether there has been undue delay in making the application;

(2) The extent to which there will be wasted public resources in granting the amendment;

(3) Whether there will be inefficiency occasioned by the need to revisit interlocutory processes;

(4) Whether a trial date would need to be vacated or a trial adjourned;

(5) Whether there is any satisfactory reason for the delay in applying;

(6) Whether the point to be raised by the amendment would be raised in any event at the trial;

(7) The likelihood of strain and uncertainty being imposed on the litigants;

(8) Whether any further delay would undermine confidence in the administration of civil justice;

(9) Any other prejudice likely to be suffered by the other party;

(10) The additional costs likely to be incurred.”

[10] Applying these principles to the application before me, it must be refused for the following reasons:

(a) The absence of any explanation: AON at [106];

(b) The lateness of the application, this matter being listed for trial on 14 March 2011, which even on traditional JL Holdings principles ( Queensland v JL Holdings (1997) 189 CLR 146) is too late;

(c) The Trade Practices Act claim set out in the proposed new pleading not only raises a fresh cause of action against the second defendant, but is brought for the collateral purpose of obtaining leave to bring defamation proceedings out of time.

These claims which could have been raised against the defendants much earlier in the existing proceedings are perilously close to an abuse of process for the reasons explained by French CJ in AON at [33], citing Henderson v Henderson (1843) 3 Hare 100; 67 ER 313; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Reichel v Magrath (1889) 14 App Cas 665; Walton v Gardiner (1993) 177 CLR 378; 112 ALR 289; [1993] HCA 77; Rogers v R (1994) 181 CLR 251; 123 ALR 417; [1994] HCA 42 and Hunter v Chief Constable of West Midlands Police [1982] AC 529 at 536; [1981] 3 All ER 727 at 729.

(d) This is not the first application of this kind brought by the plaintiff. The plaintiff has already brought an earlier application for leave to add a further publication out of time: Hughes v ISPT Pty Ltd [2009] NSWDC 101. This included a s 65 application. There is technically no reason why more than one limitation action cannot be brought in the same litigation proceedings ( Grant v Rafferty (2001) 34 MVR 136). There is a significant difference between the court revisiting case management decisions (although that should be done with caution: Roult v North West Strategic Health Authority [2009] EWCA Civ 44) and determination of a separate issue of law such as the form and capacity of an imputation. However, the lateness of this application, and the fact that there had been an earlier similar application, when these matters could have been dealt with together, puts the facts of this case within the parameters of Grant v Rafferty.

(e) The claim of injurious falsehood raises legal issues of considerable difficulty. There have been significant changes to the law of injurious falsehood in England, and I particularly note the changing judicial viewpoint as to whether or not it is necessary to plead defamatory imputations: Ajinomoto Sweeteners Europe SAS v ASDA Stores Limited [2010] EWCA 1717. In particular, malice would need to be pleaded and particularised with greater care than is currently the case in relation to the particulars of malice.

(f) Most tellingly, Ms Berberian pointed to the significant, if not overwhelming, prejudice to her clients of being obliged not only to file a defence and to seek to answer interrogatories in such a short time, but to very real difficulties that would be occasioned by reason of this substantially amended pleading, joining her clients to the main action. At present Mr and Mrs Splithof and Mr and Mrs Tritton are parties to the cross-claim by reason of their liability in contract and pursuant to s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 (NSW). They are not ready to meet these new and significant claims.

(g) Although it is a minor matter, I note that these proceedings have been set down for five days before me as the trial judge. The expansion of the case to include these additional actions would in my view substantially add to the hearing time, particularly any claim for injurious falsehood.

The future conduct of these proceedings

[11] The plaintiff’s application for leave to amend is the last pre-trial issue remaining, the first defendant having abandoned its application for substitution of the fourth to seventh defendants for the first defendant for the reasons set out in its written submissions of 14 December 2010. The matter is now ready to proceed at the hearing on 14 March 2011.

[12] One of the other orders I have made today is an order at the request of the parties for the continuation of a previous order relating to mediation. The parties have made good use of the times spent in case managing these proceedings to continue discussions about future settlement of these proceedings. Accordingly, in the hope of promoting these discussions, I have reserved the issue of costs of the plaintiff’s application today.

(1) Note the parties’ agreement that all disputes concerning answers to interrogatories have been resolved.
(2) Plaintiff’s application to file Further Amended Statement of Claim to bring proceedings for defamation, s 42 Fair Trading Act 1987 (NSW) and injurious falsehood against Mr and Mrs Splithof and Mr and Mrs Tritton (currently the cross-defendant in the first and third cross-claims) and against the second defendant (s 75B) dismissed.
(3) Grant leave to the second defendant to amend the Defence to the Trade Practices Act claim to plead proportionate liability and correct the typographical errors outlined in paragraph 6 of Mr Potter’s submissions.
(4) Grant leave to the cross-defendant to the first cross-claim to file Amended Defence in 28 days giving full particulars of the matters pleaded including but not limited to any denial of contractual liability.
(5) Matter stood over for further directions to Friday 28 January 2011 noting the substitution argument has been abandoned and this matter will be listed for directions only.
(6) Costs reserved.
(7) Time for continuation of informal discussions is continued until further order.

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