Lee v Korean Society of Victoria
[2015] VSC 262
•19 JUNE 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2013 06474
| SIMON SPENCER REYNER LEE | Plaintiff |
| v | |
| KOREAN SOCIETY OF VICTORIA AUSTRALIA INC (ACN A0026816E) & ORS | Defendants |
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JUDGE: | DIXON J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 8 APRIL 2015 |
DATE OF JUDGMENT: | 19 JUNE 2015 |
CASE MAY BE CITED AS: | LEE v KOREAN SOCIETY OF VICTORIA |
MEDIUM NEUTRAL CITATION: | [2015] VSC 262 |
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PRACTICE AND PROCEDURE – Joinder – Defamation claims - Application by plaintiff to join claim against defendants’ instructing solicitor as complicit in defendants’ publications with claims against defendants - Whether proper basis for joinder established – Delay – Whether estopped - ss 18, 23, 24 and 25 Civil Procedure Act 2010 (Vic), r 9.02 Supreme Court (General Civil Procedure Rules) 2005
PRACTICE AND PROCEDURE - Application by defendants to restrain solicitor from acting for plaintiff – Second application - Plaintiff a self-representing solicitor – Whether plaintiff in breach of overarching obligations – Whether joinder application made after unreasonable delay – Whether claim has a proper basis - Whether claim expanded the issues in dispute – Whether the plaintiff was not acting promptly and minimising delay or ensuring that costs are reasonable and proportionate - Whether plaintiff made ‘threats’ to defendant’s solicitor and to other parties to the proceeding - Whether unreasonable refusal by plaintiff to permit communications between defendants representatives and his retained counsel - Whether court empowered to require the plaintiff not to take a further step in the proceeding otherwise than by an independent solicitor - ss 18, 19, 20, 22, 23, 24, 25, and 29 Civil Procedure Act 2010 (Vic) considered.
DEFAMATION - Pleading - Objections to plaintiff’s amended statement of claim.
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Dibb with Mr C Truong of counsel | Spencer Reyner Law Office Pty Ltd |
| For the Defendants | Mr S K Wilson QC with Mr S Reid of counsel | Solomons Lawyers |
HIS HONOUR:
Background
The plaintiff sues for damages for defamation. He alleges that five defendants published a notice in the Korean language that defamed him. The notice was physically delivered in March 2013 to certain members of the Korean Society and later published in the ‘Melbourne Journal’ (‘the written notice’). Subsequently, it was available to be downloaded from web pages at internet websites. The alleged defamatory imputations are:
(a)the plaintiff had lied on Facebook and the internet about an incident concerning the Korean Society;
(b)the plaintiff had acted unethically as a lawyer in disclosing confidential client information;
(c)the plaintiff was not trustworthy as a lawyer because he releases his confidential information on the internet; and
(d)the plaintiff had defamed the Korean Society.
The plaintiff is an Australian legal practitioner, a solicitor. Until January 2013 when an employee solicitor, the plaintiff was a legal adviser to the Korean Society. He now practises as a sole practitioner. He is the principal of the legal firm Spencer Reyner Law Office Pty Ltd. The plaintiff is represented in this proceeding by his law firm as the solicitors on the record.
The defendants deny that the written notice bore any of the meanings alleged by the plaintiff. Further and alternatively, if it did, those imputations were substantially true and justified, both at common law and pursuant to s 25 of the Defamation Act 2006 (Vic). Further, the defendants plead contextual truth pursuant to s 26 of that Act, qualified privilege pursuant to s 30 of the Act, and the defence of honest opinion pursuant to s 31 of the Act.
By their counterclaim, the defendants alleged that each of them was defamed when an article the plaintiff published on Facebook was downloaded and read. The Korean Society alleged the following imputations:
(a)The Korean Society was a party to sexual assaults at a function at the Hilton Hotel on 15 December 2012.
(b)By refusing to apologise to the victims of the alleged sexual assaults, the Korean Society condoned sexual assault.
(c)The Korean Society is disreputable and dishonourable.
(d)The Korean Society is unethical and immoral.
(e)The Korean Society conducts itself in an appalling way that requires the public disclosure of the conduct by the Korean Society’s previous legal adviser.
(f)The Korean Society participates in coercion.
(g)The Korean Society harbours and protects perpetrators of sexual assault.
Some broadly similar imputations, that I need not set out for the purposes of this judgment, were made against the plaintiff by the second and third defendants by counterclaim, who were senior representatives of the Korean Society.
Further, the Korean Society alleged that, as its legal adviser, the plaintiff owed it duties arising from that relationship. The Korean Society alleged that the plaintiff provided legal advice to it in respect of the alleged sexual assault at the function at the Hilton Hotel. By what is described in the pleadings as the ‘memorandum disclosure’, the Korean Society alleges that the plaintiff published on Facebook confidential lawyer/client communications including the content and subject matter of legal advice that he had given to the Society. The defendants, by counterclaim, seek damages for defamation and for breach of fiduciary duty.
The defendants were previously all represented by Solomons Lawyers, whose principal is Mr Jae Min. Presently, only the first and second defendants are represented by Mr Jae Min.
There are several interlocutory applications before the court.
Joinder application
By summons issued on 4 December 2014, the plaintiff sought to join Mr Jae Min as a sixth defendant. The plaintiff contended that Mr Jae Min defamed him by his involvement as an author and publisher of the written notice. The plaintiff alleged that Mr Jae Min’s composition of, and agreement on, the contents of the written notice:
Is to be inferred from at least the following:
(a)the fact that he drafted and composed a complaint (which immediately preceded the publication of the written notice) with the Ethics Committee of the Law Institute of Victoria against the plaintiff concerning alleged breaches of duty to the law and to the client, which complaint used very similar wording to the written notice and which complaint was subsequently withdrawn after initial assessment by the Law Institute of Victoria.
(b)Min attended a committee meeting of the Korean Society on or around 15 March 2013 to discuss the substantive contents and nature of the written notice. A copy of the written notice which is in the Korean language, and an English translation of it, are annexed to the statement of claim. A copy of Mr Jae Min’s letter dated 7 March 2013 to the Law Institute of Victoria was exhibited to an affidavit.
Rule 9.02 of the Supreme Court (General Civil Procedure) Rules 2005 governs permissive joinder of parties to a proceeding. A plaintiff is permitted to join a defendant where, if separate proceedings were brought against the proposed defendant, some common question of law or fact would arise in each proceeding and all rights to relief claimed in the proceeding are in respect of or arise out of the same transaction or series of transaction. Even if these conditions are not satisfied, the court has a wide discretion to give leave to permit joinder. The exercise of that discretion is now primarily conditioned by s 8(1) and 9 of the Civil Procedure Act 2010. The court should take the course most conducive to the just, efficient, timely and cost effective resolution of the real issues in dispute between the party having regard to the objects specified in s 9(1) and the matters specified in s 9(2) of the Act.
Bell J observed in Main Road Property Group Pty Ltd & Ors v Pelligra & Sons Pty Ltd & Ors,[1] that the relevant factors for the exercise of this discretion generally include:
[1][2007] VSC 43, [20]-[28].
(a)whether there would be common evidence, common questions of fact and law;
(b) the public interest and the need to avoid multiplicity of proceedings;
(c)unfairness or prejudice to any party, understood in the context of the court’s powers to manage the proceeding so as to address or minimise any prejudicial consequences;
(d)delay is relevant but is not decisive and should be explained to enable a rational assessment of competing considerations.
(e)Unless the claim against the proposed defendant is obviously bad in law or futile, the merits of the claim are not a decisive consideration. The court would not refuse to allow an amendment because it raised a claim that ought not to succeed, for this will be an issue at trial.
Although Main Road Property Group predates the Civil Procedure Act, Bell J’s observations remain apposite.
Although it is for the plaintiff to determine what claims, and against whom, are to be made in a proceeding, it is no longer the case that the content and course of civil proceedings are the exclusive domain of the parties. Several factors clearly favour joinder of the proposed proceeding against Mr Jae Min with the existing proceeding. It is plain that there are common questions of fact and law arising in the proposed claim against Mr Jae Min and in the existing proceeding. The relief claimed arises from the same allegations of publication. Joinder is also warranted for the efficient conduct of the business of the court and the use of its judicial and administrative resources. These matters require no elaboration.
By their written and oral submissions, the first and second defendants (the defendants) raised five grounds of objection to the proposed joinder. First, the plaintiff’s cause of action against Mr Jae Min was out of time and was statute barred. Second, the plaintiff’s claim against Mr Jae Min was untenable because the second defendant had admitted responsibility for the publication and exonerated Mr Jae Min. Further, it was suggested that the existing defendants have sufficient assets to satisfy any judgment in the plaintiff’s favour. Thirdly, joinder of Mr Jae Min, who acts as solicitor for the defendants, would cause significant inconvenience to the defendants and, because there is a lack of evidence supporting the application, the court should, in its discretion, refuse the joinder. Fourthly, the plaintiff was estopped from joining Mr Jae Min as a party to the proceeding by virtue of his unconscionable conduct and finally, the joinder application, in conjunction with other conduct by the plaintiff, contravened the plaintiff’s overarching obligations that apply under the Civil Procedure Act 2010.
The first objection that the plaintiff’s cause of action was statute barred has fallen away as the plaintiff reframed his allegation by the proposed further amended statement of claim dated 30 March 2015. I take that date to be the relevant date for such considerations, and the plaintiff has limited the allegations to the publications that occurred in the preceding period of one year from that date.
There was force in the defendants’ submission that the inferential basis for the allegations against Mr Jae Min was not strong. The basis for the claim was that a probable inference was available from the similarity or striking similarity in the wording of the complaint drafted in English by Mr Jae Min to the Law Institute, and the written notice, in the Korean language; and the fact of the attendance of Mr Jae Min at a relevant meeting. The probable inference alleged was that Mr Jae Min participated in the drafting and publication of the written notice. The second defendant, Mr In Chool Nah has sworn that he was the author of the written notice and that Mr Jae Min did not participate in drafting or authorising its publication. These are contested facts and each party’s contentions are yet to be tested. I understood the defendant’s counsel to concede that the issue must turn on contested fact.
Because this is a matter for trial, I propose to say no more than that I was not persuaded that the allegations against Mr Jae Min were obviously bad in law or futile. Witnesses can be cross-examined at trial about the apparent textual similarities between the written notice and Mr Jae Min’s letter to the Law Institute, bearing in mind that each is written in a different language. The plaintiff is well aware that the allegation is not strong as I will explain. However, for present purposes I accept that the plaintiff has, and has had since the issue of the writ, a proper basis for his claim against Mr Jae Min.
To consider the defendants’ remaining objections, I should say a little more about the progress of the proceeding. The writ was issued on 16 December 2013. From the outset, the plaintiff was aware of the complaint that had been made against him by Mr Jae Min to the Law Institute and that it had preceded publication of the written notice. Looking at the way in which the claim against Mr Jae Min is now particularised, the plaintiff could have included Mr Jae Min as a defendant in the writ when issued as the material facts now pleaded were then known to him. As it was common ground that the plaintiff knew that Mr Jae Min was the first defendant’s solicitor and once proceeding were issued acted for all defendants, the plaintiff’s delay in making this application clearly called for explanation.
The plaintiff stated that, initially, he did not consider there was a sufficient factual basis to bring a claim in defamation against Mr Jae Min in respect of the written notice, but in late 2014 shortly prior to the issue of his summons, he reviewed his pleadings and formed a different view. The defendants submitted that after the writ was issued, there was no want of opportunity for the plaintiff to seek joinder of Mr Jae Min and there were a number of interlocutory appearances where no application or even an indication of an intention to do so, was made to the court.
Events came to a head in September 2014. Mediation of the dispute was scheduled for 23 September 2014 but it was only on 22 September 2014 that the parties inspected discovered documents. On that day, after receiving copies of the defendants’ documents, the plaintiff emailed Mr Jae Min requesting further discovery, namely ‘full disclosure including any proper materials which would include any advice provided by your office to the defendants’. The plaintiff noted that he reserved his right to amend his statement of claim to include Mr Jae Min as the sixth defendant in the event that he was satisfied that Mr Jae Min may be liable ‘on inspection of the defendants’ fully discovered documents’. The defendants assert, with some plausibility, that the timing of this email, a day prior to the mediation, was a tactical threat. They submitted that the inference became stronger when the mediation failed but the plaintiff did not immediately take any step to join Mr Jae Min into the proceeding.
On 9 October 2014, the plaintiff wrote to Mr Jae Min requesting that he disclose certain categories of documents namely:
Advice received from your office in relation to the application [to the Legal Ethics Board] and/or the [alleged defamatory] article … All advice and relevant correspondence are discoverable.
By this correspondence the plaintiff gave notice that if these documents were not disclosed, a further (unspecified) application to the court would be made.
By letter dated 17 October 2014 from Mr Jae Min, the defendants refused to produce the documents sought by the plaintiff on various grounds. Then, on 23 October 2014, the plaintiff served a proposed further amended statement of claim that did not join Mr Jae Min as a sixth defendant.
The proceeding came before the court for directions on 24 October 2014. There was some discussion of the form of the proposed pleading. No application to join Mr Jae Min was made or foreshadowed. A specific direction was made that:
(b)the defendants file and serve an affidavit(s) stating whether they have or have had in their possession documents falling within any of the following 3 classes:
(i)any documents concerning the preparation and/or internal circulation of the written notice including drafts of the written notice;
(ii)any documents concerning the uploading of the memorandum on to the Korean Society’s website;
(iii)any documents concerning the police charges brought, and Court orders made, against the Vice President in respect of the incidents at the Hilton function,
and if the documents are no longer in their possession, when they parted with them and their belief as to what has become of the documents.
The plaintiff was directed to serve another form of the proposed further amended statement of claim.
Compliance with the specific discovery direction did not produce any further relevant documents. Then, on 4 November 2014, the plaintiff gave notice to Mr Jae Min by email that he intended to include him as the sixth defendant in the proposed further amended statement of claim, which soon followed. The parties corresponded further about the content of that proposed pleading.
The plaintiff did not provide a compelling explanation as to why he failed to join Mr Jae Min at the outset. Initially although he was suspicious about Mr Jae Min’s participation, the plaintiff considered that he lacked a proper basis for the allegations. But his proposed amended pleading was based entirely on matters that were known to him prior to the issue of the writ. Essentially, the plaintiff says that he changed his mind about the sufficiency of the basis for his allegations. I accept that his ultimate decision, as to whether there was a proper basis for the claim, was delayed for completion of the discovery process. Nonetheless, if the plaintiff always had a proper basis for the claim against Mr Jae Min, that claim could have been pleaded initially and improved, if possible, by further particulars or amendment following inspection of discovery.
I was not persuaded by the defendants that the timing of the initial suggestion that Mr Jae Min might be joined as a defendant demonstrated that joinder was a tactical move. That submission was that the joinder application was an abuse of process ‑ the tactic was to apply (inappropriate) pressure to the defendants’ solicitors at mediation in order to achieve a favourable settlement with the defendants. But this theory was less attractive when the mediation failed while the joinder application was maintained. The suggested tactical motive fell further away when specific discovery in an apparent search for support for the claim against Mr Jae Min was sought prior to the joinder application. The defendants further suggested that the application was tactical because it was designed not to succeed, for it is plainly hopeless, but to separate the defendants from their Korean speaking solicitor who has a full understanding of the issues in the proceeding.
It was unhelpful to the court to obfuscate the real issues on the applications with speculation about motives.
I am satisfied that the plaintiff was aware that pressing his joinder application would cause significant inconvenience to the defendants and carried a serious risk of adverse cost consequences for him. I was not persuaded that a tactic of separating the defendants from their solicitor for forensic gain can properly be attributed to the plaintiff. Counsel seemed to concede as much, focussing on the submission that the plaintiff had, effectively, represented that he would not seek to join Mr Jae Min as a defendant. I will come back to that suggestion. There was no cross-examination on the affidavits and I accept that the more probable explanation of these circumstances was that the plaintiff made poor choices about his pleading rather than astute tactical choices to disadvantage the defendants (assuming that to be the consequence). I am also satisfied that the plaintiff has made a considered decision to proceed with this application despite the defendants’ arguments that it is a weak or hopeless claim. Most likely, he has the benefit of advice from Mr Dibb and Mr Truong, who settled the proposed further amended statement of claim and who appeared to move the application for joinder.
In the circumstances, the delay in bringing the joinder application was explained by the plaintiff. He changed his mind once he established that the evidence could not be improved. Although I do not find the explanation to be particularly compelling, I reject the submission that it is nothing more than an inappropriate tactical manoeuvre.
Turning to the question of prejudice, the defendants submitted, and I accept, that permitting the joinder of Mr Jae Min would result in the defendants losing their solicitor. The defendants further submitted that they would be unable to retain a solicitor fluent in the Korean language and additional costs would necessarily be incurred because communications must involve an interpreter.
This application must be dealt with on the assumption that the plaintiff can prove his allegations at trial. It is a necessary consequence of my finding that the plaintiff always had a proper basis to allege that Mr Jae Min actively participated in the events upon which the plaintiff’s cause of action is based, and that the defendants always faced the risk that they could not retain Mr Jae Min as their solicitors for that reason. It is incumbent on a solicitor who is involved in the events that lead to, or form the basis of, the material allegations on a cause of action to be aware of the risk of becoming either a participant in, or a witness to, the events. It is not uncommon for a solicitor who is involved in actionable events to be unable to act for the client in later litigation. The consequence of the plaintiff failing to prove these allegations at trial will be that the defendants and Mr Jae Min will have been put to expense and inconvenience for which appropriate recompense can be ordered. In the interim, the consequences for the defendants is that the prejudice flowing from losing the services of their solicitor, and the plaintiff’s delay which has contributed to that prejudice, is to be weighed against the considerations that favour joinder.
In undertaking that balancing exercise, I am not persuaded that there is any significant or relevant prejudice arising out of the need to change solicitors by reference to the fact that Mr Jae Min is fluent in the Korean language. Many litigants who are not fluent in English are properly and adequately represented by solicitors with whom they cannot communicate in their native tongue. There was no suggestion that the defendants cannot retain competent solicitors. Further, although the proceeding was commenced in December 2013, it has not yet been set down for trial and is not likely to be significantly delayed in its advance towards trial by this application. The prejudice asserted by the defendants amounts in substance to no more than the costs thrown away by having to instruct another solicitor afresh, a matter that can be cured by a costs order.
Next, the defendants contended that the plaintiff ought to be estopped by his unconscionable conduct from joining Mr Jae Min. The defendants submitted, relying on Collin v Holden[2] that where a party in the course of litigation makes representations as to the manner in which it intends to proceed, and it knows or ought to know that the other side will rely on that representation (express or implied from conduct) to conduct itself in the litigation in a particular way and incur costs in so doing, then the party making the representation ought not to be able to resile therefrom to the detriment of the other party, if to do so would in all the circumstances be unconscionable.
[2][1989] VR 510, 514.
The defendants submitted that the plaintiff had represented to them that he would not seek to join Mr Jae Min nor object to him acting as their solicitor on the grounds that he would be a material witness. The issue is whether this inference could be drawn.
The plaintiff stated that he knew at all times that Mr Jae Min acted as a legal adviser to the Korean Society. The remaining matters advanced in support of the inference are more contentious. The defendants submitted that the plaintiff, as a lawyer, could read the written notice and assess for himself the extent to which it was drafted with legal assistance. When the plaintiff determined to bring the proceeding on for trial at the earliest possible opportunity without joining Mr Jae Min and proceeded through a series of interlocutory steps without seeking to join Mr Jae Min until the day before mediation was scheduled and when the plaintiff made what the defendants characterised as a threat, the plaintiff was implicitly representing that Mr Jae Min would not be a defendant. Further, the defendants contended that the plaintiff’s own correspondence conceded that he required further discovery in order to ascertain whether he had a cause of action against Mr Jae Min.
These limited circumstances do not warrant an inference that the plaintiff made the representation contended for. Even if I am wrong in that conclusion, the detriment occasioned by the defendants if the plaintiff was permitted to resile from the representation is no more than the prejudice referred to above. As that prejudice can be relieved by an appropriate costs order, the plaintiff’s conduct cannot be described as unconscionable. No estoppel has arisen.
The final ground of objection raised by the defendants concerns contravention by the plaintiff of overarching obligations under the Civil Procedure Act. It is convenient to deal with this objection in conjunction with the application by the first and second defendants by summons dated 23 September 2014 seeking to restrain the plaintiff, or his law firm, from acting as the solicitor on the record in the proceeding. That application is predicated upon allegations of breach of overarching obligations. I will return to consideration of the grounds of opposition to the joinder application after discussing the appropriate disposition of the defendants’ summons.
Restraint application
In 2014, the defendants applied to restrain the plaintiff’s firm from acting for him on the basis that there was a prospect of conflict between the plaintiff’s duty, as a solicitor, to the court and his duty, as a solicitor, to himself as his client. The application was refused.[3] In my reasons for that decision, I left open the possibility that in appropriate circumstances, where an overarching obligation under the Civil Procedure Act had been breached, the court might, exercising the powers under s 29 of the Act, restrain a solicitor from acting for a litigant or require a litigant to instruct an independent solicitor. In the earlier application no suggestion was made that the plaintiff was in breach of an overarching obligation.
[3]Simon Lee v Korean Society of Victoria Inc & Ors [2014] VSC 316.
The defendants then contended that I should now exercise precisely that power because the plaintiff had contravened, in certain respects, the overarching obligations that bind him pursuant to the Civil Procedure Act. The defendants sought orders that the plaintiff be restrained from representing himself. Sensibly understood, what the defendants sought was an order that the plaintiff not be permitted to take any further step in the proceeding other than by instructing an independent solicitor to act for him. The defendants put their claim on three bases that are distinguished from the way in which the application was put on the prior occasion.
First, having represented that he did not intend to join Mr Jae Min into the proceeding, the plaintiff was now making a claim in a civil proceeding against him that is vexatious and an abuse of process and does not have a proper basis, that expanded the issues in dispute, and that demonstrated the plaintiff was not acting promptly and minimising delay or ensuring that costs are reasonable and proportionate. This conduct was said to be in breach of ss 18, 23, 24 and 25 of the Civil Procedure Act.
Secondly, the plaintiff unreasonably refused to accept communications from Mr Jae Min and refused permission for his counsel (Mr Truong) to engage in settlement discussions with the defendants’ counsel (Mr Wilson QC). This conduct was said to be in breach of ss 19, 20 and 22 of the Civil Procedure Act.
Thirdly, the plaintiff made threats against the defendants and their solicitor in breach of ss 19, 20 and 22 of the Civil Procedure Act. The defendants relied on two particular ’threats’. First, the defendants contended that the plaintiff threatened to join the defendants’ solicitor as a sixth defendant in the proceeding and secondly, that he threatened to bring bankruptcy proceedings against the third to fifth defendants.
These allegations are based upon the following provisions of the Civil Procedure Act:
18 Overarching obligation—requirement of proper basis
A person to whom the overarching obligations apply must not make any claim or make a response to any claim in a civil proceeding that—
(a) is frivolous; or
(b) is vexatious; or
(c) is an abuse of process; or
(d)does not, on the factual and legal material available to the person at the time of making the claim or responding to the claim, as the case requires, have a proper basis.
19Overarching obligation to only take steps to resolve or determine dispute
For the purpose of avoiding undue delay and expense, a person to whom the overarching obligations apply must not take any step in connection with any claim or response to any claim in a civil proceeding unless the person reasonably believes that the step is necessary to facilitate the resolution or determination of the proceeding.
20Overarching obligation to cooperate in the conduct of civil proceeding
A person to whom the overarching obligations apply must cooperate with the parties to a civil proceeding and the court in connection with the conduct of that proceeding.
…
22Overarching obligation to use reasonable endeavours to resolve dispute
A person to whom the overarching obligations apply must use reasonable endeavours to resolve a dispute by agreement between the persons in dispute, including, if appropriate, by appropriate dispute resolution, unless—
(a) it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only judicial determination is appropriate.
23 Overarching obligation to narrow the issues in dispute
If a person to whom the overarching obligations apply cannot resolve a dispute wholly by agreement, the person must use reasonable endeavours to—
(a)resolve by agreement any issues in dispute which can be resolved in that way; and
(b)narrow the scope of the remaining issues in dispute—
unless—
(c) it is not in the interests of justice to do so; or
(d)the dispute is of such a nature that only judicial determination is appropriate.
24Overarching obligation to ensure costs are reasonable and proportionate
A person to whom the overarching obligations apply must use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate to—
(a) the complexity or importance of the issues in dispute; and
(b) the amount in dispute.
25 Overarching obligation to minimise delay
For the purpose of ensuring the prompt conduct of a civil proceeding, a person to whom the overarching obligations apply must use reasonable endeavours in connection with the civil proceeding to—
(a) act promptly; and
(b) minimise delay.
…
29 Court may make certain orders
(1)If a court is satisfied that, on the balance of probabilities, a person has contravened any overarching obligation, the court may make any order it considers appropriate in the interests of justice including, but not limited to—
(a)an order that the person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention of the overarching obligation;
(b)an order that the legal costs or other costs or expenses of any person be payable immediately and be enforceable immediately;
(c)an order that the person compensate any person for any financial loss or other loss which was materially contributed to by the contravention of the overarching obligation, including—
(i)an order for penalty interest in accordance with the penalty interest rate in respect of any delay in the payment of an amount claimed in the civil proceeding; or
(ii) an order for no interest or reduced interest;
(d)an order that the person take any steps specified in the order which are reasonably necessary to remedy any contravention of the overarching obligations by the person;
(e)an order that the person not be permitted to take specified steps in the civil proceeding;
(f)any other order that the court considers to be in the interests of any person who has been prejudicially affected by the contravention of the overarching obligations.
(2) An order under this section may be made—
(a) on the application of—
(i) any party to the civil proceeding; or
(ii)any other person who, in the opinion of the court, has a sufficient interest in the proceeding; or
(b) on the court's own motion.
(3)This section does not limit any other power of a court to make any order, including any order as to costs.
The court’s powers to make orders under s 29 of the Act is conditioned upon being satisfied that, on the balance of probabilities, a person has contravened an overarching obligation. That is the first inquiry and, for the reasons that follow, I am not satisfied that the plaintiff has contravened an overarching obligation, or that any contravention (there has been some delay) warrants exercising any power under s 29 of the Act.
The defendants’ first ground concerned the joinder application dealt with above. The defendants asserted that the late joinder of Mr Jae Min was a ‘tactical threat’ and that the grounds for doing so were ‘tenuous’. Counsel suggested that the plaintiff was ‘one young Korean solicitor wanting to prove to the Korean Society that he is a better solicitor than Mr Jae Min’. I was taken in some detail through some correspondence to Mr Jae Min authored by the plaintiff that could reasonably be described as intemperate. The plaintiff accepted that more temperate language might have been used in his correspondence with Mr Jae Min. As I have noted, the joinder application was characterised by substantial delay and there was an absence of material supporting the joinder garnered from interlocutory processes, but for the reasons I have already given, I reject the characterisation of the joinder application as a tactical threat. Further, although I have acknowledged there is some force in the criticisms put by counsel about the proposed claim, I do not accept that there is any breach of the overarching obligation under s 18 of the Act not to make a claim in a proceeding that lacks a proper basis.
The conduct of the person owing an overarching obligation to have a proper basis for a claim can only be judged in the context of what was known or ought to have been known by that person at the relevant time. Whether a claim has a proper basis is, ultimately, a question for the court. A person discharging the overarching obligation can do so by demonstrating a reasonable belief based on the factual and legal material available at the time that the claim has a proper basis. If that is done, the obligation is discharged. There is a distinction between instituting a claim that lacks a proper basis and not instituting a claim, being uncertain about the strength of the identified basis for it, and then instituting that claim. Section 18 has no role in the latter situation.
It is consistent with the underlying policy of the Act that a person owing an overarching obligation to have a proper basis for a claim might delay commencing that claim - when there is a proper basis for it but poor prospects of success - while further inquiries are made. The time to assess whether the plaintiff breached the overarching obligation under s 18 was when the joinder application was made. I am satisfied that the plaintiff has demonstrated a reasonable belief that the claim against Mr Jae Min has a proper basis in the context of what was known or ought to have been known by him when he applied for joinder of Mr Jae Min on the basis set out in the proposed further amended statement of claim. The merits of that claim are a matter for trial. If there is delay in commencing the claim of uncertain merit, s 25 may become relevant, and that section is discussed below.
I remain perplexed by the submission that the joinder of a new party to a proceeding can constitute a breach of the overarching obligations to narrow the issues in dispute imposed by s 23 of the Act. If joinder is refused, the plaintiff may commence a fresh proceeding. Unlike the requirement to have a proper basis for a claim, the requirement to narrow the issues in dispute applies after a claim has been commenced and not before. Equally, no basis was shown in support of a contention that the circumstances of the joinder application might breach the overarching obligation to ensure costs are reasonable and proportionate under s 24 of the Act. There was no evidence to suggest that the plaintiff’s application would cause unreasonable and disproportionate costs to be incurred by the defendants. Rather, the defendants complained that they would suffer wasted costs. However, appropriate orders can be made to deal with costs thrown away by reason of the joinder application.
The defendants also submitted that joining Mr Jae Min added nothing to the sufficiency of the available assets against which the plaintiff, if successful at trial, might execute a judgment. As best I understood this submission, it was put in the context of s 24. As there was no improved financial benefit for the plaintiff through joinder, costs would be unreasonably and disproportionately incurred. This submission was misconceived and unsupported by relevant evidence. There is no reason to assume that Mr Jae Min is a man of straw and the plaintiff is entitled to seek vindication of his reputation against all persons whom he alleges have defamed him.
In Yara Australia Pty Ltd v Oswal,[4] the Court observed that s 24 involved a ‘flexible test’, and one viewed objectively. The Court said:
There is plainly no costs matrix or formula that can be applied in determining whether the parties have met their obligations. Rather, the court must weigh the legal costs expended against the complexity and importance of the issues and the amount in dispute, in order to determine whether the parties used reasonable endeavours to ensure those costs were proportionate ...
Such an inquiry was not open on the material before the court.
[4][2013] VSCA 337, [13].
Concerning the obligation to minimise delay under s 25 of the Act, I accept that there was delay but I have rejected the defendants’ contention that the delay was unexplained. I accept that the plaintiff was seeking to establish whether his proposed claim against Mr Jae Min might be strengthened by matters found on inspection of the defendants’ discovery. As a litigant acting promptly to avoid any delay, the plaintiff might have included his claim against Mr Jae Min, as presently particularised, in the writ. As I have accepted that a plaintiff may delay issuing a claim that has a proper basis sufficient to permit its issue while further investigating the prospects of success in the claim, the focus of this particular inquiry into a passible breach of s 25 narrowed to the issue of delay in making those further inquiries about whether any documents possessed by the defendants strengthened the basis for the claim.
On this narrower basis, there might be force in the defendants’ criticisms of the plaintiff’s delay in applying for joinder, but, ultimately, that question required a careful analysis of the discovery process, which could not be satisfactorily undertaken on the material before the court. It was possible that completion of discovery was delayed by the plaintiff’s successful[5] strike-out of the defendants’ pleading before an associate judge. It was also possible that completion of discovery was also delayed while the defendants applied to restrain the plaintiff from representing himself in the litigation. It was also possible that the plaintiff’s difficulties with his pleading delayed the discovery process. Despite these possibilities, I doubt that, in the circumstances governing the relationship between the parties and their advisers, particular discovery that might have addressed the plaintiff’s concerns could have been obtained at an earlier time. The plaintiff required the order for the particular discovery that was made on 24 October 2014. For these reasons, in all of the circumstances I am not satisfied that the plaintiff breached his obligation to act promptly and minimise delay.
[5]In the sense that following a contested hearing the defendants delivered an amended pleading before any final ruling of the court.
Even if I concluded that the plaintiff was in breach of the s 25 obligation, relief under s 29 of the Act is discretionary and I would not be disposed, on this ground alone, to grant the relief sought by the defendants. The plaintiff is still sorting out the claims he wishes to make in the proceeding, while the defendants are fixated with the notion that the plaintiff cannot be permitted to act as a self-representing solicitor. In the context of pressing the issues that each party regards as important in the proceeding, I do not think it can be said that the plaintiff was not acting promptly or was failing to minimise delay such that it is appropriate in the interests of justice to restrain the plaintiff from taking a further step in the proceeding otherwise that through an independent solicitor.
Turning to the second basis for the allegations of breach of overarching obligation, for evidence of the first threat, the defendants pointed to the email of 22 September 2013 from the plaintiff to Mr Jae Min notifying him that the plaintiff reserved his right to amend his claim to join Mr Jae Min as a party to the proceeding. Critical to the submission that this email constituted a threat was its timing. That was so because on a plain reading of the email it was merely notice of a possible future application and any threat was not explicit. It was sent the day before the mediation, although the defendants submission overlooked the fact that this was the day both parties provided inspection of discovery. Thus, it was contended, that to avoid being joined, himself, as a party to the proceeding, Mr Jae Min was placed under pressure to persuade the defendants to settle with the plaintiff.
For the reasons I have already given, I do not accept the characterisation of this correspondence as a threat made by the plaintiff. The relevant question of timing relied on by the defendants is answered by the fact that the notification of intention to investigate further the question of joinder of Mr Jae Min followed on the absence of documents that the plaintiff was anticipating in the discovery provided that day rather than on a tactic of placing ‘pressure’ on Mr Jae Min (or the defendants through prospective loss of the services of their solicitor) to achieve a favourable settlement for the plaintiff in some unidentified way.
For the second threat, the defendants referred to correspondence directed to the third to fifth defendants. The defendants submitted that this ‘threat’ demonstrated the plaintiff’s want of objectivity, a vice which could only be relieved by restraining the plaintiff from acting for himself. Although Mr Jae Min originally acted for all defendants in the proceeding, he had ceased to act for the third to fifth defendants after the mediation. At the time that he ceased to act, the plaintiff had served a bill of costs, a Calderbank letter and an offer of compromise on the defendants’ solicitor, which had not been acknowledged. Shortly thereafter, the plaintiff emailed those parties drawing their attention to the fact that those documents had been served on their former solicitor. The offers were about to expire. The plaintiff stated:
Alternatively, in the event that the defendants fail to provide a response to the plaintiff’s Calderbank letter and offer of compromise, the plaintiff has no option but to proceed to trial. Should such cause of action become necessary, we shall seek costs on an indemnity basis from the date of the plaintiff’s Calderbank letter and offer of compromise. Further, the plaintiff is prepared to proceed to trial and upon obtaining a successful outcome against the defendants, the plaintiff shall also, if necessary, commence bankruptcy and windup application against the defendants. Our office cannot stress enough and urge the defendants to take this matter seriously.
The defendants characterised this statement as a threat to bring insolvency proceedings and submitted that it was unusual to see solicitors threatening other parties with bankruptcy proceedings before the pleadings are even closed. The defendants invited the court to infer that the plaintiff was not using reasonable endeavours to resolve the dispute and was in breach of the overarching obligation under s 22 of the Civil Procedure Act.
The plaintiff submitted that it had not, and did not, receive any formal acknowledgement of the offer of compromise from any defendant. The purpose of the email to the unrepresented defendants was to alert them to the potential consequences of not resolving the proceeding by not accepting the plaintiff’s offer and having the matter dealt with at trial.
No question of any breach of an overarching obligation arose because neither communication on which the defendants rely can properly be characterised as a threat. That finding is sufficient to dispose of the defendants’ complaint but I would add that, in the context of s 19 of the Act, neither communication can constitute taking a step in connection with any claim in the proceeding that the plaintiff believed was not necessary to facilitate the resolution or determination of the proceeding and which contributed to undue delay and expense.
The defendants’ submissions did not make clear how those communications might be said to constitute a failure to co-operate as required by s 20 of the Civil Procedure Act. Assuming the relevant communications were threats, for the purposes of the overarching obligation to use reasonable endeavours to resolve the dispute under s 22 of the Act, the question of whether or not there has been a breach of that provision will rarely be resolved by examination of an isolated piece of correspondence. Here, the impugned communications were sent proximate to and in connection with participation by the parties in a court-ordered mediation and concerning offers of settlement made following that mediation. It would usually be difficult to determine whether a party was using reasonable endeavours to resolve a dispute by agreement without understanding the course of and the context in which, negotiations between the parties have unfolded. I declined the invitation of the plaintiff to inspect without prejudice correspondence in this context, because to do so could not advance the plaintiff’s defence to this allegation. It is unnecessary to decide whether an assertion of a breach of s 19, 22 or 23 of the Civil Procedure Act may enliven the exceptions to the exclusionary rule under s 131 of the Evidence Act 2008.
The third way in which the plaintiff was alleged to have contravened overarching obligations was found in correspondence between the parties that the defendants characterised as an unreasonable refusal by the plaintiff to accept communications from Mr Jae Min and/or an unreasonable withdrawal of permission for the plaintiff’s counsel to engage in settlement discussions with the defendants’ counsel.
At the mediation, the plaintiff was not represented by counsel although Mr Truong was apparently available to, and consulted by, the plaintiff during the course of the mediation. Later, on 24 October 2014, Mr Truong appeared for the plaintiff at a directions hearing and, on that occasion, there were communications between counsel outside court after the hearing.
In an email and letter attachment to Mr Truong, the plaintiff criticised the conduct of the mediation and described the conduct of the defendants as ‘another exercise of wasting the parties’ resources’. This email and letter was copied to the mediator. The plaintiff’s letter to the defendants dated 24 September 2014 relevantly stated that the plaintiff believed:
the offers which were put forward by the Defendants did not reflect the Defendants’ bona fide apologetic attitude toward the Plaintiff … takes offence to the ‘offers’… the offers from the defendants was another exercise of wasting the parties’ resources.
The letter stated that the plaintiff would seek an order for indemnity costs. The plaintiff conceded that the wording of this letter could have been different, but submitted that this letter could not constitute a breach of s 20 of the Act.
Mr Jae Min responded to this letter in an email on 3 October 2014. He said:
I refer to your email and letter of 24 September … copied into the mediator and Messrs Reid and Truong of Counsel.
Your assertions that the offers put by the Defendants in mediation were not made bona fide and “another exercise of wasting the parties’ resources,” are inappropriate, completely wrong, and inconsistent with the mediation itself. Your assertions are highly offensive not only to the defendants themselves, but to their legal representatives. You as a practitioner have made very serious allegations which are completely baseless and ought to be withdrawn. It is also most inappropriate that you have chosen to communicate to the mediator and to Mr Truong of counsel in this way, particular as Mr Truong was not at the confidential mediation.
The plaintiff in response to this email stated that his office would ‘no longer waste time responding to your [Min’s] letters’, which he characterised as lacking substance and not facilitating the matter toward trial. The plaintiff stated that correspondence from Mr Jae Min would be ‘strictly ignored in the future’ and he told the defendants to stop ‘making false allegations against our office’, (referring to the application to the ‘Legal Ethics Board’). The email stated:
Our office will no longer waste time responding to your letters, which lack substance in facilitating this matter towards trial. … We put you on notice that any correspondence sent to us from your office, which are similar in substance to your letter sent to our office today, will be strictly ignored in the future.
The plaintiff argued that this letter should be considered in the context that the plaintiff had sent a bill of costs, a Calderbank letter and an offer of compromise and was clearly attempting to resolve the dispute. The plaintiff was just trying to move the case forward suggesting that the defendants desist in sending unhelpful letters that did not assist in moving the case forward.
After the directions hearing on 24 October 2014, Mr Truong and Mr Wilson QC had a brief discussion outside court. Counsel described this conversation as follows:
Mr Lee saw me discussing with Mr Truong, I saw no more than that, and the next minute we all get an email saying you can’t talk, no one’s talked to Mr Truong, counsel aren’t to talk you talk to me.
The defendants argued that in an email sent later that day by the plaintiff to Mr Jae Min and all counsel retained by the plaintiff and defendants, the plaintiff unambiguously informed all recipients that he had instructed his barrister not to engage in any settlement discussions until further notice. The email relevantly states:
We refer to the above matter and put you on notice that Mr Truong of counsel will no longer be instructed to engage in any and all settlement discussions with your counsels until further notice.
Accordingly, we will require that any party (including all legal practitioners) in this proceedings, should they wish to engage in any settlement discussions, address such matters directly to our office in the future.
The defendants alleged that this conduct breached s 19 of the Civil Procedure Act by directing the defendants to breach their obligations under professional rules, citing rule 52 of the Victorian Bar’s Good Conduct Guide, and rule 13.4 of the Professional Conduct and Practice Rules of the Law Institute for Solicitors. Directing that counsel cannot negotiate or discuss the case with opposing counsel was contrary to facilitating the resolution or determination of the proceeding under s 19 of the Civil Procedure Act.
The defendants referred to the solicitor’s Professional Conduct Rules:
13.4A practitioner must not unless exceptional circumstances warrant otherwise in the practitioner's considered opinion:
13.4.1 appear for a client at any hearing, or
13.4.2 continue to act for a client,
in a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence material to the determination of contested issues before the court.
"practitioner" means a person or corporation entitled to practise the profession of the law and, if the context admits or requires, a firm.
"client" with respect to a practitioner or a practitioner's firm means a person (not an instructing practitioner) for whom the practitioner is engaged to provide legal services for a matter.
The Victorian Bar’s Good Conduct Guide stated that:
52.A barrister must not deal directly with the opponent’s solicitor or client other than through the barrister’s own instructing solicitor unless:
(a) the opponent has previously consented;
(b) the barrister believes on reasonable grounds that:
(i)the circumstances are so urgent as to require the barrister to do so; and
(ii)the dealing would not be unfair to the opponent’s client; or
(c)the substance of the dealing is solely to inquire whether the opposing party is represented and, if so, by whom.
53.A barrister must not confer with or deal directly with the party opposed to his or her client unless:
(a)the party, not being indemnified by an insurance company which is actively engaged in contesting the proceedings, is unrepresented and has signified willingness to that course.
The defendants submitted that by these communications the plaintiff precluded direct settlement discussions between the parties, at least to the extent, which was sufficient, that those discussions involved the defendants’ counsel. The defendant’s legal advisers contended that they were being asked to breach their ethical obligations. Consequently, the plaintiff had taken a step that he could not reasonably believe would facilitate the resolution or determination of the proceeding, was not being co-operative with the defendants and was not using reasonable endeavours to resolve the dispute.
Although in some circumstances intemperate language in communications between practitioners might demonstrate a want of co-operation between parties to a civil proceeding, the present circumstances do not cross that line. It is not the court’s function to enforce Professional Conduct Rules as such, but in Yara Australia Pty Ltd v Oswal,[6] the Court of Appeal said that the Civil Procedure Act does not merely reaffirm the existing inherent powers of the court. It provides a powerful indication of the will of the Parliament about the values sought to be achieved by the way in which cases are managed in the courts and the balances that have to be struck. Parties to a civil proceeding are under a strict, positive duty to ensure that they comply with each of the overarching obligations and the court is obliged to enforce these duties. The statutory sanctions provide a valuable tool for improving case management, reducing waste and delay, and enhancing the accessibility and proportionality of civil litigation. Judicial officers must actively hold the parties to account.[7]
[6][2013] VSA 337.
[7]Ibid, [22], [26].
That said, I am not attracted to the defendants’ submissions in this respect. Both the mediator and the defendants were aware that Mr Truong was not present at the mediation but available to the plaintiff by telephone and was being consulted by him during the mediation. All understood the proper ethical constraints on Mr Truong in these circumstances and the utility of independent advice for the plaintiff. No objection was taken at the mediation to such communications. I see no breach by the plaintiff in his communications with Mr Truong during the mediation or with copies of his communications with the defendants’ solicitors being provided to Mr Truong and the mediator after the conclusion of the mediation.
The unsuccessful mediation was followed by formal written offers. As I have noted, it was unnecessary to examine these offers or consider whether, in the circumstances where the defendants alleged breaches of ss 19, 20, 22 and 23 of the Civil Procedure Act, whether an inquiry into the matters governed by s 131 of the Evidence Act 2008 was necessary. All that occurred was that the plaintiff sought to control the channels of communication in respect of the offers that had been made following the failed mediation. Directing the defendants to communicate about such matters directly with the plaintiff rather than through Mr Truong is not conduct that, of itself, constituted a contravention of the relevant overarching obligations. Channels of communication were limited but were not shut down. The defendants’ counsel was disappointed to lose the opportunity to communicate directly with the plaintiff’s counsel, but it was plainly open for the defendants’ solicitors to communicate directly with the plaintiff, including in terms advised by counsel. It seems clear enough that in the aftermath of direct discussions at mediation, the plaintiff was seeking a written response to the formal offers that he had put to the defendants, as opposed to further discussion of the claims more generally.
The plaintiff’s conduct in these circumstances did not breach any of the identified overarching obligations. The plaintiff conceded that the language and tone of some of his communications was poor. That was probably the consequence of his lack of detachment from the issues in the proceeding. I accept the plaintiff’s acknowledgement of his poor judgment and express my expectation that he pay careful attention to appropriate standards of professional courtesy. However, on this basis alone, assuming such conduct was in breach of s 20 of the Act, I would not be moved, in the exercise of my discretion, to take any action under s 29 of the Act. Such conduct falls well short of requiring that the plaintiff be restrained from taking another step in the proceeding other that by an independent solicitor.
As the defendants have failed to establish a substantive breach of an overarching obligation under the Civil Procedure Act, there is no need for an analysis of the scope of the jurisdiction under s 29 of the Act to restrain a solicitor from conducting proceedings as a plaintiff.
The consequence of this finding is that no new or materially different reason to exercise the jurisdiction of the court to restrain a solicitor from acting in a particular proceeding if that course is in the interests of the administration of justice has been demonstrated to have arisen since I rejected the earlier application by the defendants. The first and second defendants’ summons dated 23 December 2014 will be dismissed.
Joinder
Returning to the plaintiff’s summons, it follows that the fifth basis for the defendants' objection to joinder, that the plaintiff, by making the joinder application has contravened an overarching obligation under the Civil Procedure Act, has not been made out.
Balancing the competing considerations that I referred to earlier, I propose to permit joinder of Mr Jae Min as the sixth defendant in the proceeding because the claim against him is neither hopeless nor fanciful, while the prejudice that may be suffered by the defendants through the plaintiff’s delay in bringing this application can be addressed. The only factor of any significance in the prejudice claimed by the defendants was the costs thrown away by having to instruct other solicitors and leave to file and serve the proposed further amended statement of claim including claims against Mr Jae Min will be conditional upon the payment of costs thrown away.
Pleading issues
I will not grant leave to the plaintiff to serve a further amended statement of claim in precisely the form of the proposed pleading dated 30 March 2015. There are a number of further issues. In some respects, the plaintiff has undertaken to provide further clarification of its allegation and in other respects, I will rule on objections raised by the defendants.
The defendants complained that the particulars to paragraph 7 of the proposed pleading were inadequate to identify the way in which each of the defendants was involved in the composition and publication of the written notice. I do not accept this objection. The plaintiff is alleging that the defendants, as a group, composed and published the document. It is not reasonable to expect that an outsider to this group activity could provide particulars of exactly who did what. The allegations are sufficiently clear to enable the defendants to deal with them at trial.
Next, the defendants complained of the particulars of publication under paragraph 10 of the proposed pleading. Particular (i) and (iv) are that the written notice was either downloaded by a person in the plaintiff’s presence or by the plaintiff’s parents. The limited utility of these particulars is plain but I do not think their presence in the pleading will prejudice, embarrass or delay the fair trial of the proceeding. There was a further issue in that particular (i) appears to be of a publication that is likely to lie outside the relevant limitation period and, during argument, counsel indicated that it would not be pressed. I will not allow the proposed pleading to be filed including that particular.
The defendants complained about the use of the word ‘lie’ in the imputations pleaded in paragraph 11(a) of the proposed pleading. The defendants’ submission was carefully limited to the proposition that the word ‘lie’ does not appear in the written notice. Bearing in mind that the characteristics of the ordinary reasonable reader include a capacity to read between the lines, I will permit this allegation to remain in the proposed pleading.
The defendants’ final objections concern the allegations in paragraph 16 of the proposed pleading in support of a claim for aggravated damages. There were a number of different complaints. First, the plaintiff accepts that its pleading fails to make clear against which particular defendant each particular act of aggravation is alleged and that, as such, the pleading is embarrassing. This criticism was particularly directed at subparagraphs (f) and (g) and the pleading to be filed is to address this issue.
The principles in respect of pleading aggravated damages were not in dispute. Aggravated damages may be awarded in cases where the conduct of the defendant has increased the subjective hurt suffered by the plaintiff.[8] Their purpose is compensatory.[9] Damages can be increased by the aggravating conduct of the defendants, whether at the time of publishing the defamatory matter or later, if the conduct is improper, unjustifiable, or lacking in bona fides.[10] Thus, the conduct of the defendant from the time of publication to eventual verdict is relevant.[11]
[8]Rookes v Barnard [1964] AC 1129, 1221.
[9]Uren v John Fairfax & Sons Ltd (1996) 117 CLR 118, 149; Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, [1316]; Herald & Weekly Times Ltd v Popovic [2003] VSCA 161, [2003] 9 VR 1, [380].
[10]Triggell v Pheeney (1951) 82 CLR 497, 514; Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44, 71; Ali v Nationwide News Pty Ltd [2008] NSWCA 183, [79].
[11]Praed v. Graham (1889) 24 Q.B.D. 53, 55, Herald & Weekly Times Ltd v Popovic [2003] VSCA 161, [2003] 9 VR 1, [380].
An issue was raised whether for the purposes of s 35(2) of the Defamation Act 2005 there was a distinction between aggravating conduct of the defendant forming part of the circumstances of publication and aggravating conduct occurring in the post-publication period. In Cripps v Vakras,[12] Kyrou J (as he then was) held that ‘conduct of the defendant from the time of publication to eventual verdict is relevant’[13] and ‘maintenance of a particular defence may give rise to an award of aggravated damages in certain circumstances’.[14] Kyrou J further stated:
I can find nothing in the Act, Forrest or any other authority that supports the proposition that, for the purposes of the statutory cap, aggravating conduct must be divided into conduct which occurs at the time of the publication, and conduct which occurs after publication.[15]
[12][2014] VSC 279.
[13]Ibid, [571].
[14]Ibid, [572].
[15]Ibid, [613] (citations omitted).
It is presently unnecessary to examine whether circumstances of aggravation might permit an award of damages that exceeded the cap but, on any view, the plaintiff is entitled to allege aggravating conduct of the defendants after publication up to the date of judgment.
Paragraph 16(a) of the pleading alleges that the defendants ‘have not apologised for the defamation’. While it may be accepted that the mere fact that a defendant has not apologised is not, of itself, a ground for aggravated damages, apologies can be relevant to the award of aggravated damages. For example, an inadequate apology may justify an increased award.[16]
[16]Packer v ABC (1993) 116 FLR 306, 312; Carson v John Fairfax & SonsLtd (1993) 178 CLR 44, 78, 118; Rogers v Nationwide News Pty Ltd [2003] HCA 52, (2003) 216 CLR 327, 370 [138].
The plaintiff contends that paragraph 16 alleged a ‘matrix of improper behaviour’ that entitled the plaintiff to aggravated damages and that the defendants’ failure to apologise was a factor that contributed to the improper conduct, or lack of bona fides of the defendants. I do not see that permitting this allegation to remain in the pleading will prejudice, embarrass or delay the fair trial of the proceeding.
The defendants submitted that the allegation that they were dilatory in removing the written notice from websites and Facebook pages was not a circumstance of aggravation, arguing that it merely went to damages. The plaintiff contended that the delayed removal of the written notice marked the defendants’ persistence in publishing the defamatory allegations against him and formed part of the matrix of improper behaviour. I am not persuaded that it is necessary to strike out this allegation in order to ensure that the fair trial of the proceeding will not be prejudiced, embarrassed or delayed.
By paragraph 16(c) the plaintiff alleged that the Korean community had not been updated with details concerning the disposal of the criminal charges that lie at the source of this dispute. The defendants submitted that this allegation was irrelevant. However, the prospect of police charges was referred to in the written notice in the sentence ‘the police have not officially prosecuted the alleged offender’. In fact, what occurred was that the vice president of the first defendant pleaded guilty to police charges and was dealt with by a magistrate. Because the manner and extent of a publication can be relevant to an award of aggravated damages as can repetition of the allegations, the plaintiff is entitled to include in its alleged matrix of improper behaviour the allegation of a failure of the defendants to relevantly update the Korean community about the police prosecutions, bearing in mind the relationship between an absence of a police prosecution and some of the imputations alleged by the plaintiff.
A similar argument was advanced in relation to subparagraphs 16(d) and (e) which alleges that the Korean community had not been updated with the withdrawal of the complaint against the plaintiff by the Legal Services Commissioner. As the written notice makes no reference to the complaint made to the Law Institute about the plaintiff and the complaint to the Law Institute predated publication, the pleading should not include paragraphs 16(d) and (e). I do not see how this failure could constitute an aggravating circumstance and I will not allow the allegation.
Conclusions
On the plaintiff’s summons, I will grant the plaintiff leave to join Mr Jae Min as the sixth defendant in the proceeding and to amend the writ accordingly, and leave to file and serve a further amended statement of claim that complies with r 36.05(4) and with these reasons. The first and second defendants’ summons dated 23 December 2014 will be dismissed.
I will hear counsel on four further consequential issues. First, how and when the costs thrown away by the first and second defendants are to be quantified. Secondly, when such costs should be paid. Thirdly, whether any or all outstanding interlocutory costs orders should now be taxed and either set off or paid. Fourthly, what orders should be made in respect of the costs of each summons.
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