Macquarie Bank Limited v Berg

[2002] NSWSC 1110

CITATION:	Macquarie Bank Limited & Anor v Berg [2002] NSWSC 1110
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 20247/99
HEARING DATE(S):	3 April 2002; 12 April 2002; 16 July 2002; 24 July 2002
JUDGMENT DATE:	22 November 2002
PARTIES :	Macquarie Bank Limited & A J Downe v Charles Joseph Berg
JUDGMENT OF:	Smart AJ at 1

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER :

COUNSEL :	(P) B McClintock SC & Mr T Blackburn (D) J Ireland QC & Mr R Dalgleish
SOLICITORS:	(P) Abbott Tout (D) Verekers
CATCHWORDS:	Leave to proceed with Statement of Claim served out of jurisdiction - what constitutes publication in New South Wales when material downloaded from Internet overseas - no abuse of process
CASES CITED:	Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Gutnick v Dow Jones & Co Inc [2001] VSC 305 Webb v Bloch [1928) 41 CLR 331 Lee v Wilson & Ors (1934) 51 CLR 276 Bristile v Buddhist Society of Western Australia Inc [1999] WASC 259 Agar v Hyde (1999-2000) 201 CLR 552
DECISION:	See paras 59-61

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SMART AJ

Friday, 22 November 2002

JUDGMENT

1 The plaintiffs in substance allege that the defendant published or caused to be published or participated in the publishing on the Internet in May and July 1999 of material which is defamatory of them, being respectively counts 1 and 2 of the statement of claim. The website was established in the United States and the allegedly defamatory material was placed on the Internet in that country. It was common ground that the allegedly defamatory material was accessible in New South Wales and was so accessed, inter alios, by the plaintiffs' solicitor. The plaintiffs relied on such access as constituting publication in New South Wales. There was an argument that the actual allegations in the statement of claim were demurrable and, in any event, did not represent the factual position for which the plaintiffs contended.

2 The previous history of these proceedings and other proceedings was summarised briefly in my judgment of 3 April 2002 to which reference should be made. On that occasion I made a number of orders intended to place these proceedings on a regular footing. On a subsequent mention of these proceedings on 12 April 2002 the Court ordered as foreshadowed in its judgment that the motions filed by the parties in proceedings 20393/00 be deemed to be filed in proceedings 20247/99.

3 It now becomes necessary to determine the plaintiffs' application of 30 March 2001 for leave to proceed against the defendant, upon their statement of claim, this being a case of service out of the jurisdiction. The defendants' motion filed in court on 13 June 2001 seeks, inter alia, a stay or dismissal of the proceedings. Counsel for the defendant told the Court that rather than become involved in as multiplicity of motions it should deal with the plaintiffs' motion as everything he wished to argue in support of the defendant's motion could be argued in opposition to the plaintiffs' motion. The plaintiffs' counsel proposed and assented to this course.

4 In opposition to the plaintiffs being granted leave to proceed the defendant contended that the proceedings were not within the categories of proceedings under SCR Part 10, Rule 1A which allows the Court to assume jurisdiction. This submission was based on the form of the statement of claim and a series of submissions as to publication. The defendant further submitted that the proceedings were an abuse of process because the plaintiffs had a collateral purpose in wishing to place a financial burden on the defendant as a strategic initiative. Lastly, he submitted that the Court should refuse the plaintiffs leave to proceed for discretionary reasons.

5 The evidence adduced by the plaintiffs comprised the concession by the defendant that the website located in the United States of America on which the material in counts 1 and 2 had been accessed in New South Wales on a number of occasions by the solicitor for the plaintiffs and pages 545 to 602 of the transcript of proceedings on 27 July 2001 in the Industrial Relations Commission between the defendant and the plaintiff bank and a subsidiary, being evidence given by the defendant. The plaintiffs relied on the concession as proving publication and some of the evidence of the defendant as proving that he published the material in the sense that he participated in the publication. The defendant denied that being able to access, and accessing in New South Wales, material on the Internet on a website in California amounted to publication in New South Wales and that he published or participated in the publication of the material in New South Wales. It was not in issue that the material on the website and the subject of counts 1 and 2 was capable of being defamatory of the plaintiffs. It is necessary to summarise the evidence.

6 In his affidavit of 5 July 2002 Mr Fernando Adrian Sirio stated that in 1999 he was studying to obtain a Master's Degree in International Business and Public Relations at the University of California, San Diego. He was studying the legal system and commercial litigation in several different countries and the strategies used by big corporations to defeat claims by individuals. He and some classmates established an Internet website in May 1999 which dealt with the defendant's case against the bank. He asked various people, including Charles Berg, for materials in the public domain and details about the case. He talked to numerous people about the case and they (including some who worked at the bank) provided material and ideas for the website. Mr Sirio did not ask the defendant for his permission to create the site nor did he encourage or discourage Mr Sirio or his helpers.

7 Mr Sirio said that he registered the domain name. He was the administrative contact nominated for the site. The creation and control of the website were under his supervision. The defendant had no control over its contents, did not authorise it or participate in the process of publication of the site. Mr Sirio did not tell the defendant whether use would be made of any material given by him to Mr Sirio. The sound recordings included in the website were mailed to Mr Sirio by a person other than the defendant. He had nothing to do with the idea of putting pictures of movie characters next to the names of the bank's executives.

8 Mr Sirio stated that the defendant requested him to take the site down when the bank filed its defamation summons against him in May 1999. Mr Sirio said it took some time before he did so. Mr Berg wanted the site to stay down but it went up again in a modified form, taking into account developments in the case. Mr Sirio said that the defendant contacted him again and requested him to take down the latest version of the website. Mr Sirio was reluctant to do so but the defendant eventually persuaded him and Mr Sirio took the site down in about March 2000. The hosting of the website was done in California with a company called U L Inc or U L Internet Inc. This company was the only ISP (Internet Service Provider) used by Mr Sirio for the website.

9 Mr Sirio created the website and uploaded the site with a view to it being used and viewed in California. No legal proceedings have been taken against him anywhere. Mr Sirio said he had done nothing to transmit the material to New South Wales. The defendant never provided any funds for the design, creation, hosting or maintenance of the website. The funds spent were nominal.

10 Mr Sirio stated that when Ms Stephanie Vass (the plaintiffs' solicitor) telephoned him in mid-1999 he told her that he did not represent anybody and that if she had any questions about the website to send him either a FAX or an e-mail with her company's letterhead and he would respond to her concerns. She hung up on him.

11 The plaintiffs ultimately did not seek to cross-examine Mr Sirio, and the arrangements which had been made for his cross-examination by video link were cancelled.

12 The defendant relied on the affidavit of 5 September 2001 of Dr Roger Clarke, a highly qualified consultant in Information Systems including computer science He had prepared a detailed and technical report which was not controversial. It explained the mechanics of the Internet and the way it works. Senior counsel for the defendant explained that the point to be made is that in order to get material which is on a server outside Australia into New South Wales one invokes "pull technology", that is the operator of the local computer chooses to visit the site and bring the material into the jurisdiction and the person who puts it on the foreign server does not designate the destination of it as to locality or identity of receiver.

13 It was explained that the plaintiffs' solicitor could have obtained access to the Californian website in one of two ways. If she did not have the address of that website she would employ a computer programme (commonly called a browser), for example, Internet Explorer, which would search Internet sites around the world using the words Macquarie Bank and Berg.

14 If the plaintiffs' solicitor knew of the address of the Californian website she could enter it in the relevant space on her browser and press the "return" or "enter" button on her keyboard. That takes her, via intermediaries, to the Californian website, the material on which will appear on her screen in New South Wales. Having the address eliminates the search first mentioned.

15 The solicitor's request goes to the Internet Access Provider to which her computer is linked. That Internet Access Provider requests the information from the Internet Services Provider (ISP) to which the Californian website is linked. That ISP procures the information on the Californian website. The information is then transmitted to the Internet Access Provider and then to the solicitor's computer.

16 Senior counsel for the plaintiffs indicated that in the present case the solicitor was alerted to and had the address of the Californian website, pointing out, however, that strictly speaking there was no evidence as to that. In the transcript of the lecture of the plaintiffs' solicitor to young lawyers on 11 October 2000 there is a reference to another site. Perhaps the material the subject of counts 1 and 2 appeared on more than one site or on different sites. The position as to these matters is not clear and it is probably not important.

17 In the course of the defendant's cross-examination in the IRC proceedings it appeared that he had made a tape recording of conversations he had with Mr Downe in March 1997. Mr Berg said that he gave the tapes (or a copy of them) to Fernando (Sirio) amongst others. Mr Berg was aware that some of the conversations on the tapes had been placed on a website. He had also given Fernando Sirio a copy of Mr Bell's conversation with Mr Downe.

18 Mr Berg denied that when he gave the tapes to Mr Sirio, he (Berg) knew that the contents would be placed on a website. He said:

"… these people [those he had given copies of the tapes] generally represent themselves as journalists and I believed all the information on the tapes and the transcripts, I mean the affidavits were public."

19 The substance of the tapes had been incorporated in an affidavit filed in the IRC proceedings. Mr Berg stated that he was not sure what was going to happen to the tapes. He thought they would be used for some journalistic purpose. He saw the website and that parts of the conversations had been put on the website so that a person could read them. It seems that one or two of the journalists to whom copies of the tapes were given said that you could put up court cases on websites. The journalists were interested in his case and Bell's case against the bank.

20 Mr Berg agreed that he had provided the information appearing in count 1 of the statement of claim, that his legal team had originally told him that the case would probably be heard by the IRC within nine months of filing on 7 December 1997, at a cost of $300,000. Mr Berg said, "I didn't encourage or discourage putting out information which I considered to be public …". On the issue of Mr Berg's participation in the publication of the matter complained of, the plaintiffs relied heavily on the text, suggesting that much of it must have come from Mr Berg.

21 Mr Berg relied on what Mr Ford said and the history of the various sets of proceedings.

22 Over objection I admitted the affidavit of Mark Ashley Ford of 27 July 2001. In January 1998 he was working as a currency derivatives dealer in the Treasury and Commodity Division of the Arab-Malaysian Merchant Bank premises in Kuala Lumpur. He was an Associate Director in the Treasury and Commodities Division of the plaintiff bank. As at January 1998 Mr Downe was an Executive Director of the plaintiff bank, a member of its Executive Committee and Official Business Head of the joint venture of the two banks. Mr Downe telephoned and spoke to Mr Jorgenson, a subordinate executive of the plaintiff bank. On the call being completed Mr Jorgenson said words to Mr Ford to the following effect:

"Bell and Berg have been silly, silly, silly. They will get nowhere with their case because the bank will just seek a large security for costs order and run them out of money."

23 Mr Ford adhered to this statement in cross-examination.

24 It was Mr Berg's contention that the defamation proceedings were instituted for the purpose of harassing him and causing him to incur substantial costs so as to bankrupt him or discourage him from pursuing his legitimate rights against the bank, or make it difficult for him to do so.

25 The proceedings in the IRC were beset with a number of interlocutory applications. The litigation was complex. The Full Bench of the IRC in Court Session in December 1999 adopted the description that "thus far the proceedings have resembled a forensic nightmare." However, not all the nightmare could be attributed to the steps taken by the defendants in those proceedings, namely, Macquarie Bank Limited (MBL) and Macquarie International Capital Markets Limited (MICM), a company registered in Hong Kong and not registered as a foreign corporation in Australia nor carrying on business in New South Wales. Marks J found (and the finding was not challenged on appeal in the IRC) that Messrs Berg and Bell were employed from about January 1995 until about 6 September 1995 by MBL and thereafter as as employees of MICM, working in South East Asia and principally out of its Hong King office. MICM was a substantially or wholly owned subsidiary of MBL. The activities of MICM were controlled by MBL's organisation in Sydney.

26 Messrs Bell and Berg instituted proceedings in the Federal Court to protect their position as to a limitation period. Ultimately they did not go on with the Federal Court proceedings.

27 As at the date of the hearing of the plaintiffs' application for leave to proceed in this Court, the proceedings in the IRC were part heard. It is a matter of public record that on 12 September 2002 the trial judge dismissed the claims of Messrs Bell and Berg. An appeal may be pending.

28 Mr Berg placed some reliance upon MBL refusing for a period to pay to Mr Bell about $50,000 due to him, being the proceeds of sale of some options. This is of very limited, if any, consequence in the action against Mr Berg.

29 In Mr Berg's action against MBL and MICM they sought security for costs, he being resident outside the jurisdiction and in the United States of America. Eventually, after extended negotiations agreement was reached between the parties. Mr Berg consented to orders made on 2 February 2001 in the IRC proceedings whereby he agreed to grant a mortgage (a second mortgage) over his home as security for costs of MBL and MICM in the IRC proceedings. It was alleged that immediately after the orders had been made a copy of the statement of claim in the defamation proceedings was served upon Mr Berg in the United States.

30 However, the process server in the United States of America stated in his affidavit that he had attended at Mr Berg's place of employment on 30 January 2001 and 1 February 2001 to effect service but Mr Berg was not there. The process server left his business card and requested that Mr Berg telephone him. Mr Berg did so and they met on 2 February 2001 in Illinois, when Mr Berg was handed a statement of claim. Mr Berg complained that he was not told during the negotiations for security for costs that MBL intended to press its defamation claim. It had been dormant for 18 months. The statement of claim, albeit 20393/2000 had been issued in August 2000.

31 SCR Part 10, r.1A provides:

"1A(1) Subject to rule 2 and rule 2A, the originating process may be served outside Australia in the following cases:
(a) where the proceedings are founded on a cause of action arising in the State
…
(d) where the proceedings are founded on a tort committed in the State
(e) where the proceedings, wholly or partly, are founded on, or are for the recovery of damages in respect of damage suffered in the State caused by a tortious act or omission wherever occurring.

… "

These are the three sub-paragraphs on which the plaintiffs rely. Sub-paragraphs (a) and (b) depend on publication taking place in New South Wales. Sub-paragraph (c) is not so limited. It raises nice questions if the act is not tortious in the place of its commission.

32 SCR Part 10, rules 2 and 2A provide:

"2(1) Where an originating process is served on the defendant outside Australia and the defendant does not enter an appearance within the time limited for appearance, the plaintiff shall not proceed against that defendant except with the leave of the Court.
(2) A motion for leave under subrule (1) may be made without serving notice of the motion on the defendant.
(2A) Where an originating process is served outside Australia, a notice in the prescribed form shall be served with the originating process."
No such notice was served with the originating process.

33 SCR Part 10 r 6A provides:

"(1) The Court may make an order of the kind referred to in Part 11 rule 8 (which relates to setting aside etc originating process) on application by such a person on whom the originating process is served outside Australia.
(2) Without limiting sub-rule (1) the Court may make an order under this rule on the ground -
(a) that the service of the originating process is not authorised by these rules; or
(b) that this Court is an inappropriate forum for the trial of the proceedings.”

Under r.6A the onus would be on Mr Berg.

34 Paragraphs 2 and 5 of the statement of claim allege that the defendant published the matter complained of "by permitting that material to be electronically accessed at the internet website." The defendant pointed out that there was no allegation by the plaintiffs that the defendant established the website or provided material to the creator of the website (Sirio). Further there was no allegation in the statement of claim that the defendant was liable for the publication because he authorised what was placed on the website in California. Reference was made to Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 per Gaudron at 580ff; Gatley on Libel and Slander (9th ed para 6.4: p.134, and supplement p 20).

35 The facts relating to the supply of material by the defendant to Mr Sirio were peculiarly within the knowledge of the defendant and Mr Sirio. Further, the defendant asserted that he did not establish the website. There is evidence upon which the plaintiffs could ask that an inference be drawn that the defendant knew that the creator of the website was planning to establish the website and place at least part of the material complained of, if not all, on the website. The evidence in question was not, until relatively recently, in the knowledge of the plaintiffs.

36 On the facts as now known the plaintiffs still assert publication by the defendant of the matter complained of but the particulars will vary. Perhaps they will read along the following lines, namely "by participating in such publication by making the matter complained of available to Fernando Sirio for publication on an internet website to be established by him and so established by him which could be electronically accessed in New South Wales." The plaintiffs may also wish to allege that the defendant authorised what was placed on the website in California.

37 Senior counsel for the plaintiffs accepted that the statement of claim required amendment but was loath to seek an amendment for fear of cost consequences. He contended that the statement of claim was not bad on its face and was sufficient to avoid being struck out: General Steel Industries Inc v Commissioner for Railways(NSW) (1964) 112 CLR 125 at 129-130. I agree with that contention although not with the reluctance to amend the statement of claim.

38 The defendant pointed out that the creator of the website in California made a contract with an internet service provider (ISP) who had a computer referred to as a server located in California. At that initial stage, the information placed on the website did not travel outside California. The defendant also pointed out that once the website became "accessible" to other computers it could be visited and the data (including the matter complained of) could be accessed in any part of the world by another computer operated by a person (Ms Vass) who first desired to bring the information into the jurisdiction. The defendant submitted that Mr Sirio's evidence showed that he had the responsibility for the website and that the matter complained of itself asserts responsibility on his part and not otherwise.

39 The defendant submitted that the fact that Mr Sirio obtained details from the defendant which were included in the website does not, in the absence of some evidence to connect the defendant with the website, constitute a publication of the matter at all.

40 This group of submissions was based on the evidence of Mr Sirio. However, the evidence given by Mr Berg in cross-examination in the IRC proceedings is capable of indicating a degree of participation and involvement greater than suggested by Mr Sirio. In the light of all the evidence the summary disposal of the proceedings would be incorrect.

41 The defendant submitted that the "pull" technology means that the decision to bring the matter complained of into the jurisdiction was that of the recipient and that neither the identify of the recipient nor the jurisdiction into which the matter would be sent could have been reasonably anticipated by the defendant on the material before the Court. In this respect the position was distinct from that in Gutnick v Dow Jones & Co Inc [2001] VSC 305 as Dow Jones had subscribers in Victoria for its journal who had paid for the material to be sent via the Internet into that jurisdiction. In the course of that judgment Hedigan J stated that Dow Jones had programmed its computers to decline requests for material. Hedigan J doubted the accuracy of the remark of Simpson J in this case that once published on the Internet, material might be transmitted anywhere in the world as an Internet connection. I doubt if that was what she intended to say. Gutnick was not concerned with the World Wide Web because Dow Jones only put its material on for subscribers or trial subscribers.

42 As to publication, reliance was placed on the statement of Isaacs J in Webb v Bloch (1928) 41 CLR 331 at 363, "To publish a libel is to convey by some means to the mind of another the defamatory sense embodied in the vehicle." See also the remark of Dixon J in Lee v Wilson & Ors (1934) 51 CLR 276, "It is the publication not the composition of a libel, which is the actionable wrong." Reference was also made to Gatley on Libel and Slander, 9th edn at p130-1 that there may be publication if a person leaves the libel in a place where others are likely to see it, provided someone does so. At p134 of Gatley this is stated:

"If [the plaintiff] proves facts from which it can be inferred that the words were brought to the attention of some third person, he will establish a prima facie case. This is particularly obviously so where the matter is … distributed … on the Internet, where in practice it would be impossible to rebut the inference …"
The proposition relating to the Internet was accepted in Bristile v Buddhist Society of Western Australia Inc [1999] WASC 259.

43 The defendant submitted that the plaintiffs had made an elision between the defendant telling Mr Sirio something and that being shown to be something which is defamatory on the website. Every person who establishes an information website asks people for information. For example, Mr Berg told Mr Sirio he had spent $300,000 on the case. That does not amount to authorising any kind of defamation. There Is a link missing. Counsel contended that the difference between supplying information and authorising any kind of defamation had been elided when assessing the defendant's evidence in the IRC proceedings. The plaintiffs were contending that because the defendant knew there was a website, ergo he authorised a particular matter to go on the website. That was an unsustainable proposition.

44 The IRC evidence is capable of establishing that the defendant knew that Mr Sirio was establishing a website and that he was prepared to supply material to put on that website about the defendant's case against MBL and MICM and their alleged use of costly legal ploys to delay or prevent the case coming to trial. This was a case where tapes (or transcripts of them) were apparently made available by the defendant to Mr Sirio. These were allegedly placed on the website. There is a hotly contested issue as to what the defendant authorised or permitted to be placed on the website. That is not an issue which should be determined on an application for leave to proceed or alternatively on an application under Rule 6A. It is an issue for the tribunal of fact. The facts need to be found.

45 Both parties took me to the decision of the High Court in Agar v Hyde (1999-2000) 201 CLR 552. At 572 the joint judgment of Gaudron, McHugh, Gummow and Hayne JJ pointed out that in deciding whether Part 10 r 1A applies attention must be directed to the way in which the claims made by the plaintiffs are framed. What is the nature of the claim which is made? As the Justices state:

"… is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations is a cause of action arising in the State." (italics in original judgment)

46 That question must be answered in the affirmative in the present case. What the defendant has sought to do is to raise factual matters going to the issue of publication. As earlier indicated they should be resolved at trial. The plaintiffs may seek discovery and interrogations and they may be important.

47 As earlier mentioned the defendant submitted that the continued maintenance of the present proceedings constitutes an abuse of process as the plaintiffs have a collateral purpose in wishing to place a financial burden on the defendant as a strategic initiative. It was submitted that that strategy was evident by inference from what has been done by MBL at every stage of each piece of litigation between it and Mr Berg since 1997. Reliance was placed on Mr Ford's evidence. The defendant submitted that that position was further reinforced by the inexplicable actions of the plaintiffs' solicitor in:

(a) failing to include a claim for damages in the original proceedings

(b) delaying service upon the defendant until 2 February 2001

(c) failing to include relevant endorsements on the statement of claim which would have properly notified the defendant of his right to challenge jurisdiction
(d) failure between 13 June 2001 and 15 February 2002 to bring on an application for leave to proceed for hearing or to exercise the leave granted by the Court on 13 June 2001 to file additional substantive evidence as to the questions of jurisdiction and delay.

48 It was submitted that all these matters in combination should lead to the conclusion of the collateral motive of the plaintiffs in maintaining these defamation proceedings.

49 As the original proceedings were instituted by summons a claim for damages could only be included with the leave of the Court. Normally, on the injunction being refused an order for pleadings including filing a statement of claim containing a claim for damages would have been sought. At that stage the main preoccupation of the plaintiffs was closing the website. On the facts as now known an injunction addressed to the defendant would have had little or no effect.

50 If the evidence of the process server is accepted he tried to effect service prior to the order for security costs. Failing to include the relevant endorsements on the statement of claim betrays a lack of knowledge on the part of the plaintiffs' solicitors of the Rules of Court or a failure to check.

51 When the matter came before the Court on 13 June 2001 the plaintiffs of their solicitors had managed to get the matter into a procedural mess and I gave directions designed to overcome the procedural problems which had arisen and to ensure that the Court could deal with the issues of leave to proceed and the striking out or the dismissal of the proceedings. There was a further problem. Counsel for Mr Berg wished to cross-examine the solicitor for the plaintiffs. She was on maternity leave. In addition, it was anticipated that the hearing of the IRC proceedings would be heard in July and August 2001 and that the parties would be engaged on that. That occurred.

52 There was some delay in re-listing the matter for hearing, one of the problems being to find mutually convenient dates. The matter should have been heard in November-December 2001 rather than in February 2002. I do not regard the delay as gross.

53 The defamation proceedings were different in character from those as to the allegedly wrongful dismissal of Messrs Bell and Berg. The matter complained of was capable of conveying serious defamatory imputations. A jury could take the view that they warranted substantial damages or the contrary view. Mr Ford's evidence is not sufficient to establish a collateral purpose. As a whole the evidence falls short of establishing that the plaintiffs instituted the defamation proceedings for a collateral purpose. I reject the submission that the proceedings of the plaintiffs constituted an abuse of process.

54 The defendant submitted that Agar indicates that the discretion is in uncontrolled terms and that the combination of doubts as to jurisdiction, the existence of a collateral purpose, the procedural manoeuvres of the plaintiffs, the delay on the part of the plaintiffs and the failure to ensure that the statement of claim contained the correct endorsements in accordance with the rules leads to the conclusion that leave to proceed should be refused.

55 The defendant submitted that the case was overwhelmed by the application of Californian law and that the indications were that the plaintiffs could not win in California because of the law as to free speech. Until the facts are found definitively it is too early to say which law applies. On the facts, this case is in a class of its own.

56 In summary the abuse of process contention fails and the debate as to publication must be left to be resolved by the tribunal of fact.

57 The plaintiffs have made out a case for leave to proceed subject to one matter. It would be unsound for leave to proceed to be granted on the basis of a statement of claim which requires amendment so as to state accurately in the light of current knowledge the basis of the publication alleged. It is one matter to decline to strike out a statement of claim applying General Steel Industries. It is a different matter to proceed to grant leave to proceed on a statement of claim which requires amendment.

58 Senior counsel for the defendant indicated that any application to amend would be opposed in view of the history of the defamation proceedings.

59 I stand over the application for leave to proceed to enable an application to amend the statement of claim. If no such application is made and granted then, as at present advised, leave to proceed should be refused.

60 If the amendment is granted and leave to proceed is granted it will be necessary to consider making an order under SCR Part 1 r,12 dispensing with compliance with Part 10, r.2A. An order is sought to that effect n the plaintiff's' motion of 30 March 2001.

61 In the meantime all questions of costs are reserved.

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Last Modified: 11/22/2002