McKay v Paule
[2022] ACTCA 72
•22 December 2022
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | McKay v Paule |
Citation: | [2022] ACTCA 72 |
Hearing Date: | 7 December 2022 |
DecisionDate: | 22 December 2022 |
Before: | Mossop J |
Decision: | 1. The application for leave to appeal from an interlocutory judgment dated 7 October 2022 and filed 12 October 2022 is dismissed. 2. The applicant is to pay the respondent’s costs of the application |
Catchwords: | APPEAL – APPLICATION FOR LEAVE TO APPEAL – Application for leave to appeal interlocutory decision – decision of primary judge to extend limitation period in defamation matter – where grant of leave would delay and fragment case – decision below not attended with sufficient doubt to warrant grant of leave – where applicant contributed to delay in bringing proceedings – application dismissed APPEAL – APPLICATION FOR LEAVE TO APPEAL – Application for leave to appeal out of time – failure to pay heed to timeframes – where appeal lacks merit – lengthy delay in filing – leave refused |
Legislation Cited: | Court Procedures Rules 2006 (ACT), r 5312 Human Rights Act 2004 (ACT), s 21 Supreme Court Act 1933 (ACT), s 37E(4) |
Cases Cited: | Barrett v TCN Channel Nine Pty Ltd [2017] NSWCA 304; 96 NSWLR 478 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Paule v McKay [2020] ACTSC 145 |
Parties: | David McKay ( Applicant) Spiro Paule ( Respondent) |
Representation: | Counsel D Robens ( Applicant) M Friedgut ( Respondent) |
| Solicitors Just Dispute Resolution ( Applicant) Harmers Workplace Lawyers ( Respondent) | |
File Number: | ACTCA 59 of 2022 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: McWilliam AsJ Date of Decision: 27 July 2022 Case Title: Paule v McKay (No 2) Citation: [2022] ACTSC 190 |
MOSSOP J:
Introduction
This is an application for leave to appeal to the Court of Appeal from a decision of the Associate Judge (the primary judge). Leave is required because the decision was an interlocutory one: Supreme Court Act 1933 (ACT) s 37E(4). An extension of time is also sought because the application for leave was filed outside the time permitted under the Court Procedures Rules 2006 (ACT).
The background to the application for leave to appeal is quite extensive. Mr Spiro Paule sought an extension of the limitation period in which to bring defamation proceedings against Mr David McKay. Mr Paule is the managing director and chief executive officer of Findex Group Limited (Findex). Mr McKay is a former employee of a subsidiary company of Findex, Findex Services Pty Ltd. Mr Paule is also a director of Findex Services Pty Ltd.
The publication the subject of the proceedings said to give rise to the defamation is contained in an email sent by Mr McKay on 15 July 2016 to two representatives of the Australian Securities and Investments Commission (ASIC). That email was then included as part of an email chain when the applicant sent a further email to the two ASIC representatives on 24 August 2016. The email of 15 July 2016 and the email chain of 24 August 2016 collectively constitute the matter complained of in the defamation proceedings. In these reasons, it is unnecessary to distinguish between the two publications and they will be referred to simply as “the ASIC email”. As at the date of publication of the ASIC email, s 21B of the Limitation Act 1985 (ACT) provided:
21B Defamation proceedings generally to be commenced within 1 year
(1)An action on a cause of action for defamation is not maintainable if brought after the end of a limitation period of 1 year running from the date of the publication of the matter complained of.
(2) However, a court must, if satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period mentioned in subsection (1) to a period of up to 3 years running from the date of the publication.
The parties and the court below have approached s 21B on the basis that the reference to “running from the date of the publication” is to be interpreted as though it means “after” the date of the publication. That meant that s 21B(1) had the effect that a limitation bar arose if proceedings were not commenced, at the latest, on 15 July 2017. However, in accordance with s 21B(2) a court had power to extend the limitation period up until 15 July 2019. In the unusual circumstances which are described below, Mr Paule commenced proceedings on 15 July 2019 and then sought an extension of the limitation period under s 21B(2) so as to regularise his proceedings.
The application came before the primary judge on 31 August 2020. Following the hearing on that day, the parties requested that the court not deliver judgment while they participated in a mediation. The matter was ultimately relisted before the court on 28 October 2021 at which time the parties requested that the court determine the application. The primary judge gave her decision on 27 July 2022, extending the limitation period up until 15 July 2019. That extension was also made pursuant to the provisions equivalent to s 21B in the applicable legislation in New South Wales, Victoria, Queensland, South Australia, Tasmania and Western Australia. Mr McKay seeks leave to appeal against that decision. That application was only filed on 12 October 2022, substantially outside the period permitted under the rules. He therefore also seeks an extension of time in which to file an application.
Proposed grounds of appeal
The Draft Notice of Appeal identified the proposed ground of appeal as follows:
(1) The learned primary judge erred in, having decided that an extension of the limitation period for commencing proceedings was appropriate, finding at [76] that the Court’s discretion should be exercised in favour of the extending the time period to 15 July 2019.
Particulars
(a)The learned primary judge correctly identified the principles applying to an extension of time pursuant to section 21B(2) of the Limitation Act 1985 (ACT) (Limitation Act) but then failed to apply, or misapplied, those principles when addressing the issue of extension of time at [75] and [76].
(b)The learned primary judge did not identify the scope and purposes of the Limitation Act, or the rationales for the existence of limitation periods, and exercise the discretion in that context, including consideration of the extent to which the extension would place an unfair and unreasonable burden on the defendant.
(c)In finding at [75] that the period after 15 July 2017 did not involve “any unreasonable delay”, the learned primary judge applied an incorrect test on the issue of extension of time in this context.
(d)The learned primary judge did not evaluate, in the context of an extension of time, the steps taken or not taken by the respondent as against the expectation that a party would ordinarily be expected to take prompt steps to obtain access to the information required to commence proceedings.
(e)The learned primary judge failed to have regard, and/or give sufficient weight, to the following relevant considerations in the exercise of the discretion:
(i) by December 2016 the respondent’s lawyers and Mr Doucas had been granted access to the matter complained of (MCO);
(ii) ASIC had, by June 2017 at the latest (J[44]), not maintained or established public interest immunity in the MCO, such that the MCO was (in the terminology adopted by the respondent) an “undisputed” document with respect to the search order proceedings;
(iii) that the respondent’s representatives had, at least by July 2018, identified the potential claim arising from the matter complained of in this proceeding and taken counsel’s advice; and
(iv) the respondent did not give instructions to his legal advisors to pursue defamation proceedings until 17 June 2019 (Zhang affidavit, 17/2/20, [48]), almost three years after publication.
(2) The learned primary judge erred in:
(a)finding at [15] that:
(i) it was unnecessary to determine whether the cause of action is limited to publication in Western Australia and that there was insufficient information about publication to permit a finding as to place of publication; and
(ii) that any distinction in the legislation applicable in Western Australia does not produce any difference in outcome; and
(b)failing to have regard to the requirements of section 44 of the Limitation Act 2005 (WA) in deciding whether to extend the time limit for commencement of the proceedings.
(3) The learned primary judge erred in making orders at [80](3) of the judgment as to costs, without first providing the parties with an opportunity to be heard on the issue.
The judgment below
The primary judge identified the legislative context for the court’s power to grant leave, including explaining the largely uniform nature of the limitation periods in other jurisdictions: [8]-[16]. There is no challenge to this aspect of her Honour’s decision. She then turned to consider the principles applicable under s 21B(2): at [17]-[34]. She identified that consistent with authorities in New South Wales and Queensland, an extension of time is mandatory if “it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication”. This is an evaluative judgment, dependent upon the facts of a particular case. It is a stringent test. Her Honour identified that the authorities require the application of an objective test in relation to which a plaintiff bears the burden of establishing that it was not reasonable to commence within the one-year period: at [22].
Her Honour identified that, once a plaintiff has established that it was not reasonable to commence proceedings within the one year, the court has power to extend the time for a period of up to three years and that Mr Paule required the maximum available extension: at [23]. She continued:
24. In that regard, the Court’s discretion is unfettered; it is confined only by the scope and purposes of the Limitation Act and by the requirement that the discretion be exercised in the context of the rationales for the existence of limitation periods: Barrett [v TCN Channel Nine Pty Ltd [2017] NSWCA 304; 96 NSWLR 478] at [82] (per McColl JA, Simpson and Payne JJA agreeing).
25. In particular, the discretion is not constrained by the ‘not reasonable’ test: Barrettat [92], [105] (per McColl JA, Simpson JA agreeing). As McCallum J (as her Honour then was) stated in Riske v Oxley Insurance Brokers Pty Ltd (No 2) [2014] NSWSC 1611 at [38]:
38.The determination of the appropriate term of the extension should be informed by the expectation that a party would ordinarily be expected to take prompt steps to obtain access to the information required to commence proceedings.
26. The reasoning in Riskewas expressly referred to as being consistent with the proper construction of the discretion in Barrett: at [118] (per Payne JA, Simpson JA agreeing).
Her Honour then referred to a number of cases which had considered the application of the “not reasonable” test, including three cases in which the existence of other court proceedings was relied upon, successfully or unsuccessfully, in order to provide a foundation for a conclusion that commencement of proceedings within the limitation period was “not reasonable”.
Her Honour then went on to consider whether it was “not reasonable” for the plaintiff to commence proceedings before the time that he did. This involved considering the history of the litigation between Mr McKay, Findex and other persons associated with Findex. As Her Honour explained it (at [35]):
There is a long and complicated litigation history in that regard, which it is necessary to understand for more than merely context or background. It is the key reason why [Mr Paule] says he was not able to reasonably commence proceedings within the year (that is, by 15 July 2017) or even within the three-year period (15 July 2019).
Her Honour annexed, as Schedule A to her reasons, an extract from a decision of Ward CJ in Eq in Findex Group Ltd v iiNet Ltd [2019] NSWSC 1198. That schedule serves to give an overview of what was occurring “while the limitation period was ticking away”: [36]. The primary judge then summarised the procedural chronology in the following terms:
37. In essence, on 13 September 2016, Findex and Mr Paule (among others) commenced preliminary discovery proceedings in the NSW Supreme Court. A potential action in defamation was foreshadowed by the plaintiffs in the NSW proceedings at that time (among other causes of action), and the application for preliminary discovery was to ascertain the identity of the publisher of various allegedly defamatory publications. That led to search and seizure orders being made on an ex parte basis.
38. On 20 September 2016, the search order was executed. Documents were seized from Mr McKay, which included the ASIC email and the email chain. They were held by an independent solicitor.
39. On 23 September 2016, Rein J made orders for the further progress of the matter, which included an order that the independent solicitor provide a copy of all seized documents to the plaintiffs’ solicitors by 20 October 2016.
40. In response to the orders made by Rein J, Mr McKay filed a motion on 31 October 2016 (October motion), objecting to access being given to the documents in the NSW Supreme Court proceedings (on grounds of confidentiality and that some of the documents did not fall within the terms of the search orders). An interim regime was put in place which restrained production or inspection of the seized documents until Mr McKay’s motion objecting to access had been resolved.
41. ASIC then intervened in the NSW proceeding in November 2016 and sought orders withholding some of the documents on public interest immunity grounds.
42. As part of the preparations for the hearing of that issue, a confidentiality regime was put in place pursuant to McDougall J’s orders made on 16 December 2016. It allowed:
(a) Limited access to the documents seized other than those over which Mr McKay claimed litigation or client legal privilege, and those over which ASIC claimed public interest immunity.
(b) The people to whom access was granted included:
1.Mr Paule’s solicitors, specifically, for the limited purpose of assisting the parties to ascertain the real areas of dispute; and
2.The head of risk management at Findex for the same limited purpose of giving instructions on behalf of Findex in the NSW proceedings.
(c) Those people were each subject to strict undertakings. The documents were not to be provided or shown to any of the plaintiffs (including Mr Paule) or any of their officers or employees.
43. Under that confidentiality regime, Mr Paule’s solicitors first obtained access to ASIC email and email chain on 6 February 2017.
44. The motion brought by ASIC was determined separately from the motion brought by Mr McKay. On 30 June 2017, some documents were found to be subject to the immunity. The ASIC email and email chain were not in that category. However, because the original motion brought by Mr McKay objecting to access had not been heard or otherwise resolved, Mr Paule still did not have access to the bundle of documents that included the matter complained of, due to the continued operation of the interim regime referred to above. Two weeks later, the one-year limitation period for commencing an action in defamation regarding the matter complained of expired.
45. Insofar as it bears upon the issues in the present application, the procedural chronology also includes the following. Again, any further detail of what occurred can be ascertained from the summary in Schedule A:
(a) In February 2017, litigation was commenced in the Federal Court in the Victorian Registry by Findex and Mr Paule (among others) against Mr McKay (and a related entity) for causes of action that did not involve defamation, such as breaches of contract, of restraint of trade covenants, contractual and equitable obligations of confidence and statutory obligations owed.
(b) In January 2018, the plaintiffs in the NSW Proceedings sought that Mr McKay’s motion be heard and determined or otherwise that it be dismissed. The plaintiffs also sought leave to use the documents in other proceedings. That is, the plaintiffs were aware that because the documents had been obtained pursuant to compulsory processes of the Court, they were each under an implied undertaking to the Court not to use the documents for any other purpose without the leave of the court, unless the documents have been received into evidence: Hearne v Street [2008] HCA 36; 235 CLR 125, Hayne, Heydon & Crennan JJ at [96]. Such obligation is commonly referred to as the Harman undertaking, so named from the case in which the obligation was articulated: Harman v Secretary of State for the Home Department [1983] 1 AC 280.
(c) In February 2018, Mr McKay filed a further motion seeking among other things to set aside the search and seizure orders and for the return of all copies of electronic and hard copy documents obtained pursuant to the search order.
(d) In April 2018, the competing motions of the parties were heard by Ward CJ in Eq but were unable to be completed on the day they were listed for hearing in the time that had been allocated. The proceedings were adjourned part-heard to 6 September 2018. The length of that adjournment was in part because the plaintiffs in the NSW proceedings had been directed to identify certain categories of documents and required some time to do that, and in part due to the other commitments of the Court.
(e) On 6 September 2018, the dispute between Findex and Mr McKay over access to the bundle of documents that included the matter complained of in the proceedings here continued. On that day, the plaintiffs did not press to be released from the Harman undertaking. It was indicated to Ward CJ in Eq that the issue had been postponed.
(f) On 19 October 2018, Ward CJ in Eq delivered judgment on the remainder of the competing applications: Findex Group Ltd v iiNet Ltd[2018] NSWSC 1567 (the 2018 October judgment). Her Honour concluded that access by the plaintiffs in those proceedings to the documents should be refused, essentially because search and seizure orders were an extraordinary form of relief, and could not be used as a substitute for discovery. They were to preserve evidence, rather than to facilitate parties accessing documents outside the established legal channels for discovery (see in particular the 2018 October judgment at [124] and [131]).
(g) However, her Honour did not order that the documents be returned. It was directed that the documents (other than those conceded to be irrelevant) should be retained pending the hearing (if pressed) of the plaintiffs’ application for leave to use any of those documents in the Federal Court Proceedings or any other contemplated proceedings (that is, the plaintiff’s application to be released from the Harman undertaking).
(h) The plaintiffs sought leave to appeal an aspect of the judgment of Ward CJ in Eq, which application was determined on 3 May 2019: see Findex Group Ltd v McKay [2019] NSWCA 93 (Findex CoA). The plaintiffs were unsuccessful, with the NSW Court of Appeal expressly upholding the reasoning at first instance (see [26]).
(i) Following delivery of that judgment, the plaintiffs returned to Ward CJ in Eq to press for the remainder of their relief seeking release, if that be necessary, from the Harman undertaking.
(j) On 24 June 2019, the balance of the plaintiff’s motion was heard, with judgment reserved.
(k) Two weeks after judgment was reserved, the plaintiffs made an urgent application for interim orders to permit the filing by them of a statement of claim making use of certain of the documents the subject of their application for release of the Harman undertaking (assuming that such undertaking was applicable). That interim application concerned the matter complained of in the proceedings in this Court.
(l) On 15 July 2019, interim orders were made, which allowed Mr Paule to file a statement of claim in the NSW Supreme Court later that day, thereby commencing the proceedings that are now in this Court, having been transferred by Sackar J on 22 November 2019, through consent orders made in Chambers.
(m) When Ward CJ in Eq delivered judgment on the plaintiff’s motion in September 2019, her Honour referred to the interim orders that were made to release the plaintiff to use certain documents including the matter complained of at [137] of Findex v iiNet:
137. Insofar as the Annexure A document is concerned, I would give leave for the use of that document. The reason for this is that, unlike the balance of the documents, access to and use of this document is essential to the prosecution of any defamation claim arising out of its publication. While I say nothing (nor would it be appropriate here to do so) as to the merits of any such claim, I am not prepared to shut the second plaintiff out of such a claim at this stage; nor do I consider it to be in the interests of justice here to do so.
Her Honour then summarised the competing contentions as to the impact of that litigation history: [46]-[52]. So far as Mr Paule is concerned, that was that he was not able to see, read or review the matter complained of and was unaware of its existence until 15 July 2019. Her Honour noted that Mr McKay did not dispute that Mr Paule did not see the matter complained of until September 2019 when Ward CJ in Eq made an order specifically permitting access to that document. However, Mr McKay contended that this was because of a series of forensic missteps on the part of Mr Paule:
(a)proceeding on the basis that he could gain access to the matter complained of by a search order;
(b)believing that it was legitimate to delay bringing proceedings while considering a complete set of causes of action; and
(c)not obtaining discovery by filing a Statement of Claim at the time the search order application was heard in 2016 or at any time subsequently.
He submitted that it was open to commence proceedings in relation to other publications of concern and that discovery in those proceedings would have resulted in the matter complained of being disclosed prior to the expiry of the 12-month period. He submitted that the delay in obtaining inspection was because Mr Paule’s purpose was to determine what further causes of action may be available to him prior to there being a Statement of Claim or preliminary discovery order on foot.
Her Honour found that it was not reasonable for Mr Paule to commence proceedings in respect of the matter complained of before 15 July 2019: [53]. She found that he did not have access to the relevant documents that would have enabled him to do so. He did not even have an awareness of their existence or content. He did not make a deliberate strategic choice not to pursue separate defamation proceedings until other proceedings had been resolved. She found that he had not adopted a forensic position of allowing the one-year statutory limitation period to pass while pursuing other proceedings in the New South Wales Supreme Court. Rather, he had at all times been seeking access to a volume of documents and the dispute over access to those documents was an essential step: [54]. In relation to the ASIC proceedings, they were concluded some two weeks before the limitation period expired, however, the remaining documents were still subject to Mr McKay’s motion to prevent access which had been deferred until after the resolution of ASIC’s motion: [55]. Her Honour found that the ongoing dispute over access to the documents for the entirety of the relevant one-year limitation period meant that it was not reasonable to commence proceedings by 15 July 2017: [57].
She specifically addressed Mr McKay’s contentions that other steps could have been taken to gain access to the document within the one-year period, namely:
(a)separate preliminary discovery proceedings;
(b)filing a Statement of Claim in relation to known publications and then seeking discovery in those proceedings;
(c)making an application for release of the Harman undertaking and a variation of the confidentiality regime to the extent necessary to obtain instructions in relation to defamation proceedings relating to the matter complained of.
Her Honour accepted the proposition that Mr Paule proceeded on a mistaken belief that he could gain access to the documents including the ASIC email following the search and seizure orders: [59]. Because the defamation proceedings foreshadowed in September 2016 were based upon then known documents rather than the ASIC email, the Harman undertaking applicable to documents obtained by the search and seizure orders was a fundamental hurdle to Mr Paule commencing proceedings based on the email.
Her Honour accepted that preliminary discovery could have been sought separately from the existing proceedings already on foot but pointed out that even such proceedings would have required a release from the Harman undertaking because it was only the information about the existence of the ASIC email obtained from the original proceedings that would have provided a foundation for the preliminary discovery application: [62]-[63].
So far as the second argument was concerned, namely filing a Statement of Claim in relation to the known publications and then seeking an order for discovery, her Honour found that this would not have yielded access to the ASIC email because the email was not related to the earlier publications: [64]. Further it was “entirely uncertain” that any discovery would have occurred within the one-year timeframe: [65]. Further again, if the ASIC email turned up upon discovery, a release of the Harman undertaking would still be required if it was to be used as the foundation for a separate cause of action in defamation: [66].
The third argument was that an application for release from the Harman undertaking might have been sought earlier, at any time after 6 February 2017 when Mr Paule’s legal representatives first gained access to the ASIC email. This was based upon the statement in the reasons of Emmett AJA in Findex Group Ltd v McKay [2019] NSWCA 93 in the New South Wales Court of Appeal that leave might have been obtained to consider the document and formulate advice followed by a further grant of leave and the variation of the confidentiality regime necessary for to Mr Paule to obtain instructions. In so far as it was suggested that Mr Doucas was a “poor choice” of Mr Paule’s representative because he did not give instructions on a personal defamation suit to be brought by Mr Paule, her Honour pointed out that anyone appointed to give instructions would be bound by the confidentiality order and Harman undertaking: [69]. Her Honour indicated that s 21B of the Limitation Act did not require that it was “not possible” to commence proceedings, only that it was “not reasonable”: [70]. Her Honour found that in circumstances where there were existing orders preventing Mr Paule’s solicitors from doing anything other than viewing the documents for the limited purposes of assisting the parties to ascertain the real areas of dispute in the existing proceedings, it was not objectively reasonable to expect that they would, without instructions, and in the five‑month period between February 2017 and July 2017, review all of the documents and then apply to the court to seek release from the Harman undertaking in order to give advice about further potential causes of action: [72].
In any event, Mr Paule himself had no awareness of the ASIC email nor could he reasonably access those documents at a stage before the expiry of the limitation period because of the unusual circumstances that existed. Her Honour therefore concluded that it was not reasonable to commence proceedings during that time: [74].
So far as the extension of time beyond the one-year limitation period was concerned, her Honour’s reasons were brief and were as follows:
75. Once the 1-year limitation period had passed, applying the discretionary considerations referred to at [23]-[25] above, and in light of the continuing operation of the Harman undertaking in the other proceedings right up until 15 July 2019, I do not think that the period after 15 July 2017 involved any unreasonable delay. That finding is made in the context of Mr Paule first pressing for such relief well before that date, and where other procedural matters in the litigation in the NSW Supreme Court were subsequently dealt with before that aspect of Mr Paule’s application.
76. Accordingly, I am satisfied that it is appropriate to exercise the discretion to extend the time in which to commence proceedings to the date of the original filing of the Statement of Claim, being 15 July 2019.
Her Honour then indicated that it was appropriate to extend the time to the date when Mr Paule’s Statement of Claim was filed: [77].
She then addressed the question of costs. She identified that Mr Paule had been successful in the application to have the limitation period extended. That application was also related to another application involving the amendment of Mr Paule’s Statement of Claim heard by Crowe AJ: Paule v McKay [2020] ACTSC 145. In that application, Crowe AJ had reserved the question of costs to the judge who heard the application for an extension of the limitation period. Her Honour understood that the intent of Crowe AJ’s orders was that the costs consequences for the amendment application would follow the outcome of the extension of limitation period hearing. As a result, she ordered that the costs of the application in proceeding filed 10 June 2020 be paid by the defendant and that such costs included the application to amend the originating application and Statement of Claim heard by Crowe AJ, but that the costs not be recoverable until the conclusion of the proceedings: [80].
Principles governing a grant of leave
Adopting and consolidating the summaries of the principles upon which the Court of Appeal approaches a decision as to whether or not to grant leave to appeal from an interlocutory decision identified by Refshauge J in Capital Property Projects (ACT) Pty Ltd v Australian Capital Territory Planning & Land Authority [2008] ACTCA 9; 2 ACTLR 44 at [28]-[29] and the additional principles identified by his Honour in Fairfax Media Publications Pty Ltd v Cummings [2012] ACTCA 36; 269 FLR 182 at [13], a summary of the principles to be applied is as follows:
(a)Leave will be granted sparingly to avoid delaying and fragmenting the hearing of cases.
(b)A court will be particularly hesitant to grant leave where the decision is one in respect of practice and procedure or is made in the exercise of a discretion.
(c)Decisions which, though interlocutory, determine substantive rights will more readily be the subject of the grant of leave.
(d)The party seeking leave bears the onus of satisfying the court of the necessary criteria to justify the grant of leave.
(e)The court will ordinarily grant leave where the decision is wrong and prejudice (sometimes referred to as “substantial prejudice”) will be suffered by the appellant.
(f)Leave may also be granted where the decision is attended with sufficient doubt to warrant its reconsideration or, to put it another way, where the decision is “attended with difficulty and [its] correctness is open to dispute” (Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400) and, if it is wrong, significant consequences will be suffered by the applicants.
(g)It may be a factor favouring the grant of leave that:
(i)the decision involves a matter of public importance; or
(ii)the decision may affect the fairness of the trial, a consideration under s 21 of the Human Rights Act 2004 (ACT), though this can also weigh against the decision if the appeal results in unfair delay or fragmentation of the trial.
Proposed ground 1
Submissions
As will be apparent from the terms of ground 1 of the Draft Notice of Appeal, Mr McKay does not challenge the conclusion that it was not reasonable in the circumstances for Mr Paule to have commenced an action within one year of the date of the publication. Nor does he challenge the interpretation of s 21B adopted by the primary judge (based on earlier New South Wales and Queensland authority) that such a conclusion means that in those circumstances the court must extend the time. What he does challenge is the discretionary exercise involving a determination as to how far beyond the one-year period the limitation should be extended.
Mr McKay contends that although the primary judge correctly stated the principles applying to an extension of time, she failed to apply, or misapplied, those principles when addressing the issue at [75] and [76] of the reasons which are set out above at [21].
Firstly, he contended that the primary judge “neither considered nor evaluated the extent to which the extension would place an unfair and unreasonable burden upon [Mr McKay] more than six years after the alleged publication”. He emphasised that the enactment of time limitations has been driven by the general perception that where there is delay, the whole quality of justice deteriorates. In oral submissions, counsel for the applicant placed emphasis on the reasons of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. Emphasis was placed upon the need to look at matters from the defendant’s perspective and the need, if an extension of the limitation period was granted, for the defendant to investigate matters that had occurred in 2016.
Secondly, Mr McKay contended that in finding that the period after 15 July 2017 did not involve “any unreasonable delay”, the primary judge adopted the same test in relation to the appropriate length of time for the extension as in relation to the question of whether it was “not reasonable” to have not commenced within the one-year limitation period and hence the discretion miscarried by application of an erroneous legal test.
Thirdly, he submitted there was no evaluation in the judgment of the steps taken or not taken by Mr Paule, as against the expectation that a party would take prompt steps to access the information required to commence proceedings. In particular, the submissions point to the matters raised in particular (e) of this ground of appeal: the grant of access in December 2016 to the email, the end of ASIC’s involvement by June 2017, that by July 2018 claims arising out of the email had been identified and counsel’s advice taken and that no instructions to Mr Doucas to initiate defamation proceedings were given until 17 June 2019, almost three years after publication. He submitted that the continuing operation of the Harman undertaking “was not relevant to the conditional commencement of proceedings”, borne out by the fact that the conditional commencement occurred before a release of the Harman undertaking was obtained.
The submissions made on behalf of Mr Paule addressed each of the submissions made by Mr McKay. Counsel emphasised that Mr Paule never had access to the ASIC email until September 2019, that at all times prior to September 2019 confidentiality orders and the Harman undertaking were in place and that the course ultimately adopted to avoid the final time bar under s 21B, by filing proceedings in relation to a publication which Mr Paule had never seen, was unprecedented. Counsel also identified that at all times disclosure and use of the documents in question had been opposed by Mr McKay. He pointed out the incongruity of Mr McKay opposing over many years access to and use of the documents on the one hand and yet on the other contending that the documents should have been accessed and used, over his opposition, earlier than they were.
Decision
The primary judge dealt with the discretionary extension briefly. Her Honour referred (at [75]) to the fact that she had identified the discretionary considerations earlier at [23]-[25]. At [24] she had identified that the discretion to extend time was confined “only by the scope and purposes of the Limitation Act and by the requirement that the discretion be exercised in the context of the rationale for the existence of limitation periods”. Her Honour had therefore correctly identified the relevant principle and said that this was the principle that she was applying.
The brevity of her reasons in relation to the discretionary extension was able to be done because she had considered in detail the variety of criticisms made by Mr McKay of the course of conduct adopted by Mr Paule earlier in her reasons, in the context of considering the position that applied during the first year after the cause of action arose. The material put before the Court of Appeal (which did not include any written submissions put before the primary judge or the transcript of argument before her) does not demonstrate that this approach was inconsistent with the manner in which the case was presented to the primary judge.
So far as the context in which the general considerations relating to the purpose of limitation periods and prejudice to a putative defendant is concerned, it is relevant that the circumstances of this case did not involve anything other than presumed prejudice and any such prejudice only arose in the unusual context of the facts in this case. No evidence of actual prejudice arising from the delay was identified as having been put before the primary judge. So far as presumed prejudice arising from the delay might have been put to the primary judge, it is difficult to see how, in the circumstances, that would have been a significant issue. From the point in time when the search was executed on Mr McKay’s residence, it must have been obvious to him that Mr Paule and the other Findex interests intended to commence proceedings against him. Indeed, a desire to avoid or delay that possibility of such proceedings must have been at the core of Mr McKay’s resistance to allowing access to, or use of, the material obtained as a result of the search. That Mr McKay may not have understood precisely which of the documents obtained might provide causes of action in defamation is not of great significance. He certainly must have known that he had sent the ASIC email and engaged in other communications which might, or were likely to, give rise to causes of action against him. Thus, the matter was determined in the context in which there was no doubt on his part about the potential for claims against him and hence the desirability of taking any steps that he needed to in order to protect his position. It was inevitable that some undefined prejudice would arise by reason of the delay in commencing proceedings, but that consideration would inevitably have to be assessed in light of the fact that the delay in commencing proceedings in relation to the ASIC email resulted from the opposition by Mr McKay to its disclosure and use.
Particular (a) of this ground of appeal accepts that the primary judge identified the correct principle. The asserted failure to apply those principles is not articulated and presumably is intended to pick up matters stated in the other particulars.
Particular (b) of the ground then suggests that the primary judge did not go on to set out the scope and purposes of the Limitation Act or the rationale for the existence of limitation periods. Her Honour was not obliged to do so. She had correctly made reference to the principles stated in Barrett v TCN Channel Nine Pty Ltd [2017] NSWCA 304; 96 NSWLR 478 which were derived from a lengthy consideration of just those matters. Insofar as the particular asserts that she failed to exercise the discretion in the context of those rationales and principles, that is inconsistent with her Honour’s correct identification of the principles. Insofar as it might be argued to have arisen having regard to the result reached by her Honour, the argument lacks merit when regard is had to the underlying facts.
Insofar as particular (b) suggests that, having regard to the purposes and rationale of limitation periods, the extension of time “would place an unfair and unreasonable burden on the defendant”, the material put before the court on the application for leave to appeal did not disclose any particular matters of fact indicative of an “unfair and unreasonable burden on the defendant”. Plainly enough, Mr McKay wanted to avoid claims being made against him. That was the whole point of his resistance to allowing the Findex interests to access and use the material obtained during the search. Nothing in particular was pointed to other than presumed prejudice arising from the length of time since the cause of action arose. However, as pointed out above, any prejudice arising from the passage of time is unlikely to have been significant and, in any event, was the result of the calculated position adopted by Mr McKay himself in relation to use of the documents.
So far as particular (c) is concerned, the contention is that by referring to “any unreasonable delay”, her Honour determined the application for an extension of time by reference to an incorrect test. As earlier pointed out, her Honour made specific reference back to what was said in Barrett and indicated at [75] that she was applying that approach. Her Honour’s reference to “any unreasonable delay” must be read as a factual conclusion addressing the principal basis upon which an extension of time was resisted, namely, the alternative courses that Mr McKay contended had been available during the three-year period. It does not represent the application of an incorrect test.
Particular (d) suggests that the primary judge did not assess the steps taken by Mr Paule by reference to “the expectation that a party would be expected to take prompt steps to obtain access to the information required to commence proceedings”. That is a surprising contention in the context of her Honour’s detailed assessment of the submissions made on behalf of Mr McKay about the steps which hypothetically might have been taken. There can be no doubt that her Honour was judging those steps in the context of a general expectation consistent with the purposes of s 21B that parties would move promptly to obtain the information required to commence proceedings. However, overwhelming that generalised consideration were the particular circumstances of the present case in which at all times the Findex interests had been attempting to obtain access to the documents obtained in the search. They had been frustrated in that effort because the court held that, having regard to the means by which they were obtained, their entitlement to use those documents was limited. However, that did not change the fact that obtaining access to the documents was their goal and that this goal had been frustrated by Mr McKay’s effective resistance to their disclosure.
Particular (e) raises a number of matters which it is alleged the primary judge failed to have regard or failed to give sufficient weight to. An allegation involving failure to give a matter sufficient weight inevitably recognises that it was given some weight. In the exercise of a statutory discretion, weight is a matter for the decisionmaker. As a result, an allegation of a failure to give sufficient weight does not provide a basis for challenging a discretionary decision.
The factual matters referred to in particular (e) were contentious in that they were asserted to be inaccurate or misleading. Each of them is addressed in the affidavit of Lauren Brouwer-French dated 4 November 2022 relied upon for the purposes of the leave application.
Particular (e)(i), which asserts the availability of the ASIC email to Mr Paule’s lawyers in December 2016, is either inaccurate or misleading. 592 documents identified as “Disputed Documents”, including the ASIC email, were provided to the solicitors for the Findex interests on 6 February 2017. However, they were subject to strict confidentiality orders as well as a Harman undertaking. The orders precluded their existence, identity and content from being disclosed to Mr Paule.
Particular (e)(ii) is contentious insofar as it describes the email as an “undisputed” document. It is not necessary to attempt to resolve the significance of its labelling as such in the Draft Notice of Appeal. However, whether or not the characterisation as “undisputed” in the Draft Notice of Appeal is of any significance, it did not affect the continuing application of the confidentiality orders or the Harman undertaking to the ASIC email which were only relevantly removed in September 2019.
Particular (e)(iii) refers to Mr Paule’s representatives having identified the potential for a claim arising from the ASIC email. That is misleading if it impliedly asserted a capacity for Mr Paule to act in relation to the document. On 6 September 2018 senior counsel for the Findex interests referred to the email as an example of an actionable publication which they wished to provide to Mr Paule to enable him to provide instructions. That was simply an example amongst many other documents which they wish to provide to Mr Paule for the same purpose. It provided a reason that the Findex interests sought to have the confidentiality orders and Harman undertakings removed, a course which was opposed by Mr McKay. Insofar as the particular might be relevant to assessing the possibility that Mr Paule’s lawyers might have made an application of the nature discussed by the primary judge at [67]-[70], for release from the Harman undertaking, then that was an issue which her Honour expressly addressed and which her Honour’s conclusion at [75] must be understood as having taken into account.
Particular (e)(iv) which refers to Mr Paule having not given instructions to his legal advisors to commence defamation proceedings until June 2019, is misleading insofar as it suggests a capacity to provide those instructions in circumstances where Mr Paule had no knowledge of the existence of or content of the email as a result of the confidentiality orders put in place at Mr McKay’s request. On the other hand, it is clear that the Findex interests more generally wished to obtain access to the documents in order to allow such instructions to be obtained, a course which was successfully resisted by Mr McKay throughout the relevant period.
None of these matters provide a basis for impugning the exercise of discretion by the primary judge. Either individually or collectively, they do not indicate any significant doubt about the correctness of the approach or the conclusion reached by the primary judge.
Proposed ground 2
This ground of appeal asserts errors in [15] of the reasons relating to the application of s 44 of the Limitation Act 2005 (WA). In relation to s 44, Her Honour said at [11], [14]-[15]:
11. One difference to be noted is the legislative regime in Western Australia, which contains an additional provision listing further matters relevant to the court’s consideration of whether an extension of time ought to be granted. Section 44 of the Limitation Act 2005 (WA) provides:
44Further matters for court’s consideration on extension applications
When deciding, on an extension application, whether to extend the time for the commencement of an action, a court is to have regard to —
(a) whether the delay in commencing the proposed action, whatever the merit of the reasons for that delay, would unacceptably diminish the prospects of a fair trial of the action; and
(b)whether extending the time would significantly prejudice the defendant (other than by reason only of the commencement of the proposed action).
…
14. Further, attention has been given to the position in Western Australia because the ASIC email which became the matter complained of was sent to ASIC employees who the defendant alleged were based in Western Australia. If that is correct, s 123(1) of the Civil Law (Wrongs) Act 2002 (ACT) is material, which is in the following terms:
If a matter is published wholly within a particular Australian jurisdictional area, the substantive law that is applicable in that area must be applied in this jurisdiction to determine any cause of action for defamation based on the publication.
15. The defendant submitted, and I accept, that if publication of the matter complained of is not established in any other jurisdiction, the choice of law for the defamation proceedings in this Court is likely to be that of Western Australia. However, the plaintiff here expressly disputes that the cause of action is limited to publication in Western Australia. It is not necessary to determine that dispute and there is insufficient information about publication to permit any finding in that regard. Where material has been published in more than one jurisdiction, s 123(2) would have a role to play with the substantive law of the jurisdiction of closest connection applying. It suffices to record that in what follows, any distinction in the legislation applicable in Western Australia, and the additional statutory considerations required, does not produce any difference in the outcome.
As articulated in Mr McKay’s written submissions, the error on the part of the primary judge was that although she held that the additional statutory considerations in s 44 would “not produce any difference in the outcome”, the court had not gone on “to assess in the reasons for Judgment the impact of the delay on the prospects of a fair trial and prejudice to the defendant”. No particular matters which ought to have been considered were identified in the submissions as having warranted consideration.
Once again, this is a matter which arises in the context of a very unusual set of circumstances which were considered in detail by the primary judge. It was not submitted that the prospects of a fair trial of the action were “unacceptably diminished” by the delay in commencing the action. No such submission could reasonably have been made having regard to the long history of litigation between the parties. Similarly, no particular circumstance was pointed to as indicating that extending the time “would significantly prejudice the defendant (other than by reason only of the commencement of the proposed action)”. In the circumstances of the case, the matters in s 44 added little, if anything, to the uncontentious background considerations against which any application for an extension of the limitation period would need to be considered. The conclusion reached by the primary judge in the last sentence of [15] – that the different legislative provision would not produce any different outcome – was one which was clearly open to her.
Proposed ground 3
This ground asserts a denial of procedural fairness in so far as the primary judge made orders in relation to costs without hearing the parties further following the publication of her reasons. It was said that because the granting of an extension of time involved an indulgence, the primary judge ought to have allowed further submissions prior to any costs order having been made.
While in some cases a judge determining an interlocutory application such as this may wish to consider further submissions in light of the reasons for decision, it would not be at all unusual for the court to determine the issue of costs at the same time as determining the substantive issue. Neither any written submissions nor a transcript of the proceedings before the primary judge were put before the court for the purposes of this application for leave to appeal. It is therefore not possible to say that the issue of costs was not addressed in the course of submissions before the primary judge or that it was addressed in some way which indicated that it would be the subject of further submissions. It is clear that some matters relevant to costs were addressed before her Honour because her Honour was clearly made aware of the earlier orders of Crowe AJ and the need to address the costs of the earlier amendment proceedings when addressing the costs of the application for an extension of time. In those circumstances, it is not reasonably arguable that by making a costs order without hearing further argument beyond that which had already been advanced involved a denial of procedural fairness.
Conclusion as to grant of leave
The grant of leave to appeal would delay and fragment the hearing of the case. The issue in question is on a matter of practice and procedure made in the exercise of discretion. It is not one which involves any question of public importance. However, significantly, the decision, although interlocutory in form, determines a substantive matter, namely the entitlement to an extension of time which is critical to Mr Paule’s capacity to bring proceedings against Mr McKay. Plainly, if the decision was wrong then Mr McKay would suffer a substantial prejudice in having proceedings brought against him in circumstances where no extension of time should have been granted. However, in the present case, for the reasons which I have given in relation to the proposed grounds of appeal, the decision of the primary judge is not attended with sufficient doubt to warrant its reconsideration. The case is one in which there was a very strong case for the grant of an extension of time and no sufficiently arguable error is disclosed by the submissions made in the application for leave to appeal. Therefore, leave to appeal must be refused.
The application for an extension of time
The application for an extension of time is made in the following circumstances.
Rule 5312 of the Court Procedures Rules provides that an application for leave to appeal to the Court of Appeal must be filed no later than seven days after the day the interlocutory order is given, or not later than any further time allowed by the Court of Appeal or the judge who gave the interlocutory order.
On 27 July 2022 reserved decisions were delivered in this matter and two other matters involving Mr McKay: McKay v Findex Group Limited [2022] ACTSC 191; Findex Group Limited v McKay [2022] ACTSC 192.
On the seventh day following the decisions, the solicitor for Mr McKay wrote to the solicitors for Mr Paule advising that he was instructed “to brief counsel to review all three decisions with a view to considering one or more appeals”. That was stated to be in order to put Mr Paule on notice of a possible application for an extension of time in which to appeal. The email sought particulars of any prejudice that might be suffered as a result of the potential delay. There was no response to this email.
The application for leave to appeal was filed on 12 October 2022. This was 10 weeks after the date by which an appeal was required to be filed.
The further delay after that date is sought to be explained in the affidavit of Mr McKay’s solicitor by reference to:
(a)the need to prepare submissions in other proceedings involving Findex;
(b)the need to file and serve any amended Statement of Claim in other proceedings involving Findex;
(c)the involvement of solicitor and counsel in unrelated matters.
Mr McKay’s solicitor deposes “there was limited time available to the Applicant’s legal advisors in which to analyse all three decisions, advise on the prospects of success of any potential appeal, obtain instructions and draft the appeal papers” whilst at the same time attending to the cost submissions and the amendment of the Statement of Claim.
The affidavit also identifies the fact that counsel for Mr McKay was on paternity leave for two weeks from 6 September 2022.
There is no explanation as to why an extension of time was not sought from the primary judge, as is permitted under r 5312, if it was contemplated that an appeal would not be able to be filed within the seven-day period. Inevitably, had such an extension been sought, it would not have been granted for as long as 10 weeks.
The circumstances outlined in the affidavit of Mr McKay’s solicitor do not provide a compelling basis for an extension of time. It is true that the decision of the primary judge had been outstanding for many months, was on a substantive matter of significance and the period in which an appeal was required to be brought was short. However, the length of time taken to file the application for leave to appeal reflects a failure to pay proper heed to the timeframes set out in the Court Procedures Rules and, even if those timeframes could not be met, represents a failure to comply as nearly as possible with the timeframe set out. Having regard to my conclusion concerning the lack of merit in the proposed appeal and the lengthy delay in filing the appeal, it is appropriate to refuse an extension of time in which to bring the appeal.
Orders
The orders of the Court are:
1. The application for leave to appeal from an interlocutory judgment dated 7 October 2022 and filed 12 October 2022 is dismissed.
2. The applicant is to pay the respondent’s costs of the application.
| I certify that the preceding sixty-two [62] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date: 22 December 2022 |
3
9
5