Paule v McKay (No 2)
[2022] ACTSC 190
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Paule v McKay (No 2) |
Citation: | [2022] ACTSC 190 |
Hearing Date: | 31 August 2020, 28 October 2021 |
DecisionDate: | 27 July 2022 |
Before: | McWilliam AsJ |
Decision: | (1) Pursuant to s 21B of the Limitation Act 1985 (ACT) the limitation period for the plaintiff’s causes of action for defamation in respect of the publications included at Schedule A and Schedule B of the Amended Statement of Claim respectively is extended to 15 July 2019. (2) To the extent necessary to do so, the extension of the limitation period in order 1 is similarly extended pursuant to the following: (a) s 56A of the Limitation Act (NSW); (b) s 23B of the Limitation of Actions Act 1958 (Vic); (c) s 32A of the Limitation of Actions Act 1974 (Qld); (d) s 37(2) of the Limitation of Actions Act 1936 (SA); (e) s 20A(2) of the Defamation Act 2005 (Tas); (f) s 40(2) of the Limitation Act (WA). (3) The costs of the plaintiff’s application in proceedings filed on 10 June 2020 be paid by the defendant, with such costs to: (a) include the costs of the application to amend the originating application and statement of claim determined by Crowe AJ on 5 June 2020; and (b) not be recoverable until the conclusion of the proceeding. |
Catchwords: | LIMITATION OF ACTIONS — Defamation – application for extension of limitation period to commence action in defamation pursuant to s 21B of the Limitation Act 1985 (ACT) – whether it was not reasonable in the circumstances for applicant to have commenced action in defamation within one year of the publication complained of – where circumstances included the publication being produced in other court proceedings and the plaintiff was unable to get access to the publication or to obtain a release from the Harman undertaking – application granted |
Legislation Cited: | Limitation Act 1985 (ACT) ss 21B; 102 Civil Law (Wrongs) Amendment Act 2021 (ACT) sch 1(1.3) |
Cases Cited: | Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676 Barrett v TCN Channel Nine Pty Ltd [2017] NSWCA 304; 96 NSWLR 478 |
Parties: | Spiro Paule (Plaintiff) David McKay (Defendant) |
Representation: | Counsel Mr M Friedgut (Plaintiff) Mr M Karam (Defendant) |
| Solicitors Harmers Workplace Lawyers (Plaintiff) Just Dispute Resolution (Defendant) | |
File Number: | SC 11 of 2020 |
McWilliam AsJ:
The plaintiff in these proceedings, Mr Spiro Paule, is seeking leave to pursue defamation proceedings against the defendant, Mr David McKay. Mr Paule is the Managing Director and Chief Executive Officer of Findex Group Ltd (Findex). Mr McKay is a former employee of a subsidiary company, being Findex Services Pty Ltd (Findex Services). Mr Paule is also a director of Findex Services.
Leave of the Court is required because of a statutory limitation period. Section 21B of the Limitation Act 1985 (ACT) (Limitation Act) provides that such proceedings must be brought within 1 year of the publication of “the matter complained of”.
The publication said to give rise to the defamation action is contained in an email sent by Mr McKay on 15 July 2016 to two representatives of the Australian Securities and Investments Commission (ASIC email). The ASIC email was then included as part of an email chain when the defendant sent a further email to the two ASIC representatives on 24 August 2016 (email chain). The ASIC email and the email chain are attached to the plaintiff’s Amended Statement of Claim (Claim) as Schedule A and Schedule B, and collectively constitute “the matter complained of”.
The statutory limitation period expired on 15 July 2017. Mr Paule did not file the Statement of Claim (later amended) until 15 July 2019, exactly three years after the original publication of the ASIC email.
The present application
The present application was filed on 10 June 2020. It seeks an order that the Court grant leave to extend the time within which to commence the proceedings to 15 July 2019. The application was initially heard on 31 August 2020 but then the parties requested that the Court not deliver judgment while the issue was mediated as part of a number of disputes between the parties and related entities.
That mediation process itself became protracted for various reasons, many of which were related to Government responses to the Covid-19 pandemic.
Ultimately the parties returned to Court on 28 October 2021 and, after providing the Court with updated authorities, confirmed they now wished the Court to determine the application.
The legislative context for the Court’s power to grant leave
The material provision to be applied is s 21B of the Limitation Act (as it existed when publication of the matter complained of occurred ) which is in the following terms:
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.
Section 21B of the Limitation Act was introduced through uniform legislation, meaning that it mirrors the limitation periods prescribed for the bringing of actions in defamation in other Australian jurisdictions: see Limitation Act 1969 (NSW) s 14B; Limitation of Actions Act 1958 (VIC) s 5(1AAA); Limitation of Actions Act 1974 (QLD) s 10AA; Limitation of Actions Act 1936 (SA) s 37(1); Defamation Act 2005 (TAS) s 20A(1); Limitation Act 2005 (WA) s 15.
The uniformity extends to the matters relevant to the court’s consideration of whether to extend a limitation period and the lack of any overriding discretion to extend time in the equivalent legislation in other jurisdictions: see Limitation Act 1969 (NSW) s 56A; Limitation of Actions Act 1958 (VIC) s 23B; Limitation of Actions Act 1974 (QLD) s 32A; Limitation of Actions Act 1936 (SA) s 37(2); Defamation Act 2005 (TAS) s 20A(2); Limitation Act 2005 (WA) s 40(2).
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).
Before the national defamation reforms in 2005, most jurisdictions maintained a defence of limitation of actions of up to six years. The policy for reducing these time bars was explained in Barrett v TCN Channel Nine Pty Ltd [2017] NSWCA 304; 96 NSWLR 478 (Barrett) at [19] as being to “encourage plaintiffs to seek to vindicate their reputations at the earliest possible opportunity”: New South Wales, Parliamentary Debates, Legislative Assembly, 12 November 2002, 6560 (Tony Stewart, Parliamentary Secretary). McColl JA went on at [21] to specifically refer to what was said in relation to the introduction of the provision in the ACT, during the Second Reading speech by Mr J Stanhope, then Chief Minister of the ACT (footnote omitted):
Early correction, restoration of reputation and resolution of defamation disputes is in the interests of the parties and the public.
Given the uniform approach to the legislative provision in question (albeit not in identical terms), the Court must be particularly mindful of the jurisprudence in other jurisdictions to ensure a consistency of approach.
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.
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.
For the avoidance of any confusion, the Limitation Act has since been amended pursuant to the Civil Law (Wrongs) Amendment Act 2021 (ACT) (Amendment Act). As it now stands, s 21B continues to provide the one-year limitation period within which to commence defamation proceedings, however it no longer governs the extension of the limitation period. A separate provision now exists, namely s 21BB, which continues to allow for extension of up to 3 years from the date of the alleged publication. The test, however, has changed, in that the court must now be satisfied that it is “just and reasonable” to do so. This amendment is mirrored across the uniform law jurisdictions apart from in Western Australia which has kept the “not unreasonable” standard. The Limitation Act as it currently stands does not apply to these proceedings pursuant to the transitional provision at s 102 (inserted by sch 1(1.3) of the Amendment Act), which provides that s 21B (as amended) and s 21BB only apply in relation to the publication of a defamatory matter on or after the commencement day. The commencement day of the Amendment Act was 1 July 2021, well after publication of the matter complained of on 15 July and 24 August 2016. Any reference throughout the judgment to any provision of the Limitation Act is a reference to the Limitation Act as it existed prior to amendment in July 2021.
Applicable principles
The Court’s task under s 21B(2) is to determine whether “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”.
If that requirement is satisfied, the Court must extend the time (as observed in cases such as Noonan v MacLennan [2010] QCA 50; 2 Qd R 537 (Noonan) at [47]; Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676 at [28]; Carey v Australian Broadcasting Corporation [2010] NSWSC 709; 77 NSWLR 136 at [45]).
The task is thus not discretionary but evaluative, and dependent upon the facts of a particular case: Carey v Australian Broadcasting Corporation [2012] NSWCA 176 (Carey) at [61], confirming the reasoning of McCallum J, as her Honour then was, in Carey v Australian Broadcasting Corporation [2010] NSWSC 709; 77 NSWLR 136.
It has been distinguished from a consideration of whether the court is satisfied it was reasonable not to have commenced proceedings: see Carey at [55] per Beazley JA. Such a distinction in the language used has the consequence of posing a stringent test. It is a test that is difficult for a plaintiff to satisfy: at [50].
The circumstances in which it will not have been reasonable to commence proceedings within the period cannot be exhaustively defined. They are likely to be “relatively unusual”, “special” or “compelling”: Noonan at [51] per Keane JA. See also Barrett at [70]-[71] per McColl JA, where her Honour explained that in recognition of the strict time limit and the public interest in the timely commencement of actions for defamation, too ready an acceptance of circumstances that are said to have made it unreasonable to sue within the year would undermine that public interest, citing Noonan at [67] and Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175 (Pingel) at [42].
The applicable principles that have emerged from the authorities are as follows:
(a) The statutory tests respectively require the Court to determine whether on an objective basis the reasons why the plaintiff did not commence the suit within time point to the conclusion that it was not reasonable to commence the action: Pingel at [115].
(b) What is meant by “on an objective basis” is that the circumstances are as they appear objectively to the court and not the circumstances which the plaintiff believed, however unreasonably, to exist: Barrett at [70] citing Noonan at [20]. The focus must be on the individual circumstances of the case: Pingel at [42], and the plaintiff’s actual reasons are a vital part of the circumstances pertinent to whether it was reasonable or not to bring the proceedings within the nominated period: Carey v Australian Broadcasting Corporation [2010] NSWSC 709; 77 NSWLR 136 at [48].
(c) The burden of establishing that it was not reasonable to commence within the one-year period is on the plaintiff: Barrett at [70], citing Noonan at [15], although a plaintiff does not have to account for every day or week in a limitation year: Noonan at [49].
Once a plaintiff has established that it was not reasonable to commence proceedings, the Court has the power to extend the time up to a period of 3 years. In this case, the plaintiff requires the maximum extension that the Court has power to grant.
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 at [82] (per McColl JA, Simpson and Payne JJA agreeing).
In particular, the discretion is not constrained by the ‘not reasonable’ test: Barrett at [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.
The reasoning in Riske was expressly referred to as being consistent with the proper construction of the discretion in Barrett: at [118] (per Payne JA, Simpson JA agreeing).
In Joukhador v Network Ten Pty Ltd [2021] FCAFC 37; 283 FCR 1 (Joukhador) at [49] the Full Federal Court referred to Noonan as the leading authority on the construction of s 56A of the Limitation Act (NSW) and its analogues in all States and Territories except Western Australia and the Northern Territory, referring to that authority again at [58]:
58. …while the onus of proof on the claimant under s 56A(2) will only be discharged in relatively unusual circumstances, as Keane JA observed in Noonan [2010] 2 Qd R at 542 [15] and [17], there is no exhaustive list of the kinds of cases that will fall within the statutory criterion that the section prescribes.
The Full Federal Court in Joukhador also provided a helpful explanation of the Court’s task when evaluating “the circumstances”. The following passages are of significance for the circumstances under consideration here at [51]-[54] (emphasis added):
51. A consideration of “the circumstances” includes the objective situation of the claimant. The question of what is not reasonable in the circumstances requires the court to evaluate all of the objective circumstances as a whole, not piecemeal. In the end, that evaluation is a question of fact, but the assessment proceeds by reference to the claimant’s position and whether, objectively, it would not have been reasonable for him or her, in light of all of the circumstances, to commence the proceeding within one year of the publication complained of.
52.Where a person is facing a criminal charge, and the allegedly defamatory publication raises questions about his or her guilt or innocence that would be likely to cause any trial of, or interlocutory processes (such as discovery in the defamation claim) to be stayed, ordinarily, it will not be reasonable for him or her to commence civil proceedings of a kind that, realistically in the circumstances, could allow forensic examination of matters bearing on his or her guilt or innocence that could prejudice the claimant’s defence of the criminal proceeding: see eg. Commissioner of the Australian Federal Police v Zhao[2015] HCA 5; (2015) 255 CLR 46 at 58–60 [36]–[44] per French CJ, Hayne, Kiefel, Bell and Keane JJ, where an analogous situation arose; see too Gregg v Fairfax Media Publications Pty Ltd[2017] FCA 440 at [15]–[21] per Rares J.
53. The Limitation Act does not evince an intention that, at all costs, a claimant must commence a defamation action within one year of the publication. The interests of justice, usually, will not require that a claimant commence, or continue with, a defamation action that raises issues concurrent with a criminal prosecution against him or her while there is a real risk of prejudice to his or her defence of the unresolved criminal charge: cf. Zhao 255 CLR at 59–60 [39], [43]–[44].
54. Thus, importantly, s 14B of the Limitation Act evinces the legislative intention that a defamation action must be commenced within one year of the publication of the matter complained of, in the context of the co-existence of the power conferred on the Court to extend that period for up to three years if the statutory criteria in s 56A can be satisfied.
The Full Federal Court emphasised that the consideration involves weighing the totality of the objective circumstances at [59] (emphasis in original, underlining added):
59. The critical legislative consideration in that section is that the Court must be “satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced” (emphasis added) a defamation action during the one year limitation period. Thus, the question of what is “not reasonable in the circumstances” requires the court to weigh together all of the relevant circumstances that cohered to bring about the objective fact that the claimant did not sue within one year of the publication. The criterion in s 56A(2) requires the Court to consider “the circumstances” by weighing all of the evidence and “the weight which is to be given to the united force of all the circumstances put together”: Belhaven and Stenton Peerage (1875) 1 App Cas 278 at 279 per Lord Cairns LC, whose reasoning Gibbs CJ and Mason J applied in Chamberlain v The Queen [No 2] [1984] HCA 7; (1984) 153 CLR 521 at 535, in a passage that Gummow, Hayne and Crennan JJ cited with approval in R v Hillier[2007] HCA 13; (2007) 228 CLR 618 at 638 [48].
Such circumstances may include the institution of criminal proceedings, and their consequences, both practical and psychological, such as were taken into account in Joukhador or the existence of Harman undertakings in relation to the impugned publication throughout the year following publication: see Morrow v Cordell Jigsaw Productions Pty Ltd [2020] NSWSC 1736 (Morrow) at [56].
In Morrow, the circumstances before Harrison J included the involvement of the plaintiff and the defendants in separate proceedings described by his Honour as “a vigorous contest in the Equity Division”, in the NSW Supreme Court: at [54]. The plaintiff sought to raise a claim in defamation as part of those proceedings. The Court had determined that the defamation proceedings ought be brought separately and released the plaintiff from his obligations pursuant to the Harman undertaking (discussed below) in order for that to occur. When considering the application to extend time, Harrison J stated at [56]:
56.In my view, it was not reasonable for Mr Morrow to commence his defamation proceedings before there had been a resolution of the contested interlocutory issues in the Equity Division. The defendants emphasise that this occurred before the expiration of the one year limitation period. However, that seems to me to take a far too restrictive view of the relevant time limit. Even if that were not relevant, Mr Morrow was never released from the Harman obligations before the limitation period expired. As already noted, at all times before Mr Morrow was released by the Court from the Harman undertakings, the parties who produced the relevant publications expressly rejected his request to be released or at least reminded him somewhat pointedly of the existence of the undertaking. I agree that Mr Morrow’s cautious approach to the release from the Harman undertakings was prudent and appropriate, and that it would not have been reasonable for him to have acted or proceeded otherwise.
In addition to those examples, the parties have provided extensive written and oral submissions, taking the Court through a variety of different circumstances across the jurisdictions. In light of the arguments made by the parties below, it is convenient to mention briefly here a couple of authorities where the would-be plaintiff was involved in litigation before commencing defamation proceedings and then sought an extension of time.
In Bidstrup v Cullen [2013] SASC 136, it was held that it was not reasonable for the plaintiff to have commenced his action within one-year of publication when he had incomplete information which depended on the completion of other proceedings; namely, a coroner’s inquest. Anderson J stated at [48]:
48. The most important factor in my opinion is the point made by Mr Whitington, namely, that Mr Bidstrup had to wait on the Coroner’s findings to see if a finding was made that he was not properly credentialed and as to whether his actions had caused the death of Mrs Allan. It is the Coroner’s duty to determine a cause of death, and this decision was vital to the future conduct of any action. The Coroner made findings which were contrary to the alleged defamatory statements which gave Mr Bidstrup the green light to issue proceedings.
In Pro Teeth Whitening (Aust) Pty Ltd v Commonwealth [2014] QSC 107 (Pro Teeth Whitening) a plaintiff had successfully challenged, via judicial review, a decision to recall some of their produce. It subsequently sought to extend the limitation period to bring an action for defamation. In rejecting the plaintiff’s application, Mullins J stated:
19.…In lay terms, it might make sense to wait for the outcome of one court action, before starting the next. That approach does not, however, take into account the important policy considerations that underpin the limitation period that applies to the commencement of an action for defamation nor the purposes that may be served by different court actions. The purpose of the plaintiff’s judicial review action was to traverse the process of decision making undertaken by the second defendant which can be contrasted with the purpose of an action for defamation which is to seek damages under the DA for the publication of the alleged defamatory matter.
20. The plaintiff may have been distracted by waiting for the Federal Circuit Court to decide the judicial review application, but objectively that was not a reason not to start the action for defamation before the expiry of the limitation period. It was speculative on the plaintiff’s part, as to whether anything would emerge in the Federal Circuit Court’s decision that would assist the defamation action.
Whether it was ‘not reasonable’ for the plaintiff to commence proceedings before the time that he did
There is a precursor to the present dispute between Mr Paule and Mr McKay. Findex and Mr Paule (among others) have been in a vigorous contest with Mr McKay in the NSW Supreme Court. 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 the plaintiff 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).
A summary of the litigation has already been referred to in this Court by CroweAJ when his Honour was dealing with the application to amend the statement of claim in these proceedings: Paule v McKay [2020] ACTSC 145 at [1]. Crowe AJ quoted [3]-[21] and [27]-[29] from the reasons for judgment of Ward CJ in Eq (as her Honour then was) in Findex Group Ltd v iiNet Ltd [2019] NSWSC 1198 (Findex v iiNet), which contained a detailed procedural history of the litigation that proceeded before her Honour. I have included that same summary as a schedule at the end of these reasons (Schedule A) with emphasis added to the parts that are of more significance to the present application. Recalling the plaintiff’s burden of accounting broadly for the entire 1-year period and also for any period after that ‘up to’ the 3-year limit, Schedule A serves to give an overview in convenient form of what was occurring while the limitation period was ticking away. The parties also each argued extensively about the procedural history, in terms of its impact on the reasonableness or otherwise of Mr Paule commencing the present action at any time before he did, and Schedule A is the most convenient reference point for considering those arguments.
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.
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.
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.
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.
ASIC then intervened in the NSW proceeding in November 2016 and sought orders withholding some of the documents on public interest immunity grounds.
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.
Under that confidentiality regime, Mr Paule’s solicitors first obtained access to ASIC email and email chain on 6 February 2017.
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.
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.
The parties’ submissions as to the impact of the above litigation history
Mr Paule submitted that by reason of the above litigation history, he was not able to see, read or review the matter complained of, and was unaware of its existence or content or effect until 15 July 2019. Reliance was placed on Carey at [61] among other cases, where that precise circumstance was given as an example of where it would not be reasonable for a would-be litigant to commence proceedings within the time limit prescribed.
Mr McKay did not dispute that Mr Paule did not see the ASIC email (or the email chain) until September 2019 when Ward CJ in Eq made an order specifically permitting access to that document.
However, Mr McKay argued that the reason he did not see the document was because of a series of forensic missteps, so that when viewed objectively, the Court would not find that Mr Paule had discharged the onus of demonstrating that it was not reasonable for him to have commenced the defamation proceedings within one year of publication of the ASIC email.
Even if the Court were to find to the contrary, Mr McKay argued it would not be reasonable, in the prevailing circumstances, for the time to be extended to the date of filing on the last day prior to the expiry of the three-year limitation period.
As to his primary argument about procedural missteps, Mr McKay submitted that the explanation for failing to bring the claim within the statutory time limit was insufficient. He argued:
(a) Mr Paule and his legal representatives proceeded on the mistaken belief that they could gain access to the matter complained of by obtaining and executing a search order.
(b) Mr Paule and his legal representatives also mistakenly believed that it was a legitimate forensic position to delay bringing proceedings in time while they considered a complete set of causes of actions.
(c) Discovery was always available to Mr Paule and there was no reason why he could not have provided the NSW Supreme Court with a statement of claim at the time the search order application was heard on 16 September 2016 or at any later time.
Mr McKay submitted that, as at 16 September 2016, Mr Paule had in his possession all the evidence and information necessary to commence proceedings in relation to other publications of concern. He had engaged legal representatives and had indicated a genuine intent to commence proceedings in respect of other causes of action. The plaintiff ought to have commenced proceedings on those causes of action and then sought discovery, which (Mr McKay argued) would have resulted in the ASIC email and email chain being provided to Mr Paule well before the expiry of the 12-month period.
Mr McKay further argued that what prevented Mr Paule from obtaining inspection access to the ASIC email as part of the bundle of documents in the NSW proceedings was not any unreasonable or unwarranted objection on the part of Mr McKay. It was because the purpose of Mr Paule seeking inspection was to determine what further causes of action may be available to him prior to there being a statement of claim or a preliminary discovery order on foot.
Consideration
As will be explained, I am satisfied that it was not reasonable for Mr Paule to commence proceedings in respect of the ASIC email or email chain before 15 July 2019. 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.
Unlike circumstances such as Pro Teeth Whitening, Mr Paule did not make a deliberate strategic choice not to pursue separate defamation proceedings until the other proceedings had been resolved. I similarly reject that Mr Paule or his solicitors adopted any perceived ‘legitimate forensic position’ of allowing the one-year statutory limitation period to pass in respect of the ASIC email while pursuing other proceedings in the NSW Supreme Court. Mr Paule was at all times seeking to access a volume of documents, which included the ASIC email and email chain. The conclusion of the interlocutory dispute between Mr Paule and Mr McKay over access to the critical material was an essential step.
The impact of the potential claim made by ASIC for public interest immunity must also be acknowledged. It was resolved two weeks before the limitation period expired. Even though ASIC had indicated after it filed its motion that the ASIC email would not be among the documents over which public interest immunity was claimed, the documents were still subject to Mr McKay’s motion to prevent access, which had been deferred until after resolution of ASIC’s motion.
That is not to suggest that Mr McKay’s conduct in preventing Mr Paule from having access to the ASIC email and email chain was unreasonable, and it is to be accepted that Mr McKay’s reasons for withholding access were found by the NSW Court of Appeal to be lawfully based.
It is simply to take into account that the ongoing dispute had a consequence, that being an inability on the part of Mr Paule, for the entirety of the relevant one-year limitation period, to access the publication forming the basis of the cause of action in defamation which he now seeks to bring. That continued dispute leads to the inexorable conclusion that it was not reasonable for Mr Paule to commence proceedings by 15 July 2017.
Mr McKay has argued that there were other ways Mr Paule could have gone about gaining access to the document within the one-year period.
(a) He could have commenced separate preliminary discovery proceedings against Mr McKay.
(b) He could have filed a statement of claim in respect of the publications he knew about and then sought discovery in those proceedings.
(c) His solicitors could have made an application for release of the Harman undertaking and a variation to the confidentiality regime to the extent necessary to obtain instructions concerning the prosecution of defamation proceedings on the basis of the ASIC email.
For the purpose of considering those arguments, it is accepted (on the basis of the reasoning of Ward CJ and the NSW Court of Appeal) that Mr Paule proceeded on a mistaken belief that he could gain access to documents which included the ASIC email following the search and seizure orders. Having taken the first step of obtaining the ASIC email through such orders meant that the Harman undertaking was a fundamental hurdle to Mr Paule commencing proceedings regardless of what course was taken.
Importantly, the defamation proceedings about which Mr Paule foreshadowed an intention in September 2016 to commence were not based on the ASIC email. Mr Paule’s expressed intention was referable to other, specific, known, publications. The evidence as to what was put before the NSW Supreme Court in September 2016 establishes that Mr Paule knew that Mr McKay had published (under other names) a number of communications that were asserted to be defamatory. None of those publications pointed towards confidential communications to employees of ASIC in the nature of the ASIC email or email chain.
The only means by which Mr Paule’s solicitors had come to know about the ASIC email and email chain was through the compulsory process of the search and seizure orders. Having come to the plaintiff’s attention in that way, the Harman undertaking applied to those documents.
I accept that preliminary discovery could have been sought from Mr McKay (or presumably from ASIC) separately from the existing NSW proceeding already on foot, which could have produced the ASIC email and email chain.
The difficulty with the argument is that it overlooks that a release from the Harman undertaking would have been required even to make an application for preliminary discovery. That is because Mr Paule could not use the information (even through the knowledge of his solicitors only) for any purpose other than the proceedings by which the documents were obtained.
The same reasoning applies in respect of the second argument, namely that Mr Paule should have filed a statement of claim with respect to the publications of concern already in his possession and then seek an order for discovery. Given that the publications of concern in September 2016 were different publications, sent to different people with a different subject matter, I do not see how it can be argued that seeking discovery in defamation proceedings relating to those publications would have yielded access to the ASIC email or email chain, as the latter was not relevant to defamation proceedings in respect of the former. Mr Paule’s submission that discovery is limited to matters in issue in the proceedings has force.
There is also something to be said for Mr Paule’s further argument in response that, discovery in any hypothetical defamation action would only have taken place once pleadings were closed. It is entirely uncertain whether any discovery would have occurred within the one-year time frame.
However, the more significant point is that even if a statement of claim had been filed to enable discovery processes that were capable of identifying the ASIC email, a release from the Harman undertaking would likely still have been required in those proceedings before Mr Paule was able to use the ASIC email as a separate cause of action in defamation.
The third argument made by Mr McKay was effectively that a release from the Harman undertaking in respect of the ASIC email and email chain could have been made earlier. The interim orders that were made on 15 July 2019 could have been sought at any stage after 6 February 2017, when Mr Paule’s legal representatives first gained access to the ASIC email. In part, Mr McKay relied on what was said by Emmett AJA, in Findex CoA when dealing with the appeal from Ward CJ in Eq’s decision at [53]:
53.A possible course would have been for the solicitors for the Leave Applicants to seek leave to use the identified documents for the purpose of considering and formulating advice to be given to them as to whether they should prosecute either or both of the Other Proceedings. Having formulated that advice, it would then be necessary to seek leave of the Court and the variation of the confidentiality regime to the extent necessary to obtain instructions concerning the prosecution of such proceedings.
Mr McKay argued that given the solicitors applied to the NSW Supreme Court for release of the Harman undertaking at the very last opportunity before the 3-year limitation period expired, the same application could have been made before the 1-year limitation period expired.
Part of the submissions made by Mr McKay were directed to an argument that Mr Doucas (the risk employee for Findex) being nominated as the collective representative of the plaintiffs for the purpose of giving instructions in relation to the October motion in the NSW proceedings was a poor choice, which somehow had an impact on the reasonableness of Mr Paule commencing defamation proceedings. To the extent that the argument was somehow that either Mr Doucas’ awareness of the ASIC email had any relevance to the issue, or that a different person should have been chosen who was capable of giving instructions on a personal defamation action to be brought by Mr Paule, any submission of that kind is rejected. Mr Doucas was under the same express confidentiality undertaking and implied Harman undertaking as Mr Paule’s solicitors. The same may be said for any other person who might have been appointed in place of Mr Doucas.
What must be established in s 21B of the Limitation Act is that it was ‘not reasonable’ to commence proceedings, not that it was ‘not possible’ to commence proceedings. As McCallum J (again as her Honour then was) reasoned in Houda v State of New South Wales [2012] NSWSC 1036 at [14]:
14.…the plaintiff does not have to establish that the commencement of proceedings would have been positively unreasonable: only that it was not reasonable.
That is consistent with the Full Federal Court in Joukhador finding (recalling the emphasised words in the extract at [28] of these reasons above) that the equivalent limitation provision does not require that at all costs, a claimant must commence a defamation action within one year of the publication.
In circumstances where there was an existing order preventing Mr Paule’s solicitors from doing anything other than viewing the documents for the limited purpose of assisting the parties to ascertain the real areas of dispute in existing proceedings, it is not objectively reasonable to expect that without instructions to do so and within the five-month period between 6 February 2017 and 15 July 2017:
(a) The solicitors could have reviewed at least 2,500 documents (being the approximate volume to which they had been given access by February 2017) for the additional purpose of discerning whether any of those documents contained potentially defamatory material about which Mr Paule may wish to bring separate defamation proceedings; and
(b) Having done so, isolated the ASIC email and email chain from other documents also capable of establishing separate causes of action and applied to the Court separately to seek a release from the Harman undertaking in order to give an advice about further potential causes of action which could then be brought.
The passage extracted from Findex CoA (at [67] above) was directed to a possible alternative only, to advice about whether anticipated proceedings and existing proceedings should be prosecuted, rather than to advice about further potential categories of proceedings, and says nothing about the timeframe in which that could have occurred or whether a release from the Harman undertaking would have been granted. In both the October 2018 judgment at [123]-[124] and Findex v iiNet at [119], Ward CJ in Eq emphasised the purpose of the search order was to preserve evidence for use in anticipated proceedings, not to obtain evidence to facilitate discovery processes not otherwise authorised by the rules of court.
In any event, it is not for this Court to attempt to canvass the different ways in which the solicitors for Mr Paule acting in separate proceedings could have obtained access to the same documents that are now the subject of these proceedings. The simple fact remains that Mr Paule himself did not have awareness of the ASIC email and email chain or its contents, nor could he reasonably access those documents at a stage before the expiry of the limitation period, by virtue of what may clearly be described as relatively unusual circumstances. Taking together all of the relevant circumstances that cohered to bring about the objective fact that Mr Paule did not sue within one year of the publication, I am satisfied that it was not reasonable to commence proceedings during that time.
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.
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.
Conclusion and Orders
For the above reasons, it would have been unreasonable, in all of the circumstances, for the plaintiff to have commenced the present proceedings before the one-year limitation period expired, and it is appropriate to extend the time to the date when the plaintiff’s statement of claim was filed.
As to the question of costs, the plaintiff has been successful on the application. In Paule v McKay [2020] ACTSC 145, an application was made by the plaintiff for leave to amend the statement of claim. Crowe AJ granted leave, and in doing so stated at [73]:
73.The amendment issue is inextricably bound to the plaintiff’s application for an extension of the limitation period. Accordingly, I propose to reserve the question of costs to the judge who is to hear that application.
The intent of the reasons of Crowe AJ appears to be that the costs consequences for the amendment application would rise or fall with the outcome of this hearing. Accordingly, the costs to be awarded will include the plaintiff’s costs.
It follows from that conclusion that the following orders should be made:
(1) Pursuant to s 21B of the Limitation Act 1985 (ACT) the limitation period for the plaintiff’s causes of action for defamation for the publications detailed at Schedule A and Schedule B respectively be extended to 15 July 2019, being the date of the filing of the original Statement of Claim.
(2) To the extent necessary to do so, the extension of the limitation period in order 1 be similarly extended pursuant to the following:
(a) s 56A of the Limitation Act (NSW);
(b) s 23B of the Limitation of Actions Act 1958 (Vic);
(c) s 32A of the Limitation of Actions Act 1974 (Qld);
(d) s 37(2) of the Limitation of Actions Act 1936 (SA);
(e) s 20A(2) of the Defamation Act 2005 (Tas);
(f) s 40(2) of the Limitation Act (WA).
(3) The costs of the plaintiff’s application in proceedings filed on 10 June 2020 be paid by the defendant, with such costs to:
(b) include the costs of the application to amend the originating application and statement of claim determined by Crowe AJ on 5 June 2020; and
(c) not be recoverable until the conclusion of the proceeding.
SCHEDULE A: Extract from Findex Group Ltd v iiNet Ltd [2019] NSWSC 1198
[3]-[21]; [27]-[29] (emphasis added)
[3] The plaintiffs (Findex Group Ltd (Findex), its managing director, and two of its senior officers) commenced proceedings in this Court on an ex parte basis in September 2016 (2016/00271090) seeking preliminary discovery; in essence, to ascertain the identity of the publisher of various allegedly defamatory publications. The plaintiffs obtained orders for preliminary discovery from McDougall J on 13 September 2016, as a result of which they ascertained that, as they had suspected, it was Mr McKay who had anonymously published those matters (using a false name). Mr McKay is a former (and obviously, by reference to his communications the subject of the present application, disgruntled) employee of Findex.
[4] The plaintiffs then sought (and on 16 September 2016 obtained), again on an ex parte basis, search orders pursuant to which documents were seized from Mr McKay. Mr McKay objected to access being obtained by the plaintiffs to various of the documents that had been obtained under the search orders (both on the basis of confidentiality and, in respect of some of the seized documents, that they did not fall within the terms of the search orders); and filed a notice of motion on 31 October 2016 seeking relief in that regard.
[5] In relation to those documents in respect of which there was no objection by Mr McKay to production, the documents were provided to the plaintiffs’ solicitors in November 2016. In respect of the balance of the documents, orders were made by consent by Slattery J on 3 November 2016, restraining production or inspection of the documents until Mr McKay’s 31 October 2016 motion was determined or until further order of the Court.
[6] In late November 2016, the Australian Securities and Investments Commission (ASIC) sought and obtained leave to intervene in the proceedings in order to bring a public interest immunity application in relation to certain of the documents.
[7] On 16 December 2016, McDougall J made orders, by consent, in effect putting in place an agreed confidentiality regime, namely for the provision to the plaintiffs’ solicitors, on a confidential basis, of electronic copies of documents, other than those over which Mr McKay claimed litigation or client legal privilege, and those over which ASIC claimed public interest immunity (see Orders 3 and 4). This was for the stated purpose of “assisting the parties to ascertain the real areas of dispute”. McDougall J also ordered that, until further order of the Court, the documents provided pursuant to Order 3 were not to be provided or shown to any of the plaintiffs or any of their officers or employees (save for Mr Doucas – the Head of Risk Management at Findex; and, in Mr Doucas’ case, subject to an undertaking by Mr Doucas: not to provide or show them, or disclose their contents, to any of the plaintiffs or any of their officers or employees; to keep them confidential; and only to use them for the purposes of giving instructions in these proceedings, until otherwise ordered). The said documents were provided to the plaintiffs’ solicitors on about 21 December 2016. (Thus, the plaintiffs’ solicitors and Mr Doucas have been aware for quite some time of the contents of much of the material that had been seized pursuant to the search orders made in September 2016.)
[8] ASIC’s public interest immunity claim was heard on 28 April 2017. For the reasons published on 30 June 2017 (Findex Group Ltd v iiNet Ltd (Application by ASIC)[2017] NSWSC 853), I upheld the claim for public interest immunity in relation to a small number of documents and made directions to enable ASIC to review the proposed redaction of the documents that I considered would meet the competing concerns in relation to that material, before making any direction for access by the plaintiffs’ solicitors to the redacted material. I subsequently made orders on 11 August 2017, following further submissions by ASIC, (Findex Group Ltd v iiNet Ltd (Application by ASIC) (No 2)[2017] NSWSC 1048) for service on the plaintiffs’ legal representatives, within seven days, of redacted copies of the relevant documents (being any documents within Confidential Exhibit “A” not already served on the plaintiffs’ legal representatives), such redactions to be in accordance with the documents prepared by ASIC and provided to the Court on a confidential basis on 28 July 2017. Access to such documents was restricted in accordance with Order 4 of the orders made by McDougall J on 16 December 2016.
[9] In the period between 11 August 2017 and December 2017, the plaintiffs’ solicitors received instructions to commence acting as solicitors for the first to third plaintiffs in the present proceedings in other proceedings that were then already on foot in the Federal Court of Australia (VID1026/2016) (the Federal Court Proceedings).
[10] There was correspondence in that period between the respective sets of solicitors as to whether Mr McKay still wished to press his 31 October 2016 notice of motion. That correspondence culminated in the filing by the plaintiffs on 24 January 2018 of a notice of motion in the present proceedings (part of the relief there claimed being what is now before me for determination, albeit pursuant to the 4 July 2018 amended notice of motion), seeking: orders for the dismissal of Mr McKay’s 31 October 2016 motion (in effect, for want of prosecution); the setting aside of the restrictions on access and disclosure of documents obtained pursuant to the September 2016 search order (other than those portions of the documents held to be subject to public interest immunity); the discharge of the confidentiality undertakings given by Mr Doucas; leave to provide to and show the plaintiffs the said documents (i.e., those documents other than the few in respect of which the public interest immunity claim had been successful); and leave to use the said documents in other proceedings “including, but not limited to, Federal Court of Australia proceedings” (see prayers 1-7 of the relief sought in the plaintiffs’ 24 January 2018 notice of motion). In the alternative, directions were sought for submissions to be filed and for Mr McKay’s 31 October 2016 motion to be listed for further directions or hearing (i.e., to bring that application to a final determination); and for leave to be granted to the plaintiffs to use the documents obtained pursuant to the search order “over which no objection is taken” in other proceedings including but not limited to Federal Court Proceedings (see Orders 8-11 of the plaintiffs’ 24 January 2018 notice of motion).
[11] The Federal Court Proceedings in respect of which leave to use the documents was then principally sought were proceedings that had been commenced in the Victorian Registry of the Federal Court by a number of Findex entities against Mr McKay and an entity, Vandaman Pty Ltd (Vandaman), which is alleged to be the “corporate alter ego” of Mr McKay (see the amended statement of claim filed 9 February 2017 at [4(c)]). Claims were made in those proceedings as to breach of certain contractual arrangements relating to the purchase by Findex Australia Pty Ltd of shares in a company carrying on the business of the provision of financial services; as well as breach by Mr McKay of restraint of trade covenants, contractual and equitable obligations of confidence, and statutory obligations owed pursuant to ss 182 and 183 of the Corporations Act 2001 (Cth); and breach by Vandaman of a restraint term contained in a Shareholders Agreement entered into as part of the said share sale arrangements.
[12] The Federal Court Proceedings (which, as I understand it, have not yet been determined) did not include any claim for breach of the non-disparagement provisions of Mr McKay’s employment agreement (notwithstanding that at least some of the documents now relied on by the plaintiffs in relation to such a claim are said to be documents that were not ever suggested to be the subject of an implied Harman undertaking – see the debate in this regard at T 35/36).
[13] At the time that preliminary discovery was sought (and also at the time, shortly thereafter, that the search orders were sought), the commencement of proceedings in defamation was foreshadowed by the plaintiffs, as well as the making of claims for misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law as contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) (the latter relating to, or at least by reference to, the potential damage that it was perceived might be occasioned to an acquisition in which Findex was involved at the time – the Moore Stephens acquisition). (No such proceedings were commenced until March 2019 and even then there was no claim made in defamation nor any claim in relation to any damage sustained in relation to the Moore Stephens acquisition.)
[14] On 19 February 2018, Mr McKay filed a notice of motion seeking orders in effect for the dismissal of the present proceedings and all outstanding applications (failing the filing by the plaintiffs of a statement of claim within 28 days); for the discharge of the search order made by Rein J (Order 6 of the orders made on 16 September 2016); for the return of all copies of electronic and hard copy documents obtained pursuant to the search order; and for leave to file and serve an application in respect of costs of the proceedings and damages pursuant to the plaintiffs’ undertaking as to damages regarding the search order. Alternatively, directions were sought for the disposition of the balance of Mr McKay’s 31 October 2016 motion.
[15] An amended notice of motion was subsequently filed by Mr McKay, relevantly seeking an order pursuant to rr 13.4(1)(b) and/or (c) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and/or the inherent jurisdiction of the Court that the proceedings be dismissed (together with the balance of the relief that had been claimed in his original notice of motion; though the order sought for the dismissal of the proceedings if a statement of claim were not filed within 28 days was now put in the alternative to the new relief claimed).
[16] The respective notices of motions were listed before me on 24 April 2018 but the hearing of those motions could not be completed in the half day then available. I directed that the plaintiffs file an amended notice of motion and affidavit identifying those documents that were produced in answer to the search orders in respect of which a variation of the confidentiality orders made by McDougall J on 16 December 2016 was sought by the plaintiffs; and identifying why it was that access to those documents was sought by the plaintiffs. The respective motions were then stood over, part-heard, to 6 September 2018, in large part to accommodate the time the plaintiffs indicated was required to prepare that affidavit evidence but also having regard to the Court’s other commitments.
[17] On 6 June 2018 and again on 27 June 2018, I made orders (on the plaintiffs’ application on each occasion) varying the confidentiality orders made by McDougall J on 16 December 2016.
[18] On 6 September 2018, the hearing of the part-heard motions resumed. By that stage, the plaintiffs moved on an amended notice of motion (the amended notice of motion filed 4 July 2018). That amended motion substituted, for the relief previously sought at prayers 3-7 of the original notice of motion, an application (prayer 2A) for any one of four different sets of orders in relation to the variation and/or discharge of the restrictions on access and disclosure of “Identified Undisputed Documents” as defined; for leave to use the Identified Undisputed Documents in the Federal Court Proceedings or alternatively in anticipated proceedings in this Court or the Federal Court against Mr McKay and Vandaman (the company referred to in the Federal Court Proceedings as his corporate “alter ego”); and other relief in relation to the use of the “Identified Undisputed Documents” and/or release from confidentiality undertakings or the like. The alternative relief claimed (at prayers 8-10) in contemplation of a hearing of Mr McKay’s 31 October 2016 motion remained the same as before.
[19] At the resumed hearing on 6 September 2018, further affidavit evidence was read by the respective parties. I was informed that an issue that had previously been foreshadowed (as to whether Senior Counsel for the plaintiffs, Mr Neil SC, should be permitted access to the documents in question, due to the possibility of inadvertent breach of the confidentiality orders) ultimately did not arise because Mr Neil had not looked at any of the documents in these proceedings until after he had settled the then proposed amended pleading in the Federal Court Proceedings (see T 5.17); that there was agreement between the parties that the documents conceded to be irrelevant could be returned; and that the issue as to the release of the Harman undertaking did not at that stage arise as the plaintiffs were not pressing for leave to use any of the documents for other proceedings (it being agreed, I was told, that that issue be “postponed”) (see T 5.35-38).
[20] All that was then left in issue, relevantly, was the question as to whether the plaintiffs should be permitted to have access to the documents that had been obtained on execution of the search order made in September 2016 (other than the admittedly irrelevant documents and those in respect of which privilege or public interest immunity had been found to exist); or whether there should be no access allowed and the documents returned to Mr McKay.
[21] For the reasons set out in my decision published on 19 October 2018 (Findex Group Ltd v iiNet Ltd [2018] NSWSC 1567 (the 2018 October judgment)), I concluded that access by the plaintiffs to the documents should not be granted but 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 (i.e., for release of the Harman undertaking).
…
[27] On 1 March 2019, fresh proceedings were commenced in this Court by Findex and other plaintiffs against Mr McKay, seeking orders restraining Mr McKay from publishing misleading or deceptive statements of or concerning the plaintiffs and from breaching his employment contract with his former employer by disparaging or otherwise making statements calculated to, or reasonably likely to, damage the plaintiffs’ reputation (as well as damages or compensation pursuant to various statutory provisions and damages at common law for breach of his employment contract). On the application of Mr McKay, these proceedings (to which I will refer as the Cross-Vested Proceedings) were cross-vested to the ACT Supreme Court, by order of Robb J made on 20 June 2019 (with the plaintiffs’ consent).
[28] I heard the plaintiffs’ revived notice of motion (seeking release, if that be necessary, from the Harman undertaking) on 24 June 2019. (By then, only the relief sought in prayer 2B(b) was sought; prayers 2B(a) and 2C now no longer being pressed.) I reserved judgment on the application. At the time, I did not apprehend there to be particular urgency in the application (not least, having regard to the time it had taken for the application to be revived, as indicated in the course of argument – see T 43.19), although I accept that reference had been made earlier in the course of oral submissions to the prospect of expiry of a limitation period in relation to one of the allegedly defamatory publications on 15 July 2019.
[29] 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 undertaking was applicable), in order to avoid the potential prejudice that it was perceived might arise if the time period for the commencement of proceedings in defamation were to expire (on 15 July 2019 on at least some of the publications) before judgment was handed down on the Harman undertaking release application. Orders were subsequently made (without opposition by Mr McKay) on 15 July 2019 to preserve the position in that regard. Those are separate proceedings to the Cross-Vested Proceedings and have been stayed pending the outcome of the present application (I refer to these latest proceedings as the Defamation Proceedings).
| I certify that the preceding eighty [80] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam Associate: Date: |
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