Pflug v Cooke
[2016] WADC 128
•25 AUGUST 2016
PFLUG -v- COOKE [2016] WADC 128
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WADC 128 | |
| Case No: | CIV:2551/2014 | 9 MARCH 2016 | |
| Coram: | STAUDE DCJ | 25/08/16 | |
| PERTH | |||
| 24 | Judgment Part: | 1 of 1 | |
| Result: | Appeals allowed Orders for security for costs made in each action | ||
| PDF Version |
| Parties: | TARA ANN PFLUG CASSANDRA LEE COOKE VICTORIA MARSHALL TREVOR MARSHALL SNR |
Catchwords: | Appeal Appeal from deputy registrar's decision refusing application for security for costs Defamation Factors affecting exercise of discretion Turns on own facts Costs Security for costs Defamation Factors affecting exercise of discretion Turns on own facts Defamation Security for costs Appeal from deputy registrar's decision refusing application for security for costs Factors affecting exercise of discretion |
Legislation: | Defamation Act 2005 District Court Rules 2005 Rules of the Supreme Court 1971 |
Case References: | Bond v Trustee of the Property of Alan Bond, a bankrupt [1994] FCA 882 Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 Cooke v Pflug [2015] FCWAM 3 Dow Jones v Gutnick [2002] HCA 56; 210 CLR 575 Idoport Pty Limited & Anor v National Australia Bank [2001] NSWSC 744 King v Commercial Bank of Australia Ltd (1920) 28 CLR 281 KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 Moran v Schwartz Publishing Pty Ltd [No 2] [2015] WASC 35 PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 Sims v Jooste [No 2] [2014] WASC 373 Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114 Webuildem v Arab Bank Australia Ltd [2014] NSWSC 1058 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
CASSANDRA LEE COOKE
Defendant
- Plaintiff
AND
VICTORIA MARSHALL
First defendant
TREVOR MARSHALL SNR
Second defendant
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : DEPUTY REGISTRAR HARMAN
Citation : 2551 of 2014 and 2592 of 2015
Catchwords:
Appeal - Appeal from deputy registrar's decision refusing application for security for costs - Defamation - Factors affecting exercise of discretion - Turns on own facts
Costs - Security for costs - Defamation - Factors affecting exercise of discretion - Turns on own facts
Defamation - Security for costs - Appeal from deputy registrar's decision refusing application for security for costs - Factors affecting exercise of discretion
Legislation:
Defamation Act 2005
District Court Rules 2005
Rules of the Supreme Court 1971
Result:
Appeals allowed
Orders for security for costs made in each action
Representation:
CIV 2551 of 2014
Counsel:
Plaintiff : Mr B Goldsmith on 9 March & 5 May 2016
: In person on 25 August 2016
Defendant : Mr J Kitto
Solicitors:
Plaintiff : Goldsmiths Lawyers
: Not applicable
Defendant : Kitto & Kitto
CIV 2592 of 2014
Counsel:
Plaintiff : Mr B Goldsmith
: In person on 25 August 2016
First defendant : Mr J Kitto
Second defendant : Mr J Kitto
Solicitors:
Plaintiff : Goldsmiths Lawyers
: Not applicable
First defendant : Kitto & Kitto
Second defendant : Kitto & Kitto
Case(s) referred to in judgment(s):
Bond v Trustee of the Property of Alan Bond, a bankrupt [1994] FCA 882
Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176
Cooke v Pflug [2015] FCWAM 3
Dow Jones v Gutnick [2002] HCA 56; 210 CLR 575
Idoport Pty Limited & Anor v National Australia Bank [2001] NSWSC 744
King v Commercial Bank of Australia Ltd (1920) 28 CLR 281
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Moran v Schwartz Publishing Pty Ltd [No 2] [2015] WASC 35
PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321
Sims v Jooste [No 2] [2014] WASC 373
Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114
Webuildem v Arab Bank Australia Ltd [2014] NSWSC 1058
- STAUDE DCJ:
Introduction
1 These appeals are from the decisions of Deputy Registrar Harman refusing the defendants' respective applications for an order for security for costs. The appeals come before the court as a hearing de novo of the defendants' applications. They were heard together.
2 After setting out in summary form the applicable principles, I will deal firstly with the appeal in the action between the plaintiff and Cassandra Ann Cooke (the Cooke action), and, secondly, with the appeal in the other action against Ms Cooke's parents, Victoria and Trevor Marshall (the Marshall action).
Principles
3 The discretion to order security for costs is broad and unfettered and will depend upon an examination of all of the relevant circumstances of the case. These circumstances cannot be stated exhaustively as they vary from case to case: PS Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321, 325. The court must exercise its discretion judicially: King v Commercial Bank of Australia Ltd (1920) 28 CLR 281, 292.
4 It is a long-established principle at common law, reflected in O 25 r 1, of the Rules of the Supreme Court 1971 (RSC) that poverty is no bar to a litigant, but it is a factor to be considered: Moran v Schwartz Publishing Pty Ltd [2015] WASC 35.
5 The other main considerations bearing on the exercise of the court's discretion were enumerated by Beasley J in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, 197 – 8.
6 Delay may be a significant discretionary consideration, particularly where the delay may have led to the plaintiff acting to his or her detriment: Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114, 123. An order for security of costs after the plaintiff has incurred significant costs in bringing the action may be oppressive: Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 [21] - [23 [29]. As Newnes JA (Murphy JA) observed:
[A] party which unreasonably delays in making an application for security for costs cannot ordinarily expect to obtain security for costs which it has incurred during the period of the delay. Nor can it ordinarily expect to obtain security for costs in relation to interlocutory steps which it was ordered to complete before the application was made but which, by reason of the applicant's default, have not been completed. In such circumstances, it would be unjust to require a plaintiff to provide security for costs which the defendant had incurred before it finally bestirred itself to take steps to seek security for costs: see Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd at 125; Darelvale Holdings Australia Pty Ltd v Waterjet Designs Pty Ltd [2003] FCA 863 [15]; Felsink Pty Ltd v City of Marribynong (2007) VSC 49 [25].
7 In that decision a Court of Appeal held that security for costs should be ordered with respect to future costs, but not the costs incurred prior to the application.
The action against Ms Cooke
8 In this part I refer to Ms Cooke as the defendant.
9 In support of the application there is an affidavit by the defendant made 1 September 2015 and an affidavit by the plaintiff sworn 25 September 2015. Before the registrar there were also the defendant's outline of submissions dated 9 October 2015 and the plaintiff's written submissions dated 23 October 2015.
10 In response to the appeal the plaintiff has given notice of a cross-appeal with respect to the deputy registrar's decision not to order that the plaintiff's costs of the application be paid forthwith. The plaintiff has filed a chamber summons for an extension of time to file its notice of intention to be heard with respect to the appeal and to file a notice of cross-appeal. This application is supported by an affidavit by Mr Goldsmith sworn 28 January 2016. There is no prejudice occasioned by the delay and no reason why the orders sought should not be made.
11 For the purpose of the appeal the defendant filed a further affidavit sworn on 24 February 2016. The parties have also lodged outlines of submissions in respect of the appeal. As the appeal is a fresh hearing of the application, I will refer to the matter as the application.
The history of the action
12 To understand and appreciate the context of the defendant's application it is necessary to chart the course of the action to this point. It is also relevant to do so because, as noted earlier, delay may militate against the exercise of the court's discretion.
13 This action arises from an event which followed the breakdown of the parties' relationship in 2012. The plaintiff is a US citizen. The parties were married pursuant to the laws of Connecticut (USA) in February 2009 and lived together in Western Australia from April that year in the defendant's home in Como.
14 A daughter was born in April 2012. She was conceived in vitro using an ovum of the defendant and was carried by the plaintiff. By operation of the Artificial Conception Act 1985, both the plaintiff and the defendant are parents of the child.
15 Following the birth, relationship difficulties developed, resulting in Family Court of Western Australia proceedings in relation to parenting arrangements. A consent order was entered in the Family Court of Western Australia (PTW 6874/2012) on 31 January 2013 granting the plaintiff access to the child Monday to Thursday each week from 12.00 pm to 6.00 pm. It is not in dispute that since the parties' separation the defendant has been their daughter's primary carer.
16 On 29 November 2013 the plaintiff took the child and all her belongings from the defendant's home where she was in the care of an au pair. She did so unilaterally without reference to the defendant. In subsequent Family Court proceedings tried before Sutherland M (Cooke v Pflug [2015] FCWAM 3, [10]) the plaintiff acknowledged that the defendant attempted to contact her several times on 29 and 30 November, but she declined to respond and did not disclose the child's whereabouts (plaintiff's affidavit sworn 31 March 2014 in PTW6874/201, being annexure CLC7 to the affidavit of the defendant sworn 1 September 2015).
17 On 30 November 2013 the defendant made an urgent ex parte oral application for a recovery order which was granted. Pursuant to that order the child was recovered and returned to the defendant's care later the same day.
18 In this action the plaintiff alleges that she was defamed by the defendant in a number of Facebook posts made by her on 29 and 30 November 2013 and in a Qantas crew website publication that also related to the plaintiff's removal of the child from the defendant's home on 29 November 2013.
19 The action was commenced by way of an indorsed writ of summons filed 11 August 2014. A statement of claim was also filed that day alleging nine instances of defamation on Facebook and one by publication on the Qantas cabin crew website. The statement of claim annexed, as schedules, screenshots of the Facebook posts complained of.
20 In summary, the Facebook posts complained of in the statement of claim as defamatory were as follows:
1. 29 November 2013 at 9.36 pm: 'Please share to find my daughter Ashley is 9 months old last seen at garden city perth with Tara Ann Pflug she was kidnapped by Tara my estranged ex-partner'.
2. Saturday, 30 November 2013 at 6.24 am: 'Lucie my French AP who is also crying as she was shopping with Ashley when Tara snatched her'.
3. Saturday, 30 November 2013 at 11.22 am: 'Ashley is still missing Tara on the run with her'.
4. Saturday, 30 November 2013 at 7.29 am: 'Tara is on the run with Ashley [telephone numbers] are her last contact details no job no fixed address Ashley has seen Tara three times in the last 12 months … She is a drug addict and alcoholic don't approach pls contact me [telephone numbers] any sightings or 000 thank u'.
5. Saturday, 30 November 2013 at 7.31 am: 'I just want my baby back safe … Tara has American nurse from RPH helping/hiding her and Ashley her name is Tammy'.
6. Saturday, 30 November 2013 at 5.19 pm: 'Tara is trying to get Ashley out of the country to the USA with American travel documents pls help AFP circulating her pic now also'.
7. Saturday, 30 November 2013 at 5.39 pm: 'French AP was Xmas shopping with her when Tara snatched her'.
8. Saturday, 30 November 2013 at 5.55 pm: 'no idea Rosie and yes was well planned and executed' and (at 5.56 pm) 'no idea waiting for cops to do errr anything arghhh'.
9. Saturday, 30 November 2013 (time not specified): 'Some people are concerned that media coverage might affect court … I can tell u can get an order of recovery of ur child but without people power u can't recover ur child without knowing where they are cos in my case my ex had just returned from the USA and had no job no address no friends and no fingerprint so when cops found her the first time using mobile phone all she did was do a runner and turn it off and hence off the grid so thank you and I am forever grateful for the power of Facebook and people in the community stepping up to have my child returned home safely THANK YOU Caz n Ash'.
21 The defamation published on the Qantas cabin crew website was not particularised, but alleged to carry an imputation that the plaintiff had abducted the defendant's child.
22 The statement of claim pleaded that the Facebook posts were defamatory on the grounds that they carried the imputations that the plaintiff had abducted the defendant's child and seeking to avoid the authorities, that the plaintiff was a drug addict and alcoholic, that the plaintiff was dangerous such that it was not safe to approach her, that the plaintiff was hiding the defendant's child from her, that the plaintiff was trying to flee Australia and the plaintiff had committed a criminal offence so as to warrant the intervention of the Australian Federal Police. The last post (number 9) was said also to carry the imputations that the plaintiff was a vagrant, had entered Australia illegally, had a criminal background and was evading the police.
23 In response, the defendant acting in person, filed on 3 November 2014 a defence which attached 21 evidentiary documents.
24 In her defence the defendant pleaded that the timeframe of the Facebook posts was 9.36 pm on 29 November 2013 to 10.30 pm on 30 November 2013. She alleged that there were no Facebook posts thereafter, that her Facebook page had privacy settings that allowed only her 'friends' to read the posts and that they were made in order to locate and protect her daughter. She stated that the statements made in the Facebook posts were truthful opinions.
25 The defendant denied publishing any information on the Qantas cabin crew website as alleged by the plaintiff.
26 The defence went on to plead a counterclaim for damages for the distress caused by the plaintiff's actions in relation to the child. The defendant also pleaded that she was willing to make a without prejudice apology to the plaintiff on the basis that the Facebook posts complained of were made by her whilst under 'incredible duress' due to the removal of her daughter.
27 In response to the defence, the plaintiff served a request for further and better particulars, requesting the defendant to identify those 'friends' who were allowed to read the posts and to specify the occasion on which the plaintiff allegedly admitted in court that she had disappeared with the child, that the defendant had no way of knowing where she was and no way of contacting her and that the plaintiff had no intention to return the child.
28 A chamber summons for such particulars was filed on 1 December 2014 and heard on 23 December 2014. Leave was granted to the plaintiff to amend the request and the defendant was ordered to provide further and better particulars of pars 6 and 13 of the defence. Discovery was also ordered to be exchanged. A listing conference was appointed on 2 February 2015.
29 By letter dated 20 January 2015 the defendant provided particulars in the following terms:
• The Facebook account of myself Cassandra Cooke was deactivated over 12 months ago.
• My personal recollection of known friends at this time were Rose Bang, Vikki Aldridge, Belinda Montie, Victoria Lange, Monique Archer, Mary-Ann Mort, Kelly Smith, Susan Childs and Hayley Dennis.
• I am unable retrieve any other information in relation to this Facebook account.
30 On that occasion orders were made permitting the plaintiff to file and serve an amended statement of claim, directing the defendant to file and serve an amended defence and the parties to exchange discovery on affidavit and adjourning the listing conference to a directions hearing on 16 March 2015, the time in which the action was to be entered for trial to be extended to 30 April 2015. It was also ordered that any application to strike out the statement of claim be filed and served on or before 27 February 2015.
31 An amended statement of claim was filed on 9 February 2015. The only substantial amendment was to add a claim for aggravated damages.
32 The defendant lodged a chamber summons for summary judgment pursuant to O 16 r 1 on 26 February 2015 on the grounds that the action was frivolous and vexatious and that the defendant had a good defence on the merits.
33 The defendant then filed an amended defence dated 2 March 2015, a document of 70 pages. This document did not conform to the rules of pleading: it was in fact a compendious statement of the defence case, containing submissions and references to evidence.
34 The plaintiff then applied by chamber summons dated 9 March 2015 for an order striking out parts of the amended defence and an order for further and better particulars of other parts of the amended defence. The request for particulars related to the plaintiff's pleading that the words used by her were true.
35 On 12 May 2015 the defendant's application for summary judgment was dismissed and the plaintiff's application to strike out the defence allowed. The time for entry for trial was extended to 12 August 2015. The matter was removed from the inactive list. The defendant was ordered to pay the costs in any event.
36 The defendant then appointed her current solicitors to act on her behalf. A substituted defence and counterclaim was filed on 30 June 2015.
37 The substituted defence in essence pleaded that the Facebook posts complained of could only be read by the few persons who were 'friends' of the defendant, that the posts were substantially true, in the alternative that they were contextually true, such that the plaintiff was not further harmed by them, and in the further alternative, that they were made in circumstances of qualified privilege at common law or pursuant to s 70 of the Defamation Act. The alleged defamation on the Qantas cabin crew website was denied. A counterclaim was pleaded for damages for trespass and conversion.
38 The plaintiff then filed a further amended statement of claim on 16 July 2015 expanding upon her initial allegations. This pleading detailed 12 defamatory Facebook posts, as well as the alleged publication on the Qantas cabin crew website and a publication on the Perth WA Crime Reports website by which the defendant requested help in finding her daughter who she said had been abducted by the plaintiff. In the alternative, with respect to the Qantas cabin crew website publication, the plaintiff pleaded that the alleged defamation was re-published by another on that website as a natural and probable consequence of the defendant's first Facebook post which requested that it be shared. Similarly, it was alleged that the Perth WA Crime Reports post was a re-publication by another as a natural and probable consequence of the defendant's Facebook posts.
39 The further amended statement of claim does not alter the substance of the claim. That no responsive amendments have been made to the defence is of no significance for present purposes.
40 On 31 July 2015 the plaintiff's solicitors filed particulars of damage claiming general compensatory damages and aggravated damages. The sums claimed are not meaningful.
41 On 10 August 2015 the plaintiff's solicitors purported to enter the matter for trial, notwithstanding that discovery had not been given as previously ordered. Why the matter was entered when it was not ready for trial is not apparent. The proper course would have been to apply to extend the entry for trial milestone.
42 On 11 August 2015 the defendant's solicitors provided further and better particulars of the substituted defence. In those particulars the defendant pleaded that she did not know which of her Facebook 'friends' could have read the Facebook posts and could not identify which of them did so, and gave the same names of her Facebook friends as she had previously.
43 A pre-trial conference was appointed on 10 September 2015. Regrettably, the action was not settled. The conference was adjourned sine die and directions were made, inter alia, that any application for security for costs be filed and served by 11 September 2015.
44 The application for security for costs was filed on 10 September 2015 and heard on 10 November 2015. The application was dismissed. This appeal ensued.
45 This history reveals what is thus far an unduly protracted and, no doubt, very expensive litigation process over statements made by the defendant in the course of an incident which was subsequently the subject of Family Court of Western Australia findings in the decision to which I have referred.
Grounds of application
46 The application as made on appeal is based on narrower grounds than those advanced at first instance. The defendant does not rely on any of the factors set out in O 25 r 2 (which are non-exhaustive), but grounds the application on the first two O 25 r 3 considerations, namely, the prima facie merits of the claim and whether the plaintiff has property in the jurisdiction that may be available to satisfy an order for costs. The defendant contends that the plaintiff's claims lack merit and that there is a good defence to them and that the plaintiff is unlikely to have assets available in Western Australia capable of satisfying a costs order.
47 Dealing with the merits, the defendant argues that publication of the posts cannot be proved beyond the class of a few Facebook 'friends'; that the plaintiff cannot prove that the posts were capable of being read by persons 'throughout Australia and the world, as yet unknown to the plaintiff' as pleaded, pointing to Dow Jones v Gutnick [2002] HCA 56; 210 CLR 575 and Sims v Jooste[No 2] [2014] WASC 373.
48 The defendant then argues justification. Clearly, some of the posts carried the serious imputation that the plaintiff abducted the child, i.e. carried her off unlawfully. Whether the plaintiff's admitted act of taking the child from the care of the defendant's au pair was unlawful is an issue to be tried. The defendant contends that the plaintiff was in breach of the consent order of 31 January 2013 granting the plaintiff access to the child Monday to Thursday each week from 12.00 pm to 6.00 pm. The plaintiff disputes that this order was in effect at the material time.
49 The defendant submits that the posts in question, if not substantially true, could not do any more harm to the plaintiff's reputation than the proven circumstances of her taking the child and her belongings from the defendant's home and not disclosing her whereabouts. Nor in that context, it is contended, could she be further harmed in her reputation by the statements that she is an alcoholic, a drug addict and a vagrant.
50 Contextual truth emerges as a more potent defence than substantial truth, given that by the plaintiff's actions the defendant was put to obtaining a urgent Family Court injunction and police assistance in recovering the child. Section 26 of the Defamation Act 2005 provides:
It is a defence to the publication of defamatory matter if the defendant proves that —
(a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true; and
(b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.
51 The defendant's submissions do not develop the defence of qualified privilege as pleaded in the substituted defence in terms that the defendant's Facebook 'friends' were close friends and relatives who had an interest in the child's welfare and in assisting the police to locate her. It would seem to be apposite, particularly to those posts which followed that making of the recovery order.
52 From the undisputed facts and the submissions made by the defendant, it would seem that even if the plaintiff is successful in proving that the Facebook posts or any of them were defamatory, she cannot prove the extent to which the defamatory matter was published and, as a consequence, the extent of any harm. Quantum is, in my opinion, a relevant consideration. It was explored in the hearing of the appeal. Mr Goldsmith was given the opportunity to explain how the plaintiff proposed to prove harm to her reputation by the posts complained of. He indicated only one potential witness to whom any of the publications were made. He could not show that the plaintiff could prove any publication to persons beyond the group of 'friends' indicated by the defendant.
53 The court is required to take a broad view of the merits for the purpose of the application. Against the undisputed factual background it is my view that if the claims or any of them succeeded, damages would be modest, if not nominal. The costs to date, and to be incurred, should the matter progress to trial, will far exceed any damages the plaintiff may hope to prove.
54 Furthermore, it may be observed that if the plaintiff is seeking vindication, it is hardly likely to won by the ventilation of the circumstances of her removal of the child on 29 November 2013, which have already been fully ventilated in the Family Court of Western Australia. The plaintiff has made substantial admissions as to what occurred. Findings have been made that are, quite probably, final (although I express no concluded view on that point as issue estoppel was not fully argued in the appeal).
55 It is clear, then, that what is at stake in this action is not damages, but costs.
56 With respect to the plaintiff's capacity to pay the defendant's costs if the action fails, being the second ground of the application, it is observed by the defendant that the plaintiff has failed to provide any information as to her means of funding the action or of meeting an award of costs.
57 The plaintiff argues that she bears no onus as it is for the defendant to prove the facts on which she relies to ground her application.
58 The plaintiff has deposed in the Family Court proceedings to having a full-time job with an advertising company from which she earns $50,000 per annum and that she shares a house with her present partner. There is no evidence as to what assets or other financial resources the plaintiff may have.
59 In response to this application, the plaintiff has purposefully (in a forensic sense) declined to provide any evidence as to such assets and resources, or as to her means of funding the litigation to date. The defendant submits that the plaintiff should not be advantaged in her position in relation to the application by standing mute, as it were, in relation to her financial circumstances.
60 In support of her position in relation to the failure of the plaintiff to disclose her financial resources, the defendant refers to Moran v SchwartzPublishing Pty Ltd[No 2] wherein Kenneth Martin J held [66]:
As to evidence regarding the likelihood of such financial support being available, a court is entitled to be bold, when a party fails to give evidence on matters of which it clearly has knowledge: The Insurance Commissioner v Joyce [1948] HCA 17; (1948) 77 CLR 39 [49] (Rich J). However, a court should not speculate and should only draw an adverse inference if a factual substratum exists supporting that conclusion; Montfroy v Rhodes Corporation (2005) VSC 320 [91]; The Owners of Strata Plan 62930 v Kell& RigbyHoldings Pty Ltd (2010) NSWSC 610 [182]. Thus if a plaintiff claims the benefit of personal impecuniosity (as a shield, in effect, against the making of an order for security) but clearly does receive considerable third party financial support to prosecute an action, a court may appropriately consider whether an adequate disclosure of the financial circumstances of the plaintiff has been made, including as to the nature, extent and continuity of third party financial support, plus what other evidence exists in relation to this issue.
61 The defendant contends that the factual substratum which affords grounds for the application is that the plaintiff has a full-time job with a salary of $50,000 per annum, lives with her partner, presumably on a shared expense basis, and has funded the litigation to date or been supported in that regard.
62 The defendant deposes (affidavit sworn 1 September 2015) to having been in a relationship with the plaintiff from 2008 to 2013 and to have supported her financially in Australia from April 2009 to July 2013. She deposes to the plaintiff's debts as known to her, and also to correspondence between her solicitor and the plaintiff's, by way of conferral, in which no response was made to a request that the plaintiff disclose her assets in Australia. It may be inferred from the evidence of the parties' conjugal relationship that if the plaintiff had any significant assets the existence of them would be known to the defendant. Moreover, the disclosure of substantial assets capable of satisfying an order for costs would be an answer to the application.
63 The defendant accepts that the court may not order security for costs to be given merely on that account (RSC O 25 r 1), but submits that the action's lack of merit, taken together with the plaintiff's apparent lack of substance and presumed reliance on third party support, justify the exercise of the court's discretion to make such an order.
64 The defendant argues that she has discharged her onus of proving grounds for the application, such that an evidentiary onus shifts to the plaintiff to disclose relevant facts within her knowledge: Moran v SchwartzPublishing Pty Ltd[No 2], [66],[86]; Idoport Pty Limited & Anor v National Australia Bank [2001] NSWSC 744 [62]; Webuildem v Arab Bank Australia Ltd [2014] NSWSC 1058 [8]. The latter two authorities involve corporate plaintiffs in respect of which somewhat different considerations apply.
65 The importance of the general rule that mere impecuniosity is not a bar to litigation, especially in the case of a natural person, as opposed to a corporation, was explained by Kenneth Martin J in Moran v SchwartzPublishing Pty Ltd[No 2] [5] - [7], [29] - [37], [52]. This was a case of a natural plaintiff suing for defamation. The defendant sought security for costs. His Honour considered that the high costs of the proceedings were likely to be irrecoverable against the plaintiff, but held that that factor was not sufficient in itself. Nor did his Honour consider the likely benefit to others from an award of damages to be material. Indeed, his decision turned on the fact that there were, it could be inferred, persons standing behind the plaintiff who were funding the litigation (though not in a formal way so as to require notification pursuant to RSC O 9A) and who had not been shown to be unable to provide the sought security.
66 In this regard, his Honour relied on Bond v Trustee of the Property of Alan Bond, a bankrupt [1994] FCA 882, where French J held at [14] that the probabilities were that the plaintiff being impecunious, he was being funded or likely to be funded by members of his family such that a security order was likely to be met and thus the appeal unlikely to be stultified by the making of an order.
67 In this case, as in Moran and Bond, in the absence of evidence from the plaintiff as to the means by which she is able to prosecute this action, the defendant submits that the court is entitled to be bold and to infer that if she is able to litigate as she has thus far, she is unlikely to be stultified by an order to give security. The plaintiff has not deposed to any such inability.
68 In the defendant's submission, the plaintiff cannot submit impecuniosity without deposing to it. Nor can the plaintiff submit possible stultification of her action as a likely effect of an order without disclosing the support she has received for the purpose of litigating.
69 The plaintiff contends that mere impecuniosity is all that can be demonstrated and that that as a matter of law does not permit the order sought. The plaintiff submits that no inference can be drawn as to the means by which she is able to prosecute her claim. The plaintiff also argues that to require security for costs would risk stultifying the action, thereby depriving the plaintiff of her right to litigate a cause that has survived a summary judgment application by the defendant. No evidence of this risk has been adduced.
70 I accept, of course, as submitted by the plaintiff, that orders for security for costs are not made if they would prevent a natural person from litigating a reasonable cause of action, notwithstanding that the action might fail and that a costs order may not be satisfied. The example was given of a disputed claim in tort for damages for personal injury, of which this court sees many. Such claims are often brought by persons who cannot afford the actual cost of doing so, but are assisted by legitimate 'no win, no fee', or deferred fee, arrangements. They are generally made against defendants who are insured, though not invariably.
71 Significantly, there are statutory thresholds which limit the recovery of damages for non-pecuniary loss for personal injury which have the intended effect of deterring the litigation of disproportionately small claims (relative to costs): for example, Civil Liability Act 2002, s 9; Motor Vehicle (Third Party Insurance) Act 1943, s 3C.
72 No such thresholds apply to defamation, yet in this context it is salutary to note the objects of the uniform defamation law as set out in s 3 of the Defamation Act 2005.
The objects of this Act are —
(a) to enact provisions to promote uniform laws of defamation in Australia;
(b) to ensure that the law of defamation does not place unreasonable limits on freedom of expression and, in particular, on the publication and discussion of matters of public interest and importance;
(c) to provide effective and fair remedies for persons whose reputations are harmed by the publication of defamatory matter; and
(d) to promote speedy and non-litigious methods of resolving disputes about the publication of defamatory matter.
73 The Act recognises as a matter of public policy the undesirability of costly litigation of claims of defamation that may consume valuable court resources for relatively little benefit in terms of vindication or compensation.
74 Although it is fair to say that security for costs orders are rarely made against individuals, in principle each case is to be determined according to its own particular circumstances and there are no rules circumscribing the exercise of the court's discretion, other than that mere poverty is not enough.
75 The court can readily infer from the length of these proceedings and the evidence adduced with respect to the application (and the cross-appeal) that they have been very expensive in terms of costs.
76 Annexure A to the affidavit of Mr Goldsmith sworn 8 March 2016 includes a client cost ledger report for a period from 31 July 2015 to 10 September 2015. This document demonstrates the high rates at which costs are capable of being generated in litigation of this kind. In that document some $3,000 in legal costs are evidenced by a series of attendances charged at the rate of $595 per hour in the case of Mr Goldsmith and $395 in respect to another practitioner whose attendances appear to have been mainly clerical.
77 None of the entries for the attendances documented in that ledger report describes substantial legal work, such as, for example, the provision of an opinion on the merits, the preparation of an advice on evidence, the pleading or re-pleading of the statement of claim, or any substantial getting up. Accordingly, one may readily conclude that the costs to the plaintiff thus far are likely to be in the tens of thousands of dollars. This is broadly consistent with the defendant's evidence in her affidavit sworn 1 September 2015 that she has been advised by her solicitor, Mr Kitto, that the fees to be incurred if this matter proceeds to trial will be in excess of $100,000.
78 Obviously, these levels of expenditure are potentially ruinous to the parties. They are, as a matter of common sense and experience, disproportionate to the alleged harm.
79 Whilst it is not for the court to judge the motives of the parties in contesting the issues in this matter so extravagantly, the court nevertheless has a legitimate concern when it comes to the amount of resources consumed by such litigation. This is reflected in RSC O 1 r 4B, which provides:
Case flow management, use and objects of
(1) Actions, causes and matters in the Court will, to the extent that the resources of the Court permit, be managed and supervised in accordance with a system of positive case flow management with the objects of —
(a) promoting the just determination of litigation; and
(b) disposing efficiently of the business of the Court; and
(c) maximising the efficient use of available judicial and administrative resources; and
(d) facilitating the timely disposal of business; and
(e) ensuring the procedure applicable, and the costs of the procedure to the parties and the State, are proportionate to the value, importance and complexity of the subject matter in dispute; and
(f) that the procedure applicable, and the costs of the procedure to the parties, are proportionate to the financial position of each party.
(2) These rules are to be construed and applied and the processes and procedures of the Court conducted so as best to ensure the attainment of the objects referred to in sub-rule (1).
80 Also, it is argued that the application comes too late, being brought after the entry for trial. I will deal with that point in due course.
81 For completeness, I add that even if the plaintiff had disclosed that she was enabled to bring this action by means of a legitimate deferred or conditional fee arrangement, my conclusion would not be different, for the reason that I consider the likely benefit to the plaintiff of a successful outcome in terms of compensation will be meagre by comparison to the costs recovery by her lawyers, such that it would be unfair to the defendant to be entirely unprotected from an unsatisfiable costs order. In this respect I find the circumstances of this case, as I have described them, put it in a very different category from other personal actions conducted on such a basis.
Conclusion: Cooke action
82 The action between the plaintiff and the defendant is, I find, one that involves arguable claims for defamation to which the defendant may have a good defence, but which, even if successful, fully or in part, is not likely to justify an award of damages of any significance, or achieve significant vindication.
83 The costs of the litigation if the action proceeds to trial will be high, having regard to what Mr Goldsmith has told the court regarding the interlocutory steps yet to be taken in terms of discovery, and the possible subpoenaing of witnesses from outside the jurisdiction.
84 The costs to be incurred by the parties, as indicated by the estimates of costs given by Mr Kitto to the defendant and the evidence of costs contained in Mr Goldsmith's affidavit to which I have referred, would indicate that each of the parties is likely to incur solicitor-client costs that will exceed those that can be recovered on a party-party basis.
85 On the balance of probabilities, the plaintiff, I find, does not have assets which are capable of satisfying an adverse costs order. On the same basis, I am satisfied that the action is likely to have been maintained by means of third party support. In the absence of full disclosure by the plaintiff in this respect the court is disinclined to find that security for costs, if ordered, would stultify the action.
86 The delay in bringing the application is explained to some extent by the fact that the defendant acted in person until June last year. It was upon the appointment of her solicitors, and following the filing of a substituted defence, that the initial application was made. This militates against the exercise of the discretion, but only to the extent that the court should, as in Christou v Stanton Partners, order that security be given only with respect to the defendant's anticipated costs of the trial of the action.
87 As presently informed, I consider that there are good reasons to allow the appeal and to make an order that the plaintiff give security for the defendant's future costs of the action. However, I am not inclined in the particular circumstances of this case to make orders as to the amount or terms of the security to be given before the parties have submitted to a process of mediation that would, I hope, if it did not have the desired effect of resolving the matter, at least refine the issues to be tried so that an accurate estimate may be made of the length of trial.
88 For this reason, I will deliver these reasons for decision in draft to the parties and direct, by way of case management, that the parties attend before the principal registrar for the purposes of a mediation of this action.
The action against Mr and Mrs Marshall
89 The other action to which this decision relates has taken a parallel course and it is therefore unnecessary to detail the history as I have with respect to the Cooke action.
90 Mr and Mrs Marshall are sued for damages for defamation with respect to three matters which are particularised in the statement of claim filed 14 August 2014.
91 The defamatory matters are pleaded by reference to three schedules which are screenshots of Mr Marshall's Facebook page. It would appear to be the case that the communications were made by Mrs Marshall. The matters are as follows:
1. 'beth, tara kidnapped ashleigh. Police are looking for them now. Please help find ashleigh to make sure she is safe. Vicky'.
2. 'beth, best to get tara to leave the country as soon as possible … big trouble brewing for her and her cop girlfriend …'.
3. 'Okay now beth, ashleigh is home safe with her mummy. Federal police rescued ashleigh but tara may now be charged, jailed and deported for abduction, theft (she stole all ashleigh's clothes, bottles, blankets, pram from the house) … and she's not allowed within 200 metres of cass, ashleigh, lucie the nanny, or the house … court hearing today. So sad, she must be mentally ill. ashleigh was tired, hungry, thirsty and upset when found'.
92 Again, it is alleged by the plaintiff that the posts were able to be read by persons throughout Australia and the world 'as yet unknown to the plaintiff'.
93 It is alleged that the first matter is defamatory in that it imputed that the plaintiff was a kidnapper and had committed a crime.
94 The second matter is said to carry the imputation that the plaintiff had engaged in conduct such that she should leave Australia promptly, that she had broken the law and that she was likely to be arrested.
95 The third matter is said to be defamatory on the basis that it carried the imputation that the plaintiff was a kidnapper, was liable to be deported, was a thief and was mentally ill.
96 There is no evidence to indicate that the matters communicated to Beth Ambelang Jackson by Facebook were communicated to any other person.
97 The same observations can be made with respect to the merits. The defence on behalf of Mr and Mrs Marshall is to the effect that the matters stated were substantially true, alternatively contextually true and made in circumstances that attract qualified privilege.
98 Again, I would observe that if the claims made in the statement of claim or any of them were upheld, damages would be modest, if not nominal. Clearly, the costs of the litigation are vastly and disproportionately greater than any compensation for harm that might be awarded, if the action were successful to any extent.
Conclusion: Marshall action
99 For the same reasons as I have given with respect to the Cooke action, I would allow the appeal and to order that the plaintiff give security for the defendants' future costs of the action, but not make orders as to the terms of the security to be given until the parties have participated in mediation.
Direction made on 5 May 2016
100 On 5 May 2016 I delivered these reasons in draft and made the following directions in each appeal:
1. Pursuant to DCR r 24(2)(e) the parties do attend for mediation before the principal registrar by special appointment on a date and time to be appointed upon request by letter to the listing coordinator specifying the unsuitable dates of both parties.
2. The action will be stayed pending the mediation conference.
3. In the event that mediation is unsuccessful, the appeal is to be re-listed before me.
Further hearing on 25 August 2016
101 At the request of the defendants, the appeals were listed before me on 25 August 2016. Neither party in either action had obtained an appointment for mediation. The plaintiff was unrepresented. Ms Pflug handed up a notice of change of representation and address for service (which she undertook to file) and informed the court that she was no longer represented by Goldsmiths Lawyers and would be in future.
102 For reasons that are recorded in the transcript, I recalled my direction with respect to mediation and made orders disposing of the appeals as follows.
CIV 2551 of 2014 (Cooke)
1. The appeal be allowed.
2. Within 60 days the plaintiff do pay into court by way of security for the defendant's further costs of the action an amount of $20,000.
3. The cost of the application for security costs and the appeal be costs in the cause.
CIV 2592 of 2014 (Marshall)
1. The appeal be allowed.
2. Within 90 days the plaintiff do pay into court by way of security for the defendants' further costs of the action an amount of $20,000.
3. The costs of the application for security for costs and the appeal be costs in the cause.
103 No application was made by any party for an order suppressing the publication of these reasons for decision.
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