Rayney v The State of Western Australia [No 5]
[2014] WASC 147
•02/05/2014
RAYNEY -v- THE STATE OF WESTERN AUSTRALIA [No 5] [2014] WASC 147
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 147 | |
| 02/05/2014 | |||
| Case No: | CIV:2177/2008 | 17 APRIL 2014 | |
| Coram: | EDELMAN J | 17/04/14 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | LLOYD PATRICK RAYNEY THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Practice and procedure Strike out application Defamation Whether plea of special damages should be struck out with leave to replead Whether additional matters should have been pleaded by the plaintiff or whether they should be pleaded by the defendant Case flow management considerations Proper use of strike out applications |
Legislation: | Defamation Act 2005 (WA) Rules of the Supreme Court 1971 (WA) |
Case References: | 3 Oceans Wine Company Pty Ltd v Heyshott Pty Ltd [2011] WASC 12 Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120 Arthur Robinson (Grafton) Pty Ltd v Carter [1968] HCA 9; (1968) 122 CLR 649 Australian Broadcasting Corporation v Obeid [2006] NSWCA 231; (2006) 66 NSWLR 605 Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408 Bonney v Ngunytju Tjitji Pirni Aboriginal Corporation [2009] WASC 209 Brazel v Nicholls [2003] NSWCA 387 Burrows v Knightley (1987) 10 NSWLR 651 Calvet v Tomkies [1963] 1 All ER 610; [1963] 1 WLR 1397 Character Design Pty Ltd v Kohlen [No 2] [2013] WASC 340 Commodore Homes WA Pty Ltd v Goldenland Australia Property Pty Ltd [2007] WASC 146 CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1 Dare v Pulham (1982) 148 CLR 658 Fairworld Holdings Pty Ltd v Burrup Fertilisers Pty Ltd [No 2] [2011] WASC 136 Gordon v Amalgamated Television Services Pty Ltd [1980] 2 NSWLR 410 Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 Kavanagh v Akhtar [1998] NSWSC 779; (1998) 45 NSWLR 588 Londsdale Investments Pty Ltd v OM (Manganese Ltd) [2009] WASC 188 MacMahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271 Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 Muller v Lalic [2000] NSWCA 50 Neesham v 6PR Southern Cross Radio Pty Ltd [2006] WASC 266 Paff v Speed [1961] HCA 14; (1961) 105 CLR 549 Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479; [1969] 1 WLR 570 Pisano v Thrum [No 4] [2011] WASC 290 Pulham v Dare [1982] VR 648 Rayney v Pan MacMillan Australia Ltd [2014] WASC 129 Rayney v The State of Western Australia [No 2] [2009] WASC 133 Rayney v The State of Western Australia [No 3] [2010] WASC 83 South Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2004] QSC 457 TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57; (1963) 180 CLR 130 The Oropesa [1943] P 32 The State of Western Australia v Bond Corporation Holdings (1991) 5 WAR 40 The State of Western Australia v Rayney [2013] WASCA 219 The State of Western Australia v Rayney [No 3] [2012] WASC 404 Total Waste Management Pty Ltd v City of Kalgoorlie-Boulder [2010] WASC 234 Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Defendant
Catchwords:
Practice and procedure - Strike out application - Defamation - Whether plea of special damages should be struck out with leave to replead - Whether additional matters should have been pleaded by the plaintiff or whether they should be pleaded by the defendant - Case flow management considerations - Proper use of strike out applications
Legislation:
Defamation Act 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr M Bennett
Defendant : Mr C Bydder
Solicitors:
Plaintiff : Bennett & Co
Defendant : State Solicitor for Western Australia
Cases referred to in judgment:
3 Oceans Wine Company Pty Ltd v Heyshott Pty Ltd [2011] WASC 12
Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120
Arthur Robinson (Grafton) Pty Ltd v Carter [1968] HCA 9; (1968) 122 CLR 649
Australian Broadcasting Corporation v Obeid [2006] NSWCA 231; (2006) 66 NSWLR 605
Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82
Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408
Bonney v Ngunytju Tjitji Pirni Aboriginal Corporation [2009] WASC 209
Brazel v Nicholls [2003] NSWCA 387
Burrows v Knightley (1987) 10 NSWLR 651
Calvet v Tomkies [1963] 1 All ER 610; [1963] 1 WLR 1397
Character Design Pty Ltd v Kohlen [No 2] [2013] WASC 340
Commodore Homes WA Pty Ltd v Goldenland Australia Property Pty Ltd [2007] WASC 146
CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1
Dare v Pulham (1982) 148 CLR 658
Fairworld Holdings Pty Ltd v Burrup Fertilisers Pty Ltd [No 2] [2011] WASC 136
Gordon v Amalgamated Television Services Pty Ltd [1980] 2 NSWLR 410
Graham v Baker [1961] HCA 48; (1961) 106 CLR 340
Husher v Husher [1999] HCA 47; (1999) 197 CLR 138
Kavanagh v Akhtar [1998] NSWSC 779; (1998) 45 NSWLR 588
Londsdale Investments Pty Ltd v OM (Manganese Ltd) [2009] WASC 188
MacMahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271
Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1
Muller v Lalic [2000] NSWCA 50
Neesham v 6PR Southern Cross Radio Pty Ltd [2006] WASC 266
Paff v Speed [1961] HCA 14; (1961) 105 CLR 549
Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479; [1969] 1 WLR 570
Pisano v Thrum [No 4] [2011] WASC 290
Pulham v Dare [1982] VR 648
Rayney v Pan MacMillan Australia Ltd [2014] WASC 129
Rayney v The State of Western Australia [No 2] [2009] WASC 133
Rayney v The State of Western Australia [No 3] [2010] WASC 83
South Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2004] QSC 457
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57; (1963) 180 CLR 130
The Oropesa [1943] P 32
The State of Western Australia v Bond Corporation Holdings (1991) 5 WAR 40
The State of Western Australia v Rayney [2013] WASCA 219
The State of Western Australia v Rayney [No 3] [2012] WASC 404
Total Waste Management Pty Ltd v City of Kalgoorlie-Boulder [2010] WASC 234
Watts v Rake [1960] HCA 58; (1960) 108 CLR 158
Text cited:
Atiyah, P 'Loss of Earnings or Earning Capacity?' (1971) 45 Australian Law Journal 228
- EDELMAN J:
(This is the published version of the judgment which was delivered orally at the conclusion of the hearing. It has been edited for grammar and syntax.)
Introduction
1 These proceedings involve a claim by Mr Rayney against the State of Western Australia for defamation.
2 Mr Rayney's claim for defamation arises from statements made at a number of media conferences in August and September 2007 by a police officer, Detective Senior Sergeant Lee. The media conferences were given after the murder of Mr Rayney's wife, Mrs Corryn Rayney.
3 This is the third application in these proceedings by the defendant, the State of Western Australia, to strike out parts of Mr Rayney's statement of claim.1 The proceedings were also delayed until the conclusion of criminal proceedings against Mr Rayney for the murder of Mrs Rayney. On 1 November 2012 the Supreme Court acquitted Mr Rayney of the charge of wilful murder and the alternative charge of manslaughter.2 On 23 September 2013 the Court of Appeal dismissed the State’s appeal against this judgment.3
4 In his re-amended substituted statement of claim, Mr Rayney says that statements made by Detective Senior Sergeant Lee at a media conference on 20 September 2007 in the context of the other conferences, or by themselves, bore the meaning that:
(i) Mr Rayney murdered his wife; alternatively
(ii) that Mr Rayney so conducted himself so as to give rise to a reasonable suspicion that he murdered his wife.
5 On 5 February 2010, the State filed an amended defence.
6 Subsequent to the trial of Mr Rayney, and the State appeal from his acquittal, the State has brought this third strike out application in relation to par 11 of Mr Rayney’s re-amended substituted statement of claim. That paragraph pleads the special damages which Mr Rayney says were suffered from the alleged defamation.
7 The factual matters in controversy concerning this paragraph do not catch the State by surprise. The State has already pleaded one of the matters that makes par 11 controversial. As the written and oral submissions by counsel for the State on this application have shown, the State might raise defences that even if the publication was defamatory,
(i) some or all of Mr Rayney's pleaded loss would have arisen in any event;
(ii) the pleaded loss suffered was not within the scope of liability for consequences flowing from any defamation by Detective Senior Sergeant Lee; or
(iii) new intervening acts broke the chain of causation.
8 These overlapping matters are issues that will depend upon facts as proved at trial. In the context of modern case management the proper course is for the defendant to plead its defence in relation to these matters and for the matter to progress to trial. The State has not established a basis for striking out this paragraph.
Paragraph 11 of the Statement of claim
9 Paragraph 11 claims special damages for the loss and damage suffered as a result of alleged defamation by the State. It is set out as follows.
11. Further, in consequence of the publication ... and its widespread replication in all forms of media, including via the World Wide Web, the plaintiff has suffered special damages.
Particulars
Particulars of the plaintiff's claim for special damages will be provided in due course. At this stage, the plaintiff's claim for special damages is comprised of:
11.1 loss of revenue from earning fees in his professional calling as a barrister from the date of publication ... until judgment;
11.2 loss of expected future revenue from earning fees in his professional calling as a barrister; and
11.3 loss of opportunity to be appointed a Senior Counsel in his professional calling and earn fees commensurate with a barrister appointed as Senior Counsel.
11 The answer to the request for further particulars gives particulars of a specific past loss of $77,000 including GST.
12 The schedule of special damages relies upon a 29 January 2009 actuarial report from Mr Dennis Barton of Barton Consultancy Pty Ltd. The Barton report estimates Mr Rayney's loss of future earnings for the period from 8 January 2008 onwards.
A reminder of a modern principle concerning strike out applications
13 The law relating to strike out applications is well known. I described the relevant principles last week in Rayney v Pan MacMillan Australia Ltd.4 It is unnecessary to repeat them other than to highlight particular points later in these reasons.
14 But one point should be emphasised in light of the reference in submissions to authorities in relation to pleading practice from 23 years ago in this jurisdiction5 and 32 years ago in Victoria.6
15 In recent years, strike out applications have become less frequent. The reason for this is that it is commonly recognised that, in the past, strike out applications sometimes delayed the progress of an action for the illusory benefit of a more precise pleading. If a pleading reveals the essential issues to the other party then the course of striking out, and re-pleading, infelicitous paragraphs may be disproportionate to the objectives of case flow management for the delay. As the Chief Justice has said,7 in words that unfortunately have had to be repeated constantly in this Court:8
[provided that] a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
The strike out application
16 The State submits that par 11 should be struck out pursuant to O 20 r 19 of the Rules of the Supreme Court 1971 (WA) as it:
(a) discloses no reasonable cause of action;
(b) may prejudice, embarrass or delay the fair trial of the action; and/or
(c) is an abuse of process.
17 There are various reasons why the State submits par 11 should be struck out. These reasons often overlap and are difficult to separate into distinct arguments. In broad summary they are as follows.
(i) par 11 is inconsistent with pars 9.7 and 9.8.
(ii) par 11 fails to plead five material facts in relation to the losses incurred.
(iii) par 11 is an abuse of process because Mr Rayney must have known that he could not have worked for 2,300 hours per year in light of five factual matters which were not pleaded.
(iv) par 11 fails to identify the other material facts that may have caused, in some part, the defamation, and to draw a distinction between the loss that flows from the alleged defamation and the loss that flows from the other material facts.
(v) par 11 fails to establish a causal nexus between the alleged defamation and the loss of revenue and loss of expected future revenue.
18 The State claims that, as a consequence of the above reasons, par 11 is not pleaded sufficiently to inform the State of the case it will have to meet at trial.
19 Mr Rayney submits in response that the State’s arguments are matters that should be brought up in its defence. He says that they are not grounds for striking out the paragraph.
20 I deal below with each of the five submissions set out at [17] above. I deal with the last two submissions together.
(i) Alleged inconsistency with pars 9.7 and 9.8
21 The State submits that the par 11 is inconsistent with pars 9.7 and 9.8.
22 Paragraphs 9.7 and 9.8 plead that the State failed to apologise to Mr Rayney, and to retract the defamatory statements, despite the decision of the Supreme Court acquitting him of murder, and the decision of the Court of Appeal dismissing the State's appeal.
23 The State says that pars 9.7 and 9.8 involve an acceptance that Mr Rayney was necessarily taken away from his legal practice in order to prepare for and attend the hearings. This is said to be inconsistent with the particulars to par 11 that assume that Mr Rayney would have charged for 230 days (or 2,300 hours) per year including this period.9
24 I reject this submission for two reasons.
25 First, this assertion of inconsistency is not a matter of any evidence. In the absence of evidence there is no prima facie inconsistency arising from the pleading alone. For how long does the State allege that Mr Rayney spent preparing for and appearing at the hearings? Would this preparation necessarily have precluded other legal work? Would this include work on weekends as well as sitting days? How would this inconsistency, if proved, affect the calculation by Mr Barton's assessment of his overall figure as a 'present value net of tax income that Mr Rayney would have received, but for the defamation'?10
26 Secondly, as counsel for the State accepted, matters of factual inconsistency which might emerge can be raised in cross-examination of Mr Barton and Mr Rayney (based on the instructions he gave about these matters) as well as in the State's pleading of its defence. Counsel for the State said that it would be 'more efficient' for Mr Rayney to plead these matters. That may turn out to be the case. But there is also efficiency lost by the delay caused from a strike out application, a further amendment, and further amendments to the defence. The inconsistency alleged by the State does not impair the State's ability to understand Mr Rayney's case. To the contrary, the State understands the case and asserts that Mr Rayney's case involves matters which, on the evidence, involve factual improbability.
(ii) Alleged failure to plead material facts
27 The State submits that Mr Rayney has failed to plead other relevant matters, about which there could be no bona fide dispute, that may have caused, at least in part, the loss of revenue pleaded in par 11 of the statement of claim. Those relevant matters are said to be as follows:11
(i) the plaintiff’s acquittal by the Supreme Court and the upholding of that verdict on appeal to the Court of Appeal;
(ii) the plaintiff being taken away from his legal practice in order to prepare for and attend the hearings which led to the above judgments;
(iii) the plaintiff’s arrest on 8 December and subsequent bail application and hearing;
(iv) the plaintiff being taken away from his legal practice in order to prepare for and attend hearing in other legal proceedings in the Magistrates Court, the District Court and the Supreme Court to which the plaintiff was or is a party; and
(v) the plaintiff’s undertakings to the Legal Practice Board to restrict his engagement or not to engage in legal practice.
28 The submission that par 11 should be struck out because it fails to plead these other material facts is, in effect, a strike in application. I reject this submission for three reasons.
29 First, an application to strike out a paragraph on the basis that additional matters should have been included will rarely be successful. This is particularly the case where those matters can be pleaded by way of defence and are matters which would not fall to a jury to determine. To strike out for this reason and require re-pleading can be a waste of the Court's time and resources and inappropriate in the context of modern case flow management.
30 In ABC v Obeid,12 the New South Wales Court of Appeal considered a 'strike in application' in circumstances in which the defendant alleged that the plaintiff was required to put the whole of a publication before the jury, not merely part of it. The trial judge had allowed the application and required some additional material before the jury but not the whole publication.
31 The New South Wales Court of Appeal dismissed the appeal, and in the course of doing so summarised the well-known principles in this area set out by Hunt J.13 The first of those principles was that (citations omitted):
Where the publication sued upon is in written form, a plaintiff is obliged to include within his or her pleading every passage which materially alters or qualifies the complexion of the imputation complained of ... The justification for that rule is the principle that the effect of the matter complained of must be taken from the whole of what has been published ...
32 These principles have been applied by Le Miere J in this jurisdiction.14 In doing so, his Honour observed that he was not aware of any 'strike in' application that had been brought in this Court. I am equally unaware of any such application which has been brought outside the circumstance involving 'striking in' in the context of a defamatory publication. His Honour continued:15
The Court must be vigilant not to encourage unnecessary complexity and interlocutory applications in defamation actions. However, the justification for the rule that a plaintiff is obliged to include within his or her pleading every passage which materially alters or qualifies the complexion of the imputation complained of applies equally in Western Australia as in New South Wales, notwithstanding differences in substantive law and procedure. The justification for the rule lies in the principle that the effect of the matter complained of must be taken from the whole of what has been published. A statement of claim that pleads imputations arising from part of a broadcast but omits parts that materially alter or qualify the complexion of the imputations complained of, raises a false issue.
33 In contrast with the false issue that is raised by an incomplete pleading of an imputation, a pleading of damages that does not raise matters which might reduce those damages, even substantially, does not present a false issue. It might present matters for cross-examination or it might raise issues for a defence. And, as I explain below, the omitted matters might raise issues concerning whether the plaintiff is entitled to any damages. But this is something that is properly a matter for the defence.
34 Secondly, one reason why it is important that an incomplete pleading of the relevant context to a pleaded publication be struck out is because that publication is the subject matter which can go before a jury. In contrast, a pleading concerning special damages is a matter for the judicial officer, not the jury.16 In assessing the extent of any damages which should be awarded, the judge is not restricted to consideration of matters pleaded in a statement of claim. Hence, the parties' dispute on this point reduces to whether these matters should be pleaded by the plaintiff or by the defendant. This is not a proportionate use of a strike out application in the context of modern case flow management.
35 Thirdly, as counsel for the State properly accepted in his written submissions,there can be a fine line between, on the one hand, matters that concern the extent or quantum of special damages and, on the other hand, matters that concern an argument that the 'chain of causation was broken' (ie that there was a new intervening act or novus actus interveniens). The onus of proving a novus actus interveniens is on the defendant.17
36 As McHugh J said in Bennett v Minister of Community Welfare18
the common law concept of common sense causation accepts that the chain of causation between breach and damage is broken for the purpose of attributing legal responsibility for that damage if there has been an intrusion of 'a new cause which disturbs the sequence of events, something which can be described as either unreasonable or extraneous or extrinsic'19.
37 Counsel for the State also raised the possibility of a defence on the basis that the five matters above (see par [27](i) to [27](v)), either singly or in combination, broke the chain of causation between any defamation and any loss suffered by Mr Rayney. Such a submission would require those matters to be pleaded by the defendant. In fact, in the 5 February 2010 Amended Defence, the State has already pleaded a defence in relation to matters raised in [27(iv)] above concerning
the plaintiff's capacity to earn income has been and will be reduced in any event by the time which he has spent and will spend defending the charge pleaded in paragraph 32 [intercepting a communication passing over a telecommunications system in breach of s 7(1)(a) of the Telecommunications (Interception and Access) Act 1979 (Cth)] and in responding to the five police applications to the Magistrate's Court made under s 151 of the Criminal Investigations Act 2006 (WA) ...
38 For these reasons, I refuse to strike out the paragraph based on failure to plead material facts.
(iii) Alleged abuse of process
39 I do not accept that it is an abuse of process for Mr Rayney to plead a loss of income deriving from 230 days (or 2,300 hours) of work lost each year from 2008. The State asserts that in light of the five matters described above at [27](i) to [27](v), Mr Rayney must have known that he could not have worked to that extent.
40 As I have explained, in the absence of any evidence at all on this issue I do not accept this submission. It is possible that these matters might form a basis for cross-examination of Mr Barton or Mr Rayney. But, at the level of a strike out application on the pleadings, I need not, and do not, speculate on this issue.
(iv) The allegation that the pleaded loss 'does not flow naturally' from the alleged breach and other pleading objections, including causation
41 The next reason given by the State for why par 11 should be struck out is because Mr Rayney's pleaded loss of an ability from 2008 to earn any income from his working life does not flow naturally from the alleged imputation.20
42 The State says that par 11 fails properly to apprise it of the case it will have to meet at trial in relation to special damages21 because the loss of income claimed in par 11 does not flow naturally from the alleged defamation, and par 11 fails to plead the material facts in relation to the losses incurred.22
43 The State attempts to bolster this argument by the submissions that par 11:
(i) alleges a total destruction of Mr Rayney's ability to earn any income;23 and
(ii) draws no distinction between the alleged loss that flows from the primary pleaded imputation (Mr Rayney murdered his wife) and the alleged loss that flows from the alternative imputation (that Mr Rayney so conducted himself so as to give rise to a reasonable suspicion that he murdered his wife).24
44 In The State of Western Australia v Bond Corporation Holdings,25 Malcolm CJ applied the reasoning of Lord Donovan in Perestrello E Companhia Limitada v United Paint Co Ltd26 that
[i]f a plaintiff has suffered damage of a kind which is not the necessary and immediate consequence of the wrongful act, he must warn the defendant in the pleadings that the compensation claimed will extend to this damage, thus showing the defendant the case he has to meet.
45 As Lord Donovan explained, the distinction is one which is sometimes understood as a difference between 'general' damages and 'special' damages. But his Lordship emphasised that the limits of the requirement to warn a defendant are not dictated by any preconceived notions of what is general or special damage.27 The short point is that 'a mere statement that the plaintiff claims "damages" is not sufficient to let in evidence of a particular kind of loss which is not a necessary consequence of the wrongful act and of which the defendant is entitled to fair warning'.28
46 The first point to be made is that whether or not the pleaded loss flows naturally from the alleged defamatory publications, the loss is specifically pleaded in this case. The detail of the Barton report gives the State fair warning of the damages which Mr Rayney seeks to recover. Indeed, as I have explained, the State has already indicated five factual matters by which it will defend this plea.
47 It is also useful to illustrate the nature of Mr Rayney's pleading of loss by beginning with the difference between three different types of loss.
48 In CSR Limited v Eddy,29 Gleeson CJ, Gummow and Heydon JJ explained that the first type of loss is non-pecuniary loss, the second type of loss is loss of earning capacity, and the third type of loss is actual financial loss.
49 The first type of loss can be put to one side.
50 The second type of loss is concerned with earning capacity.
51 The third type of financial loss is actual financial loss. This is a category including losses such as ambulance charges; charges for medical, hospital and professional nursing services; and travel and accommodation costs. It is necessary to prove that these costs will be incurred.30 Loss based on these costs can also be put to one side.
52 Mr Rayney's plea is plainly one in the second category of loss: loss of earning capacity. In Paff v Speed,31 Windeyer J said:
Where a plaintiff claims damages, not because he has lost the benefits of his engagement with a particular employer, but because he has been deprived of the capacity for employment in a particular trade or calling, payments received from his employer up till the date when his employment ceased are, generally speaking, to be taken into account in assessing his damages up to that time. From the date his engagement ceases, however, his claim is for the destruction of earning capacity (emphasis added).
53 It is possible that claims might be conceived where the claim for destruction of earning capacity is a sum which represents the notional value of the plaintiff's right to continue in a chosen profession. But the conventional view is that although a claim for loss of earning capacity concerns the money that the plaintiff could have earned, that consideration is only part of an overall assessment of the extent of an assessed financial loss.
54 In CSR v Eddy,32 their Honours explained that (footnotes omitted):
Although the damages recoverable in relation to reduced future income are damages for loss of earning capacity, not damages for loss of earnings simpliciter, those damages are awardable only to the extent that the loss has been or may be productive of financial loss. Hence 'the valuation of the loss of earning capacity involves the consideration of what moneys could have been produced by the exercise of the [plaintiff's] former earning capacity'.
55 Again, in Husher v Husher,33 Gleeson CJ, Gummow, Kirby and Hayne JJ emphasised that the diminution in earning capacity is only one step in identifying the 'economic consequences' of the wrongdoing but for the injury:
Since at least Graham v Baker34 it has been recognised that it is convenient to assess an injured plaintiff's economic loss "by reference to the actual loss of wages which occurs up to the time of trial and which can be more or less precisely ascertained and then, having regard to the plaintiff's proved condition at the time of trial, to attempt some assessment of his future loss".35 But damages for both past loss and future loss are allowed to an injured plaintiff "because the diminution of his earning capacity is or may be productive of financial loss".36Both elements are important. It is necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss. Only then will it be possible to assess what sum will put the plaintiff in the same position as he or she would have been in if injury had not been sustained (emphasis added).
56 During oral submissions, counsel for Mr Rayney accepted that the State had properly characterised Mr Rayney's pleading as one which pleaded the economic consequences which have been, and will be, suffered as a result of the alleged defamation.
57 This is sufficient to dispose of the strike out application on this ground. Once again, although it is for Mr Rayney to prove loss, it is his choice about how he wishes to plead and prove allegations of loss. The absence of any provision by Mr Barton for the possibility of alternative income earned by Mr Rayney might be the subject of cross-examination concerning the assumption inherent in the Barton report that Mr Rayney would not have, and will not, take any other paid engagement or employment. As counsel for the State accepted, it might also be the subject of pleas concerning novus actus interveniens (new intervening causes), or cumulative causes which amount to a failure to mitigate loss. But the onus of pleading and proving mitigation of loss, like that of pleading a novus actus interveniens, lies on the State as defendant.37 As McHugh J said in Medlin v State Government Insurance Commission38
If the retirement is treated as going to mitigation, the onus is on the defendant to prove that the plaintiff failed to mitigate his loss.39 If it is treated as going to causation, the onus is also on the defendant. In Adams,40 Walsh JA said, correctly in my opinion, that, if a person has the post-accident capacity to do a particular job but a question as to the reasonableness of a refusal to do it arises, the onus is on the defendant to show that the refusal was unreasonable. Walsh JA gave as an example the case where the plaintiff is offered work at a remote place. Similarly, where a plaintiff with impaired earning capacity resigns from a position that he or she is capable of retaining and sustains a financial loss, the onus is on the defendant to prove that the resignation was unreasonable. Whatever approach is followed in this case, therefore, the onus is on the defendant to prove that the plaintiff acted unreasonably in retiring early.
58 I also consider that, for the purpose of sufficiency of a pleading, Mr Rayney has pleaded the material facts that are said to give rise to a causal connection between the alleged defamation and the alleged special damages.
59 Causation is an essential element of Mr Rayney's claim which requires him to plead 'the facts which lead to a reasonable inference that the acts complained of ... and the alleged later event ... stand to each other in the relation of cause and effect'.41
60 Although as counsel for Mr Rayney says, this is likely to be a hotly disputed issue at trial, his pleading has pleaded in par 11 (and pars 4(b), 4(c) and Schedules A, B and C) a sufficient causal connection between the alleged defamation and 'its widespread replication in all forms of media, including via the World Wide Web' and the special damage claimed.
61 As to the other matters raised by the State, I do not accept the assertion by counsel for the State that it will always be necessary for a plaintiff separately to plead special damage arising from alternative claims for defamation. No authority for this apparent proposition was cited.
62 Ultimately, each of the State's submissions should be rejected in light of the concerns of case flow management and in the context that this pleading is sufficient (i) to apprise the State of the nature of the case to be met, (ii) to provide sufficient information to ensure a fair trial, (iii) to guard against surprise, and (iv) to provide the State with the mode by which Mr Rayney's case is proposed to be proved.
Conclusion
63 The reality of much of the dispute in this application was that the State of Western Australia does not consider that Mr Rayney can establish that his loss of professional income from 2008 was caused by any alleged defamation by Detective Senior Sergeant Lee. Although this application was put in a number of different ways, this point was the central concern underlying many of them. In particular, the State pointed to five matters, which it assumed were independent, including Mr Rayney's trial and appeal for murder and his undertakings to the Legal Practice Board to restrict his engagement or not to engage in legal practice.
64 The concern of the State said to arise from these five matters gives rise to different legal issues. As counsel for the State submitted, the line between these different legal characterisations can sometimes be fine. One is whether these matters, singly or in combination, were new intervening events, which 'broke the chain of causation' of the loss suffered by Mr Rayney. Another is whether the alleged loss suffered by Mr Rayney was within the scope of the liability for consequences for any defamation made by Detective Senior Sergeant Lee. There may also be issues concerning whether Mr Rayney can satisfy his onus of proving causation based upon a negative criterion of whether the loss would have been suffered 'but for' the alleged defamation. But all these are issues to be considered at trial and in the light of the evidence.
1Rayney v The State of Western Australia [No 2] [2009] WASC 133; Rayney v The State of Western Australia [No 3] [2010] WASC 83.
2The State ofWestern Australia v Rayney [No 3][2012] WASC 404.
3The State of Western Australia v Rayney[2013] WASCA 219.
4Rayney v Pan MacMillan Australia Ltd [2014] WASC 129 [12].
5The State of Western Australia v Bond Corporation Holdings (1991) 5 WAR 160.
6Pulham v Dare [1982] VR 648, 654 (Starke J; Murphy and Brooking JJ agreeing). Overturned by the High Court in Dare v Pulham (1982) 148 CLR 658.
7Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82, 84 [7] - [8] (Martin CJ).
8Character Design Pty Ltd v Kohlen [No 2] [2013] WASC 340 [87]; 3 Oceans Wine Company Pty Ltd v Heyshott Pty Ltd [2011] WASC 12 [40] (Allanson J); Fairworld Holdings Pty Ltd v Burrup Fertilisers Pty Ltd [No 2] [2011] WASC 136 [14] (Allanson J); Bonney v Ngunytju Tjitji Pirni Aboriginal Corporation [2009] WASC 209 [11] - [14] (Beech J); Londsdale Investments Pty Ltd v OM (Manganese Ltd) [2009] WASC 188 [2] (Beech J); MacMahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271 [20] (Templeman J); Commodore Homes WA Pty Ltd v Goldenland Australia Property Pty Ltd [2007] WASC 146 [24] - [25] (Beech J).
9 Submissions of the State of Western Australia [8].
10 Barton report [3].
11 Submissions of the State of Western Australia [10].
12Australian Broadcasting Corporation v Obeid [2006] NSWCA 231; (2006) 66 NSWLR 605.
13Gordon v Amalgamated Television Services Pty Ltd[1980] 2 NSWLR 410, 413; Burrows v Knightley(1987) 10 NSWLR 651, 656.
14Neesham v 6PR Southern Cross Radio Pty Ltd [2006] WASC 266 [7] - [13].
15Neesham v 6PR Southern Cross Radio Pty Ltd [2006] WASC 266 [13].
16Defamation Act 2005 (WA) s 22(3).
17Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, 22 (McHugh J); See also Kavanagh v Akhtar [1998] NSWSC 779; (1998) 45 NSWLR 588, 597 (Mason P); Muller v Lalic [2000] NSWCA 50 [40] (Stein JA; Handley & Powell JJA agreeing); Brazel v Nicholls [2003] NSWCA 387 [76] - [77] (Tobias JA; Meagher JA & Palmer J agreeing).
18Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408, 428.
19The Oropesa [1943] P 32, 39 (Lord Wright).
20 Submissions of the State of Western Australia [11].
21Calvet v Tomkies [1963] 1 All ER 610; [1963] 1 WLR 1397, 1399 (Denning LJ).
22 Submissions of the State of Western Australia [13] - [14].
23 Submissions of the State of Western Australia [11].
24 Submissions of the State of Western Australia [12].
25The State of Western Australia v Bond Corporation Holdings (1991) 5 WAR 40, 73. See also Total Waste Management Pty Ltd v City of Kalgoorlie-Boulder [2010] WASC 234[35] (Le Miere J).
26Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479; [1969] 1 WLR 570, 579.
27Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479; [1969] 1 WLR 570, 579.
28Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479; [1969] 1 WLR 570, 580.
29CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1, 16 [29] - [31].
30CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1, 16 [31].
31Paff v Speed [1961] HCA 14; (1961) 105 CLR 549, 566.
32CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1, 16 [30].
33Husher v Husher [1999] HCA 47; (1999) 197 CLR 138, 143 [7].
34Graham v Baker [1961] HCA 48; (1961) 106 CLR 340.
35Graham v Baker [1961] HCA 48; (1961) 106 CLR 340, 346 - 347 (Dixon CJ, Kitto & Taylor JJ).
36Graham v Baker [1961] HCA 48; (1961) 106 CLR 340, 347 (Dixon CJ, Kitto and Taylor JJ). See also Arthur Robinson (Grafton) Pty Ltd v Carter[1968] HCA 9; (1968) 122 CLR 649, 658 (Barwick CJ); Atiyah, P 'Loss of Earnings or Earning Capacity?' (1971) 45 Australian Law Journal 228.
37TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57; (1963) 180 CLR 130, 138 (the Court).
38Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, 22.
39Watts v Rake [1960] HCA 58; (1960) 108 CLR 158, 159 (Dixon J).
40Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120, 139.
41South Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2004] QSC 457, [15] (Chesterman J); Pisano v Thrum [No 4] [2011] WASC 290 [11] (Le Miere J).
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