Sawires v Price

[2022] NSWDC 390

District Court

New South Wales

Medium Neutral Citation:

Sawires v Price [2022] NSWDC 390

Hearing dates:

1 September 2022

Date of orders:

1 September 2022

Decision date:

01 September 2022

Jurisdiction:

Civil

Before:

Gibson DCJ

Decision:

Orders:

(1)   Noting that Mr Sawires, the plaintiff, has not contacted the court as at 9:55am; the plaintiff’s telephone number [redacted] was called at 9:57am and the call failed.

(2)   Noting the Plaintiff was called a second time at 11am and the call failed for a second time.

(3) Pursuant to s 67 of the Civil Procedure Act 2005 (NSW), these proceedings are permanently stayed.

(4)   The plaintiff is to pay the defendant’s costs of the proceedings on an indemnity basis as agreed or assessed.

Catchwords:

TORT - defamation - plaintiff commences proceedings for publications arising from material obtained under subpoena in Local Court proceedings - plaintiff’s application to be released from his implied undertaking refused by the magistrate - application by defendant for proceedings to be struck out as an abuse of process - plaintiff fails to attend court - application granted

Legislation Cited:

Civil Procedure Act 2005 (NSW) s 67

Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 29.7

Cases Cited:

Ainsworth v Hanrahan (1991) 25 NSWLR 155

Attorney-General for Victoria v Bahonko [2011] VSC 352

Bahonko v Sterjov (2007) IR 43; [2007] FCA 1244

Bahonko v Sterjov (2008) 166 FCR 415

Hearne v Street (2008) 235 CLR 125; HCA 36

Lamb v Sherman [2021] QCA 290

Miller v RL Polk & Co (Australia) Pty Ltd (Supreme Court of NSW, Hunt J, 4 July 1985, unreported)

Registrar, Supreme Court v McPherson [1980] 1 NSWLR 688

Riddick v Thames Board Mills Ltd [1977] 1 QB 881

Shiels v Manny; Manny v Shiels [2012] ACTCA 22

Victoria International Container Terminal v Lunt (2021) 271 CLR 132

Wallis v Valentine [2002] EWCA Civ 1034; [2003] EMLR 175

Category:

Principal judgment

Parties:

Plaintiff: Mr Emad Sawires
Defendant: Ms Christie Price

Representation:

Counsel:
Defendant: Ms S Jeliba

Solicitors:
Defendant: Mills Oakley Lawyers

File Number(s):

2020/00209460

Judgment

The application before the court

1. The plaintiff, by statement of claim filed on 16 July 2020, commenced proceedings for defamation against the defendant for two statements that she made, on 16 and 17 July 19, 2019 to an insurance company concerning proceedings the plaintiff had commenced against her in the Local Court for motor vehicle property damage. The information the plaintiff had gained about these conversations came from documents produced under subpoena in those proceedings.

2. The defendant brings an application for the following orders:

1. An order pursuant to s 67 of the Civil Procedure Act 2005 (NSW) that these proceedings be permanently stayed.

2. An order that the plaintiff pay the defendant’s costs of the defamation proceedings on an indemnity basis, as agreed a recess.

3. Such other order as this honourable Court deems fit.

3. The basis for the application is that, in order to bring proceedings for defamation reliant upon documents obtained in such a fashion, the court in which the documents in question were produced must grant leave: Shiels v Manny; Manny v Shiels [2012] ACTCA 22 at [14]. However, that leave has been refused by the court in which these documents were produced.

The evidence before the court

4. The defendant relies upon the following evidence:

1. Exhibit A: Affidavit of Peter Hodges sworn 10 March 2022 and exhibits.

2. Exhibit B: Affidavit of Peter Hodges sworn 25 August 2022 and exhibits.

3. Exhibits C and D: Correspondence with the plaintiff advising of today’s hearing date.

5. The plaintiff did not provide any evidence and did not appear.

6. Where a party does not attend court, both the opposing party and the court must comply with their obligations under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 29.7, namely to ensure that the missing party was notified of the hearing, received all of the documentation, and had been contacted to ensure that the missing party was not absent due to misunderstanding or mischance.

7. Conformably with those obligations, I received into evidence correspondence from the defendant’s solicitor advising the plaintiff of today’s hearing (as well as correspondence from this court confirming the date and providing an AVL link) and two affidavits sworn by the plaintiff. In addition, my associate attempted, unsuccessfully, to contact the plaintiff by telephone twice this morning. I have also carefully considered whether there is any authority to support a less draconian approach than summary dismissal: Victoria International Container Terminal v Lunt (2021) 271 CLR 132.

The statement of claim and the imputations

8. In an amended pleading filed on 10 August 2020, the plaintiff identified each of the documents from which the text of the matters complained of were drawn.

9. The imputations for the first matter complained of, an oral publication made on 16 July 2019 are as follows:

(a) The plaintiff is a liar, in that he has falsely claimed that the defendant reversed her vehicle into his vehicle, causing damage to the front of his vehicle (entire first matter complained of but in particular paragraphs 23, 25, 29, 75 and 139);

(b) The plaintiff is a fraudster, in that he has deliberately made a claim against the defendant for damage to his motor vehicle, knowing that she did not cause the damage to the vehicle (entire first matter complained of but in particular paragraphs 23, 25, 27, 29, 75 and 139);

(c) The plaintiff is serial fraudster, in that he has a history of committing fraud, having previously made fraudulent claims for damage to his motor vehicle against people other than the defendant (entire first matter complained of but in particular paragraphs 23, 25, 27, 29 and 139);

(d) The plaintiff is an intimidating and potentially violent man, causing anyone who is in a dispute with him to fear for their safety (entire first matter complained of but in particular paragraphs 27 and 81).”

10. The imputations for the second matter complained of, an oral publication made on 17 July 2019, are as follows:

(a) The plaintiff is a liar, in that he has falsely claimed that the defendant reversed her vehicle into his vehicle, causing damage to the front of his vehicle (entire second matter complained of but in particular paragraphs 30 and 62);

(b) The plaintiff is a fraudster, in that he has deliberately made a claim against the defendant for damage to his motor vehicle, knowing that she did not cause the damage to the vehicle (entire second matter complained of but in particular paragraphs 30 and 62);

(c) The plaintiff is serial fraudster, in that he has a history of committing fraud, having previously made fraudulent claims for damage to his motor vehicle against people other than the defendant (entire second matter complained of but in particular paragraph 62).

The procedural history of these proceedings

11. As noted above, the plaintiff obtained details of these conversations from documents produced under subpoenae in Local Court proceedings. This was recognised by the solicitors for the defendant from the very beginning and they advised Mr Kalantzis, the solicitor for the plaintiff, that, for the claim to proceed, the plaintiff would need the court’s leave to rely upon this material.

12. Unfortunately, the plaintiff’s solicitor, Mr Kalantzis, mistakenly brought this application in the District Court of New South Wales, rather than in the Local Court, which was where the relevant undertaking had been given. The solicitor for the defendant notified the solicitor for the plaintiff of this problem. When the proceedings came before the court on 15 October 2020, the orders made included the following:

“Orders:

(1) Matter stood over Defamation List on Thursday 4th February 2021, noting the plaintiff agrees an application must be brought in the Local Court.

(2) Reserve the issue of Costs of today and notice of motion.”

13. Between early 2021 and early 2022, these proceedings were stood over 11 times while the plaintiff’s Local Court application was being made and determined. That delay was not due to the Local Court, which heard and determined the plaintiff’s application very promptly, with the result that, on 15 December 2021, the plaintiff’s application to be released from his undertaking was dismissed. An appeal was lodged but, as is set out in the affidavit of Mr Hodges sworn 10 March 2022, the appeal to the District Court was discontinued some time prior to 10 March 2022.

14. During this time, the plaintiff’s solicitor, Mr Kalantzis, ceased to act, and the plaintiff’s address for service was changed to his own address in orders made on 31 March 2022. The defendant was anxious to bring this application for a stay at the earliest opportunity, but the plaintiff sought an order for pro bono referral under UCPR r 7.36, which was refused on 16 June 2022. The defendant’s application was set down for hearing on 1 September 2022 and, as the orders note, the plaintiff was informed of this hearing date by the court.

15. The parties then sought an extension of time to comply with the timetable for this application. The following orders were made on 16 August 2022:

(1) Extending the time for service of the plaintiff’s evidence and submissions to 18 August 2022.

(2) Extending the time for any evidence and submissions in reply to 25 August 2022.

(3) Confirming the hearing date of our client’s[sic] application for a permanent stay and costs, on 1 September 2022.

16. The plaintiff never provided any submissions and failed to attend the hearing on 1 September 2022.

17. In summary, the plaintiff has been aware since October 2020 that, in order to commence proceedings for these publications, he needed to be released from the undertaking he gave to the Local Court in relation to the production of documents under subpoenae. He has been aware, since December 2021, that the Local Court has refused to do so.

The basis of the submission for a permanent stay

18. Section 67 of the Civil Procedure Act 2005 (NSW) provides:

“67 Stay of proceedings

Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.”

19. The use of a document to commence and continue proceedings in breach of an implied undertaking has generally been regarded as an abuse of process: Riddick v Thames Board Mills Ltd [1977] 1 QB 881 at 895 - 896 per Lord Denning MR. Examples of documents attracting an implied undertaking include subpoenae. In Registrar, Supreme Court v McPherson [1980] 1 NSWLR 688 at 694,695, Moffitt P and Hope JA stated:

"A party who is permitted to inspect a document (produced on subpoena) is not entitled to make use of knowledge so acquired for purposes other than in connection with the proceedings. The Court has power to make appropriate orders; or to extract undertakings, or to limit inspection, e.g., to the legal representatives or a party, in order to ensure that a document to be inspected is not used for purposes other than in relation to the proceedings".

20. In Miller v RL Polk & Co (Australia) Pty Ltd (Supreme Court of NSW, Hunt J, 4 July 1985, unreported), where the documents in question were obtained on subpoena, Hunt J set out the relevant principles as follows:

“The starting point of the company's argument is to be found in the line of authority culminating in Riddick v Thames Board Mills Ltd [1977] QB 881, in which it was held that the plaintiff was not entitled to sue for damages for defamation upon a document the existence of which he learnt only in the course of discovery in previous proceedings between the parties. The reasoning was as follows. The document in question (an inter-office memorandum) was the defendant's confidential document (895). Its production to the plaintiff was obtained by the compulsion imposed by the legal process (896, 910, 911, 9I2). There is an implied obligation on the party to whom the document is so produced (or an implied by [sic] undertaking by him) not to make any improper use of it (896, 901, 911). It is improper if the document is used not for any purpose connected with the conduct of the action in which it is produced but for some collateral or ulterior purpose (896, 901-902, 911). The rationale for the rule is that a full and frank disclosure of documents in the discovery process would be discouraged if documents produced on discovery could be used otherwise than in the conduct of that particular action (896, 902, 912).

These propositions from Riddick ’s case were accepted as correct by the English Court of Appeal in Church of Scientology of California v Dept of Health and Social Security [1979] 1 WLR 723 at 735, 743, 746, which was in turn applied by the NSW Court of Appeal in Kimberly Mineral Holdings Ltd (In liq) v McEwan [1980] 1 NSWLR 210 at 2l5-216.”

21. This is not restricted to the documents themselves; the information in those documents is also protected, as Hunt J went on to point out:

“The principle which the cases lay down is not, of course, restricted to preventing only the use in other proceedings of the documents themselves. It is certainly wide enough to prevent the use in other proceedings of any information obtained from those documents as well. That proposition underlies all of the case, in the emphasis given to the need to protect documents which are confidential to the person from whose possession they are produced. It is also stated expressly in the passage from McPherson 's case which I have already quoted. 

But, it should be noted, what is prevented is the use of that information in the other proceedings.”

22. The undertaking is an obligation of substantive law, as Hayne, Heydon and Crennan JJ pointed out in Hearne v Street (2008) 235 CLR 125; HCA 36 at [96]:

“Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise[66], to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery[67], answers to interrogatories[68], documents produced on subpoena[69], documents produced for the purposes of taxation of costs[70], documents produced pursuant to a direction from an arbitrator[71], documents seized pursuant to an Anton Piller order[72], witness statements served pursuant to a judicial direction[73] and affidavits[74]. The appellants did not dispute the existence of this principle, and in particular did not dispute its potential application to the affidavit of Mrs Hesse and the witness statement of Dr Tonin.”

23. There are, however, authorities to the contrary. In Bahonko v Sterjov (2007) IR 43; [2007] FCA 1244, the applicant brought proceedings in the Fair Work Commission and demanded that her former employers produce documentation relating to her dismissal and then commenced an action for these “defamations” published in November 2005 (at [9]). Jessup J treated the date the documents were produced at court (11 January 2006) as the actionable date and applied the Defamation Act 2005 (Vic), although the savings provisions (s 46; not referred to in the judgment) clearly demonstrated that the repealed legislation applied. The status of documents produced in the Fair Work Commission as part of a mediation process is not referred to in the judgment at all. Jessup J awarded the applicant $50, without identifying how this amount was reached. Both parties appealed but the cross-appeal from this award was dismissed without any further analysis: Bahonko v Sterjov (2008) 166 FCR 415 at [41]. (Ms Bahonko was undeterred by this result and went on to bring a further 15 actions in the Federal Court and 16 in the High Court, including actions brought against the judiciary and court staff, most of which included documents obtained as part of the court process; after a further 26 cases in the Supreme Court of Victoria she was declared a vexatious litigant on a number of grounds, one of which I note was subpoena misuse (Attorney-General for Victoria v Bahonko [2011] VSC 352)).

24. More recently, in Lamb v Sherman [2021] QCA 290 at [28], McMurdo JA (Daubney and Boddice JJ agreeing) held that the plaintiff was entitled to bring defamation proceedings for a publication to a Family Court mediator. The publication revealed that the plaintiff’s former wife had made a complaint about the plaintiff to the police. The plaintiff did not complain of publication to the police but of publication of this information by his former wife in a Family Court mediation to which his current partner was a party.

25. These decisions are hard to reconcile with Riddick v Thames Board Mills, Registrar, Supreme Court v McPherson or Miller v Polk, none of which were referred to by the court.

26. There appear to be different reasons for this. As to Bahonko v Sterjov, the point never seems to have been realised and the judgments are of little assistance as a result.

27. As to Lamb v Sherman, the Court was clearly placing weight on the desirability of curing the default by less drastic means than summary dismissal, citing Victoria International Container Terminal v Lunt at [18] - [22]. There are, however, two reasons why this decision is of no assistance to the plaintiff. The first, and most compelling, is that he has sought leave and been refused. The second is that in Victoria International Container Terminal v Lunt, the High Court’s concern was with the inherent jurisdiction of the court (which this court does not have, in circumstances where the Civil Procedure Act provides the relevant power).

28. I have considered these decisions with care because of my obligations to the plaintiff, who has not attended court for the hearing of this application.

Application of these principles to the facts of this case

29. By reason of the subpoena, the plaintiff has had access to private conversations between the defendant and her insurance company’s employees. It is not in dispute that this information was unknown to the plaintiff previously.

30. My conclusion is, however, that the ruling by the magistrate has effectively put an end to these defamation proceedings. The plaintiff’s application for release from the undertaking was refused by Magistrate Perry, who found that the use of these communications was a breach of the undertaking, that special circumstances had not been demonstrated and that the plaintiff was in breach of the implied undertaking and therefore in contempt. I also note that the plaintiff was ordered to pay the defendant’s costs of the Local Court application on an indemnity basis.

31. I am satisfied that the plaintiff has not been released from the implied undertaking, that he has not cleansed his breach of that undertaking and that he should not be permitted to continue these proceedings.

32. I make no comment concerning the magistrate’s contempt findings beyond noting that such conduct may result in the bringing of contempt proceedings, as occurred in Ainsworth v Hanrahan (1991) 25 NSWLR 155, where a defendant in defamation proceedings sought to tender answers to interrogatories in unrelated Licensing Court proceedings.

The application for indemnity costs

33. The defendant submits that:

1. This was a serious abuse of process and that the plaintiff’s conduct was contumelious.

2. There has been extraordinary delay in that the plaintiff commenced on the last day of the limitation period and has conducted the application in the Local Court in a dilatory fashion. The plaintiff’s delay in this court is also noteworthy.

3. The plaintiff has shown discourtesy to the defendant and to the court by failing to attend court on a number of occasions.

4. The defendant has made offers to resolve these issues which the plaintiff has ignored: s 40 of the Defamation Act 2005 (NSW).

34. Additionally, given the findings in the Local Court proceedings brought by the plaintiff against the defendant for motor vehicle property damage, which were dismissed, the proceedings had weak prospects of success. The defendant’s motive for bringing this application is not to vindicate his reputation but as part of a vendetta against the defendant: Wallis v Valentine [2002] EWCA Civ 1034; [2003] EMLR 175. I also note that indemnity costs were ordered in the Local Court proceedings.

35. Taking all of the above into account, I consider that it is appropriate for an order for indemnity costs to be made.

Orders:

1. Noting that Mr Sawires, the plaintiff, has not contacted the court as at 9:55am; the plaintiff’s telephone number [redacted] was called at 9:57am and the call failed.

2. Noting the Plaintiff was called a second time at 11am and the call failed for a second time.

3. Pursuant to s 67 of the Civil Procedure Act 2005 (NSW), these proceedings are permanently stayed.

4. The plaintiff is to pay the defendant’s costs of the proceedings on an indemnity basis as agreed or assessed.

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Decision last updated: 02 September 2022