Slater v Ecosol Pty Ltd - [2024] SASCA 95

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
SLATER v ECOSOL PTY LTD
[2024] SASCA 95
Judgment of the Honourable Justice Bleby
2 August 2024
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - ADMISSION OF FURTHER EVIDENCE - EVIDENCE NOT AVAILABLE AT HEARING - WHEN NOT ADMISSIBLE
Application in appeal against dismissal of a claim in defamation.
The appellant has filed an interlocutory application ahead of the appeal, seeking the following:
1.      Admission of fresh evidence in relation to the credit of a witness at trial;
2.      Leave to file a notice of alternative contention; and
3.      Security for costs.
Held, dismissing the interlocutory application:
1.      The principle of finality stands in the way of the application to adduce fresh evidence.
2.The notice of alternative contention which the appellant seeks to advance challenges a finding made on the cross claim, which is not the subject of the appeal.
3.On acceptance of the respondent’s undertaking to not make any distributions to its shareholders until the appeal is finalised, there is no need to consider a freezing order.

Supreme Court Act 1935 (SA) S 35; Uniform Civil Rules 2020 (SA) r 112.14, r 215.3, referred to.
Clone Pty Ltd v Players Pty Ltd ( In Liq) (2018) 264 CLR 165; Goldsmith v Sandilands (2002) 76 ALJR 1024; Slater v Ecosol Pty Ltd (No 2) [2024] SASC 29; Slater v Ecosol Pty Ltd [2023] SASC 99; Zabusky v Virgtel Limited [2022] QCA 223, discussed.

SLATER v ECOSOL PTY LTD
[2024] SASCA 95
Court of Appeal – Civil:

BLEBY JA: On 10 July 2023, Blue J dismissed the appellant Mr Matthew Slater’s claim in defamation against the respondent, Ecosol Pty Ltd.[1] His Honour also dismissed a cross claim in defamation by Mr Jeffrey Smith against Mr Slater in the same proceedings. Mr Slater and Mr Smith were both shareholders in Ecosol. Mr Smith was also the chairman of directors of Ecosol. The claim and cross claim arose out of correspondence written by each to shareholders in Ecosol, respectively opposing and supporting a proposed sale of Ecosol’s stormwater treatment business to a third party.
[1] Slater v Ecosol Pty Ltd [2023] SASC 99.
Mr Slater has appealed against Blue J’s dismissal of his claim. That appeal has been listed for hearing before the Court of Appeal on 11 September 2024. Mr Smith has not appealed against the dismissal of his cross claim.
Mr Slater, who is self-represented, has now filed an Interlocutory Application. The Interlocutory Application is expressed as follows:
Fresh evidence as to the credit of Mr Smith
1Evidence in relation to whether Mr Smith tendered a fraudulent invoice be admitted into evidence in this appeal.
Notice of Alternative Contention
2His Honour Justice Blue’s finding in the Smith claim that the second Respondent’s defences of justification failed was incorrect.
Security for costs
3Ecosol given an undertaking it will not make any capital distributions to its shareholders until this appeal is finally determined.
4Ecosol appear only by AVL at the appeal hearing unless it agrees not to press to recover for costs associated with Mr Smith travelling from overseas to be physically present in these proceedings or in the alternative an amount up to $3,500.00 be allowed to cover for such travel costs but only apportioning the time spent by Mr Smith in and around attendance at the appeal hearing.
I initially considered whether it would be more appropriate to refer the application to adduce fresh evidence to the hearing of the appeal. However, in the course of submissions it became clear that the nature and scope of the application were such that it was appropriate that I determine it directly. I reserved my decision and have obtained sufficient familiarity with the trial judgment to address the application in its necessary context.
I address each paragraph of the Interlocutory Application in turn.
The application to adduce fresh evidence
Blue J held, relevantly, that most of the imputations Mr Slater alleged did arise from Ecosol’s impugned publications and that all but two of those imputations were defamatory. However, his Honour also held that Ecosol’s common law qualified privilege defences were prima facie established and that Mr Slater’s malice response to those defences was not established.
The application to adduce fresh evidence is supported by two affidavits of Mr Slater. The fresh evidence that Mr Slater seeks to adduce is said to be relevant to Mr Slater’s response of malice in response to Ecosol’s defence of qualified privilege. That ‘evidence’ is as follows:
·an extract of the subsequent costs judgment of Blue J;[2]
·extracts of transcript of Mr Smith’s evidence during a hearing on costs on 16 February 2024, relating to the validity of an invoice from Mr Smith’s former legal representatives, FM Legal, in respect of an action in the District Court of New South Wales;
·the Record of Outcome dated 16 February 2024; and
·subsequent email correspondence between FM Legal and Blue J’s chambers, and between FM Legal and Mr Slater, regarding the invoices rendered by FM Legal to Mr Smith.
[2] Slater v Ecosol Pty Ltd (No 2) [2024] SASC 29.
Putting aside, for the moment, whether all of these items can be regarded as evidence for the purposes of the application, Mr Slater seeks to rely on these items at the forthcoming appeal in the following way.
The first item, the extract from the costs judgment, is the highlighted part of the following paragraph:[3]
In relation to malice, it is important to have regard to the stage reached in the action. At that point, Mr Slater did not have witness statements of Mr Smith, Mr Macklin, Mr Bishop or Mr Charlton. He did not have full discovery from Ecosol and Mr Smith and they made discovery of substantial additional documents after August 2021. For the reasons given in my primary judgment, Mr Slater had reason to suspect that the directors had not been acting in Ecosol’s best interests. Ultimately, the reason that I rejected Mr Slater’s malice case was that I accepted the evidence given by Mr Smith, Mr Macklin, Mr Bishop and Mr Charlton. It cannot be said as at August 2021 that Mr Slater ought to have appreciated that he would fail on the issue of malice or that his prospects were poor.
[3] [2024] SASC 29 at [187].
Mr Slater submitted that Blue J’s rejection of the malice response was founded predominantly in his acceptance of the credibility of Mr Smith. In this regard, I note the following matters from his Honour’s reasons in the primary judgment:
·Blue J found Mr Smith to be an honest witness. Mr Smith was on occasion argumentative and evasive, but that did not affect his assessment of Mr Smith’s honesty.[4] Blue J noted that Mr Slater contended that Mr Smith was not a credible witness but indicated that Mr Slater did not make detailed submissions in support of that contention;[5]
·Mr Slater’s primary contention on malice was that Ecosol’s dominant motive in publishing the defamatory words was to undermine Mr Slater’s credibility and his communications to shareholders opposing the sale of the business, which was in furtherance of an improper purpose.[6] Blue J accepted that Mr Slater had grounds for suspicion in relation to the promotion of the sale[7] and traversed the extensive evidence that supported this. However, he also observed:[8]
On the other hand, each of Mr Smith, Mr Bishop and Mr Charlton denied on oath the existence of the scheme. Mr Slater was unable to identify a motive for them to formulate and implement the scheme. While it is not necessary that a motive be identified or proved, in the absence of an identified motive their adoption and implementation of the scheme appears to be illogical. Each of Mr Smith, Mr Bishop and Mr Charlton were shareholders in Ecosol and, on the face of the scheme as contended by Mr Slater, were acting contrary to their own self-interest by minimising returns to shareholders.
·His Honour relied on the evidence of each of Mr Smith, Mr Bishop and Mr Charlton in finding that each acted in what they considered to be the best interests of Ecosol and shareholders in advising in relation to the sale;[9]
·His Honour found that Mr Smith and Mr Slater disliked each other intensely but held that he was not satisfied that Mr Smith’s dislike of or ill-will towards Mr Slater was the dominant or even a substantial reason, purpose or motive for the impugned publications. He accepted Mr Smith’s evidence that his purpose in sending the letters to shareholders containing the impugned passages was to provide information relevant to the payment of dividends, Mr Slater’s litigation and other company matters;[10]
·His Honour found that Mr Smith believed that Mr Slater was lying in relation to various matters when he made the publications and was not satisfied that Mr Smith was reckless to the point of wilful blindness in relation to any of the impugned statements in the letters to shareholders.[11]
[4] [2023] SASC 99 at [281].
[5] [2023] SASC 99 at [280].
[6] [2023] SASC 99 at [519].
[7] [2023] SASC 99 at [522].
[8] [2023] SASC 99 at [551].
[9] [2023] SASC 99 at [553].
[10] [2023] SASC 99 at [558].
[11] [2023] SASC 99 at [562].
Blue J’s acceptance of Mr Smith as a credible witness clearly contributed to his Honour’s rejection of Mr Slater’s malice response.
This then leads to the next item of ‘fresh evidence’ that Mr Slater seeks to adduce, being an extract of Mr Smith’s evidence at the costs hearing on 16 February 2024. It was identified in that hearing that one of the invoices (Invoice 354) that Mr Smith had exhibited to his affidavit and represented to be from FM Legal in respect of an action in the NSW District Court had been superseded by a subsequent invoice. Mr Smith had no separate liability under Invoice 354.
Mr Slater’s contention at that hearing was that this was the product of some form of malfeasance on Mr Smith’s part, specifically, that the invoice was a forgery. Blue J excluded that invoice from his assessment but indicated that Mr Slater’s comments would have no consequence in the action before him. Mr Smith conceded at the hearing that he had made an error but denied any malfeasance.
The third item of ‘evidence’ is the Record of Outcome from that hearing. Order 1 recorded there reads:
1.Mr Slater has leave, with the consent of Mr Smith, to contact FM Legal requesting that they email directly to Chambers all invoices rendered to Mr Smith (whether paid or unpaid and whether subsequently withdrawn, superseded or not) in his action in the New South Wales District Court.
Mr Slater duly did so. The ensuing correspondence comprises the fourth item Mr Slater seeks to adduce. On 20 February 2024, FM Legal enclosed invoices numbered 356, 366 and 404. Subsequent correspondence indicated that these were the only invoices in FM Legal’s possession ‘which were paid by Mr Smith’. That is, they did not include invoice 354.
Mr Slater’s argument is that it follows that Invoice 354 must be a forgery by Mr Smith in an attempt to inflate his legal costs at a time that Mr Slater had made offers to settle, with the objective of Mr Smith avoiding indemnity costs in respect of his failed claim. It follows, in Mr Slater’s submission, that the Court of Appeal should draw an inference that Invoice 354 is fraudulent, that Mr Smith has committed perjury in the subsequent costs proceedings and that his credit in the primary action before Blue J should be viewed in this light.
Mr Slater makes this submission with a view to seeking to overturn the findings on Mr Slater’s malice response which, in Mr Slater’s submissions, relied heavily on the positive credit findings with respect to Mr Smith, as summarised above.
To be clear, Mr Slater is seeking to adduce evidence of matters arising for the first time well after the delivery of judgment, which he says reflect adversely on Mr Smith’s credit generally, and thereby have the Court of Appeal revisit Blue J’s credit findings and overturn his Honour’s conclusions with respect to Mr Slater’s malice response.
In Commonwealth Bank of Australia v Quade,[12] the High Court quoted with approval the statement of Dixon CJ on Greater Wollongong Corporation v Cowan:[13]
If cases are put aside where a trial has miscarried through misdirection, misreception of evidence, wrongful rejection of evidence or other error, and if cases of surprise, malpractice or fraud are put to one side, it is essential to give effect to the rule that the verdict, regularly obtained, must not be disturbed without some insistent demand of justice. The discovery of fresh evidence in such circumstances could rarely, if ever, be a ground for a new trial unless certain well-known conditions are fulfilled. It must be reasonably clear that if the evidence had been available at the first trial and had been adduced, an opposite result would have been produced or, if that is not reasonably clear that it would have been produced it must have been so highly likely as to make it unreasonable to suppose the contrary. Again, reasonable diligence must have been exercised to procure the evidence which the defeated party failed to adduce at the first trial.
[12] (1991) 178 CLR 134 at 140.
[13] (1955) 93 CLR 435 at 444.
As Mr Slater succinctly submitted, the test for the reception of fresh evidence has been stated as requiring that it must be shown that the evidence could not have been obtained with reasonable diligence for use at the hearing, that it was likely to have an important influence on the result of the appeal, though it need not be decisive, and that the evidence must be apparently credible.[14]
[14] Citing Zabusky v Virgtel Limited [2022] QCA 223 at [85] (Bradley J, Mullins P and Cooper J agreeing).
This test is articulated as an exception to the principle of finality, the need for a strict approach to which the High Court has emphasised.[15] In this regard, it is important to consider precisely what it is that Mr Slater is seeking to do.
[15] Clone Pty Ltd v Players Pty Ltd ( In Liq) (2018) 264 CLR 165 at [69]-[70].
Mr Slater is not seeking to adduce evidence of something that existed at the time of trial but could not be obtained with reasonable diligence for use at the hearing. He is seeking to adduce evidence of subsequent conduct of Mr Smith. While it is obviously true that this could not have been adduced at trial, that is because it had not yet occurred.
Next, the forensic purpose of adducing this evidence is to attack Mr Smith’s credibility generally. That forensic purpose relies on the Court making a finding that by exhibiting Invoice 354 to his affidavit in the costs proceedings, Mr Smith acted fraudulently. This raises a considerable difficulty. That conclusion would require a contest over Mr Smith’s actions in propounding Invoice 354. What the outcome of any such contest would be is quite unknown.
Contrary to Mr Slater’s submissions, it cannot be said that this evidence is likely to have an important influence on the result of the appeal. First, the provenance of Invoice 354 is entirely contested, with Mr Smith saying that the invoice is genuine, albeit that he mistakenly propounded it. Secondly, Mr Slater only seeks to adduce evidence of an asserted fraud occurring subsequent to the trial so as to attack Mr Smith’s credit generally. That is in service of a complaint that Blue J should not have accepted Mr Smith as a credible witness for the purpose of Mr Slater’s malice response.
Mr Slater thus seeks to adduce fresh evidence on appeal in order to raise a collateral issue that goes only to the credit of Mr Smith. Adducing evidence to that effect would not be permitted at trial. As Gleeson CJ said in Goldsmith v Sandilands,[16] the adversarial system of civil litigation would collapse if the adversaries were permitted to lead evidence about every matter of contention that arises in the course of proceedings.
[16] Goldsmith v Sandilands (2002) 76 ALJR 1024 at [3].
The mischief is compounded here in that the effect of the evidence is contested. Moreover, it is said to go to the credit of Mr Smith only in the most obscure of ways, in that it seeks to draw on conduct subsequent to the trial to show that Mr Smith should have been found at trial to have been a dishonest witness.
The word ‘collapse’ is insufficient to describe the damage that would be done to the adversarial system of civil litigation if litigants were to be permitted to adduce fresh evidence on appeal of subsequent conduct of a witness, the effect of which is contested and which, in any event, was only directed to the general credibility of that witness by casting a backward light over answers given at trial. The principle of finality stands firmly in the way of Mr Slater’s application.
In a further email submission received after the oral hearing, Mr Slater indicated that his grounds of appeal extend to a complaint that Blue J ‘put case management principles over the delivery of justice’. He complains, in effect, that he was prevented at trial from making complete submissions on the issue of Mr Smith’s credibility. In this regard he takes issue with Blue J’s statement, referred to above, that he did not make detailed submissions in support of his contention that Mr Smith was not a credible witness. He included in his email submission transcript references as examples of where he says he was so prevented.
Mr Slater submitted that the question of fresh evidence going to Mr Smith’s credibility should be subject to hearing at the appeal whether Mr Smith’s credibility was properly ventilated at trial. I reject that submission. Whatever the merits of these complaints on the Notice of Appeal, for the reasons given above it would not be appropriate to permit Mr Slater to adduce the ‘fresh evidence’.
I dismiss paragraph 1 of the Interlocutory Application.
The application to file a Notice of Alternative Contention
The second paragraph of the Interlocutory Application seeks leave to file a Notice of Alternative Contention. By that Notice, Mr Slater challenges a finding by Blue J on Mr Smith’s cross claim that Mr Slater’s defences of justification failed. The difficulty with this challenge is that Blue J dismissed the cross claim and Mr Smith has not appealed against that part of the judgment.
Pursuant to s 50 of the Supreme Court Act 1935 (SA), an appeal lies to the Court of Appeal against a judgment of the Court constituted of a single judge. “Judgment” for these purposes includes an order or direction. The only Notice of Appeal filed is that of Mr Slater. Under the heading, ‘Orders challenged’ it specifies, appropriately, the order, ‘The action by Mr Slater is dismissed’. Blue J’s finding that Mr Slater’s defences of justification failed on Mr Smith’s cross claim was not made in service of that order. The ‘Notice of Alternative Contention’ that Mr Slater seeks to advance in effect challenges a finding made in support of an order on the cross claim only.
An appeal does not lie against mere reasons. Mr Slater’s dissatisfaction with the finding that the defences of justification were not made out does not mean that he has an avenue to challenge that finding where the orders on the cross claim were in his favour and where Mr Smith has not filed an appeal against that part of the judgment.
Security for costs
The third part of the Interlocutory Application is expressed to seek security for costs against Ecosol. It has two parts. It seeks that Ecosol not make any capital distribution until the appeal is finally determined and it seeks to have Mr Smith’s attendance at the hearing regulated, either by requiring that he attend by AVL or that his costs of attendance in person be capped.

UCR r 215.3 governs security for costs on an appeal. Sub-rule 215.3(1) provides that the Court may order that the appellant on an appeal provide security for costs. It does not provide that a respondent may provide security for costs. The reason for this is that security for costs is, at its essence, a procedural measure to protect a respondent from being put to the expense of defending an appeal without the benefit of the expectation that if it is successful in its defence, it will be able to recover its costs from the unsuccessful appellant.[17]
[17] Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 38 at [40].
Paragraph 3 of the Interlocutory Application really seeks, in substance, an undertaking in lieu of a freezing order under UCR r 112.14, rather than an order for security for costs. Whatever the merits of that application, Ecosol has undertaken that it will not make any distributions (capital or revenue) to its shareholders until the appeal is finalised. Mr Smith restated that undertaking on behalf of Ecosol at the hearing before me. On acceptance of that undertaking, there is no need to consider further the need for an order in the terms of paragraph 3.
I would not make any order on paragraph 4 of the Interlocutory Application. Ecosol has advised that Mr Smith will appear as Ecosol’s legal representative by AVL at the hearing of the appeal, and at any other hearings. If he is to return to Australia, it will be at his own expense. I note that advice. In any event, however, it would be inappropriate to restrict, in this fashion, the manner in which Ecosol chooses to conduct its response to the appeal.
Conclusion
I order as follows:
1.I dismiss paragraph 1 of the Interlocutory Application FDN 9 seeking leave to adduce fresh evidence on the appeal.
2.I dismiss the application in paragraph 2 of FDN 9 seeking leave to file a Notice of Alternative Contention.
3.On the undertaking of Ecosol that it will not make any distributions (capital or revenue) to its shareholders until the appeal is finalised, I dismiss the application in paragraph 3 of FDN 9.
4.I dismiss the application in paragraph 4 of FDN 9.