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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Slater v Ecosol Pty Ltd

Details

AGLC: Slater v Ecosol Pty Ltd [2024] SASCA 95
Case: [2024] SASCA 95
Decision Date: 2 August 2024

CaseChat Overview and Summary

This matter concerned an application by Mr Slater to adduce fresh evidence on appeal against a decision of Blue J in the Supreme Court of South Australia. The original proceedings involved a defamation claim brought by Mr Slater against Ecosol Pty Ltd. Blue J had found that most of Ecosol's publications were defamatory, but that Ecosol had established a defence of common law qualified privilege, and that Mr Slater had failed to establish malice in response to that defence. Mr Slater sought to rely on a subsequent costs judgment, transcripts of evidence relating to an invoice, a record of outcome, and email correspondence concerning legal invoices, all of which he contended were relevant to his malice argument.

The primary legal issue before the court was whether the fresh evidence sought to be adduced by Mr Slater was admissible on appeal. This required consideration of the principles governing the admission of further evidence on appeal, particularly evidence that was not available at the original hearing and its relevance to the issue of malice. Mr Slater argued that this new material demonstrated that the original finding of no malice was predominantly based on the credibility of Mr Smith, and that the subsequent material cast doubt on that credibility.

The court dismissed Mr Slater's application to adduce fresh evidence. It reasoned that the proposed evidence, relating to a costs judgment and legal invoices, was not of a nature that would likely alter the outcome of the appeal. The court noted that the original judge had found Mr Smith to be an honest witness, despite some argumentative and evasive tendencies, and that the grounds for suspicion regarding the sale of the business, which Mr Slater relied upon, had been traversed in the primary judgment. The court found that the subsequent material did not provide a sufficient basis to overturn the original findings on malice, particularly in light of the evidence given by Mr Smith and other directors, who were found to have acted in Ecosol's best interests.

The court made several orders. It dismissed the application to adduce fresh evidence and the application to file a Notice of Alternative Contention. It also dismissed an application concerning distributions to shareholders, conditional upon an undertaking by Ecosol not to make any distributions until the appeal was finalised. Finally, the court dismissed the application concerning the manner in which Ecosol would conduct its response to the appeal.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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].

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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