STATE OF NEW SOUTH WALES v DEREN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL COLE JA 6 April 1998 [1998] NSWCA 215 Cole JA I have before me two notices of motion. The first is filed on behalf of the State of New South Wales, which is the appellant in these proceedings, and seeks an unconditional stay pending the determination of the appeal. The second is brought by the respondents to the appeal, Mr and Mrs Deren, who seek that the appeal be expedited. The State of New South Wales is supporting the application by Mr and Mrs Deren that the matter be expedited. The circumstances of this appeal relate to judgments given by Abadee J consequent upon a jury trial in which there was awarded to Mrs Deren the sum of $450,000 and to Mr Deren the sum of $350,000 arising from defamations which were held to flow from information provided by police officers subsequent to the charging of Mr and Mrs Deren with various charges associated with alleged assaults on young children, those assaults being said to be of a sexual nature and arrangements, if I can put it that way, in relation to the assaults. The allegations that are said to give rise to the defamations occurred in 1988. There was a charge or charges against Mr and Mrs Deren which were the subject of some magisterial inquiry in 1989 and they were not sent to trial in relation to those charges. The writ in defamation was issued in 1990. I am told that the defences were filed in 1991. There was then some inquiry by a police officer, which may be taken to be a reason for the delay in the further progression of the matter, and there was subsequently an inquiry by Wood J in which I am told some of these matters the subject of the allegations grounding the defamation were investigated. In those circumstances it cannot be said that there has been any unreasonable delay in the progression of the hearing of the defamation proceedings. notwithstanding that they did not come on until 1998. This court in Elders Rural Finance Ltd v Smith & Ors! laid down certain guidelines which the court follows in determining whether expedition should be granted. There are, of course, exceptional cases which do not fit within those guidelines where it is appropriate for there to be expedition granted. I do not think that this case falls within those guidelines but I do regard it as a matter of an exceptional category which ought to be granted expedition. The allegations against Mr and Mrs Deren have received quite enormous publicity since they were first made some decade ago. They have had to suffer legal proceedings, both of an inquiry type before a magistrate and now these proceedings in defamation. They have been subject to an inquiry apparently by Wood J and throughout that time the allegations against them and their responses have received wide media publicity, as did the trial in these proceedings. 1. (1995) 38 NSWLR 395 at 400-401. 2 UNREPORTED JUDGMENTS It seems to me that they are entitled to have these matters brought to a conclusion as soon as is reasonably possible. I have been informed that 3 and 4 June are as available as dates on which this appeal could be heard and I propose to fix it for hearing on those days. Accordingly, I will order expedition and the matter will be fixed for hearing on 3 and 4 June 1998. The remaining matter is whether this court should grant a stay in whole or in part of the amounts of the verdicts. The principles and factors to be considered are well stated in Alexander v Cambridge Credit Corporation.2 The successful plaintiffs have in their favour a presumption that they are entitled to the fruits of the judgment. Another factor to be taken into account is the prospects of success on appeal in accordance with the notice of appeal which has been filed. I think it inappropriate that I say too much concerning my initial view regarding the prospects of success of the appellant. It is sufficient to say that I regard the appellant as having strongly arguable grounds of appeal. The major contention of the appellant is that the trial miscarried because, in essence, the appellant was not permitted to rely upon a contextual imputation that the second plaintiff, that is Mr Deren, is a child molester, and further that it was not permitted to call as a witness a person known as JM whom it is said would have given evidence that at some time preceding the events which gave rise to the defamations in 1988, the second plaintiff, Mr Deren, had sexually assaulted her when she was a young person. The imputations which were alleged by the plaintiffs were essentially (a) the plaintiffs participated in sexual assaults on young children attending a Sydney kindergarten and (b) the first plaintiff, that is Mrs Deren, took advantage of her position as the director of a Sydney kindergarten to entice young children into a situation where they became victims of sexual assault and (c) the plaintiffs took part in the photographing or videotaping of sexual assaults on young children attending a Sydney kindergarten. The imputations were thus of some specificity and as the plaintiffs' contend are related with some directness to events alleged to have occurred at a kindergarten in Sydney. At the trial apparently no photographing or videotaping was sought to be established. The appellant, on the other hand, sought to raise two contextual imputations, the first being that the second plaintiff, that is Mr Deren, was a child molester and that the first plaintiff, that is Mrs Deren, had managed the affairs of the kindergarten, of which she was the proprietor, in a grossly irresponsible manner by permitting a person, said to be the second plaintiff, whom she knew to be a child molester, to have access to young children, knowing also that it was likely or possible that he would molest some of those children. In relation to the plaintiffs' imputations the defendant pleaded both s15 and s16 and they sought to justify the contextual imputations to which I have referred. Apparently the second plaintiff, Mr Deren, led evidence in chief that in the early 1970's he had in fact assaulted sexually two young persons and been dealt with by courts in Papua New Guinea in respect of those incidents. 2. (1985) 2 NSWLR 685, in particular at 694 and 695. URJ STATE OF NEW SOUTH WALES v DEREN (Cole JA) 3 There was also material which was admitted at the trial that in 1990 Mr Deren, accompanied by Mrs Deren, had been interviewed by a television station and on that occasion, when asked why he had engaged in the activities which were the subject of the court proceedings in New Guinea, he gave an answer indicating a need to perform the acts which he did. It was against that background that the appellant sought to lead from the witness JM further evidence that at some time after the events the subject of the charges in New Guinea and at some time prior to the alleged events giving rise to the charges of 1989, which resulted in the publication of the alleged defamations, Mr Deren had in fact assaulted sexually JM when she was a young person. The trial judge did not permit the appellant to rely upon either of the contextual imputations and he rejected an application on behalf of the appellant to, as it were, strike out the words from the imputation alleged by the plaintiffs, "attending a Sydney kindergarten" so that that imputation would have read, "The plaintiffs participated in sexual assaults on young children". There is a significant debate between counsel for the appellant and counsel for the respondents regarding the propriety of the trial judge's rulings in each respect. Each counsel has informed me that they are supported by one hundred years of law in support of their propositions. It is not a matter which I feel I need to resolve this morning. It is sufficient to say that that makes plain that there is a significant argument which requires to be addressed regarding the correctness of the trial judge's decisions because it seems to me that the effect of those decisions was to narrow the trial to the particularity for which the plaintiffs contended in a fashion which meant that ultimately the appellant was restricted from calling evidence which might have had an effect upon the deliberations of the jury, either in relation to what I shall call liability or in relation to damages. I say might because it is obviously uncertain what effect, if any, that material would have had if it had been permitted to go to the jury. As I have said, there are significant matters to be determined on appeal of a legal nature relating to the circumstances in which contextual imputations can be relied upon either at common law or pursuant to s16. A third factor to be considered is the consequence of either making or not making an order for a stay. Mrs Deren has put on affidavit her financial position and the position to which she deposes is that of herself and her husband. It shows that she has assets of about $47,000 and liabilities of about $119,000. Included in those liabilities is the sum of about $80,000 owing to her solicitors and $36,000 which she has borrowed to cope with legal fees and personal expenses. It seems plain to me that if a stay is not granted, then moneys which may be paid to Mr and Mrs Deren will be used to repay legal expenses and borrowings in the nature of legal expenses or for personal expenses. As such, it seems to me that those moneys would be irrecoverable. The financial position shown of a deficit of some $72,000 makes plain that Mr and Mrs Deren are not in a position to give any security for any moneys which they may receive pursuant to the verdicts. On the other hand, it has been put by Mr Sexton that they ought to have at least some proportion of the amount of the verdicts because they may need funds to enable them to prepare for the appeal which will be heard in June. 4 UNREPORTED JUDGMENTS Ihave weighed those three factors in particular in my consideration of whether or not a stay should be granted either conditionally or unconditionally. The view I have come to is that there should be an unconditional stay, particularly as the appeal can be heard within less than two months. In those circumstances I will make the orders sought in paral of the notice of motion filed on behalf of the appellant dated 20 March 1998. I think the appropriate order is that the costs of these two motions, which I regard as reasonable, should be costs in the appeal. I direct the appeal books be prepared by 4 May; written submissions by the appellant by 11 May; response by the respondents by 25 May and any reply to that as appropriate.