TW and Associates Pty Limited & Ors v Ireland & Ors [2000] NSWSC 1185

New South Wales Supreme Court

CITATION : TW and Associates Pty Limited & Ors v Ireland & Ors [2000] NSWSC 1185 CURRENT JURISDICTION: Comon Law FILE NUMBER(S) : SC 20312/00 HEARING DATE(S) : Wednesday 6 December 2000 JUDGMENT DATE : 15 December 2000

TW and Associates Pty Limited (1st Plt) Anthony Webster (2nd Plt) PARTIES : David Webster (3rd Plt) David Ireland (1st Def) Andrew Inwood t/as Crikey Media (2nd Def) Crikey Media Pty Limited (3rd Def) JUDGMENT OF : Levine J

T Blackburn (Plt) COUNSEL : D Sibtain (2nd Def) S Mayne (in person) Tress Cocks & Maddox (1st, 2nd 3rd Plts) SOLICITORS : Bush Burke & Co (2nd Def) S Mayne (in person) CATCHWORDS : Publication on website - domain name register search - quality of disclosed information as to identity of a "publisher" - discontinuance - indemnity costs DECISION : See para 31

DLJ:2 CAV [2000] NSWSC1185

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST No.20312/00

JUSTICE DAVID LEVINE

FRIDAY, 15 DECEMBER 2000

TW AND ASSOCIATES PTY LIMITED & ORS (Plaintiff)

v

IRELAND & ORS (Defendant)

JUDGMENT: (Publication on website - domain name register search - quality of disclosed information as to identity of a "publisher" - discontinuance - indemnity costs). 1 HIS HONOUR: On 12 July 2000 the plaintiffs commenced proceedings claiming damages for defamation against David Richard Ireland (the first defendant) and Andrew Inwood t/as Crikey Media RBN:BN 83410201 (the second defendant). 2 The action relates to material posted on an internet website at the domain "www.crikey.com.au". 3 In that Statement of Claim no allegation as to publication was made as against the second defendant. 4 On 24 August 2000 an amended Statement of Claim was filed joining as the third defendant Crikey Media Pty Limited (ACN 091 304 059). In paragraph 3 of that pleading the allegation is made that the "defendants" published the relevant material. 5 On 28 November the plaintiff filed a Notice of Motion seeking leave to discontinue the proceedings against the second defendant and that the second defendant's costs upon discontinuance of the proceedings be paid by the third defendant. 6 On 28 November 2000, by leave, a further amended Statement of Claim was filed joining Mr Stephen Mayne a Director of the third defendant, as fourth defendant. 7 In support of the Notice of Motion two affidavits by Carol Hanania sworn 27 October and 23 November 2000 were relied upon as was an affidavit of Stuart Anthony Wells of 28 November. 8 Mr Kouper on 5 December 2000 swore an affidavit on behalf of second defendant. 9 Prior to the filing of the amended Statement of Claim which for the first time makes an allegation against the second defendant Mr Inwood as publisher, Messrs Bush Burke and Co solicitors for that party wrote to the solicitors for the plaintiffs. I gather that prior to that communication from Messrs Bush Burke there may well have been communications directly between Mr Inwood and Mr Wells prior to the institution of proceedings and following a communication from Messrs Tress Cocks & Maddox dated 12 May 2000 (exhibit 1 on the motion). 10 Be that as it may, Messrs Bush Burke & Co made it quite clear in their letter (annexure B to the affidavit of Ms Hanania of 27 October 2000) that Mr Inwood did not then trade as Crikey Media and had never done so and that the registered business name to which the Statement of Claim refers was a registration undertaken by Mr Inwood's wife, who also never traded, but who simply held that name on trust for a company to be formed. The company now joined as third defendant Crikey Media Pty Limited, it was pointed out by Bush Burke, was registered on 24 January and it was stated that it was the only entity which has published any material in any form whatsoever. It was pointed out that Mr Inwood who was initially a director of that company to facilitate its establishment, resigned prior to the company commencing practical operations or publishing any material. It was pointed out by Bush Burke that a search of ASIC records would demonstrate that Mr Inwood ceased to be a director on 12 February and that documentation was lodged with ASIC on 7 March to that effect. It was also pointed out by Bush Burke that a check with an entity known as Internet Names Australia (a division of Melbourne IT Limited) which administers domain names would reveal that the domain name "crikey.com.au" is owned by Crikey Media Pty Limited. 11 On 2 August Messrs Tress Cocks & Maddox replied to Bush Burke first pointing out that a communication had been received by Mr Inwood on 13 July, the day after the filing of the process. It was pointed out by Tress Cocks & Maddox that Crikey Media was registered as a business on 25 November 1999 and curiously Tress Cocks & Maddox pointed out to Messrs Bush Burke & Co that Mrs Inwood was listed as the proprietor of Crikey Media. Whilst it was acknowledged that the company may have been registered on 24 January, searches by Tress Cocks & Maddox indicated that Crikey Media (the business name) was at the time of publication the domain name owner of "www.crickey.com.au." Tress Cocks & Maddox agreed that ASIC records indicated that Mr Inwood ceased to be a director of the company on 12 February and ingenuously asked the question "if it is the case that the business Crikey Media owns the domain name how does this impact on the proceedings?" 12 Bush Burke replied on 4 August repeating that their client was not the proprietor of the business name. They stated against the position of their client's wife. It was pointed out that Mrs Inwood assigned the business name to the corporation on 21 February 2000 and as far as was known had nothing to do with that business name nor the company since that date. 13 It is important to bear in mind that this exchange of correspondence took place before the plaintiffs filed the amended Statement of Claim in which for the first time they alleged Mr Inwood was a publisher. 14 It is to be understood from Ms Hanania's affidavit of 27 October 2000 that some information by a search of "Internet Names Worldwide" of the domain name "www.crikey.com.au" gave the following information: "descr: Crikey Media descr: (CAN) None given descr: (Business Name) Crikey Media descr: (RBN) BN83410201 (NSW) descr: 96 Cliff Avenue North Bridge NSW 2063 person: Andrew Inwood address: 96 Cliff Avenue address: North Bridge address: NSW 2063 address: AU phone: +61 9380 7431 fax-no: +61 9380 7517 e-mail: andrew@peakhour.com.au remarks: (Organisation) Crikey Media remarks: (position) owner remarks: Created 1999/12/01" 15 What this information downloaded from "www.aunic.net" discloses as to the identity of a person who fairly and reasonably could be assumed to be a publisher escapes me. Mr Inwood is identified as a "person". Crikey Media is identified as a business name with the relevant number. What is clear is that at no time did Tress Cocks & Maddox make a search of the business name which would have disclosed that Mr Inwood had no connection with it. 16 It is further clear on the evidence (exhibit A) that on 16 May 2000 there was downloaded from the relevant website a document "Your Say" at the end of which is a copyright notice asserting the copyright of the published material on that downloaded matter in Crikey Media Pty Limited. To some extent, one would have thought, that would have alerted the plaintiffs to the existence of the corporation prior to the filing of a Statement of Claim on 12 July (the corporation was joined in the amended Statement of Claim filed on 24 August). 17 It is clear from the evidence of Ms Hanania that there are mechanisms available for the determination of the identity of persons or entities "associated with" (the neutral term I use advisedly) with domain names. Searches could be made of "www.ina.com.au", "www.inww.com", or through what is known as the AUNIC website "www.aunic.net". This is evident from an affidavit of Janice Webster being annexure A to Ms Hanania of 23 November 2000. 18 The significance of the information disclosed by a search of the kind referred to above is another matter entirely. The more so this is the position when it is borne in mind that a plaintiff in an action for defamation bears the onus of proof of publication. One would think care should be taken, especially in the new technological environment, to ensure that an appropriate person is sued. 19 The information referred to above being that found on the search on 11 August 2000 is said by Mr Wells in an affidavit of 28 May 2000 to be the same as the information he received when searching "www.aunic.net" some time between 5 and 9 November 2000. Mr Wells was unable to locate that search and swears that it was in substantially the same terms as that of 11 August 2000. Interestingly Mr Wells swears that the May 2000 search indicated a person "connected with "the domain name "www.crikey.com" as Mr Andrew Inwood. 20 By the time that the amended Statement of Claim was filed (24 August) it seems to me quite clear on the evidence in this motion that the plaintiffs disregarded the information they had obtained on their search of the registration upon a statutory register of the business name - they did not search it, relying only upon the bare outline of material provided by Melbourne IT Limited. It appears to me clear also that upon the identification of Mr Inwood as an "administrative" contact or some form of "technical contact" the plaintiff was satisfied that the second defendant was the "owner" of the website and thus in some way potentially a publisher - this is something more than Mr Wells swears to as being merely a person "connected with" the website. It is also apparent that the plaintiff dismissed as irrelevant the incorporation of Crikey Media Pty Limited and the resignation of Mr Inwood as a director of that company more than two months prior to the publication of the matter complained of. The plaintiffs took the view that the information given to them by Mr Inwood's solicitors was not true, indeed was false. 21 It was unreasonable for the plaintiffs to embark upon litigation naming Mr Inwood as the defendant (but not alleging publication against him) in circumstances where they had failed to conduct a business name search against the name of the entity disclosed by their domain name search. Regard also should have been had to the identification of a corporation (now the third defendant) as the entity claiming copyright on the published material. 22 Exhibit 2 on the motion is a bundle of e-mails from the now fourth defendant, Mr Mayne (who admits publication) the first of which is dated 12 May 2000 advising that the material the subject of complaint had been removed. The significance of this material is to say the least slight in so far as it discloses that Mr Wells e-mailed someone called Andrew at andrew@crikey.com.au. There is no evidence before me as to where that e-mail address came from. Frankly nothing turns on it. 23 In any event on 30 August (after the amended Statement of Claim had been filed) Bush Burke & Co make an open offer for the resolution for costs to which their client was clearly entitled to on discontinuance. This was an offer made in the light of instructions to seek indemnity costs. The plaintiffs took the position that they were not prepared to consider the offer or indeed discontinue until they had admissions of publication from the now fourth defendant, Mr Mayne. Whereupon inevitably Mr Inwood was confronted with the situation that he had to argue for his costs and in a context where it was made known to his solicitors that the plaintiffs in the event of being ordered to pay Mr Inwood's costs would be seeking costs from the corporate defendant (Crikey Media Pty Limited). 24 Argument was heard on 6 December at the conclusion of which I granted leave to the plaintiff to discontinue the proceedings against Mr Inwood reserving my consideration of the argument for costs. 25 For the plaintiffs some point was sought to be made by reference to exhibit 1, the letter of demand in so far as "…….rights were reserved". An observation to make is that exhibit 2 discloses an e-mail from the fourth defendant, Mr Mayne, to Mr Wells advising him that the material had in fact been removed. That disclosed of course that the material the subject of complaint had been removed, and that Mr Stephen Mayne was speaking for Crikey Media the business name in respect of which no search was ever carried out by the plaintiffs. Indeed, Mr Mayne was not joined as a defendant until 28 November by which time all relevant admissions had been made by him on behalf of the corporate defendant. 26 No doubt in pursuance of the rights reserved the plaintiffs embarked upon the proceedings against Mr Inwood, not having searched the business name, and not even making an allegation against him in the initiating process that he was a publisher. 27 I have no difficulty in coming to the view that the former second defendant is entitled to an order for indemnity costs in the light of the unreasonable conduct. It was open to the plaintiffs seriously to consider the information promptly given to them by Messrs Bush Burke & Co and to conduct the business name search. It was not reasonable in my view for the plaintiffs to keep Mr Inwood "hanging" until they obtained relevant admissions from another party. At least from the information provided by Messrs Bush Burke & Co it should have been quite apparent that the case (not even pleaded) against Mr Inwood was hopeless. 28 The former second defendant is entitled to an order for indemnity costs payable forthwith under SCR Pt 52A r (3)(a)(iii). Such costs are to include of course, the costs incurred in arguing his entitlement. 29 The plaintiffs seek in effect a "Bullock order" against Mr Mayne the person who, on 12 May at the very least, disclosed his close identity with the publication complained of months before the institutions of proceedings and in respect of whom it was not until 27 October 2000 that preliminary discovery was sought by order against him and Crikey Media Pty Limited in respect of matters now admitted. 30 I can see no basis for any action or inaction by Mr Mayne as giving rise to his being liable to indemnify the plaintiffs for the costs they are obliged to pay by reason of their own conduct vis a vis the person against whom, as early as May 2000, it would have been clear had reasonable steps been taken no proceedings at all should have been instituted. 31 The formal orders are: