New South Wales Supreme Court CITATION : King v Linney [2009] NSWSC 911 HEARING DATE(S) : 2 September 2009 JUDGMENT DATE : 2 September 2009 JUDGMENT OF : Harrison J EX TEMPORE JUDGMENT DATE : 2 September 2009 DECISION : Order pursuant to s 26(1) Civil Procedure Act 2005 that these poceedings be referred to mediation. CATCHWORDS : PRACTICE & PROCEDURE – defamation and related proceedings between former neighbours – several interlocutory applications at an early stage – prospect that other similar applications will be made - considerable ill-feeling between the litigants – where a prospect exists that costs may be disproportionate to final outcome – Civil Procedure Act 2005 s 26(1) – where Court has power to order mediation – proceedings referred to mediation LEGISLATION CITED : Civil Procedure Act 2005 CATEGORY : Procedural and other rulings Wendy Gay King (First Plaintiff) PARTIES : Brendan John Murphy (Second Plaintiff) Darren Linney (First Defendant) Tanya Morris (Second Defendant) FILE NUMBER(S) : SC 20035/2008 COUNSEL : P W Bates (Plaintiffs) S T Chrysanthou (Defendants) SOLICITORS : Gerard Malouf & Partners (Plaintiffs) Goldsmith Lawyers (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HARRISON J 2 September 2009 20035/2008 Wendy Gay King and Brendan John Murphy v Darren Linney and Tanya Morris JUDGMENT – EX TEMPORE 1 HIS HONOUR : These are proceedings that were originally commenced by statement of claim in 2008. An amended statement of claim was filed on 2 October 2008, which for present purposes is the relevant pleading. The plaintiffs claim damages for defamation and other relief. 2 The proceedings arise out of considerable acrimony and disharmony that appears to have developed between the parties who were once neighbours in the village of Emerald Beach on the central north coast of New South Wales. It is for present purposes unnecessary to descend into the detail of the enmity that has now developed, but the relationship between the plaintiffs and the defendants deteriorated to a point where offensive signs were allegedly being erected on the front lawn of the defendants' property drawing attention to the defendants' perceived concerns and complaints about the plaintiffs. This undoubtedly interfered with everyone's ability to live in close proximity and ultimately the plaintiffs sold their home and moved away. Before that had occurred, a series of unfortunate incidents took place. Poisonous correspondence was delivered. The second plaintiff also contends that he sustained personal injuries as the result of one such incident that occurred quite literally over a fence. He claims damages for his injuries. The plaintiffs also claim that they were forced to sell their home at a loss as a result of a reduction in its value that is attributable to the defendants' locally notorious unpleasantness. The plaintiffs seek compensation from the defendants for this as well. 3 The amended statement of claim is replete with references to pecuniary loss, aggravated and exemplary damages and other matters in argumentative terms to which it is unnecessary in detail to refer. The current defence to the amended statement of claim is in the nature of a denial of liability and does not yet adequately inform a reader of the precise position which the defendants intend to adopt in response to the plaintiffs' various allegations. A cross claim has been filed. 4 The proceedings come before me today for adjudication of a series of notices of motion. Two of those notices of motion, filed by the defendants, deal with matters relating to whether or not the pleadings can withstand scrutiny and whether or not imputations said to arise from the matters complained of ought to be struck out. The plaintiffs have also filed a notice of motion that seeks to challenge the retainer of the defendants' present solicitor. In the events that have now occurred, that challenge is understandably no longer pressed. 5 I noted in passing during the course of a discussion with counsel that this matter involves a number of issues that are predominantly, although I concede not exclusively, in the nature of a backyard dispute between parties who were formerly neighbours. Whatever hopes the parties to this litigation originally had, or may since have been given, about the likelihood of successfully prosecuting or defending it, they are thankfully not matters about which I need or ought to offer an opinion. I have already said, and I reiterate, that litigation between private parties involving disputes of this nature is no less emotionally painful and expensive in comparative terms than the equivalent litigation between corporate entities arguing over very large sums of money. 6 The parties to this litigation can be absolutely certain, before it proceeds much further, that whatever may be the outcome that either may ultimately achieve, whether by adjudication or settlement, it will be significantly diminished in size and diluted in effect by an inevitable, unstoppable and continuing increase in costs. It is also likely that a large proportion of these costs will in the end result be unrecoverable and that any costs that may be awarded will very inconveniently fall short of a complete indemnity for what has been expended. 7 I have enquired of Mr Bates of counsel, who appears for the plaintiffs, and Ms Chrysanthou of counsel, who appears for the defendants, about whether or not their respective clients would be amenable to these proceedings being referred to mediation. I made that enquiry in the context of Part 4 of the Civil Procedure Act 2005 , which gives this Court power in an appropriate case to order that any proceedings before it, or any part of any such proceedings, be sent to a mediator: see s 26(1) of the Act. 8 I take it to be the case that the parties do not oppose mediation, but against the contingency that I have misunderstood the position of either of them, or that their attitude might change, I should indicate that in the circumstances of this case I propose to order it and to give other directions for the conduct of the proceedings in anticipation of the mediation taking place. In making that order, I understand from my own experience that mediations are necessarily not always successful and that this Court has no power to require or to force a party to settle a matter at mediation. Despite the fact that by s 27 of the Act litigants are (somewhat counter intuitively) subject to a duty to participate in the mediation in good faith, I recognise that the authentic or justified intransigence of one or other of them in a quest for the achievement of a compromise is something over which this Court has no effective or final control. It seems to me in this case, from what I know of it so far, and assisted by the pleadings and the affidavits that have been filed, that the parties' approach to its resolution runs the risk of being unduly influenced by subjective considerations whose effect I consider might helpfully be minimised by the interposition of a skilled mediator or conciliator. 9 Mr Bates quite properly raises some concerns about whether or not the proceedings are yet ready to be referred to mediation. Ms Chrysanthou in turn suggests that the plaintiffs, as far as she can determine, are evincing a view of their prospects of success that is on her assessment disproportionate to the best likely outcome in their favour. Be that as it may, it does seem to me that the relatively and comparatively small costs of organising and concluding mediation in a timely way will have a number of significant advantages to the parties. It will enable them to confront each other in a non-binding forum and will provide them with an opportunity in that setting to give vent to the significant matters of concern to them all. It will also permit them in that relatively informal and benign environment, and without prejudice to their entitlement to continue the proceedings (if necessary), to gain some insight into and appreciation of the particular concerns of the other side and possibly also to be given the benefit of the views and the experience of the appointed mediator on a confidential basis. 10 Costs are not the only thing that determines whether a matter should be referred to mediation but I reiterate that in this case the unstaunched flow of costs from the private and presumably modest resources of the plaintiffs and the defendants is in the end result going to be more troublesome and productive of distress and disappointment than anything that is likely to arise out of the mediation process if it fails. With the agreement of the parties, I have indicated that I will retain the file in this matter and provide such case management as it requires. I have in mind that even notwithstanding that the pleadings may be incomplete and that some evidentiary enquiries and examinations may not yet have been concluded, the parties should be required within a short time frame to prepare and exchange position papers and to agree upon or, in the absence of agreement, to accept the appointment by the Court of an appropriate mediator and to attend such preliminary meetings and mediation sessions as she or he may in due course require. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.