New South Wales Supreme Court CITATION : King v Linney (No 2) [2010] NSWSC 342 HEARING DATE(S) : 26 February 2010 JUDGMENT DATE : 29 April 2010 JUDGMENT OF : Harrison J 1. Order that paragraph 4 of the statement of claim be struck out. 2. Grant liberty to the plaintiffs within 28 days to file and serve an amended statement of claim if so advised. 3. Order the plaintiffs to pay the defendants' costs of and incidental to the application to strike out paragraph 4 of the statement of claim. DECISION : 4. Order that within 21 days the plaintiffs furnish the defendants with such answers to the defendants' request for particulars of the statement of claim as are contained in their solicitor's letter dated 29 May 2009 and which remain unanswered. 5. Order the plaintiffs to pay the defendants' costs of and incidental to the application for particulars issue. 6. Dismiss the defendants' application for costs on the notice to produce issue. 7. Order the plaintiffs to pay the defendants' costs on the challenge to retainer issue. 8. Dismiss the plaintiffs' application for adjudication of reserved costs with no order as to costs. CATCHWORDS : PRACTICE AND PROCEDURE – where plaintiffs' neighbours published allegedly defamatory material about them by erecting signs and distributing a letter – application by defendants pursuant to UCPR 14.28 to strike out a paragraph of the statement of claim upon the contention that the pleaded imputations are not capable of arising from the matters complained of – further application by defendants to strike out entire claim in defamation for non-compliance with UCPR 15.19(1)(d), 15.19(1)(e) and 15.19(2) – where no way of knowing what part of which publication is said to give rise to each pleaded imputation – pleading wholly bad in form and cannot stand – COSTS - where plaintiffs served notice to produce upon defendants' solicitor personally - where no disadvantage or prejudice caused to defendants – overly technical insistence on form viewed in light of Civil Procedure Act s56 – no order as to costs – where plaintiffs challenge retainer of the defendants' solicitor – subsequently abandoned - where no confidential information communicated - plaintiffs to pay the defendants' costs incurred resisting the challenge. LEGISLATION CITED : Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005 CATEGORY : Procedural and other rulings Amalgamated Television Services Pty Ltd v Marsden [1997] NSWCA 17; (1998) 43 NSWLR 158 Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716 Griffith v John Fairfax Publications Pty Ltd [2004] NSWCA 300 CASES CITED : Holmes v Fraser [2008] NSWSC 570 John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 201 ALR 77 Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 King v Linney [2009] NSWSC 911 UTi (Aust) Pty Ltd v The Partners of Piper Alderman [2008] NSWSC 219 Wendy Gay King (First Plaintiff) PARTIES : Brendan John Murphy (Second Plaintiff) Darren Linney (First Defendant) Tanya Morris (Second Defendant) FILE NUMBER(S) : SC 2008/289190 COUNSEL : P W Bates (Plaintiffs) SOLICITORS : Gerard Malouf & Partners (Plaintiffs) Goldsmiths Lawyers (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HARRISON J 29 April 2010 2008/289190 Wendy Gay King and Brendan John Murphy v Darren Linney and Tanya Morris JUDGMENT 1 HIS HONOUR: I have previously dealt with some aspects of this somewhat unusual matter: see [2009] NSWSC 911. I am now required to deal with a series of competing applications by the plaintiffs and the defendants. These are explained and dealt with in turn. Background 2 The plaintiffs are de-facto partners who formerly lived together in a house that they owned at 67 Lake Russell Drive, Emerald Beach They sold that property in August 2007 and moved to Corindi Beach. The defendants lived together at 61 Lake Russell Drive, Emerald Beach at the time of the matters complained of in the statement of claim. They have since also moved elsewhere. 3 The plaintiffs allege, among other things, that the defendants published material of and concerning them that was defamatory. That material was in the form of signs said to have been erected by the defendants in places that were prominent and visible to the public. The defendants are also alleged to have published a letter on or about 20 April 2007, which was delivered to letterboxes in their area. 4 Photographs of the signs are in evidence. There are four of them. The signs say "No. 67 STOP VANDALISING OUR PROPERTY THANKYOU", "ANOTHER ACT OF 67", "KEEP OUT 67 SIXTEY [sic] SEVEN" and "DAMAGE TO OUR CAR BY WENDY KING NO 67 $1000 PLUS 3/05/07 8.40AM LIAR". These are the first four matters complained of. The fifth is the letter. It is much longer. Unfortunately, it becomes necessary, even for presently limited purposes, to record all of what it says. It is in the following terms: "To the fool who left their joke of a letter in our letterbox on the 11/09/2005 Due to the facts that the information in which you have only recently been advised of was promoted by the mentally imbalanced fool in which you represent. With all you're so called legal knowledge you failed as a legal representative of the fool in question. Firstly, the fool you professionally represent failed to put forward the true facts that it was her that fed all the knowledge and information about: - - You and your drug habits including your mum's health problems and the dispute between neighbours (from day 1 of moving in). - Peter & Jill Doig (from day 1 of moving in) No wonder the stupid bitch has a brain tumour when all she does is fuckin poison everything. People she knows reckon Peter has no friends. You only have to look at how many people visit their home in comparison to the maggots next door. Considering the slag has been here for approximately 7-8 years it highlights who is the social misfit. - Wayne & Lyndall Dykes (from day one of moving in) Every single time they would be around, Wendy King the fulltime slagger and nosey pig of a neighbour would say some of the nastiest things about Jill, Lyndall, Wayne and Peter that could ever come out of somebodies [sic] mouth. (The first meeting between Tanya and Wendy was highlighted by Wendy Kings slagging of these lovely neighbours that our family has come to know. - John & Annette Kramer (from day one of moving in) about a tree in the back yard and what a fucked doctor John Kramer was. - Trevor Windmill (from day one of moving in) the list goes on of back stabbing she has slagged on about Trevor. Now they want to befriend Trevor. - The Slaters (after her daughters problem with their daughter she stated Mrs Slater was 'Fucking psycho'. - Harley (Brendon Murphy's work college [sic]) Wendy and Brendon have bad mouthed and backstabbed this person on many occasions. The most disturbing being Wendy saying he was a wife basher and the speed he rides past here she wised [sic] he would smash and dies. Wendy and Brendon stated to us that Harley's not working cause [sic] he took time off work to get the drugs out of his system otherwise he faces the sack. - John & Michele Howard - Wendy the slagger backstabbed Michele Howard over being a religious person and that her husband 'couldn't build shit'. - The Gay man that lives next to Harley (how does the slag know so much) - Rob & Jessie (Wendy's neighbours) she bagged them to me without even meeting them. They have lived here for the same time as us. One statement the slag made was about the bug zapper in Rob's front yard. 'Have you seen where the dickhead has put it'? - Dianne - the lady who walks the block several times a day is in Wendy the slagger's words "the stuck up spotty dog bitch" Tanya's parents when they were here and we rang WIRES about a sick kangaroo Wendy King needs to look at her family instability. Maybe that's why Brendon looked elsewhere for sex and her parents live how they do. She made comment's to me that Tanya's parents didn't seem suited. Funny thing is they've been married for years. Maybe the backstabbing slag you represent should look at her poor family structure before commenting on EVERYBODY ELSE. Again, you tell me who should shut their septic slag mouth and MIND THEIR OWN BUSINESS. Our family (stated that she knows three people who I call mates that live up here but reckon I'm a wanker. Funny thing is I don't know three people from Sydney that live up here, but the strange thing is that the back stabbing slag that Wendy King is stated on 11/09/05 that she didn't back stab anyone. Tell me who talks? Whilst minding my own business using Roundup the septic talking slag yelled out from near the banana tree on her property to 'Try using hot water ya fuckin dickhead'. Brendon later used his work vehicle and consumables (is that stealing?) to poison some of the top of their yard. On this day I made comments to Brendon that it's funny that you use this chemical after the trash Wendy said to me and Brendon stated that "this stuff is that harmless you could drink it'. For you to send me such dribble about minding your own business and those who are bored you should take a good look at yourself and the fools you pathetically try to impress. Wendy has bad mouthed nearly every single person in this neighbourhood. She has gone into great detail and spoken very foul mouthed about all of the people I have listed. Need not have a BALLB (pending) to work out who creates their own undoing. If my memory serves me correct it was her that during the first week of moving to the area gave Tanya and myself an in depth rundown on what neighbourhood it was in which we moved into of which mainly focused on Wayne, Lydall, Peter, Jill and Trevor. That is having involvement in an AVO in which you are involved. Wendy told us that she was a witness. Am I right or am I wrong? The Doigs and the Dykes have kept their mouths shut so maybe the dirty backstabbing loose lipped slag who helped you promote your letter should be the one to GROW UP. She stated to Tanya that she likes their privacy. It's a shame the slag cannot do the same for others. Wendy is also the person who has informed us of when people have visited our home Eg:- Banana coast Pest Control (twice) - Kwick curb garden edging. She even went into detail of what time they arrived and what time they left to the minute. You tell me who's sticking their nose into other peoples business. The list goes on with what this nosey slag that you represent in your letter has informed Tanya and I about. She loves to know what is going on around her because it is you and them that conduct a feeble life. How did you know my fully name? Seems like you need to mind your own business and considering you ASS ume to know so much about the law you should try at some stage to follow it. You can thank the fools you represent as Wendy the backstabbing whinger actually made jokes of you and your pot smoking. Not only can we smell it, do you also drive after? I'm glad you have such a thorough understanding of the law. You and the other fools you are trying to represent a [sic] need to get a life. Try spending time in reality and finding out the true facts before a low life piece of trash like you not only enters our property to deliver this useless and totally incorrect documentation you also may need a little extra information that has no bias with at least 50% truth. Your useless service supplied to the fools was their only resort of pointing the finger. They can't talk to anyone else because nobody likes them. I suppose when your [sic] socially inept you have no other immediate alternatives. What an absolute circus you fools operate. Don't enter/damage my property or confront any of my family as since you're in depth septic knowledge of the true goings on has again slipped the minds of you useless, nosey fools. If you do you will find out more about the law than your brainless stoned and nosey attitude can consume. Just to think it was only 16 months ago that Brendon Murphy try to push their pot that they grew near the chicken shed onto us only to find we are non-smokers. You may need to talk more with those fools as their minute little brains may have forgotten some things that they have acquired and/or conducted and big noted to us during conversation. YOU FOOLS ARE THE MAGGOTS OF SOCIETY WHO NEED TO GET A LIFE Always pointing the finger at others Wendy cannot miss out what's going on because she has no life (that's from another neighbour who also knows how nosey and what a two faced sleazy backstabber she really is.) THE NOSIEST PIECE OF BACKSTABBING TRASH I HAVE EVER MET. MIND YOUR OWN BUSINESS (especially when what goes on in our yard has nothing whatsoever to do with psychotic, backstabbing socially inept dysfunctional fool.) The perfect example was 25/09/05 at 4.10pm. Practice what you wrote in the feeble letter you left in our letterbox. YOU TRIO OF USELESS TWO FACED DOUBLE STANDARD MAGGOTS. GET YOUR FACTS CORRECT - NOT FROM A LIAR Wendy stated she never swears (What do you call Lindall being a cocaine addicted fuckin cunt and her best friend was the local Coffs dealer.) Wendy stated butter wouldn't melt in her mouth (short memory) Wendy should remember some of the nasty things she has told Tanya DON'T ASSUME YOU AND THE FOOLS ARE OF THEIR OWN LAWS Kind Regards Darren Linney (you already know my full name because you MIND YOUR OWN BUSINESS –HA HA HA PRACTICE WHAT YOU MAGGOTS PREACH - THE FOOLS YOU REPRESENT ARE THE ONES WHO NEED TO MIND THEIR OWN BUSINESS. HISTORY HAS PROVEN THIS. YOU INFORM THOSE FOOLS YOU REPRESENT TO GET A LIFE. Don't forget that Brendon and Wendy both threatened to assault me in my own yard. (11-09-05) Twice. (If you don't belt him I will) Let's see how good their memory is with that if we end up in court." The imputations issue 5 This is an application pursuant to UCPR 14.28. The plaintiffs contend that the published material conveys imputations that are defamatory of them, that each plaintiff was or both of them were criminals, bad neighbours, bad citizens and that they damaged property belonging to other people. These imputations are pleaded in paragraphs 4(a) to 4(d) inclusive of the statement of claim. Paragraph 4(e) of the statement of claim is no longer pressed. By their notice of motion filed 10 June 2009 the defendants seek to strike out the whole of paragraph 4 upon the basis that it fails to disclose a reasonable cause of action and has a tendency to cause prejudice, embarrassment or delay. The defendants' contention is that the pleaded imputations are not capable of arising from the matters complained of. 6 The defendants relied upon cases such as Amalgamated Television Services Pty Ltd v Marsden [1997] NSWCA 17; (1998) 43 NSWLR 158 at 164-167, Griffith v John Fairfax Publications Pty Ltd [2004] NSWCA 300 at [19] - [20], John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 201 ALR 77 at [23], [26] and [181] and Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716. In Holmes v Fraser [2008] NSWSC 570 at [23] - [27], Simpson J helpfully summarised the position as follows: "[23] The approach to determining whether a publication is capable of conveying the imputations pleaded was comprehensively stated by Hunt CJ at CL, (with whom Mason P and Handley JA agreed) in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 165-167. Marsden was decided in a context in which a judge decided issues of capacity to convey or to defame but a jury decided whether a publication in fact conveyed the imputation or imputations, and whether the publication of the imputation or imputations in fact defamed the plaintiff. Although the distinction is not so stark in circumstances where all issues are decided by a judge it is, nevertheless, a real and relevant distinction. The principles stated in Marsden adapt readily to determination of whether the publication does, in fact, convey the imputation. [24] The enquiry is whether an ordinary reasonable reader (or listener or viewer) would derive from the words of which complaint is made any imputation or imputations pleaded. In answering this enquiry any strained or unreasonable interpretation is to be rejected. [25] The Court is entitled, and required, to take into account the mode or manner of publication: some forms of publication, by their nature, call for more assiduous attention than others (eg a book, as distinct from a newspaper; a written publication as distinct from a radio or television broadcast). The ordinary reasonable reader may engage in some loose thinking. [26] An imputation is not to be held to have been conveyed if it involves drawing an inference upon an inference: that is, if it depends upon a conclusion that the ordinary reasonable reader would draw an inference (something not explicitly stated in the words published but implied) from the words published and build upon that inference to draw a second inference. [27] It is to be assumed that the reader reads the whole of the publication…" 7 The defendants submitted that none of the pleaded imputations was capable of arising from any of the matters complained of. The plaintiffs were in effect impermissibly requiring the reader to draw an inference from an inference. The defendants submitted that the meanings contended for were simply unavailable from a proper reading of the published matter. 8 The defendants also make a series of formal or procedural complaints. They submit that the entire claim in defamation should also be struck out because the plaintiffs have failed to comply with UCPR 15.19(1)(d), 15.19(1)(e) and 15.19(2). That rule is as follows: " 15.19 Particulars in relation to statements of claim for defamation (1) The particulars required by rule 15.1 in relation to a statement of claim seeking relief in relation to the publication of defamatory matter must include the following: (a)… (d) if the plaintiff is not named in the matter complained of - particulars of identification of the plaintiff together with the identity, by reference to names and addresses or class of persons, of those to whom any such particulars were known, and (e) particulars of the part or parts of the matter complained of relied on by the plaintiff in support of each pleaded imputation. (2) Such of the following as is applicable must be filed and served with a statement of claim seeking relief in relation to the publication of defamatory matter (or any amended statement of claim) and be referred to in the statement of claim or amended statement of claim: (a) a legible photocopy of the original publication or, in the case of an internet, e-mail or other computer displayed publication, a printed copy, (b) a typescript, with numbered lines, of: (i) if the original publication is in English - the text of the original publication, or (ii) otherwise - a translation of the text of the original publication." 9 The fifth matter complained of has not been particularised in a way that identifies which parts of the letter are said to give rise to the various imputations pleaded, contrary to rule 15.19(1)(e). Rule 15.19(1)(d) has not been complied with in all respects. 10 I observe that none of the first three matters complained of refers to the plaintiffs as criminals, bad neighbours or bad citizens. These words are not used and no cognate expressions are used in their place. The second and third matters complained of are almost anodyne in content and otherwise do not specify their intended target. The plaintiffs are not named or identified and are unidentifiable by reference to the published matter. Moreover, the plaintiffs allege that each and every one of the matters complained of conveyed each imputation and all of the imputations. That is said by the defendants to be bad in form because each publication is a separate cause of action and therefore the meanings that are said to arise from each publication should be pleaded separately in distinct paragraphs. The defendants contend that the current pleading is embarrassing and liable to cause confusion. They submit that each imputation should be struck out. 11 I agree. There is no way of knowing what part of which publication is said to give rise to each of the pleaded imputations. Some of them are clearly incapable of doing so alone. For example, a publication of the words "Another act of 67" appears on one view to be incapable of conveying any defamatory imputation, let alone any of the imputations pleaded by the plaintiffs. It may be for this reason that the plaintiffs have purported in an omnibus fashion to plead in paragraph 4 that "[e]ach and every one of the respective aforesaid matters complained of in each of the aforesaid respective publications referred to in paragraph 3 herein conveyed each and all of the following imputations, each of which such imputation was defamatory of each of the first and second plaintiffs respectively". Having regard to the very limited nature of the first four matters complained of, and to the contrast with the dense and lengthy nature of the fifth matter complained of, this form of pleading is wholly bad and cannot stand. The plaintiffs' obligation to comply with UCPR 15.19(1)(e) in respect of the fifth matter complained of is very clear and the defendants' complaints about the plaintiffs' failure to do so after requests that it be complied with are well founded. 12 Compliance with UCPR 15.19(1)(d) is no mere formality. Only the fourth matter complained of mentions the first plaintiff by her full name. The second plaintiff is never mentioned by his full name in any of the matters complained of. The fifth matter complained of mentions the first plaintiff's name in full but only the second plaintiff's first name. The rule has work to do in this case and should have been complied with. 13 I also consider that the reasoning process required to connect the matters complained of to the imputations that are said to arise from them follows a strained and tortuous path. It requires at least the drawing of an inference based upon inference, if not some detective work as well. The defendants should not be required to do this and should not be placed in a position where the allegations against them are as uncertain and ill defined as they are in the present case. 14 In my opinion the whole of paragraph 4 should be stuck out. The particulars issue 15 The second prayer for relief in the defendants' notice of motion filed on 10 June 2009 seeks an order that within 14 days the plaintiffs serve further particulars of the statement of claim in answer to the defendants' request by letter dated 29 May 2009. The letter is eight pages long and contains 53 separate requests. The letter was not answered by the provision of the particulars that were sought when the plaintiffs' solicitor replied on 2 June 2009 so the defendants' solicitor wrote again on the same day in the following relevant terms: "In acknowledging the criticisms that you have made, we also reiterate that, in our clients' submission, the amended statement of claim pleads imputations that are not reasonably capable of arising and, further, it pleads allegations that are inadequately particularised, thereby entitling our clients to further particulars." 16 By a letter dated 3 June 2009 the solicitor for the defendants wrote to the solicitor for the plaintiffs in these relevant terms: "We note that it has been asserted that requests for particulars, presumably of the amended statement of claim, have previously been served, and presumably responded to. We confirm that we are not in possession of copies of any such requests or of any responses provided, and our clients, likewise, are not in possession of such documents. We again invite you to provide to us copies of any requests and any responses. We also invite you to identify which of the requests made in our letter dated 29 May 2009 you say have already been made, and fully and properly responded to. By taking that course, it may then be possible for us to consider which of the requests made in our letter dated 29 May 2009 are pressed, if it be the case that some have previously been made and answered." 17 Other correspondence passed between the parties. It did not advance the matter to any notable extent. On 2 July 2009 the solicitor for the defendants wrote a letter to the solicitor for the plaintiffs that included the following paragraph: "We note from your letter dated 29 June 2009 that you are seeking instructions in relation to the various particulars requested. We also note from comments made by Mr Bates that some or all of those particulars may be provided." 18 The reply by letter dated 8 July 2009 was relevantly as follows: " AS TO YOUR REQUEST FOR FURTHER AND BETTER PARTICULARS 5. We are seeking further instructions from our clients and anticipate being able to update the court by the directions hearing on 16.7.09." 19 It would appear that this did not happen. The particulars requested were not provided. Instead, the plaintiffs' counsel produced submissions dated 28 August 2009 to which is attached a document described in handwritten words as "Additional Particulars". It is otherwise described as a list of events for dates underlined in the amended statement of claim. It is too long to reproduce here but is in any event not an answer to the request for particulars that the defendants made. It looks very much instead like a document that may have been prepared by the plaintiffs and provided by them to their solicitor as and by way of instructions from which an answer to the defendants' request for particulars could be crafted. It is on another level wholly irrelevant and can be ignored. 20 The most intriguing aspect of this somewhat sterile dispute is why the solicitor for the plaintiffs did not simply answer the defendants' requests as best they could or object to doing so if that is what they proposed to do. Nothing could have been simpler. Instead there developed a series of letters to-ing and fro-ing to no good end and with no tangible result. Costs were generated but progress was not. The defendants press for their answers and no reason why they should not be provided has emerged. They should be provided in full now unless the fate of paragraph 4 of the statement of claim renders any of the requests irrelevant or unnecessary. The notice to produce issue 21 The plaintiffs served a notice to produce upon the solicitor for the defendants. It was addressed to him personally rather than to the defendants. The defendants took the point that the notice was for that reason invalid or ineffective and sought to have the plaintiffs withdraw it. The issue for consideration is who should pay the costs of that dispute. 22 By letter dated 13 July 2009 the solicitor for the defendants wrote to the solicitor for the plaintiffs concerning the notice to produce in the following relevant terms: "We acknowledge receipt of the notice to produce faxed by you to us at about 5.16 pm last Friday. In our view, the notice to produce is misguided and ill-founded. We invite you to withdraw it. If we do not receive your written confirmation by 12 noon tomorrow that the notice to produce is withdrawn, then we shall assume that it is not, and that it is not to be. In that event, we shall be filing a motion to set aside the notice to produce. In our view, the notice to produce has been served improperly and without reasonable cause. Furthermore, in our view, its service is the responsibility of your firm. In the circumstances, if a motion is necessary, then, assuming that it is granted, we give you notice that we intend to seek an order that the principals of your firm pay the costs of the motion, pursuant to section 99(1) of the Civil Procedure Act 2005. We shall also seek an order for costs upon an indemnity basis." 23 The reply to that letter came on the same day as follows: "We are instructed to press the notice to produce. If your sole difficulty is that you need additional time to comply with it, and you inform us how much time you would need, we would seek further instructions about that aspect." 24 No further correspondence on this topic ensued. The plaintiffs withdrew the notice to produce in due course. The defendants submit that it is fundamental that a notice to produce can only be served upon a party and not upon a solicitor. The notice was in terms directed to the production of documents going to a challenge by the plaintiffs to the retainer of the defendants' solicitor. That challenge has been abandoned although the costs that were generated remain in issue. This is dealt with below. 25 The defendants rely upon UCPR 21.10. That rule provides as follows: " 21.10 Notice to produce for inspection by parties (1) Party A may, by notice served on party B, require party B to produce for inspection by party A: (a) any document or thing that is referred to in any originating process, pleading, affidavit or witness statement filed or served by party B, and (b) any other specific document or thing that is clearly identified in the notice and is relevant to a fact in issue. (2) A notice to produce may specify a time for production of all or any of the documents or things required to be produced." 26 The defendants' approach to the matter is technically correct. They rely upon the rules and referred to them in correspondence with the plaintiffs' solicitor concerning this dispute. However, the rules are also framed in the context of the Civil Procedure Act 2005 to which all litigants are required to have regard. Section 56 is pertinent. I am asked to adjudicate upon the issue of costs generated by a misdirected notice to produce. No argument was raised concerning its content or its relevance. A letter asking that it be redrawn and addressed to the defendants, or suggesting that it be treated as if it had been directed to the defendants, would in all likelihood have obviated the debate that occurred and would have avoided the incurring of the associated costs. 27 There is in my opinion considerable tension between the obligation to deal with matters justly, quickly and cheaply on the one hand and an overly technical insistence on form and the assertion of rights without good cause, or where a more conciliatory, not to say commonsense, approach is indicated, on the other hand. Forms should be our servants, not our masters. There is nothing to indicate that the defendants would have been disadvantaged or prejudiced by approaching the matter in the way I have suggested, or in some similar fashion. I consider that the days have long since passed when practitioners were entitled to expend time and incur costs, which they seek ultimately to inflict upon another party, when it is clear that a moment's reflection upon the overriding purpose would indicate a different, more efficient, approach was called for. That is what should have happened in this case. 28 I consider that there should be no order for costs made concerning this issue. The challenge to the retainer issue 29 The plaintiffs sought at one time to enjoin the defendants' solicitor from representing them further in these proceedings upon the basis that the plaintiffs had earlier retained him for legal advice about the matter and that he had become possessed of confidential information and was in those circumstances confronted with an irreconcilable conflict of interest. Before the plaintiffs withdrew their challenge to the retainer of the defendants' solicitor, the defendants had incurred costs resisting it. They seek an order that these costs be paid by the plaintiffs. 30 The defendants submitted that the application to restrain their solicitor from acting for them was ill founded and misconceived from the start. They rely upon what was said by Barrett J in UTi (Aust) Pty Ltd v The Partners of Piper Alderman [2008] NSWSC 219 at [29] as follows: "Possible foundations of injunctive relief [29] The proposition that a lawyer should, at the suit of a client or former client, be restrained from acting for another person in particular legal proceedings is generally supportable on any of three bases: 1. That to act for the other person is inconsistent with the duty of loyalty owed by the lawyer to the client as an incident of the fiduciary relationship – the 'loyalty ground'. 2. That the lawyer possesses information to which an obligation of confidentiality in favour of the client attaches, which confidentiality will be actually or potentially compromised if the lawyer acts for the other person – the 'confidentiality ground'. 3. That restraint is necessary for the protection of the integrity of the judicial process and the due administration of justice – the 'administration of justice ground'." 31 The defendants submitted that the question of loyalty did not arise because the plaintiffs had never been clients of the defendants' current solicitor. With respect to the question of confidential information, the defendants point to what Barrett J said at [45] of the case cited earlier: "[45] In essence it is for a client or former client seeking to enjoin a lawyer to show that the lawyer possesses confidential information, that the client or former client has not consented to the use or communication of the information and that there is a real and not fanciful or theoretical risk of disclosure." 32 There is no suggestion before me that there is any confidential information that was communicated to the defendants' solicitor. What the evidence reveals is that in about June 2007, Ms King made enquiries of Mr Goldsmith about commencing defamation proceedings against the defendants. She asked some general questions about defamation and litigation, such as whether a sign could be a publication, and also about whether selling her house would affect such a claim. She also asked about costs. The plaintiffs have not pointed to the existence of any information that was confidential to them, which they communicated to the defendants' solicitor at that time. The defendants emphasise that anything that was or may have been communicated by the plaintiffs has in effect been disclosed openly by them as part of the case they bring against the defendants and no longer retains any confidential character if it ever had it in the first place. 33 In relation to the administration of justice point the defendants rely upon what was said by Brereton J in Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 at [76]: " [76] The foregoing authorities establish the following:- · During the subsistence of a retainer, where the court's intervention to restrain a solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court's jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting for clients with competing interests [ Prince Jefri ]. · Once the retainer is at an end, however, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) [ Prince Jefri ]. · After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention, such duty having come to an end with the retainer [ Prince Jefri ; Belan v Casey ; Photocure ; British American Tobacco ; Asia Pacific Telecommunications ; contra Spincode ; McVeigh ; Sent ]. · However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice [ Everingham v Ontario; Black v Taylor ; Grimwade v Meagher ; Newman v Phillips Fox ; Mitchell v Pattern Holdings ; Spincode ; Holborow ; Williamson v Nilant ; Bowen v Stott ; Law Society v Holt ]. Prince Jefri does not address this jurisdiction at all. Belan v Casey and British American Tobacco are not to be read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications appears to acknowledge its continued existence. · The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice [ Everingham v Ontario ; Black v Taylor ; Grimwade v Meagher ; Holborow ; Bowen v Stott ; Asia Pacific Telecommunications ]. · The jurisdiction is to be regarded as exceptional and is to be exercised with caution [ Black v Taylor; Grimwade v Meagher; Bowen v Stott ]. · Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause [ Black v Taylor; Grimwade v Meagher; Williamson v Nilant; Bowen v Stott ]. · The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief [ Black v Taylor; Bowen v Stott ]." 34 The defendants contend that there was no evidence to suggest that enjoining their solicitor would be in the interests of justice or necessary to protect the integrity of the judicial process. They submit that the evidence is to the contrary because such an order would deprive them of their choice of solicitor and would also cause them financial loss by reason of the costs that they have already incurred. Appointing a new solicitor would necessarily lead to duplication of some work already done by their present solicitor. 35 The defendants also contend that the withdrawal of the challenge to the retainer itself bespeaks the futility of the challenge, which in turn informs the outcome of any argument about who should bear the costs of the issue. The plaintiffs on the contrary contend that their decision to abandon the challenge to the solicitor's retainer was prompted by an affidavit sworn by the solicitor for the defendants on 2 September 2009, which corrected what are referred to as "incorrect statements in [his] previous affidavit", and which made it clear to the plaintiffs for the first time that their application should be reconsidered. The burden of this submission is that the plaintiffs would not have sought to challenge the retainer if the defendants' solicitor had provided them with the correct information in the first place. 36 There was correspondence about this issue. By letter dated 29 June 2009 the solicitor for the plaintiffs wrote to the solicitor for the defendants as follows: "2. We have also been instructed this morning (28.6.09) by the plaintiffs to challenge your firm's retainer for the defendants. We are instructed that the plaintiffs first became aware, from your letter to us dated 29.5.09 seeking particulars, that they previously sought, and obtained, confidential legal advice from Mr Goldsmith in the matter relating to the current dispute between the parties. More particularly, we are instructed that: (a) Wendy King logged into a website known as 'Australian Defamation Lawyers' and sent an email to that site on or about 13 June 2007 at 10.35 am – the website captured her email and did not give her a copy of it, but we are instructed that it set out confidential aspects of the instructions of Ms King and Mr Murphy against Mr Linney and Ms Morris in the current dispute. (b) Within two or three days, Ms King received a telephone call from Mr Barrie Goldsmith of Goldsmiths who apparently has a connection with the 'Australian Defamation Lawyers' website. Mr Goldsmith told Ms King he had received the email, and discussed the dispute more fully including more details about the signs and the other issues in dispute. Mr Goldsmith during the conversation told Ms King words to the effect that she and Mr Murphy 'definitely have a case against Mr Linney and Ms Morris', and 'they had no right to put signs up in their yard and sit up there and get away with that' and 'no one [King and Murphy] has to put up with that sort of stuff' and 'no one has the right to abuse you especially if you are in your own yard' and 'it was not a one-off incident'. (c) Mr Goldsmith asked Ms King to forward $3,000 to start proceedings. (d) Ms King and Mr Murphy did not have $3,000 at that stage, and instead instructed Gerard Malouf and Partners. (e) Ms King and Mr Murphy instruct us they would not have entrusted Mr Goldsmith with confidential instructions and sought confidential legal advice from him, which he gave Ms King, if they knew Mr Goldsmith would be in a position to use that information in a way that may be prejudicial to them if Mr Goldsmith acts for Mr Linney and Ms Morris in the current dispute. In our view, that perception is one that any reasonable observer would reach. (f) We require Mr Goldsmith, and Goldsmiths, to produce, at the directions hearing tomorrow (29.6.09) the entire file in your firm's and Mr Goldsmith's ownership, possession custody and/or power, including but not limited to any and all emails, file notes, records, instructions, advice, and any and all other documents (including print outs of electronic documents), with regard to the inquiry made by Wendy King (on her own behalf and/or for her husband, Brendan Murphy) to 'Australian Defamation lawyers' and with regard to any and all investigations, advice, answers by Mr Goldsmith and/or by Goldsmiths Lawyers and/or by 'Australian Defamation Lawyers' in response to that inquiry during June 2007 and since that time to date. 3. We are instructed to ask your firm to excuse itself and cease to act for the defendants due to the issues of ongoing confidentiality, earlier advice in the same dispute, likelihood of manifest risk of prejudice, and the requirements of the administration of justice. We draw your attention to the elucidation of these principles in Kallinicoss v Hunt [and] Uti Pty Ltd v The Partners of Piper Alderman … 4. In our opinion the retainer issue needs to be resolved before your firm takes any further step affecting our clients, the plaintiffs. Please advise your instructions and your position with regard to your retainer. We note that the evidential burden has shifted to your firm … Depending on your further instructions, we may be instructed to file a notice of motion disputing your retainer by the defendants/cross claimants." 37 In my opinion this issue can be determined by reference to the original email sent by the plaintiffs to the defendants' (current) solicitor. It follows upon an original conversation with him and one of the plaintiffs. It has not been suggested that the original conversation is important for present purposes. The email contains all the information that the plaintiffs conveyed to him. His responses to the questions that were asked are not relevant to the present issue but for the sake of completeness they are included in what follows. The email is dated 13 June 2007 and together with the solicitor's replies is in these terms: "To Mr Barrie Goldsmith Hello Barrie, I spoke with you a couple of weeks ago regarding a defamation case against my neighbour. The neighbour in question put up signs in their front yard stating that we are damaging their property, they also wrote a letter to the CEO of my partners company saying that he was harassing them while they are driving on the road. I am interested in starting legal action, but I have some questions that I need to ask! Someone is interested in buying our house and we are waiting to exchange contracts, is it better to start proceedings now while we still live here or should we wait until we have moved, as I am not sure how this will affect the lawsuit. Legally, it makes no difference at all. My neighbours have their house on the market, does this affect the case in any way? No. If they sell before we start, would we be able to find them to proceed? Presumably, but obviously I do not know where they may go to, and how difficult it may be to find them. If you were to commence proceedings now, obviously we would be able to serve them at this time. Will you be needing police records of past history? No. How does the case begin? We prepare and serve a Concerns Notice under the Defamation Act. Basically, that puts them on formal notice of the defamation claim and gives them an opportunity to settle the claim without the necessity of actual proceedings. How long will the case take and what is involved? Defamation cases can take 12 - 18 months to be heard and determined, if they are fully contested. There are a number of steps involved in such proceedings, as there are in all Court proceedings, but hopefully this matter would not proceed to a contested hearing (obviously, until the process was started, we would not know what their reaction will be). The signs in question have since been removed, they were removed on the 7th & 8th of June, does this affect the case in any way? No. What is the cost of a defamation suit? It really depends upon the nature and extent of the issues raised and, again, we will not know of the nature and extent of the issues until we have started the process, and we see what their reaction is. Our costs in relation to the Concerns Notice are $3,000 + GST. That includes time spent to-date, preparing and serving a Concerns Notice, advising you generally and perusing any response received from the neighbours, obtaining your instructions on that and sending one further letter, if necessary, to the neighbours. If the neighbours do wish to try and resolve matters after the Concerns Notice has been served then it is a matter for you as to the terms of any settlement but you could certainly make it a term of the settlement that they pay your legal costs. My neighbours are: Darren Linney & Tanya Morris 61 Lake Russell Drive EMERALD BEACH NSW 2456 I have photos of the signs and video footage of Darren Linney painting the sign and also of him calling me a lying whore, I also have a copy of the letter that was sent to my partners work. Thank you for your time and I look forward to hearing from you. Yours sincerely Wendy King & Brendan Murphy" 38 It is apparent that the plaintiffs sought and received this advice from the solicitor. The communication was limited, preliminary and is arguably uncontroversial. It does not purport to deal with the provision or receipt of confidential advice. More importantly, the email and the response to it had been in the plaintiffs' possession for a considerable period of time before they commenced the proceedings and well before the defendants' current solicitor was retained. There is no confidential information given by the plaintiffs to that solicitor in the email in question, and certainly no information that the plaintiffs have not otherwise revealed as part of the case that they now wish to prosecute against the defendants. Whatever wisdom provoked the application to challenge the retainer of the defendants' solicitor, the plaintiffs ultimately recognised that it was ill founded and belatedly withdrew it. Nothing that the solicitor revealed in his correcting affidavit appears to me to be actually related to the decision to abandon the challenge, which was never likely to succeed and should not have been mounted. 39 It is apparent that the defendants incurred costs in resisting the plaintiffs' application. The costs would appear to be relatively limited. Be that as it may, the plaintiffs should pay those costs. The reserved costs issue 40 The defendants' former solicitor acted for them from at least 18 April 2008 until 11 May 2009. The defendants failed to comply with directions and costs of directions hearings on 12 March 2009 and 16 April 2009 were reserved. The defendants' former solicitor swore an affidavit on 16 April 2009 and at the directions hearing on that date Registrar Bradford directed the defendants to provide a further affidavit as to the conduct of the case by the defendants. However, before that happened, those solicitors ceased to act for the defendants. The defendants' current solicitor has been unable to obtain their file from his predecessor and the reserved costs issue remains unresolved. 41 Despite the plaintiffs' submissions I do not feel that I am yet possessed of sufficient information to resolve this issue. The defendants ought to be given the opportunity to respond to the plaintiffs' claim, that they pay these costs, in an informed fashion. It is not sufficient protection for the defendants simply to reserve some liberty to them to proceed personally against their former solicitor for an indemnity, or similar, in respect of costs that they may have been ordered to pay. I consider that the costs will have to remain reserved until more information becomes available. There does not appear to be an overwhelming urgency for this issue to be resolved and the plaintiffs cannot realistically complain that they are prejudiced by any delay that may be associated with the resolution of this question. Orders 42 In all of these circumstances I make the following orders: 1. Order that paragraph 4 of the statement of claim be struck out. 2. Grant liberty to the plaintiffs within 28 days to file and serve an amended statement of claim if so advised. 3. Order the plaintiffs to pay the defendants' costs of and incidental to the application to strike out paragraph 4 of the statement of claim. 4. Order that within 21 days the plaintiffs furnish the defendants with such answers to the defendants' request for particulars of the statement of claim as are contained in their solicitor's letter dated 29 May 2009 and which remain unanswered. 5. Order the plaintiffs to pay the defendants' costs of and incidental to the application for particulars issue. 6. Dismiss the defendants' application for costs on the notice to produce issue. 7. Order the plaintiffs to pay the defendants' costs on the challenge to retainer issue. 8. Dismiss the plaintiffs' application for adjudication of reserved costs with no order as to costs. ********** 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.