Supreme Court New South Wales Medium Neutral Citation: Houda v State of New South Wales [2012] NSWSC 1036 Hearing dates: 8, 10 August 2012 Decision date: 05 September 2012 Before: McCallum J Decision: Limitation period for bringing a cause of action for defamation extended to 19 March 2012 Catchwords: LIMITATION OF ACTIONS - claim in defamation - whether it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication - where plaintiff facing criminal charges raising the same issues of fact during that year Legislation Cited: Crimes Act 1900 Defamation Act 2005 Law Enforcement (Powers and Responsibilities) Act 2002 Legal Profession Act 2004 Limitation Act 1969 Cases Cited: Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676 Carey v ABC [2010] NSWSC 709 Carey v ABC [2012] NSWCA 176 Noonan v MacLennan [2010] QCA 050; 2 Qd R 537 NRMA Insurance Ltd v Flanagan [1982] 1 NSWLR 585 Ritson v Gay & Lesbian Community Publishing Limited [2012] NSWSC 483 Category: Interlocutory applications Parties: Adam Houda (plaintiff) State of New South Wales (defendant) Representation: Counsel: P Neil QC, P Lange (plaintiff) D Caspersonn (defendant) Solicitors: Watson Mangioni Lawyers Pty Ltd (plaintiff) Henry Davis York (defendant) File Number(s): 2012/87798 Publication restriction: None Judgment 1Adam Houda is a solicitor. On 16 September 2010, police conducting "proactive patrols" following a spate of armed robberies approached Mr Houda near his home and requested that he provide identification. He responded by asking to know the basis for the request. Following a further exchange during which Mr Houda evidently did not provide identification as sought, he was arrested. He was later charged with failing to comply with a request to submit to a search contrary to s 27 of the Law Enforcement (Powers and Responsibilities) Act 2002 and resisting a police officer in the execution of his duty contrary to s 58 of the Crimes Act 1900. 2Mr Houda alleges that police issued a defamatory statement the following day concerning his arrest and that the contents of the statement were republished in the Sydney Morning Herald on 18 September 2010. 3Mr Houda pleaded not guilty to the two charges. They were heard in the Local Court commencing on 30 May 2011. On 7 October 2011, a Magistrate dismissed both charges, finding that the prosecution had not made out a prima facie case. The Director of Public Prosecutions considered lodging an appeal against the Magistrate's decision but had decided against that course by mid-November 2011. 4On 19 March 2012, Mr Houda commenced these proceedings against the State of New South Wales. Mr Houda seeks to prosecute a number of causes of action against police including a claim in defamation in respect of the statement issued on 17 September 2010. 5The claim in defamation is statute-barred. That point having been raised in correspondence on behalf of the defendant, Mr Houda now seeks an order pursuant to s 56A of the Limitation Act 1969 extending the limitation period to the date on which the statement of claim was filed. This judgment determines that application. 6The limitation period for a claim in defamation is one year. Section 14B of the Limitation Act provides: 14B Defamation An action on a cause of action for defamation is not maintainable if brought after the end of a limitation period of 1 year running from the date of the publication of the matter complained of. 7The court has power under s 56A(1) of the Act to make an order extending the limitation period. The wording of the test for exercising that power (under s 56A(2) of the Act) is curious. The section provides: (2)A court must, if satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period mentioned in section 14B to a period of up to 3 years running from the date of the publication. (3)A court may not order the extension of the limitation period for a cause of action for defamation, other than in the circumstances specified in subsection (2). 8I had occasion to consider the application of that test in Carey v ABC [2010] NSWSC 709. I held (at [44] to [45]) that s 54A imposes an onus on the plaintiff to satisfy the court that it was not reasonable to bring proceedings within the one-year limitation period and that, unlike its predecessor, the section apparently does not raise any question as to prejudice to the defendant due to the delay. I held further, as had already been stated by Simpson J in Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676 at [28], that the section does not confer a discretion. The power to order an extension is enlivened or not, according to whether the court is satisfied in the terms of the section. The section mandates a result depending on the Court's determination of that issue. 9The Court of Appeal endorsed that construction: see Carey v ABC [2012] NSWCA 176 at [55] per Beazley JA; McColl JA and Sackville AJA agreeing at [95] and [98] respectively. 10It has been acknowledged that the burden thus imposed on a person seeking an extension of the limitation period is one which will only be satisfied in relatively unusual circumstances: see Noonan v MacLennan [2010] QCA 050; 2 Qd R 537 at [15] per Keane JA; at [50] to [51] per Chesterman JA. 11In considering the test under s 54A, it is appropriate to consider the plaintiff's actual reasons for not commencing proceedings within that time. However, the test also requires the Court to consider whether, on an objective test, those reasons point to the conclusion that it was not reasonable to commence the action. It is not enough for an applicant to prove a subjective belief to that effect: see my judgment in Carey at [46] to [48]; approved by the Court of Appeal in Carey at [56] to [57]. 12I consider, however, that those principles must be applied in the context that the statute plainly contemplates the existence of circumstances in which the court will be satisfied that it was "not reasonable" to commence proceedings within one year from the date of publication. Care must be taken in that context to distinguish between the reasonableness of commencing an action within that year and the reasonableness of allowing the limitation period to expire. The section focuses on the passage of time rather than on the reasonableness of ignoring the statute. 13That is not to say that the existence of the limitation period is an irrelevant circumstance in the consideration of that question. However, the court must be astute not to approach the issue on the premise that it is always "not reasonable" to let a limitation period pass without commencing an action. The section expressly contemplates otherwise. 14Further, in my view, the plaintiff does not have to establish that the commencement of proceedings would have been positively unreasonable: only that it was not reasonable. I acknowledge that my conclusion in that respect is inconsistent with the view stated by Chesterman JA in Noonan v MacLennan [2010] QCA 50; 2 Qd R 537 at [51]. With great respect to his Honour, the formulation there endorsed puts a gloss on the words of the section. It must be accepted however that, absent some particular consideration militating against the commencement of proceedings, it would ordinarily be reasonable to commence proceedings during the prescribed period. Mr Houda's reasons for not commencing an action 15The statement authorized for publication in respect of Mr Houda's arrest was an email in the following terms: About 8.20 pm yesterday (Thursday 16 September 2010), NSW Police officers issued a lawful direction to a 35-year-old Yagoona man who was uncooperative, would not supply particulars to police and did not comply with the lawful direction. As a consequence the 35 year old man will be issued with a Future Court Attendance Notice for not complying with a request to submit to a search and resist arrest. Police officers were conducting proactive patrols in the Yagoona area following a series of robberies involving knives. 16Although the text of the email did not identify Mr Houda, the subject line of the email did. 17The proposed claim in defamation is pleaded from paragraphs 36 to 42 of the statement of claim filed 19 March 2012. Those paragraphs reveal that Mr Houda seeks to sue on the email as the matter complained of, relying on its republication in the Sydney Morning Herald as a matter going to damages, not as a separate cause of action. That is perhaps not surprising in the circumstance that Mr Houda is quoted extensively in the newspaper article, which is primarily a report of allegations he makes against police (of racial vilification, harassment and brutality). The content of the email is reproduced only at the conclusion of the article, effectively by way of response to those allegations. 18The defamatory imputations pleaded by Mr Houda as arising from the email are: (a)that he Plaintiff disobeyed a lawful direction of a police officer to submit to a search; (b)that the Plaintiff had not cooperated with police; (c)that the Plaintiff had resisted arrest; (d)that the Plaintiff had been lawfully arrested; and (e)that the conduct of the Plaintiff was such as to warrant his arrest for failure to submit to a search. 19The elements of the cause of action in defamation do not raise an issue as to the truth of those imputations. The only elements required to be proved by Mr Houda are that the matter complained of was published by the defendant and that it conveyed imputations defamatory of him. However, it would plainly be an important consideration in making a sensible decision as to whether to prosecute such a claim to assess the likely strength of any defences, including the defence of justification. 20As already noted, the hearing of the criminal proceedings against Mr Houda commenced on 30 May 2011 and concluded on 7 October 2011 with the dismissal of both charges. By that date, the limitation period had expired. 21Mr Houda received notice on 19 October 2011 that the Director of Public Prosecutions was considering whether to appeal the Magistrate's decision. Mr Houda stated that he received notice of the Director's decision not to appeal in "about mid December 2011". Evidence at the hearing before me revealed that the notice was in fact dated 18 November 2011. However, Mr Houda's evidence as to when he received it was unchallenged and it is appropriate to proceed on that premise. 22Mr Houda explained his decision not to commence proceedings within one year of the publication of the email in the following terms: In the period between when I was arrested on 16 September 2010 and the middle of December 2011 when the Director of Public Prosecutions indicated the Crown would not be proceeding with the appeal, a period of 1 year and 3 months, I was deeply concerned to take advice, prepare for and defend the criminal proceedings. I regularly attended upon my solicitors and counsel. I did not, in fact, give evidence before the Local Court, as the case was dismissed before I would have been called upon to give evidence. I was under a considerable degree of stress in respect of these proceedings, which, if determined adversely to me, could have resulted in penalties and possible proceedings against me by the Law Society. I considered that if I was successful in defending the criminal proceedings, I would bring an action in respect thereof, but I had to wait until the criminal proceedings were finalized. As far as the defamation component of my case is concerned, I considered that it would not be reasonable for me in the circumstances to bring such a case before the completion of the criminal proceedings. 23It was submitted on behalf of the plaintiff that the objective "unreasonableness" of commencing proceedings for defamation during the currency of the criminal proceedings is demonstrated in two ways. First, the success or otherwise of the defamation action would be "closely linked" to the outcome of the criminal case against Mr Houda. Specifically, it was submitted that, had the plaintiff been convicted at the hearing, the defence of truth would almost inevitably have been available to the defendant. 24Mr Neil QC, who appeared with Mr Lange for Mr Houda, did not suggest that, had Mr Houda been convicted, the fact of the convictions would of itself be admissible in the defamation proceedings to prove the substantial truth of the publication. As I understood the submission, it was that the forensic strength of the Crown case in the Magistrate's Court was an important consideration in the assessment of the prospects of success in the defamation action. Mr Houda's legal representatives could reasonably have taken the view that, if the evidence against him sustained a finding of guilt beyond reasonable doubt, and assuming the same evidence was available to the defendant in defending the defamation action, the prospect that Mr Houda would be successful in receiving an award of damages may well be minimal. Further, the fact that the charges were dismissed would not preclude the defendant from seeking to establish a defence of justification. 25Mr Neil pointed, in that context, to the requirements of s 347(2) of the Legal Profession Act 2004. That section provides: A law practice cannot file court documentation on a claim or defence of a claim for damages unless a principal of the practice, or a legal practitioner associate responsible for the provision of the legal service concerned, certifies that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success. 26Mr Neil placed emphasis on the fact that the section expressly prohibits a law practice from filing initiating process without the required certification. 27The second aspect of the alleged "unreasonableness" of commencing defamation proceedings whilst the criminal proceedings were continuing was that Mr Houda may well have suffered a forensic disadvantage in the criminal proceedings if he had elected to proceed in his civil matter at the same time. The proper pursuit of the civil action may, for all practical purposes if not at law, have abrogated Mr Houda's right to silence in the criminal proceedings. 28The defendant submitted that the criminal proceedings posed no impediment to the commencement of proceedings for defamation during the year after 17 September 2010. It was submitted that Mr Houda was aware of and had proof available for all of the elements necessary to prove a claim for defamation. The defendant submitted that the kind of circumstance commonly referred to in the authorities in which it would be "not reasonable" for a plaintiff to commence proceedings within time was when the plaintiff was unaware of the publication or the identity of the publisher: see for example Ahmed v Harbour Radio Pty Ltd [2010] NSWSC 676. 29In my view, the question whether it is reasonable or, conversely, not reasonable to commence proceedings entails consideration of more than just the known existence of the elements of the cause of action. A publication is actionable if it conveys meanings defamatory of a person. However, that says little about the wisdom of pursuing such an action, which requires careful consideration of any likely defences. Whilst that is largely a matter of common sense for which no authority is needed, it is a proposition which finds endorsement in the obiter remarks of Hunt J in NRMA Insurance Ltd v Flanagan [1982] 1 NSWLR 585 at 599B where his Honour said: No plaintiff properly advised should ever embark upon a defamation action unless he is prepared to litigate the truth of the imputations of which he complains, or of other imputations also conveyed by the matter complained of which are contextual to them. 30It was submitted on behalf of the defendant that those remarks must be read in the context that the investigation of defences potentially available to the defendant should not put the plaintiff "in breach of" the Limitation Act. It is not strictly accurate to speak in terms of breaching the Limitation Act. The Act is not prescriptive. It simply provides a consequence for failing to commence an action within a limitation period prescribed under the Act, which is that the action is not maintainable unless the Court makes an order extending that period. 31The defendant noted that, at the time the remarks of Hunt J in Flanagan were made, there was a six-year limitation period for defamation. The professional obligation of legal practitioners to give due consideration to the prospects of success of a claim before filing process to commence an action, combined with the now substantially shortened limitation period in defamation actions, potentially poses something of a dilemma for legal practitioners in circumstances such as the present. Much of the argument in the present case was directed to that issue. 32Thus the defendant submitted that a practical and reasonable solution open to the plaintiff would have been to file a statement of claim shortly before the expiration of the limitation period but defer service of that document, noting that a statement of claim is valid for service for six months under rule 6.2(4) of the UCPR. Alternatively, it was noted that Mr Houda could have commenced proceedings and then sought a stay of the proceedings pending the determination of the criminal proceedings. It was indicated that the State would have consented to a stay in the circumstances. 33Those are steps which a solicitor could and arguably should responsibly recommend, depending on the circumstances of the particular case. However, s 54A is not concerned with the reasonableness of the conduct of the legal practitioner acting for the plaintiff. The only question to be determined under that section is whether it was "not reasonable" for the plaintiff to commence an action. The steps required to be taken by those acting for a plaintiff to protect themselves against an allegation of professional negligence (for allowing the limitation period to expire) is a different question. 34I am satisfied that it was not reasonable for Mr Houda to commence proceedings for defamation before the conclusion of the criminal proceedings against him. The wisdom of that course was inextricably linked with the fate of the criminal charges, which demanded priority as the forum in which he had to vindicate his reputation. 35Further, Mr Houda was intending to pursue other causes of action against the defendant that also depended on the fate of the criminal proceedings. In my view, it would not have been reasonable for him to launch the juggernaut of defamation proceedings before he was in a position to assess the prospects of success of those claims. Had he been convicted of the criminal charges, the prospect of then vindicating his reputation in a civil action would have been derisory. Indeed, a premature decision to commence such action may have compounded the very harm sought to be vindicated. 36Although Mr Houda faced the dilemma of having otherwise to allow the limitation period to expire, in my view it was not reasonable for him to attempt to pre-empt the outcome of the criminal proceedings when so much was at stake. Those acting for a plaintiff have an obligation to give proper advice as to the steps available to preserve a cause of action within the limitation period. However, that obligation should not be seen as a straight-jacket constraining the responsible assessment by a plaintiff in the circumstances of Mr Houda as to whether to take on the burden of litigating the truth of a defamatory imputation while defending the same allegation in criminal proceedings. 37It does not necessarily follow that every person facing criminal charges should automatically have an extension of the limitation period. My decision in the present case is based on the complete overlap between the issues raised in the criminal proceedings and by the claim in defamation, the fact that the plaintiff is a solicitor who faced the prospect of professional ramifications if he misjudged the seriousness of the criminal allegations against him and the fact that Mr Houda seeks to pursue other causes of action at the same time as the claim in defamation. 38The defendant submitted that, even if the Court were satisfied that it was not reasonable for Mr Houda to commence defamation proceedings within the one year period, the proceedings ought to have been commenced before 19 March 2012 and, accordingly, that the limitation period ought not be extended to that date. It was submitted that the Court has a discretion as to the period for which the limitation period should be extended. 39Authority for that proposition may be found in the decision of Noonan at [47] per Chesterman JA; and see Ritson v Gay & Lesbian Community Publishing Limited [2012] NSWSC 483 at [22] to [25] per Beech-Jones J. In Ritson, his Honour observed that the language of the section does not readily lend itself to being described as a "discretion" except in the sense of involving a normative judgment as to the period of extension. 40Beech-Jones J noted in that context (at [29]) that each case will turn on its own circumstances. Whilst the legislature plainly contemplated that defamation actions should be brought promptly, there is no warrant for requiring a plaintiff to move with undue haste. 41In the present case, it was not until mid-December 2011 that Mr Houda became aware that the DPP had decided not to appeal against the Magistrate's dismissal of the charges. The proceedings were commenced within three months after that time. I do not think that period entailed any unreasonable delay. Accordingly, I am satisfied that it is appropriate to extend the limitation period to 19 March 2012. 42For those reasons, I order that the limitation period for commencing an action in relation to the matter complained of in paragraph 38 of the statement of claim be extended to 19 March 2012. ********** 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. Decision last updated: 05 September 2012