Supreme Court New South Wales Medium Neutral Citation: Templar v Britton [2014] NSWSC 187 Hearing dates: 5 March 2014 Decision date: 05 March 2014 Jurisdiction: Common Law Before: Beech-Jones J Decision: (1) Paragraphs 14 to 20 and the claim for the particulars of exemplary damages in paragraph 21 of the second further amended statement of claim be struck out. (2) Order the plaintiffs to file and serve a third further amended statement of claim consistent with order 1 and verified by them within 21 days. (3) Extend the time for compliance by the plaintiff with order 2 made by McCallum J on 4 December 2013 a further 21 days. (4) Order the plaintiffs to provide any further particulars including particulars of the calculation of damages specified under the heading "General Actual and Special Damages" in paragraph 21 of the Second Further Amended Statement of Claim, within 21 days hereof. (5) The plaintiffs pay the defendants' costs of the application determined today. (6) The plaintiffs file and serve within 14 days any affidavit material they wish to rely on in response to the application that those costs be payable forthwith. (7) The parties exchange outlines of submissions on the question of when those costs should be paid within 21 days, such submissions to be longer than two pages. (8) The parties have liberty to apply to fix a time for brief oral submissions on the question as to when those costs are payable. Catchwords: DEFAMATION - application to dismiss proceedings by reason of failure to comply with Court orders - no question of principle. Legislation Cited: - Civil Procedure Act 2005 (NSW), s 56, s 61(3) - Competition and Consumer Act 2010 (Cth) - Uniform Civil Procedure Rules 2005 (NSW), Part 12 r 7 Cases Cited: - Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 - Templar v Britton (Supreme Court (NSW) McCallum J, 5 August 2013, unnrep) - Templar v Britton [2013] NSWSC 1827 Category: Interlocutory applications Parties: Stephen Templar (First Plaintiff) Audametrics Pty Ltd (Second Plaintiff) Paul Britton (First Defendant) Bradley Laughlin (Second Defendant) State of New South Wales (Third Defendant) Representation: Counsel: R.K.M. Rasmussen (Plaintiffs) D.R. Sibtain (Defendants) Solicitors: City Attorneys (Plaintiffs) Hicksons Lawyers (Defendants) File Number(s): 2012/393936 ex tempore Judgment 1The defendants have applied, pursuant to Part 12 r 7 of the Uniform Civil Procedure Rules 2005 ("UCPR") or, in the alternative, pursuant to s 61(3) of the Civil Procedure Act 2005 (NSW) for the dismissal of the entirety of the proceedings essentially by reason of the failure of the plaintiffs to comply with orders made by McCallum J on 4 December 2013. 2The background to the proceedings is set out in her Honour's judgment: Templar v Britton [2013] NSWSC 1827 ("Templar"). It is, however, necessary to describe the procedural background in further detail. 3The events the subject of the proceedings are alleged to have occurred in May 2012. In late 2012 the plaintiffs commenced proceedings. They sued, inter alia, in defamation. The first six months of 2013 were not positive ones for the plaintiffs' case. By 1 August 2013 the statement of claim had undergone five iterations and the plaintiffs were in breach of orders made by Rothman J on 1 July 2013, which required the filing and service of a second further amended statement of claim by 27 July 2013. 4The proceedings came before McCallum J in the defamation list on 5 August 2013. The defendants opposed any extension of time for the plaintiffs to file and serve a further pleading. Despite that objection, her Honour concluded that the preferable remedy would be to allow the plaintiff one further opportunity to amend his claim rather than force him to prosecute it on the strength of what was plainly a defective pleading. (Templar v Britton (Supreme Court (NSW), McCallum J, 5 August 2013, unrep) at [7]). 5Her Honour extended the time in which the plaintiff was to file and serve a second further amended statement of claim to 26 August 2013. It is plain from her Honour's reasons that a critical factor in allowing that to occur was that new counsel had been briefed and had acknowledged the difficulties with the existing pleading and indicated that efforts would be made to rectify them. In the end result, that counsel did not retain the brief but further counsel was retained. 6On 26 August 2013 a second further amended statement of claim was filed. It pleaded three causes of action: one in defamation, another for misleading and deceptive conduct, and the other for injurious falsehood. 7On 22 October 2013 the solicitors for the defendants wrote to the plaintiffs' solicitors outlining various defects with the second further amended statement of claim. Amongst other matters, they identified some reasonably fundamental and, in my view, obvious defects with the misleading and deceptive conduct claim, as well as pointing out that the claim for injurious falsehood was liable to be struck out because no loss or damage was pleaded. That was by no means the limit of the deficiencies that were identified. 8The sending of this letter was made pursuant to an order made by McCallum J on 10 October 2013 which required the defendants to serve any such objections by the date of the letter, that is, 22 October 2013. 9The matter was fixed for argument in the defamation list in November 2013 but, for reasons that are unnecessary to describe, it was adjourned to the defamation list in December 2013. 10When the matter was called on in the December defamation list, a very detailed set of submissions was provided on behalf of the defendants which expanded upon the objections that had been raised. 11On 2 December 2013 McCallum J heard argument in respect of a number of issues that had been raised by the defendants. Her Honour published her reasons in Templar on 4 December 2013. Her Honour made four orders. 12The first order was to require the second further amended statement of claim to be verified. Her Honour made that order because the second further amended statement of claim set out a materially different oral statement as founding the cause of action in defamation to the earlier versions of the statement of claim. Thus it was felt that there was a need to have the plaintiff verify that version, which may or may not have consequences for his credit at any trial. 13The second order was that the plaintiff provide particulars of the re-publication pleaded in paragraph 8 of the pleading in accordance with her Honour's reasons. Her Honour's reasons in Templar (at [17]) had identified that a pleading of a re-publication of the matter complained of which had occurred in minutes of a school meeting required particulars "of the persons to whom the minutes were published who knew facts such as to identify the plaintiff as the person referred to in the relevant part of the minutes". 14The third order her Honour made was that the plaintiff provide particulars of the re-publications pleaded in paragraphs 12 and 13 of the pleading in accordance with her Honour's reasons. This order was expanded upon in [25] and [26] of Templar in which her Honour discussed paragraphs 12 and 13 of the further amended statement of claim where there is a general allegation of re-publication to a "wide and extensive audience". Her Honour at [25] stated that the pleading created some confusion in that it was not clear "whether it is a general allegation of grapevine effect or general circulation of the original publication (going only to damages) or something more specific". At [26] her Honour also indicated that it was necessary to specify whether this re-publication was "relied upon as separate publications or only as to damages". 15The fourth order that her Honour made was that "the plaintiff provide particulars of the other claims in the proceedings in response to the complaint made in paragraphs 23 to 37 of the defendants' written submissions". This was a reference to those parts of the defendants' written submissions that I referred to earlier, which identified with specificity various objectionable aspects of the misleading and deceptive conduct and injurious falsehood claims. In many respects those objections echoed the points raised in the letter of 22 October 2013. 16On 20 January 2014 the plaintiffs' solicitors wrote to the defendants' solicitors referring to the orders made by her Honour. They enclosed a verified second further amended statement of claim. It appears that the verification that was provided was only in respect of paragraph 6 of the second further amended statement of claim and not the entirety of the document, as seems to have been contemplated by her Honour's orders. I do not consider that this warrants any further consideration on this motion, except that it will be necessary for a fully verified pleading to be provided. Paragraph 6 of the second further amended statement of claim was the paragraph that set out the terms of the oral statement that I referred to earlier. It is perhaps understandable why the plaintiffs' solicitors might have understood that that was all that was required. 17The second paragraph of the letter of 20 January 2014 purported to provide particulars of the re-publication pleaded in paragraph 8 of the second further statement of claim as required by order 2 made by McCallum J on 4 December 2013. The particulars provided, however, merely consisted of a schedule of persons to whom the re-publication was made. There was no specification of any facts that might be known so as to allow the identification of the plaintiffs. 18The third paragraph of the letter of 20 January 2014 purported to enclose a schedule of public schools on the Central Coast which are said to have received a particular document. It is clear from what I have earlier stated that this did not satisfy what was required by order 3 made by McCallum J on 4 December 2013. 19The letter of 20 January 2014 did not address order 4 made by McCallum J on 4 December 2013 at all. 20On 24 January 2014 the plaintiffs' solicitors responded. They pointed out the various deficiencies in the letter of 20 January 2014, including the failure to comply with order 4 by providing any particulars in response to paragraphs 23 to 37 of the defendants' written submissions. 21The matter was listed before me in the defamation list on 3 February 2014 when the alleged failures of the plaintiffs were touched upon. I made orders allowing the defendants leave to file a notice of motion seeking relief in respect of the alleged failures to comply with her Honour's orders and making it returnable in the defamation list this week. 22There was further correspondence in February 2014 that did not advance the matter at all. In addition, I issued directions in respect of all matters in the defamation list requiring the provision of submissions in respect of interlocutory orders of any substance that were in dispute. The defendants provided submissions. The plaintiffs' submissions on this issue were filed just recently, well past the time when they were required. 23Finally, in the chronology it should be noted that around lunchtime today the plaintiffs provided a letter which purported to address the deficiencies in the cause of action for misleading and deceptive conduct and injurious falsehood that were set out in paragraphs 23 to 37 of the submissions that were provided in December 2013. They also purported to respond to the points raised in the letter of 24 January 2014 which include the complaints about the particulars that were provided on 20 January 2014. 24The end result of this procedural history is that the plaintiffs failed to comply with order 1 made by McCallum J on 4 December 2013, but as I have already indicated, I regard that failure as of no moment. The plaintiffs failed to address the substance of what was required by orders 2 and 3 made by McCallum J on 4 December 2013, and failed to comply in any respect with order 4 until service of some particulars at around lunchtime today. 25In respect of the failure to comply with order 2, I have already outlined what her Honour indicated was required. The current state of affairs is that the plaintiffs' compliance with that order is still outstanding. The letter that was sent around lunchtime today provided some material that addressed it, but I think as a matter of substance there has not been an identification of what facts were known so as to enable the recipients of the relevant document to identify the plaintiffs. 26In respect of order 3, counsel for the plaintiffs, Mr Rasmussen, expressed puzzlement as to what was required. He stated that the matters identified by her Honour in Templar at [25] to [26] were spelled out in the second further amended statement of claim. There are two answers to that. The first is that at no point since her Honour's orders has there been any attempt by the plaintiffs to say that those matters are specified in the pleading. Secondly, if Mr Rasmussen is right, it was a relatively easy matter for the plaintiffs to answer the request to comply with the order if it was already in the pleading. In any event, the answer as stated by Mr Rasmussen, is that in respect of what her Honour stated in Templar in [25], that there is a general allegation of "grapevine effect" and in respect of Templar at [26] it is only relied on as to damages. 27In relation to compliance with order 4, the plaintiffs' solicitor has sworn an affidavit stating that he did not receive the written submissions referred to in order 4 of her Honour's orders until they were sent to him on 4 March 2014. He states that he arranged for an agent to attend when her Honour delivered judgment. Nowhere in his affidavit does he reveal that he made any attempt to obtain those submissions from any person until they were sent to him this week. Thus, while there is an explanation, it is not an adequate one. 28Counsel for the defendants, Mr Sibtain, seeks an order that the proceedings be dismissed. Although to this point in time I have recounted the details of the non-compliance, he submits that what the history reveals is in effect a complete inability on the part of the plaintiffs' camp to properly articulate a case for his clients to meet. He submits that, stepping back and considering the matter overall, the history of the matter is such that the Court could simply have no confidence that this case will ever be prosecuted close to the standard that is expected of litigation of this kind, and which is contemplated by s 56 of the Civil Procedure Act 2005 (NSW). 29I accept that the power to dismiss the proceeding conferred by s 61(3) of the Civil Procedure Act in the event of a failure to comply with a direction has arisen. Certainly in respect of order 4 made by McCallum J on 4 December 2013 the overall performance on the plaintiffs' side must be described as desultory. 30Mr Rasmussen explained that during argument before McCallum J in December 2013 he did not seek to address the deficiencies that were identified in the defendants' submissions because they were not elaborated upon orally. I accept that is the case. Further, Mr Rasmussen submitted that it was difficult to address them after that time, because her Honour's orders contemplated them being answered in the style of an answer to particulars when in substance they were objections to the form of the pleading rather than a request for particulars. There might be some force in that point if there was at least an attempt on the part of the plaintiffs' camp to actually obtain the submissions and respond to them. However, as I have indicated, notwithstanding that her Honour's judgment was available shortly after it was delivered, it does not appear that there was any attempt to even obtain the submissions so that the points could be addressed. If Mr Rasmussen's point represented the position of the plaintiffs' camp, then one would expect to see a letter saying something to that effect. 31Otherwise, one must assess the plaintiffs' performance on this issue having regard to the fact that the various objections were notified on 22 October 2013. 32Despite my misgivings about the performance of the plaintiffs' camp, which I think are illustrated by its approach to order 4 by McCallum J, I am not minded to take the drastic step of dismissing the proceedings altogether. It is a very significant step to shut a litigant out of court without having a hearing on the merits. At the very least, one part of the second further amended statement of claim raises a viable case in defamation which appears to be unaffected by the orders made by McCallum J on 4 December 2013. Even in respect of those other parts of the defamation count that were affected by orders 2 and 3 made by her Honour, there has at least been a genuine, albeit unsatisfactory, attempt to comply with order 2 and a late but complete response to what is required by order 3. 33In those circumstances to dismiss the claim outright would, in my view, be a disproportionate response to the deficiencies that have been exposed on this application. 34However, s 61(3)(b) of the Civil Procedure Act also enables the striking out of any claim made by a plaintiff. In relation to the causes of action for misleading and deceptive conduct and injurious falsehood, it is apparent that on their face the various elements of those causes of action are not properly pleaded. This is in effect conceded by the letter that was received at around lunchtime today. In response to various objections, the letter conceded that these causes of action did not plead a suffering of loss and damage and stated that that would be addressed by inserting a pleading to that effect. It seems to me that it follows that if these causes of action are to survive then on any view the plaintiffs would need leave to amend. 35There are a number of other and potentially more significant deficiencies identified with these aspects of the pleading in the paragraphs of the submissions which were the subject of order 4 made by McCallum J on 4 December 2013. The end result is that I am in the position that there are causes of action which are defectively pleaded. Her Honour addressed objections raising those points by allowing the plaintiffs the indulgence of seeking to address them by way of particulars, but the plaintiffs for various reasons, none of which was satisfactorily explained, was not even able to comply with that step. 36In light of that history of default, in my view the appropriate course in respect of these causes of action is to strike them out. In taking that course of action I am mindful that, prima facie, the limitation period for both of them has not yet expired and is not likely to for some period. The result of taking this course of action will be that if the plaintiffs wish to press them, then they will have to bring in a properly pleaded amended statement of claim with full particulars and a proper explanation consistent with the decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 before leave to amend is likely to be granted. If this occurs it will be a contrast to what has occurred on previous occasions where pleadings have been struck out but the plaintiffs have been granted a general leave to file a further amended pleading. 37As I have stated, order 3 made by McCallum J on 4 December 2013 addressed the re-publication pleaded in paragraphs 12 and 13 of the existing pleading. As indicated, in oral argument Mr Rasmussen addressed and nailed the plaintiffs down in respect of the matters referred to in Templar at [25] and [26]. No further order is required in respect of order 3 made by McCallum J on 4 December 2013. 38In respect of order 1, I will make an order that the plaintiffs provide a verified amended statement of claim. 39In respect of order 2, the state of the documentation concerning compliance with that order is confusing to say the least. I think the only safe course is simply to extend the time for compliance by the plaintiffs with order 2 for a further 21 days. This will mean the plaintiffs will have to set out clearly in a single letter the full particulars required by that order. [Counsel addressed.] 40I should add that Mr Sibtain has helpfully indicated that the above references to misleading and deceptive conduct claim should also include a claim of engaging in unconscionable conduct contrary to the relevant provisions of the Australian Competition and Consumer Act 2010 (Cth). This judgment should be so understood. 41Accordingly the Court orders that: (1)Paragraphs 14 to 20 and the claim for the particulars of exemplary damages in paragraph 21 of the second further amended statement of claim be struck out. (2)I order the plaintiffs to file and serve a third further amended statement of claim consistent with order 1 and verified by them within 21 days. (3)I extend the time for compliance by the plaintiff with order 2 made by McCallum J on 4 December 2013 a further 21 days. (4)I order the plaintiffs to provide any further particulars including particulars of the calculation of damages specified under the heading "General Actual and Special Damages" in paragraph 21 of the Second Further Amended Statement of Claim, within 21 days hereof. [Counsel addressed in relation to costs.] 42In respect of costs, Mr Sibtain seeks an order that the plaintiffs pay his clients' costs of the application before McCallum J on 4 December 2013 as well as the costs of this application, and that they be payable forthwith. Mr Rasmussen accepted that it follows that his clients should be ordered to pay the costs of today. In my view that concession was well founded in that his clients, clearly having been in default, obtained an indulgence and costs consequences must follow. 43However, Mr Rasmussen disputed that there should be any order for costs made at this point in respect of the application before McCallum J in December 2013. He submitted that his clients succeeded before her Honour in respect of some arguments, and that otherwise to determine costs it would be necessary for me to revisit all the points that were in dispute. I accept that submission. I am not minded to make any costs order in respect of that application. They will remain reserved. 44In relation to the application that the costs of this application be payable forthwith, Mr Rasmussen indicated that his client would need some time to respond as he wished to contend that if such an order was made it would bring the proceedings to a premature end, and that is relevant to whether any such order should be made. Given that there is at least a reasonably arguable basis for making such an order, I consider it appropriate to allow Mr Rasmussen's client the opportunity to advance such matters as it wishes to in opposition to it being made. 45Accordingly, the Court further orders that (5)The plaintiffs pay the defendants' costs of the application determined today. (6)The plaintiffs file and serve within 14 days any affidavit material they wish to rely on in response to the application that those costs be payable forthwith. (7)The parties exchange outlines of submissions on the question of when those costs should be paid within 21 days, such submissions to be longer than two pages. (8)The parties have liberty to apply to fix a time for brief oral submissions on the question as to when those costs are payable. ********** 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: 12 March 2014