Supreme Court New South Wales Medium Neutral Citation: Sporting Shooters Association of Australia (NSW) Inc v McGuire [2014] NSWSC 1370 Hearing dates: 12 September 2014 Decision date: 09 October 2014 Before: McCallum J Decision: Application to have proceedings transferred to the District Court refused Catchwords: PRACTICE AND PROCEDURE - application to have defamation proceedings transferred to the District Court - factors relevant to the Court's discretion Legislation Cited: Civil Procedure Act 2005, s 146 Defamation Act 2005 Uniform Civil Procedure Rules Cases Cited: Bodenstein v Hope Street Urban Compassion [2014] NSWSC 174 Haddon v Forsyth (Supreme Court of New South Wales, Nicholas J, 10 August 2009, unreported) Hoser v Hartcher [1999] NSWSC 1060 John Fairfax & Sons v Palmer (1987) 8 NSWLR 297 West v Nationwide News Pty Ltd [2003] NSWSC 767 Category: Procedural and other rulings Parties: Sporting Shooters Association of Australia (NSW) Inc (first plaintiff) Sporting Shooters Association of Australia (NSW) Coffs Harbour Branch Inc (second plaintiff) Padraig Christopher McGuire (defendant) Representation: Counsel: J Knackstredt (plaintiffs) S Chrysanthou (defendant) Solicitors: Schweizer Kobras Solicitors (plaintiffs) Kalantzis Lawyers (defendant) File Number(s): 2013/136455 Publication restriction: None JudgMent 1HER HONOUR: The Sporting Shooters Association of Australia (New South Wales) Inc is an unincorporated association with 48 member branches throughout the State of New South Wales, each a separate unincorporated association having its own members. In May 2012, Mr Padraig McGuire, a member of the Guyra branch, wrote a series of emails concerning the affairs of the Coff's Harbour branch. The tenor of the emails was to suggest that members' funds had been wasted in other litigation brought by the Coff's Harbour branch against Mr McGuire. The Association and the Coff's Harbour branch have brought this litigation in order to vindicate their reputations against those allegedly defamatory remarks. 2The proceedings first came before me on 12 September 2014. On that occasion, the plaintiffs made an informal application to have the proceedings transferred to the District Court. This judgment determines that application. 3The Court has a discretionary power to transfer proceedings to the District Court or to the Local Court, as the case requires, in the circumstances stated in s 146(1) of the Civil Procedure Act 2005. That section provides: "146 Transfer of proceedings to lower court (1) If the Supreme Court is satisfied, in relation to proceedings before it: (a) that the proceedings could properly have been commenced in the District Court or the Local Court, and (b) that any cross-claim in the proceedings could properly have been brought as a cross-claim in the District Court or the Local Court, the Supreme Court may order that the proceedings, including any such cross-claim, be transferred to the District Court or to the Local Court, as the case requires." 4The power is not enlivened unless this Court is satisfied that the proceedings "could properly have been commenced" in the District Court or the Local Court. Once enlivened, it is a broad discretionary power. The section contains no guidance, in terms, as to how the discretion is to be exercised. The exercise of the discretion is of course guided by the mandatory considerations in ss 56, 57 and 58 of the Civil Procedure Act. Circumstances in which the application is made 5The proceedings were commenced by statement of claim filed on 2 May 2013. On 5 July 2013, no defence having been filed, the plaintiffs filed an application for default judgment. However, the Registrar was not satisfied that the statement of claim had been served personally on Mr McGuire in accordance with the rules. Mr McGuire accepts that the statement of claim was later duly served (in accordance with an order for substituted service) in February 2014. A notice of appearance was filed on 31 March 2014. 6On 22 May 2014, the Registrar made orders for the service of a defence and reply. Mr McGuire served his defence within the time allowed (by 6 June 2014) but the plaintiffs failed to file any reply. 7On 3 July 2014, orders were made extending the time to file any reply and requiring the parties to exchange categories of documents and serve lists of documents. Again, the plaintiffs failed to serve any reply. After drawing the plaintiffs' breach to the attention of their solicitor, Mr McGuire's solicitor proceeded to serve his categories of documents. None were served on behalf of the plaintiffs. 8On 5 September 2014 a new practice note governing new and existing proceedings in the defamation list came into force. Mr McGuire's solicitor drew that development to the attention of the plaintiffs. 9When the proceedings came before me on 12 September 2014 Mr Knackstredt, who appears for the plaintiffs, frankly acknowledged the delay on the plaintiffs' part. He proposed orders allowing a second extension of the time within which to file and serve a reply and the transfer of the proceedings to the District Court. It was foreshadowed that there would also be a contest as to the categories of discovery served by Mr McGuire and that the plaintiffs would wish, evidently in their own time, to serve categories as well. Mr Knackstredt acknowledged that the plaintiffs should pay Mr McGuire's costs of the day. 10Ms Chrysanthou stated that Mr McGuire neither consented to nor opposed the order transferring the proceedings to the District Court (subject to the issue of costs). Having said so, however, she pitted her considerable energies to the submission that there is no reason to make the order sought. 11Ms Chrysanthou relied in that context on the decision of Nicholas J in Haddon v Forsyth (Supreme Court of New South Wales, Nicholas J, 10 August 2009, unreported). She submitted that, before making an order for transfer, the Court must be satisfied that there is some reason for the transfer to occur. To the extent that that submission paraphrases the Court's obligation under s 58 of the Civil Procedure Act to seek to act in accordance with the dictates of justice, it is undoubtedly correct. However, I do not think s 146 is to be read as posing an evidentiary or persuasive onus, the failure to discharge which will mandate maintenance of the status quo. To the extent that the decision in Haddon v Forsyth suggests otherwise, I would respectfully disagree. 12Conversely, however, the Court is not required to order that the proceedings be transferred to another court merely upon being satisfied that they could properly have been commenced in that court. To adopt that approach would ignore the requirement to act in accordance with the dictates of justice. 13There is no doubt that the present proceedings could properly have been commenced in the District Court. Since 1997, the jurisdiction of that Court in cases other than claims for damages arising out of motor vehicle accidents has been $750,000. Pursuant to s 35 of the Defamation Act 2005, the maximum amount of damages for non-economic loss that may be awarded in defamation proceedings is presently capped at $366,000: Gazette No. 57 of 27.6.2014, p 2322. There is no claim for economic loss in the present case and the publications sued on are of relatively limited circulation. Accordingly, the claim may readily be seen as one falling within the jurisdictional limit of the District Court. 14Bare reference to the amount in dispute by reference to the jurisdiction of the District Court would, in almost all cases, produce the answer that proceedings for defamation should be commenced in that Court. But that is not what the law provides. In particular, the Defamation Act 2005, whilst imposing a cap on damages, is not prescriptive as to the court in which proceedings should be commenced. 15Further, whereas the rules of court previously placed a hurdle in the way of recovery of costs where a plaintiff suing in this Court recovered less than a certain sum, the rules now expressly carve defamation cases out of those provisions. In West v Nationwide News Pty Ltd [2003] NSWSC 767, Simpson J considered an application for costs which invoked part 52A rule 33 of the Supreme Court Rules. That rule provided that, in proceedings commenced after 1 October 1997, where a plaintiff recovered a sum of not more than $225,000, that plaintiff would not be entitled to payment of his or her costs of the proceedings unless, it appearing to the court that the plaintiff had "sufficient reason for commencing or continuing proceedings in the court", the court made such an order. Her Honour described the purpose of that rule as being "a disincentive to the commencement of small or non-complex claims in this Court". 16The factors which Simpson J considered relevant to the exercise of the discretion under that rule included the underlying purpose of a claim for damages for defamation (vindication of reputation). Her Honour also noted that it was previously relevant to consider the fact that this Court had a specialist defamation list whereas the District Court did not. Her Honour noted that, since the year 2000, the District Court has also had a specialist defamation list. Indeed, as early as 1999, the defamation list judge of this Court, Levine J, rejected as being anachronistic the notion that this Court has any exclusive expertise in the field of defamation: see Hoser v Hartcher [1999] NSWSC 1060 at [12]. 17Simpson J also had regard to "the complexities of law and fact involved in any particular case, and that commonly attend the determination of defamation proceedings" (at [8]). 18In John Fairfax & Sons v Palmer (1987) 8 NSWLR 297 at [306], the Court of Appeal considered the factors relevant to the exercise of the discretion to award full costs notwithstanding the recovery of a verdict less than the amount provided in the rules. Kirby P said (at 306D): "The considerations which are relevant are those which Stephen CJ first mentioned, namely the existence of complex questions of law and fact. Although it is not permissible to treat defamation cases as being in a class of their own (no such approach having been taken by the rules) it is appropriate to say that typically, such proceedings do raise complexities of a kind which will (simple cases apart) more readily warrant the initiation of proceedings in the Supreme Court than other damages actions." 19The Uniform Civil Procedure Rules do now treat defamation cases as being in a class of their own. Rule 42.34 provides: "42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court (1) This rule applies if: (a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and (b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants. (2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted." 20Costs in defamation proceedings are instead now governed by s 40 of the Defamation Act 2005. Consistently with the objects of the Act, which include the promotion of speedy and non-litigious methods of resolving disputes about the publication of defamatory matter, that section punishes a plaintiff in costs not by reference to any failure to recover damages up to a specified amount but by reference to unreasonable failure to accept a settlement offer. 21On behalf of the plaintiffs, four reasons were put forward for transferring the proceedings in the present case. The first two were related. They were the fact that the likely award of damages would be relatively small and that the publications were "private communications" by way of email. For the reasons considered above, the likely award of damages is plainly relevant but it is not determinative. 22Thirdly, the plaintiffs submitted that "there is unlikely to be any issue of principle that would warrant the Supreme Court's attention in this matter". It is relevant to note in that context that the defence pleads defences of qualified privilege at common law and under s 30 of the Defamation Act, honest opinion under s 31 of the Defamation Act, justification under s 25 of the Act and triviality under s 33 of the Act. Each of those defences will raise issues of some factual and legal complexity. However, as already noted, the application should not be approached on the basis that this Court has exclusive expertise in the field of defamation. I accept, without equivocation, that there is ample expertise in the District Court to address such matters. 23Finally, in what appeared to be the substantive motive for bringing the application, Mr Knackstredt relied on the fact that there are other proceedings on foot brought by the same plaintiffs against a different person, Mr Keith Judge. Those proceedings were also commenced in this Court but were transferred to the District Court by consent. Mr Knackstredt submitted that efficiencies could be obtained by having these proceedings consolidated with those or at least managed and heard by the same judge. 24I accept that the two proceedings may raise common issues of fact but that is not the end of the matter. The efficiencies contemplated in the submission would appear to be efficiencies for the plaintiffs to the detriment of each individual defendant, each of whom is a gentleman of senior years. Each could, according to the plaintiffs' submission, be compelled or required to attend at least parts of the hearing of the claim against the other. It may be doubted whether formal consolidation would be granted in the circumstances. While the prospect of efficiencies that might be achieved less formally is superficially attractive, it is difficult to imagine how that might work in practice in a way that was fair to all the parties. 25It may be accepted that the case has the features of one which could properly, and perhaps ought to, have been commenced in the District Court. The principal difficulty I have with the application lies in its timing and the circumstances in which it is brought. The defendant came to this list having complied with the timetable and ready to take a hearing date. I have ascertained that dates are available early in the New Year. 26Conversely, the plaintiff came to court in breach of the timetable seeking, in addition to the transfer order, further opportunities to take additional interlocutory steps which would face the provisions of the new practice note if the proceedings remain in this court. One potential consequence of the orders sought by the plaintiffs would be to render wasted some of the defendant's costs to date. Further, it seems inevitable that transfer of the proceedings at this stage would occasion further delay in circumstances where the plaintiffs have already been the authors of some delay: cf ss 58(2)(b)(ii), (iv), (v) and (vi) of the Civil Procedure Act. 27In the unusual circumstances of this case, whilst the case is one which ordinarily would be readily amenable to a transfer order, I have concluded that the dictates of justice require that the proceedings remain in this court and be listed for hearing promptly, as sought by the defendant. ********** 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: 16 October 2014