Supreme Court New South Wales Medium Neutral Citation: Riske v Oxley Insurance Brokers Pty Ltd (No 2) [2014] NSWSC 1611 Hearing dates: 6 June 2014 Decision date: 14 November 2014 Before: McCallum J Decision: Limitation period for the causes of action in relation to the publication of the 3rd to 6th matters complained of in the second further amended statement of claim extended to 16 April 2014. Catchwords: LIMITATION OF ACTIONS - extension of limitation period - where not reasonable to have commenced proceedings within one year from publication - mandatory extension to a period of up to 3 years - proper approach to determining length of extension to be granted. Legislation Cited: Defamation Act 2005 Limitation Act 1969 Cases Cited: Casley v ABC [2012] VSCA 182 Lakaev v Denny [2010] NSWSC 1480 Noonan v MacLennan [2010] QCA 50 Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175 Riske and Oxley Insurance Brokers Pty Ltd [2013] NSWSC 1381 Ritson v Gay and Lesbian Community Publishing Ltd [2012] NSWSC 483 Wookey v Quigley (No 2) [2010] WASC 209 Category: Interlocutory applications Parties: Lee Hendrick Riske (first plaintiff) Stephen Edward Charles Cook (second plaintiff) Oxley Insurance Brokers Pty Ltd (first defendant) Rodney McLean (second defendant) Representation: Counsel: P Wass SC, M Lewis (plaintiffs) M Richardson (defendants) Solicitors: Priest McCarron (plaintiffs) Lee &Lyons Lawyers (defendants) File Number(s): 2013/184125 Publication restriction: None Judgment 1HER HONOUR: These are proceedings for defamation commenced by Mr Lee Riske and Mr Stephen Cook against their former employer. The proceedings were commenced by statement of claim filed 17 June 2013. There were three matters complained of in that pleading. In a second further amended statement of claim filed 16 April 2014, the plaintiffs abandoned the third matter complained of and instead pleaded four further defamatory publications dating back to 5 October 2011 (the 3rd to 6th matters complained of). The limitation period prescribed in respect of those further publications expired before the pleading was amended and accordingly the plaintiffs seek an extension of that period. This judgment determines that application. 2Section 14B of the Limitation Act 1969 provides that an action on a cause of action for defamation is not maintainable if brought after the end of a limitation period of one year running from the date of publication of the matter complained of. The entitlement to apply to the Court for an order extending that period is contained in s 56A of the Act, which provides: 56A Extension of limitation period by court (1) A person claiming to have a cause of action for defamation may apply to the court for an order extending the limitation period for the cause of action. (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). 3It is common ground between the parties that the plaintiffs were not in fact aware of the four further matters complained of until 14 March 2014, when the defendants provided proper answers to interrogatories administered by the plaintiffs (the plaintiffs having complained as to the adequacy of the answers initially provided). For the reasons explained below, the defendants do not dispute that the Court would be satisfied in the terms of s 56A(2), namely, that it was not reasonable in the circumstances for the plaintiffs to have commenced an action on those causes of action within one year from 5 October 2011. The defendants submitted, however, that the Court could not properly extend the limitation period until the date on which the second further amended statement of claim was filed (16 April 2014). It was submitted that, on the most generous approach, an extension could only be granted until the end of last year, which would be of no avail to the plaintiffs. Circumstances in which the application is brought 4Each of the plaintiffs gave evidence on the application and was cross-examined. The application was also supported by an affidavit sworn by the plaintiff's solicitor, Mr Jeremy Brigden, who was not required for cross-examination. 5Mr Riske and Mr Cook were employed (as a financial planner and a life insurance advisor, respectively) by the first defendant, Oxley Insurance Brokers Pty Ltd. The second defendant, Mr Rodney McLean, is the principal of that company. 6On 5 October 2011, the plaintiffs' employment was terminated. Each commenced unfair dismissal proceedings against Oxley. Those proceedings were settled on the terms contained in a deed of settlement and release dated 23 December 2011 (exhibit 4). The deed included a clause requiring the parties to keep confidential the circumstances surrounding the entering into of the deed (clause 8). 7The plaintiffs accordingly had no occasion to expect that defamatory remarks would be made about them concerning the termination of their employment. On 20 June 2012, Mr Riske received an email from Ms Debbi Morn in which she informed him that Mr McLean had told her Mr Riske was "sacked for inappropriate misconduct along with another financial planner". Those remarks are alleged to have been made by Mr McLean to Ms Morn on 18 June 2012. That is the first matter complained of in these proceedings. Since the proceedings were commenced by statement of claim filed 17 June 2013, there is no suggestion that that claim is statute- barred. 8Mr Riske gave evidence that, at that stage, he was "hoping it was a one-off occurrence". However, in about December 2012, Mr Riske learned of the possibility that Mr McLean had made a similar statement to someone at AXA. He understood that that communication had occurred in about October or November 2011. That publication was initially relied upon by the plaintiffs as the third matter complained of but that has since been abandoned. 9At some time in late January 2013, Mr Cook became aware that Mr McLean had sent a letter dated 19 December 2012 to Ms Merrill Phillips which included the following statement: "As discussed, I understand your decision and the importance of you maintaining a relationship with your previous advisor Stephen Cook, but unfortunately I had to terminate his employment due to a serious and wilful misconduct issue". 10That is the second matter complained of in these proceedings. As with the first matter complained of, there is no suggestion that the action on that cause of action was not brought within time. 11Mr Cook approached solicitors for legal advice in respect of the apprehended defamations on 29 January 2013. 12On 28 March 2013, the plaintiffs' solicitor sent a concerns notice for the purposes of s 14(2) of the Defamation Act 2005 in respect of the three known matters complained of. The letter concluded with the following request: "You are required immediately: (i) to desist from making any further publications of a defamatory nature; (ii) to identify all of those persons or entities (both within and external to OIB) to whom OIB have written in similar terms to your letter of 19 December 2012, and provide copies of such correspondence, including but not limited to emailed correspondence; (iii) to identify any person or entity (both within and external to OIB) to whom OIB have written since 23 December 2011 which identifies any one or more of our clients and provide copies of such correspondence, including but not limited to emailed correspondence; (iv) to identify those persons or entities (both within and external to OIB) to whom you have made verbal publications about our clients since 23 December 2011 and provide particulars of all such publications including, but not limited to, the second and third matters complained of. 13Oxley replied to the concerns notice by letter dated 2 April 2013 but the reply ignored that request. Oxley contended that the statement made in respect of each of Mr Riske and Mr Cook was "substantially true" and sought particulars as to why the plaintiffs alleged that it was false. At the same time, the letter denied the words used were defamatory. Following an invitation by the plaintiffs' solicitor for any further response to the concerns notice, a further reply by letter dated 16 April 2013 was sent by Oxley which included the following statement: "The circumstances leading up to the termination of Mr Riske's and Mr Cook's employment is [sic] well known between us and within your firm. To the extent that it is inferred by your letter that the two statements made are part of a broader course of conduct engaged in by OIB to damage the reputation of Mr Riske, Mr Cook or SFIS, then for the avoidance of doubt this is denied." 14By further letter dated 6 June 2013 the solicitor for the plaintiffs again responded to the matters raised by Oxley, again repeating the invitation to furnish the information sought in the concerns notice. That letter concluded: "If you genuinely hold the view that any such publications are innocent then there is no reason not to provide the above information. If you refuse to provide it voluntarily then we will seek production by way of Court order." 15The statement of claim was verified by the plaintiffs on 13 June 2013 and served under cover of a letter dated 14 June 2013, although not in fact filed until 17 June 2013. It was necessary for the plaintiffs to commence proceedings at that time, since the first matter complained of was published on 18 June 2012. Oxley and Mr McLean nonetheless expressed surprise to have received a statement of claim, in effect accusing the plaintiffs of moving precipitously without having provided all of the information necessary to allow an understanding of the claims being made and the alleged damage. In that correspondence, Oxley and Mr McLean again ignored the plaintiffs' repeated requests for the information sought in the concerns notice. 16The proceedings came before Garling J on 15 July 2013, when his Honour made orders restraining the defendants from continuing to publish representations of the kind reflected in the defamatory imputations relied upon by the plaintiffs. 17The proceedings were next listed in the defamation list on 2 September 2013 for argument as to the plaintiffs' imputations. The defendants' objections to the plaintiffs' imputations were heard and determined the following day: see Riske and Oxley Insurance Brokers Pty Ltd [2013] NSWSC 1381. 18An amended statement of claim reflecting the rulings given in that judgment was filed on 13 September 2013. On 8 October 2013, by consent, I ordered the parties to attend a mediation before a registrar on or before 20 December 2013 (the suggestion of mediation had been foreshadowed when the proceedings were in the list in September). 19On 16 October 2013, in preparation for the Court-ordered mediation, Oxley sought further particulars of the plaintiffs' damages (including an indication as to whether they would abandon their claim for special damages). In responding to that letter (the following day), the plaintiffs again sought information as to whether the second defendant had told any other people of the reasons the plaintiffs left Oxley's employment, seeking details of any such statements. The letter said: "We would be grateful for a response within 14 days. Failure to respond will result in an application for preliminary discovery and early discovery based on the present pleading." 20A motion seeking discovery and leave to interrogate was filed on 28 November 2013. Ultimately (on 31 January 2014) the defendants consented to the orders sought in that motion. Answers to interrogatories and a list of documents were provided on 28 February 2014 but the plaintiffs contended that the answers were inadequate. On 14 March 2014 further answers were served. Those answers disclosed, for the first time, that on or about 5 October 2011 some 45 members of staff of Oxley and one other person had received an email stating that the employment of the plaintiffs had been terminated "due to a serious and wilful misconduct issue". Issues raised by the application 21As already noted, Mr Richardson, who appears for the defendants, did not dispute that it was not reasonable for the plaintiffs to commence proceedings within the first year after publication of the third to sixth matters complained of. With respect, that concession was properly made. There is no suggestion that the plaintiffs had any basis for suspecting the publication of defamatory statements at any point before Mr Riske received the email from Debbi Morn on 20 June 2012. The limitation period in respect of the third to sixth matters complained of expired on 4 October 2012, less than four months later. The plaintiffs had no basis at that time for suspecting that there had been a broader defamatory campaign, particularly in light of the confidentiality clause in the settlement deed in the unfair dismissal proceedings. 22However, the parties were in dispute as to the proper approach for the Court to adopt in those circumstances. Section 56A(2) is expressed in mandatory terms. If a court is 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 one year from the date of the publication, the Court "must ... extend the limitation period ... to a period of up to three years running from the date of the publication". 23Mr Richardson submitted that a court "should only exercise its discretion to extend time during a period that it remained not reasonable to have sued". On that analysis the onus of establishing that it was not reasonable in the circumstances for the plaintiff to have commenced an action would extend for the whole term of the extension sought. 24Ms Wass SC, who appears with Mr Lewis for the plaintiffs, disputed that analysis. She submitted that the section requires the Court to address the application in two steps. First, the Court must determine whether it is satisfied that it was not reasonable for the plaintiff to have commenced an action within the one year limitation period. Satisfaction in those terms is a pre-condition to the grant of any extension. Ms Wass submitted that, if the Court is so satisfied, the Court has a wider discretion as to the term by which the limitation period will be extended, which is not qualified by the requirement of the first step to establish that it was not reasonable to have commenced an action any earlier. 25The order sought in the notice of motion is that the limitation period be extended to 4 October 2014, the maximum period allowed under s 56A(2) (the date of publication in each case being 5 October 2011). However, all that is required in the present case is an extension until 16 April 2014, the date on which the second further amended statement of claim was filed. 26As already noted, it was common ground that the plaintiffs were not aware of the new matters complained of until they received the defendants' further answers to interrogatories on 14 March 2014. The second further amended statement of claim was filed just over a month later, on 16 April 2014. Mr Richardson submitted, however, that there are several periods of inactivity and delay the combined effect of which is that the plaintiffs have not discharged the onus of establishing that it was not reasonable for them to sue on the four new causes of action until that date. Proper approach where the pre-condition of s 56A(2) is met 27Before turning to the detail of the argument, it is appropriate to consider the legal question raised as to the proper application of s 56A(2). 28As submitted by Mr Richardson, s 56A, which came into force at the same time as the Defamation Act 2005, presented a radical departure from the previous section, which conferred power on the Court to grant an extension of time if it considered it "just and reasonable to do so". 29The difficulty of discharging the onus that it was not reasonable to commence proceedings within the first year after publication has been considered in a number of authorities. It is not necessary to revisit those principles in the present case, since it is accepted that the plaintiff has discharged that onus. The question that arises in the present case is a narrower one. Once it is established that the Court "must" extend the limitation period to a period of up to three years running from the date of the publication, what is the proper approach to determining the length of the extension that should be allowed? 30One possible construction of the section is that, if the pre-condition is met, the section mandates an extension of the limitation period for so long as is required to allow the action to be maintainable, provided only that the total limitation period can never be extended beyond 3 years. That is a construction which makes sense of the mandatory terms of the section. Otherwise, in some circumstances, the section mandates the making of an order which has no efficacy. 31However, I think that battle is already lost, at least until an appellate court says otherwise. The description of a "discretion" appears to have its origin in the obiter remarks of Chesterman JA in the decision of the Queensland Court of Appeal in Noonan v MacLennan [2010] QCA 50 at [47] and [66]. Those remarks were echoed in a further decision of the same court (differently constituted) in Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175 at [34] per Fraser JA and at [87] per Applegarth J, again by way of obiter dicta. 32The existence of such a discretion has been recognised determinatively by this court in Lakaev v Denny [2010] NSWSC 1480, where Fullerton J expressly referred to those passages in Noonan and Pingel (at [17] to [19]), dismissing the application on the basis that the plaintiff had failed to discharge "the burden of proving it was not reasonable for her to have commenced proceedings within 2 years after seeking legal advice" (at [56]). 33Beech-Jones J accepted that analysis in Ritson v Gay and Lesbian Community Publishing Ltd [2012] NSWSC 483 at [21] to [25] (while questioning the description of the relevant task as the exercise of "a discretion"). His Honour expressed the view, at [62], that the limitation period "should not be extended beyond the point at which it ceased to be not reasonable in the circumstances for the plaintiff to have commenced an action." 34Finally in Casley v ABC [2012] VSCA 182, the Court of Appeal of Victoria rejected a submission that, upon satisfaction of the threshold test, the Court "must" extend the limitation period and has no discretion as to the length of the extension granted. Hansen JA regarded that issue as settled by the "accepted construction" explained by Chesterman JA in Noonan, which his Honour thought was not "plainly wrong" (evidently accepting those remarks as carrying the authority of a majority of the court, which they did not) (at [71] to [73]; Robson AJA agreeing at [76]). 35It is one thing to accept that, where the pre-condition is met, the section does not mandate an extension of the limitation period for so long as is required by the applicant (with an ultimate bar of 3 years). The authorities to which I have referred appear to go further in saying that an extension cannot be allowed beyond the point at which it ceased to be not reasonable in the circumstances for the plaintiff to have commenced an action. 36That was the analysis contended for by Mr Richardson in this case. He submitted that the Court should only exercise its discretion to extend time during a period that it remained not reasonable for Mr Riske and Mr Cook to have sued. The principal difficulty with that submission is that it is not what the section says. The power to extend the limitation period is not enlivened unless the Court is satisfied in the terms stated. Once the Court is satisfied in those terms, the statute says "a court must extend the limitation period ... to a period of up to three years running from the date of the publication". Had Parliament intended to constrain the determination of the length of the extension (other than providing an upper limit of three years running from the date of publication), that could easily have been made clear in the terms of the section. 37That is not to say that, upon discharging the onus of establishing that it was not reasonable to have commenced an action within the limitation period, an applicant is automatically entitled to have the limitation period extended to three years. The power is to extend the limitation period to a period of "up to three years". For present purposes, I am content to accept that those words recognise that it is within power to extend the limitation period to a period of less than three years running from the date of the publication, even if that means that the order granting the extension has no efficacy. 38In my view, however, there is no warrant in the language of the section for concluding that the so-called discretion as to the term of the extension is constrained by the "not reasonable" test which applies in the first step in the task. I would accept, however, that the determination of the appropriate term of the extension should be informed by the expectation that a party would ordinarily be expected to take prompt steps to obtain access to the information required to commence proceedings: Wookey v Quigley (No 2) [2010] WASC 209 at [77] per Martin J; cf Ritson at [29]. 39On the assumption that my analysis of s 56(2) is correct, I do not have any doubt that the plaintiffs should be granted an extension of the limitation period to 16 April 2014. 40Mr Richardson accepted that the plaintiffs may well be found to have acted reasonably. In my view, they did, at all stages. The focus of the defendants' submissions was the contention that the plaintiffs have not discharged the suggested onus of establishing that it was not reasonable to commence proceedings for the entire period up to 16 April 2014. 41There is no suggestion of any prejudice to the defendants if the limitation period is extended so as to allow the new claims to proceed. The plaintiffs made many requests for information as to any further publications beyond those they had learned of. At every turn, those requests were ignored. In my view, assuming the correctness of my interpretation of the legislation, the interests of justice would plainly require that the extension be granted. As already noted, I did not understand Mr Richardson to contend otherwise - his argument focussed on the extended application of the "not reasonable" test over the whole of the relevant period. For those reasons, I am persuaded that the application should be granted. 42In case my interpretation of s 56A(2) is wrong, I should consider the application on the understanding of the legislation contended for by Mr Richardson. Although that undoubtedly raises a more difficult question, I have ultimately concluded that, even on that higher test, the plaintiff's application should be granted. 43Mr Richardson's submission was put in two ways. First, he submitted that, from January 2013, the plaintiffs had all the information they needed in order to take steps to compel the production of the information ultimately obtained. Alternatively, he submitted that, certainly by May 2013, after speaking to a former employee of the defendants who told them further matters, they had all the information they needed. On either analysis, taking six months as the reasonable period for obtaining the answers to interrogatories, he submitted that on no analysis could it be said that it was not reasonable to commence proceedings until April 2014. 44The critical question is, what information did they really have? This was not a case in which, as in Wookey, the plaintiffs knew of the existence of a certain defamatory publication. They had no more than a basis for speculation. As submitted by Ms Wass, it is easily said in hindsight that the application they ultimately pressed from October could have been started in May. Each defendant frankly acknowledged that his knowledge was the same in October as in May. But it does not follow that, in all the circumstances, it was not reasonable to commence proceedings earlier. The plaintiff's could hardly have had any confidence as to what they would learn from the interrogatories, let alone predicting that what would be uncovered would be well and truly statute-barred. 45In Noonan, Keane JA (as his Honour then was) noted that the section proceeds on the assumption that there may be circumstances where it will not be reasonable for a plaintiff to commence an action to vindicate his or her legal rights in accordance with the time limits provided by law (at [15]). His Honour remarked that some assistance in understanding the legislative intention of the equivalent Queensland section may be gleaned from the Defamation Act 2005 including its procedures for concerns notices and offers to make amends. His Honour said (at [16]): "In this context one can understand that section 32A(2) of the Act is apt to encompass a case where the plaintiff has been engaged in the pursuit of non-litigious processes to vindicate his or her rights. In such a case, it may well be unreasonable to disrupt those processes and to incur needless expense by commencing proceedings". 46His Honour also suggested that, where a plaintiff is not able to establish the extent of the defamation or is without the evidence necessary to establish his or her case during the year after the publication, an action brought in such circumstances might be said to be speculative or irresponsible. 47In my view, that was the position here. Accordingly, even upon the construction of the section contended for by Mr Richardson, I would have allowed the application. 48I order that the limitation period for the causes of action in relation to the publication of the 3rd to 6th matters complained of in the second further amended statement of claim be extended to 16 April 2014. ********** 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: 18 November 2014