Boland v Dillon; Cush v Dillon (No. 2) [2007] NSWDC 77

New South Wales District Court

CITATION: Boland v Dillon; Cush v Dillon (No. 2) [2007] NSWDC 77

HEARING DATE(S): 09/03/07 EX TEMPORE JUDGMENT DATE : 9 March 2007

JURISDICTION: Civil

JUDGMENT OF: Gibson DCJ

DECISION: (1) Pursuant to s56A Limitation Act 1969 the limitation period for the bringing of the plaintiffs' causes of action pleaded in para 3 of the statement of claim is extended to expire on 18 February 2006; (2) The plaintiffs pay the defendant's costs of the notice of motion.

CATCHWORDS: Defamation – application for extension of time to bring proceedings

Defamation Act 1974 (NSW) Defamation Amendment Act 2002 (NSW) LEGISLATION CITED: Limitation Act 1969 (NSW) ss. 14B, 56A, 60G Limitation Act 1980 (UK) s.32A Uniform Civil Procedure Act 2005 (NSW) s.65

Brisbane South Regional Health Authority v Taylor (1966) 186 CLR 541 Carr v Reynolds Porter Chamberlain [2007] NSWSC 21 Cranbrook School v Stanley (2002) NSWCA 290 Itek Graphix Pty Ltd v Elliot (2002) 54 NSWLR 207 Jones v Hamersley Resources Ltd [2005] NSWCA 371 CASES CITED: Kidron & Andrew Spaile Architects Pty Ltd v Garrett (1994) 35 NSWLR 572 Maitland v Nationwide News Pty Ltd [2004] NSWCA 155 Muter v Newcastle Upon Tyne Aero Club Ltd, Queens Bench, December 17, 2001 Russo v Aiello (2003) 201 ALR 231 Steedman v BBC [2002] ELR 17 Whybro v The State of New South Wales [2006] NSWCA 324

Plaintiff: Leslie Boland PARTIES: Plaintiff: Amanda Cush Defendant: Meryl Lurline Dillon

FILE NUMBER(S): 4917/06; 4735/06

COUNSEL: Plaintiffs: P Sibtain Defendant: M Lynch

SOLICITORS: Plaintiffs: Etheringtons Solicitors Defendant: Banki Haddock Fiora Lawyers

1 HER HONOUR: The plaintiffs by way of statement of claim (first filed on 17 February 2006, and then amended in July 2006) seek damages for defamation arising from two slanders. The first of these is pleaded in para 3 of the original statement of claim as being made on or about February 2005, in the course of travelling by car to Moree from Inverell, when it is alleged that the defendant said to Michelle Chittenden words to the effect of: "What do you think of Les and Amanda? They seem to be very close. I think they might be having an affair."

2 The second matter complained of were words spoken allegedly by the defendant to one James Croft, on or about 8 April 2005 in Moree, when the defendant is alleged to have said words to the effect of: "It is common knowledge among people in the CMA that Les and Amanda are having an affair."

3 The matters complained of were asserted to convey imputations in similar terms arising from their highly similar content, namely that each of the plaintiffs was accused of having an affair. In the case of Amanda Cush it is pleaded that as general manager of the Rivers Gwydir Catchment Management Authority she was acting unprofessionally by having an affair with a member of the board of that organisation and that she was undermining the marriage of Mr Boland and his wife. In relation to Mr Boland there are imputations that are very similar although not identical.

4 The plaintiffs move pursuant to a notice of motion filed on February 12 2007 for an extension of time for twenty-nine days in relation to the first matter complained of pursuant to s56A Limitation Act1969 (NSW) in the event that the first alleged statement took place on 21 January 2005 rather than "February 2005" as was initially claimed when the proceedings were commenced. Thus it is that the statement of claim when filed was at best only just out of time. It was by reason of some subsequent events that the publishee thought it was possible that the matter complained of could have been published at an earlier meeting of the organisation of which the recipient of the alleged slander was attending, namely the January meeting, as opposed to the February meeting. The plaintiff does not rely upon s65 Uniform Procedure Act 2005 (NSW) but on limitation provisions.

5 The relevant legislation is as follows. The Defamation Act 1974 (NSW) underwent significant changes by reason of the Defamation Amendment Act 2002 (NSW) which on 17 February 2003 reduced the limitation period from six years to one year in New South Wales. Following that, in legislation that has become uniform throughout Australia, the limitation period is now one year throughout the whole of Australia. When introduced, this was a significant, far-reaching and much-welcomed change, but what is important is to note that as well as there being a one year limitation period, a period of two years for applications for extension to be brought was enacted. The relevant provisions of the Limitation Act are as follows:

Firstly, the Limitation Act 1969 (NSW) provides in s14B(3):

"An action on a cause of action to which this section applies is not maintainable if brought after the expiration of one year running from the date on which the defamatory matter was published."

Section 56A provides a procedure for the extension of a limitation period in s14B. Section 56A(4) provides: "After hearing such of the persons likely to be affected by the application as it sees fit, the court may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period as it determines. However, the court cannot extend the period beyond three years running from the date on which the defamatory matter concerned was published." The parties have agreed in their submissions before me that the language of s56A(4) is similar to the language of s60G(2) Limitation Act 1969 concerning the extension of time for an action for negligence, nuisance, breach of duty or personal injury. Accordingly, I can obtain guidance from the many cases which consider applications brought pursuant to s60G Limitation Act. The most notable of these is the helpful and wise explanation given by Ipp A-JA (who was then an acting justice in the Court of Appeal and who is now a judge in the Court of Appeal). In Itek Graphix Pty Ltd v Elliott (2002) 54 NSWLR 207, where his Honour explained. at paras 48 to 55, the nature of this discretion as being very broad. It is important for the test to be a flexible one with regard to the particular circumstances of the case. The question is whether a sufficient explanation has been given for the failure to commence proceedings in time and if so whether, having regard to all of the circumstances of the case, it is fair and just to grant (or refuse, as the case may be) the application.

6 Thus there is no requirement in defamation actions for the kind of full and satisfactory explanation of the kind that is sought under certain statutory regimes. The real question is whether the delay has made the chance for a fair trial unlikely. Relevant factors to consider include the broad range of factors set out in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551-556 per McHugh J.

7 In addition I should have regard to the circumstances in which the law changed in fairly dramatic circumstances in 2003. The High Court had regard to this in Russo v Aiello (2003) 201 ALR 231 at 102 and 103 where the court referred to what was called "complex moveable time limits" of the kind that are likely to lay traps for people with claims.

8 One thing that I can have regard to is that the change to the Limitation Act was such an unforeseen surprise in the litigation and, in fact, it took by surprise Mr Butler, who is the solicitor for the plaintiffs, in that he thought the limitation period was in fact three years.

9 Another factor I should have regard to is what could be called the prospects of success of the cause of action. It is clear that this is a relatively straightforward cause of action and the kind of concerns that the Court of Appeal had in Cranbrook School v Stanley (2002) NSWCA 290 need not be considered here.

10 The purpose of this significant reduction in the Limitation Act was because the impact of delay and defamation cases is of an unusual kind, as Gatley on Libel and Slander (10th edition, para 18.26) points out: "It is important when considering applications for extension of time to have regard to the factors which are considered in defamation actions and in particular to slander actions."

This is something that was put before me with some force by Mr Lynch for the defendant.

11 Similar reductions of limitation periods in defamation occurred in other jurisdictions, notably in England where in 1996 the Limitation Act 1980 was amended by s5(4) Defamation Act 1996 to insert a new s32A. However, this section, unlike s56A Limitation Act 1969, requires the court, rather than having the broad discretion and flexibility that Australian courts have, to have regard to a checklist. This included such matters as the length of (and reasons for) the delay on the part of the plaintiff, whether one of the reasons was it all or some of the facts relevant to the case did not become known until after the period of time expired, and any relevant evidence which was likely to be what is called "less cogent" than if the action was brought in the defamation period.

12 Gatley at para 18.26 considers that the ultimate question under the English law is whether it is equitable to allow the action to proceed. This means that I should regard the English cases with some caution. I do note, however, that the English courts have nevertheless taken the view that the discretion in question is still "largely unfettered," as the court held in Steedman v BBC [2002] ELR 17 at para 17.

13 I mention that because in fact the general approach in England has been to refuse such applications. Gatley notes only one case where s32A was applied in a claimant's favour and this was the case where the delay was very short: Muter v Newcastle Upon Tyne Aero Club Ltd, Queens Bench, December 17, 2001.

14 I have set out those cases in some detail partly because Steedman was a case that was referred to me by the defendant and partly because the approach in England to the extension of time has not been similar to the approach set down by the Court of Appeal in New South Wales in Itek Graphix and other such actions.

15 The only case that has come before the courts in Australia has been Carr v Reynolds Porter Chamberlain (2007) NSWSC 21 (30 January 2007). This was a case where there were a number of similar publications two of which were out of time and five of which were within time. It has been pointed out to me by Mr Lynch, and I accept, that since there does not seem to have been any substantial challenge to the addition of these causes of action to the actions that were within time, that case is not of much assistance to me in that it does not review the authorities.

16 What, then, are the circumstances here? What happened was the first slander was either January or February 2005 and the second was in April 2005, but the plaintiffs did not become aware of them until August 2005. Bearing in mind that it was a slander (and a slander of very limited capacity) there were some inquiries made between August and December and it became apparent between late September and early October that what might be called the "grapevine effect" was a factor. In other words, this was not simply something that was said to one person but that there was a "grapevine" of rumour that was spreading throughout the CMA.

17 Subsequent to this, a decision was made to send a letter of demand on 5 December 2005, at which time both causes of action were still within time. The plaintiffs commenced proceedings on 17 February 2006. They were within time for both actions if the first action was in fact published on 18 February 2006; they were well within time for the second.

18 It is against that background that there was, I think it would be fair to say, some delay by the plaintiffs' solicitors by reason of their solicitor believing there was a three year limitation period and also for a number of other reasons, including some unfamiliarity with the law and that he had a degree of informality in his instructions in circumstances where effectively what he told the plaintiffs to do was to seek the advice of solicitors who were more skilled in defamation. The plaintiffs then went to a firm who are very well known in this area (Etheringtons Solicitors) and the proceedings were commenced with great promptness by those solicitors who I infer picked up that there was a limitation period that was likely to expire.

19 Having set out that background I now come to a consideration of the issues identified by the defendant as being a problem. The first is that no sufficient reason has been demonstrated as to why the publication alleged in para 3 of the amended statement of claim on 21 January 2005 was not initiated prior to 20 January 2006. This is related to some other grounds which have to do with the circumstances in which apparently this change of date arose from a conversation with a Mr Badenoch which is asserted to have taken place. Mr Badenoch as it transpires vehemently denies having any such conversation but it was as a result of what is asserted to have been a conversation with this gentleman that the possibility arose that the conversation in question occurred after a meeting on 21 January and not in February as was pleaded in the statement of claim.

20 It is my view that the circumstances in which the plaintiffs were uncertain about when this conversation took place are adequately explained by the factual circumstances. As to the question of the delay in relation to the phone conversation with Mr Badenoch in May 2006, that is after the proceedings were commenced and really is not a significant matter in my view. The real question is how it was that there came to be a delay in the commencement of these proceedings. The fact that there is some subsequent delay in relation to a realisation in relation to a matter being out of time is not something that is going to carry as much weight as a failure to commence proceedings within time.

21 It is then asserted that there is no explanation offered as to why the plaintiff's representatives did not adequately inquire of Ms Chittenden as to when the alleged publication occurred. However, it seems to me that in circumstances where Ms Chittenden advised that a conversation took place and that she thought it was in February that is a good example of a plaintiff who, of course, was not there when the conversation took place was only as good as the information given by the witness and the witness is either clear or not clear as the case may be. It seems to me that there is an adequate explanation for this and there really was not this need for minutely inquire if Ms Chittenden was indicating as I understand that she was indicating that she was setting out to the best of her ability when this conversation took place. It may well be that she is not capable of giving better particulars and if so that will be a matter for a jury assessing her evidence in due course to determine whether they accept or reject her evidence that the conversation took place at all.

22 The next matter that is raised is that it was incumbent upon the plaintiffs to seek the court's leave to extend the time pursuant to s56A. I have had a look at the history of this matter and indeed I dealt with this history in my earlier judgment in these proceedings in relation to the application for a special fixture. It would appear that what the parties were doing was having an argument about the form and capacity of the imputations and then the matter was referred to mediation and then the matter was referred to this court. In those circumstances where there were other steps being taken and where an amended statement of claim was filed it seems to me that there is an adequate explanation for the failure to seek the leave of the court. In a perfect world it would have been something that was done but, of course, where other steps were being taken I can appreciate that it might be something on the list of things to do but might not have been done.

23 Requiring rather more explanation, however, are the circumstances in which when the plaintiffs were represented by Etheringtons at the first return date of these proceedings before me on 27 November 2006 and they indicated that they would file a notice of motion in relation to the s14A Limitation Act point. They not only did not do so but when counsel appeared before me who is not the counsel in this matter it was indicated to me that that application would not be proceeded with. I think this is unfortunate but decisions of this sort are from time to time made by counsel. It may well be that the counsel in question thought that this was a very straightforward case where the publication was almost certainly made in February. I do not know. But in any event to take that factor and give it so much weight that it would outweigh all of the other factors would in my view to be to misconceive the very flexible nature of the very general discretion that Ipp A-JA so helpfully set out in Itek Graphix as being the appropriate test in these circumstances.

24 There is no prejudice of an actual kind that is put before me. The question is, what is a test of just and reasonable and I have indicated already that the relevant principles are set out in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. Ms Sibtain draws to my attention the recent decision of the Court of Appeal in Jones v Hamersley Resources Ltd (2005) NSWCA 371 at 334 to 40 per Santow JA. I note in addition that more recently in Whybro v The State of New South Wales (2006) NSWCA 324 the Court of Appeal has again set out what is prejudice of a "significant" kind. However, effectively what these decisions are doing is dealing with material along the lines that Ipp A-JA set out in Itek Graphix and in my view this is really a relatively straightforward case where it is appropriate that leave should be granted. That is for the following reasons. First of all that although the first matter complained of took place at the beginning of 2005 either in January or February, the plaintiffs were unaware of it until Mr Boland learned of it in August 2005. Obviously, since it was a slander it was important to undertake inquiries and I can see that obviously one would need to be very careful to ensure that it is was something that had in fact been said and had been said by the defendant. It is appropriate that careful inquiries should be made and it is hard to say what is a reasonable time to make such inquiries. The letter of demand was sent within the time, and it was reasonable to wait for a response. The originating process was filed in the belief that the conversations were both within time, namely the first publication occurred on 18 February. I note that the statement of claim says, "On or about February" and that technically this means that s14A was enlivened. However, bearing in mind it was subsequently refined (I gather, by particulars) to 18 February, it seems to me that the circumstances in which it was later sought to be amended to read either 21 January or 18 February is understandable. The delay has been explained as including a mistaken and reasonably honestly held belief that the plaintiffs were in fact bringing their statement of claim within time and I note that the delay in question is a matter of twenty-nine days in circumstances where, and I consider this to be important, the defendant was put on notice by a letter of demand that was issued before the statement of claim was filed in circumstances where the plaintiff was put on notice.

25 I have indicated that there is no claim of actual prejudice. However Mr Lynch has put to me that in all cases involving slander there must be actual prejudice because of the delay. He has particularly put to me that this is a case where this was a three to three and a half hour car trip where only one sentence is sued upon in circumstances where there would be inherent unfairness.

26 Ms Sibtain for the plaintiffs has submitted that there is no evidence put before me that the conversation in question was not recorded or indeed any evidence of actual prejudice. It goes without saying that prejudice occurs if someone who was a witness was dead or that some important record was missing such as, for example, the minutes of the meeting which took place subsequently when it was asserted that there was some wish for there to be an apology at these meetings. If those minutes of meetings were no longer available or something similar then that would be actual prejudice of the kind that might enliven the prejudice.

27 In my view, it is important when considering the application to extend time to have regard to the very generous period of extension given by the legislation of two years. That is more generous than some other periods for extension of time and the purpose was clearly for cases such as the present. Other factors that I could take into account include the high degree of similarity between the first and second matter complained of and the circumstances in which the plaintiff put the defendant on notice within the limitation period by sending a letter of demand. Finally, the relatively short period of delay is twenty-nine days, and I note Ms Sibtain has drawn to my attention Maitland v Nationwide News Pty Ltd (2004) NSWCA 155 where there was a delay of seven weeks and Kidron & Andrew Spaile Architects Pty Ltd v Garrett (1994) 35 NSWLR 572 where there was a delay of several days.

28 It is in my view that it would do justice between the parties to allow this matter to be heard on its merits. It would be a matter for the jury to determine whether the publication was in fact out of time or in time because one of the things they are going to have to do is determine I would imagine when the publication occurred, if it occurred at all, and the like. It seems to me that it is appropriate that this should be a jury question and it would be artificial in the extreme for me to take the view that by reason of the fact that this is a slander that some special rule applies that puts it outside the principles so wisely enunciated by Ipp A-JA.

29 Accordingly, having regard to all of the above I am of the view that I should make the orders sought in the plaintiff's notice of motion. The orders I make are:

30 SIBTAIN: Your Honour, I think there are two notices of motion, one in Cush and one in Boland.

31 HER HONOUR: Sorry, notices of motion.

32 SIBTAIN: Thank you.

33 HER HONOUR: The orders I make are: (1) In proceedings number 4917 of 2006, one, that pursuant to s56A Limitation Act 1969 the limitation period for the bringing of the cause of action pleaded in para 3 of the statement of claim is extended to expire on 18 February 2006.

(2) Proceedings number 4735 of 2006, one, that pursuant to s56A Limitation Act 1969 the limitation period for the bringing of the cause of action herein be extended so it expires on 18 February 2006. 34 I will now hear from the parties as to costs.

35 LYNCH: Your Honour, I seek an order for costs.

36 HER HONOUR: What usually happens in motor vehicle cases is that if they bring an action out of time you get your costs unless there's been unreasonable opposition.

37 LYNCH: Yes, your Honour, we say that the opposition has not been unreasonable and that reflects the common law position not just for motor vehicle cases and the resistance to the order was reasonably raised. Your Honour's judgment reflects there were unarguable bases upon which to resist and we seek an order on that basis.

38 SIBTAIN: I don't wish to be heard, thank you, your Honour.

39 HER HONOUR: In that case, the plaintiffs pay the defendant's costs of the notice of motion.

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