Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Lee v Keddie [2011] NSWCA 2
• Hearing dates: Friday 21 January 2011
• Decision date: 21 January 2011
• Before: Allsop P at 1, Tobias JA at 17

Decision

1 The application for leave to appeal be dismissed.

2. The application to vacate the hearing in the defamation list in February be dismissed.

3. The applicants pay the respondent's costs of the application.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: PROCEDURE - Civil - pleadings - amendment - refusal to allow amendment - application for leave to appeal - application to vacate hearing date - no question of principle
• Cases Cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175; House v R [1936] HCA 40; (1936) 55 CLR 499; McMahon v John Fairfax Publications Pty Ltd [2010] NSWCA 308; Richards v Cornford (No 3) [2010] NSWCA 134
• Category: Principal judgment
• Parties: Siu Sheng Lee (First Applicant); Hong Mei Li (Second Applicant); Hong Liu (Third Applicant); Russell Keddie (First Respondent); Scott Roulstone (Second Respondent); Tony Barakat (Third Respondent)
• Representation: Counsel: Mr P Gray SC, Ms C Traill (Applicants); Mr T Tobin QC, Mr R Glasson (Respondents); Solicitors: Horowitz & Bilinsky Solicitors (Applicants); Verekers Solicitors (Respondents)
• File Number(s): 2007/265163

Decision under appeal

• Jurisdiction: 9111
• Date of Decision: 2010-12-17 00:00:00
• Before: Nicholas J
• File Number(s): 07/265163

Judgment

1 ALLSOP P: This is an application for leave to appeal from the refusal of the defamation list judge to allow certain amendments to have applied. It is also an application to vacate a three week defamation hearing listed in February 2011. There is no substantive contest in principle in this case. The facts I will not recite in detail.

2 A letter was sent to a number of clients or former clients of the respondents (defendants below) in 2006. A letter was sent in the Chinese language, the clients being Chinese. There is accepted to be a mistake in the translation into the Chinese from the English instructions from the defendants. There appears little doubt that what appeared in Chinese script in the letters was significantly different from the instructions.

3 What appeared in the Chinese version was a significant allegation that the plaintiffs were responsible for acts of some unethical or immoral character. The plaintiffs became aware of the letters and their apparently defamatory character not long after they were sent. They were sent towards the end of 2006. Approximately a year later, defamation proceedings were commenced. A defence was filed which raised the question of qualified privilege in a fashion it is unnecessary to identify. This immediately gave rise to the possibility of a reply pleading malice. The matters in respect of which the judge refused leave were matters going to malice and in particular serious allegations that the defendants had requested the plaintiffs to behave in a way which would be both inappropriate, and indeed, dishonest in meeting allegations being made by clients of former clients. In the particulars, it was said that the refusal of the plaintiffs to comply with these requests or demands was the motivating factor for the asserted defamation of the defendants, solicitors of this Court. The seriousness of the allegations does not have to otherwise be described.

4 These matters were not raised in reply until an application was made in late October, early November 2010 for the existing reply dealing with qualified privilege to be amended. They were matters which were within the knowledge of all the plaintiffs from 2006. The plaintiffs are now represented by solicitors who assumed their responsibilities in June last year. It is unnecessary to traverse in detail the history of retainers with counsel beyond saying senior counsel first briefed, later withdrew after challenge by the defendants who said that he had advised them in the past. Junior counsel was briefed in August. Present senior counsel was briefed in October.

5 Nothing that I say in the balance of this judgment is a criticism of present counsel. It might be said by others that they could have acted more speedily, but I do not think that is a legitimate proposition. Nevertheless, from June when answers to interrogatories were delivered, the kernel of these most serious allegations was illuminated in the answers given. I should say at this stage that the plaintiffs are three Chinese speakers, however, their familiarity with English varies. The third plaintiff has a good familiarity with English and is indeed, at least at the present time, a solicitor in the Court. The second plaintiff has some familiarity with English on a working basis. The first plaintiff does not have English as a language.

6 However, the matters of which the plaintiffs became aware do not turn on the subtleties of expression or language. They are in their form most serious allegations which could not have been misunderstood by anyone, thus the question of language goes to communication to legal representatives. There is no evidence before the Court as to what occurred prior to June last year as to why these allegations were not brought forward in the time that was available from the first raising of qualified privilege.

7 The reasons of the primary judge for refusing leave were, in my view, compelling. A three week hearing date would have been vacated having already been vacated in August last year. The matters the subject of the paragraphs in question contain allegations of the utmost seriousness. They had not been part of any pleaded case although, interlocutory steps of discovery had been sought for material which would have underpinned them. Those requests were some time ago abandoned.

8 The answers to interrogatories which threw up the kernel of these allegations were made in answer to interrogatories administered by the defendants which did not direct themselves to these precise allegations. It is unnecessary to dwell on the detail of the question. Some of the answers can be seen to a point to be non-responsive. Nevertheless, the legitimate conduct of the interlocutory proceedings was not directed to the elucidation of these matters.

9 It is common ground and was common ground before the learned primary judge, that should the reply be amended as sought, the trial would have to go off. It is also common ground, I think, that any further hearing would require some more time than three weeks. Mr Gray SC for the applicants, recognises this, although he does not accept that the case would be necessarily substantially longer, although he accepts that there is a real risk of that being the case.

10 Before turning to the primary judge and his reasons, in my view, the history of the matter reveals that there was ample and indeed, more than ample time for litigants, including those with language difficulties in English to the extent that they existed, to illuminate and explicate their case. I will not go through the questions of principle. As I said earlier, this is not in dispute. The parties accept that his Honour properly directed himself as to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175, McMahon v John Fairfax Publications Pty Ltd [2010] NSWCA 308, Richards v Cornford (No 3) [2010] NSWCA 134 and the other cases to which reference has been made. The real question is whether in these circumstances, the conclusion of his Honour not to permit these matters in reply were so unjust and so wrong as to bespeak an error in application of principle.

11 Before coming to that, I should note that there are a number of matters referred to in the helpful written submissions of Mr Burke, Mr Gray and Ms Traill. They seek to identify factual errors and errors of principle by the learned primary judge without going through each individually. I was assisted by those submissions and the submissions in reply of Mr Tobin and Mr Glasson. I am not persuaded that there was any material error in factual conclusions of a trial judge or in any application of principle. That leads to the question as to whether the result and the refusal and the shutting out of the plaintiffs of these aspects of the reply bespeaks a misapplication of principle by reason of its apparent and clear injustice. In my view, that is not a proper conclusion to be drawn. Justice is justice to both sides and relevant is the timely and appropriate administration of justice. Matters of the most serious kind have been raised in a relevant sense four years after the defamation and three years after the case began. Matters which go to the heart of the question of malice which was always at the forefront of the plaintiffs' case in reply was pleaded from the outset, that is, malice was pleaded from the outset. The subject matter is a matter that was always to the knowledge and within the knowledge of the plaintiffs. No aspect of language could have affected their understanding of what they say had been said to them by the defendants.

12 The reasons why this was not pleaded from the almost two and a half years that the matter came to Mr Burke must be borne in mind. Further, the matter was available to the legal representatives from June 2010. If these defamation proceedings were the only possible avenue for ventilation of these matters, that would be a considerable factor to weigh in favour of the granting of the application. That matter was not put squarely to the learned primary judge, no doubt because it is not the case. There was material given from the bar table to which there was no objection as to the state of complaints by various clients and former clients of the defendants both to the Office of the Legal Services Commissioner and in their own suits.

13 What is plain is that if the matters which are the subject of the amended reply are true, these are matters of the utmost seriousness for the administration of justice in this State, and the Legal Services Commissioner should be apprised of them. It is not appropriate in my view for this Court to refer any question because we do not have evidence before us; we are dealing with allegations in a pleading.

14 I am not able to discern a ground of any error likely to persuade a court of error in the exercise of discretion and in my view, for that reason, and bearing in mind also the reluctance and caution with which the appeal court attends to matters of practice and procedure, in particular, in a specialist list, I would dismiss both applications for leave to appeal and to vacate the hearing. The dismissal of the application of course, would not prevent the matter being raised as a substantive ground of appeal after the trial if it is still a relevant consideration. For those reasons I will dismiss both applications with costs.

15 TOBIAS JA: I agree and would simply add the following. I have given careful consideration to the eleven matters referred to in para 29 of the applicant's summary of argument and relied upon as underpinning the submission that the primary judge's reasons contained errors of principle. Like the President, I do not consider that any of those items involve any error of principle by the primary judge. Nor do I consider that they involve any relevant errors of fact on his part which could be relied upon as indicative of a miscarriage of the exercise by his Honour of his discretion.

16 The same comment applies to the submissions in para 30 of the applicant's summary. Each of those matters is probably true, but they do not, with respect, involve any relevant error on the part of the primary judge, although they were matters which another judge may have taken into account and come to a different conclusion. But that fact is not sufficient to justify a finding that the primary judge fell into an error in the exercise of his discretion within the meaning of the principles espoused by the High Court in House v R [1936] HCA 40; (1936) 55 CLR 499 at 505.

17 I therefore, join in the President's proposed order that the summons for leave to appeal be dismissed with costs.

18 ALLSOP P: The orders of the court are:

1. The application for leave to appeal be dismissed.

2. The application to vacate the hearing in the defamation list in February be dismissed.

3. The applicants pay the respondents' costs of the application.

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Decision last updated: 04 February 2011