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GWA Pty Ltd v Russo[2004] QCA 326

 

SUPREME COURT OF QUEENSLAND 

 

CITATION:

GWA P/L v Russo & Anor; Thornton v Russo & Anor [2004] QCA 326

PARTIES:

GWA PTY LTD ACN 008 647 523

(plaintiff/applicant)

v

NICK RUSSO

(first defendant/respondent)

EQUUSCORP PTY LTD ACN 006 012 344

(second defendant/respondent)

BARRY THORNTON

(plaintiff/applicant)

v

NICK RUSSO

(first defendant/respondent)

EQUUSCORP PTY LTD ACN 006 012 344

(second defendant/respondent)

FILE NO/S:

Appeal Nos 3311 & 3312 of 2004

DC No 81 & 82 of 1993 

DIVISION:

Court of Appeal

PROCEEDING:

Application for leave s 118 DCA (civil)

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

10 September 2004

DELIVERED AT:

Brisbane

HEARING DATE:

9 August 2004

JUDGES:

McPherson JA, Helman J, Dutney J

Separate reasons for judgment of each member of the Court,  each concurring as to the orders made 

ORDER:

Applications in each action dismissed with costs

CATCHWORDS:

PRACTICE AND PROCEDURE – WANT OF  PROSECUTION – DEFAMATION ACTION – where primary judge dismissed actions for want of prosecution – whether applications for leave to appeal against those orders should be granted

Supreme Court of Queensland Act 1991, s 85(2)

Uniform Civil Procedure Rules, s 389(2)

Cooper v Hopgood & Ganim [1999] 2 Qd R 113, cited

COUNSEL:

D R Cooper SC with D Ryan for the applicant

M J Burns for the respondent  

SOLICITORS:

MacDonnells for the applicant

Gadens for the respondent

  1. McPHERSON JA: More than 11 years ago on 12 January 1993 the plaintiff Barry Thornton filed a plaint in the District Court at Brisbane claiming damages for defamation against the defendants Nick Russo and a company named Equuscorp Pty Ltd. The defamatory statement sued upon was contained in a letter dated 1 October 1992 written by Mr Russo on behalf of Equuscorp to Anthony Johnson. Copies were allegedly circulated by the defendants throughout Australia to investors, said to number some 350 in all, in a series of limited partnerships which had been formed by Johnson Farm Management Pty Ltd to promote and manage a crayfish farming enterprise known as the Red Claw Project. In respect of that letter or the statements it contained, a plaint claiming damages for defamation was on 12 January 1993 also issued out of the District Court by GWA Pty Ltd, which is a company of which Mr Thornton is a or the principal. The allegations in the two plaints and the steps taken in the two proceedings are sufficiently alike to enable the fate of both applications here to be determined together, and it is enough here to refer to the pleadings, correspondence and proceedings in the Thornton action. The actions have throughout been conducted by the same solicitors on either side.
  1. The applications now before this Court are made by the plaintiffs in each of the actions in the District Court for leave to appeal against orders refusing them leave to proceed in those actions, and instead dismissing the actions for want of prosecution. Orders to that effect are authorised respectively by rule 389(2) of the Uniform Civil Procedure Rules in a proceeding in which no step has been taken for two years; and under s 85(2 ) of the Supreme Court of Queensland Act 1991 where two years have elapsed since the last step was taken in a proceeding. In each of the present instances, the last step was the provision of further and better particulars of the defence delivered on 9 or 10 July 2001, although there had earlier been lengthy periods of delay dating back to May 1993 during which nothing was done to carry the action forward. The orders sought to be appealed against were made on 17 March 2004 by applications filed in September and heard in November 2003.
  1. The principles applied by the courts in Queensland in such matters have been discussed in various decisions of this Court of which one of only several referred to by McGill DCJ here is Cooper v Hopgood & Ganim [1999] 2 Qd R 113. It is not in doubt that in granting or refusing leave to proceed, or in dismissing proceedings for want of prosecution, the court is exercising a discretionary power; nor that, in doing so, prominent factors affecting the exercise of that discretion are whether or not there is a satisfactory explanation for the delay; and whether the defendant is likely to have suffered prejudice in consequence of it: cf Cooper v Hopgood & Ganim [1999] 2 Qd R 113, 124.
  1. According to the letter of 1 October 1992, which was written in response to an earlier letter by Johnson, some $15 million was subscribed by investors acquiring units in the Red Claw Project, of which $10.4 million was borrowed from an entity known as Rural Finance Pty Ltd. Equuscorp became involved in the transaction by taking an assignment of the loans made by Rural to investors in the Project. When it sued to enforce those loans, it was met by defences from some of the borrowers, (who are not otherwise identified in the plaint but are referred to in the letter as the Brisbane based or “privileged” investors) to the effect that they had a special “non-recourse” arrangement with Rural. Under its terms they claimed they would not have to repay their loans out of their own money; but they would nevertheless receive a substantial share of the Red Claw Project, and would be entitled to claim tax deductions well beyond the amounts of the “real” investments made by them. Johnson and his companies, so the letter asserted, also received commissions on the loans, but it or they had, it was said, hidden from Equuscorp and the “genuine” investors that these arrangements had been made with Rural. They had come to light only when Equuscorp sued some of the “genuine” investors for amounts owing by them under the loans.
  1. The letter went on to say that these arrangements or “guarantees”, as they were called, were now subject to investigation by the Australian Tax Office in New South Wales; that they were an illegal device, having the effect of defrauding the revenue of the Commonwealth, that “we believe will be struck down”; and that the moneys recovered in consequence would go to meeting the obligations that the privileged investors had to Equuscorp, which in turn could then consider releasing any surplus for the benefit of the Project. The Brisbane based or “privileged” investors had decided to defend the demand that they pay their debts, and Equuscorp was now pursuing its remedies against them. The letter related that the chairman of those investors (who is the plaintiff Thornton) had made it clear to the writer of the letter that they were now resisting all attempts to get them to meet their loan obligations; but, it was said, when the matter eventually came to trial the correspondence and documents would all be produced, and would vindicate the defendants’ assertions.
  1. The contents of the letter, so far as relevant, are set out in para 10 of the most recent or fifth amended version of Thornton’s plaint in the District Court action delivered on 21 February 1997. The foregoing is a summary of their effect. Paragraphs 11, 12 and 13 of the plaint alleged that references to “the chairman of the Brisbane based investors” were understood by readers of the letter to refer to the plaintiff. Paragraph 14 set out a number of defamatory imputations alleged to be conveyed by the matter published including that the plaintiff had engaged in illegal and criminal misconduct; was dishonest, and subject to investigation by the Taxation Office; that he did not meet his business obligations; did not pay his debts; and so on.
  1. In response to these allegations, the defence in paras 9, 10 and 11 admitted that the offending letter was sent to Anthony Johnson and to investors, but claimed that the publication was excused under s 377(3) of the Code. It is a provision, which along with others has since been transferred from the Code to another Act, that confers on the publisher a qualified protection for defamatory matter published in good faith for the protection of the interests of a person. Paragraphs 12 and 13 also rely on the specific form of qualified protection conferred by s 377(5) of the Code for publication of the defamatory matter in the letter if it was done in good faith for the purpose of giving information to investors as to a matter in which they had an interest in knowing the truth; that is to say, the status and effect of the agreements between Rural and the Brisbane based investors and the dealings between them and the defendants. The final paragraph of s 377 excuses publication in good faith of defamatory matter in various circumstances, which for present purposes may conveniently be summarised by saying that the defendant must not have believed the defamatory matter to be untrue.
  1. It will be seen from this that the defendants did not seek to justify the publication by claiming that under s 376 of the Code it was true and for the public benefit that it should be made. This meant, as McGill DCJ perceived, that it would not be necessary or relevant to the issues at the trial of the action to determine the truth of the matters alleged to be defamatory published in the letter of 1 October 1992. Instead, the question was or would be whether those matters were published by the defendants in good faith at that date and not after it. It is an issue as to which the onus of proof is by s 378 of the Code imposed on the plaintiff; it would, in order to deprive the defendants of the protection or defence of qualified privilege, be necessary for the plaintiff to establish the absence of good faith on their part on 1 October 1992 when the letter was published. Subsequent events could not affect the fact that it was the date on which the issue of good faith under s 377(5) fell to be determined.
  1. This conclusion, which his Honour arrived at and expressed in detail in his reasons, is with respect plainly correct. It became relevant to the application to dismiss the plaintiff’s action for want of prosecution because the plaintiff sought to meet or explain the allegation of delay on his part by submitting that the delay was justified. It was submitted that the defamation action in the District Court could not or should not be brought to trial until the determination of other proceedings brought by Equuscorp in the Supreme Court against Brisbane based investors having the benefit of recourse agreements to recover the indebtedness alleged to be due to Equuscorp as assignee from Rural. Those proceedings have had a somewhat chequered career, involving a determination in the trial division followed by a reopening of the hearing, and then an appeal to the Court of Appeal, which in turn has been followed by an appeal by special leave to the High Court, in which the decision was and is at present still pending.
  1. It is, however, plain that the determination in those actions of the issue whether the indebtedness was due and owing to Equuscorp, or whether the recourse agreements were vitiated by one or more of the factors relied on to defeat them in those proceedings, cannot affect the question whether or not allegedly defamatory matter in the letter of 1 October 1992 was or was not published by the defendants in good faith. There were his Honour said no significant common issues of fact between the two sets of actions. It was nevertheless submitted on behalf of Thornton that the question of the validity of the recourse agreements had been made an issue in the District Court action by the form in which the pleadings were formulated. In some of the prefatory allegations, especially perhaps in para 2(d) of the plaint in the District Court, the plaintiff had averred the making of those recourse agreements, and the defendants in their defence had denied it. It is, however, clear enough that, as the learned judge held, those allegations in the plaint were simply pleaded as background facts introduced to facilitate an understanding of the relationship in which the parties stood at the time the defamatory matter was published but were really irrelevant to the issue of whether the publication constituted actionable defamation. A determination one way or another of those allegations cannot affect the outcome of the issue whether or not the matter contained in the letter of 1 October 1992, if it was otherwise defamatory, was published by the defendants in good faith on that occasion.
  1. It was further submitted that an issue had also been made of the truth of the contents of the letter by particulars of para 12 of the defence provided on 11 May 1993 by the defendants in response to a request by the plaintiff. In para 4(e), the defendants said that the facts, matters and circumstances by reason of which it was alleged by the defendants that the publication of the letter was made in good faith were that:

“(a)the facts set out in the letter are true and correct;

(b)the expressions of opinion set out in the letter were honestly and reasonably held;”.

There may be a question whether under the rules of court as they stood at that time the defendants were required to provide particulars in support of the allegation of their state of mind at the time of publication; but, however that may be, the particulars in fact provided in para 4(e) are simply a form of the familiar “rolled up” plea to the effect that, in so far as the matter complained of consists of statements of fact, they were true in substance and in fact; and, in so far as they consist of expressions of opinion, they were made honestly and in good faith. The learned judge at first instance considered that the statements in the letter alleged to give rise to the defamatory imputations imputed by the plaintiff (such as that debts were owing but not paid) were matters of opinion; and it remains true to say that, at least until it is known which of them are facts and which are expressions of opinion, it is not possible to say that, by the particulars furnished in para 4(e)(i) and (ii), the defendants put in issue facts that call for a determination of the proceedings in the Supreme Court before the defamation action in the District Court is capable of being progressed or decided.

  1. Then the plaintiff submits that, even if this is so, nevertheless the defendants induced the plaintiff to believe that they (the defendants) considered that the same issues arose in both sets of proceedings in the Supreme Court and the District Court. The foundation for this submission is contained in a letter dated 3 July 2000 from the defendants’ solicitors, in which the writer said:

“We are currently working through the issue of discovery in this action which, it is clear, will be very extensive for both parties. It is clear that many of the issues which arose in the litigation in the  Supreme Court … involving Equuscorp and Mr Thornton, if not most, will also arise in this action.

It will therefore take time to finalise our client’s disclosure. We are attending to that aspect of the case as best we can.”

The letter went on to propose that within, say four weeks, both parties should aim to exchange a full and complete list of documents directly relevant to the issues in the action.

  1. There might have been greater substance in the plaintiff’s complaint about this aspect of the matter had he acted on the proposal contained in the letter of 3 July 2000. In fact, there is no evidence to show that the plaintiff or his solicitors took any notice of it at all. By letter dated 2 May 2001, they insisted that the defendants amend their defence by incorporating into it certain particulars ordered by Brabazon DCJ on 3 November 2000, failing which they would apply to strike out the defence. The occasion on which that order was made was one on which the defendants had made an earlier application to have the action dismissed for want of prosecution. In a letter dated 3 May 2001 in which they announced that they were now instructed by their client “to proceed to trial as soon as possible”, the plaintiff’s solicitors took issue with the particulars that had been supplied by the defendants under the order of Brabazon DCJ. A further letter of 14 May 2001 from those solicitors reiterated the complaint that the defendants had failed to incorporate the particulars into the defence, and again threatened to apply to have the defence struck out.
  1. The solicitors for the defendants replied on 15 May 2001 making certain concessions and suggesting that the parties adopt a directions timetable, in which the first item was that their clients deliver an amended defence with particulars within 28 days, along with other proposals, including disclosure, designed to bring the matter to trial. The plaintiff’s response was contained in an answering letter of 18 May 2001, in which his solicitors somewhat abruptly observed: “We don’t see the need at this point to adopt any timetable”. They went on, however, to “confirm” that the amended defence incorporating the particulars would be “filed and served by Friday 15 June 2001” This was followed by a further letter from the defendants’ solicitors dated 28 May 2001 stressing that delay was the “very matter” that Brabazon DCJ had sought to avoid, and questioning why the plaintiff would not agree to the proposed timetable, or suggest an alternative. Another brief letter dated 6 June 2001 followed from the plaintiff’s solicitors saying that they would give further consideration to the interlocutory steps, including a timetable needed to bring the actions to trial, but only “once we are satisfied that your amended pleadings are in order”. The particulars insisted upon were in fact provided on 9 or 10 June 2001, which as I have said was the last step taken in the action. More than two years later, during which nothing further took place, the defendants in September 2003 applied to have the action dismissed for want of prosecution, with the outcome that is now before us on this application for leave to appeal.
  1. To my mind, it is evident that, not only is there no evidence that the plaintiff’s course of proceeding was influenced by the defendants’ solicitors’ letter of 3 July 2000, but that the plaintiff was unwilling to join in any kind of proposal designed to bring the actions to trial within the foreseeable future. What is apparent is that they intended that the actions would come to trial at a time of the plaintiffs’ choosing Perhaps the plaintiffs supposed, or were advised, that in some way they would be in a stronger position in the two actions in the District Court if their appeal to the High Court succeeds. But, for the reasons given by McGill DJ, now confirmed in what has been said here, it is simply not the case that the determination of the issues in the proceedings in the Supreme Court will facilitate the decision of the issues raised in the defamation actions in the District Court. Those issues are quite distinct. Nor is there any substance in the applicants’ submission in this Court that the determination of the Supreme Court proceedings will affect the quantum of damages liable to be awarded in the District Court actions assuming they succeed. That submission was not advanced before McGill DCJ in the court below, and it naturally found no place in his Honour’s extensive reasons. The applicants ought not now be permitted to raise it for the first time in this Court.
  1. His Honour was correct in considering that the bulk of the delay had been the fault of the plaintiffs. He was, in my opinion, also right in concluding that the defendants would be disadvantaged by a trial at some unspecified future date after such lengthy delay. At such a trial, witnesses who are proved to have received the offending letter will presumably be asked to recall their recollections or impressions at a time remote from its receipt some 12 or more years ago. The issue of publication in good faith is another matter in respect of which the passage of that length of time can fairly be assumed to have taken its toll on human memory. The state of a man’s mind may, as Lord Justice Bowen once suggested, be as much a fact as the state of his digestion; but it is improbable that most people could confidently recall the condition of either of them after the lapse of so many years. The ensuing prejudice to the fair trial of the action may not affect the defendants alone; but it is not they who instituted the actions or who bear the responsibility for delaying its trial for the period of time that has elapsed here.
  1. In any event, the question before us is not whether his Honour was right in putting these neglected actions out of their misery; but whether he was wrong to do so. The decision he made is one that involved the exercise of a judicial discretion on a matter of practice and procedure, which, as such, is not lightly interfered with on appeal unless some material error in the reasoning is demonstrated, which is not the case here. In addition, it is well settled that an order striking out an action for want of prosecution is interlocutory in character, and so requires leave to appeal under s 118(3) of the District Court Act. To make matters worse, the plaintiffs, despite being alerted to the point by the defendants’ solicitors, allowed a period of some three months or more to elapse from judgment before making these applications for leave to appeal. They now seek the indulgence of the Court in extending the time within which to make the applications. Their predisposition for further delaying the proceedings for no legitimate reason should not be rewarded by making such an order on appeal. Once again, the reason in this instance for failing to apply earlier for an extension of time has not been adequately explained.
  1. It was not suggested that the circumstances in the action by GWA Pty Ltd called for a different analysis or treatment from those in the action by Thornton. It follows that the applications to this Court in each action should be dismissed with costs.
  1. HELMAN J: I agree with the orders proposed by McPherson JA and with his reasons.
  1. DUTNEY J: I respectfully agree with the reasons for judgment and order proposed by McPherson JA.
Close

Editorial Notes

  • Published Case Name:

    GWA P/L v Russo & Anor; Thornton v Russo & Anor

  • Shortened Case Name:

    GWA Pty Ltd v Russo

  • MNC:

    [2004] QCA 326

  • Court:

    QCA

  • Judge(s):

    McPherson JA, Helman J, Dutney J

  • Date:

    10 Sep 2004

Litigation History

EventCitation or FileDateNotes
Primary Judgment[1997] QDC 4123 Jan 1997Plaintiff applied for an order that defendants make discovery; defendants cross-applied to strike out plaintiff's pleading; whether corporation entitled to sue for defamation; pleading struck out with leave to replead: McGill SC DCJ
Primary Judgment[2000] QDC 38703 Nov 2000Defendants applied to strike out plaintiff's amended pleading and for an order dismissing its claim; application dismissed: Brabazon DCJ
Primary Judgment[2004] QDC 3317 Mar 2004Plaintiff applied for leave to proceed having failed to take a step for two and a half years; defendants cross-applied to dismiss claim for want of prosecution; claim dismissed for want of prosecution and application for leave to proceed dismissed: McGill SC DCJ
Appeal Determined (QCA)[2004] QCA 32610 Sep 2004Plaintiff applied for extension of time in which to seek leave to appeal against orders refusing leave to proceed; applications dismissed: McPherson JA, Helman and Dutney JJ

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Cooper v Hopgood & Ganim[1999] 2 Qd R 113; [1998] QCA 114
3 citations

Cases Citing

Case NameFull CitationFrequency
Lane v Trustee of the Property of Gregory William Delaney [2007] QDC 2222 citations
Lu v Fenson Legal Pty Ltd [2025] QCA 1651 citation
1

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