Lemin v Cooper[2020] QCA 103

[2020] QCA 103

COURT OF APPEAL

HOLMES CJ

MORRISON JA

WILSON J

Appeal No 9431 of 2019

DC No 807 of 2019

GRANT KENNETH LEMIN Applicants

PRECISION PRIORITY PTY LTD

ACN 611 742 771

v

DAVID MAYHEW COOPER Respondent

BRISBANE

THURSDAY, 14 MAY 2020

JUDGMENT

HOLMES CJ:  I will ask Justice Morrison to give his reasons first.

MORRISON JA:  The applicants commenced proceedings in the District Court seeking damages for the publication of defamatory material.  The defamation was said to have occurred by the sending of six defamatory emails.

In the original statement of claim, the plaintiffs relied on purported text of the six emails as particulars.  In each case, the purported text was quoted in inverted commas, thus giving the appearance of a verbatim quote.  In fact, in each case the quoted text was created by a process later found by the learned primary Judge and accepted by the plaintiffs to be a “a bad cut and paste process”.  In addition, some emails were presented out of context and some emails were alleged to have been sent to a wider audience than was the case.  The defendant requested copies of the pleaded emails pursuant to r 222 of the Uniform Civil Procedure Rules 1999.  Copies of the emails were produced but they repeated the errors that had been made in the statement of claim.

The defendant filed an application to strike out the claim.  Prior to its being heard, the plaintiffs provided an amended statement of claim which changed the extracts of the emails already pleaded and added a further one.  On the hearing of the application, the plaintiffs sought to file a further amended statement of claim providing a draft of it.  During the course of the hearing, the plaintiffs’ solicitor accepted that even that draft needed further alteration.  In a reserved decision, the learned primary Judge ordered that the plaintiffs pay the costs of and incidental to the application, notwithstanding the pleading was not struck out.  The decision is Lemin & Anor v Cooper [2019] QDC 137.

On 2 September 2019, the learned primary Judge refused to grant leave to appeal against that decision: Lemin & Anor v Cooper (No.2) [2019] QDC 163.  The plaintiffs were again ordered to pay costs.  The plaintiffs now seek leave from this Court to appeal against the refusal by the learned primary Judge to grant leave to appeal against the costs order made on 5 August 2019 and thus challenge that order.

What follows is taken from the findings by the learned primary Judge in her Honour’s decision of 5 August 2019.  There is no challenge to these facts.

The plaintiffs filed the statement of claim on 8 March 2019.  The plaintiffs’ claim alleged the publication of defamatory material by the defendant by the sending of six allegedly defamatory emails.

The defendant filed an application on 11 June, which sought to strike out the plaintiffs’ claim as alternative relief to a summary judgment.  In the written submissions filed in support of the application, it was said the primary basis for the application was that the statement of claim alleged that the defendant sent emails that were in fact not sent.  It was said the deception had been replicated by the production of the emails under r 222 of the UCPR.

By both the statement of claim and the documents produced pursuant to r 222 of the UCPR, the plaintiffs presented as true some emails that had in fact been created by merging different emails, some emails that had been presented out of context and some emails that were alleged to have been sent to a wider audience than in fact sent.  It was submitted by the defendant that the deception was an abuse of process.  It was further submitted that there was evidence to support a finding that the proceedings were vexatious, having been commenced for the ulterior purpose of harassment of the defendant.

On 2 July 2019, the plaintiffs provided an amended statement of claim by email.  The email contained no explanation with respect to the amendments.  The amended pleading amended, in a significant respect, the extracts of the emails pleaded in the original statement of claim.  The amendments inserted extracts from an additional email making the alleged number of defamatory emails seven in total.

At the hearing on 4 July 2019, the plaintiffs were granted leave to read and file an amended statement of claim.  However, as a copy of the emails referred to in either the statement of claim or the amended statement of claim had not been provided by the plaintiffs, the hearing of the application was adjourned and an order was made for the plaintiffs to provide unedited copies of the relevant emails by close of business on 8 July 2019.  By email from the plaintiffs’ solicitor to the defendant’s solicitor on 8 July 2019, the email chains were provided.

By email dated 8 July 2019, the defendant’s solicitor confirmed that they would require the explanation made from the bar table, that the application on 4 July 2019 with respect to the errors contained in the extracts of the emails included in the statement of claim, to be verified by affidavit.  The solicitor for the plaintiffs responded by email of the same date indicating that both he and the first plaintiff had been unwell, and the first plaintiff was in hospital.  It was said the affidavit would be provided by Thursday, if at all possible.

The defendant’s solicitor responded by email of the same date and stated that the plaintiffs had had many weeks to prepare this evidence, and that unless the material was received by 4 pm Wednesday, they would be pressing ahead with the application.  An affidavit of the first plaintiff sworn 9 July 2019 was provided.  A comparison of the amended statement of claim provided on 2 July 2019 and the emails produced in accordance with the order indicated that the extracts in the amended statement of claim correlated with the actual emails.

At the hearing on 11 July 2019, counsel for the defendant pointed out some inconsistencies between the explanation contained in the affidavit of the first plaintiff, the submissions of the plaintiffs’ solicitor and the copy emails produced pursuant to the order made on 4 July 2019.  At the hearing, the plaintiffs’ solicitor sought to file a further amended statement of claim.  That statement of claim sought to amend the pleading again.  In submissions, the solicitor for the plaintiffs accepted that the draft further amended statement of claim needed further correction and sought the Court’s leave to file yet another further amended statement of claim.

At the hearing, the learned primary Judge foreshadowed making a costs order against the plaintiffs, even though the pleading would not be struck out.  Each party was given leave to file submissions on that issue and did so.  The learned primary Judge, in the reasons for ordering costs, recited the history of the proceedings leading to the eventual hearing of the application to strike out.  Because the pleading was finally rectified, her Honour concluded there was no justification to strike it out.

However, her Honour gave several reasons for ordering the plaintiffs to pay the costs in any event.  There was no basis to accept that the defendant ought reasonably to have been aware that a bad cut and paste job had been done on the email extracts included in the first pleading.  In that respect, her Honour said that a party was entitled to assume that an accurate depiction of a document was contained in the pleading and would be concerned to know whether reliance was being placed on some documents other than those alleged.  In any event, the party had an obligation to make pleaded allegations based on fact, not to mislead in the pleading, and see the application had been properly brought, and even at the hearing the statement of claim had not been finalised.

The challenge to the costs order

It must be borne in mind that the costs order was an interlocutory order made in the exercise of a discretion by the learned primary Judge.  Consequently, it may be overturned only if error in the sense of that laid down in House v The King (1936) 55 CLR 499; [1936] HCA 40 at 504-505 is made out.

That is to say, if the learned primary Judge acted on a wrong principle, allowed extraneous or irrelevant matters to guide her, mistook the facts, or did not take into account a relevant consideration, or if this Court concludes that while it cannot say how the result has been reached, the order is plainly unreasonable or unjust on the facts.  It is not sufficient that this Court might have made a different order: House v The King at 504-505.  See also Mace v Murray (1955) 92 CLR 370; [1955] HCA 2 at 378.

Further, appellate Courts are reluctant to interfere with the exercise of a discretion, especially one on an interlocutory basis, which is the case with a costs order: Velissaris v Fitzgerald [2008] VSCA 152 at 8-9; Grundmann v Georgeson [1996] QCA 189 at 29-30.

Having advanced 33 proposed grounds of appeal, the applicants have abandoned all but five, proposed grounds 1, 19 and 27 to 29.

Ground 1 contends that there was an error on the part of the learned primary Judge by departing from the usual rule that costs follow the event, and by not giving consideration to making a split costs rule under r 684 of the UCPR.  Further, it was said that there was misconduct on the part of the defendant applicant, which should have been considered but was not.

It is true that the general rule is that costs follow the event, but that is not an immutable rule and different costs orders can be made in the exercise of judicial discretion.  In my view, the fact that the pleading quoted verbatim from emails which were, however innocently, the product of a bad cut and paste job, and the fact that the pleading was still under the process of amendment even at the hearing of the application to strike out, amply justified the learned primary Judge’s order.  The text of the pleaded emails did not accord with reality, nor did those produced under r 222 of the UCPR in response to a request for documents.  It cannot be demonstrated that her Honour erred in concluding that the application was properly brought.

The alleged misconduct to which reference is made, consists largely of strident or overreaching submissions in the outline of submissions used on the hearing of the application.  Additional references made to allegations of criminal intimidation and improper purpose are made in an affidavit used for the hearing.  However, even if that conduct was rightly the subject of criticism, it does not in my view, displace the fact that emails were erroneously pleaded, erroneously supplied, and as a consequence, the application to strike out was justified.  That conduct did not compel as a matter of the exercise of discretion, the making of a split costs order.

The applicants also criticised the learned primary Judge for not accepting a submission that the bad cut and paste job would have been apparent.  They point to the fact that the bad cut and paste job was carried out on emails sent by the defendant himself.  On this aspect, I respectfully agree with the learned primary Judge.  Parties are obligated under the UCPR to plead material facts in the statement of claim and by doing so propound the case upon which they intend to rely.

The defendant here sought production of the pleaded emails, inferentially because they did not match those which were actually sent.  What was produced was a set of emails that did not reflect those which had been sent, because they were the product of a bad cut and paste job.  The defendant was not obligated to give lessons to the plaintiffs as to the content of their pleading.  The defendant was entitled to bring a challenge to their pleading which he did.

Finally, it was contended that the application to strike out was brought in a form of ambush.  I do not accept that contention.  The defence served at the same time as the application put in issue that the pleading accurately recorded the actual emails.  The affidavit in support gave details of the discrepancies and by 4 July 2019, the defendant’s outline made the case clear.

Ground 19 contends that there was an error in not giving consideration to the fairness of a costs order being made against the second plaintiff, as opposed to only the first plaintiff.  The contention is that the first plaintiff’s wife was an equal shareholder of the second plaintiff, but it was the first plaintiff alone who was responsible for the errors made in the statement of claim.  That being the case, it was said that no costs order should have been made that had the effect of making the first plaintiff’s wife liable for costs.  This ground is misconceived.  The two parties subject to the costs order are the first plaintiff and the second plaintiff, which is a corporation.  The first plaintiff’s wife might be an equal shareholder in that corporation, but that does not make her liable to the costs.  In any event, no such limited order was sought at the hearing.

Grounds 27 and 28 are based upon similar contentions as to the defendant’s conduct in bringing the application and the alleged misconduct in making unsubstantiated allegations.  They add nothing to what has gone before.

Ground 29 contends that there was an apprehended bias on the part of the learned primary Judge.  The contention is that a reasonable bystander would have considered:

“That the learned judge’s complete lack of consideration of the defendant’s conduct and misconduct and complete lack of consideration of an order under UCPR rule 684, suggested that the learned judge was biased against the plaintiffs and biased in favour of the defendant.”

A different but related contention was that a reasonable bystander would have considered that the learned primary Judge was biased against any party who made a mistake in their pleadings which required amendment.  There is nothing whatsoever in this ground.  No such contention was advanced before the learned primary Judge.  I have read the transcripts of the hearing below and nothing in them supports the contention that a fair-minded lay observer would reasonably apprehend that her Honour could not bring an impartial mind to the issues: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at 334-345, [6], [8]; Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at 437, [31] and 445, [63].

The reasons disclosed the basis upon which the costs order was made and do not disclose any basis upon which it could be considered that the discretion miscarried.  Nothing has been shown which could credibly raise a case of apprehended bias.

It is not necessary to deal with the applicants’ contention that in the reasons delivered on 2 September 2019, the learned primary Judge made findings contrary to those made on 8 August 2019.  In any event, I am not persuaded that the contention has merit.

For the reasons set out above, the costs order made by the learned primary Judge cannot be shown to have been made in error.  There is therefore, no basis to conclude that there is any substantive ground to challenge the making of that order and leave to appeal was rightly refused by the learned primary Judge.  I propose the following orders:

1. Application for leave to appeal is refused.
2. The applicants are to pay the respondent’s costs of the application, including the reserved costs to be assessed on the standard basis.

HOLMES CJ:  I agree.

WILSON J:  I agree.

HOLMES CJ:  The orders, then, are that the application for leave to appeal is refused and the applicants are to pay the respondent’s costs of the application, including the reserved costs to be assessed on the standard basis.  We will adjourn.