Wyatt v Cutbush[2016] QDC 114

DISTRICT COURT OF QUEENSLAND

1. [1]
   On 29 April 2016 I heard the plaintiffs’ application for judgment in default of defence and made the orders set out above. At the hearing I indicated I would publish written reasons for the orders. These are my reasons.

2. [2]
   Peter Wyatt is the Managing Director and CEO of Auscript. Paul Cutbush is a former employee. When his employment was terminated, he entered into a settlement agreement with Auscript. Over a period of some months, it appears Mr Cutbush has published a number of allegations about Mr Wyatt and current and former employees of Auscript. Amongst other things, he has accused Mr Wyatt of corruption and dishonesty in relation to a tender by Auscript for a contract with the Department of Justice and Attorney General to provide transcription services.

3. [3]
   Mr Wyatt alleges Mr Cutbush has defamed him. Auscript alleges Mr Cutbush has breached the terms of an agreement reached upon termination of his employment with Auscript. The claims arise out of emails they say Mr Cutbush sent on 29 October 2015, which they allege contain defamatory imputations and breach the agreement. Mr Wyatt’s cause of action is in defamation. He seeks permanent injunctive relief and damages. Auscript’s claim is for breach of contract. It seeks permanent injunctive relief; return of the settlement sum paid to Mr Cutbush and damages for breach of the agreement.

4. [4]
   The same plaintiffs commenced earlier proceedings in the Supreme Court seeking similar relief, but for an earlier publication by Mr Cutbush. The Claim and Statement of Claim were served pursuant to orders for substituted service. Mr Cutbush did not file a defence. The plaintiffs obtained default judgment, with damages to be assessed by the District Court. At the time of the hearing, they had not served that judgment on Mr Cutbush and damages had not been assessed.

5. [5]
   The email which is the subject of the Supreme Court proceedings (sent by Mr Cutbush on 9 July 2015) is not in issue in the current proceedings. However, the plaintiffs rely on the earlier publication as evidence to support their argument that injunctions are required because, without them, Mr Cutbush will continue to publish the statements. The publications which are the subject of these proceedings (two emails sent on 29 October 2015) are essentially republications of an email sued on in the Supreme Court action. The plaintiffs allege republication by two emails sent on 29 October 2015 to a former Chair and Director of Auscript; three officers of the University of Queensland; the Auditor-General of Queensland and a member of his staff; and an officer of the Queensland Crime and Corruption Commission.

6. [6]
   These proceedings commenced on 29 February 2016. In an email apparently sent by Mr Cutbush to the solicitor for the Plaintiffs and my associate,^[1]Mr Cutbush asserted he was not personally served with the Claim and Statement of Claim. However, Rosemary Vescio swore an affidavit^[2]that she served Mr Cutbush personally on 14 March 2016. The place of service is the same as the address Mr Cutbush stated in a draft affidavit he emailed to my associate on the morning of the hearing.^[3]In light of Ms Vescio’s sworn evidence and Mr Cutbush’s own draft affidavit, I am satisfied Mr Cutbush was personally served on that date.

7. [7]
   Mr Cutbush did not file a Notice of Intention to Defend or Defence within the time required. Wyatt and Auscript sought judgment in default. Although Mr Cutbush was aware the application was to be heard, he did not appear. He did, however, participate in a vigorous email exchange with my associate and the solicitor for the plaintiffs. He also provided an unsigned draft affidavit which arrived at the time the matter was listed for hearing. In the emails and the draft affidavit, Mr Cutbush raised two issues that I have treated as applications that had to be determined before I could deal with the application for judgment: (a) that I recuse myself from hearing the application; and (b) that I adjourn the hearing and transfer the matter to Beenleigh. I will address those applications before giving reasons on the merits of the application.

Application to recuse myself

8. [8]
   In his draft affidavit Mr Cutbush asked:

“8.I also request that Your Honour consider any perceived conflict as Your Honour heard and rejected a request for injunctive relief requested on another matter by myself while at QCAT. Furthermore I am aware that QCAT were used as a “pilot” and “reference” site to support the award of the contract to Auscript.”

9. [9]
   I take this to be an application that I recuse myself on the ground of apprehended bias. The test for apprehended bias is:

“a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.”^[4]

10. [10]
    The QCAT matter that Mr Cutbush referred to is Phillips v Cutbush & Anor.^[5]I rejected an application by Mr & Mrs Cutbush for an interim order or injunction which was, in effect, an application to stay an order to pay compensation to the owner of a residential property they had formerly rented. The application was heard on the papers and determined on a point of law.  A final decision had already been made, so an interim order or injunction was not available. Even if it were available, I decided it was not in the interests of justice to make such an order as the final decision was subject to an application for leave to appeal and the Tribunal had already refused a stay of the decision, pending determination of the application for leave to appeal. The fate of the application did not rest on any assessment of Mr Cutbush’s credit. The second issue raised by Mr Cutbush was that QCAT was a pilot or reference site for the Auscript tender. Although I was the Deputy President of QCAT between July 2009 and July 2012, I am not sure that QCAT was the pilot site during that period. As far as I can recall, I had no involvement in any contractual dealings with Auscript.

11. [11]
    It does not appear to me that the matters raised by Mr Cutbush, either individually or collectively, provide a foundation for a fair minded lay observer to reasonably apprehend that I would not bring an independent mind to these proceedings. For that reason, I heard and determined the applications by Mr Wyatt and Auscript.

12. [12]
    Since this application was heard, I became aware of other matters that relate to this question. Firstly, I am now aware that I had an indirect interest in Auscript until 30 November 2009, when a self-managed superfund of which I am a member (StormCliff Superannuation Fund) sold its minor shareholding in Auscript. Secondly, my spouse, David Barbagallo, was a Director of Auscript from 22 October 2007 until 1 April 2009. I note that his role ceased before I commenced my term as Deputy President of QCAT, but the superfund held some shares until November 2009.

13. [13]
    Given this further information, I grant the parties liberty to apply. I express no view about the implications of the disclosures, but will hear from the parties, if they apply.

Application to adjourn the hearing and transfer it to Beenleigh

14. [14]
    Mr Cutbush asserted Beenleigh is the appropriate district and applied to have the matter transferred. The proceedings were properly commenced in the Brisbane Central Registry of the District Court.^[6]

15. [15]
    I also declined the application to adjourn the hearing as I was satisfied that Mr Cutbush was personally served with the originating documents, had notice of the application and did not raise grounds to justify adjourning the hearing.

16. [16]
    I have already noted the evidence that Mr Cutbush was personally served with the Claim and Statement of Claim (at [5]). The application itself was not personally served but I am satisfied on the affidavit of Tanya Theodoridis filed on 28 April 2016, that it was served on Mr Cutbush on or about 20 April 2016, by email and post. The email address used by Ms Theodoridis is the same email address used by Mr Cutbush in his communications with the solicitors for the applicants and also with my associate. The address to which the documents were sent is the address at which he was personally served with the claim and statement of claim and the same address that Mr Cutbush himself nominated in the draft and unsigned affidavit he provided by email to my associate. Although there was some material provided by the applicants shortly before the hearing, it was responsive to the matters raised by Mr Cutbush in his emails about the application.

17. [17]
    Mr Cutbush’s many communications to the court the day before and the morning of the hearing, did not raise any circumstances that would justify an adjournment.

18. [18]
    Application for Final Relief in default of Defence

19. [19]
    Having satisfied myself that Mr Cutbush was personally served with the Claim and Statement of Claim and that he had failed to indicate any intention to defend, I considered whether I should enter default judgment on the material filed by the applicants.

20. [20]
    Firstly, in relation to Mr Wyatt’s claim, he had already satisfied the Supreme Court that the imputations in the first publication were defamatory. His claim in this court involved republication of those imputations. I accept the applicant’s characterisation of those imputations as being that Mr Wyatt had engaged in corruption and dishonesty in relation to a tender made by Auscript to the Qld Department of Justice and Attorney-General. I am satisfied Mr Wyatt has established a prima facie case that the imputations are defamatory.

21. [21]
    In his unsigned draft affidavit, Mr Cutbush asserted an unspecified protection for the publications. It may be that Mr Cutbush could raise defences of public interest disclosure^[7]or qualified privilege^[8], but he has not properly articulated these. Although default judgment could have been entered against Mr Cutbush, as he did not appear at the hearing and appears to be a litigant-in-person, I considered it appropriate to give him an opportunity to articulate a defence before judgment is entered against him.

22. [22]
    In relation to Auscript’s claim, I am satisfied the company has established a prima facie case that the emails breach clause 6.1 of the Deed of Settlement with Mr Cutbush. As well as the defamatory imputations in relation to Mr Wyatt, the emails convey imputations that an employee of Auscript improperly alters records. By clause 6.1 Mr Cutbush undertook not to make any derogatory, disparaging, harmful, defamatory or negative comment (or make any other statement) about Auscript, its directors or employees, which was likely to harm Auscript or the reputations of its directors or employees. The Deed provided for the return of the settlement sum in the event of breach.

23. [23]
    Auscript’s position is somewhat stronger than Mr Wyatt’s as defences to a defamation claim would not necessarily defeat its claim in contract, given the width of Mr Cutbush’s undertaking. Nevertheless, I have afforded Mr Cutbush an opportunity to defend, as it is arguable the public interest disclosure defence is effective against the contractual claim.

24. [24]
    In relation to the applications for injunctions, I have already stated my satisfaction that the plaintiffs have established a prima facie case. Mr Cutbush’s conduct in these and in the Supreme Court proceedings, suggests he is unlikely to avail himself of the opportunity to defend. The imputations are about serious misconduct and have the potential to greatly damage the reputation of both Mr Wyatt and other employees of Auscript.

25. [25]
    Permanent injunctions may be granted where a party is in breach of non-disparagement clauses^[9]or where there is “an apprehension that the respondent may, by reason of irrationality, defiance, disrespect of the court’s judgment or otherwise, publish allegations similar to those found to be defamatory unless restrained from doing so.”^[10]

26. [26]
    Mr Cutbush entered into the Deed of Settlement with Auscript on 13 June 2012 and published the first email on 9 July 2015. The Supreme Court proceedings were commenced on 14 July 2015. He was served with the Claim and Statement of Claim in compliance with an order for substituted service and judgment was entered on 18 September 2015. Although that judgment was not served on him, I am satisfied that, in July 2015, Mr Cutbush was aware of them, because of his text messages with a process server.^[11]I am satisfied that Mr Cutbush was aware of the Supreme Court proceedings and this did not deter his republication of the material.

27. [27]
    Before these proceedings were commenced, solicitors for the applicants sought undertakings from Mr Cutbush that he would not repeat the allegations by letters sent on 4 and 5 November 2015. Mr Cutbush apparently responded to that email at 8.45pm on 4 November 2015. Mr Cutbush has not given the requested undertakings and has not defended these proceedings, personally served upon him.

28. [28]
    Given all of those circumstances, I consider both interim and, if Mr Cutbush does not defend, permanent injunctions are warranted.

29. [29]
    The orders I have made provide Mr Cutbush a reasonable opportunity to articulate a defence to all claims made against him. In the interim they protect Mr Wyatt and Auscript from further publication. If Mr Cutbush does not take up the opportunity to defend, judgment will be entered against him, with damages to be assessed.

30. [30]
    For reasons already given, I have added to the orders originally made that the parties have liberty to apply in relation to Mr Cutbush’s application that I recuse myself from hearing the applications.