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  4. Craven v Globe Valley Pty. Ltd. - [2018] QDC 155

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Craven v Globe Valley Pty. Ltd.[2018] QDC 155

Craven v Globe Valley Pty. Ltd.[2018] QDC 155

DISTRICT COURT OF QUEENSLAND

CITATION:

Craven v Globe Valley Pty Ltd & Ors [2018] QDC 155

PARTIES:

GORDON JAMES CRAVEN

(Plaintiff/Respondent)

v

GLOBE VALLEY PTY LTD

(First defendant/Applicant)

and

PETER ROSS HEGARTY

(Second defendant/Applicant)

and

DEBORAH HEGARTY

(Third defendant/Applicant)

and

SEBASTIAN JAMES HEGARTY

(Fourth defendant)

and

THOMAS ROSS HEGARTY

(Fifth defendant)

and

SHELI BOWMAN

(Sixth defendant)

FILE NO/S:

228/18

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

Brisbane

DELIVERED ON:

10 August 2018

DELIVERED AT:

Brisbane

HEARING DATE:

28 March 2018

JUDGE:

Williamson QC DCJ

ORDER:

  1. The Plaintiff provide security for the First, Second and Third defendants’ costs of the proceeding in the amount of $10,000 in a form satisfactory to the registrar by 4pm on 24 August 2018; and
  2. Costs be reserved.

CATCHWORDS:

PROCEDURE – COSTS – SECURITY FOR COSTS –where defendants seek an order for security for costs under r 620(1) of the Uniform Civil Procedure Rules 1999 (Qld) – where the plaintiff is impecunious – where an order for security will stifle the pursuit of the plaintiff’s claim – whether justice of the case requires the making of the order – whether plaintiff engaging in vexatious mode of litigation against defendants

COUNSEL:

N Ferrett for the First, Second and Third Applicants/Defendants

The Respondent/Plaintiff appeared on his own behalf

SOLICITORS:

Archibald & Brown for the First, Second and Third Applicants/Defendants

The Respondent/Plaintiff appeared on his own behalf

Introduction

  1. [1]
    On 23 January 2018, Mr Craven commenced proceedings in this Court by way of Claim and Statement of Claim against six defendants. The Claim seeks general and aggravated damages for defamation and injunctive relief to restrain the publication of material, and to compel the publication of apologies. An application is made in the proceedings by the First to Third defendants (‘the Applicants’) for security for costs under r. 670(1) of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’). The issue to be determined is whether the justice of the case requires the making of the order in the amount of $10,000.
  1. [2]
    For the reasons that follow, I am satisfied the justice of the case requires the making an order for security for costs[1]. The application is allowed and I order as follows:
  1. (a)
    the Plaintiff provide security for the First, Second and Third Defendant’s costs of the proceeding in the amount of $10,000 in a form satisfactory to the Registrar by 4pm on 24 August 2018; and
  2. (b)
    costs be reserved.

Background

  1. [3]
    The Applicants are involved in the floristry industry. Two of the Applicants (the Second and Third Defendants) are associated with a company known as Ready Flowers Pty Ltd. In March 2009, Mr Craven commenced proceedings against this company and a second defendant, Mr Owen, in the Federal Magistrates Court[2]. In that proceeding, Mr Craven purported to sue in the capacity of “an average consumer”[3]and alleged both defendants had breached State and Federal consumer protection laws.
  1. [4]
    The issue to be determined in the proceedings involved an examination as to whether the defendants had engaged in misleading and deceptive conduct for the purposes of section 20 of the Australian Consumer Law[4].
  1. [5]
    The proceeding commenced by Mr Craven in the Federal Magistrates Court did not enjoy success. It was dismissed by order of 10 March 2015[5]. The true extent to which the proceeding was unsuccessful is revealed once it is appreciated that Mr Craven:
  1. (a)
    unsuccessfully raised for determination a preliminary point with respect to the operation of an estoppel[6];
  2. (b)
    unsuccessfully sought leave to appeal against the ruling on the preliminary point[7]in circumstances where the application for leave was described as lacking bona fides[8];
  3. (c)
    did not comply with the order of the Federal Court of 5 December 2013 requiring him to pay Ready Flowers’ costs of and incidental to the application for leave to appeal;
  4. (d)
    did not comply with a bankruptcy notice for which the debt was an amount of $30,578.45 for the costs payable pursuant to the order of 5 December 2013[9];
  5. (e)
    unsuccessfully made an application to the Federal Court for an extension of time to comply with a bankruptcy notice issued in relation to the costs payable under the order of 5 December 2013[10];
  6. (f)
    appealed against the order of 2 May 2014 dismissing the application for an extension of time to comply with the bankruptcy notice[11];
  7. (g)
    did not comply with the self-executing order of 18 June 2014 of Rangiah J providing that his appeal against the order of 2 May 2014 would be dismissed if security for costs in the amount of $10,000 was not provided by him[12];
  8. (h)
    unsuccessfully resisted an application by Ready Flowers Pty Ltd for its costs of the appeal against the order of 2 May 2014 and the application for security for costs[13]; and
  9. (i)
    unsuccessfully resisted an application for a sequestration order based on the costs orders made by the Federal Court[14].
  1. [6]
    The affidavit material reveals that Mr Craven is subject to a number of costs orders which remain unsatisfied. The orders were identified in correspondence dated 5 March 2018 from the Applicants’ solicitor to Mr Craven. The correspondence states:

“3. You have been engaged in a long standing dispute with the Hegarty family, including our clients Peter and Deborah Hegarty, of varying a (sic) nature since March 2009. In doing so, you have brought 5 sperate (sic) pieces of litigation over that time, all of which have failed. As a result of the said failed litigation, you were made subject to the following costs orders which remain unsatisfied:

a) Costs order made on 5 March 2013 (Greenwood J) in the Federal Court of Australia; which order was assessed at $30,578.45;

b) Costs order made on 2 May 2014 (Dowsett J) in the Federal Court of Australia; which order was assessed at $19,014.25;

c) Costs order made on 14 August 2014 (Rangiah J) in the Federal Court of Australia; which order was assessed at $29,164.25.

d) Costs order made on 5 March 2015 (Logan J) in the Federal Court of Australia; which order was never assessed, having been made immediately prior to the order making you a bankrupt.

e) Costs order made on 10 March 2015 (Jarrett J) in the Federal Circuit Court of Australia; which order was assessed at $86,014.40, which award was post-bankruptcy and remains unpaid to its benefactor, Ready Flowers Pty Ltd (In Liquidation).”

  1. [7]
    The order of 10 March 2015 dismissing the proceedings commenced in the Federal Magistrates Court did not mark the end of legal proceedings as between Mr Craven and Ready Flowers Pty Ltd. In February 2016, Ready Flowers Pty Ltd and the Second Defendant, Peter Hegarty, commenced an Originating Application in the Supreme Court of Queensland against Mr Craven for defamation[15]. An injunction was sought to prevent Mr Craven from publishing defamatory statements about them on the internet. The proceeding was transferred to this Court for determination. On 22 April 2016, his Honour Judge Butler SC granted an interlocutory injunction restraining Mr Craven from publishing “Any matter of and concerning” Ready Flowers Pty Ltd and the Second Defendant that imputes or implies, inter alia, that they are or were involved in “rip-off” conduct.  The costs of the interlocutory hearing were reserved.
  1. [8]
    As I have already said, Mr Craven commenced proceedings in this Court in January 2018 for damages and injunctive relief for defamation. The proceedings focus on three internet sites where it is alleged defamatory statements were published. The internet sites are known as zFlowers.com, zflowers.com.au and blog.zflowers.com. The Plaintiff alleges that the internet sites published, by way of two blogs, and a press release, “offending material” that falsely accuse him of:
  1. (a)
    being an internet troll;
  2. (b)
    being a cyber-bully;
  3. (c)
    being a serial cyber stalker;
  4. (d)
    being mistaken in his claims about a website, zflowers.com;
  5. (e)
    engaging in cyber-bullying, stalking and vilification;
  6. (f)
    suffering a misconception as to how international businesses operate;
  7. (g)
    attacking and publicly humiliating companies and public figures;
  8. (h)
    suing zflowers.com when he in fact sued Ready Flowers Pty Ltd;
  9. (i)
    making an extortionate demand for $60,000 to settle the case;
  10. (j)
    pursuing a misguided crusade against zFlowers.com; and
  11. (k)
    refusing to comment when he had not been approached for comment.
  1. [9]
    Mr Craven alleges that the First Defendant, Globe Valley Pty Ltd, is responsible for publishing the offending material. This is pleaded on the premise that it is responsible for, and maintains, the internet sites where the alleged offending material was published.
  1. [10]
    As to the Second Defendant, Peter Hegarty, it is alleged that he is a director of Globe Valley Pty Ltd and, as a consequence, had control of that company. Further, Mr Craven alleges that Peter Hegarty:
  1. (a)
    consented, approved or acquiesced to all publications on the zflowers.com zflowers.com.au internet sites as well as the associated blog websites;
  2. (b)
    contributed to and controlled the offending material the subject of the Claim and Statement of Claim; and
  3. (c)
    as a director and contributor, was involved in publishing the offending material.
  1. [11]
    Similar allegations are made by Mr Craven about the Third Defendant, Deborah Hegarty, save that he does not assert that she was involved in contributing to, controlling, or publishing the press release that is alleged to be defamatory.
  1. [12]
    On 5 March 2018, a Notice of Intention to Defend and Defence were filed on behalf of the Applicants. The Defence calls in aid s 12AA of the Limitation of Actions Act 1974 (Qld) in relation to publications occurring more than 12 months before the commencement of the proceeding. Further, it is expressly denied that the Applicants uploaded, or otherwise authorised or made available for publication, any of the alleged offending material.
  1. [13]
    Contemporaneous to the conduct of these proceedings, Mr Craven has published a “running commentary” on various internet sites about this proceeding, including commentary on steps taken by him to serve various defendants. One such internet site is www.floristcollective.report. Mr Craven controls the site, including the text and images that are published on it. The affidavit material contains screen shots of the internet site showing photographs and published text. The text discusses, in colourful terms, the difficulties Mr Craven encountered serving a number of defendants to this proceeding. The text calls for assistance to locate particular defendants for that purpose and includes a colourful heading of “WANTED Hegarty’s on the run”. In addition to this colourful heading, Mr Craven also posted photographs of defendants to this proceeding with a watermark overlayed on each photograph indicating whether they had been “Served” or are “avoiding service”.
  1. [14]
    Text posted by Mr Craven on the www.floristcollective.report internet site includes a suggestion that the orders made by his Honour Judge Butler SC were intended to pacify the lawyers for Peter Hegarty. The text posted by Mr Craven is in the following terms:

“Hegarty has been sending out an old Court Order which prohibited me describing him or Ready Flowers…as one particular deregatory (sic) term (which happens to be accurate), however Judge Butler at the time just wanted to pacify Hegarty’s lawyer. So I am allowed to call him what I like just not that particular term”

This statement is followed by:

“HEGARTY, if you think I am in Contempt of Court, go to the Court and complain, instead of sneaking around behind my back spreading fear, innuendo and other crap. Your stupid and delinquent bully boy conduct does not (and will not) work on me.”

  1. [15]
    Mr Craven has contributed to the published content on other internet sites describing the Hegarty family in pejorative terms. On www.readyflowersreview.hk, in comments attributed to Mr Craven, he described the Hegarty family as the “same scum” and accused them of “phoenixing”. That was said to be an illegal activity, followed by “what else would you expect”.
  1. [16]
    Mr Craven also published text on the www.pleading.com.au internet site. One particular example of the text posted by him seeks to explain why he was bankrupt and purports to offer a reason for his comprehensive loss in the proceedings before the Federal Magistrates Court and Federal Court. The relevant published text is as follows:

“WHY GORDON WAS MADE BANKRUPT

Gordon Craven was made bankrupt when, in the public interest as a service to consumers and without representation, he sued and lost to persons that are involved in deplorable conduct regarding consumers, florists and review sites as shown at the following websites:  Ready Flowers Review and Ready Flowers Australia. The only consolation to Gordon is that it cost the persons (the Hegarty clan) well over $200,000 to employ a legal team to represent them over a 6 year period, together with also attempting to sue Gordon and his wife for defamation (District Court File), for which the results is, those persons now appear to be in financial trouble… SEE ready Flowers Unravels, whilst apparently also being under investigation by the ACCC …more info on that is HERE.

The main reason for losing, was that at the beginning of 2009 Ready Flowers Pty Ltd was replaced as operator on the Ready Flowers website with Ready Flowers Limited (RFL). A search revealed that RFL was not registered in Australia and even ASIC in a letter said that it was misleading or deceptive as neither ASIC or Gordon or anyone else knew that RFL was registered in Hong Kong as the website did not reveal it nor did the Ready Flowers solicitors in Perth. Gordon assumed that was some sort of bogus attempt to hide the true operator of the website which would have been in line with the way the website operated. It wasn’t until the first day of trial in August 2015 some 2.5 years later that Peter Hegarty produced THIS AFFIDAVIT to say that the business had been sold to RFL in Hong Kong which in fact Hegarty founded in 2008….”

(emphasis added)

  1. [17]
    The same internet site, www.pleading.com.au includes text posted by Mr Craven that describes Ready Flowers Pty Ltd as “Scum” and as an organisation engaging in what he considers to be unlawful “Phoenix activity”.
  1. [18]
    The allegation that organisations associated with some of the Applicants are engaging in phoenix activity also appears on an internet site known as zflowers.sucks. This website is controlled by Mr Craven. He is responsible for what is published on the site. It has contained text that alleges: (1) customers have been scammed by Ready Flowers; (2) directors of Ready Flowers (the Hegartys) are on the run avoiding service; and (3) Ready Flowers is posting dishonest reviews of their own products. One particular post reads “Having Scammed Consumers and Scammed Florists, Ready Flowers now Scams the Reviews”. The posted reviews are described by Mr Craven as “Fake reviews by the scum”.
  1. [19]
    The proceedings before the Court have not progressed beyond the exchange of pleadings. On 19 March 2018, the Applicants filed this application seeking an order for security for costs.

Security for costs - relevant principles

  1. [20]
    The Applicants seek an order for security for costs on two bases. First, pursuant to r. 670 of the UCPR. Second, pursuant to the Court’s inherent jurisdiction to grant security for costs having regard to s. 69(1) of the District Court of Queensland Act 1967 (Qld).
  1. [21]
    As to the first of the two bases advanced, the Court may make an order for security for costs under r. 670 of the UCPR. An order of this kind may be made against a Plaintiff only if the Court is satisfied of one or more of the matters stated in r. 671. The Applicants rely upon r. 671(h), namely “the justice of the case requires the making of the order”. In deciding to make the order, the Court may have regard to the matters stated in r. 672. The Applicants emphasise r. 672(c), “the genuineness of the proceeding”.
  1. [22]
    Mr Craven was, until 24 March 2018, an undischarged bankrupt and stated in a sworn affidavit that he would be unable to provide security for costs if ordered. Given Mr Craven was only recently discharged from bankruptcy, I infer that he is impecunious and would be unable to meet any order for costs if one was made against him in this proceeding. Mere impecuniosity is not of itself a reason to order a natural person to provide security for costs[16], although it is a factor that favours doing so.
  1. [23]
    An examination of the “justice of the case” requires consideration to be given to established principles applicable to orders for security for costs. In this case, particular focus is to be given to those principles relevant to a natural person who is impecunious. As a general rule, the law requires defendants to accept the risk that a natural person who litigates a viable claim in good faith for their own benefit might not be able to satisfy an order for costs. There is an exception to this general rule. A recognised exception to the general rule is where a claimant has adopted a vexatious mode of conducting litigation. Where a party has adopted a vexatious mode of litigation, the interests of justice in the case may justify an order for security for costs[17].
  1. [24]
    In Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197, Deane J attributed the following meaning to the word vexatious[18]:

“Vexatious should be understood as meaning productive of serious and unjustified trouble and harassment”.

  1. [25]
    In the context of describing a claim as being scandalous, vexatious or frivolous, Reeves J in Crocker v Toys ‘R’ Us (Australia) Pty Ltd (No 3) [2015] FCA 728 at [9] said:

“A vexatious proceeding is one without foundation, which cannot succeed, or is brought for an ulterior and collateral purpose: see Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225 at 330; Packer v Meagher [1984] 3 NSWLR 486; Williams v Spautz (1992) 174 CLR 509. It might also describe proceedings that are “seriously and unfairly burdensome, prejudicial or damaging“: see Hamilton v Oades (1989) 166 CLR 486.” (emphasis added)

  1. [26]
    In Mbuzi v Hall [2010] QSC 359 at [70], Applegarth J identified a number of points of principle relevant to the determination of an application for security for costs against a natural person where the exception to the general rule I have dealt with above is relevant. Two particular points of principle that have assisted me are stated by his Honour in the following terms:

“4.  The unmeritorious conduct of interlocutory or related applications that result in unpaid costs orders may evidence a vexatious mode of conducting the litigation. The bare fact that unpaid interlocutory costs orders exist is not sufficient to conclude that a party has adopted a vexatious mode of conducting the litigation. An interlocutory application may have been brought or resisted on reasonable grounds by an impecunious litigant, and the determination of the application may have been finely balanced. In other cases, the unmeritorious prosecution or defence of interlocutory applications, resulting in unpaid costs orders, will evidence a vexatious mode of conducting the litigation.”

…

8.  The existence of an arguable claim in the principal proceeding (in the sense of one that survives an application for defendant’s summary judgment) or even a claim with reasonable prospects provides no excuse to a claimant to adopt a vexatious mode of conducting the litigation. An order for security for costs may be warranted in such a case in the interests of justice.”

(emphasis added)

The submissions on behalf of the Applicants

  1. [27]
    The Applicants rely on two grounds to establish that an order for security for costs is appropriate in this case.
  1. [28]
    First, it is submitted that the claim has been brought by Mr Craven to harass rather than in good faith. It is submitted that the claim is not concerned with alleged defamation, but rather Mr Craven’s ongoing crusade against the Hegarty family. The crusade is said to be evidenced by Mr Craven’s conduct who:
  1. (a)
    is recycling allegations from the earlier proceedings on the internet;
  2. (b)
    is using this proceeding as a basis for publishing criticism of the Applicants on the internet; and
  3. (c)
    has obvious contempt for the injunction ordered against him by Judge Butler SC.
  1. [29]
    Having regard to the background set out above in paragraphs [3] to [19], I accept the submission that this proceeding is intended to maintain Mr Craven’s crusade against the Hegarty family. By his own admission, the crusade commenced in the Federal Magistrates Court on the footing that Mr Craven was acting in the public interest as a service to consumers to expose poor conduct in the online floristry industry. The litigation was wholly unsuccessful. The degree to which the litigation was unsuccessful cannot be understated.
  1. [30]
    Notwithstanding the lack of success in the earlier litigation, Mr Craven has maintained his crusade by publishing material on internet sites about Ready Flowers and two of the Applicants, Peter and Deborah Hegarty. The material published is far from complimentary. It is inflammatory and indicative, in my view, of an unsuccessful litigant who is seeking to justify his conduct of litigation on the misapprehension that he is acting in the public interest and providing an unpaid service to consumers.
  1. [31]
    There is little to suggest that the Court could have comfort the crusade commenced by Mr Craven will come to end. There are three matters which satisfy me that there is a genuine risk that the crusade will continue and impact on the mode of litigation adopted by Mr Craven.
  1. [32]
    In the first, instance, the Statement of Claim maintains Mr Craven’s view that he is acting in the public interest to expose misconduct in the online floristry industry. Paragraph 1(d) of his Statement of Claim states:

“1. At all times material to this proceeding, the Plaintiff was and is a person:

…

(d) well known within the Australian florist community for exposing and publishing misconduct in the online florist industry, that includes entities:

(i) publishing substantial numbers of fake positive online reviews;

(ii) removing substantial numbers of negative online reviews;

(iii) non delivery of product within an agreed time, or at all;

(iv) delivering product not as described and of inferior quality or value;

(v) failing to refund consumers within a reasonable time, or at all;

(vi) non payment of monies due to florist creditors;

(vii) causing substantial consumer and florist dissatisfaction;

(viii) having a serial lack of regard for consumer’s rights;

(ix) causing numerous negative television, radio and newspaper articles;

(x) causing a Senator’s consumer alert warning in the Australian Senate;

(xi) causing tens of hundreds of complaints to online product reviews;

(xii) causing multiple consumers and business complaints to government consumer protection authorities.”

  1. [33]
    In addition to the Statement of Claim, Mr Craven’s decision to maintain what I have described as a running commentary about the proceedings is further evidence that the crusade is unlikely to abate. The commentary posted on the internet by Mr Craven does, as submitted by Mr Ferrett, recycle allegations relevant to the earlier unsuccessful litigation. He maintains allegations that the Hegarty family are dishonest and have engaged in misleading and deceptive conduct. Further, the commentary reveals that Mr Craven is resolute in his position that this litigation will continue as he is a person well known for exposing misconduct in the online floristry industry.
  1. [34]
    The running commentary also exposes that Mr Craven is not prepared to accept decisions of a Court that are unfavourable to him. In the case of Judge Butler SC’s decision to grant an interim injunction, the decision was rationalised by Mr Craven as one intending to pacify a party’s lawyer. As is evident, he continues to publish material online which is critical of the commercial conduct of Peter Hegarty in the face of the injunction granted by this Court. Whilst I do not make any finding that he has acted in contempt of the order of Judge Butler SC, material published on the internet by him certainly describes the business conduct of the Hegartys in a manner which sails close to the wind.
  1. [35]
    Finally, Mr Craven himself made a telling concession during the course of oral argument. He interrupted Mr Ferrett’s submissions and the following exchange took place:

“Mr Ferrett: He wants to continue to harass through litigation the Hegarty family.  Sorry?

Plaintiff: Your Honour, that well could be true but ---

His Honour: Sorry, it could well be true?

Plaintiff: Yes.  Yes, Your Honour.  Yes.  I was – if it was to go to trial and I lose, well, I’d have to make a decision what to do then.  But put myself into Mr Hegarty’s position, I would want to get rid of that Craven bloke, and there could be a settlement and part of the settlement would be, ‘I want all your websites, all your domains, and I never want to hear from you again.’  Now, that could – that could well happen, and that’s what happened in the – in the – in the – in my – mainly in my wife’s litigation with my trustee in bankruptcy.  The two websites that were being published, if they hadn’t been published the matter wouldn’t have settled.  They were so keen to get rid of those websites.  I mean, they sued me in the Federal Court.  It’s in – it’s in my affidavit I think.[19]”

(emphasis added)

  1. [36]
    The exchange set out above reveals that Mr Craven did not cavil with Mr Ferrett’s submission to the effect that this proceeding is a further attempt by him to harass the Hegarty family. Mr Craven accepted the suggestion.
  1. [37]
    The second point advanced by the Applicants involves emphasising Mr Craven’s status as a recently discharged bankrupt, who is unlikely to meet any costs orders made against him. Further, they emphasise there are current outstanding costs orders against Mr Craven and there is no suggestion that he intends to settle those orders. I accept that Mr Craven is subject to unpaid costs orders.
  1. [38]
    Mr Craven’s plan to discharge the unpaid costs orders is contingent upon success in this proceeding. The proposal to settle the outstanding costs order was described at paragraph 2(f) of Mr Craven’s affidavit sworn 27 March 2018 in this way:

“I am unable to provide any Security For Costs, and being ordered to do so would frustrate my rights to litigate, and stifle my Claims against the first 3 defendants for:

…

(f) [it will] hamper extinguishing the remaining Costs order against me referred to at sub-paragraph 6(c) of the Affidavit of Leslie Edward Moore sworn  19 March 2018. This Costs Order was not included in my bankruptcy. Should I be successful in receiving damages in this proceeding, $86,014.40 of those damages could then be paid to the Ready Flowers Ltd Liquidator and put to satisfying the unpaid debts to florists by Ready Flowers referred to at sub-paragraphs 7(d) and 7(d)(i) below…”

(emphasis added)

  1. [39]
    Mr Craven’s proposal to settle unpaid costs orders is unrealistic. Further, this aspect of his sworn affidavit serves to reinforce that an underlying reason for the litigation includes Mr Craven’s view that the relief he seeks in this proceeding will also benefit other florists. He suggests that the damages he obtains in this proceeding may well satisfy debts owed by Ready Flowers Pty Ltd to unnamed florists.
  1. [40]
    The outstanding costs orders against Mr Craven were not made in this proceeding. Nor is Mr Craven required to pay costs to any of the defendants to this proceeding. This does not however mean the unpaid costs orders are irrelevant. In this regard, Mr Ferrett emphasised the following passage in Green v CGU Insurance Ltd[20]where Hodgson JA said:

“Cases in which security for costs might be ordered against an actual person… outside those provided for in r 42.21 of the UCPR include cases where (in addition to proof that there is reason to believe the plaintiff will be unable to pay the defendant’s costs) the plaintiff has …not paid previous costs orders (especially if those costs orders were in favour of the defendant) and/or brings a weak case to harass the defendant and/or brings a case for the benefit of others…”

  1. [41]
    It was submitted that this decision lends support to the proposition that it is relevant to take into account in an application for security for costs that a plaintiff, who is unlikely to be able to pay the defendant’s costs, has not paid previous costs orders. This is said to be a relevant consideration, even if the costs orders were made in different litigation and in favour of different defendants.
  1. [42]
    I accept this submission. The importance of this factor is ultimately a question of weight, rather than relevance.

The submissions on behalf of Mr Craven

  1. [43]
    Mr Craven confirmed that he relied on ten grounds in opposition to the application for security for costs[21]. The grounds can be stated as follows:
  1. (a)
    the impetus for the proceeding was the apparent vendetta against Mr Craven evident in the defamatory publications and the number of times the material was published (alleged to be 115 million times);
  2. (b)
    Mr Craven does not have the financial means to pay security for costs which will stifle the proceedings and his right to litigate in circumstances where:
  1. (i)
    he had warned the Applicants he would commence these proceedings;
  1. (ii)
    he has a very strong case;
  1. (iii)
    he has a massive amount of evidence and he should be entitled to present that to the Court;
  2. (iv)
    the Second defendant does not have clean hands;
  1. (v)
    there are no existing costs orders hanging over his head from this proceeding;
  2. (vi)
    he is free to publish material on the internet,  and it is all true;
  3. (vii)
    he was not declared a vexatious litigant by the Federal Court; and
  4. (viii)
    he intends to settle outstanding costs orders against him, this is however contingent on achieving success in this proceeding.
  1. [44]
    I accept that Mr Craven has established the submissions stated in paragraph [43](b)(i), (v) and (vii) above. I also accept the submission that an order for security for costs will stifle this proceeding. It is uncontroversial that Mr Craven has no financial means to satisfy costs orders if made. Further, Mr Craven indicated that he does not have the financial means to pay the amount of $10,000 for security for costs of the proceedings. He also said that the security for costs would not be provided just on principle.
  1. [45]
    As to the balance of Mr Craven’s submissions opposing the order for security for costs:
  1. (a)
    I do not accept that the impetus for the proceeding was an apparent vendetta against him. The impetus was his desire to continue a crusade in circumstances where he regards himself as a person well known for exposing misconduct in the online floristry industry;
  1. (b)
    it was asserted by Mr Craven that he has a strong case, but this was not developed, or established, having regard to the evidence. For example, there was no evidence before me to establish the foundation for the argument that the Applicants were responsible, or acquiesced in, the publication of the alleged offending material. Accordingly, I am unable to make any finding as to the strength of Mr Craven’s case;
  1. (c)
    the reference to a “massive body of evidence” is, in my view, more troubling than it is of assistance to Mr Craven. It suggests that the litigation to be conducted will involve substantial material. The Applicants will be required to consider and respond to this material to defend the proceeding. The Applicants will incur costs considering and responding to the material. Having regard to the nature of the evidence Mr Craven has put before the Court for this application, there is a genuine risk that the “massive amount of evidence” that may be led at trial is confusing, irrelevant and lacking in probative value. The evidence with respect to the number of times the alleged offending material was published on the internet is a good example of this;
  1. (d)
    it is unfair to submit that Peter Hegarty does not have “clean hands” for the purposes of determining this application.  This submission is no more than an assertion and Mr Craven has not established on the evidence that it is a submission open to him. A perusal of the reasons for judgment in Craven v Ready Flowers Pty Ltd & Anor [2015] FCCA reveals that Mr Craven has a track record of making allegations that a party has acted dishonestly and failed to lead evidence to support that allegation;
  1. (e)
    I accept that Mr Craven is free to publish material on the internet, subject of course to the injunction granted by Judge Butler SC.  I am not however prepared to accept that the matters published by Mr Craven on the internet about Peter and Deborah Hegarty are true. There is no evidentiary basis to so find and it would, in any event, be irrelevant to the determination of the application before me; and
  1. (f)
    I have already dealt with Mr Craven’s proposal to satisfy outstanding costs orders. The proposal is unrealistic.

Does the justice of the case require an order for security for costs?

  1. [46]
    The central question to be determined is whether the justice of the case requires the making of an order for security for costs. I am satisfied that this question should be resolved in the affirmative.
  1. [47]
    I have accepted that an order for security for costs will stifle the litigation. This will occur in circumstances where the Applicants do not contend that the claim lacks all basis. They concede for the purposes of this application that terms such as “internet troll” are arguably defamatory. This is a weighty consideration that mitigates against granting the relief sought.
  1. [48]
    The weighty consideration is however overcome by a number of features that have persuaded me that the justice of the case requires an order for security for costs. Those features are consistent with the submissions made on behalf of the Applicants and are as follows, namely:
  1. (a)
    the litigation represents a continuing crusade by Mr Craven against the Hegarty family justified by his view that he is well known for exposing misconduct in the online floristry industry. The conduct of litigation as a crusade is, in my view, tantamount to conducting litigation that is not genuine, or is fairly described as vexatious in the sense discussed by Deane J in Oceanic Sun Line Shipping Company (Supra);
  1. (b)
    there is a substantial number of unpaid costs orders against Mr Craven, some of which were the product of litigation that was wholly unsuccessful, and in one instance, was said to lack bona fides. This factor, coupled with his inability to pay costs (if ordered) in this proceeding is a strong indicator that the justice of the case requires the making an order for security for costs; and
  1. (c)
    whilst it may be assumed that Mr Craven’s claim has some basis and the litigation will be stifled by an order for security for costs, that does not protect him from providing security for costs where, as here, the litigation has the hallmarks of being conducted in a way that is vexatious, or is not genuine.
  1. [49]
    The points made by Mr Craven in opposition to the application for security for costs are not, in my view, sufficient to demonstrate that the discretion should not be exercised in favour of the Applicants.
  1. [50]
    The Applicants seek an order requiring $10,000.00 for security for costs. This sum was supported by an affidavit of an experienced litigation solicitor, Mr Moore. He has estimated the cost of the litigation up to the first day of trial to be in the order of $35,000.00. That estimate does not include interlocutory applications or appeals against interlocutory decisions. The sum of $10,000.00 for security for costs is fairly regarded as a modest request having regard to Mr Moore’s estimate. It is also a sum that is consistent with the principle that it is appropriate for an impecunious litigant with limited means to be required to provide greater security than is absolutely necessary.[22] 

Conclusion

  1. [51]
    I will allow the application and make orders in accordance with paragraph [2] above.

Footnotes

[1] r 671(h) of the UCPR.

[2] Craven v Ready Flowers Pty Ltd & Anor [2015] FCCA 538, [3].

[3] Craven v Ready Flowers Pty Ltd & Anor [2012] FMCA 1128, [4].

[4] Craven v Ready Flowers Pty Ltd & Anor [2015] FCCA 538, [2].

[5] Craven v Ready Flowers Pty Ltd & Anor [2015[ FCCA 538, [104].

[6] Craven v Ready Flowers Pty Ltd & Anor [2012] FMCA 1128.

[7] Craven v Ready Flowers Pty Ltd & Anor [2013] FCA 1308.

[8] Craven v Ready Flowers Pty Ltd & Anor [2014] FCA 467, [6].

[9] Craven v Ready Flowers Pty Ltd & Anor [2014] FCA 467, [1] and [2].

[10] Craven v Ready Flowers Pty Ltd [2014] FCA 467.

[11] Ready Flowers Pty Ltd v Craven [2015] FCA 297, [5].

[12] Ready Flowers Pty Ltd v Craven [2015] FCA 297, [5] and Craven v Ready Flowers Pty Ltd [2014] FCA 865, [1] and [2].

[13] Craven v Ready Flowers Pty Ltd [2014] FCA 865, [3] and [9].

[14] Ready Flowers Pty Ltd v Craven [2015] FCA 297.

[15] Hegarty & Ready Flowers Pty Ltd v Craven [2016] QDC 91, [2].

[16] Mbuzi v Hall [2010] QSC 359, [59] citing Jeffery& Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43, [38].

[17] Mbuzi v Hall (Supra), [68] and [70], point 3.

[18] At 247.

[19] T1-60, Line 1-17.

[20] 67 ACSR 105, [45].

[21] T1-56, Line 14 to 1-58, Line 15 and T1-60, Line 25 to 28.

[22] Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241, [9].

Close

Editorial Notes

  • Published Case Name:

    Craven v Globe Valley Pty. Ltd. & Ors

  • Shortened Case Name:

    Craven v Globe Valley Pty. Ltd.

  • MNC:

    [2018] QDC 155

  • Court:

    QDC

  • Judge(s):

    Williamson QC DCJ

  • Date:

    10 Aug 2018

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2018] QDC 15510 Aug 2018First to third defendants' application for security for costs granted: Williamson QC DCJ.
Primary Judgment[2018] QDC 19827 Sep 2018Plaintiff's application to set aside security for costs order refused; defendants' application to dismiss plaintiff's proceedings against them allowed (for the first to third defendants) and refused (for the fourth to fifth defendants): Porter QC DCJ.
QCA Interlocutory Judgment[2018] QCA 32827 Nov 2018Application for security for costs granted: Gotterson JA.

Appeal Status

No Status

Cases Cited

Case NameFull CitationFrequency
Craven v Ready Flowers Pty Ltd [2012] FMCA 1128
2 citations
Jump To
Cite 1 - [2012] FMCA 1128
Cite 2 - [2012] FMCA 1128
Craven v Ready Flowers Pty Ltd [2014] FCA 865
2 citations
Jump To
Cite 1 - [2014] FCA 865
Cite 2 - [2014] FCA 865
Craven v Ready Flowers Pty Ltd & Anor [2015] FCCA 538
3 citations
Jump To
Cite 1 - [2015] FCCA 538
Cite 2 - [2015] FCCA 538
Cite 3 - [2015] FCCA 538
Craven v Ready Flowers Pty Ltd & Anor [2013] FCA 1308
1 citation
Jump To
Cite 1 - [2013] FCA 1308
Craven v Ready Flowers Pty Ltd & Anor [2014] FCA 467
3 citations
Jump To
Cite 1 - [2014] FCA 467
Cite 2 - [2014] FCA 467
Cite 3 - [2014] FCA 467
Crocker v Toys 'R' Us (Australia) Pty Ltd (No 3) [2015] FCA 728
1 citation
Jump To
Cite 1 - [2015] FCA 728
Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd (2008) 67 ACSR 105
1 citation
Jump To
Cite 1 - (2008) 67 ACSR 105
Hamilton v Oades (1989) 166 CLR 486
1 citation
Jump To
Cite 1 - (1989) 166 CLR 486
Hegarty v Craven [2016] QDC 91
1 citation
Jump To
Cite 1 - [2016] QDC 91
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd & Ors [2009] HCA 43
1 citation
Jump To
Cite 1 - [2009] HCA 43
Mbuzi v Hall [2010] QSC 359
3 citations
Jump To
Cite 1 - [2010] QSC 359
Cite 2 - [2010] QSC 359
Cite 3 - [2010] QSC 359
Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241
1 citation
Jump To
Cite 1 - [2002] QCA 241
Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197
2 citations
Jump To
Cite 1 - (1988) 165 CLR 197
Cite 2 - (1988) 165 CLR 197
Packer v Meagher (1984) 3 NSWLR 486
1 citation
Jump To
Cite 1 - (1984) 3 NSWLR 486
Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225
1 citation
Jump To
Cite 1 - (1883) 23 Ch D 225
Ready Flowers Pty Ltd v Craven [2015] FCA 297
3 citations
Jump To
Cite 1 - [2015] FCA 297
Cite 2 - [2015] FCA 297
Cite 3 - [2015] FCA 297
Williams v Spautz (1992) 174 CLR 509
1 citation
Jump To
Cite 1 - (1992) 174 CLR 509

Cases Citing

Case NameFull CitationFrequency
Brookfield v RealEstate Now Pty Ltd [2021] QDC 952 citations
Craven v Commercial & Process Services Australia Pty Ltd [2020] QDC 122 citations
Craven v Globe Valley Pty Ltd [2019] QDC 282 citations
Craven v Globe Valley Pty Ltd [2018] QDC 1982 citations
1

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