FEDERAL COURT OF AUSTRALIA

Monte v Gianni Versace SpA [2003] FCA 956

FRANK MONTE v GIANNI VERSACE SpA, SANTO VERSACE and DONATELLA VERSACE

N 745 OF 2003

WHITLAM J

10 SEPTEMBER 2003

SYDNEY

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The appellant provide by 4 pm on 30 September 2003 security in a form acceptable to the Registrar for costs of the appeal in the sum of $65,000.

2.         In the event that such security is not provided, the appeal be stayed.

3.         The appellant is to pay the respondents’ costs of their motion, notice of which was filed on 12 August 2003.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

1                     This is an application for security for costs in an appeal instituted on 19 June 2003.  The notice of appeal purports to appeal from orders made by Tamberlin J on 8 March 2002 and on 29 May 2003. 

2                     No substantive orders were, in fact, made on 8 March 2002.  On that day Tamberlin J published reasons for judgment dealing with the questions of liability and relief other than damages: see Gianni Versace SpA v Monte (2002) 119 FCR 349.  On 29 April 2002 his Honour made orders to give effect to those reasons and also made a costs order in favour of the respondents, entitling them to have such costs taxed and paid forthwith.  Those orders were entered on 1 May 2002.  An application to ‘reconsider’ the requirement that the costs be paid forthwith was made on 19 June 2002.  That application was not granted by Tamberlin J, who also refused leave to appeal from the costs order.

3                     On 29 May 2003 the respondents were given leave by Tamberlin J to discontinue that part of the proceeding in the Court below which related to the quantification and payment of damages.  A notice of discontinuance was filed that day.  The respondents have not objected to the competency of the appeal.  It seems that the parties take the view that such discontinuance turns the orders made on 29 April 2002 into ‘final’ orders and starts the time running to appeal against them.

4                     The appeal has been fixed for hearing on 3 November 2003 for two days.  The evidence before me establishes quite clearly that the appellant is impecunious in the sense that he will be unable to pay the respondents’ costs of his appeal.  Moreover, the respondents submit that the appeal has no prospects of success.

5                     The proceeding in the Court below may be briefly described.  The first respondent bears the name of the eponymous fashion designer who was killed on 15 July 1997.  It is the holding company of a group of companies with worldwide operations in businesses utilizing the Versace name.  The second respondent is the brother, and the third respondent is the sister, of the late Gianni Versace.  They are both involved in the group’s business affairs.  The respondents sued the appellant and Arkitude Holdings Pty Ltd (‘Arkitude’), a company which Tamberlin J found (at 381 [116]) was controlled by the appellant, over statements made in a book, a magazine article and a website.  The article was published in a newspaper magazine dated 23-24 June 2001.  The respondents relied on the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) against both the appellant and Arkitude in respect of alleged representations in such statements and on causes of action in defamation against the appellant only in respect of alleged imputations in the book and the article.

6                     The alleged representations and imputations were pleaded with some precision.  Many of them were identical.  Tamberlin J found that, with a few exceptions, the alleged representations or imputations were made out.  His Honour also found that the conduct of the appellant and Arkitude in making such representations was misleading and deceptive.  Tamberlin J held that the publication of the book and the dissemination of its contents through the article and the website were carried out in trade and commerce within the meaning of the Trade Practices Act and the Fair Trading Act.  He also held that the publication was not a prescribed publication for the purposes of s 65A and s 60 respectively of those Acts and that, even if it were, the misleading and deceptive conduct provisions of those Acts still applied to the publication.  Tamberlin J was satisfied that there was a real prospect that the appellant would repeat the false allegations, and he held that the respondents were entitled to appropriate declatory and injunctive relief.

7                     Tamberlin J also held that the imputations he found to be conveyed were defamatory.  His Honour rejected defences of qualified privilege and fair comment relied on by the appellant.  Moreover, he found that, in any event, the appellant was motivated by malice in making those imputations.

8                     The trial judge also rejected a submission by the appellant and Arkitude that the proceeding before him was an abuse of process in the light of proceedings previously instituted in the Supreme Court of New South Wales against the commercial publisher who arranged the printing of the book authored by the appellant.  His Honour held that the causes of action in defamation brought by the respondents against the appellant in this Court did not contravene or circumvent s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and that the principle enunciated in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598 had no application to their case against the appellant.

9                     On 29 April 2002 Tamberlin J made the orders which are the subject of the present appeal.  These comprised declarations that the appellant and Arkitude made specified representations, each of which was ‘(a) false and untrue and (b) misleading and/or likely to mislead, and deceptive and/or likely to deceive, contrary to s 52 of the Trade Practices Act 1974’, declarations that they published specified imputations of one or other of the respondents, each of which was defamatory of that respondent; a declaration that, in publishing those imputations, the appellant was motivated by malice; injunctions restraining the appellant and Arkitude from publishing the book and the article; an injunction restraining them from making the representations declared to be false; an injunction restraining them from representing that the book ‘is a work of fact’; and an injunction restraining them from publishing statements or statements to the effect of several of the representations declared to be false.

10                  The grounds of appeal are stated in paragraphs 2-14 of the notice of appeal.  Paragraph 2 begins by alleging error on the part of the trial judge in finding that certain pleaded representations were made ‘without making a finding as to the evidence which provided the basis for such finding’.  (The appellant does not challenge any finding that such representations were false.)  This is not a promising ground of appeal.  Tamberlin J noted (at 374-375 [90]-[91]) that the three alleged representations first singled out in this ground, namely those in relation to the appellant and his contact and communication with the late Mr Versace, were not ‘substantially disputed’.  If that statement is wrong, then so much should be alleged as an error.  So far as the other sixteen pleaded representations mentioned in this ground are concerned, his Honour noted (at 390 [148] and 392 [155]) that two of them were ‘not contested’ and held (at 394 [165]) that another two of them were not made.  In respect of the other twelve representations, his Honour gave (at 390-395 [147]-[166]) detailed reasons for concluding that they were made with extensive reference to the evidence for his findings. 

11                  Paragraph 3 challenges the finding (at 374 [90]) that false representations were made by the appellant that the book was a work of fact insofar as it related to the late Mr Versace.  It is alleged that the trial judge erred in failing (i) to find the ‘precise representations’ made, (ii) to identify in what respects they were false, and (iii) to refer to the evidence for his conclusion.  This is a quite ludicrous ground of appeal. The pleaded representation is mentioned (at 359 [28]).  Tamberlin J commented generally (at 360-364 [35]-[44]) on the credibility of the witnesses and set out (at 366-375 [53]-[93]) his findings on the alleged relationship between the appellant and the late Mr Versace.  The reasoning for his conclusion on the falsity of the pleaded representation is perfectly clear.  Moreover, his Honour returned to the topic in discussing at (390 [145]) the question whether the matter complained of was capable of conveying a pleaded imputation:

‘… In the context of the book in the present matter, the assertions in question are advanced as statements of reported fact and not as expressions of opinion or comment.’

Later, too, when dealing with the defence of fair comment, he pointed out (at 399 [183]) that the appellant’s allegations in the book were provided ‘as statements of fact’. 

12                  Paragraphs 4 and 5 baldly allege errors in ‘findings’ on the ‘prescribed information provider’ and ‘in trade and commerce’ issues.  In truth, the trial judge’s relevant conclusions represent holdings of law on these issues supported by findings of fact elaborated in his reasons (at 382-387 [118-135] and at 377-380 [100]-[109]).  Paragraph 6 challenges the grant of the injunctions and making of the declarations by Tamberlin J, but it provides no hint as to any error in the approach to such relief outlined by his Honour (at 387 [138-139]).

13                  The ground in paragraph 7 alleges the trial judge erred in finding eleven of the pleaded imputations arose.  Again, no hint is given as to the basis of any alleged error.  This is extraordinary in view of the fact that his Honour carefully set out (at 388-390 [143]-[145]) the principles to be applied in determining whether an imputation is conveyed and then proceeded (at 390-395 [147]-[166]) to apply those principles to the pleaded imputations by reference to the evidence.

14                  In paragraph 8 the appellant has the effrontery to challenge the finding that the imputations found to be conveyed in the book and article were defamatory.  Again, the trial judge set out (at 396 [168]-[170]) the test to be applied and gave reasons (at 395-396 [170]) for his conclusion that such imputations were ‘highly defamatory’ and ‘of the gravest and most damaging nature’.

15                  Tamberlin J gave elaborate reasons (at 396-403 [172]-[201]) for his conclusions on the issues of qualified privilege, comment, malice and abuse of process.  On the first such issue paragraphs 10 and 11 of the notice of appeal simply assert error in the findings that the appellant had no positive belief in the truth of what he published and that the appellant had no reasonable grounds to assert the truth of the imputations alleged in fifteen of the pleaded imputations.  A major problem with this lastmentioned ground is that his Honour held (at 394 [165]) two of those imputations were not made out and noted (at 394 [162]) that the appellant did not express any honest belief in one of the other imputations found to have been conveyed.  On this aspect of the case, his Honour said (at 398 [179]):

‘In the present case I do not consider that the action of [the appellant] in publishing the material was reasonable.  He made no inquiries as to the objective truth of any of the allegations and made no attempt to furnish any evidence in relation to it, either oral or documentary.  The allegations were extremely grave and reasonable conduct would require some investigation before publication.  He made some general inquiries with the police in Miami and collected gossip and rumours from a number of media sources which were not substantiated in any objective way and repeated them without verification.  He fabricated a nonexistent relationship with [the late Mr Versace].  He could not point to any credible documentary evidence to support any allegation and I have found that he fabricated some of the documentary material he relied on.  He failed to refer to the reversal of the conviction of [the second respondent] on appeal and he made a large number of grave, unsubstantiated, and sensational allegations against each of the [respondents] without any foundation. In the case of [the third and second respondents] this was done with malice in publishing the material.  Accordingly, the defence based on qualified privilege has not been made out.’

Paragraphs 12, 13 and 14 simply assert error in ‘not upholding’ the defence of comment, in ‘finding’ malice, and in ‘not finding’ an abuse of process.  These are all issues on which the trial judge expressed his conclusions (at 398-403 [180]-[201]) in reasons replete with extensive reference to various statutory provisions and authorities and to the evidence before him.

16                  The disposition of the appeal is, of course, a matter for the Full Court constituted by the Chief Justice.  However, I have to deal with the respondents’ submission that the appeal has no prospects of success, and I can only do so on the basis of the material before me.

17                  It will be apparent from what I have said thus far that some of the grounds of appeal are opaque and others are simply obtuse.  If the appellant were unrepresented, such an unfortunate situation might be explicable.  However, in the present case it excites grave suspicion about the genuineness of the appeal.  A notice of appeal is supposed to inform the Court and the respondents what the appeal is about.  This does not mean that it should be so prolix that it challenges virtually every observation of the trial judge.  Recently, in Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193, a Full Court (Wilcox, French and Gyles JJ) pithily remarked (at [125]):

‘…It is not too much for the Court to expect lawyers who prepare a notice of appeal to subject the case, and the trial judge’s reasons, to a degree of analysis and to identify the issues critical to a successful appeal.’

18                  Pro-forma grounds may be acceptable in a ‘holding’ notice of appeal.  They are inexcusable in a notice of appeal filed fifteen months after the judge’s reasons were published.  The damning assessment of the appellant’s credibility, which pervades the trial judge’s reasons, is not directly confronted.  It is, of course, possible to argue abstract propositions of law interminably, but I am bound to say that these mindless grounds of appeal leave me with the firm impression that the prospects of success for this appeal are negligible.  My view was buttressed by a desperate submission on behalf of the appellant to the effect that a ground of appeal might become available if it were discovered that Tamberlin J had written on or otherwise marked any document put in as an exhibit during the trial.  (The exhibits have apparently not yet been delivered to the Registry as contemplated by O 52 r 23 of the Federal Court Rules.) 

19                  The fact that the appellant is the party against whom relief was claimed at first instance makes no difference.  He is the person who brings the appeal.  See Riv-Oland Marble Company (Vic) Pty Ltd v Settef SpA (1988) AIPC ¶90-503 per Jenkinson J at p 38,334.  I am persuaded that this is an appropriate case in which to exercise the discretion to order security for costs.

20                  The unchallenged evidence of Ross Nicholas, a legal costs consultant, is that, if the respondents are successful on the appeal, they will, in his opinion, recover as costs on a party-party basis a minimum of $66,568.80.  That amount would, of course, not provide a complete indemnity to the respondents.  I shall order that security be provided in the sum of $65,000 by 30 September 2003 and that, if it is not, the appeal will be stayed.  The respondents are also entitled to their costs of the present motion.

21                  There is, however, one aspect of the orders made on 29 April 2002 that I have tripped over in the course of considering this matter and that I should mention.  Tamberlin J expressly found (at 376 [95]) that the representations pleaded in subparagraphs 14(l) and (r) of the amended statement of claim were not made, yet the declaration states in subparagraphs 4(v) and 5(v) that they were made.  The ‘slip’ rule would appear to be in point in order to correct this error.

Associate:

Dated:              10 September 2003