FEDERAL COURT OF AUSTRALIA

Toben v Jones [2012] FCA 1193

THE COURT ORDERS THAT:

1.    The originating application and statement of claim be struck out.

2.    The proceeding be stayed permanently.

3.    The applicant pay the respondent’s costs of the proceeding including the interlocutory application filed on 22 June 2012.

Note:    Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The respondent seeks to strike out the originating application and statement of claim that have been filed in this proceeding. The respondent relies on paras (c), (e) and (f) of r 16.21(1) of the Federal Court Rules 2011 (the Rules), which provide as follows:

(1)    A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

….

(c)     is evasive or ambiguous; or

…

(e)     fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(f)     is otherwise an abuse of the process of the Court.

2    The originating application seeks declarations that the respondent has defamed the applicant and engaged in conduct that contravenes ss 18 and 20 of Sch 2 of the Competition and Consumer Act 2010 (Cth) (ACL). It also seeks “compensatory, general, special, aggravated and exemplary damages” as well as a stay of the respondent’s claim for costs against the applicant in proceeding NSD 327 of 2001.

3    The statement of claim pleads that, on 31 August 2009, the respondent caused an article to be published on the Internet about the applicant. Paragraph 3 of the statement of claim pleads that the article conveyed the following imputations about the applicant, which are said to be defamatory:

(a)    The Applicant is an anti-semite.

(b)    The Applicant falsely said that the influence of the Talmud was pervasive.

(c)    The Applicant falsely said that the Shoah was a mass fraud perpetrated on humanity.

[As in original]

4    The statement of claim also pleads that the alleged imputations were representations that constituted conduct by the respondent that was misleading or deceptive or likely to mislead or deceive. The statement of claim further pleads that the alleged representations were false to the respondent’s knowledge and constituted unconscionable conduct within the meaning of the unwritten law from time to time. The applicant thus claims that the respondent has contravened ss 18 and 20 of the ACL.

5    In an affidavit read on the hearing of the interlocutory application, the applicant’s solicitor stated that the applicant seeks leave to file an amended statement of claim. A copy of the amended statement of claim is annexed to the affidavit. There is, however, no interlocutory application presently before me seeking the requisite leave.

6    The foreshadowed amendments:

(a)    add an allegation that the matter complained of has remained on the Internet since 31 August 2009 and that the applicant’s claim for defamation is limited to the period from 23 May 2011;

(b)    amend the imputation identified in paragraph 3(b) of the statement of claim (see [3] above) so as to read: “The Applicant falsely said that all Jews were opposed to non-Jews because the influence of the Talmud was pervasive”, and to carry that amendment into the pleading of the claim based on s 18 of the ACL;

(c)    limit the claim based on s 18 of the ACL to the period from 1 January 2011;

(d)    add a particular to the claim based on s 18 of the ACL that the matter complained of was placed on the Internet by the respondent in the course of his employment with the Australia/Israel & Jewish Affairs Council (the AIJAC) and that the placing of that matter on the Internet “related to the business and/or professional activities of the AIJAC, of the Respondent as its employee and of the Applicant”;

(e)    remove the claim based on s 20 of the ACL.

7    The respondent says that the amendments foreshadowed by the draft amended statement of claim do not overcome the defects of pleading or the other bases on which he seeks to strike out the originating application and statement of claim. However the respondent relies on the draft amended statement of claim, and on what he sees to be the continuing deficiencies of pleading revealed by it, as a reason why, if his application to strike out is successful, leave to replead should not be granted as a matter of discretion.

8    The bases for the respondent’s application to strike out the originating application and statement of claim can be summarised as follows:

(a)    The cause of action for defamation is barred by s 14B of the Limitation Act 1969 (NSW) (the Limitation Act).

(b)    In any event, two of the alleged imputations (those identified in paragraph 3(b) and (c) of the statement of claim) are bad in form in that they are vague and embarrassing.

(c)    No proper cause of action against the respondent for contravention of s 18 of the ACL is disclosed.

(d)    In any event, the pleading of the cause of action based on s 18 of the ACL is defective in that the only matter pleaded is a mere conclusion drawn from unstated facts.

(e)    The whole of the proceeding is, in any event, an abuse of the Court’s process.

9    In the course of the hearing I raised the question of the jurisdictional basis on which the applicant sought to advance his case under s 18 of the ACL. I was informed that the applicant relied on the extended operation given by s 6(3) of the Competition and Consumer Act 2010 (Cth) to the ACL as a law of the Commonwealth: see in that regard Australian Competition and Consumer Commission v Jutsen (No 3) (2011) 285 ALR 110. Reliance on that particular operation of the ACL is not manifest on the face of the statement of claim, although counsel for the respondent made clear that the respondent did not seek to raise any jurisdictional objection in that regard. Nevertheless, that matter, in my view, is a defect in the pleading of the applicant’s claim based on contravention of s 18 of the ACL which should not be left unattended.

The defamation claim

The relevant limitation period

10    The respondent’s position is as follows. Section 14B of the Limitation Act provides that an action on a cause of action based on the publication of defamatory matter is not maintainable if brought after the end of a limitation period of one year running from the date of the publication of the matter complained of. The statement of claim, on its face, pleads the publication of the alleged defamatory matter took place on 31 August 2009. The present proceeding was commenced on 23 May 2012. It follows that the action for defamation, as pleaded, cannot be maintained. The statement of claim also pleads that the matter complained of remains on the Internet. The respondent submits that that allegation does not assist the applicant because it is legally irrelevant and ought to be struck out as well.

11    In this connection the respondent points to the principle that, in the context of defamation, publication is the communication of the defamatory material: Webb v Bloch (1928) 41 CLR 331 at 363; R v Grassby (1988) 15 NSWLR 109 at 114. In Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 the plurality (at [25]-[27]) said:

The tort of defamation, at least as understood in Australia, focuses upon publications causing damage to reputation. It is a tort of strict liability, in the sense that a defendant may be liable even though no injury to reputation was intended and the defendant acted with reasonable care. Yet a publication made in the ordinary course of a business such as that of bookseller or news vendor, which the defendant shows to have been made in circumstances where the defendant did not know or suspect and, using reasonable diligence, would not have known or suspected was defamatory, will be held not to amount to publication of a libel. There is, nonetheless, obvious force in pointing to the need for the publisher to be able to identify, in advance, by what law of defamation the publication may be judged. But it is a tort concerned with damage to reputation and it is that damage which founds the cause of action. Perhaps, as Pollock said in 1887, the law went "wrong from the beginning in making the damage and not the insult the cause of action" for slander but it is now too late to deny that damage by publication is the focus of the law. "It is the publication, not the composition of a libel, which is the actionable wrong."

Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer. Until then, no harm is done by it. This being so it would be wrong to treat publication as if it were a unilateral act on the part of the publisher alone. It is not. It is a bilateral act – in which the publisher makes it available and a third party has it available for his or her comprehension.

The bilateral nature of publication underpins the long-established common law rule that every communication of defamatory matter founds a separate cause of action. That rule has found reflection from time to time in various ways in State legislation and it would be a large step now to depart from it.

[Footnotes omitted]

12    Later (at [44]) their Honours said:

In defamation, the same considerations that require rejection of locating the tort by reference only to the publisher's conduct, lead to the conclusion that, ordinarily, defamation is to be located at the place where the damage to reputation occurs. Ordinarily that will be where the material which is alleged to be defamatory is available in comprehensible form assuming, of course, that the person defamed has in that place a reputation which is thereby damaged. It is only when the material is in comprehensible form that the damage to reputation is done and it is damage to reputation which is the principal focus of defamation, not any quality of the defendant's conduct. In the case of material on the World Wide Web, it is not available in comprehensible form until downloaded on to the computer of a person who has used a web browser to pull the material from the web server. It is where that person downloads the material that the damage to reputation may be done. Ordinarily then, that will be the place where the tort of defamation is committed.

13    Although the statement of claim identifies, by name, persons who are alleged to have downloaded the matter complained of, there is no pleading as to when or in what circumstances this was done.

14    The applicant submits that he is entitled to prove publication of the matter complained of without the need to establish individual instances of publication. He says that the matter complained of was available to be read on the AIJAC website as late as 5 July 2012. Thus, he submits, there is a continuing publication of the matter complained of and that the limitation period under s 14B of the Limitation Act continues to run for as long as that matter remains on the website after 23 May 2011.

15    In this connection, the applicant relies on the following passage from David v Abdishou [2012] NSWCA 109 at [286] where McColl JA (with whom Beazley JA (at [1]) and Sackville AJA (at [392])) agreed:

It is self-evident that a plaintiff can prove publication without calling evidence in every case that the matter complained of was in fact communicated to a third party. As Gatley says (at [6.9]), if the plaintiff "proves facts from which it can be inferred that the words were brought to the attention of some third person, he will establish a prima facie case". This will be so if it is a matter of reasonable inference that the matter complained of was "actually seen and read by some third party": Gatley (at [34.9]). Such an inference will be particularly obvious "where the matter is contained in a book or distributed in the news media where in practice it would seem impossible to rebut the inference and in such a case it would seem that the presumption of publication would be impossible to displace": Gatley (at [6.14]). Similarly, as the examples given in Gatley (at [34.8]) indicate, proof that a defamatory letter was sent through the post is prima facie evidence of publication to the person to whom it was addressed: Warren v Warren (1834) 1 C M & R 250. The contents of defamatory matter in a telegram are "necessarily communicated to all clerks through whose hand it passes": Williamson v Freer (1874) LR 9 CP 393 (at 395). Publication may also take place where defamatory matter is placed on a notice board in a position in which it could be read by any passer by: Byrne v Deane [1937] 1 KB 818 (at 829) per Greer LJ; see also Greene LJ (at 838).

16    Her Honour stressed, however, that publication is not established merely by proving that an article containing alleged defamatory material was made available. Publication requires communication to a third party who is capable of understanding the alleged defamatory matter: see at [259]-[260] and [282]-[283].

17    It may be accepted that each time there is a communication of defamatory matter a plaintiff has a new cause of action. That is really what the applicant is seeking to allege in the present case. In my view, however, the pleading of his cause of action for defamation in the statement of claim is wholly deficient for that purpose and should be struck out.

18    First, paragraph 2 of the statement of claim is explicit in claiming that publication took place on 31 August 2009. An action for defamation so framed is plainly not maintainable.

19    Secondly, paragraph 4 of the statement of claim pleads that the matter complained of “remains” on the Internet. That, however, is simply to allege that the matter complained of has been made available. It ignores the bilateral nature of communication that is required in order to make out publication for the purposes of defamation. Paragraph 4 of the statement of claim does identify, by name, persons said to have “read and/or downloaded” the matter complained of. There is no pleading, however, as to when this occurred. In light of paragraph 2 of the statement of claim it can only be assumed that this was on 31 August 2009. In any event, “downloading” in and of itself may not necessarily be sufficient to constitute the communication that is required for publication, although it will be a necessary antecedent step for that purpose in this context.

20    Thirdly, the applicant’s pleading of this cause of action is not assisted by merely alleging, as in the foreshadowed amendments, that the applicant’s claim for defamation “is limited to the period 23 May 2011 to date and continuing”.

The pleading of the imputations

21    The respondent contends that the pleading of the imputations in paragraph 3(b) and (c) of the statement of claim is bad in form. In that connection he submits that each of these imputations, as presently pleaded, is vague and embarrassing and rolls up a number of different concepts. For that reason, he submits, it is not possible to consider whether the matter complained of is capable of giving rise to the imputations or whether they are, in fact, defamatory of the applicant.

22    As I have noted, the applicant does not seek to rely on the current pleading of paragraph 3(b) of the statement of claim, but on a reformulation of it which I have quoted in subparagraph (b) of [6] above. Otherwise, the applicant submits that the pleading does identify the precise act or condition attributed to him by the matter complained of.

23    In my view paragraph 3(c) of the statement of claim and paragraph 3(b) (whether in its present or proposed form) are ambiguous and embarrassing as presently pleaded. In my view they do not identify with precision the act or condition asserted of or attributed to the applicant. The main difficulty lies in the ambiguous use of the word “falsely” and is highlighted by the applicant’s written submissions. In [10] of his “reply” submissions, the following submission is advanced:

The Applicant submits that imputations (b) and (c) in context do identify the precise act or condition attributed to the Applicant namely that he said the propositions attributed to him by Mr Jones and that those propositions were false.

24    If that is what the applicant intends to plead in the relevant subparagraphs then it is not at all clear to me that that is what is in fact conveyed by those subparagraphs. It is not clear whether the applicant’s use of the word “falsely” in the pleading of the imputations is intended to refer to a state of mind or a statement of fact or both.

25    In my view paragraph 3(b) and (c) of the statement of claim should be struck out.

The claim for misleading or deceptive conduct

26    Section 18(1) of the ACL provides:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

27    Paragraph 6 of the statement of claim pleads:

On or about 31 August 2009 to date and continuing, the Respondent in trade or commerce (to wit business or professional activity) engaged in conduct that was misleading or deceptive or which was likely to mislead or deceive, contrary to the provisions of section 18 of schedule 2 of the Competition and Consumer Act.

28    Particulars are provided. These particulars:

(a)    repeat the pleaded imputations as “representations”;

(b)    state that the representations were false, misleading and deceptive because each was untrue to the knowledge of the respondent; and

(c)    allege that, as a result, the applicant has suffered loss and damage.

29    There are two main objections raised by the respondent to this pleading. These objections are connected.

30    The first objection is that paragraph 6 merely pleads a broad legal conclusion unsupported by the pleading of material allegations of fact, as required by the Rules. In the present case the provision of the particulars does not overcome this deficiency.

31    The second objection is that, for a number of reasons, paragraph 6 does not plead a reasonable cause of action based on s 18 of the ACL. These reasons, in essence, are that:

(a)    the act complained of is the publication on the Internet of the alleged representations on 31 August 2009, which was before the ACL came into force;

(b)    the alleged representations, as contained in the impugned article, cannot be misleading or deceptive simply because the impugned article is placed on the Internet; and

(c)    it cannot be discerned from the face of the pleading that the conduct complained of was “in trade or commerce”.

32    Although a statement of claim must be as brief as the nature of the case permits, it must also state the material facts on which the applicant relies that are necessary to give the respondent fair notice of the case to be made at trial: r 16.02. A party must state the necessary particulars of each claim that is pleaded: r 16.41. However, the function of particulars is not to “fill the gaps” where the material allegations of fact are missing. Furthermore, if knowledge is pleaded then the material facts on which the applicant relies must be particularised: r 16.43.

33    In McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 at [21]-[31] Weinberg J helpfully set out the principles explaining the need for a pleading to contain the material allegations of fact on which the pleading party relies. At [25]-[27] his Honour said:

For a statement of claim to disclose a cause of action it must set out the material facts which give rise to the cause of action. A cause of action for misleading and deceptive conduct is not established unless the statement of claim sets out the circumstances which gave the representation its deceptive and misleading character at the time it was made. Mere non-fulfilment of a statement as to a future matter does not establish that the statement was relevantly misleading and deceptive: Pioneer Electronics Australia Pty Ltd v Edge Technology Pty Ltd.

When a claim is made under s 82 of the Act, the gist of the cause of action being damage, the statement of claim must allege the damage suffered, and that it was suffered by reason of the contravention of the Act. Material facts must be pleaded which show the required causal link between any alleged contravention of the Act, and any damage to the applicant. A deficient pleading, namely one that does not plead relevant material facts, cannot be saved by particulars. It is not sufficient simply to allege loss and damage as a result of alleged contraventions of the Act; it is necessary to identify a causal connection between the impugned conduct and such loss as is said to have been suffered by the applicants: Bond Corp Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222; 71 ALR 125 per French J, cited with approval by Burchett J in Multigroup Distribution Services Pty Ltd and by Goldberg J in Mitanis.

In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Ltd (1998) ATPR 41–633 Foster J dealt with an application to strike out certain paragraphs of a further amended statement of claim which purported to plead a cause of action under ss 51A, 52 and 53 of the Act. His Honour stated (at 40,977):

It necessarily follows that when [s 52] is sought to be used in litigation as the foundation of a cause of action or claim for some specific form of relief, it imperative that the factual basis upon which the section is alleged to be brought into play must be stated with appropriate clarity in a statement of claim. This is, of course, a fundamental principle of pleading.

34    These observations apply with equal force to claims based on s 18 of the ACL, including for damages under s 236.

35    In the present case it is clear, as the respondent contends, that all the applicant has done in relation to his claim based on contravention of s 18 of the ACL is to plead a bald legal conclusion. For this reason alone, the pleading of the s 18 claim is wholly deficient and should be struck out. The deficiency is illustrated by the respondent’s second objection, specifically that it cannot be discerned from the face of the statement of claim that the conduct complained of was “in trade or commerce”.

36    It may be that, in many cases, this particular question would not arise because allegations of fact will have been pleaded from which this element of s 18, or at least the applicant’s case in relation to it, with reference to the impugned conduct, is apparent. In the present case, however, the impugned conduct is simply identified as the publication on the Internet of the impugned article. On what basis can it be said that this single act was “in trade or commerce” beyond the applicant’s mere formulaic assertion of that fact?

37    The significance of the words “in trade or commerce” as an essential element of the statutory proscription of s 52 of the Trade Practices Act 1974 (Cth) was discussed by the High Court in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594. There the plurality (Mason CJ and Deane, Dawson and Gaudron JJ) stressed that the phrase “in trade or commerce” has a restrictive operation. The statutory proscription only attaches to “conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character”: see at 603.

38    Their Honours continued (at 603):

So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth, the words “in trade or commerce” refer to “the central conception” of trade or commerce and not to the “immense field of activities” in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business”.

[Footnote omitted]

39     In that case it was held that the making of an incorrect statement to a worker by his employer’s foreman, leading to the worker’s injury, was not “in trade or commerce” for the purposes of s 52.

40    In the course of submissions I was taken to a number of authorities in which the requirement of “in trade or commerce” was discussed extensively. I refer, in particular, to Fasold v Roberts (1997) 70 FCR 489 at 526-531; Giraffe World Australia Pty Limited v Australian Competition and Consumer Commission (1999) ATPR ¶41-669 at 42,540; Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 at [25]-[50]; Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 134 FCR 422 at [43]-[54] and [59]; and Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) Inc (2002) 120 FCR 191 at [172]-[194]. These cases make clear that it is not sufficient to attract the operation of the statutory proscription that the impugned conduct be “in relation to” or “in connection with” trade or commerce, as opposed to “in trade or commerce”. The respondent also relied on a number of these authorities to draw a distinction between conduct that is essentially political in character or represents public advocacy and conduct that is essentially of a trading or commercial character.

41    It is not sufficient for the applicant merely to plead that the impugned conduct was “in trade or commerce”. He must, by his pleading, identify the material facts that identify the trade or commerce in question and the connection between that trade or commerce and the publication of the impugned article so as to lay the foundation to allege that the impugned conduct was “in” trade or commerce.

42    In submissions the applicant pointed to the fact that the impugned article was published on the AIJAC’s website and that, on the website, the AIJAC referred to its activities as including publication of a monthly magazine and a free email news and commentary service. I am unable to see, however, how the mere fact that the AIJAC publishes, separately, a monthly magazine and a free email news and commentary service renders the respondent’s publication on the AIJAC website itself an activity “in trade or commerce”, without further elaboration. In any event, none of these matters are referred to in the statement of claim or the amendments proposed thereto.

43    I should also note in that regard that in the foreshadowed amendments the applicant, by particulars, refers to the respondent placing the impugned article on the Internet in the course of his employment with the AIJAC and that “such material related to the business and/or professional activities of the AIJAC, of the Respondent as its employee and of the Applicant”.

44    It may be accepted that an employee may be capable of contravening s 18 of the ACL when acting in the trade or commerce of his employer: Houghton v Arms (2006) 225 CLR 553 at [35]; Taylor v Crossman (No 2) (2012) 199 FCR 363 at [44]. But these particulars do not carry the matter much further. They are expressed in omnibus form and at a level of generality that leaves unanswered the question of why the impugned conduct was in trade or commerce.

45    Finally, the pleading of the s 18 claim also suffers from the defects noted in subparagraphs (a) and (b) of [31] above.

Abuse of process

46    Quite apart from the pleading deficiencies with which I have dealt, the respondent seeks to have the originating application and statement of claim struck out as an abuse of the Court’s process. The basis for that limb of the respondent’s interlocutory application can be summarised as follows.

47    The applicant and the respondent were parties to proceeding NSD 327 of 2001 – Jeremy Jones v Gerald Fredrick Toben. As is apparent, the applicant was the respondent in that proceeding. The applicant was subsequently found to be in contempt of orders made in that proceeding (the contempt proceeding). On 13 May 2009 a costs order was made against him in the contempt proceeding. On 27 February 2012 the present respondent applied for those costs to be taxed. The applicant filed an interlocutory application dated 10 April 2012 in which, amongst other things, and by amendment made on 20 April 2012, he sought an order that the bill of costs be “struck off”. The interlocutory application came before Mansfield J who, on 3 May 2012, made orders refusing that relief, with costs: Toben v Jones [2012] FCA 444. On 18 May 2012 the applicant wrote to the respondent in the following terms with respect to that proceeding:

FEDERAL COURT PROCEEDINGS NSD 327 of 2001

Your claim against me in the above matter for costs in excess of $175,000 is unfair and unreasonable. I have sold my home of twenty-seven years being my only asset to satisfy your previous costs orders. I have no other funds or assets and will not be able to pay one cent. If necessary, you could apply for my bankruptcy.

At all times I have exercised my right of freedom of speech.

In order to establish the injustice you have occasioned to me, I am bringing a cross claim against you in the Federal Court claiming damages for breaches of sections 18(1) and 20(1) of schedule 2 of the Competition and Consumer Act. I also propose to bring a defamation claim. The causes of action arise out of your article of 31 August 2009 (“The Last Word: Contempt for Truth”) which you published on the internet and which remains on the internet.

If my proposed proceedings are heard by the Court I expect to receive a substantial sum of damages well in excess of your claim for costs. However, I am prepared to forego my legal rights to bring claims against you for the causes of action above referred to providing you discontinue your application for costs.

I await your advises. [sic]

48    Thereafter, on 23 May 2012, the applicant commenced this proceeding.

49    On 14 June 2012 the respondent’s solicitors wrote to the applicant pointing out a number of deficiencies with respect to the applicant’s claims and his pleading of them in the statement of claim. The letter included the following:

You have failed to take genuine steps prior to the commencement of these proceedings. We do not consider your letter dated 18 May 2012 constitutes any genuine steps to resolve the alleged dispute. We note that the Application and Statement of Claim was filed five days after you sent the letter. Your letter purports to be a threat to commence proceedings unless our client discontinued his “application for costs” by which we take it to mean a reference to our client’s bill of costs filed with the Court on 27 February 2012. We note that this letter was written after his Honour Justice Mansfield published his Reasons for Judgment on 3 May 2012.

You made no attempt to serve a concerns notice under s.14 of the Defamation Act 2005 (NSW). Further, you have failed to take any steps in relation to the matter complained of since its publication on 31 August 2009. Indeed, the commencement of these proceedings seems to be motivated by malice following his Honour’s judgment. ...

50    The applicant responded to this letter on 18 June 2012. His response included the following:

I regard the genuine steps statement as being in proper form. However I welcome mediation or any other steps the Respondent may take to settle the matter including an appropriate apology.

51    The Court has power to prevent an abuse of its process. That power extends to ordering a stay of proceedings: Clyne v The New South Wales Bar Association (1960) 104 CLR 186 at 201; Barton v The Queen (1980) 147 CLR 75 at 96, 107 and 116; Williams v Spautz (1992) 174 CLR 509 at 518. Such an abuse will occur where a proceeding is commenced not for the purpose of vindicating the claimant’s rights advanced in that proceeding but for some collateral or otherwise improper purpose, such as to exert pressure on the person against whom the proceeding is commenced to effect an object not within the proper scope of the proceeding. In such a case the issue is one of predominant purpose, not sole purpose. The relevant principles are summarised in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 4) (2010) 269 ALR 76 at [37]-[51] in the context of setting aside a subpoena. The same general principles apply here.

52    The respondent submits that, in the present case, the proceeding against him has been commenced for the collateral and improper purpose of coercing him to refrain from having his bill of costs taxed in the contempt proceeding and that, for that reason, the commencement of the present proceeding is an abuse of the Court’s process.

53    If it be assumed that the applicant has an underlying arguable claim for defamation or contravention of s 18 of the ACL, then to strike out the originating application and statement of claim as an abuse of process is a serious step and one that the Court would be slow to take. Nevertheless, in the present case, I am persuaded that this is the appropriate step to take.

54    The impugned article was published on 31 August 2009. It was not the subject of any complaint by the applicant until 18 May 2012. The circumstances in which that complaint came to be made are important. On 3 May 2012 the applicant’s attempt to prevent the taxation of the respondent’s bill of costs in the contempt proceeding failed. It was that circumstance which apparently spurred the applicant to commence the present proceeding.

55    In that connection the terms of the applicant’s letter of 18 May 2012 are revealing. The letter is referenced to proceeding NSD 327 of 2001. Its subject matter is the applicant’s complaint that the respondent’s pursuit of costs in that proceeding is “unfair and unreasonable”. The applicant makes clear that his reason for commencing the present proceeding is “to establish the injustice you have occasioned to me”. The “injustice” to which the letter refers is not the publication of the impugned article, but the respondent’s pursuit of his costs in the particular circumstances set out in the first paragraph of the letter.

56    It is with that understanding in mind that the last paragraph of the letter should be read. When it is so read, the applicant’s statement that he is “prepared to forego my legal rights to bring claims against you” reveals his predominant and immediate purpose in commencing the present proceeding. That purpose is to bring about the result that the respondent discontinue his application for costs in the contempt proceeding. Having regard to considerations of timing and context, as well as the terms of the letter itself, I am satisfied that that was the applicant’s true purpose in commencing the present proceeding; it was not to vindicate the rights he claims in this proceeding.

57    The applicant’s predominant and immediate purpose, as I have found it to be, is not an object that is within the proper scope of the present proceeding but one that is collateral thereto and improper. The appropriate order in those circumstances is not merely to strike out the originating process but to order that the proceeding be stayed permanently.

Disposition

58    I have found that the pleading of the statement of claim is deficient in a number of respects. Those deficiencies are not overcome by the amendments that the applicant has proposed. The originating application and statement of claim should be struck out.

59    Moreover, I am satisfied that the commencement of this proceeding is an abuse of the Court’s process. I will therefore order that the proceeding be stayed permanently.

60    The applicant is to pay the respondent’s costs of the proceeding including the interlocutory application filed on 22 June 2012.

Associate:

Dated:    31 October 2012