Barnes v Saal [1991] QSC 30

/W~~ IN THE SUPREME COURT\'? OF QUEENSLAND No. 1570 of 1990 BETWEEN: JANET KAY BARNES Plaintiff VIVIAN LANE SAAL Defendant EXTEMPORE REASONS - SENIOR MASTER HORTON O.C. Delivered the first day of February, 1991 This is an application for security for costs which arises out of an action brought by the respondent plaintiff for damages for defamation. The sorry saga of events which lead to this litigation apparently commence in March 1988 when the plaintiff was employed by a company of which the present applicant defendant is a director. Apparently harmony had ceased and in mid to late November, 1988 the quite serious defamatory remarks against the plaintiff are alleged to have taken place. I think it important at this stage to stress that the defamatory allegations said to have been made against the plaintiff are very serious. They go to her/basic integrity and are matters which would obviously effect the capacity to earn income in what I assume to be a fairly restricted area of commercial activity. On the 8th December, 1988 the plaintiff was dismissed by the company of which the defendant is a director. Some eight days later she and one Ruzicka became directors of a company, N.R. Surgical Pty. Ltd., which commenced to trade in direct opposition to the company which had previously employed her and of which the present defendant is a director. -- 1 of 7 -- l Circumstances have gone from bad to worse in this case and they are circumstances that have caused me in the past and will today cause me again a great deal of concern for the personal welfare of all parties. Although there are corporations intervening here, it is clear that the disputes are between the present plaintiff Ms. Barnes and her de facto husband Quilter and the present defendant Saal and his wife Caroline Saal. Each, I assume, are parties who do not possess unlimited financial resources and the prospects of litigation in this Court and the financial aspects associated with litigation in this Court should be a factor to be borne in mind at all times. In any event there are now four bases of litigation on foot in Queensland. In Writ 2235/89 with Ms. Barnes as plaintiff against Mrs. Saal, the plaintiff alleges damages for defamation arising out of one publication on 15th June, 1989 to a person, Myers, described as a private investigator. Although of course technically this was publication I gather it was a one to one conversation. Damages are sought in the sum of $350,000 and naturally the litigation has commenced in this Court. This writ was issued on 30th June, 1989. On the same day by writ 2236/89 the present plaintiff's de facto husband, Quilter, who was a former police officer and who now describes himself as a "stress management consultant" alleges he was defamed by Mrs. Saal again on a one to one conversation with Myers on the same date, 15th June, 1989 and he in turn is suing for $350,000 in this Court. This litigation has had a number of interlocutory steps and indeed on the last occasion it came before me when the parties were present in Court I made what I hoped to be helpful remarks -- 2 of 7 -- .l about the need for both parties to consider the financial implications to themselves of suing in this Court. On the 3rd October, 1990 writ 1570/90 with the plaintiff Ms. Barnes, was issued against Mr. Vivian Saal claiming damages for defamation alleged to have occurred on 18th November, 1988 in a telephone conversation to Mr. Ruzicka who it has been mentioned above is with the plaintiff, a director of M.R. Surgical Supplies. Further in this present piece of litigation the plaintiff alleges that he was defamed by the present defendant in two further telephone conversation which occurred in approximately November 1988 with one Mr. Smith who it is pleaded is an employee of M.R. Surgical Supplies (Australasia), which I take to be an associated company with the company of which the plaintiff is a director. In other words, there have been three instances alleged in writ no. 1570/90, each of which was a one to one conversation and each of which was to a person, presumably known to the plaintiff. Damages in the sum of $200,000 are sought in this action. This unfortunate saga does not conclude here. Apparently it is said in preparation of the earlier body of Supreme Court litigation, Thompson King and Partners, then solicitors for the plaintiff and Quilter, wrote to a number of the persons and institutions with which the present defendant and his wife through their company, deal in the normal course of their business. It is alleged that that letter is defamatory and on the 11th April, 1990 a District Court plaint no. 1790/90 was brought by Mrs. Saal against the present plaintiff and Thompson King and Partners as her solicitors. This seeks damages in the sum of $200,000 and relates to a number of publications. Mr. Varitimos, who appears for the applicant defendant, concedes that the general rule is that a natural person living -- 3 of 7 -- in the jurisdiction although impecunious will not be prevented from having his day in Court by the imposition of an order for security for costs. Mr. Justice Connolly clearly recognised this principle in Harpur v. Ariadne Australia 1984 2 Q.R. 523 where at p.526 His Honour said:- 11S0 far as natural persons are concerned poverty was no bar to a litigant." His Honour referred to the earlier English case of coiwell v. Taylor reported in Volume 31 Chancery Division at p.34 wherein Lord Bowen said:- "The general rule is that poverty is no bar to a litigant. That from time immemorial has been the rule at common law and also, I believe in equity ... There is also an exception in traduced in order to prevent abuse. That is, if an insolvent sues as nominal plaintiff for the benefit of someone else he must give security." The Legislature of course has in the case of a corporation abrogated this rule and now as Lord Denning said in Sir Lindsay Parkinson & Company Limited v. Triplan 1973 Q.B. 609 at p.626:- "The word 'may' gives the Judge a discretion whether to order security or not. There is no burden one way or the other. It is a discretion to be exercised in all the circumstances of the case." That is of course not the law in the case of a natural person. In my view however the law still recognises that if the Court is satisfied that there is an element of abuse and Lord Justice Bowen in instancing the case of an insolvent suing as a nominal defendant was doing no more than giving an instance of such an abuse, the Court may order the giving of security notwithstanding that the plaintiff is impecunious. Mr. Varitimos of counsel has pointed to a number of features of this case all of which I regard as particularly troubling. There are four bases of litigation presently joined between the -- 4 of 7 -- ~ plaintiff, the de facto husband and the defendant and his wife, one of which I hasten to add, was commenced by the present defendant's wife. They are now competitors through their respective corporate personalities. Writ 1570/90 the present action, was instituted some almost two years after the alleged three defamatory publications were made. The plaintiff seeks to explain this by saying this was the delay of her former solicitors but the delay of course exists and will be a factor to be borne in mind at trial by a jury when assessing damages. Nextly, although technically publications, all of the publications which are the subject of defamation claims by the present plaintiff and her de facto husband, arise out of one to one conversations and involve publicationed persons with whom they are associated. No apology was sought by the plaintiff and/or her de facto husband before commencing litigation. The plaintiff has been asked to give details of her financial position before the applicant defendant brought this application but has refused. A certificate of readiness in the present action was tendered by the respondent plaintiff's solicitors on her behalf, signed by those solicitors, certifying that all interlocutory steps had occurred and that the matter was ready for trial before the period provided by the Rules of the Supreme Court had expired in which the present applicant defendant was entitled to deliver his defence. Nextly, a claim for privilege has been made in action 2235/89 between the present plaintiff and Mrs. Saal with respect to a tape recording alleged to have been made of the conversation constituting the publication of the defamatory remarks on the ground that it is a proper subject for a claim for legal -- 5 of 7 -- Q professional privilege. I bear in mind of course that this claim is made in another action, and I cannot put and I ought not put from my mind in my view the fact that this extraordinary assertion was made by the solicitors for the present plaintiff in a related action and in my view, could only be made for the purposes of obstruction. Nextly Mr. Varitimos has said that the plaintiff has not deposed to any merits of the case in any affidavit placed before me today and that such a deposition is required in that the defendant in this action has denied actually publishing the words complained of. I should say that this is a factor to which I do not given any substantial weight. The applicant defendant has carried out investigations into the plaintiff's financial circumstances following the refusal to supply any details. It appears that she is a director of a company and she, together with her de facto husband in 1989, paid $105,000 for a home and no doubt to assist in the purchase thereof, they borrowed $70,000 which is secured by a first mortgage over the subject property. At the time of purchase therefore there was an equity of some $35,000 held jointly. The plaintiff is in two Supreme Court actions in which she requires trial by jury. Her de facto husband is the plaintiff in another Supreme Court action in which he claims trial by jury. The present plaintiff is a defendant in a District Court action claiming damages for defamation. It is fair in my view to say that given the litigation in which the plaintiff is presently involved and the absence of any material to the contrary, I am entitled to regard her financial position as being slight. In my view this is one of those rare cases to form a view that the plaintiff's behaviour in litigating in this Court claiming sums of money entirely inconsistent with any damages -- 6 of 7 -- l that she may have suffered in th~ event that does found that she has been defamed the somewhat bizarre conduct of this particular piece of litigation coupled with the failure to seek an apology before launching into litigation, entitles me to form the conclusion that there is an element of abuse of this Court's process present and accordingly I order that on or before 4 p.m. Friday, 15th February, 1991 the plaintiff do give security in the sum of $10,000 to the satisfaction of the Registrar. Applicant defendant's costs be costs in the cause. -- 7 of 7 --