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Supreme Court 17 January 2019

McLachlan v Browne (No 9)

[2019] NSWSC 10

Sexual offences
CIVIL PROCEDURE

Citation: McLachlan v Browne (No 9) [2019] NSWSC 10
Court: Supreme Court of New South Wales
Date: 17 January 2019
Judge: McCallum J

Background

A plaintiff in two defamation proceedings sought a stay of those proceedings shortly before a four-week jury trial was due to commence in February 2019. The defendants in each action were a fellow performer and a media entity. The only substantive defences pleaded were truth and contextual truth, directed to allegations of sexual misconduct by the plaintiff.

Days before the hearing date, criminal proceedings were commenced against the plaintiff in Victoria. Nine of the ten charges overlapped directly with the allegations underpinning the truth defences in the civil actions. The criminal matter was listed in the Victorian Magistrates Court during the first week of the scheduled civil trial.

The plaintiff applied urgently for a stay of the defamation proceedings until the criminal proceedings were finally determined. Two defendants opposed the application; the third neither consented nor opposed it. The court determined the matter on an expedited basis and delivered judgment ex tempore.

Legal Issues

  • Whether the court should stay civil defamation proceedings where concurrent criminal charges overlap directly with the issues raised in the truth defences.
  • Whether the guidelines for stay applications stated in McMahon v Gould (1982) represent binding or immutable legal principles.
  • How the privilege against self-incrimination should be weighted in the balancing exercise, having regard to the subsequent High Court decision in Reid v Howard (1995).
  • What conditions, if any, should be attached to any stay granted.

Decision

Issue 1: The applicable legal framework

The court confirmed its power to stay civil proceedings where the interests of justice require it, including to protect a party's privilege against self-incrimination (at [5]). The defendants argued the court was bound by the guidelines in McMahon v Gould. The court rejected that submission for two principal reasons. First, the earlier Court of Appeal decision approving McMahon arose from a leave-to-appeal dismissal and does not operate as formal precedent (at [7]-[8]). Second, guidelines for the exercise of a judicial discretion are not immutable statements of legal principle, and the task of adapting such guidelines to the circumstances of each case lies at the heart of the judicial function (at [8]).

The court accepted that the McMahon guidelines remained relevant and were not to be dismissed without consideration, but held that they must be assessed in light of the High Court's subsequent treatment of the privilege against self-incrimination in Reid v Howard (at [17]). In particular, the court found that McMahon underrated the significance of the privilege against self-incrimination, and it declined to apply those guidelines without qualification (at [23]).

Issue 2: The competing considerations

The defendants pressed three principal factors against a stay: delay (with a criminal trial potentially years away), wasted costs already incurred in preparing for the imminent hearing, and the stress and reputational harm being suffered by the individual defendant (at [30]-[36]). The court accepted all three as genuine and weighty considerations, describing the vacation of a hearing so close to the date as a grave matter (at [35]).

Against those factors, the court identified powerful countervailing concerns. If the civil trial proceeded, it would function as a dress rehearsal for the criminal trial given the exact overlap between the criminal allegations and the particulars of the truth defences (at [38]). Any cross-examination of the plaintiff in the defamation proceedings would likely be deployed against him in the criminal trial, engaging the very jeopardy the privilege against self-incrimination is designed to protect (at [38]). The court also found that two separate juries deciding the same factual questions created a serious risk of prejudice that directions alone could not reliably cure (at [39]).

Issue 3: The plaintiff's dilemma and the privilege against self-incrimination

The court found that, if no stay were granted, the plaintiff would face an inescapable dilemma: he would either have to conduct the defamation action with a significant handicap and likely lose, or waive the privilege against self-incrimination (at [41]). The court noted this dilemma arose because the plaintiff himself had commenced the proceedings, but observed that the short limitation period for defamation and the high threshold for extension had constrained his options (at [43]). Importantly, the plaintiff was presumed innocent of all criminal charges, which precluded any assessment of the strength of those charges in the balancing exercise (at [46]).

The court weighed the plaintiff's personal liberty as paramount. He faced ten indictable charges, most carrying maximum terms of ten years' imprisonment, and personal liberty was described as the most fundamental of all common law rights (at [47]). Having assessed all competing considerations, the court was satisfied that the privilege against self-incrimination and the potential prejudice to both the criminal and civil proceedings required that the stay be granted (at [54]).

Issue 4: Conditions on the stay

The court reserved the costs of the application and costs thrown away, finding the timing of the application was not the plaintiff's fault (at [55]). It imposed a condition that any pre-judgment interest awarded to the plaintiff would not accrue during the period of the stay (at [56]). It declined to impose a condition that the proceedings be automatically dismissed if the plaintiff were convicted of any charge, finding such an order would improperly prejudge issues that remained too uncertain to resolve in advance (at [57]-[58]).

Orders Made

  • Proceedings stayed until final determination of the criminal proceedings commenced in the Magistrates Court of Victoria.
  • Costs of the application and costs thrown away reserved.
  • Pre-judgment interest not to accrue for the period of the stay.
  • Application for automatic dismissal on conviction of any charge refused.

Key Takeaways

  • Guidelines stated in McMahon v Gould for stay applications involving concurrent criminal proceedings are not binding statements of legal principle. A court must adapt those guidelines to the circumstances of each case, and cannot apply them in a manner inconsistent with subsequent High Court authority, particularly Reid v Howard (at [8], [14]).

  • Where civil and criminal proceedings share an exact factual overlap, proceeding with the civil trial creates a structural risk that cross-examination of the plaintiff will become a tool in the criminal trial, engaging the core purpose of the privilege against self-incrimination (at [38]).

  • The existence of a separate civil jury verdict on the same facts as a criminal charge presents prejudice that jury directions alone may not adequately address, distinguishing such cases from ordinary pre-trial publicity concerns (at [39]).

  • Significant delay, substantial wasted costs, and harm to an individual defendant are all legitimate and weighty factors in a stay application, but they did not outweigh the plaintiff's privilege against self-incrimination where his personal liberty was at stake on serious indictable charges (at [35], [47], [54]).

  • Courts may attach conditions to a stay, including suspending the accrual of pre-judgment interest. However, a condition requiring automatic dismissal of proceedings upon conviction is inappropriate where the relationship between particular charges and the civil claims remains too uncertain to be prejudged in advance (at [56]-[58]).

Legislation and Cases Referenced

Legislation
- Civil Procedure Act 2005 (NSW), part 6
- Criminal Procedure Act 2009 (Vic), ss 28 and 29
- Evidence Act 1995 (NSW), s 128
- Limitation Act 1969 (NSW), s 56A
- Crimes Act 1958 (Vic)

Cases
- Australian Securities Commission v Kavanagh (1993) 12 ACSR 69
- Commissioner of Australian Federal Police v Zhao (2015) 225 CLR 46; [2015] HCA 5
- Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581; [2009] NSWCA 347
- Flegg v Hallett [2015] 1 Qd R 191; [2014] QSC 220
- Glenister v R [1980] 2 NSWLR 597
- Griffin v Sogelease Australia Ltd [2002] NSWCA 421
- Gypsy Fire v Truth Newspapers Pty Ltd (1987) 9 NSWLR 382
- Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26
- Kanaan v R [2006] NSWCCA 109
- McMahon v Gould (1982) 7 ACLR 202
- Reid v Howard (2005) 184 CLR 1; [1995] HCA 40
- Williams v R (1986) 161 CLR 278; [1986] HCA 88