Stein v Scallon, Gorrell v Scallon

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 30 November 2018
• Neutral Citation: [2018] IECA 380
• Date: 30 November 2018
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2018] IECA 380 Record Number: 2017 28 Record Number: 2017 29

BETWEEN/

SUSAN STEIN

PLAINTIFF/RESPONDENT

V

DANA ROSEMARY SCALLON

FIRST DEFENDANT/APPELLANT

AND

TV3 TELEVISION NETWORK LIMITED

SECOND DEFENDANT

BETWEEN/

SUSAN GORRELL

PLAINTIFF/RESPONDENT

V

DANA ROSEMARY SCALLON

FIRST DEFENDANT/APPELLANT

AND

TV3 TELEVISION NETWORK LIMITED

SECOND DEFENDANT

[2018] IECA 380

Whelan J.

Peart J.

Whelan J.

McGovern J.

Neutral Citation Number: [2018] IECA 380

Record Number: 2017 28

Record Number: 2017 29

THE COURT OF APPEAL

Defamation – Damages – Security for costs – Appellant seeking security for costs – Whether security for costs should be provided

Facts: The plaintiffs/respondents, Ms Stein and Ms Gorrell, are mother and daughter. Ms Stein and the first defendant/appellant, Ms Scallon, are sisters. Litigation before the Court of Appeal stemmed from a statement made by the appellant on 14th October 2011 in an interview with the second defendant, TV3 Television Network Ltd. Arising from that interview, on 1st December 2011, the respondents each instituted High Court proceedings seeking damages for alleged defamation including punitive and aggravated damages and sundry reliefs pursuant to the provisions of the Defamation Act 2009 together with interest pursuant to statute and costs. The appellant appealed to the Court of Appeal from the refusal of the High Court to grant security for costs. Eagar J refused to make an order directing that each of the respondents furnish security for the costs of the respective proceedings together with consequential orders as sought in a notice of motion issued on 13th November 2013. The High Court judge delivered his judgment on 30th November 2016.

Held by the Court of Appeal (Whelan J) that the trial judge correctly concluded on the evidence that the appellant had indeed established on affidavit a prima facie defence to the respondents’ claims which was capable of succeeding at trial before a jury. Whelan J held that the respondents failed to discharge the burden of proof with regard to the issue of their impecuniosity. Whelan J held that the trial judge erred in placing reliance on reported excerpts from an affidavit that was not before the court and which was apparently alluded to in a non-relevant Supreme Court decision of years before. Whelan J held that the trial judge erred in entering into an assessment of the merits of the appellant’s defence of truth.

Whelan J held that the appeal ought to be allowed, and that the Court should order that security for costs be provided. Whelan J held that the Court should fix security for costs in the sum of €150,000 to be apportioned between the respondents equally.

Appeal allowed.

JUDGMENT of Ms. Justice Máire Whelan delivered on the 30th day of November 2018

Introduction

1 The respondents are mother and daughter. Susan Stein and Dana Rosemary Scallon are sisters. The parties are accordingly closely related. As with all familial conflict, virtually all of the salient facts in the case are strenuously contested. The litigation before the Court stems from a statement made by the appellant on 14th October 2011 in an interview with the second named defendant TV3 Television Network Limited. Arising from that interview, on 1st December 2011, the respondents each instituted High Court proceedings seeking damages for alleged defamation including punitive and aggravated damages and sundry reliefs pursuant to the provisions of the Defamation Act 2009 together with interest pursuant to statute and costs.

2 This is an appeal by the first named defendant (‘the appellant’) from the refusal of the High Court to grant security for costs. Eagar J. refused to make an order directing that each of the respondents furnish security for the costs of the respective proceedings together with consequential orders as sought in a notice of motion issued on 13th November 2013. The High Court judge delivered his judgment on 30th November 2016. It sets out in detail the litigation history between the parties insofar as germane to the application.

3 On 4th May 2012 a statement of claim was delivered. On 25th May 2012 the appellant's solicitors wrote seeking information regarding assets of the respondents within the jurisdiction. Both respondents are ordinarily resident in the State of Iowa, USA. On 1st June 2012 a letter on behalf of the respondents asserted that the request regarding information on assets within the jurisdiction was premature. In the course of the following year there was further progress with the litigation including the delivery of notice for particulars and a court application on behalf of the appellant to compel replies to a notice for particulars which was ultimately complied with in February 2013. On 10th July 2013 a defence was delivered on behalf of the appellant. On the same date a formal request for security for costs pursuant to Order 29 of the Rules of the Superior Courts was directed to each of the respondents. Following a reminder, a motion for security for costs issued on behalf of the appellant in respect of both respondents on 13th November 2013.

Arguments before the High Court

4 Both motions were heard together. The appellant relied on the provisions of the defences as delivered which included inter alia:

(a) a plea of truth and reliance on s. 16 of the Defamation Act 2009;

(b) a plea of honest opinion and reliance on s. 20 of the said Act;

(c) a denial that either plaintiff was identified;

(d) a denial that either plaintiff had a sufficient reputation in Ireland to bring the proceedings;

(e) the meaning of the words as contended for by the plaintiffs was denied.

5 It appears that at the lengthy hearing of the interlocutory motion, which took three days and resulted in a reserved judgment, there was broad agreement between the parties with regard to the relevant legal principles governing an application for security for costs.

6 It was contended on behalf of the appellant that, inter alia, there was full compliance with the provisions of Order 29, r.1 of the Rules of the Superior Courts. Delays were attributed to the respondents. It was asserted that the appellant had a prima facie defence upon the merits to the matters claimed in the statement of claim. The particulars and details of that defence were set out.

7 A key contention on behalf of the appellant was that the respondents had failed to establish that they had an inability to provide security for costs and had failed to provide any documentation to support their bare assertions in this regard. It was asserted that the respondents had been vague and not forthcoming about their true financial circumstances.

8 In support of the latter contention, it was argued by counsel for the appellant that a compromise and financial settlement had been concluded between the respondents and TV3 but that neither respondent had disclosed, even in broad terms, what monetary sums they had received under the settlement. The appellant also argued before the High Court that a contention on behalf of the respondents that the litigation was ‘in the public interest’ was misguided. The respondents had each offered an after the event insurance policy (ATE insurance) and contended that same was of ‘transcending importance’ to the security for costs application. The appellant contested this, asserting that the significant degree of conditionality attached to the operation of the policies resulted in them failing to provide sufficient security to the appellant to warrant a refusal of an order for security of costs. It was further argued that the structure of the policies amounted to champerty, and accordingly that as a matter of public policy the ATE insurance policies being tendered should not be accepted by the court.

9 On behalf of the respondents it was contended before the High Court that the motion pursuant to Order 29 amounted to a tactical manoeuvre designed to stifle a legitimate claim. It was argued that the application took advantage of the residency of the respondents outside of the EU and their lack of resources. It was emphasised that both respondents had secured after the event insurance which ‘not only demonstrates their own belief in the legitimacy of their cause it removes any possible prejudice which Ms Scallon might suffer should she ultimately win this case. In truth, the presence of this insurance policy should bring this application to an end.’

10 It was argued that a notable feature of the proceedings was that TV3 had apologised to the respondents for the alleged defamation caused from the same interview and had paid ‘a sum in compensation.’

11 In detailed submissions filed on behalf of both respondents in the High Court it was contended that no convincing defence had been articulated by the appellant to the claims of the respondents. Each of the grounds of defence advanced on behalf of the appellant were analysed in light of the relevant jurisprudence, it being contended that no bona fide defence was made out. It was contended that delays on the part of the appellant were a material factor which the court should take into account and went towards refusing the relief being sought.

12 There was a significant disparity between the parties in the High Court as to the projected likely cost of proceedings should they proceed to a hearing. On behalf of the appellant it was contended that €450,000 in respect of security between both sets of proceedings was required. The respondents in a written report from Flynn & O'Donnell dated 26th June 2014 suggested that the total costs would amount to approximately €189,000.

13 It was contended on behalf of the respondents, arising in part from the appellants” reliance on s. 20 of the Defamation Act 2009 in her defence, that the words used by the appellant and which are the subject matter of the defamation suits involve matters of public interest. It was argued that if the court was of the view that this plea amounted to a ...