Palavi v Radio 2UE Sydney Pty Ltd

ALLSOP P: The applicant for leave to appeal, the appellant if leave be granted, complains about the striking out of two imputations in her statement of claim for defamation on the grounds of her failure to comply with discovery obligations. The respondent seeks leave to cross-appeal to have the remaining imputations in the applicant's statement of claim struck out, with the effect that the proceedings below would be dismissed in their entirety. An appreciation of why the appeal and cross-appeal should be dismissed necessitates a close examination of the factual and procedural context of the orders of the primary judge (Colefax DCJ). I have come to the view that whilst there were some errors in the findings that his Honour made, nevertheless, because of the legitimacy of fundamental findings of fact by the primary judge, the same orders should be made by this Court on a re-exercise of the discretion.

The relevant failure on the part of the applicant concerned the discovery (or lack thereof) of five mobile phones. Those phones are described in the evidence and will be referred to in these reasons as the black and gold Nokia, the red Nokia, the Prada phone, the first iphone and the second iphone. Only the last of those (the second iphone) is currently in the possession of the applicant. The black and gold Nokia and the Prada phones ceased to be in the applicant's possession before the commencement of the proceedings, but in circumstances not shown to amount to any procedural default of the applicant. The red Nokia and the first iphone were found by the primary judge (correctly in my view) to have been disposed of in defiance, and to avoid the consequences, of the applicant's discovery obligations. The last two phones (the first and second iphones) came into the possession of the applicant after the commencement of the proceedings. I will seek to integrate the chronology of procedural matters with the findings of the primary judge and any relevant evidence about the five telephones in question.

On 4 April 2009, the applicant, Ms Charmyne Palavi, was interviewed by a television journalist from the Australian Broadcasting Commission (the "ABC") which was making a "Four Corners" programme that concerned the off-field behaviour of a sexual nature of professional rugby league players. The programme went to air on 11 May 2009. Some of the interview with Ms Palavi went to air; some was edited out. All the interview was in evidence before the primary judge.

Three days after the ABC broadcast, on 14 May 2009, a radio compere, Mr Steven Price, employed by the respondent, was speaking with a reporter, Mr Peter Ford, on air, about the "Four Corners" programme. The discussion had begun with the treatment of another former footballer in the news and his ceasing to appear on a television programme concerned with rugby league because of his conduct, that had a sexual character. When the subject turned to the "Four Corners" programme, the transcript of the exchange recorded Mr Ford referring to "that lady Charmaine Pahlavi (sic)" and the following exchange on air, between Mr Ford and Mr Price (Red Book pp 11-12): "13 STEVE PRICE: Yes. 14 PETER FORD: ... who sets herself up as some kind of match maker or madam or something. Now she claims that ... 15 STEVE PRICE: Can I use another word? 16 PETER FORD: Yeah. 17 STEVE PRICE: Slut. 18 PETER FORD: Yeah. She sets herself up to do this stuff and to put people together, presumably all willing participants, except she's claiming that there are NRL players who are seeking out underage girls, and one particular player's house is where they meet and where the underage sex takes place. Now if she has this information, well for a start the media should be onto it, and secondly the police ought to be onto it as well because she's claiming she has knowledge of NRL players having sex with underage girls in a very organised fashion. 19 STEVE PRICE: Yeah well the police ought to investigate that." (The numbers on the left were placed on the copy of the transcript attached to the statement of claim and relate to particulars in the pleading.)

On 27 July 2009, the applicant sued the respondent in the Defamation List of the District Court. Paragraph 3 of the statement of claim alleged that the matter complained of (set out above) conveyed or was understood to have conveyed four imputations, with one in the alternative, as follows: "(a) The plaintiff is a slut (paragraph 17) (b) (i) The plaintiff is a Madam (14) OR (ii) The plaintiff runs a brothel (14) (c) The Plaintiff puts NRL players and underage girls together for sex (18) (d) The plaintiff condones NRL players having sex with underage girls in a very organised fashion (18)." (The numbers on the right are the paragraphs referred to above.)

A defence was filed on 12 November 2009. Paragraph 3 of the defence denied that the matter complained of was or was capable of being defamatory of the plaintiff in the sense of the imputations or otherwise and denied that the material complained of was capable of conveying or did convey or was understood to convey the pleaded imputations. Special defences of truth, contextual truth and honest opinion were then pleaded.

Substantial truth was pleaded to imputation (a) (the plaintiff is a slut).

Contextual truth was pleaded in the event that the Court were to find any of the imputations were made and were defamatory, in the following terms: "(a) each of the plaintiff's imputations which is not found to be substantially true was published contextually to the plaintiff's imputation 3(a); (b) by reason of the substantial truth of the plaintiff's imputation 3(a) publication of such of the plaintiff's imputations as are not found to be substantially true did not further harm the reputation of the plaintiff; (c) further, and/or in the alternative, each of the plaintiff's imputations were published contextually to the following imputation of and concerning the plaintiff (the defendant's contextual imputation): i. That the plaintiff boasted about her role in arranging sexual liaisons for NRL footballers. (d) the defendant's contextual imputation was substantially true; (e) by reason of the fact that the defendant's contextual imputation was substantially true, the plaintiff's imputations did not further harm the reputation of the plaintiff."

The particulars provided of substantial truth to imputation (a) (the plaintiff is a slut) were three typed pages. It is necessary to set them out in full. I have removed the names of third parties referred to in the particulars. "(a) the plaintiff deliberately seeks out sexual liaisons with many NRL Footballers including particularly NRL footballers much younger than she is: (i) in an article authored by the plaintiff headed 'NRL's biggest groupie tells her secrets' published in the Daily Telegraph on or about 19 May 2009, and the Townsville Bulletin on 23 May 2009, the plaintiff said 'I don't deny I've had liaisons with many, many footballers ... I'm no angel.'; (ii) on a live blog on 2 September 2009 the plaintiff said 'We are all attracted to a type of male. I couldn't care less if they played in the local league. It's just that footy bloke.'; (iii) in an interview on Brisbane Radio Station 97.3FM on 13 May 2009, the plaintiff said 'I have slept with footballers. You know that has been documented in the media in the past. ... I have had liaisons with footballers in the past ...'; (iv) the plaintiff, in the company of another woman, regularly attended nightclubs and hotels frequented by footballers in order to engage in sexual liaisons with them and arrange sexual liaisons between other women and footballers; (v) the plaintiff is regularly contacted by footballers asking her to arrange sexual liaisons; (vi) in an interview on Brisbane Radio Station 97.3FM on 13 May 2009 the plaintiff said 'whenever a footballer suddenly becomes single or something I receive a message from my Facebook and you know they can easily look up my name and they go, hi Charmyne have you got any girls for me? and things like that. I had [...] contact me on my Facebook ...'; (vii) footballers with whom the plaintiff has had sexual relations include [...] (who is 16 years younger than the plaintiff and who entered into a sexual relationship with the plaintiff when he was approximately 21); [...] (who is 13 years younger than the plaintiff and had a sexual relationship with the plaintiff when he was approximately 24); [...] (who is 5 years younger than the plaintiff and had a sexual relationship with the plaintiff when he was approximately 32); [...]; [...]; and an 18 year old with whom the plaintiff was having a sexual relationship in or about mid 2008. (b) the plaintiff has engaged in sexual relationships with footballers who had girlfriends, were engaged to be married and were married. The plaintiff then publicised these relationships, causing embarrassment for the footballers and their partners involved: (i) the plaintiff in or about late 2008 had a sexual relationship with [...] at a time when he was engaged to be married to [...]. The plaintiff publicised this relationship and later sent abusive messages through Facebook to [...'s] fianc e referring to the sexual liaison; (ii) the plaintiff posted photographs of herself kissing [...] on her Facebook page and examining a tattoo on his bare chest. The plaintiff alluded to a sexual relationship with him when she responded 'He didn't mention it at the time' to a question about whether [...] 'had a missus'. In fact at that time [...] was in a relationship with long term girlfriend [...]. (c) the plaintiff has actively sought to publicise her sexual relationships with footballers and boasted about her multiple sexual relationships with NRL footballers: (i) the defendant repeats particulars (a)(i), a(iii) and a(vi) above; (ii) the plaintiff publicised her sexual relationship with [...] on her Facebook page in or about March 2008; (iii) the plaintiff gave an interview to the Courier Mail in February 2008 about her sexual relationship with [...]; (iv) the plaintiff publicised her sexual relationship with [...]. She told the London Sun and/or the Daily Telegraph on or about 5 November 2008 'He's a ten between the sheets and has a great body for an old guy. He was like a machine'; (v) on her twitter account on 18 May the plaintiff posted a message 'shag a footy player hun and then your name will be all over the world'; (vi) the plaintiff told Four Corners in or about May 2009 that she slept with footballers in the following circumstances: 'I'm not drunk or on drugs and it's in, has an element of class to it do you know what I mean? It's either in the privacy of my own bedroom, or a hotel room, or their house ' (d) the plaintiff has published numerous photographs of herself on the internet and/or Facebook and/or elsewhere in provocative poses and wearing skimpy clothing. The defendant relies on: (i) the photographs the plaintiff placed on her Facebook page in 2008, including a photograph of her receiving a spray tan whilst wearing a bikini that covered only a small portion of her breasts; (ii) the cover photograph of the plaintiff on 'People' magazine in late 2008; (iii) the photographs of her in compromising positions with footballers and other women posted on Facebook in 2008; (e) the plaintiff appeared semi-naked in a 'documentary' film titled 'Happy Birthday Charmine' in 2008. (f) the plaintiff has a large number of footballers, including [...], [...] and [...] as friends on her Facebook page; (g) the plaintiff engages in coarse, vulgar and vicious behaviour, including the following: (i) following her sexual relationship with [...] the plaintiff changed her Facebook status to '[...] you low life piece of shit payback is a bitch and that bitch is me'; (ii) the plaintiff sent abusive messages through Facebook to [...], who was at the time engaged to [...]. (iii) on or about 20 July 2008 the plaintiff was arrested and charged for public nuisance after describing police as 'cocksuckers' who should get a life and engaging in a verbally abusive tirade against police. This occurred in the early hours of the morning outside Flinders nightclub Townsville. The plaintiff was subsequently fined $200; (iv) the plaintiff regularly engages in sending and receiving quasi-pornographic texts and images on her mobile phone; (v) the plaintiff in an interview with the Courier Mail in February 2008 said that 'she's been hit on by a number of players through her MySpace page and that [...] was among several players who sent her graphic messages and images'; (vi) the plaintiff in June 2009 said about a woman who had been involved in an incident with the footballer [...]: 'She's nothing but a groupie, meeting him on Facebook like all the rest.'; (vii) in an interview on Brisbane Radio Station 97.3FM on 13 May 2009 the plaintiff called the female host a 'fucking idiot'. (h) the defendant will provide further particulars after discovery and interrogatories."

The particulars of the respondent's contextual imputation (that the applicant boasted about her role in arranging sexual liaisons for NRL footballers) were as follows: "(a) The plaintiff told Four Corners in an interview in or about May 2009 that she received many calls from women asking her to set them up with football players and that footballers contacted her saying 'you know I'm getting a lot of friend requests from your page, they're all female, they're all hot, keep them coming'; (b) The defendant repeats particulars A(a)(i); A(a)(iii); A(a)(vi); A(b)(i); A(b)(ii); A(c)(i); A(c)(ii); A(c)(iii); A(c)(iv); A(c)(v); A(f) and A(g)(v) above; (c) the defendant will provide further particulars after discovery and interrogatories."

In order to understand the debate about the defaults of the applicant concerning discovery it is critical to appreciate what the applicant said to the "Four Corners" journalist. The primary judge referred to the contents of the interview at [13] of his reasons: "However, not all of the plaintiff's interview was included in the broadcast. Some, at least, of the non-broadcast material (the out takes) recorded the plaintiff discussing with the journalist the contents of a black and gold Nokia mobile phone. The plaintiff showed the journalist some, and spoke of other, text messages and photos stored on the phone. The subject matter of the text messages and the photos was clearly sexually explicit. The plaintiff twice told the journalist (specifically in this context of such messages and photos) that the black and gold Nokia was not her only phone - she had at that time 'other phones' (note, not 'another phone'): 'This is just this phone, you know, and this is only a new phone, but I have other phones and, like the players have a couple of phones, but I have other phones and I've had other phones in the past with several NRL players sending me pictures, even AFL players.' The plaintiff told the journalist that she had had the black and gold Nokia for only a few months and that already she had many photos on it (notwithstanding that she had deleted many other photos). The plaintiff told the journalist that photos take up a lot of memory on a mobile phone."

We were provided with a DVD of the interview. The primary judge's summary is accurate.

The transcript of the programme included the following dealing with mobile phones, after Facebook was discussed with the applicant (recalling that the journalist and the applicant had the black and gold Nokia before them at the time): "SARAH FERGUSON: After Facebook comes the phone. CHARMYNE PALAVI: They ask you for your phone number, then it's funny they send you a photo, like they're very quick to send you a photo and these aren't photos of their just their face because you already know what they look like. (Excerpt of footage of Charmyne showing pictures she has received on her phone) SARAH FERGUSON: Charmyne's been getting texts all afternoon from different NRL players. SARAH FERGUSON: Ah right. That's pretty full on. Sorry. CHARMYNE PALAVI: This? I know. That's what you get heaps of. SARAH FERGUSON: You're kidding. Sorry. The messages are pornographic. CHARMYNE PALAVI: That's what they send the most of. You're very hard pressed to get a picture of them just with no shirt on."

At [14] of his reasons, the primary judge found that when the applicant participated in the ABC interview, she had three phones: (a) a black and gold Nokia that was relatively new and the subject of the discussion with the ABC journalist; (b) a Prada and a red Nokia that were the "other phones" that "I have", as referred to by the applicant in the discussion with the ABC journalist.

At [20]-[23] of his reasons the primary judge said: "[20] It is clear from the out takes of the interview that the black and gold Nokia contained sexually explicit text messages and photographs. [21] It is equally clear in my opinion that on the balance of probabilities the plaintiff's reference in the out takes to 'other phones' meant the other two phones which the plaintiff had (i.e. the Prada and the red Nokia) also contained sexually explicit text messages and photographs. [22] My conclusion in this regard in relation to the Prada phone is reinforced by the fact that it had the same telephone number as the black and gold Nokia which makes it probable they were interchangeable. [23] My conclusion in relation to the red Nokia is reinforced by the facts that: (a) the plaintiff conceded in cross-examination ... that, contrary to her affidavit, the phone was not exclusively used for communications between herself and her now husband; and (b) when the red Nokia was replaced by the first Apple iphone, that replacement phone was referred to in one of the plaintiff's List of Documents - an admission in my opinion that it (the replacement phone) contained relevant material; and I find on the balance of probabilities so did the phone it replaced (viz the red Nokia)."

These findings that the Prada and red Nokia phones contained sexually explicit material were attacked in this Court. I will deal with those arguments in due course. It is convenient at this point to say, however, that the only conclusion possible from what the applicant said to the ABC journalist is that the other two phones had sexually explicit material on them. This can be taken from the discussion with the journalist of sexual activity and photographs sent by some NRL and AFL players of an explicit character. For instance, the interviewer asks the applicant why she thought some players sent pictures of their penises and whether some girls would like that. The applicant made clear that there had been a large number of messages including photographs sent to her, although she had deleted some because of reasons of space.

It is also relevant to appreciate that the applicant stated to the ABC journalist that she had many photographs on the black and gold Nokia within a short time (months) of owning it. This is relevant to the likely content of the first iphone dealt with below.

The matter was listed for directions for the second occasion on 4 September 2009. No defence had been filed. A provisional hearing date of 13 September 2010 was set. The fourth directions hearing took place on 13 November 2009, the defence having been filed the day before. On 13 November 2009 "a general order for discovery was made" ([6] of the reasons of the primary judge). This order required the applicant to give discovery on or before 21 December 2009 ([24] of the reasons of the primary judge). I note at this point that the Uniform Civil Procedure Rules 2005 (NSW) (the "UCPR"), Pt 21 dealing with discovery, no longer provide for general discovery, but provide for discovery of classes of documents as specified in the order for discovery: r 21.2. Further, by reference to the definition of "excluded document" in r 21.1(1), "any document that wholly came into existence after the commencement of proceedings" will not be the subject of discovery obligations: r 21.1(1)(c). No point was taken about either of these matters at the time the orders were made, or in argument below. It was not argued in this Court that the order was not effective to require obedience. I will return to the necessary extent of that obedience in due course.

The applicant denied being told of the order on that day. The primary judge, at [6] of his reasons, made findings as to the applicant being told of her discovery obligations: ".... in the absence of any evidence from the plaintiff or her solicitors to the contrary, it is highly likely that within a very short period of time of the order for discovery being made the plaintiff's solicitors did inform their client precisely of what was involved in such an order - particularly as the court's order required discovery to be given by 21 December 2009. I therefore find that on or about 13 November 2009 the plaintiff had been fully and properly advised as to her obligations for discovery. I also find that, absent any evidence to the contrary, she was similarly fully and properly advised on the many subsequent occasions ... when further discovery orders were made."

No complaint was directed to these findings. They encompass the finding that the applicant knew that she was obliged to discover her red Nokia phone if it had sexually explicit photographs on it.

On 13 November 2009 (the day of the fourth directions hearing), the solicitors for the respondent sent a letter to the applicant's solicitors concerned with the question of discovery. The letter said (Blue Book Vol 2 p 607): "You have now been served with our client's defence which contains extensive particulars in support of the defences of truth and contextual truth. It will be apparent from those particulars that a large portion of the material that we will be relying upon in order to make out our defences comprises material on your client's mobile phone and/or Facebook and/or MySpace pages. All of that material is clearly discoverable by your client, and we write to put you on notice that we will be pressing for discovery of it. In the circumstances, we ask you to make it clear to your client that she is not to delete or destroy any of this material. At the appropriate time, we will engage consultants to examine relevant material stored on your client's mobile phone and her computer."

After referring to this letter at [8] of his reasons, the primary judge said the following at [9]: "At no stage in the voluminous correspondence which followed did the plaintiff's solicitors dispute the appropriateness of what was contained in that letter."

Given the proximity of [6], [8] and [9] to each other in the reasons of the primary judge, I would conclude that his Honour found that the advice to the applicant about "her obligations for discovery" (see [6]) included the matters in the letter of 13 November 2009.

It is to be recalled that at the time of the ABC interview (and so before proceedings commenced) there were three phones: the black and gold Nokia, the Prada and the red Nokia. These were the phones that the primary judge concluded were referred to by the applicant in the interview, and there can be no doubt as to the correctness of that conclusion.

The applicant gave evidence in the application before the primary judge which his Honour set out at [15] of his reasons that between 4 April 2009 (the date of the interview) and 11 May 2009 (the date of the "Four Corners" programme going to air) "the black and gold Nokia was lost after she left it on the roof of her car, from where it fell after she drove off - and has subsequently not been found". As to the Prada phone, the applicant's evidence to which his Honour referred in [16] of his reasons, was that in the same period (4 April to 11 May 2009) that phone "'crashed and stopped working' and was placed by her in a recycle bin".

The primary judge found at [19] of his reasons that the black and gold Nokia and the Prada phones had the same telephone number and service provider.

As to the red Nokia phone, the applicant's evidence, referred to by the primary judge at [17] of his reasons, was that this phone "was replaced in December 2009 by an Apple iphone; and the red Nokia placed in a recycle bin at that time".

Thus, on the findings of the primary judge, having been made aware of the legal obligations to discover the red Nokia phone, it was disposed of by the applicant.

The first iphone that the applicant said replaced the red Nokia phone was said by the applicant to have been damaged on 3 or 4 May 2010 when someone in a hotel in Brisbane spilt a drink into her handbag. At [28] of his reasons the primary judge recounted: "On 3 May 2010 the plaintiff says she was in a hotel in Brisbane and the first Apple iphone was in her handbag '... and someone spilt a drink on me and the drink went over me and into my handbag ... My iphone was immediately unusable ...'. The plaintiff says that the next day she replaced the iphone with another Apple iphone. The first iphone was placed in the recycle bin at the shop."

Thus, the second iphone came into the applicant's possession.

It is to be noted that the mobile phones were all "documents" within the definition of the Interpretation Act 1987 (NSW), s 21 (which is the same as the relevant definition in the Dictionary to the Evidence Act 1995 (NSW)). The two iphones, however, were "excluded documents" for the purposes of the discovery provisions of the UCPR, Pt 21.

Meanwhile, on 22 April 2010, before the first iphone was said to have been made inoperable by the spilt drink, the applicant's solicitors filed an unverified list of documents. No phone was mentioned in the list (Part 1 or Part 2). At [25]-[27] of his reasons, the primary judge recounted the procedural events from 22 April to 30 April as follows: "[25] The plaintiff did not provide a list of documents as ordered by 21 December 2009. Rather, on 22 April 2010 the solicitors for the plaintiff sent a List of Documents (unverified) to the defendant. The four month delay has not been explained. There was no suggestion that the document was a draft - it merely required verification. The documents discovered in this list only identified documents in possession of the plaintiff (Part 1). That schedule made no reference to any mobile phone; and there was no Part 2. [26] On 28 Aril 2010 the solicitors for the defendant wrote to the solicitors for the plaintiff amongst other things complaining that no discovery had been given of the plaintiff's mobile phone. [27] On 30 April 2010 another order for discovery was made by the court. The plaintiff was to give discovery by 14 May 2010."

Thus, by 30 April 2010, the applicant knew that another order had been made for discovery, again consequent upon complaints about her failure to discover any mobile phone. In this context, the primary judge, at [30] of his reasons, recounted events concerned with the applicant's Facebook page on 4 May 2010: "On 4 May 2010 the following two entries were posted on the plaintiff's Facebook. The first was posted at 3:18 pm: 'Charmyne Ellen Palavi this is gonna sound stupid but how do I get pics off my iphone that I don't want? Like ones that have synced from computer?'"

On 14 May 2010, the applicant's solicitors wrote to the respondent's solicitors stating that counsel had only just advised them of the new date for discovery. They said (Blue Book Vol 2 p 614): "Our client is in course (sic) of preparing the Amended List but unfortunately, due to the late notice of the deadline, there will be some delay."

No mention was made of the damage to the first iphone (on 3 or 4 May 2010 in the Brisbane hotel). The respondent's solicitors replied on the same day, saying (Blue Book Vol 2 p 615): "While we note your immediate difficulty we are surprised and concerned by your client's abject failure to comply with her obligations. We advised you on 13 November 2009 of relevant material that would be required to be included in your client's list of documents. It would seem she has done nothing during the course of six months despite the fact that the final hearing date is drawing closer. Would you please ensure that this failure is remedied forthwith, and within seven days at the latest. We put you on notice that we anticipate being instructed to seek peremptory orders that your client's claim be struck out should the breach continue."

On 20 May 2010, a second unverified list of documents was sent by the applicant's solicitors to the respondent's solicitors. The primary judge addressed this at [32] of his reasons, saying: "By letter dated 20 May 2010 the solicitors for the plaintiff served another unverified List of Documents. Again on its face, it did not purport to be a draft or subject to instructions; it was merely unverified because the plaintiff was living in Queensland. Again, this document contained only Part 1 - which did not contain any reference to any mobile phone. There was no reference in the letter of 20 May 2010 to the events of 3 or 4 May 2010."

On 21 May 2010 a third order for discovery was made to be complied with by 24 May 2010.

On 28 May 2010, the respondent's solicitors wrote a two-page letter to the applicant's solicitors. The letter contained complaints about a number of aspects of discovery, asserting that there had been a failure to disclose a wide range of documents. Relevant to the application before the primary judge was the assertion (Blue Book Vol 2 p 621) that there had been a failure to disclose: "... (f) Photos and messages relevant to proceedings stored on the plaintiff's mobile phone ..." The letter concluded (Blue Book Vol 2 p 621): "We remind you that on 13 November 2009 we wrote to you and put you on notice that we would be pressing for discovery of this material. Six months later the discovery provided is manifestly inadequate and the trial is now only four months away. Please confirm that you will provide an amended list of documents within 7 days, failing which we will file a motion for further discovery (including orders granting experts retained by our client access to your client's hard drive) and seek a hearing date for argument when this matter is before the Court on 4 June 2010."

On 31 May 2010, the applicant's solicitors wrote in answer to the letter of 28 May 2010 and stated only the following to the respondent's solicitors (Blue Book Vol 2 p 622): "Thank you for your letter of 28 May 2010. We have been provided with an additional CD which we are instructed contains entries from the Facebook page of Charmyne Ellen Palavi. This CD is available for collection or delivery subject to your undertaking to return it within seven days."

At [35] of his reasons, the primary judge noted the following about this letter: "... This was a third letter written to the solicitors for the defendant on the topic of discovery following 3 May 2010 and, again, no reference was made in the letter to the alleged events of 3 or 4 May 2010."

His Honour continued at [36]: "On 2 June 2010 the solicitors for the plaintiff again wrote to the defendant's solicitors on the topic of discovery and again there was no reference to the events of 3 or 4 May 2010."

The matter returned to the District Court on 4 June 2010. The chronology from then to mid-July 2010 was recounted by the primary judge at [37]-[42] and [47] as follows: "[37] On 4 June 2010 the court made its fifth order in connection with discovery. On this occasion the solicitors for the defendant foreshadowed that a Notice of Motion to strike out the pleadings would be filed. Consistent with that indication the defendant's solicitors filed a Notice of Motion on 4 June 2010. The first prayer for relief was: '1. The plaintiff provide further discovery in accordance with categories (a) to (h) in the letter sent [by the defendant's solicitors to the plaintiff's solicitors] of 28 May 2010' - that category included the category (f) to which I have referred in paragraph 34 above. The return date for the Notice of Motion was 25 June 2010. On that date the Notice of Motion was adjourned and listed for hearing on 2 July 2010. [38] The day before the hearing of the Notice of Motion (1 July 2010) the solicitors for the plaintiff served another list of documents. The covering letter serving the list yet again made no reference to the events of 3 or 4 May 2010; and the list itself in Part 1 made no reference to any mobile phone; and there was no Part 2. [39] On the morning of the hearing of the Notice of Motion, the solicitors for the plaintiff wrote to the solicitors for the defendant consenting amongst other things, to the first prayer for relief in the Notice of Motion and, later that day, the court made consent orders including: '1. The plaintiff provide further discovery in accordance with categories (a) to (h) in the letter sent by [the solicitors for the defendant to the solicitors for the plaintiff] of 28 May 2010.' [40] On 16 July 2010 the solicitors for the plaintiff served a further List of Documents entitled 'Plaintiff's Amended List of Documents'. [41] Of significance in this List is the fact that for the first time it included 'Part 2: Documents that are not, but within the last six months prior to the commencement of the proceedings have been, in the possession of the plaintiff'. [42] Item No 5 in Part 2 was: Item No Nature of Document/s No of Doc'ts in Group (if applic.) Date/ Period Name of Person Who Deponent Believes Has Possession ... ... ... ... ... 5 Mobile telephone - SMS Not known. 3 May 2010 Three (3) ... [47] On 19 July 2010 a certified and verified version of the Amended List of Documents was served by the plaintiff."

On 26 July 2010, the solicitors for the respondent wrote a three-page letter to the solicitors for the applicant that contained numerous complaints about discovery, dealing with "Facebook" and "MySpace" records. The letter included the following about para (f) of the letter of 28 May 2010 (Blue Book Vol 2 pp 648-649): "11. Order 1 dated 2 July 2010 and paragraph (f) of our 28 May letter require your client to give discovery of 'photos and messages relevant to the proceedings stored on [your client's] mobile phone'. On 13 November 2009 we put you on notice that our client would require discovery of that material. On 13 November 2009 and 30 April 2009 Gibson DCJ made orders for discovery. Item 5 of Part 2 of the Amended List states that your client had 'mobile telephone sms' as at 3 May 2010 but does not now have them. 12. Are we correct in assuming, therefore, that your client has destroyed this material on about 3 May 2010, notwithstanding our client's discovery request and the orders of the court? Please confirm what the position is as a matter of urgency. 13. In the circumstances, please identify the three persons who are in possession of those messages and confirm the identity of your client's mobile telephone telecommunications carrier."

The respondent then filed on 19 August 2010 the notice of motion that sought the following relief: "1. The Plaintiff be cross-examined on the adequacy of discovery. 2. Pursuant to Rule 13.4 (1)(c) of the Uniform Civil Procedure Rules 2005, that the proceedings be dismissed as they are an abuse of process of the Court. 3. Alternatively, that the proceedings be stayed until orders of the Court for discovery by the Plaintiff have been complied with. 4. Alternatively, the Plaintiff give further discovery. 5. Such further or other orders as the Court thinks fit. 6. Costs."

In support of the motion, the respondent filed an affidavit affirmed on 19 August 2010 by Natalie Buck, a solicitor acting on the matter for the respondent. The affidavit annexed correspondence with the solicitors for the applicant requesting discovery, dealt with asserted inadequacies in respect of preservation and discovery of material on the applicant's Facebook and MySpace pages and annexed pages of the transcript from the "Four Corners" programme with the ABC journalist.

As one would expect, Ms Buck's affidavit did not purport to set out all the evidence that was available, otherwise, to support the defences; rather it sought to address the various claimed deficiencies in the applicant's discovery, including concerning mobile phones.

On 26 August 2010, the solicitors for the applicant wrote to the solicitors for the respondent and addressed the matters in Ms Buck's affidavit. The letter (Blue Book Vol 2 p 720) began with the sentences: "The plaintiff has discovered everything that she has. She takes her obligations seriously." One takes from this that the solicitors had clearly explained to the applicant her legal responsibilities in this regard.

The letter (Blue Book Vol 2 p 721) dealt with the Facebook and MySpace complaints. As to the telephone, the letter then stated: "As to your apparent complaint about the Telephone SMS. We note that Ms Palavi's telephone was destroyed in an accident on 3 May 2010. The telephone and its data were irrecoverable. Hence the reference in Part 2 of the Plaintiff's Amended List of Documents. It is not rocket science to work out that '3' is a reference to the well known mobile telephone network run by Hutchison Telecom - your suggestion otherwise is ridiculous. Please feel free to subpoena them also." The letter concluded: "We will not be serving an affidavit. You should include this letter in the bundle that is to be given by you to the Judge on Friday, 27 August 2010 . Please inform us on that day of each document that you provide to the Judge. Your attempts to manufacture an adjournment of the trial are of considerable concern to the plaintiff. Be on notice that if your motion is not successful we will seek the costs of it to be assessed and payable forthwith on the indemnity basis." (Emphasis in original.)

The primary judge, at [52] of his reasons, made the following comments about this letter: "This was the first time that the plaintiff had indicated that her mobile phone had been 'destroyed' in an accident on 3 May 2010. No explanation was provided as to why the telephone had not been discovered between November 2009 and the date of the alleged accident. No explanation was provided as to why the destruction of the phone was not earlier communicated to the defendant's solicitors. No explanation was provided as to why the alleged damaged phone was placed in a recycle bin rather than being made available to the defendant's solicitors. As I have earlier said, the circumstances clearly called for a full and satisfactory explanation of these matters."

No complaint was made of these comments on appeal. I should add at this point that I do not take the primary judge to be criticising in any way the solicitors for the applicant. I would conclude that the solicitors were told of these matters shortly prior to 26 August 2010.

Two other affidavits of Ms Buck were filed. It is unnecessary to deal with their contents.

On 31 August 2010, the solicitors for the respondent wrote to the applicant's solicitors. At [53] his reasons the primary judge said of this letter: "On 31 August 2010 the solicitors for the defendant wrote to the plaintiff's solicitors. Relevantly that letter: first, complained that discovery had not been made of that phone between 22 April 2010 and 3 May 2010 (and, I would add, from November 2009 to 3 May 2010); and secondly, drew to the attention of the plaintiff's solicitors the part of the out takes of the plaintiff's interview with the ABC on 4 April 2009 ..."

The motion came on for hearing on 3 September 2010. It is unnecessary to deal with the debate on that day over 62 pages of transcript. As described in [54]-[55] of the reasons of the primary judge, the day concluded with a further order for discovery (by consent): "[54] I commenced the hearing of that Notice of Motion on 3 September 2010 at the conclusion of which the parties prepared Short Minutes of Order incorporating conclusions I had expressed during the course of the hearing (neither party required reasons). [55] The relevant orders in the Short Minutes were as follows: '1. The plaintiff to provide Verified Discovery by 5 p.m. on Thursday 9 September 2010 of: ... (b) all texts and images held on all mobile phones: (i) of a sexual nature; or (ii) relating to meetings between women and footballers ... 2. Stand the defendant's Notice of Motion dated 19 August 2010 over to 13 September 2010.' (the trial date)"

At [56] of his reasons, the primary judge described the response to the order of 3 September: "On 9 September 2010 a document entitled 'Plaintiff's Supplementary List of Documents' purportedly made pursuant to my orders of 3 September 2010 was certified by the plaintiff's solicitor and verified by the plaintiff. The supplementary list had no relevant additional document in either Part 1 or Part 2 insofar as telephones were concerned."

At [57]-[60] of his reasons, the primary judge explained what happened on 13 September on the renewed hearing of the matter: "[57] On the morning of the trial on 13 September 2010 Mr R. McHugh SC who with Ms P Sibtain appeared for the defendant renewed that party's application to strike out the Statement of Claim on the basis that the orders I had made on 3 September 2010 had not been complied with - and in the context of longstanding alleged non-compliance by the plaintiff with orders for discovery. Mr McHugh read a further affidavit in support of his application and tendered a number of documents. Mr Evatt who appeared with Mr Rasmussen for the plaintiff, also tendered some documents. [58] Mr McHugh then commenced his address at the conclusion of which Mr Evatt commenced his submissions. During the course of his submissions Mr Evatt sought leave ... to re-open his case for the purpose of getting the plaintiff to swear an affidavit explaining 'what was on the phones and why they haven't been in a list of documents' (T52:25). [59] Over the objection of senior counsel for the defendant, I granted the application and a short adjournment was taken whilst the affidavit was prepared. I pause to observe that such an affidavit should have been prepared in accordance with the directions I gave on 18 August 2010; and no adequate explanation was forthcoming as to why it had not been prepared earlier. I nevertheless gave the leave because of the possibly serious consequences to the plaintiff if it had been refused. [60] Ultimately later that day the plaintiff filed and served an affidavit. In it she referred to the black and gold Nokia and, for the first time, to the Prada and red Nokia mobile phones. Also, for the first time, she specifically referred to the two Apple iphones and provided an explanation as to what had happened to the first of those iphones. According to the plaintiff's affidavit none of those 5 mobile phones (except for the latest iphone) was any longer in her possession."

The affidavit affirmed by the applicant on 13 September 2010 (Blue Book Vol 2 pp 585-586) was in the following terms: "... 2. I have owned mobile phones for approximately seventeen years. 3. They are replaced or upgraded by me on a regular basis when either a plan expires or when they are damaged or stolen. 4. In about April/May 2009 I recall doing an interview with reports and film crew from the ABC where I made reference to mobile phones. At the time of that interview I had three mobile phones. a. One was a red nokia; i. I had it from the time of filming up to December 2009 when my husband, Michael Browne organised the iphone for me. ii. It was an upgrade and I put the red nokia in the recycling bin in the phone store. b. The second was also a black and gold nokia; i. Shortly after the interview and before the interview had gone to air the second nokia phone I left on the roof of my car and it fell off when I drove away. I never found it. c. The third was a Prada mobile phone; i. Shortly after the interview and before the interview had gone to air the Prada mobile phone crashed and stopped working. 5. I have been unable to download or obtain any of the texts, SMS or photos from the above phones. 6. From about December 2009 to 3 rd May 2010 I had an Apple iphone. a. I used this phone to take pictures which I uploaded to my facebook site; b. I also used this phone to send and receive text messages, emails and multi media messages but never kept copies of these. c. On or about 3 rd May 2010 my iphone was in my hand bag. I was at the Caxton Hotel, Brisbane and someone spilt a drink on me and the drink went over me and into my handbag where I kept my iphone. d. My iphone was immediately unusable and on 4 th May 2010 I took the iphone to the Apple Store at Chermside Shopping Center and after inspection of that phone the person serving me said 'all your data is lost we will give you a new phone.' e. They provided me with a new phone. f. I recall sending a Facebook Status update as I wanted to know the process if my computer uploaded photos to my iphone on connection that I did not want, how to delete them off my iphone. g. At that stage there were no photos on my iphone. h. There were photos on my computer of my ex partner which I did not want on my iphone. These were the only photos I had kept on my computer as they were of the father of my two children and I only kept them on the computer so that my children could access them. 7. My current phone is an iphone I acquired on or about the 4 th May 2010. 8. It is not possible for me to obtain the images or text on the destroyed and lost phones. There were no text or images on the red nokia phone of a sexual nature or relating to meetings between women and footballers or in relation to matters in the dispute. 9. The sexual text messages on the black and gold nokia were sent to me in early 2009 and were sent to me without my permission. They came before I met and married my husband Michael Browne."

The consequence of the deployment of this affidavit for the hearing was set out at [61] of the primary judge's reasons: "The defendant's counsel wished to cross-examine the plaintiff on her affidavit. I therefore adjourned the hearing of the Notice of Motion for three weeks to allow subpoenas to be issued to the service providers of each of the five phones. I also vacated the hearing date and reserved the questions of costs."

At the resumed hearing, records of the service provider of the black and gold Nokia and Prada phones (that had the same phone number) were tendered. After discussing these records and some other evidence, the primary judge concluded (at [67] of his reasons) that he was not satisfied that the respondent had established that the applicant deliberately disposed of those two phones for the purpose of evading her discovery obligations. He did, however, conclude at [67] that there had been a deliberate failure by the applicant to comply with her discovery obligations: "However, they should have been discovered in Part 2 of the plaintiff's various Lists of Documents (by which I mean they ought to have been specifically referred to and the nature of the contents provided ) but never have been. In that latter regard I am satisfied she has deliberately failed to comply with those obligations." (Emphasis in original.)

It will be necessary to return to the primary judge's criticisms in [67] in due course and in particular whether it was open to his Honour to criticise the applicant for failing to provide the respondent with information as to the "nature of the contents" of the black and gold Nokia and the Prada phones. It is sufficient to say at this point that r 21.3 does not require the contents of a document to be described, just the "nature" and "date or period" of each document: r 21.3(2)(b) and, if the document is in the possession of another person, who that person is: r 21.3(2)(c).

As to the red Nokia phone, this was in the applicant's possession within six months of commencing the proceedings; it was not an excluded document. The primary judge found (at [20], [21] and [68] of his reasons) that this phone (like the black and gold Nokia and the Prada phones) contained relevant (that is in this context, sexually explicit) material. This phone (the red Nokia) was placed in a recycling bin in December 2009. The crucial findings by the primary judge about the red Nokia phone are at [69]-[71] of his Honour's reasons, as follows: "[69] The plaintiff is likely to have known of the order for discovery on or shortly after 13 November 2009. It required compliance by 22 December 2009. [70] The red Nokia phone has never been discovered nor referred to in any of the many pieces of correspondence or various Lists of Documents sent or prepared by the plaintiff's solicitors until the plaintiff's affidavit of 13 September 2010. [71] In my opinion, the phone was deliberately disposed of by the plaintiff in December 2009 to avoid complying with the order for discovery."

The finding in [71] is a critically important finding. If open to the primary judge, it lays a clear foundation for the exercise of power that his Honour undertook. For the reasons later discussed, the conclusion was both open and properly made.

The primary judge then turned to the first iphone. His findings are at [72]-[73] of his reasons: "[72] The first Apple iphone obtained by the plaintiff was acquired to replace the red Nokia in December 2009. It was in the plaintiff's possession from that date until 4 May 2010. In that six month period orders for discovery were in place. The phone was not referred to in any of the many pieces of correspondence or various Lists of Documents sent or prepared by the plaintiff's solicitors until the letter of 26 August 2010. It was subsequently referred to in a List of Documents in Part 2 - an admission that it contained relevant material. No explanation has ever been provided as to why it was not discovered and made available for inspection before it was damaged and replaced on 3 May 2010; nor why it was not made available for inspection after it was allegedly damaged; nor what the nature of the contents were. [73] In my opinion, that phone was deliberately disposed of by the plaintiff to avoid complying with the order for discovery."

The finding that the first iphone contained relevant material by the fact of discovery can be buttressed by the evidence referred to at [17] above that the black and gold Nokia had many photographs on it within a few months of the applicant having acquired it, and the shortness of time of owning the first iphone is unlikely to have interrupted the flow of content, at least to the phone.

I would add at this point, that I think the primary judge's comments that he would have expected identification of the person who spilt the drink on the first iphone somewhat unrealistic, with respect. Nevertheless, his Honour was, in my view, entitled otherwise to conclude that the phone was deliberately disposed of to avoid discovery for the reasons later discussed.

The primary judge then turned to the second iphone. His findings are at [74]-[77] of his reasons: "[74] The plaintiff's second Apple iphone is still in her possession. It has not been discovered; nor was it referred to in any document prepared for or on behalf of the plaintiff until her affidavit of 13 September 2010. [75] The plaintiff denies it contains any relevant material. She accepts however that on 4 May 2010, the day she acquired it, she 'synced' it with her computer and as a result a number of photographs were downloaded from the computer onto the phone. She denies that they were relevant material; rather, she says, they were photographs taken by her children. [76] There is no doubt from the plaintiff's own Facebook postings, to which I have already referred, that on 4 May 2010 certain photographic material was loaded onto that phone and subsequently deleted by the plaintiff. [77] Given my findings regarding black and gold Nokia, the Prada, the red Nokia mobile phones and the first Apple iphone, I do not accept the plaintiff's evidence that the images deleted were her children's photographs. In my opinion, on the balance of probabilities, it (like the phones it replaced, viz the red Nokia and the first Apple iphone) contained relevant material and has been deliberately withheld."

The primary judge was strengthened in the conclusion he drew in [77] by three aspects of an unsatisfactory character of the applicant's evidence discussed at [79]-[81]: "[79] First, as I have referred to above, the plaintiff denied that the red Nokia and the Prada phones which she admitted having along with a black and gold Nokia at the time of the interview contained sexually explicit text messages and photos. I have already found that they did contain such material. The plaintiff's denial on oath was incorrect and in my opinion was deliberately false. [80] Secondly, paragraph 4 of the plaintiff's affidavit contained a clear factual error - viz that the red Nokia had only been used to communicate between herself and her now husband Mr Michael Browne. In cross-examination she ultimately conceded that that evidence was not correct. The plaintiff further said, however, after that concession was made that she knew that her statement was not correct before she went into the witness box but that she had not brought the error to the attention of any of her legal advisers. I find that explanation implausible. In my view it was made up only after her original error was exposed in cross-examination. I find this to be a second example of deliberate false evidence. [81] Thirdly, she was asked in cross-examination on many occasions to explain the absence of the black and gold Nokia, the Prada and the red Nokia phones from any of her List of Documents. Her answers were evasive. The plaintiff sought to suggest that the cross-examiner was confusing her with difficult legal concepts of which she was unfamiliar. This was not correct. I have already found that the plaintiff's solicitors had on many occasions fully explained to the plaintiff her obligations regarding discovery. The evasive answers were a deliberate attempt to avoid legitimate questions as to the fate of the phones."

The applicant opposed the respondent's motion before the primary judge on three substantive grounds described by the primary judge at [10] of his reasons: "(1) The defendant has not proved the plaintiff has failed to comply with the orders for discovery. (2) Alternatively if the defendant has proved a non-compliance, such non-compliance has not resulted in any prejudice to the defendant receiving a fair trial. (3) Further the issue of any alleged non-discovery effectively relates only to one of the plaintiff's imputations - and therefore the plaintiff should not have her entire case dismissed if it be the circumstance (which the plaintiff does not concede) that there has been a failure to discover on a limited issue."

The primary judge's consideration of the matter is contained in [82]-[90] of his reasons. His Honour first referred to the power of the Court under the Civil Procedure Act 2005 (NSW), s 61(3)(a) and (g) to order the dismissal of proceedings or part thereof and to make appropriate orders in circumstances where a party has failed to comply with directions.

The primary judge, at [85] of his reasons, accepted the submission of the respondent that the applicant's default: "... 'is not a mere technical non-compliance'. The material on the phones '... is material at the heart of the case ... with enormous probative value that should have been discovered'."

The primary judge accepted that the power to dismiss or strike out proceedings should be sparingly used. He stated that he was guided in the exercise of the power by what Johnson J had said in Clark v State of New South Wales [2006] NSWSC 673; 66 NSWLR 640 at [100]-[104], as follows: "[100] The principles surrounding the consequences of destruction of potential evidence by a party have emerged largely from cases where destruction has occurred before the commencement of proceedings. [101] Applications for a stay or dismissal of proceedings ( Fuji ) or entry of a verdict for the defendant ( British American Tobacco Australia Services Limited v Cowell ) have not been granted. Where destruction of potential evidence or fabrication of evidence has occurred after proceedings have commenced ( Arrow Nominees ), dismissal of proceedings has been ordered. In cases where material is intentionally suppressed but is finally produced ( Logicrose ), the Court has taken the view that the Court's processes have not been defeated and that the proceedings should be allowed to proceed. [102] In other cases, the issue has been left to the drawing of inferences adverse to the party who has destroyed the material prior to trial, applying the principles in Allen v Tobias and Katsilis . Whether an adverse inference will be drawn, and the strength of the inference, will depend upon the particular circumstances of the case. In a clear case of conscious destruction of material which was likely to be used in evidence, a strong inference adverse to the destroying party may be drawn with the ultimate inference being of the type referred to in Marsden v Amalgamated Television Services Pty Limited . [103] However, the remedies available in such circumstances are not confined to the drawing of appropriate inferences. If the conduct of the destroying party may be characterised as an abuse of process, then the power of the court to stay or dismiss proceedings may be utilised in an appropriate case. This power is to be exercised sparingly. [104] Ordinarily, a party is entitled to initiate and continue proceedings with the court determining those proceedings on their merits. Where, however, a party to proceedings intentionally destroys material which is significant to the determination of the proceedings, and such destruction occurs after the proceedings have been commenced, then a clear foundation would appear to exist for the court to call in aid its power to stay or dismiss the proceedings. The court will have in mind the interests of the individual parties to the civil proceedings, but also the protection of the administration of justice and the integrity of the courts and the system of justice generally. Resolution of an application for a stay or dismissal of the proceedings will consider the question whether a fair trial may take place in the absence of the destroyed material even where an appropriate inference may be drawn adverse to the destroying party."

(The cases to which Johnson J referred in short form are: Fuji Xerox Australia Pty Ltd v Lee [2003] QSC 303; British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; 7 VR 524; Arrow Nominees Inc v Blackledge [2000] EWCA Civ 2000; Logicrose Ltd v Southend United Football Company Ltd (No 1) (1998) 132 SJ 1591; Times, March 5, 1988 (Chancery Division); Allen v Tobias [1958] HCA 13; 98 CLR 367 ; Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181; and Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 510.) There was no submission that the principles were erroneously expressed by Johnson J.

Stating that he was applying those principles, the primary judge expressed his conclusion in relation to paragraphs 3(a) and (b)(i) of the statement of claim in [89]-[90] of his reasons: "[89] In my opinion: [90] In these circumstances, it is not in the interests of the administration of justice that the plaintiff's claim on those imputations ought to be allowed to proceed to trial. Paragraphs 3(a) and (b)(i) of the Statement of Claim should be struck out. There is no reason why the balance of the plaintiff's claim should be struck out on the basis of a failure to give discovery."

The primary judge made the following relevant orders (at [95]): "(1) Paragraphs 3(a) and (b)(i) of the Statement of Claim are struck out. (2) The plaintiff is to file an Amended Statement of Claim within fourteen (14) days limited to the deletion of those paragraphs and the defendant is to file a Defence accordingly within twenty-one (21) days. (3) The plaintiff is to pay the defendant's costs thrown away by the vacating of the trial date of 13 September 2010 and the costs of the Notice of Motion dated 19 August 2010."

The applicant submitted that the primary judge erred in the following respects: (a) The first asserted error lay in the finding that the respondent was prejudiced. The respondent had pleaded three pages of particulars in support of the defence of truth to imputation 3(a) and only particular (g)(iv) referred to a mobile phone and receiving and sending images. The absence of the material from the phones was, it was said, outweighed by the other material and the missing material could not be said to be crucial such as to prevent the trial proceeding fairly. The material on the ABC footage as well as the images of and from the SMS texts from that footage were available and so there was no deprivation of critical evidence. The absence of prejudice was revealed by the ability to replead the particulars in the defence to the remainder of the case after imputations 3(a) and 3(b)(i) were struck out. (b) There was no evidence to contradict the applicant's evidence that the red Nokia had no photographs or text messages of a sexual nature or to found a conclusion that it was deliberately destroyed. (c) There was no evidence to contradict the applicant's evidence that the red Nokia, the black and gold Nokia and the first iphone were disposed of innocently. (d) There was no evidence to contradict the applicant's evidence that she only ever had material of a sexual nature on the black and gold Nokia and that she never had material relating to meetings between women and footballers on any telephone. (e) The primary judge was wrong to conclude that the UCPR had not been complied with. In this respect the two iphones were "excluded documents" within the definition in r 21.1(1). (f) The whole procedure undertaken of cross-examination in respect of discovery and making critical findings on credit at an interlocutory stage before the trial was inappropriate. (g) The primary judge impermissibly drew, from a rejection or disbelief of certain evidence given by the applicant, a positive inference to the contrary, thus offending the rule in Jack v Smail [1905] HCA 25; 2 CLR 684 at 698; Scott Fell v Lloyd [1911] HCA 34; 13 CLR 230 at 241; and the cases discussed by Lindgren AJA in Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 at [106]. It should be noted, however, that Mr Evatt, who, with Mr Rasmussen, appeared for the applicant, accepted that he could not attack the legitimacy of the credit findings themselves. (h) A particular complaint was made about the finding in [77] that the second iphone had sexually explicit material on it and that it was deliberately withheld as being reached only upon a rejection of the applicant's oral evidence.

I would reject the argument that the primary judge was in error in concluding that the respondent was prejudiced by the applicant's conduct. His Honour was entitled to conclude that not only the black and gold Nokia, but also the Prada and red Nokia phones had sexual images and texts on them. A fair appreciation of the ABC interview could lead to no other conclusion. His Honour's conclusion in this respect was not founded solely on a rejection of the applicant's denials as untruthful.

No attempt was made by the respondent to put all its available evidence before the Court to prove its particulars. Nevertheless its nature and scope can be gleaned from the three pages of particulars set out earlier. There was no attempt by the primary judge to weigh up what could be proved against what might be seen to be lost from the phones. It was not submitted below that he should, except for the submission of the significance of particular (g)(iv) in the context of the defence. Nevertheless, from what can be taken from the ABC records, the conclusion of the primary judge that what was in all probability on the black and gold Nokia, the Prada and the red Nokia phones as likely significant and important evidentiary material, was entirely legitimate. Such material would be central to the evaluation of the truth of the relevant paragraphs. There may well be other evidence; but the very phones apparently used for her continuing communications and sexually explicit material would have borne critically on 3(a) and (b)(i).

Whilst the respondent was still in a position to particularise, and no doubt to a point prove, its case of truth, it has been deprived of material relevant, and in all likelihood significant, by the destruction of the red Nokia phone. The primary judge's conclusion that the red Nokia phone was disposed of in knowing defiance of the order for discovery was plainly open. A number of reasons can be given for this. First, the only possible conclusion is that the phone contained and had been used to receive sexually explicit material, including photos and text messages. Secondly, the applicant knew by December 2009 that such material was discoverable. She must have understood its relevance to the case that she made and the case of the respondent - that she had been injured by being called a slut and a Madam and by the assertion that she could be truthfully and accurately so described. Thirdly, the applicant deliberately disposed of the phone. Fourthly, the primary judge disbelieved her evidence as to the contents of the phone. Fifthly, the otherwise unsatisfactory evidence of the applicant was disbelieved by the primary judge.

Undoubtedly, the greatest caution should be exhibited in embarking on credit findings at an interlocutory stage of proceedings, especially if the issues raised are capable also of being exposed at trial. That said, the problem faced by the primary judge was of the applicant's own making. There was a clear failure to attend to discovery. That had to be dealt with. On examination of the facts attending the procedural aspects of the proceedings his Honour was presented with material from which he made these serious findings. The judge undertook no fine weighing of evidence to measure the prejudice, but it is sufficient to recognise, as his Honour did, that the fairness of the trial has been prejudiced or at least put at real risk by the disposal of the red Nokia. Whether or not that conclusion of real risk could be legitimately assessed without any fine weighing was a matter that depended on the circumstances. In the context of someone who apparently used the mobile telephone to receive and in all likelihood send communications that concerned explicit sexual material, the destruction of the tool of such communication pervaded the particulars and was not restricted to the particular that mentioned the mobile phone ((g)(iv)).

As to the two iphones being excluded documents, it is, with respect, unsatisfactory that orders for discovery were made without precise attendance to the UCPR. Nevertheless, it is clear that the parties conducted themselves, both inter se and in relation to the Court, as though the iphones were legitimately the subject of discovery. The first iphone was discovered. The subsequently acquired iphone, if containing sexual images and texts, was plainly relevant: Maisel v Financial Times Ltd [1915] 3 KB 336 and Habib v Nationwide News Pty Ltd [2010] NSWCA 34; 76 NSWLR 299 at 371-375 [313]-[328].

The primary judge criticised the applicant (at [72] of his reasons) for failing to provide the nature of the contents of the first iphone and (at [67]) for failing to provide the nature of the contents of the black and gold Nokia and the Prada phones. Two points can be made about this. First, compliance with Pt 21 did not require a description of the contents of a document and therefore of the phones. Rather, a description of the document by reference to its nature was required. The iphone was a document, it was described by its nature as a "mobile telephone". The definition of "document" in the Interpretation Act does not support the implicit proposition in [67] and [72] that each electronic image is a document. Rather each phone is or was.

Secondly, and consequentially upon that, no real prejudice flowed from the failure to make reference in Part 2 of the list of documents to the black and gold Nokia and Prada phones that were disposed of without criticism. Nor was there any deficiency in describing the first iphone in the manner employed in the list served on 1 July 2010. The other comments and criticisms made by the primary judge at [72] about the first iphone can be accepted as reflecting badly upon the applicant's attitude to discovery and reinforcing the conclusion that her attitude was one at least to ignore, if not act in defiance of (where she could), the orders of the Court. Nevertheless, they (that is the matters referred to in [72] of the primary judge's reasons) have not prejudiced the respondent.

The prejudice in connection with the first iphone flows if (as his Honour found) it contained sexually explicit material and if (as his Honour found) it was deliberately disposed of. The first conclusion is supported by the fact that the phone was discovered in Part 2 of the list. It is also supported by the content on the earlier phones, the rapidity with which the applicant said she received sexually explicit material, the message on her Facebook page of 4 May 2010 and the judge's disbelief of her honesty. The second conclusion could be reached from a disbelief of the applicant's story of a spilt drink, a conclusion otherwise legitimately drawn that she deliberately disposed of an earlier phone (the red Nokia), a body of conduct reflected in [72] otherwise revealing a lack of attendance to her obligations in the light of the phone's contents and an absence of any credible explanation by her as to the phone's disposal.

As with the red Nokia, the deliberate disposal of a phone with relevant information may not affect the strength of the case otherwise found in the proof supporting the three pages of particulars, but it can be reasonably concluded that significant and relevant material has been denied to the respondent by the deliberate defiance of discovery obligations by the applicant. That significant and relevant material can be seen as relevant to the whole of the case to which the particulars are directed.

As to the second iphone, I do not consider that the primary judge's conclusion at [77] that this phone, like the others, contained relevant material and was deliberately withheld was illegitimately founded on the mere rejection of the applicant's evidence. The legitimacy of the findings about the other phones, the matters in [75] and [76], the plainly unsatisfactory attitude of the applicant to discovery, as well as the rejection of her evidence about it provide that foundation.

Nevertheless, the question of any real prejudice from the failure to discover the second iphone is problematic. The second iphone exists; it could be the subject of a specific order for production. None has been sought.

Thus, I see no error in the findings of his Honour of some importance: that the red Nokia and the first iphone contained sexually explicit images and texts and were deliberately disposed of in defiance of discovery orders, and that this in all likelihood will have denied significant relevant evidence to the respondent, thereby impairing the fairness of the trial.

The first iphone fell within the meaning of an excluded document. But the point was not taken before the primary judge. If the point had been taken, the issue may have been the subject of evidence concerning the circumstances of the making of the orders. This possibility is real because the parties' behaviour asserted and admitted the relevance of the first iphone. Thus, I would not dilute the significance of the primary judge's conclusions by reference to this factor.

I do, however, see error in the primary judge's criticism of the applicant in her failing to provide the nature of the contents of the black and gold Nokia, the Prada and the red Nokia phones and the first iphone and concluding that this has resulted in prejudice to the respondent.

I also conclude that the present availability of the second iphone for production (and the failure of the respondent to call for its production) undermine significantly any conclusion that could otherwise be drawn about the prejudice caused to the respondent in relation to the failure to discover the second iphone.

I reject the criticism made of the procedure permitted by the primary judge. He was entitled in all the circumstances, not the least being the late provision of the applicant's affidavit and its contents, in the light of all that had happened (or not happened) in relation to discovery to permit the cross-examination that he did. As I said earlier, considerable caution needs to be exhibited before credit findings are made at an interlocutory stage which will or may contribute to an order denying a litigant the right to run a case. That said, in the face of the evidence and the apparent attitude of the applicant to her obligations over almost a year, it was entirely proper for the primary judge to permit the detailed cross-examination of her. Having done so, properly, his Honour was entitled to assess that evidence. He did so.

Given, however, that I have concluded that there was some error affecting the exercise of the discretion, it is open to this Court to re-exercise it.

In exercising the power afresh I would adopt all the findings legitimately made by the primary judge. Those findings support the exercise of the power to strike out imputations 3(a) and (b)(i).

Johnson J set out principles attending the exercise of such a power in Clark at [100]-[108]. No party submitted that this was an erroneous expression of the matter. As far as they go, they contain no error. They need, however, to be qualified by the following. None of the cases from which Johnson J drew his expression was governed by the Civil Procedure Act . I have previously expressed the view that the provisions of that Act (of course informed by conforming existing principle) now govern procedure in this State: Hans Pet Constructions v Cassar [2009] NSWCA 230; Bi v Mourad [2010] NSWCA 17; Richards v Cornford (No 3) [2010] NSWCA 134; McMahon v John Fairfax Publilcations Pty Ltd [2010] NSWCA 308. It is to be recognised that under the Civil Procedure Act , s 56(3) a party to a civil proceeding is under a statutory duty to assist the court to further the over-riding purpose (in s 56(1)) and to that effect participate in the processes of the court and to comply with directions and orders. To a degree this may be seen as a duty of imperfect obligation, not sounding in damages; but it is a duty nevertheless, and a real one. Significant public resources are devoted to the administration of justice. The Parliament has recognised and expressed the duty of those using the courts (and the resources devoted to them) to act responsibly, honestly and to further the just, quick and cheap resolution of proceedings. This recognition should form the framework of the exercise of power described by Johnson J in Clark . Of course, the power should not be exercised merely to punish a defaulter; of course, risk of significant prejudice should normally be demonstrated; of course, the power should be used sparingly; of course, the power should be used proportionately; but, if grounds are made out otherwise for the exercise of such a power, a recognition of the content and purpose of the statutory duty in s 56(3) assists in the assessment of deciding whether the power should be exercised. The deliberate destruction of discoverable material in knowing defiance of discovery obligations that produces the real risk of impairment to the case of the other side may lead to restrictions on what points litigants can run or to the striking out of all or parts of their claims.

Here, the fairness of the trial was put in jeopardy by the deliberate and abusive destruction of evidence central to the case rendering further proceedings unsatisfactory in that they would be unfair and unjust to the respondent. The fairness of the trial and whether it has been put at risk require an evaluation of the potential consequence of the abusive conduct and all the other circumstances. The extent of the evaluation depends on the circumstances. The trial has to be fair to both parties and the order must be just to both parties. It is hardly fair to the defendant to require it to do its best with the evidence it can otherwise muster, in circumstances where the plaintiff, by conduct that was deliberate and an abuse of the Court's process destroys relevant evidence of real significance to the case knowing of her obligations and knowing of the relevance of the material.

Here, the legitimate findings of the primary judge more than amply provided a foundation for his orders. On the findings, the applicant deliberately disposed of two phones that contained relevant material of real significance to the propounding of the defence of the respondent. This was brought about by the knowing and deliberate conduct of a plaintiff who comes to court seeking redress. It plainly amounted to an abuse of process. It created a not insignificant risk to the ability of the respondent successfully to propound its defence. The respondent may (without this material) still have been able to do so; but a real and substantial risk was deliberately created by the applicant that could be seen, at least, to impair that defence. Taking into account, in particular, all the considerations in the Civil Procedure Act , ss 56 and 58, like the primary judge, I would strike out imputations 3(a) and (b)(i).

The respondent, as cross-applicant, sought to have the primary judge's orders widened to strike out the whole of the pleading. Two errors were said to have been made by the primary judge. First, that his Honour wrongly limited the non-discovered material to imputations 3(a) and (b)(i). It was submitted by the respondent to be relevant to all the imputations and to the claim for aggravated damages. Secondly, it was submitted that his Honour failed to give adequate weight to the administration of justice in a case where there has been a deliberate breach of the Court's processes.

Given that I would re-exercise the power, it is strictly not necessary to decide whether his Honour erred. It falls to this Court to consider these matters.

The respondent sought to analyse and categorise the cases to formulate particular sub-principles. This process is unhelpful. The general approach (not expressed by way of hard and fast rule) can be taken as expressed by Johnson J in Clark with the qualification I have already made.

Whilst it is impossible to know the extent to which the material on the red Nokia and first iphone would have affected the pleaded case other than imputations 3(a) and (b)(i), the kind of material known to exist from the ABC programme most clearly relates to imputations 3(a) and (b)(i). Further, there is nothing in that material that would lead to the inference that the two phones contained images or material concerning "under age" girls.

I would give weight to the primary judge's conclusion that a proportionate response was to strike out the paragraphs of the pleadings he did. I agree that that is a proportionate response to the conduct of the applicant and its consequences. In the circumstances of a re-exercise of discretion, and giving weight to his Honour's view of proportionality, I reach the same view. In saying that, I should not be understood as concluding that others may not have a different and valid view as to what is or would be the proportionate response.

The material placed before the Court does, however, raise concerns about the use of discovery in defamation cases. What I am about to say is not a criticism of the practitioners in this case. As a close examination of the preparation of this case reveals, at least in relation to the mobile phones, significant conduct of the applicant was an abuse of process and the respondent was entitled to pursue, with vigour, its entitlement to production of mobile phones for the purpose of scientific and technical examination. That said, there were very detailed claims made over many pages of letters, none of which came before the Court. Parties should understand that the restriction on discovery now contained in Pt 21 is the current framework for discovery. Discovery (and its uncontrolled use) always contains (and contain) the risk of abuse and oppression. Discovery can be a highly expensive exercise. Courts in defamation, as in all other matters, including commercial matters, should be astute to ensure that it is not used as a weapon of oppression by wealthy litigants to oppress less well-funded parties. Even when all parties are well resourced, over-enthusiastic and unnecessary use of discovery impedes the due administration of justice and undermines confidence in the court system's ability to resolve disputes justly, quickly and cheaply. Parties should understand that there is no entitlement to "chain of inquiry" discovery. If discovery is being used abusively, the courts can and should control it. Defamation litigation is no exception to this.

The asserted defamation here and the defence pleaded to it raise issues of social and personal judgment of the character of the applicant. How a court or a jury would view the behaviour of an individual, such as the applicant, in society when sexual conduct is called into question is a matter for the trier of fact to assess by reference to contemporary values. It should not be taken that anything I have said (other than the necessary criticisms about the conduct by the applicant of the litigation) should be taken as a criticism of her.

For the above reasons I would make the following orders:

McCOLL JA: The facts of the matter are set out in the judgment of Allsop P which I have had the benefit of reading in draft. I will repeat them only to the extent necessary to explain my reasons.

The primary judge's decision to strike-out imputations 3(a) and (b)(i) on the basis that the appellant's non-compliance with her discovery obligations constituted an abuse of process was a discretionary one. Appellate review of his Honour's exercise of his discretion looks to whether he acted upon a wrong principle, was guided or affected by extraneous or irrelevant matters, mistook the facts or failed to take into account some material consideration: Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council [2006] HCA 27; (2006) 226 CLR 256 (at [7]) per Gleeson CJ, Gummow, Hayne and Crennan JJ. In my view the primary judge so erred in a manner which has wrought a substantial injustice to the appellant: In re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318 (at 323); Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 (at 177). Appellate intervention is warranted. Accordingly, I agree with Allsop P that leave to appeal should be granted.

However, with respect, my disagreement with the primary judge's reasons goes to broader issues than those which have led Allsop P to conclude that his Honour erred. Those issues also lead to my disagreement with Allsop P's conclusion as to the outcome of re-exercising of the discretion consequent upon the appellant's proven non-compliance with discovery orders. In my view the appellant's non-compliance does not have the consequence that there is a real risk of impairment to the respondent's case or that there cannot be a fair trial. Nor, applying the principle of proportionality, should the case management provisions of the Civil Procedure Act 2005 (the "CP Act") be brought to bear to punish the appellant by depriving her of her right of access to the court. The appeal should be allowed with costs. In the light of these conclusions there was no basis for the cross-appeal and that, too, should be dismissed with costs.

The core premise of the respondent's application before the primary judge was that the material on the appellant's mobile phones went to the "heart of the case ... [and had] enormous probative value". Having noted (at [4]), that the respondent had pleaded truth, contextual truth and honest opinion in relation to imputation 3(a) and honest opinion to imputation 3(b)(i), the primary judge recorded (at [5]): "The defendant's case on the present application is that one of the primary means by which the plaintiff communicated with footballers and others was by mobile telephone; and that by that medium the plaintiff regularly engaged in sending and receiving quasi-pornographic texts and images as well as allegedly arranging such liaisons for herself and for others. The contents of the plaintiff's mobile phone communications therefore is at the core of the defendant's case insofar as imputations 3(a) and 3(b)(i) are concerned ." (Emphasis added)

The primary judge also recorded (at [10](2)) the appellant's submissions that if the respondent had proved non-compliance with the discovery order, it had not proved that that non-compliance had prejudiced its prospects of receiving a fair trial and (at [10](3)) that "the issue of any alleged non-discovery relates only to one of the plaintiff's imputations" so that if non-compliance with the discovery order was established, dismissal of her entire case was not warranted.

The appellant's written submissions on the application before the primary judge, repeated in this Court, also expressly drew the primary judge's attention to the apparent insignificance, if not virtual irrelevance, of the mobile phone particulars to the respondent's particulars as to the substantial truth of imputation 3(a), referring to the extensive particulars otherwise pleaded in defence to imputation 3(a), the material available to the respondent from the Four Corners out takes, including the images of the text messages depicted on her mobile phone. It will be necessary to refer further to that material.

The primary judge accepted (at [85]) the core premise of the respondent's case on the application. He concluded (at [89](e)) that because the appellant had not discovered three mobile phones in her possession when discovery was ordered, nor given a "... a meaningful description of the material which was in her possession but which has since been 'lost' (the black and gold Nokia, the Prada, the red Nokia and the first Apple iphone)", he should strike out imputations 3(a) and (b)(i). This was because, in his Honour's view, the appellant's non-discovery constituted a gross abuse of process, because the non-disclosed material was likely to have been highly relevant to imputations 3(a) and (b)(i), because there was no readily identifiable alternative means by which the respondent could gain access to the foregone material and, consequently, the respondent had "been gravely prejudiced in the conduct of the proceedings [and] a fair trial could not take place in relation to [those] two imputations...".

Each of these conclusions was significant, individually and cumulatively. In his Honour's view they warranted the grave conclusion that the appellant should not be permitted to advance her properly pleaded case. His Honour reached that conclusion, however, without considering the appellant's submissions. He did not analyse the meaning of the imputations he struck out, the nature of the defences the respondent had pleaded to those imputations (in particular the extent of the particulars the respondent had advanced to support its defence of truth) and how, and to what extent, the material which might be said to have been found on the mobile phones which had not been discovered might relate to those imputations.

In my view his Honour could not determine what consequence should flow from his conclusion that the appellant had failed to comply with her discovery obligations without undertaking such analysis. Had his Honour done so, he should, in my view, have appreciated that the contents of the mobile phones - whatever they were - were only a part of the extensive material the respondent had pleaded in support of its defence of truth to imputations 3(a). Moreover, his Honour would also have determined that the respondent had not sought to rely on the mobile phone material at all insofar as it had pleaded honest opinion in defence to imputation 3(b)(i). Those factors were plainly relevant to the questions whether the respondent had been "gravely prejudiced" and whether a fair trial could take place in relation to those imputations. His Honour erred in failing to take those factors into account in a manner permitting interference with the exercise of his discretion: House v R [1936] HCA 40; (1936) 55 CLR 499 (at 504 - 505).

Finally, as Allsop P has explained (at [31] and [59]), his Honour misunderstood the nature of the appellant's discovery obligation, both as to its extent (it did not catch the two mobile phones the appellant acquired after the proceedings were commenced: Uniform Civil Procedure Rules 2005 ("UCPR") 21.1(c) and as to what the appellant was required to describe in her list of documents: UCPR 21.3. I infer, for reasons to which I will come, that the primary judge's misapprehension of the appellant's discovery obligation, insofar as describing the contents of her mobile phones, compounded his view of what he regarded as her egregious conduct.

It is necessary to consider the issues between the parties at the time the respondent sought to strike out the appellant's proceedings for non-compliance with her discovery obligations.

The appellant pleaded five imputations, only three of which need be set out: "3(a) the Plaintiff is a slut; (b)(i) the Plaintiff is Madam." OR "(ii) the Plaintiff runs a brothel."

His Honour struck out imputations 3(a) and (b)(i), but not (b)(ii).

The respondent filed its defence on 13 November 2009 before any order for discovery was made. It denied that the matter complained of was capable of being defamatory of the plaintiff, or was capable of, or did, convey the plaintiff's imputations. In addition it pleaded a number of alternative defences.

First, the respondent pleaded that imputation 3(a) was a matter of substantial truth: s 25, Defamation Act 2005 (the "2005 Act").

The respondent provided extensive particulars of its defence of substantial truth to imputation 3(a): see Allsop P (at [9]). Although Allsop P has removed the names of the third parties referred to in the particulars, it is relevant to note that the unexpurgated version of the defence named a number of different men as persons with whom the respondent alleged the appellant had had, and/or had boasted she had had, sexual relations. It should be inferred, in my view, that the respondent was able to establish those allegations in relation to each male at the time it pleaded those particulars.

The respondent's defence of substantial truth to imputation 3(a) was not confined to the proposition that the appellant had had and/or had boasted she had had sexual relations with a number of men. The structure of the particulars was that the defendant pleaded a primary proposition, each of was supported by numerous detailed particulars. There were seven primary propositions and 26 particulars - not including repetition. Precisely why that structure was adopted need not be (and was not at the hearing) debated. Nevertheless it is apparent that the respondent proposed to support its defence of substantial truth by, in a sense, compartmentalising its case in respect of each of those heading s - albeit of course with the ultimate intention of relying cumulatively upon the primary propositions.

In addition to the allegations concerning the appellant's sexual relationships with men (primary propositions (a) and (b)), the respondent pleaded that the appellant had publicised and/or boasted of those relationships (primary propositions (b) and (c)). It also pleaded matters relating to how the appellant had been portrayed on the internet and/or Facebook and on celluloid (primary propositions (d) and (e)) and the fact that she had a large number of footballers, as friends on her Facebook page (primary proposition (f)).

Significantly, as the appellant submitted, the only explicit reference to her mobile phone appeared in respect of primary proposition (g): "The plaintiff engages in coarse, vulgar and vicious behaviour, including the following: ... (iv) the plaintiff regularly engages in sending and receiving quasi-pornographic text and images on her mobile phone;..."

Secondly, the respondent pleaded contextual truth (s 26, 2005 Act) to imputation 3(a), "pleading back" each of the plaintiff's imputations found not to be substantially true in relation to imputation 3(a). That form of pleading is impermissible under the 2005 Act: Besser v Kermode [2011] NSWCA 174. The respondent also pleaded that each of the appellant's imputations was published contextually to the imputation, "(i) that the plaintiff boasted about her role in arranging sexual liaisons for NRL footballers" and that that contextual imputation was substantially true, by reason of which the appellant's imputations did not further harm her reputation; s 26, 2005 Act.

The particulars of the respondent's defence of contextual truth are set out in Allsop P's judgment (at [10]). None of them expressly related to the respondent's mobile phone, although it might be inferred that the calls referred to in particular (a) were received on such a device. However the point of the respondent's contextual imputation was not the content of any such calls, but rather the assertion that the plaintiff boasted about her role in arranging sexual liaisons. To the extent the respondent sought to particularise such boasting, it asserted that conduct occurred in various newspapers, on radio stations and on Facebook. The respondent also repleaded certain of its particulars of truth as part of its particulars of contextual truth. It did not replead particular (g)(iv). It is apparent, therefore, that the appellant's mobile phones were not relevant to the defence of contextual truth.

Thirdly, the respondent pleaded the defence of honest opinion to the matter complained of: s 31, 2005 Act. As to matters of public interest (s 31(1)(b)), the respondent pleaded matters relating to "the sexual promiscuity and sexual ethics of NRL footballers" and the appellant's public conduct in relation to commenting upon such matters, including upon her own liaisons, and her role in facilitating other women's liaisons, with such footballers. In accordance with its obligation under UCPR 15.28(2)(b) to identify the material alleged to be proper material (s 31(3)(c)), the respondent pleaded the Four Corners programme, and, again, the appellant's public conduct in relation to commenting upon "the sexual promiscuity and sexual ethics of NRL footballers", including upon her own liaisons, and her role in facilitating other women's liaisons, with such footballers.

None of the particulars of the defence of honest opinion related to the appellant's use of her mobile phone(s). I do not understand, accordingly, the basis for the primary judge's conclusion in the passage from paragraph [5] of his reasons I have earlier emphasised, that the appellant's mobile phone communications were "at the core of the defendant's case" insofar as imputation 3(b)(i) was concerned. In my view this demonstrates manifest error on the primary judge's part in striking out imputation 3(b)(i).

In summary, the respondent's defence relied expressly on the appellant's use of her mobile phone(s) only in relation to its defence of substantial truth to imputation 3(a)).

It is convenient at this stage to consider the possible meanings of the imputations the primary judge struck out. Although, as I have pointed out, this was not an exercise in which the primary judge engaged, it was necessary to appreciate the significance of the appellant's conduct in respect of her mobile phones.

The Oxford English Dictionary Online contains a number of definitions of the noun "slut" of which the following, judging by the particulars of the substantial truth defence, appear to encapsulate the sense of the word for which the respondent intended to contend at trial: " 2 a. A woman of a low or loose character ..."

The Macquarie Dictionary Online contains the following definition: " noun 1 . (derogatory) A woman who has many sexual partners ..."

It is apparent from the particulars the respondent subscribed to its defence of substantial truth (Allsop P at [9]) that from at least sometime in 2008, apparently more than a year before the Four Corners programme was broadcast, the appellant referred to what most people would regard as private information on her Facebook page, elsewhere on the internet and in numerous interviews with media outlets. The matters she has made public relate to liaisons she says she has had with "many, many footballers" and, further, to footballers contacting her to ask her whether she has "got any girls for me". It is equally apparent from those particulars, that the appellant has in terms admitted to having had sexual relations with "many, many footballers", of whom the respondent appears to be able to identify at least six.

As to imputation 3(b)(i) ("The plaintiff is a Madam"), the appellant clearly intends to rely upon the natural and ordinary meaning of that expression being "a female brothel-keeper" ( Oxford English Dictionary Online ) or "the woman in charge of a brothel" ( Macquarie Dictionary Online ). The respondent did not plead any case which would directly support that allegation. Rather in its particulars of public interest (honest opinion) it referred to the appellant's conduct as a person who "publicised her role as a facilitator of sexual liaisons between women and NRL footballers".

This brief analysis of the meaning of imputations 3(a) and 3(b)(i) demonstrates, in my view when related to the respondent's particulars, the amplitude of the material available to the respondent for its substantial truth defence to 3(a) and the irrelevance of any mobile phone material to its honest opinion defence to 3(b)(i).

The primary judge's conclusion that the appellant deliberately disposed of her mobile phones was based, in part, on his conclusion that she did so, conscious of her discovery obligations. The appellant seeks to challenge the findings of deliberate destruction. In my view she has failed to establish that those findings were tainted by error such as would attract appellate intervention.

I would, however, have placed some weight in considering this issue on whether it was worth the appellant disposing of the phones having regard to the weight of material the respondent had available to establish its defence imputation 3(a).

Another factor which might have been thought relevant to the question whether the appellant deliberately disposed of her mobile phones was the insouciant attitude she displayed to retaining/caring for mobile phones, demonstrated by her statement on the out takes about the number of phones she had had, and the (found innocent) circumstances in which the black and gold Nokia and red Prada were disposed of. Those matters might support the conclusion that the appellant may well have disposed of the red Nokia and first iphone in the circumstances for which she contended. That factor it must be recognised, however, has to compete with the timing of those dispositions and discovery orders.

The primary judge's view that the appellant should have disclosed the "contents" of those mobile phones in Schedule 2 of a List of Documents also, in my view, tainted his conclusion (at [77]) that the second iphone "contained relevant material and has been deliberately withheld".

None of these last three matters, however, can be described as falling within the incontrovertible category which would permit a primary finding to be set aside.

The respondent moved to dismiss the proceedings as an abuse of process pursuant to UCPR 13.4(1)(c). Recourse to that rule was necessary not least no doubt, because there is no express rule in the UCPR dealing with the consequences of default in giving discovery: cf UCPR 22.9 which addresses default in complying with an order to answer interrogatories.

To the extent that there was evidence before the primary judge hearing the strike-out application as to the use of the appellant's mobile phones, it appears to have been confined to the material on the DVD representing out takes from the Four Corners programme (see Allsop P at [11]) and the transcript of the Four Corners programme (Allsop P at [13]). What is significant about that material is that in each, the appellant is speaking about the conduct of third parties forwarding information to her black and gold Nokia mobile phone. To the extent that the nature of that material can be gleaned from the out takes, the commentator referred to "them" sending pictures of their penises. This was not shown, but one shot of a bare-chested male in underpants was. What appears to be the appellant's hand was also seen scrolling through text messages from men stored on her mobile phone. The text messages were readable and were lewd. The appellant also referred, as Allsop P has noted (at [11]), to having had "other phones in the past with several NRL players sending me pictures, even AFL players".

There is nothing in the out takes that suggests the appellant sends "quasi-pornographic text [and/or] images on her mobile phone". If the respondent had evidence which supported that part of particular (g(iv)) it must be inferred it was evidence it acquired prior to filing its defence.

The primary judge was not shown the Four Corners programme. Nor was this Court. His Honour, accordingly, appears to have based his conclusions about the contents of the appellant's mobile phones on the out takes and inferences he drew from the cross-examination of the appellant. He found (at [13]) that "the subject matter of the text messages and the photos [depicted in the out takes] was clearly sexually explicit". That conclusion was open to his Honour.

The primary judge also found (at [21]) "that on the balance of probabilities the plaintiff's reference in the out takes to 'other phones' meant the other two phones which the plaintiff had (i.e. the Prada and the red Nokia) also contained sexually explicit text messages and photographs". That conclusion was also open to his Honour.

I have already referred to a critical aspect of the primary judgment being his Honour's failure to deal with the appellant's submission as to the significance of non-compliance with discovery. Some other aspects should be briefly referred to.

First, the primary judge concluded (at [67]) that he was not satisfied that the respondent had established that the appellant had deliberately disposed of the black and gold Nokia or the red Prada phone for the purpose of evading her discovery obligations. However he concluded she should have discovered those phones in Part 2 of her list of documents - by which he meant, "they should have been specifically referred to and the nature of the contents provided". In that latter regard he was satisfied she had deliberately failed to comply with her discovery obligations. The latter statement was erroneous for the reasons already given. It was, however, clearly material to the primary judge's conclusion as to the course he should ultimately take. It, accordingly, compounded the error earlier identified.

Secondly, the primary judge concluded (at [69] - [71]) that the appellant had deliberately disposed of a red Nokia phone in December 2009 to avoid complying with the order for discovery. As Allsop P has said (at [61]) this was "a critically important finding". Whether that finding alone, or in combination with the later findings, was a basis, without more, for the primary judge's exercise of power is the central issue on appeal.

Thirdly, the primary judge concluded (at [73]) that the appellant's first iphone (which replaced the red Nokia), ultimately referred to in Part 2 of a list of documents (albeit belatedly) was deliberately disposed of by the appellant to avoid complying with the order for discovery.

Further, the primary judge had earlier (at [28]) recorded the appellant's explanation that she had disposed of the first iphone after "someone spilt a drink [which went into her handbag and]...my iphone was immediately unusable" and that it had been replaced the next day by a second iphone and the first put into a recycle bin. His Honour said (at [29]) in relation to the first iphone (that although there was "some corroboration that [the appellant's first iphone] had been damaged in some manner by a document ... that is not corroboration of how the phone was damaged, merely that it was." The document to which I assume his Honour was referring was a "Genius Bar Work Authorization & Service Confirmation" from an Apple store dated 4 May 2010. In fact that document referred to "Liquid Damage" under the heading "Problem Description/Diagnosis" and proposed "swap repair" as resolution. This was to some extent corroborative of the cause of the iphone malfunctioning, if not as to who had spilled any liquid on it. As to this, his Honour said he would have expected identification of the person who spilt the drink on the first iphone. As Allsop P has said (at [64]) this was "somewhat unrealistic".

Fourthly, the primary judge found (at [74]) that the appellant's second iphone was still in her possession, had not been discovered, nor was it referred to in any document prepared for or on behalf of her until her affidavit of 13 September 2010. He concluded (at [77]) that it contained relevant material and had been deliberately withheld. He was reinforced in reaching that conclusion by his "findings regarding [the] black and gold Nokia, the Prada, the red Nokia mobile phones and the first Apple iphone". As has been demonstrated, his Honour's findings in relation to the black and gold Nokia and Prada phones were erroneous. Further, although the primary judge also found support for his conclusion about the second iphone in his rejection of aspects of the appellant's evidence (see Allsop P (at [66])), somewhat curiously, he did not place any balancing weight on the fact that although that iphone was available, the respondent had never called for it in court. As Allsop P says (at [85]), the question of any real prejudice from the failure to discover the second iphone is problematic. I agree with Allsop P's conclusion (at [89]), that in the light of its availability and the respondent's failure to call for it "undermine[s] significantly any conclusion that could otherwise be drawn about the prejudice caused to the respondent in relation to the failure to discover the second iphone".

On the re-exercise of the discretion, the appellant submitted that it was open to the Court to have regard to the state of the pleadings at the time of the hearing in this Court. The respondent did not contend otherwise.

Following the primary judge's order the appellant filed an amended statement of claim striking through the imputations his Honour had struck out, but otherwise in the same form as that she had first filed.

The respondent, in turn, put on an amended defence. It abandoned its defences to the struck-out imputations. This meant there was no longer a defence of substantial truth. The defence of contextual truth was expanded to add two contextual imputations additional to that originally pleaded: "(ii) That the Plaintiff arranged sexual liaisons between NRL footballers and young women. (iii) The Plaintiff is immoral."

The amended defence relied upon the same particulars to support contextual imputation (ii) as originally pleaded in relation to contextual imputation (i) (see [124]). The particulars of the respondent's defence of contextual truth are set out in Allsop P's judgment (at [10]). None of them expressly related to the respondent's mobile phone, although it might be inferred that the calls referred to in particular (a) were received on such a device. However the point of the respondent's contextual imputation was not the content of any such calls, but rather the assertion that the plaintiff boasted about her role in arranging sexual liaisons. To the extent the respondent sought to particularise such boasting, it asserted that conduct occurred in various newspapers, on radio stations and on Facebook. The respondent also repleaded certain of its particulars of truth as part of its particulars of contextual truth. It did not replead particular (g)(iv). ]). The particulars of the defence of the substantial truth of contextual imputation (iii) were, the appellant's counsel submitted without contradiction, in relevantly identical terms to the particulars of substantial truth pleaded in relation to (struck-out) imputation 3(a). This meant the particulars of primary proposition (g) were substantially repeated, including particular (g)(iv). However that particular was amended so that it was expressed in past tense, more significantly to refer to more than one mobile phone as follows: "the [appellant] regularly engaged in sending and receiving quasi-pornographic texts and images on her mobile phones;" It should be inferred, accordingly, that the respondent is still of the view it can prove further particulars notwithstanding the destruction of the mobile phones.

The respondent also pleaded a further particular to sub-paragraph (g) of its particulars of the substantial truth of contextual imputation (iii) and added two new primary propositions as follows: "(g) the Plaintiff engages in coarse, vulgar and vicious behaviour, including the following: ... (viii) the Plaintiff participated in exchanges on Facebook involving sexually explicit content and vulgar language. (h) the Plaintiff regularly arranged sexual liaisons between NRL players and young women; (i) when the Plaintiff regularly arranged sexual liaisons between NRL players and young women (referred to in (h) above), the Plaintiff had no regard to the age of the young women involved."

The defence of honest opinion was abandoned.

The appellant's primary complaints are that having regard to the breadth of the material the respondent had pleaded in relation to the defence of substantial truth to imputation 3(a), it could not be said that the respondent had suffered relevant prejudice such as to prevent a fair trial proceeding -even in the absence of her mobile phones. She also points to the fact that the respondent has re-pleaded the (g)(iv) particulars as demonstrating that the respondent had not suffered any prejudice by reason of its inability to have further access to the appellant's mobile phone(s).

The respondent submitted that the primary judge erred to the extent that he did not strike out the entirety of the appellant's claim. This was the basis of its cross-appeal. Its submissions on the cross-appeal developed its case as to the relevance of the mobile phones to its original defence and ought, accordingly, to be considered on the question of the re-exercise of the discretion. In this respect, the respondent argued that mobile phones were relevant to all the imputations because of the first manner in which it put its contextual truth defence (see [123]). Secondly, the respondent pleaded contextual truth (s 26, 2005 Act) to imputation 3(a), "pleading back" each of the plaintiff's imputations found not to be substantially true in relation to imputation 3(a). That form of pleading is impermissible under the 2005 Act: Besser v Kermode [2011] NSWCA 174. The respondent also pleaded that each of the appellant's imputations was published contextually to the imputation, ]). As I have pointed out, that manner of pleading contextual truth is impermissible under the 2005 Act. Next it contended that the "non-discovered material on the mobile phones" was relevant to establish the truth of its original contextual imputation. This submission should be rejected for the reason, earlier stated, that the defence did not rely upon the mobile phone particulars (g)(iv) in relation to the contextual truth defence. This is also true of the respondent's contention that this material was relevant to it establishing the substratum of its honest opinion defence. Finally, the respondent contended this material was relevant to the appellant's particulars of aggravated damages insofar as she relied upon her knowledge of the falsity of the imputations and to its reliance upon the substantial truth of the appellant's imputations and its contextual truth imputation in mitigation of damages. It is sufficient to say that ultimately this is a question of fact and degree. No doubt the same can be said of the respondent's other particulars of truth. In my view on the panoply of other particulars pleaded in the substantial truth defence, and having regard to the evidence already available to the respondent as to messages on the appellant's mobile phone, it is apparent the respondent was not dependent on such material to put forward its defence or to mitigate damages.

In oral submissions, the respondent's counsel accepted that because there were many ways, other than reliance on the mobile phone particulars, in which it advanced its defence, there was force in the appellant's de minimis submission. It was for that reason that it also sought to support the primary judge's orders (and seek to strike out the entirety of the appellant's claim) on the basis that even if a fair trial was theoretically possible, in all the circumstances, the Court nevertheless had, and should exercise, its broad discretion to dismiss the whole proceedings.

Insofar as it had re-pleaded particular (g)(iv) in its amended defence, the respondent submitted that the fact that case could still be maintained was a different question from whether or not it was not prejudiced by the appellant's non-discovery.

On the re-exercise of the discretion, the following issues arise. First, did the appellant's conduct constitute an abuse of process? Secondly, if it did should the power under UCPR 13.5 to dismiss proceedings generally or in relation to any claim for relief be exercised?

In Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 (at 393), the plurality ( Mason CJ, Deane and Dawson JJ) cited Mason CJ's judgment in Jago v District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23 (at 28) as standing for the proposition that "a court, 'whose function is to dispense justice with impartiality and fairness both to the parties and to the community which it serves', possesses the necessary power to prevent its processes being employed in a manner which gives rise to unfairness". That proposition was supported by Mason CJ, by reference to passages his Honour adopted from Richardson J's reasons in Moevao v Department of Labour (1980) 1 NZLR 464 (at 481), to be underpinned by the "public interest in the due administration of justice necessarily extend[ing] to ensuring that the Court's processes are used fairly by State and citizen alike ...[and] the public interest...in the maintenance of public confidence in the administration of justice" and the fact that it is "contrary to the public interest to allow that confidence to be eroded by a concern that the Court's processes may lend themselves to oppression and injustice". These tenets underlie the following discussion of the concept of abuse of process.

What amounts to abuse of court process is insusceptible of a formulation comprising closed categories: Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council per Gleeson CJ, Gummow, Hayne and Crennan JJ. However, as French CJ, Gummow, Hayne, Crennan and Kiefel JJ said in PNJ v R [2009] HCA 6; (2009) 83 ALJR 384 (at [3]), many cases of abuse of process exhibit at least one of three characteristics, including either that the use of the court's procedures would be unjustifiably oppressive to a party or that the use of the court's procedures would bring the administration of justice into disrepute. As Gaudron J said in Jago v District Court of New South Wales (at 74) (referred to with approval in Walton v Gardiner (at 394)), "[t]he power of a court to control its own process and proceedings is such that its exercise is not restricted to defined and closed categories, but may be exercised as and when the administration of justice demands."

Not all conduct of a party in relation to judicial proceedings is an abuse of process if it can be characterised as in some sense unfair to a party. In that class of abuse of process, which involves inter partes considerations, it appears that to constitute abuse of process the proceedings must be "manifestly unfair to a party to litigation ... or [such as] would bring the administration of justice into disrepute among right-thinking people" or be seriously and unfairly burdensome, prejudicial or damaging: Jeffery & Katauskas Pty Limited v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Limited v Rickard Constructions Pty Limited [2009] HCA 43; (2009) 239 CLR 75 (at [28]) per French CJ, Gummow, Hayne and Crennan JJ. Any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process: Rogers v The Queen (1994) 181 CLR 251 (at 286) per McHugh J, referred to with approval by the majority in Batistatos (at [15]).

I accept that the appellant's found conduct demonstrated she abused the process of the court. I do not reach that conclusion because her conduct imperilled the prospect of a fair trial, but because her abuse of the court's processes brought the administration of justice into disrepute.

The jurisdiction to act under UCPR 13.5 is, accordingly, enlivened

A decision to stay or strike out a plaintiff's case, whether in whole or in part, is accepted to be draconian. It is for that reason that it is accepted that the power to stay proceedings permanently on the ground that they are an abuse of process (and, a fortiori, to strike out a part of a party's case) should be exercised with caution ( Moore v Inglis (1976) 50 ALJR 589 (at 593) (upheld on appeal (1976) 51 ALJR 207) per Mason J (as his Honour then was)) and only in the most exceptional or extreme case: Walton v Gardiner (at 392) per Mason CJ, Deane and Dawson JJ.

It is necessary to understand how these principles operate in cases where a party has destroyed potentially evidentiary material. The power to stay and/or dismiss proceedings in whole or in part where a party has failed to comply with an order for discovery is founded on the Court of Chancery's jurisdiction to so act: Republic of Liberia v Roye (1876) 1 App Cas 139 (at 143 -144) per Lord Cairns LC. It was a discretionary power. An order would not be made unless the court was satisfied the plaintiff was seeking to avoid fair discovery: Bray, The Principles and Practice of Discovery , (1885) Reeves and Turner (at 588). While it must be recognised that the rules in relation to the process of discovery, production and inspection of documents have outgrown their Chancery origins, and are now the subject of other detailed rules and many decisions intended to adapt them to the efficient conduct of modern litigation ( Esso Australia Resources v Commissioner of Taxation [1999] HCA 67; 201 CLR 49 (at [150]) per Callinan J), the underlying principle of "fair discovery" remains germane as the following discussion reveals.

The principles concerning the circumstances in which a court will act, and how it may act, following a party's non-compliance with an order for discovery were discussed by Johnson J in Clark v State of New South Wales [2006] NSWSC 673; (2006) 66 NSWLR 640. As Allsop P has said, the parties accepted Johnson J's statements of principle.

In Clark , Johnson J found the plaintiff had deliberately destroyed "an original cassette tape and a compact disc which were expected at that time to play a significant, if not decisive, role in the civil proceedings" (see [65]). The Court had directed (see [144] - [145]) that the tape and compact disc be subjected to technical analysis to determine their genuineness. Johnson J concluded (at [144]), that the destruction of the tape constituted an abuse of process and also (at [145]) that they had been destroyed within hours of the court's directions. He discussed the principles concerning abuse of process. They relevantly included the following: (a) Courts have an inherent power to prevent misuse of their procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people: Walton v Gardiner (at 393) Mason CJ, Deane and Dawson JJ; (b) The inherent power to deal with abuse of process exists to enable the Court to protect itself from abuse of its process thereby safeguarding the administration of justice. That purpose may transcend the interest of any particular party to the litigation: Batistatos (at [12]); (c) It is not necessary that there be an element of contumelious disregard, oppressive conduct or moral delinquency before the power to intervene with respect to abuse of process can be exercised: Batistatos at [67] - [70], [137], [142]. It is the objective effect of the continuation of the action which is decisive: Batistatos (at [70]); (d) The power to terminate or stay proceedings as an abuse of process does not exist simply to punish a party or its legal representatives who deliberately delay proceedings to the disadvantage of other parties. In the exceptional cases to which it applies, the power to stay exists to prevent the conduct, or further conduct, of proceedings that would be fundamentally unfair to another party, because, for example, of serious delay in the commencement, or continuation, of the proceedings: Batistatos (at [141]) per Kirby J. (e) These principles must be considered against the background of the fundamental right of access to courts by citizens and that such access should not be denied other than in exceptional circumstances: Clarke (at [63]) referring to Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 (at 91); General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 (at 130); Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598 (at 602); Williams v Spautz (at 519); Batistatos at [157]ff. (f) When considering the notion of a fair trial, it should be borne in mind that, for a trial to be fair, it need not be perfect or ideal: Clarke (at [64]) referring to Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 (at 142); Batistatos at paragraph 163; Commonwealth of Australia v Smith [2005] NSWCA 478 (at [129]).

Having determined (at [150]) that there was "a real and substantial risk" that the defendant would not have a fair trial of the proceedings, and the fact of the tapes destruction in the face of "a near contemporaneous link between the directions made by a Judge of this Court and the destruction of potential evidence", Johnson J concluded (at [154], [156]) that the proceedings should be dismissed.

The " 'right' of the plaintiff with a ... claim" referred to in paragraph [169](e) "to institute an action is not at large [but is] subject to the operation of the whole of the applicable procedural and substantive law administered by the court, whose processes are enlivened in the particular circumstances [includ[ing] the principles respecting abuse of process": Batistatos (at [65]).

The concept of the "fair trial" ( paragraph [169](f)) should also be teased out to some extent. "[T]he term [fair trial] is a relative one and must, in any particular case, mean a fair trial between the parties in the case in the circumstances of that particular case; [such]... a trial ... need not be perfect or ideal [and]...[t]rials are constantly held in which for a variety of reasons not all relevant evidence is before the court: Holt v Wynter (at [79]) per Priestley JA; referred to with approval in McLean v Sydney Water Corporation [2001] NSWCA 122 (at [27]) per Giles JA (Stein and Hodgson JJA agreeing) and in Walters v Cross Country Fuels Pty Ltd [2009] NSWCA 10 (at [23]) per Campbell JA (Allsop P and Handley AJA agreeing).

In Jago v District Court (NSW), Gaudron J held (at 74), that in civil proceedings, the power to grant a permanent stay should be seen as a power which is exercisable if the administration of justice so demands, and not one the exercise of which depends on any nice distinction between notions of unfairness or injustice, on the one hand, and abuse of process, on the other hand". Her Honour's statement was approved in Walton v Gardiner (at 394) per Mason CJ, Deane and Dawson JJ.

A series of English cases decided before the legislation of case management provisions established that, having regard to the fact that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the court, a party was not to be deprived of the right to a proper trial as a penalty for disobedience of those rules, even if that disobedience amounted to contempt for, or defiance of, the court, if that object was ultimately secured, by (for example) the late production of a document which had been withheld. That reasoning also applied, as I understand the cases, even if, for example, documents which ought to have discovered had been destroyed by a litigant, if that conduct did not put the fairness of the trial in jeopardy - in short where to allow the proceedings to continue in whole or in part did not bring the administration of justice into disrepute.

Logicrose Ltd v Southend United Football Company Ltd [No 1] (1998) 132 SJ 1591, (1988) Times, 5 March 1988, to which Johnson J referred in Clark (at [101]), was a case in which an allegation was made, but found not to have been established, that the principal witness for the plaintiff company failed to disclose and deliberately suppressed a crucial document in his possession or power. In the course of his reasons, Millett J considered the consequences of deliberate disobedience of a peremptory order for discovery in the following terms: "Deliberate disobedience of a peremptory order for discovery is no doubt a contempt and, if proved in accordance with the criminal standard of proof, may, in theory at least, be visited with a fine or imprisonment. But to debar the offender from all further part in the proceedings and to give judgment against him accordingly is not an appropriate response by the Court to contempt. It may, however, be an appropriate response to a failure to comply with the rules relating to discovery, even in the absence of a specific order of the Court, and so in the absence of any contempt, not because that conduct is deserving of punishment but because the failure has rendered it impossible to conduct a fair trial or would make any judgment in favour of the offender unsafe. In my view a litigant is not to be deprived of his right to a proper trial as a penalty for his contempt or his defiance of the Court, but only if his conduct had amounted to an abuse of the process of the Court which would render any further proceedings unsatisfactory and prevent the Court from doing justice. Before the Court takes that serious step, it needs to be satisfied that there is a real risk of this happening. ... This might well be the case [i.e., exceptional circumstances requiring action by the court] if it was no longer possible to remedy the consequences of the document's suppression despite its production, perhaps because a material witness who could have dealt with the document had died in the meantime or where, despite the production of the document, there was reason to believe that other documents have been destroyed or remain concealed . But I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render the further conduct of proceedings unsatisfactory. The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice ." (Emphasis added)

Millett J's emphasis on the necessity to consider whether, notwithstanding the deliberate destruction of the document amounting to contempt, a fair trial was possible reflected the views expressed by the Court of Appeal in Coleman v Dunlop (Court of Appeal, England, 20 October 1999, unreported). In that case the trial judge struck out a defence because documents she considered went to the core of the plaintiff's case had been destroyed after proceedings were commenced and after discovery had been completed. Judge LJ who delivered the judgment of the Court of Appeal upholding the ruling, said: "The judge of course reminded herself of the relevant principles and, in particular, that the order being sought was not to be made merely to strike out a defence as a matter of punishment, but constantly to bear in mind that what she was deciding objectively is whether it would be possible to conduct a fair trial of the liability issue... " (Emphasis added)

The views expressed in Logicrose and Coleman reflect the proposition that that the object of the rules of discovery is to secure the fair trial of the action in accordance with the due process of the court: see Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 2 NSWLR 340 (at 356) per Waddell J in Eq. Accordingly, the question of what sanction, if any, should be imposed for non-compliance (whether deliberate or inadvertent) is to be tested against the question whether "a litigant's conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice": see Arrow Nominees Inc v Blackledge [2000] EWCA Civ 200; (2000) All ER (D) 854; [2000] 2 BCLC 167 (at [54]) per Chadwick LJ (Roch LJ agreeing). The Victorian Court of Appeal cited Chadwick LJ's statement with approval in British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197 (at [159]).

In Arrow Nominees Inc , Chadwick LJ also said (at [55]): "55. Further, in this context, a fair trial is a trial which is conducted without an undue expenditure of time and money; and with a proper regard to the demands of other litigants upon the finite resources of the court. The court does not do justice to the other parties to the proceedings in question if it allows its process to be abused so that the real point in issue becomes subordinated to an investigation into the effect which the admittedly fraudulent conduct of one party in connection with the process of litigation has had on the fairness of the trial itself. That, as it seems to me, is what happened in the present case. The trial was "hijacked" by the need to investigate what documents were false and what documents had been destroyed. The need to do that arose from the facts (i) that the petitioners had sought to rely on documents which Nigel Tobias had forged with the object of frustrating a fair trial and (ii) that, as the judge found, Nigel Tobias was unwilling to make a frank disclosure of the extent of his fraudulent conduct, but persisted in his attempts to deceive. The result was that the petitioners' case occupied far more of the court's time than was necessary for the purpose of deciding the real points in issue on the petition. That was unfair to the Blackledge respondents; and it was unfair to other litigants who needed to have their disputes tried by the court."

Ward LJ agreed with Chadwick LJ, but added reasons based on the impact of the English Civil Procedure Rules. He referred to Biguzzi v Rank Leisure plc [1999] 4 All ER 934; [1999] 1 WLR 1926, (a case concerning striking-out proceedings on account of delay) where Lord Woolf MR said (at 941, 1934) that "[e]arlier authorities are no longer generally of any relevance once the CPR applies." Ward LJ observed (at [69]) of this remark that " '[g]enerally' does not, of course, mean 'never' ". His Lordship then traced the development of Lord Woolf's "more robust approach" to cases of "inordinate delay" or ""complete, total or wholesale disregard...of the Rules of Court ... amounting to ... an abuse", leading to Hirst LJ's statement in Lace Co-ordinates Limited v NEM Insurance Co Limited (Court of Appeal (Civil Division), 19 November 1998, unreported) that: "These [case management] guidelines ... create an entirely new climate in which the court is required to examine the plaintiff's conduct by reference to the overall interests of justice and fairness (including considerations of public importance reflecting the interests of other litigants, and the interests of the court, to ensure the prompt despatch of court business in accordance with efficient case management), and not exclusively the impact (as in Birkett v James [1978] A.C. 297) of the delay on the conduct of the defendant's case, having regard to any prejudice the defendant may suffer."

Notwithstanding those references, Ward LJ recognised (at [72]) that the question whether a fair trial was possible was "a factor of very considerable weight [which]... may often be determinative", but that "other matters have now to be put in the scales and weighed."

The civil procedure reforms effected in substantially the same terms in virtually all Australian jurisdictions are modelled on the civil procedure reforms to which Waller LJ and Hirst LJ referred in Arrow Nominees Inc . The effect of these reforms was considered in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 in the context of an application for leave to amend a statement of claim made on the third day of a four week trial. The High Court was unanimously of the view that the trial judge (and the majority in the Australian Capital Territory Court of Appeal) erred in permitting the amendment.

Relevantly, the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) emphasised in Aon (at [98]), that a just resolution of proceedings remained the paramount purpose of r 21 of the Court Procedures Rules 2006 (ACT) (which is substantially on all fours with s 56 of the CP Act), but that what was a "just resolution" was to be understood in light of the purposes and objectives of case management set out in that rule. Their Honours emphasised (at [111]), that matters relevant to the exercise of the power to permit amendment included the effect on the individual litigant's case, but also the fact of substantial delay and wasted costs and the concerns of case management.

As is manifest from the plurality judgment in Aon , the operation of s 56 - s 60 of the CP Act involves the weighing or balancing of considerations which may, but do not necessarily, go beyond the circumstances of a particular case. In all cases, however, it is necessary to keep in clear focus the purpose of there being a just resolution of the dispute. The plurality in Aon (at [112]) referred to a party's right to bring proceedings, in language redolent of the authorities emphasising the fundamental right of access to courts by citizens which should not be denied other than in exceptional circumstances: see Clark (at [63]). However both s 58(2)(b)(vi) of the CP Act and general principle require attention to the burden the appellant's conduct has cast upon the respondent: Batistatos (at [63]).

The power to strike out pleadings for default is not intended to be used to punish the litigant, but proportionally by giving fundamental weight to the (sometimes competing) considerations of s 56 - s 58: Hans Pet Constructions v Cassar [2009] NSWCA 230 (at [46]), per Allsop P (Campbell and Young JJA agreeing).

The Full Court of the Federal Court (Keane CJ, Gilmour and Logan JJ) spoke in similar terms in Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 as follows: "[51] Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application ." (Emphasis added)

The Full Court also said (at [45]) , "[n] othing in Aon Risk suggests that [the achievement of justice in the particular case] is not relevant to the exercise of the discretion to permit or refuse an amendment. Rather, the point made in Aon Risk is that this consideration must not be allowed to trump other relevant considerations...". While acknowledging the weight of this dicta, it should not, in my view, be seen as supporting the proposition that notions of individual justice are merely one of many factors. This would be contrary to the language of the CP Act, fundamental principle and Aon (at [98]).

UCPR 13.4(1)(c), which was the basis of the respondent's application to strike out the appellant's statement of claim, is subject to the obligations imposed on the court by s 58(1) of the CP Act. The primary proposition in that provision is that in deciding whether to make, and the terms of, an order of a procedural nature, the court should seek to act in accordance with the dictates of justice. The emphasis in s 58 on the dictates of justice repeats the concept of justice unsurprisingly underlying the case management provisions generally: s 56 refers to the " just , quick and cheap resolution of the real issues in the dispute", while s 57 identifies "the just determination of the proceedings" as the first object of case management. The emphasis on justice reflects, no doubt, the concern of the legislature that its case management reforms should not be used to deny citizens access to the courts, or that, once accessed, they should not be prevented from pursuing their claims without anxious consideration of the consequences to the individual. The latter proposition is underlined by s 58(2)(b)(vi) which requires the court when determining what are the dictates of justice in a particular case, to have regard to the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction.

Whatever the new climate of case management may be, I cannot accept that it requires the discretion arising consequent upon the appellant's transgressions without regard to whether, notwithstanding an abuse of process, a fair trial can nevertheless be had. Maintaining public confidence in the administration of justice requires consideration to be given not only to the appellant's unsatisfactory conduct, but also to its effect on the respondent.

If one assumes, as one should in my opinion, that taking account of other litigants includes the latter's perception that the court should not by punishing one litigant confer an unfair boon on another, then, in my view, that requires the conclusion, that notwithstanding the appellant's abuse of process, she should not be prevented from pursuing her proceedings to their full extent.

The appellant's written submissions before the primary judge specifically addressed the question of the significance of particular (g)(iv) in the context of the respondent's defence. It was incumbent on the primary judge, both as a matter of general principle and because of the requirement of s 58(2)(b)(vi), CP Act, to address the issue of the extent of, if any, the prejudice the respondent suffered by the destruction of the mobile phones before determining the orders he should make. As I have said, his Honour did not carry out that exercise. It should be undertaken on the re-exercise of the discretion.

I disagree with Allsop P and Macfarlan JA's inference that the mobile phones were relevant to other particulars the respondent pleaded. That, with respect, is a matter of speculation. While the respondent was not required to plead evidence, it was obliged to give such particulars of its defence as were necessary to enable the appellant to identify the case that the pleading required her to meet: UCPR 15.1. In purported discharge of that obligation, the respondent confined its particulars concerning the mobile phone to one only of its primary propositions. As I have sought to explain, many of its other particulars were highly probative of imputation 3(a) and entirely independent of any mobile phone usage.

Allsop P says (at [76]) that the appellant's mobile phones would be relevant to imputation 3(b)(i). I respectfully disagree. As I have pointed out, the respondent only pleaded comment to that imputation and did not plead the appellant's use of her mobile phone as providing a factual substratum for that defence. To the extent it particularised the appellant's conduct in this respect, it was that she "publicised her role as a facilitator of sexual liaisons between women and NRL footballers". That proposition was clearly directed to public communications, not private conversations/communications on mobile phones.

A court considering exercising the exceptional power to strike out a party's case on the basis of an abuse of process should be punctilious to scrutinise the pleadings to determine what effect the alleged defaulter's conduct would have on the conduct of a fair trial. It should not stray beyond the pleaded case into the realm of speculation about the relevance of confined particulars to other aspects of the case.

It must be emphasised at the outset that the appellant's conduct cannot be condoned. On the primary judge's findings (at [71] and [73]), she deliberately destroyed the red Nokia phone and the first Apple iphone to avoid complying with the order for discovery and (at [77]) deliberately withheld relevant material on the second iphone. The characterisation, and consequences, of that conduct have to be considered in all the circumstances of the case and the court's obligation to dispense justice to all.

In my view, even though the respondent established that the appellant had failed to comply with her discovery obligations, and therefore abused the process of the court, I do not accept that this is in that category of exceptional case in which the dictates of justice warrant an order striking out imputations 3(a) and 3(b)(i). I disagree, with respect, with Allsop P's conclusion (at [94]) that the appellant's conduct "created a not insignificant risk to the ability of the respondent successfully to propound its defence".

First, as I have said (at [126]), none of the particulars of the defence of honest opinion related to the appellant's use of her mobile phone(s).

Secondly, the significance of the mobile phones to the respondent's defence of justification to imputation 3(a) was comparatively minor when its other extensive particulars of that plea are considered - a matter the respondent effectively acknowledged in oral submissions.

Thirdly, the respondent did not rely upon discovery of the mobile phones insofar as primary proposition 3(g) (and particular (g)(iv)) or imputation 3(a) generally was concerned. It had direct evidence from the Four Corners' out takes that clearly fell within particular (g)(iv) in the original defence. It also had footage of the appellant explaining and displaying the nature of the messages and images footballers sent to her mobile phones - not just the mobile phone she was holding at the time of the interview. This material constituted admissions and provided a fertile field for even the most pedestrian cross-examiner to plough. It should also be inferred that it had a reasonable basis for pleading that the appellant regularly sent material of the nature of that to which particular (g)(iv) referred.

Fourthly, it is significant that the respondent did not seek access to the appellant's second iphone in the course of the proceedings before the primary judge. On the basis of its apparent case theory that iphone would have provided more material of the nature of that it contended successfully had been on the destroyed iphones.

Although, I accept the question is finely balanced, in my view, in circumstances where a fair trial is still possible, imputations 3(a) and 3(b)(i) should not be struck out.

I would add the manner in which the discretion should be exercised becomes stronger when the respondent's amended defence is taken into account. If sanctions are imposed in circumstances where a person has abused the processes of the court to avoid the administration of justice being brought into disrepute, it cannot be a just exercise of the discretionary power to exercise the power in a manner which would lead to the conclusion that the administration of justice was brought into disrepute - albeit in an attempt to cure an earlier abuse. This proposition should be developed.

The premise of the respondent's case before the primary judge was that the mobile phone evidence went to the "heart of the case ... [and had] enormous probative value". That was the premise that underlay the primary judge's decision to strike out the two imputations. Yet the respondent has substantially repleaded as a contextual imputation, the imputation to which it had pleaded the mobile phone particulars and given the same particulars. In my view it would bring the administration of justice into disrepute in the mind of right-thinking people if the Court were to prevent the appellant from pursuing her defamation proceedings as originally pleaded because she destroyed two mobile phones, yet allow the respondent to defend her emasculated case in reliance on the particulars it said at first instance her non-compliance had substantially prejudiced it from establishing.

Finally I would note that the appellant's found destruction of her mobile phones means that the respondent can have recourse to various forensic strategies/tools to counter the effect of their unavailability. These include, without being exhaustive, applying for the jury (for which one party had apparently elected) to be dispensed to ensure a judge experienced in dealing with the issues which might arise as to the appellant's credit having regard to her proven conduct could be given appropriate weight. It could also rely upon the principle omnia praesumuntur contra spoliatorem ("all things are presumed against a wrongdoer") to contend an adverse inference should be drawn against the appellant: see Allen v Tobias [1958] HCA 13; 98 CLR 367 (at 375); Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 85 ALJR 533 (at [64]) per Heydon, Crennan and Bell JJ and the comprehensive discussion in Clark (at [76] - [81]).

I would grant leave to appeal, allow the appeal with costs and set aside the judgment and orders of Colefax SC DCJ made on 9 November 2010.

MACFARLAN JA : I agree with the judgment of Allsop P and the orders that his Honour proposes. As his Honour's views differ from those of McColl JA, it follows that my views also differ from those of her Honour.

Fundamental to McColl JA's reasoning is her Honour's implicit rejection of the "core premise" of the respondent's case "that the material on the appellant's mobile phones went to the 'heart of the case ... [and had] enormous probative value" and of the primary judge's finding to that effect (McColl JA [107], [157] and [195]). Rejection of this premise leads her Honour to conclude that "the appellant's non-compliance does not have the consequence that there is a real risk of impairment to the respondent's case or that there cannot be a fair trial", with the result that the primary judge erred in striking out the appellant's imputations 3(a) and (b)(i) (McColl JA [106] and [195]). In other words her Honour takes the view that although the appellant "failed to comply with her discovery obligations and therefore abused the process of the court", the respondent was not prejudiced, at least not in any significant fashion, by that abuse (see McColl JA [106], [144], [164], [188] and [195]).

McColl JA bases this conclusion principally upon the fact that the particulars contained in the respondent's defence referred to the appellant's mobile phones only to a very limited extent (and then only in relation to imputation 3(a)) (McColl JA [109], [126]-[127], [157] and [197]-[198]) and upon the view that without the benefit of the material on the mobile phones the respondent nevertheless had extensive material to support its defence of the substantial truth of imputation 3(a) (McColl JA [109], [112], [133] and [198]).

Taking the former point first, in my view the limited reference in the respondent's particulars to the mobile phones does not have the significance that McColl JA attributes to it.

Imputation 3(a) was that "The plaintiff is a slut". As her Honour points out, a relevant definition of the word "slut" contained in the Macquarie Dictionary Online is that it is a noun referring in a derogatory fashion to a "woman who has many sexual partners" (McColl JA [130]). This definition can be taken to adequately convey the meaning of that word when used in the present context.

Particulars contained in the respondent's defence that were of obvious significance to its defence of substantial truth of this imputation included that "the plaintiff deliberately seeks out sexual liaisons with many NRL footballers including particularly NRL footballers much younger than she is" and that: "(iv) the plaintiff, in the company of another woman, regularly attended nightclubs and hotels frequented by footballers in order to engage in sexual liaisons with them and arrange sexual liaisons between other women and footballers" (Allsop P [9]).

In my view the fact that mobile phones are not referred to in these (and various other) particulars is not of present importance. A party is not required to plead the evidence by which it proposes to prove its particularised case. It would be open to the respondent to prove the particularised matters to which I have referred by evidence of mobile phone communications. The mobile phones that the appellant deliberately destroyed to avoid discovering them could well have provided powerful evidence in support of these particulars.

Furthermore I do not consider that the fact that the respondent can be assumed to have some evidence, in fact probably weighty evidence, to support its defence of substantial truth means that it has not been prejudiced by the appellant's destruction of mobile phones that are likely to have contained further evidence to support that defence.

The respondent's particulars assert for example that the appellant authored a newspaper article saying that "I don't deny I've had liaisons with many, many footballers" and that she said in a radio interview "I've slept with footballers. You know that has been documented in the media in the past" (Allsop P [9]). Proof that the appellant made these statements and of other admissions that the appellant made on the "Four Corners" programme and its out-takes would no doubt considerably assist the respondent in its defence. However such admissions would by no means be conclusive. The appellant might successfully explain away what she said on the basis that it was, for example, exaggeration. Likewise, it is possible that the unspecific form of such admissions might lead a tribunal of fact to give them little, or even no, weight.

The respondent was entitled to the benefit of discovery by the appellant to assist it in establishing its defence. Evidence from the appellant's mobile phones of specific (and possibly numerous) communications involving the organisation by the appellant of sexual liaisons would have considerably assisted the respondent's defence. Arguably such evidence would have far transcended the general admissions that the appellant may have sought to explain or resile from. The contents of the "Four Corners" programme and its out-takes suggest that there was a significant prospect that the mobile phones contained such material prior to their destruction, as does the fact that the appellant deliberately destroyed them in order to avoid having to discover them.

I add that, with respect, I do not agree with McColl JA that it is significant that it can be inferred from the respondent's defence and amended defence that the respondent was, and remains, of the view that it can prove the matters alleged in its particulars notwithstanding that it does not have the benefit of such material as was on the mobile phones that the appellant destroyed (McColl JA [119], [153], [156] and [202]). All that can be inferred from those pleadings is that the respondent had available to it sufficient evidence to justify it concluding that it had a reasonable prospect of establishing the particulars. This does not mean that the respondent suffers no prejudice if it is wrongly deprived of additional evidence that would improve those prospects.

Further, I would not interpret what the respondent's senior counsel said at the hearing of the appeal as giving rise to the concession to which her Honour refers (McColl JA [158] and [197]). As I read the transcript, counsel was first accepting that there were many different ways in which the respondent had particularised its defence of substantial truth and, secondly, making it clear that he did not rest his case solely on the grounds of prejudice (Appeal Transcript pp 29-30). Counsel made it clear that he maintained that his client had been prejudiced (ibid, p 30.27 and 30.31).

For these reasons I respectfully disagree with the emphasis that McColl JA places upon the limited nature of the references to the mobile phones in the respondent's particulars and upon the other evidence that her Honour concludes was available to the respondent to support its defence of substantial truth. It follows that I disagree with her Honour's ultimate conclusion and that I agree with that of Allsop P. 08 September 2011 - cross-referencing Amended paragraphs: 153, 157, 171, 172, 196 13 September 2011 - typographical error Amended paragraphs: 191