Ahmadi v Fairfax Media Publications Pty Ltd

LEGISLATION CITED : Civil Procedure Act 2005 Uniform Civil Procedure Rules

Ahmadi v Fairfax Media Publications Pty Ltd [2010] NSWSC 702 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175 Cretazzo v Lombardi (1975) 13 SASR 4 Hughes v Western Australian Cricket Association (Inc) [1986] FCA 382 CASES CITED : James & Ors v Surf Road Nominees Pty Limited & Ors [No 2] [2005] NSWCA 296 John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Sydney Ferries v Morton (No 2) [2010] NSWCA 238 Vilo v John Fairfax and Sons Ltd and Anor [2000] NSWSC 1206

PARTIES : Abdullah Ahmadi (Plaintiff) Fairfax Media Publications Pty Ltd (Defendant)

COUNSEL : R Rasmussen (Plaintiff) T Blackburn SC / D Sibtain (Defendant)

SOLICITORS : The People's Solicitors (Plaintiff) Johnson Winter & Slattery Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2008/289438 Abdullah Ahmadi v Fairfax Media Publications Pty Ltd (No 2)

JUDGMENT 1 HIS HONOUR: On 1 July 2010 the Court issued judgment for the plaintiff and awarded damages of $7,500: Ahmadi v Fairfax Media Publications Pty Ltd [2010] NSWSC 702 ("the principal judgment"). Arising from the principal judgment is a dispute between the parties as to whether an order for costs should be made and if so on what basis and whether there should be an award of interest. This judgment deals with each of those aspects. These reasons for judgment should be read in conjunction with the principal judgment, but it is necessary to summarise, very briefly, the circumstances that have arisen. 2 Mr Ahmadi sued Fairfax Media Publications Pty Ltd ("Fairfax") for defamation arising from a publication on the weekend commencing 4 August 2007. Mr Ahmadi alleged eight imputations, two of which dealt with an imputation that Mr Ahmadi had smuggled Mr Haideri into Australia and was a people smuggler (together referred to as "the people smuggling imputation"). The other six imputations dealt with an allegation that Mr Ahmadi had persecuted Mr Haideri, and various imputations of extortion, all six of which, in summary, can be described as "the extortion imputations". 3 Initially, Fairfax put in issue whether the article identified Mr Ahmadi, whether the imputations were made and if so whether they were defamatory and also sought to prove the truth or substantial truth of the imputations. By the conclusion of the trial before the jury, the only substantive issue remaining was the substantial truth of the imputations alleged. The jury held that Fairfax had not proved the substantial truth of the people smuggling imputation and the jury also determined that Fairfax failed to establish that Mr Ahmadi's reputation was not further harmed by the publication of the people smuggling imputation, notwithstanding the substantial truth of the other imputations. 4 Based upon the foregoing findings, Fairfax submits that the plaintiff has not been successful and, even if the plaintiff were to have been successful, the adoption of the traditional rule that costs ought to follow the event is not a fair result and does not do substantial justice between the parties. General principles on costs 5 The principles applicable to the awarding of costs have been stated on a number of occasions and are, in most respects, trite. Leaving aside the inherent jurisdiction of the Court, costs are governed by s 98 of the Civil Procedure Act 2005 and are in the discretion of the Court. The Court has full power to determine by whom, to whom and to what extent costs are to be paid: s 98(1) of the Civil Procedure Act. 6 The application of that general jurisdiction is governed by the provisions of Part 42 of the Uniform Civil Procedure Rules 2005, which provides (UCPR 42.1) that costs should follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 568-570; Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at 97-98. 7 As has been stated on a number of occasions, costs are intended neither as a punishment, nor as a reward. The entitlement to costs arises because of the necessity to incur expenses either in enforcing a right or defending against an allegation of right, and, in that sense, costs are awarded as part of the compensation awarded to a plaintiff or are intended as the compensation to a successful defendant who has resisted a claim. 8 One of the issues in these proceedings is the identification of the "event" that costs should follow. The Court should take a practical rather than a highly technical approach to this issue. Recently the Court of Appeal (Sydney Ferries v Morton (No 2) [2010] NSWCA 238) cited, at [10], with approval, the statements of principle of the Court of Appeal in James & Ors v Surf Road Nominees Pty Limited & Ors [No 2] [2005] NSWCA 296 at [31]-[36]. The passage is in the following terms: "[31] Costs orders in the Supreme Court are governed by the provisions of s.76 of the Supreme Court Act 1997 and the Supreme Court Rules . Section 76 provides, relevantly that subject to the Act and the Rules, costs shall be in the discretion of the Court: s.76(1)(A). Part 52A r.11 acts as a limited proscription of the Court's discretion conferred by s.76. Part 52A r.11 provides that, subject to Part 52A, the Court shall order that costs follow the event ' except where it appears to the Court that some other order should be made as to the whole or any part of the costs ' .

[32] The effect of Pt 52A r.11 is that an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. However, as is specified by the rule itself, the Court is entitled to make a different order. That may occur where there are multiple issues involved. This was the subject of comment in Waters v. P C Henderson (Aust) Pty. Limited (unreported CA(NSW) Kirby P, Mahoney and Priestley JJA, 6 July 1994) where Mahoney JA said:

'Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless, unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.'

[33] Similarly, Toohey J made the following observations in Hughes v Western Australian Cricket Association (1986) ATPR 40-748:

'1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.

2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed.

3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law.' (references omitted)

[34] Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called 'discrete issues', for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to ' any disputed question of fact or law ' before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter.

[35] In Madden v Connell [2001] NSWSC 1051, Hamilton J referred to there being a 'rule' that where there are 'discrete issues and the time taken on each issue at the hearing can be identified or realistically estimated', an order for costs may be made against the party which fails on such issues, or alternatively, that party may be deprived of its costs for that portion of the matter. In the Court's opinion it is preferable not to speak in terms of 'rules'. However, the underlying approach to the 'rule' stated by his Honour may be an available approach to the exercise of the court's discretion as to costs in a particular case, depending upon all of the circumstances.

[36] Where the court does exercise its discretion to apportion costs, the apportionment itself involves the exercise of discretion. As Gummow, French and Hill JJ recognised in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261:

'Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation.'

This case is a classical example of that sentiment." 9 As recited in Morton, supra, that passage has been repeatedly approved and, although the governing provisions are now s 98 of the Civil Procedure Act and UCPR 42.1, as previously stated, the principles remain unaltered: see Morton, supra, at [12]. Ordinarily, the courts do not differentiate between particular issues in any proceeding but deal with the proceedings as a whole. This is due, in part, to the view that a successful party should not be deprived of the costs of its proceedings merely because issues were relied upon which proved unsuccessful. However, that general rule does not, by definition, apply at all times. In Cretazzo v Lombardi (1975) 13 SASR 4 at 12, Jacobs J cautioned in the following terms: "But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues." 10 This passage was cited by approval by Toohey J in Hughes v Western Australian Cricket Association (Inc) [1986] FCA 382, in cautioning against an overzealous application of the principle that a successful party who has failed on certain issues may not only be deprived of the costs of those issues, but may also be ordered to pay the other party's costs of them. In this sense "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law: ibid, at [9]-[10]. 11 In the present proceedings, no separate cause of action was alleged. Nevertheless, the plaintiff alleged a number of imputations which were proved to be substantially true. Fairfax argues, in those circumstances, that the principles to which Toohey J referred in Hughes, supra, ought be applied and that Mr Ahmadi ought to pay Fairfax's costs, or at least 75% of them. There is a difficultly with that approach. 12 The cause of action, for which Mr Ahmadi sued, was defamation. He alleged that Fairfax had defamed him. It had defamed him. And Mr Ahmadi received damages for that defamation, albeit at a level lower than would have been the case if none of the imputations were proved to be true. 13 Because of the interrelationship of the allegations of fact, if Mr Ahmadi had sued Fairfax for defamation arising only from the imputations that were not proved to be true, the evidence in the proceedings would have been little or no different from that which was the case in the proceedings before the Court. Of course, if Fairfax had been sued for defamation arising only from that imputation, then it may have looked more carefully at the basis for that allegation. However, the conduct of the proceedings would indicate that, at the very least, Fairfax would have conducted the proceedings so as to argue, as it did, that the true imputations rendered the untrue imputations such that damages would not be awarded and that defamation did not arise. 14 Having stated those principles, facts and conclusions, it seems that a proportional approach to costs based arithmetically upon the number of imputations proved against those that were not proved is not an appropriate manner in which to apportion costs. Further, it would seem, in the circumstance of these proceedings, that Fairfax should not have any part of its costs paid by Mr Ahmadi. 15 It seems that the plaintiff should have some of his costs paid, but not all of them. As stated, the evidence, even if the proceedings had been confined to the untrue imputations, would have been in or to the same effect, both in terms of the evidence that was adduced and the length of the proceedings. It seems, taking a general and overall approach to the costs, that the plaintiff should have one-third of his costs paid and the Court will so order. Interest 16 Pursuant to s 100 of the Civil Procedure Act, interest may be awarded up to judgment on the amount of damages. In this case, there are nice questions as to whether this issue is sufficiently important to warrant the attention of the Court. Generally the appropriate rate for a non-economic loss is 4%: MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657 at 666. The principles on the awarding of interest in defamation cases take account of the assumption that damages represent, at least in part, a loss spread over the time from the date of publication to trial: see, inter alia, John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 143; Vilo v John Fairfax and Sons Ltd and Anor [2000] NSWSC 1206 at [25]. Such an approach takes account of the theoretical fact that the plaintiff was entitled to damages immediately upon publication and the extent, if any, that the award was increased by reason of continuing injury. The practical approach is usually taken to award half the interest rate over the entire period: see John Fairfax & Sons Ltd v Kelly, supra, per McHugh JA at 143 and see, contra, Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175. Further discussion of the issue occurred in the Court of Appeal in Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, particularly at [1553]-[1556]. 17 While the amount is minimal, to say the least, it is clear that the principles do not allow the application of a mathematical formula without assessing the appropriateness of an interest rate and determining, on the basis of that assessment, that which is fair and proper. 18 In the view that I take of the defamation that has occurred, half of it occurred immediately and the other half was spread over the period between publication and judgment. In order to arrive at a result which reflects that proposition and is just and fair, an apportionment of 50% of the awarded damages shall be subject to the full 4% interest rate over the entire period and the other half would be subject to an interest rate that effects an equal spread of damage over the period between publication and judgment, namely, 2%. The effect of such an apportionment, arithmetically, is equivalent to the application of an overall interest rate of 3% on the entire judgment for the entire period. That is the award that will be made. 19 It is unnecessary to deal with interest after judgment as that is governed by the provisions of s 101 of the Civil Procedure Act and no contrary order is warranted, or sought. Conclusion 20 For the foregoing reasons, the Court makes the following further orders:

(i) The defendant shall pay one-third of the plaintiff's costs of and incidental to the proceedings, as agreed or assessed;

(ii) The defendant shall pay interest on the amount of $7,500, being the judgment in favour of the plaintiff, from 4 August 2007 until 1 July 2010 at the rate of 3% per annum, being an amount of $656;

(iii) Otherwise the proceedings are dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.