Craftsman Homes Australia Pty Ltd v Channel Nine Pty Ltd - Costs - [2006] NSWSC 1297 - NSWSC 2006 case summary

Supreme Court of NSW|2006-10-18|Before: Smart AJ

CITATION : Craftsman Homes Australia Pty Ltd v Channel Nine Pty Ltd - Costs [2006] NSWSC 1297

Civil Liability Act 2002 LEGISLATION CITED : Civil Procedure Act 2005 Trade Practices Act 1974 Fair Trading Act (NSW)

Houda v The State of New South Wales [2005] NSWSC 1053 Hughes v Western Australian Cricket Association (1986) ATPR 40-748 James & Ors v Surf Road Pty Ltd & Ors (No 2) 2005 [NSWCA] 296 John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 King v Gillard 1905 1 CCh 11 CASES CITED : McDonald v Coles Myer Ltd 1995 ATR 81-361 M.B.P (SA) Pty Ltd v Gogic (1990-1991) 171 CLR Plenty v Dillon (1990-1991) 171 CLR Ritter v Godfrey 1920 2 KB 47 State of NSW v Ibbett (2005) 65 NSWLR 68 Vilo v John Fairfax & Sons Ltd & Anor [2002] NSWSC 1206 Waters v P.C.Henderson (Australia)Pty Ltd 6/7/94 NSWCA BC 940952

PARTIES : Craftsman Homes Australia Pty aLimited & 3 Ors v TCN Channel Nine Pty Limited & 2 Ors - Costs

COUNSEL : (P) Mr Bell (D) Mr McClintock SC

SOLICITORS : (P) G Donaghy & Co (D) Gilbert & Tobin

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

20085/02: CRAFTSMAN HOMES AUSTRALIA PTY LIMITED (First Plaintiff) ILVARITY PTY LIMITED T/as CRAFTSMAN HOMES NORTHERN RIVERS and CRAFTSMAN HOMES SOUTH WEST SYDNEY (Second Plaintiff) and FREDERICK ROBERT COX (Third Plaintiff) v.

TCN CHANNEL NINE PTY LIMITED (First Defendant) (TCN9) MIKE MUNRO (Second Defendant) and BEN FORDHAM (Third Defendant) JUDGMENT ON INTEREST and COSTS

Consequent upon my judgment of 2 June 2006 the parties argued the questions of interest and costs

The plaintiffs claimed interest on the verdicts in their favour from the date of the Edmondson Park trespass. 22 February 2002. They conceded that in view of the Chief Justice's judgment in TCN Channel Nine Pty Limited v Anning (2002) 54 NSWLR 333 at 364 interest on the award of exemplary damages was not payable from the date of the incident but from the date of the judgment. This is without prejudice to the plaintiff being able to contend to the contrary on appeal if so advised. Exemplary damages are not compensatory.

The cause of action of trespass to land protects and vindicates the right of the person entitled to exclusive possession of the land not to have that possession disturbed. It is an important right.

Aggravated damages augment the compensatory damages and, it was submitted, should carry interest. The plaintiffs submitted that proper compensation required that interest be awarded for the whole period to reflect that the plaintiff has been kept out of his money while the corporate defendant has had the benefit of that sum.

The plaintiffs relied on s 100 of the Civil Procedure Act 2005 and sought interest at the rate of 9 per cent per annum, pointing out that this was the prescribed rate of interest under Schedule 5 of the Civil Procedure Rules as from 28 February 2002. The plaintiffs were content that this rate be adopted for the whole period.

The plaintiffs submitted that in view of the seriousness of the conduct of the defendants in respect of which verdicts and judgment were obtained, the intentional nature of that conduct and the engaging in that conduct for the benefit of the commercial purposes of the defendants, the Court's exercise of its discretion in awarding interest under s 100 of the Civil Procedure Act should be exercised to entitle the plaintiffs to interest at 9 per cent for the whole period. The plaintiffs contended that the defendants strenuously resisted the whole of the plaintiffs' claims over that period and went behind the back of the plaintiffs to engage in trespass, fraud and contravention of the Trade Practices Act and the Fair Trading Act.

The defendants submitted: (1) By reason of s 18(1) of the Civil Liability Act 2002 no interest is payable

(2) No interest was payable on the award of exemplary damages. They are not compensatory. In view of the plaintiffs' concession this point need not be considered further (3) No interest is payable on damages under the Trade Practices Act

(4) The appropriate interest rate is 2 per cent or alternatively, 4 per cent.

Civil Liability Act 2002 8. Section 18(1) of this Act provides that a Court cannot order the payment of interest on damages awarded for non-economic loss.

Section 18 is in Division 4 of Pt 2 of the Act. Part 2 is headed and deals with Personal Injury Damages and Division 4 is headed Interest on Damages. It is directed to interest on personal injury damages.

The further relevant statutory provisions include Part 1 Preliminary

"3B Civil liability excluded from Act (1) The provisions of this Act do not apply to or in respect of civil liability (and awards in those proceedings) as follows: (a) civil liability in respect of an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct - the whole Act except Part 7 (Self defence and recovery by criminals) in respect of civil liability in respect of an intentional act that is done with intent to cause injury or death." 11. The defendants contended that it was incorrect to exclude the conduct in question because it was not done with the intention to cause injury.

Section 11 provides that in Pt 2 "injury" means "personal injury" and includes the following: (a) pre natal injury (b) impairment of a person's physical or mental condition (c) disease

and that "personal injury damages" means damages that relate to the death of or injury to a person. 13. Section 11A(1) provides that Pt 2 applies and in respect of an award of personal injury damages except an award that is excluded from the operation of this Part by s 3B. As earlier pointed out s 18 falls within Pt 2. Section 11A(3) provides that a Court cannot award damages or interest on damages contrary to Pt 2.

The defendants submitted that if the damages awarded in the present case were personal injury damages interest cannot be awarded. The defendants further submitted that damages for trespass are at least in part, personal injury damages because they are injury to the feelings of the plaintiff and that is personal injury. The defendants acknowledged that different considerations may apply as to that component of the damages awarded as reflecting the disturbance of the plaintiffs' right of possession.

Senior Counsel for the defendants drew the Court's attention to the decision of Cooper AJ in Houda v The State of New South Wales [2005] NSWSC 1053. The plaintiff there alleged malicious prosecution, false imprisonment, wrongful arrest and assault and the judge found that these torts had been established and intentionally committed. The assault comprised police officers placing their hands on the plaintiff in the course of the unlawful arrest. The judge considered the terms of the Civil Liability Act 2002 at some length. The judge found that the police officer had the intent or purpose to cause injury to the plaintiff in the sense of depriving him of his freedom, restraining with force his mobility, causing him humiliation, damaging his reputation, causing him the emotional upset of having to undergo these experiences and of having a criminal charge hanging over his head.

The judge rejected the submission that "injury" in s 3B(1)(a) of the Act was limited to bodily injury and held that the word "injury" extends to all forms of injury including the classes of injury which were within the police officers' intention. The judge held that by reason of s 3B(1)(a), the Act did not apply to that case. I agree with the reasoning and the decision of Cooper AJ.

In State of NSW v Ibbett (2005) 65 NSWLR 68 at [11] Spigelman CJ expressed the opinion that the word "injury" in s 3B(1)(a) should be given its ordinary and natural meaning and that that meaning would encompass the harm occasioned by an apprehension of physical violence. He also held at [12] that s 3B(1)(a) was satisfied in the case of the assault because there was an intention to cause injury. See also per Ipp JA at [123-124] and Basten JA at [218].

Cooper AJ in Houda held there were additional reasons why the Civil Liability Act 2002 did not apply. The judge at [349-355] followed the statements of Powell JA in McDonald v Coles Myer Ltd 1995 Australian Torts Report 81-361 at pp 62, 689 and 62, 691 as to the principal heads of damage in actions for the torts of false imprisonment and malicious prosecution

The judge pointed out that these were quite different from the definition in s 3 of the non-economic loss namely - a. Pain and suffering b. Loss of amenities of life c. Loss of expectation of life d. Disfigurement.
In the present case the heads of damage available are quite different from those contemplated in the definition of non-economic loss.
In Ibbett at [21] Spigelman CJ said: "The concept of 'personal injury' is reasonably well established in Australian legal practice. It has rarely, if ever, been used to refer to harm to reputation, deprivation of liberty, or to injured feelings such as outrage, humiliation indignity and insult or to mental suffering such as grief, anxiety and distress not involving a recognised psychological condition."
In my opinion s 18 of the Civil Liability Act does not operate so as to prevent the awarding of interest on compensatory damages in the present case.

Senior Counsel for the defendants took me to Ritchie's Uniform Civil Procedure, p 2706, note s.100.90 namely "Interest cannot be awarded under this section (s 100) in relation to claims for damages under s 82 of the Trade Practices Act 1974." A number of cases are cited. Senior counsel pointed out that there was no power to award interest in the Trade Practices Act, 1974 and that the Federal Court Act gives that Court power to award interest. The defendants submitted that this Court acting under the Civil Procedure Act of NSW had no power to award interest on damages awarded under the Trade Practices Act.

In reply the plaintiffs pointed out that reliance was placed not only on the Trade Practices Act (Cth) (TPA) but also on the Fair Trading Act (NSW) (FTA) and that damages were sought under both Acts. In my judgment I referred extensively to the TPA and the decisions on that Act. That is the way the matter was argued, counsel taking the view that that was appropriate given the similar provisions in the two Acts. I followed the approach of counsel. No one foresaw the argument as to interest which has now arisen. In formulating the list of verdicts in para 1075 of my earlier judgment I wrote: "5. On the count of false and misleading conduct (para 13C), verdict for Mr Cox for $50,000 against TCN Channel Nine Pty Limited and Ben Fordham and verdict for Ilvarity Pty Limited for $30,000 against TCN Channel Nine Pty Limited and Ben Fordham. On these counts as between Craftsman Homes Australia Pty Limited and TCN Channel Nine Pty Limited, Mike Munro and Ben Fordham, verdict for the defendants. On these counts as between the plaintiffs and Mike Munro, verdict for Mike Munro."
I did not differentiate between the TPA and the FTA. Para 13C of the Third Further Amended Statement of Claim alleged breaches of both s 52 of the Trade Practices Act and s 42 of the Fair Trading Act as against the first defendant (TCN Channel Nine Pty Ltd). It alleged breaches of s 42 of the Fair Trading Act by the third defendant (Mr Ben Fordham). In para 14(d) damages including aggravated damages pursuant to TPA, s 82 and FTA s 68 were claimed.

In my opinion, for the purposes of interest I should proceed on the basis that the awards of damages were made under s 42 of the FTA and carry interest and that the power under s 100 of the Civil Procedure Act 2005 is available.

The defendants submitted that as this was not in substance a commercial cause, the commercial rate of interest should not be applied.

The starting point in considering the question of interest is the judgment of the High Court in M.B.P. (SA) Pty Ltd v Gogic (1990-1991) 171 CLR 657. While that was a personal injury case many of the Court's observations have a wider operation.

At 663 the Court stated that the function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period. In the present case that is the period from 22 February 2002 to the date judgment is entered.

At 663-664 the Justices said: "Damages for pre-trial non-economic loss, however, are assessed in accordance with the value of money as at the time of the award. In no way is any loss which a plaintiff incurs by reason of being deprived of his or her damages for pre-trial non-economic loss brought about by inflationary factors. In those circumstances, to award interest on damages for non-economic loss during the pre-trial period by reference to commercial rates is to compensate the plaintiff for a 'loss' which he or she has not sustained. No doubt whatever interest rate is used to compensate a plaintiff, it can be at best only a rough guide as to the value of the plaintiff's loss during the period when he or she was deprived of the use of his or her money."
In assessing the compensatory damages (including the aggravated damages) I did so in accordance with the value of money at the time of delivering judgment.

At p 666 the Justices said: "A plaintiff is awarded interest because he or she has been deprived of the use of his or her money, not because he or she has forgone investment opportunities. It would be wrong, for example, to refuse to award a plaintiff interest simply because the real rate of interest during the relevant period was zero or a negative figure. Moreover, to award interest calculated by reference to the real rate of interest, when it has been a positive figure, ignores the important fact that the return to the real-life investor from his or her investment is diminished by income tax on both the inflationary and real profit components of that return. Thus, the use of the real rate of interest figure as the measure of a plaintiff's loss in being deprived of his or her damages for pre-trial pain and suffering does not seem inherently superior to the use of a fixed figure."
In Gogic the Court noted that the South Australian Supreme Court had selected a figure of 4 per cent. That is the figure that has been used consistently in New South Wales.

The defendants submitted that in view of the years of economic stability and relatively low inflation the time had come to review the often selected rate of 4 per cent.

The defendants relied upon the judgment of McHugh J as to interest in John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 142-144. Kirby P agreed with McHugh J as to the award of interest. That was a defamation case. McHugh J at 142-143 pointed out that damages in a defamation case, apart from special damage, operate as a vindication of the plaintiff to the public and as a consolation for the wrong done to him, that is, injury to feelings and reputation. At p 142 McHugh J said:

"The settled doctrine of the Australian courts relating to awards of interest requires that interest should be awarded for real and practical and not merely theoretical losses:" (citations omitted) Speaking generally, I think that the plaintiff in a defamation action is entitled to interest on each of the ordinary elements of the award of damages in a defamation action." 36. At p 143 McHugh J referred to what theory required and the difficulties of assessment. He pointed out that in theory the correct approach would seem to be that since the plaintiff was entitled to damages immediately upon publication, the proper enquiry was first to determine to what extent the award was increased by continuing injury. McHugh J said: "Speaking generally, the best approach is to treat the award as though the damages represent a loss spread over the period from the date of publication to trial. It is a process which does not achieve perfect justice for the plaintiff since he may have ceased to suffer actual injury well before the trial but it seems to be the most practical approach to a difficult problem." 37. In Vilo v John Fairfax & Sons Ltd & Anor [2000] NSWSC 1206, a defamation case, Simpson J said:

"The damage to the plaintiff's reputation has no doubt continued from the date of publication until the date of the judgment vindicating his reputation. The hurt to his feelings may also be taken to have continued from the date of publication to the date of judgment."

The judge thought it was best to treat the " …injury as spread evenly over the period, that this would justify a halving of the interest rate of 4 per cent declared by the High Court." The judge awarded interest on the whole of the damages over the whole period at a rate of 2 per cent. In that case a period of 17 years elapsed between the date of publication and the date of judgment.

The judge was satisfied that the delay did not prejudice the defendant and that it had not altered its position. She stated that she was persuaded by the reasoning in Gogic that the interest should be awarded at the applicable rate for the whole period.

The defendants submitted that the situation with trespass to land was analogous to that of defamation and that I should apply the principles developed as to awarding interest on defamation damages in the present case.

In my opinion there are significant differences between damages for defamation and damages for trespass. In assessing damages for defamation part of the entitlement consists of damages to vindicate the plaintiff to the public.

In trespass to land a plaintiff is entitled to some damages to vindicate his right to exclude a defendant from his land (Plenty v Dillon 1990-1991) 171 CLR 635 at 645 per Mason CJ, Brennan & Toohey JJ. At 654-655 Gaudron and McHugh JJ made a comment to the same effect and took the view that this was no trifling matter and that the plaintiff was entitled to have his right of property vindicated by a substantial award of damages. See also TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333 at 365. Vindication of a right to exclusive use and occupation is of a different order and nature to vindication of reputation to the public.

In both defamation and trespass to land actions damages may be awarded for the hurt to feelings. In both cases aggravated damages may be awarded if the circumstances so warrant.

In my opinion the "continuing injury element" is not as strong in the case of trespass as in the case of defamation. The plaintiffs emphasised the commercial background to this case and that the ACA program was designed to attract viewers and therefore advertisers and revenue. It was a commercial operation. These considerations do not justify awarding interest at commercial rates. I would apply the reasoning in Gogic.

After considering all the circumstances I think that the appropriate rate of interest is 3 per cent from 22 February 2002 to the date of judgment on the compensatory damages (including the aggravated damages) for the trespass.

The damages for breach of the FTA were assessed having regard to the money values which prevailed at the date of delivery of judgment. Again I would not apply the commercial rate of interest. Following the reasoning in Gogic and in all the circumstances I would apply the interest rate of 3 per cent to the sums awarded for the period from 22 February 2002 to the date of judgment.

It was common ground that there had been no relevant payment into Court and no relevant offer.
The plaintiffs contended that they should receive their costs of the trial on all issues.
The defendants submitted that: 1 as they succeeded on the issues litigated overwhelmingly they should have all their costs of the trial on a party/party basis. This was the primary position of the defendants
alternatively, the plaintiffs should pay on a party and party basis -

(a) the costs of the defendants of the s 7A trial and,

(b) 87 per cent of the remaining costs of the defendants of the trial being the amount of time assessed by Mr M O'Brien as the amount of time spent on the defamation issues at the hearing before me, not including the addresses

alternatively that the plaintiffs should pay all the costs of the first and third defendants: (a) of the s 7A trial (b) of the defamation trial (c) of the claim of trespass on the Moss' land (d) of the claim for trespass at Edmondson Park by Craftsman Australia Pty Limited and by Ilvarity Pty Limited - these claims failed (e) Mr Munro's costs (on all issues) (f) of defending the claim by Craftsman Australia Pty Ltd based on fraud and false and misleading conduct (g) of defending the claim the defendants aided the allegedly false and misleading conduct of others

The first and third defendants accepted that if the third alternative was adopted they would have to pay the costs of Mr Cox of the trespass action. 4. alternatively, each party bear its own costs. 50. The defendants pressed for the first or second alternative. One of the drawbacks of alternative 3 was that it would lead to a prolonged costs assessment as the assessor sorted out the issues, how much preparatory work and hearing time was devoted to each, their relative importance and the extent to which they overlapped. 51. The evidence led on the trespass issue was principally in Mr Cox's case. The evidence and argument as to whether Craftsman Homes Australia Pty Ltd and Ilvarity Pty Limited could sue in trespass occupied a small amount of time. The evidence as to their claims lay in a short compass and the addresses on their claims were succinct. 52. At the s 7A trial (which lasted four days) the trial judge took the claim in defamation by Craftsman Homes Australia Pty Ltd both as to the promo and the program away from the jury and reserved all questions of costs. The jury held that some of the imputations contended for by Ilvarity and Mr Cox did not arise from the promo or from the program and verdicts for the defendants were entered in respect of those. The majority of the imputations for which Ilvarity and Mr Cox contended were upheld. 53. The claim in trespass by Mr Cox was an important part of his case. He also succeeded in his claims for damages for misleading and deceptive conduct and his claim of fraudulent representation as against TCN Channel Nine Pty Limited and Mr Fordham, as did Ilvarity Pty Limited. 54. The case against and for Mr Munro occupied very little time at the hearing. He was, of course, able to take advantage of the evidence led by TCN Channel Nine Pty Limited. Essentially, the evidence did not establish any liability on his part. 55. As the claim made by Craftsman Homes Australia Limited in trespass, defamation and misleading and deceptive conduct failed there is no good reason why it should not pay the costs of the defendants of these. The question arises as to what proportion of those costs it should pay. Its defamation case did not get to the jury so that the defence of justification never had to be established against it and the majority of the evidence and the addresses went to that issue. As mentioned, the trespass issue which it raised occupied a small amount of time.

The Plaintiffs' case 56. A distinction has to be drawn between the cases of Ilvarity and Mr Cox and that of Craftsman Homes Australia Pty Limited. 57. The argument on behalf of Ilvarity and Mr Cox was as follows:

(a) The general rule in awarding costs is that costs follow the event (s 98 of the Civil Procedure Act and Pt 42.1 of the UCPR) but the Court retains a wide discretionary power. (This was not disputed).

(b) The plaintiffs have succeeded very substantially in their claims in the proceedings and the normal rule should apply.

(c) The serious trespass and misleading and deceptive conduct found were inseparably connected with and made use of in the advertisements for and the defamatory publications.

(d) The serious and wrongful conduct of TCN9 and Mr Fordham would, if defamation alone were litigated, not only require them to be deprived of their costs, although successful in some respects, but because of the seriousness of that conduct could well require them to pay the costs of the plaintiffs.

(e) It would be extraordinary in such circumstances for the successful plaintiffs to be deprived of costs and in substance suffer the reduction of the substantial amounts of damages for clearly wrongful conduct. It would encourage the defendants, through A Current Affair, to continue as serial offenders for their own ratings and commercial gain.

(f) The trespasses and misleading conduct were carried out for the benefit of the business of TCN 9. The conduct was intentional, deliberate and persisted in.

(g) An order for costs is intended to compensate the successful party not to punish the unsuccessful party. Any order for costs other than in favour of the plaintiffs will have the result of more than negating the punitive intent apparent in the award of exemplary damages.

(h) Although trespass, fraud and misleading and deceptive conduct were wholly in issue on the defence pre-trial, the defendants did not at trial seriously defend those claims on the facts. Such conduct was integral to the course of the litigation and the relationship between the parties that gave rise to the proceedings Had the defendants conceded trespass and the like, the defamation proceedings may well have been resolved. The overall conduct of the proceedings served to merge all issues together.

(i) The defamatory publications would probably not have been made were it not for the fruits of the trespass and the misleading and deceptive conduct or, if they had been made, would have been of less significance. There is a close factual relationship between the causes of action which militated against severing the various claims and litigating them separately.

(j) There is no basis to view the proceedings other than as one event. Reference was made to James & Ors v Surf Road Pty Ltd & Ors (No 2) 2005 NSWCA 296 at [34]. "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." And I would add from the same paragraph: "… 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." See also per Toohey J in Hughes v Western Australian Cricket Association (1986) ATPR 40-748.

(k) The blanket maintenance by the defendants of their defences to these actions "tainted" their conduct of the entire proceedings.,

(l) Ilvarity and Mr Cox succeeded substantially in the separate 7A case and are entitled to the costs of that trial. The defendants resisted in respect of all the imputations alleged. (That was the position on the pleadings. In his closing address to the jury Senior Counsel for the defendants did not actively contest some of the imputations alleged). 58. I am unable to accept some of the assertions within the foregoing submissions. TCN9 by Mr Fordham saw the building work of Ilvarity. What was seen was shoddy and of poor quality. I do not agree that without the fruits of the trespass and the misleading and deceptive conduct the defamatory publications would not have been made. That is speculation. It was in the public interest for the faulty building work to be exposed. While I have made serious findings against TCN 9 and Mr Fordham as to the trespass, fraud and misleading and deceptive conduct, the defence of justification was upheld.

I do not share the view that the proceedings should be viewed as one event. This is not a case where it is difficult to separate the defamation issues from the other issues. The bulk of the hearing was taken up by the defamation issues and the defence of justification. They dominated the trial. TCN 9 called a great deal of evidence on the justification issues. That evidence concerned the conduct and work of Ilvarity and Mr Cox on four separate sites.

Ilvarity and Mr Cox contended that in any event the Court has a discretion to refuse costs to a successful party and a discretion to order costs against a successful party particularly where the misconduct of that party has substantially contributed to the institution and prosecution of the proceedings. The plaintiffs sought an order that the defendants should pay their costs of the defamation action. Alternatively, the plaintiffs submitted that the defendants should bear their own costs of the defamation because of the manner in which the defendants misconducted themselves over the extended period of the misleading and deceptive conduct. This conduct was a precursor to, and facilitated the publications complained of, and disentitled the defendants from a costs order in their favour in the subsequent litigation. The plaintiffs submitted that the wrongful conduct of TCN9 and Mr Fordham was inseparably connected with their preparation and publication of the defamatory material.

Ilvarity and Mr Cox further submitted that the Court cannot be required to disentangle the various claims nor the time spent on each of them. They relied on these observations of Mahoney JA in Waters v P.C. Henderson (Australia) Pty Ltd (6 July 1994 NSWCA BC 940952). "I do not think it would have been appropriate for his Honour to attempt to determine which issues were won by particular parties, to what extent they were won and what was the amount of time spent on each of the issues so as to apportion costs accordingly. I think that would have been contrary to the trend of decision in relation to the exercise of discretion as to costs."
Mahoney JA did not dissent from the trial judge's description of the case as a construction dispute, being concerned with the equipping of premises in the Darling Harbour complex. Priestley JA observed in that case it was open to the judge to take a global approach rather than a particular approach. Priestley JA emphasised the wide discretion as to costs given to trial judges and the reluctance of the Court of Appeal to intervene unless it is pretty clear something has gone badly wrong. Waters v P C Henderson is a different case but the principles are helpful.

The plaintiffs attacked the mathematical and statistical approach adopted by Mr O'Brien in his detailed affidavit submitting it was contrary to authority and in substance inaccurate and somewhat misleading in the light of the following: (a) The claims for aggravated and exemplary damages can be seen as distinct claims, integral to the various causes of action. The foundation for the claims for aggravated and exemplary damages in relation to the distinct causes of action largely depended upon the factual and legal implications of the defamatory imputations.

(b) The specific factors listed in para 947 of the judgment relevant to the award of exemplary damages encompass evidentiary and legal elements extracted from the entirety of the plaintiffs' causes of action, including the defamation case, for example: (i) the general allegations of poor work and leaving a trail of devastation when no prior notice had been given and there had been negotiations with Mr Chaseling for an interview (ii) the confrontation of Mr Cox in unfair circumstances where he could not effectively answer his critics and the sustained attack being made on Mr Cox's reputation and businesses without regard to the damage being done and the hurt being done to Mr Cox's feelings (iii) the public appeal of ACA in the success of which TCN9 and Mr Fordham had a clear financial interest was significantly enhanced by actual footage of poor work and "guilty men."

The plaintiffs submitted that much pre-trial preparation related to areas other than pure defamation, although these other areas occupied minimal hearing time. It was a mistake to simply rely upon the hearing time itself. In my opinion the case on trespass and the claims for aggravated damages and exemplary damages and the cases on fraud and misleading and deceptive conduct had to be carefully prepared. That involved a full investigation of the facts relating to a chain of events. Regard must be had to the issues raised on the pleadings.

TCN 9 and Mr Fordham were obviously desirous of obtaining footage of Mr Cox in circumstances which would enhance the program and give it intimacy and immediacy and make the program more memorable. The deceptions and trespass enabled them to achieve those goals. It could not be said that the trespass and the misleading and deceptive conduct were unrelated to the publication of the matter complained of. At the hearing before me the theme of Senior Counsel for the defendants was that this was a defamation case and the trespass count was allowed to pass by. The defendants were dismissive of the fraud count and the allegations of misleading and deceptive conduct. The plaintiffs' pleadings on these points were greatly improved after debate in Court and they filed the Third Further Amended Statement of Claim.

A great deal of the evidence concerned the contract between Ilvarity and Mr and Mrs Moss, the partial construction of their house, the quality of the building work done, the course of contractual conduct and events which occurred. There was also evidence dealing with three other building projects and what occurred in relation to each of them. One of those other projects was not mentioned on the program. Appreciable expert evidence was called.

Ilvarity and Mr Cox are entitled to their general costs of the action as they succeeded on the trespass count, the fraud count and the misleading and deceptive conduct counts. They are also entitled to their costs of preparation of those counts.

I do not agree with the submission that the defendants should pay the costs of Ilvarity and Mr Cox of the s 7A trial. While it was a separate hearing and many of the imputations propounded were upheld and Ilvarity and Mr Cox enjoyed a substantial measure of success (but not complete success) that does not take into account sufficiently the defences which succeeded.

Despite the arguments advanced on behalf of Ilvarity and Mr Cox, it is my opinion that there is no sufficient basis to order that TCN9 and Mr Fordham pay the costs of Ilvarity and Mr Cox of the defamation issues which occupied the majority of the hearing time and, given the extensive evidence called, the majority of the preparatory work undertaken by each of the parties. The trespass and the misleading and deceptive conduct were engaged in during the course of the preparation of the program (and the promo) and to enhance them and regard was had to all the conduct of TCN9 and Mr Fordham when assessing the aggravated and exemplary damages (see paras 927-949 of my earlier judgment). Notwithstanding this, the great majority of the defamation evidence and the addresses can be isolated. The amount of evidence that is common to the trespass count, including the assessment of damages and the defamation counts is small. The same comment applies to the evidence common to the misleading and deceptive conduct counts and the defamation counts.
The next question is whether there is any sufficient basis to deprive TCN9 and Mr Fordham of their costs of successfully resisting the actions of Ilvarity and Mr Cox for damages for defamation. Insofar as there was evidence common to the actions for defamation and those for trespass and false and misleading conduct, including the assessment of damages, that evidence should, for costs purposes, be treated as being given in the latter actions and not in the defamation actions. A small amount of evidence falls into this category. Based on Ritter v Godfrey 1920 2 KB 47 at pp 60-61 per Aitkin LJ, it seems that in the present case before an order should be made depriving TCN9 and Mr Fordham of their costs on the defamation counts it would have to be shown that they had done some wrongful act in the course of the transaction (or publishing the matter complained of) of which the plaintiff correctly complains. Atkin LJ explained that this included that they had engaged in improper conduct in or connected with the litigation calculated to defeat or delay justice, or that they had committed "a wrong to the public": King v Gillard 1905 2 Ch 11, that is some criminal or quasi criminal conduct, e.g. a fraud or crime or preparation for fraud or crime or some act of serious oppression. In King v Gillard it was held that a successful defendant cannot be deprived of costs on the ground of improper conduct, e.g, of misrepresentation to the public - not connected with the issue between himself and the plaintiff.
This is an unusual case, the facts of which differ markedly from any previous decision. There was improper and wrongful conduct on the part of TCN9 and Mr Fordham which understandably made Mr Cox ropeable. There was sustained deception and trespass. TCN9 and Mr Fordham temporarily took over the home and office of Mr Cox. The result of their conduct was to enhance the impact of the program against Mr Cox, using wrongful means.

My mind has fluctuated as to the correct decision. I think that there was a sufficiently close connection between the wrongful conduct or misconduct of TCN9 and Mr Fordham and the publication of the matter complained of to justify depriving successful defendants, whose defence of justification has been upheld, of their costs.

The parties were hoping that it would be possible for some general orders to be made as to costs which would avoid a detailed costs assessment. That has not been possible. The following orders for costs are made on a party/party basis.

As to each of the causes of action of Craftsman Homes Australia Pty Limited against each of the defendants Craftsman Homes Australia Pty Limited pay the costs of each of the defendants, such costs to be limited as to hearing time to 2 hours for all such causes of action. (It is noted that on the defamation counts verdicts for the defendants were entered by direction of the judge. Its case did not go to the jury).

Ilvarity and Mr Cox pay the costs of Mike Munro of all their causes of action against him, such costs to be limited as to hearing time to 2 hours for all such causes of action.

Ilvarity and Mr Cox on the one hand and TCN9 and Mr Fordham on the other, each bear their own costs of the defamation actions.

Ilvarity pay the costs of each of TCN9 and Mr Fordham of its action in trespass against them, such costs to be limited as to hearing time to 1 hour for such causes of action.

Ilvarity and Mr Cox pay the costs of TCN 9 and Mr Fordham of the claim (para 13D of the Third Further Amended Statement of Claim) that they aided abetted counselled and procured and induced and been directly and indirectly knowingly concerned in the contravention by W & J Moss,I & G Vimpany and N Allan of s 42A of FTA within s 61, limited as to hearing time to one-half hour. (This was a very minor point).

Ilvarity pay the costs of TCN9 and Mr Fordham of Ilvarity's claim for trespass as to the land of W & J Moss.

TCN 9 and Mr Fordham pay the general costs of Ilvarity and Mr Cox of these proceedings and the costs of the action by Mr Cox for the Edmondson Park trespass and the costs of Ilvarity and Mr Cox's action for fraudulent misrepresentation and misleading and deceptive conduct, limited as to hearing time for the trespass, fraudulent representation and misleading and deceptive conduct to three days (evidence and addresses).
I have not heard argument as to the time estimates. They have been given so as to facilitate any costs assessment by the parties or, if it becomes necessary, by a costs assessor. I am prepared to hear argument as to those estimates. I have no way of knowing what reasonable preparation was undertaken by the parties on the various issues.

I did take into account the time assessments in the affidavit of Mr M O'Brien. Of the 14 days in Court on the hearing (excluding oral submissions and case in reply) he assessed that 1.7 days were spent on trespass/trade practices issues. Some time was spent on these in the closing oral submissions which extended over four days and involved referring to some of the authorities. In all the hearing before me took place over 21 days. There were opening speeches and some time was spent on dealing with pleading amendments. The jury trial before Kirby J took place over four days. I have taken into account that there was some argument before Kirby J as to whether the defamation case of Craftsman Australia Pty Limited should be left to the jury.

I set out the verdicts which should be entered and the declaration which should be made. So far as possible they follow the same sequence as the costs orders:

Verdict for each of the defendants on all causes of action brought against each of them by Craftsman Homes Australia Pty Limited..

Verdict for Mike Munro on all causes of action brought against him by Ilvarity and Mr Cox.

Verdicts for TCN9 and Mr Fordham on all defamation causes of action brought against each of them by Ilvarity and Mr Cox.

Verdict for TCN9 and Mr Fordham on Ilvarity's cause of action in trespass against each of them.

Verdict for TCN9 AND Mr Fordham on Ilvarity and Mr Cox's cause of action (para 13D of the Third Further Amended Statement of Claim) that they aided, abetted, counselled and procured etc.

Verdict for Mr Cox on the cause of action in trespass (Edmondson Park) against TCN9 and Mr Fordham in the sum of $230,000 with interest at 3 per cent from 22 February 2002 to date.

Verdict for TCN9 and Mr Fordham on the cause of action of Ilvarity for trespass as to the property of W & J Moss.

Verdict for Mr Cox for $50,000 on the cause of action for misleading or deceptive conduct against TCN9 and Mr Fordham together with interest at 3 per cent from 22 February 2002 to date.

Verdict for Ilvarity for $30,000 on the cause of action for misleading or deceptive conduct against TCN9 and Mr Fordham together with interest at 3 per cent from 22 February 2002 to date. 10. As to the false representation count (para 13A) between Ilvarity Pty Limited and Mr Cox on the one hand and TCN Channel Nine Pty Limited and Ben Fordham on the other declare that these defendants shortly prior to 22 February 2002 falsely represented to Ilvarity Pty Limited and Mr Cox that Ben Fordham's name was John Stinson and that he was a prospective customer of Ilvarity Pty Limited and Mr Cox and was seeking an appointment and meeting with Mr Cox to discuss and obtain advice concerning the construction of a Craftsman Home and that all damages have been awarded under the other counts.

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.

Craftsman Homes Australia Pty Ltd v Channel Nine Pty Ltd - Costs

At a glance

Court

Decision date

Before

Source

Judgment (101 paragraphs)

Parties

Cases Cited (7)