Cross v Queensland Newspapers Pty Ltd

CATCHWORDS: PRACTICE and PROCEDURE - Judgments and orders - amending orders- slip rule - orders amended to properly reflect judgment - COSTS - Civil Procedure Act 2005 - differential costs orders - where party is successful on either a discrete cause of action or particular issue only - judicial discretion - COSTS - orders for costs of trial where Court of Appeal remits proceedings to trial judge

LEGISLATION CITED: Civil Procedure Act 2005, s 98 Uniform Civil Procedure Rules 2005, rr 36.17, 42.1, 42.7

Craftsman Homes Australia Pty Ltd v Channel Nine Pty Ltd (2006) NSWSC 1297 CASES CITED: Lewis v Nortex Pty Ltd (In liq); Lamru Pty Ltd v Kation Pty Ltd [2006] NSWSC 480 LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd (No 2) [2002] NSWSC 72 Western Australia Cricket Association Inc (1986) ATPR 40-748

PARTIES: Ronald Cross (Appellant) Queensland Newspapers Pty Ltd (Respondent)

COUNSEL: GO Reynolds SC; CA Evatt; JE Rawlings (Appellant) S Wheelhouse SC; M Richardson (Respondent)

Licardy Harris & Co (Appellant) SOLICITORS: Thynne & Macartney (Brisbane) (Respondent) Kemp Strang (Sydney) (Respondent's agent)

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT DATE OF DECISION: 6 December 2006

LOWER COURT MEDIUM NEUTRAL CITATION: Cross v Qld Newspapers Pty Limited [2006] NSWSC 1340

• 9 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40811/06

MASON P BEAZLEY JA BASTEN JA

30 May 2008 Ronald Cross v Queensland Newspapers Pty Ltd (No 2) Judgment 1 THE COURT: The Court delivered judgment in this matter on 7 May 2008, in which it allowed the appeal and made orders setting aside the judgment at first instance and remitting the matter for rehearing on certain defences. The unintended effect of the orders made by the Court was to set aside portion of the judgment in respect of which the respondent had been successful at first instance and against which no appeal had been brought. 2 The respondent, by Notice of Motion filed 16 May 2008, has sought a variation of the Court's orders to properly reflect its judgment (see Orders 2 and 3 sought in the Notice of Motion) and also seeks a variation of the costs order made by the Court (Order 4 sought in the Notice of Motion), as well as an additional order relating to an earlier costs order made by the trial judge (Order 5 sought in the Notice of Motion).

Orders 2 and 3 sought in the Notice of Motion 3 The appellant consents to the amendment of the Court's orders so as to reflect the judgment. This matter should be attended to under the slip rule: Uniform Civil Procedure Rules 2005 (the UCPR), r 36.17. Accordingly, Orders 2 and 3 made by the Court on 7 May 2008 should be varied, so as to read: "2. Allow the appeal and set aside the judgment and orders delivered on 6 December 2006 in relation to the first imputation carried by the respondent's publication dated 20 June 2003;

3. Remit the appellant's claim for defamation arising from the respondent's publication dated 20 June 2003 to the Common Law Division for consideration of defences, other than that of truth, and damages, if any."

Orders 4 and 5 sought in the Notice of Motion 4 The variation of the Court's costs order and the additional order sought by the respondent require a little more explanation. The proceedings, in the final form heard by his Honour the trial judge, were in respect of two imputations, each found by a jury to be carried and to be defamatory. The defamatory imputations had been conveyed by one of two separate newspaper articles. The first article was published in The Courier-Mail on 20 June 2003 (the first publication) and was entitled "Marketeer aims for the south". The second article was published in the same newspaper on 1 July 2003 (the second publication) and was entitled "Coast marketeer targeted in raid". The defamatory imputation conveyed by the first publication was that the appellant had "ripped off Mum and Dad investors by selling them investment properties at exorbitant prices". The defamatory imputation conveyed by the second publication was that the appellant is a "rip off merchant". 5 Two other imputations conveyed by those publications and found by the jury to be defamatory were abandoned at the commencement of the proceedings before the trial judge. These will be referred to as 'the abandoned imputations'. His Honour made a costs order in respect of the abandoned imputations and there was no appeal from that costs order. 6 The trial judge held that the defence of truth had been established in respect of each of the defamatory imputations conveyed by the first and second publications respectively. His Honour accordingly ordered that there be judgment in favour of the respondent against the appellant in each of the defamatory imputations sued upon. His Honour also ordered the appellant to pay the respondent's costs of the proceedings. The appeal to this Court was only in respect of his Honour's finding that the defence of truth had been established in respect of the defamatory imputation conveyed by the first publication. There was no appeal in respect of the judgment entered in favour of the respondent in respect of the second publication. 7 As already indicated, the Court allowed the appeal and ordered that the matter be remitted for rehearing other than in respect of the defence of truth, which the Court found had not been established. The Court ordered: "4. If an order as to costs was made in the Common Law Division with respect to the judgment delivered on 6 December 2006, set aside the order and direct that those costs be dealt with by the Court on remittal". 8 In its Notice of Motion filed 16 May 2008, the respondent sought an order that this costs order be varied as follows: "4. Set aside the costs order made on 6 December 2006. Order that the appellant pay the respondent's costs in respect of the second imputation carried by the respondent's publication dated 1 July 2003, to be assessed and payable by the appellant to the respondent forthwith. Direct that the costs of the first imputation carried by the respondent's publication dated 20 June 2003 be dealt with the Court on remittal". 9 The additional order sought was that: "5. The costs of the second imputation carried by the respondent's publication dated 20 June 2003 and first imputation carried by the respondent's publication dated 1 July 2003 be assessed and payable by the appellant to the respondent forthwith."

This order as sought is directed to the immediate payment of the costs ordered in respect of the abandoned imputations and in respect of which there was no appeal. 10 Orders 4 and 5 sought in the Notice of Motion are opposed by the appellant.

Should Order 4 in the Notice of Motion be made? 11 The costs of proceedings before the court are in the court's discretion: Civil Procedure Act 2005, s 98. The general principle as to costs is governed by UCPR, Pt 42, r 42.1, namely, 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". 12 The respondent relies upon a line of authority that where a party, although not totally successful in the proceedings, is successful on either a discrete cause of action or on a particular issue, then the court may order the costs of that cause of action or issue (a discrete matter) notwithstanding that the party has not succeeded in the proceedings as a whole: see Hughes v Western Australia Cricket Association Inc (1986) ATPR 40-748; Craftsman Homes Australia Pty Ltd v Channel Nine Pty Ltd (2006) NSWSC 1297; Lewis v Nortex Pty Ltd (In liq); Lamru Pty Ltd v Kation Pty Ltd [2006] NSWSC 480; LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd (No 2) [2002] NSWSC 72. 13 The respondent contends that these authorities stand for the proposition that a party who has substantial success on a discrete matter "should be entitled to its costs of that cause of action or issue". There is no principle to that effect and the respondent has stated the effect of the authorities too highly. The fact that there has been substantial success on a discrete matter is a factor that the Court may, in the exercise of its discretion, take into account in determining the costs order that should be made. The Court may, in such a case, make an order that the otherwise unsuccessful party have its costs of the discrete matter notwithstanding its lack of success in the proceedings as whole. 14 The respondent advances four factors as supporting the favourable exercise of the Court's discretion in this regard. First, it relies upon its success in respect of the second publication. Secondly, it contends the costs of trial that were incurred in respect of the second publication will be "irrelevant to the conduct of any second trial". As the Court understands this submission, it is that the matters in issue on the second publication will play no part in the remitted hearing. This is disputed by the appellant. He points out that the respondent will rely upon matters in the second publication in support of its case on the contextual truth of the defamatory imputation conveyed by the first publication and also in respect of damages. 15 The respondent, as part of its submissions in support of the second factor, also contended that as the trial judge has now retired, this Court is in a better position to determine the appropriate costs order than the judge assigned to the rehearing will be. It submitted that if this Court does not make an order now in respect of the costs of the trial relating to the second publication, substantial further costs will be incurred in reviewing the conduct of the first trial. 16 Next, the respondent contended that there is likely to be a substantial lapse of time before the proceedings finally conclude and before the respondent can recover its costs, unless the Court makes Order 4 as sought in the Notice of Motion. The respondent submits that there is an unfairness in this, because the appellant is in fact now free to tax and recover his costs of the appeal. 17 Finally, the respondent submitted that the costs of the trial have already been submitted for assessment by both parties and with considerable time and money expended by each party on the assessment which, the Court was informed, was nearing completion. It was submitted that it was more efficient and in the interests of justice if that process be completed, rather than it having to be restarted at some time in the future. 18 The appellant opposed the making of Order 4. He submitted that the respondent brought upon itself the incurring of time and apparently, considerable expense, in preparing the bill of costs for assessment in circumstances where there was an appeal pending. The respondent replied, asserting that it was entitled to have its costs assessed and that the appellant could have sought a stay on the assessment of those costs. Rather than doing so, the appellant engaged in the process by filing a Notice of Objection and the assessment proceeded in the normal fashion. The respondent submitted that the assessment could now continue by removing from the Bill of Costs those items referrable to the defamatory imputation arising from the first publication. 19 The appellant also contended that the proportion of time spent at trial in respect of the second publication was about 10 per cent of the hearing time, so that any order in the respondent's favour would not be substantial as a proportion of the entire costs. This assessment was disputed by the respondent. 20 The appellant submitted that it is unfair for the respondent to seek the payment of the costs ordered by the trial judge in respect of the abandoned imputations to be paid forthwith, in circumstances where the respondent repleaded those imputations as contextual imputations in respect of the defamatory imputation conveyed by the first publication. The appellant also opposes an order that the costs the respondent seeks in Order 4 be paid forthwith. 21 The respondent's answer to this is brief, namely, that it is unjust for it to be forced to wait to recover its costs of the second matter complained of, upon which it has been entirely successful, notwithstanding that it has pleaded back the same imputations as contextual imputations. The respondent points out that if it wishes to establish those factual matters again, it must start from scratch. It also submits that as there was no appeal from the order for the payment of the costs of the abandoned imputations, those costs should now be paid. It contends that the order for costs made in respect of the abandoned imputations, is a final, not an interlocutory, order. 22 The Court has a wide discretion as to costs. In cases such as the present, there is a range of possible costs orders that might be made. Such order could be: that costs follow the event, on the basis that 'the event' is the result of the proceedings as a whole; that costs follows the event on the basis 'the event' is the cause of action based on each imputation, so that the respondent will have its costs of the defamatory imputation conveyed by the second imputation, and the party that succeeds at the remitted hearing will have the costs of the defamatory imputation conveyed by the first publication; that the respondent have its costs of any discrete matter upon which it succeeded; that the respondent be ordered to pay a proportion only of the appellant's costs; that the appellant pay the respondent's costs should the respondent succeed on the remitted hearing, although in that case some other order may be made in the exercise of the court's discretion; or that there be no order for costs. 23 In circumstances where the result of the entire proceedings is unknown because the proceedings have not been concluded, and where there may be factors relating to the conduct of the remitted proceedings which may impact upon the appropriate order for costs as to the whole of the proceedings, this Court is not in a position to determine the order for costs which ought to be made. Accordingly, the variation of the Court's costs order, as sought by Order 4 in the Notice of Motion, should be refused.

Should Order 5 in the Notice of Motion be made? 24 That leaves the question whether the Court should make Order 5 as sought in the Notice of Motion. The costs order to which this proposed order relates is the costs order made in relation to the abandoned imputations. That order was not subject of the appeal and accordingly the matter is not one properly for this Court's consideration. For that reason alone, the proposed Order should be refused. Order 5 as sought in the Notice of Motion also raises questions as to the scope and operation of UCPR 42.7 and the Court has not been provided with any assistance in that regard. That is an additional reason why it is not appropriate for this Court to enter into a consideration of the making of an order in terms of Order 5 as sought. 25 The respondent should pay the costs of the Notice of Motion. Prior to the filing of the Notice of Motion, the Court had indicated to the respondent's legal representatives that Orders 2 and 3 made on 7 May 2008 could be amended under the slip rule. The Court's direction that the respondent file a Notice of Motion and written submissions only arose out of the additional matters (Orders 4 and 5 as sought in the Notice of Motion) that the respondent sought to raise in respect of costs. The respondent has been unsuccessful in having the Court make those orders and for that reason should bear the costs of the Notice of Motion. 26 Whilst Orders 2 and 3 are to be corrected under the slip rule, the orders proposed by the respondent require modification. This is best done by setting aside Orders 2 to 4 made by this Court on 7 May 2008 and making orders to reflect the amendments made under the slip rule. As the orders that are now to be made will affect the numbering of the orders previously made, the orders on the appeal as amended are now set out in full. For the sake of clarity it should be noted that the Orders made below do not affect the costs order made by the trial judge in respect of the abandoned imputations. That order remains in force. 27 The orders on the appeal are:

1. Grant an extension of time within which to file a Notice of Appeal with Appointment up to and including 9 March 2007;

2. Set aside Orders 2, 3 and 4 made by this Court on 7 May 2008;

Set aside Orders 1 and 2 made by the trial judge on 6 December 2006;

Judgment for the respondent (defendant) in respect of the appellant's (plaintiff's) claim for defamation arising from the respondent's publication dated 1 July 2003;

Remit the appellant's claim for defamation arising from the respondent's publication dated 20 June 2003 to the Common Law Division for the determination of the respondent's defences, other than that of truth, and for the determination of damages, if any;

Order that the costs of the first trial, including the costs of the claim arising from the respondent's publication dated 1 July 2003 be determined by the trial judge at the remitted hearing;

Order that the respondent pay the appellant's costs of the appeal and, if otherwise eligible, have a certificate under the Suitor's Fund Act 1951;

The Court makes the following orders on the Notice of Motion filed 18 May 2008:

1. The Notice of Motion is allowed in part and dismissed in part;

2. Orders 2 and 3 as sought in the Notice of Motion are made as amended in the Orders made above;

3. Orders 4 and 5 sought in the Notice of Motion are refused;

4. The respondent is to pay the appellant's costs of the Notice of Motion. **********

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.