Diver v Highland FM 107.1 Co-operative Limited

Category: Costs

Parties: Hamish Diver (Plaintiff)
Highland FM 107.1 Co-operative Limited (Defendant)

Representation: Solicitors:
Peter Short Lawyers (Defendant)

File Number(s): 2025/00045392

Publication restriction: Nil

Judgment

The application before the court

1. These are defamation proceedings with a short history, as the plaintiff discontinued his claim on the first return date. The sole remaining issue is the defendant’s application for a gross sum costs order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW).

2. The defendant acknowledges that the consequences of discontinuance generally include adverse costs orders. The issue addressed by the parties is whether the costs to be awarded (which the plaintiff concedes should be determined in a gross sum) should be for the maximum sum claimed of $4572, or the sum proposed by the plaintiff, namely $2324.10.

3. The two reasons for the difference between these modest amounts arise from the defendant’s claim for travelling expenses for travelling 240 km to attend court and for legal advice obtained by the defendant prior to the statement of claim being filed.

4. The second of these objections raises important issues in relation to the costs of the now mandatory concerns notice procedure set out in the Defamation Act 2005 (NSW) (“the Act”) where proceedings either do not eventuate at all or are abandoned in circumstances such as the present. The plaintiff submits that costs prior to the commencement of proceedings should be modest in nature and awarded only where there is evidence of work of some substance. The defendant submits that these reforms have led to an escalation of costs in terms of retaining counsel and considering not only the appropriate reply but the claim generally, in circumstances of some urgency, having regard to the shortness of the 28-day notice period.

The plaintiff’s claim for defamation

5. The plaintiff, by statement of claim filed on 4 February 2025, sought damages in the sum of “no less than AUD $100,000” for general and aggravated damages, a retraction (on the basis that the statements were “false and misleading”) and permanent injunctive relief. The publications identified were a meeting in the broadcasters’ office on 5 February 2024 and an email sent to one person a year later, on 21 January 2025.

6. Contrary to the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 14.30, neither the matters complained of nor the concerns notices were attached to the statement of claim. Immediately prior to the return date, the plaintiff was notified by my associate that these documents would need to be provided on the first return date. This resulted in production to the court of three concerns notices dated 21 January, 4 February and 15 February 2025. The exchange of documents between the court and the parties also put the defendant (who had not yet been served) on notice of these proceedings having been commenced in this court.

7. The concerns notices and the statement of claim both breach the provisions of ss 12A and 12B of the Act. The main defects are as follows:

(a) The concerns notice of 20 January 2025: The 28-day notice period for this concerns notice (which relates to the first matter complained of only) was still running when the plaintiff commenced proceedings on 4 February 2025. The imputations do not match those which were pleaded in the statement of claim, the text of the publication is not attached and there are generalised references to other publications to “multiple third parties”. (b) The concerns notice of 4 February 2025: This notice was sent after the statement of claim had been filed earlier that same day, as is stated in the text of the notice, so the 28-day period had not even commenced. The imputations do not match those which were pleaded in the statement of claim and the text of the publication is not attached. (c) The concerns notice of 15 February 2025: This is a further warning that the “statutory 28-day notice period will expire at 11:59 PM on 17 February 2025”, adding that correspondence in reply to the concerns notices are themselves actionable as they “heighten Highland FM’s legal exposure by exacerbating the risk of vicarious liability for defamatory actions committed by its representatives”, although correspondence from the defendant to the plaintiff could never be actionable unless sent to a third party (and, in addition, is likely to be afforded absolute privilege by reason of s 27 of the Act). This third notice also includes an “expanded private settlement provision” imposing still more conditions, all of which must be complied with by 17 February 2025. (d) All concerns notices: The contents of these concerns notices, which demand substantial financial compensation as well as relief not obtainable in defamation proceedings (such as disciplining and sacking persons connected to the defendant’s radio station), are inconsistent with the language of the concerns notice procedure. The defendant is informed that this is a “strict, non-negotiable settlement offer” (paragraph 4 of the second concerns notice). The defendant is informed that unless all the plaintiff’s demands are agreed to by 17 February 2025 (which is less than 28 days after all concerns notices were sent, particularly since there was clearly a response amounting to a request for information under s 12A(4)), not only will his statement of claim, filed in an unnamed court on 4 February 2025, be served, but regulatory and professional complaints will be instituted. (e) The statement of claim: There are multiple errors and omissions in the pleading of the plaintiff’s claims. Contrary to UCPR r 14.30, neither the concerns notices nor the matters complained of were attached. Contrary to UCPR r 14.30, only one set of imputations (which does not match those in the concerns notices) is pleaded to arise although the publications were by different persons and a year apart in time. The claim for vicarious liability is misconceived, defamation being an intentional tort. There is no proper pleading of serious harm (a defect shared by the concerns notices); there is only a generalised claim of “severe reputational harm” and “loss of professional and social standing”. In addition, an impermissible claim for legal costs (as the plaintiff is not a solicitor) is made.

8. In correspondence to the court, the plaintiff candidly admitted that he had not yet served the statement of claim, was not ready to proceed, and was considering discontinuing so that he could consult a firm of solicitors for advice.

9. On the first return date, 27 February 2025, the defendant, having learned that these proceedings were in this court on this date only days before, was represented by its solicitor. The plaintiff did not attend.

10. The defendant drew attention to the failure to comply with the concerns notice procedure, the inadequacies of the statement of claim and the absence of the plaintiff, who had not attended court, and sought orders for summary dismissal. The following orders were made:

“Plaintiff called outside the court 3 times at 10:00am; no appearance.

Grant leave for the defendant to file a Notice of Appearance.

The defendant’s submissions and evidence on its application to strike out the claim pursuant to s 12A of the Defamation Act 2005 (NSW) are to be served on the Plaintiff by 6 March 2025.

The plaintiff’s submissions and evidence in reply to be served by 17 March 2025.

The defendant’s application for summary dismissal listed for hearing at 2:00pm on Friday 21 March 2025.

Both parties are to provide a copy of the submissions and evidence to the Court. In the case of the defendant, these should also be supplied to Blackbay Lawyers.

Costs reserved.

Note: Both parties may serve documents by email, including documents sent to Gibson’s DCJ associate.”

11. Unbeknownst to the defendant or to the court, the plaintiff had filed a notice of discontinuance in the registry later that same day (27 February 2025). That discontinuance was, however, silent as to costs.

12. The filing of this document triggered the costs argument which I have heard today. The plaintiff sent an outline of submissions and Mr Short, who appeared for the defendant, made oral submissions and tendered material on costs that had been served on the plaintiff. These are the reasons for the orders I made.

Challenges to the defendant’s claim for costs

13. The plaintiffs written submissions start with an acknowledgement that the price to be paid for the discontinuance may include a costs order (UCPR r 42.19) but submitting that the costs order in question should not include any allowance at all for travelling expenses or for work done prior to these proceedings before the court. The suitability of a gross sum costs order is not challenged by the defendant, although two quantum issues are canvassed.

14. The first of these challenges is to the travel arrangement costs.

Travel arrangements

15. The circumstances in which the defendant learned of these proceedings being on foot in this court are unusual. The defendant and its solicitor were, on very short notice, obliged to travel a significant distance very early in the morning, in order to be present in court on the first return date, about which they had had no notice until a day or two beforehand.

16. The plaintiff’s failure to serve the defendant promptly and inform it of the first return date is contrary to the requirement in UCPR r 10.1 that sealed pleadings must be served “as soon as practicable”. I also note the one-month period for service of all statements of claim in this court.

17. The defendant and its solicitor were taken by surprise, not only by the imminence of the first return date, but also by the fact that the action was brought in this court. During the 28-day period following service of the concerns notice on 20 January 2025, the plaintiff had sent a second and third concerns notice on 4 and 15 February 2025, noting that he had filed a statement of claim for defamation, but without identifying in which court this had been done.

18. If the defendant had been given proper notice, an appearance by AVL could have been organised. This was impossible in the short time available. I consider it particularly inappropriate for the plaintiff to have failed to advise the defendant of the identity of the court in which these proceedings have been filed. They could have been brought anywhere in Australia and in any court with jurisdiction, ranging from local or administrative courts in the Australian Capital Territory to courts at Federal level to courts at State level in Sydney. As well as jurisdiction, all these courts share one further feature: they are a long way away from the defendant’s place of business.

19. I note the complaints about mileage, but Mr Short reminds me that there were massive traffic hold-ups on the morning in question and that he had been obliged to contact the court from his car to advise that he was running late.

20. The challenge to travelling costs is rejected.

21. The second challenge is to the quantum of costs sought, which are claimed to be excessive for what amounts to work carried out over a two-month period and required only two brief appearances in court.

The parties’ submissions about legal costs

22. The first issue is whether costs should be assessed on the ordinary or indemnity basis.

23. The claim brought by the plaintiff suffers from many pleading and procedural defects but, even on the most generous reading of the pleadings, it must be struck out by reason of the failure to comply with the requirement to give 28 days’ notice. Should this result in an award of costs on an indemnity basis, and should these costs be restricted to the conduct of these proceedings in court?

24. Mere discontinuance of a claim is insufficient to warrant an award of indemnity costs (Lahoud v Lahoud [2006] NSWSC 126 at [38]). However, the court should not shrink from such a course where the conduct of one party to the litigation is conduct which could “poison the fountain of justice” (Packer v Meaghe**r [1984] 3 NSWLR 486 at 494*;* cf Rivkin v John Fairfax Publications P/L [2004] NSWSC 671; see also TW and Associates Pty Limited & Ors v Ireland & Ors [2000] NSWSC 1185).

25. Mr Short submits that the conduct of the plaintiff is sufficient for this requirement to be made out. He points to a wide range of conduct including the contents of the concerns notices (demanding disciplinary proceedings and sanctions) and the unsatisfactory conduct of the litigation, as well as the hopelessness of a claim of vicarious liability of a corporation for an intentional tort.

26. The plaintiff offers, as an explanation for the inadequacies of his pleading and conduct of his claim, the fact that he is a litigant in person who is unfamiliar not only with the complex principles of defamation law but also the court registry filing procedure. He says that he was concerned that the limitation period on the first publication pleaded was about to run out, and that this required him to file a statement of claim, even though the period for notice had not yet expired. The plaintiff says he was unaware that there were provisions extending the limitation period where a concerns notice requires time to run after the 12-month period, and that indulgences should be granted to litigants in person struggling with such technicalities.

27. The plaintiff was aware of there being not only a limitation period of 12 months, but also that there is a concerns notice procedure, a requirement to set out serious harm and imputations and a procedure for filing and service of proceedings. It is clear from his correspondence that he has been in contact with lawyers specialising in defamation matters. He has clearly had resources to draw upon for the commencement of these proceedings.

28. Even if this were not the case, it has long been the law that a litigant in person is not entitled to expect the court to exercise generosity of this kind to litigants who elect to represent themselves: Duraisamy v Sydney Trains [2019] NSWCA 269 at [25]; Gallo v Dawson (1990) 93 ALR 479 at [3]; Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806 at [47]; Rajski v Scitec Corporation Pty Ltd (NSW), Court of Appeal, 16 June 1986, unreported.

29. The plaintiff particularly complains about what is called the “apparent procedural inconsistency” in the online court system whereby his statement of claim was accepted and listed for a first return date despite its many defects, whereas he had considerable difficulty filing a notice of discontinuance because he had failed to use the correct form.

30. There is no procedure in this court for the registry to analyse pleadings in order to ensure that there has been correct compliance with the legal requirements. It is of particular importance that a person who files a statement of claim where there is a very tight limitation period, such as defamation, should be entitled to have the statement of claim processed by the registry promptly. Only in cases of gross and obvious inconsistency will the court refused to file a statement of claim, as occurred in Kelly v University of New South Wales [2025] NSWDC 24 at [115]-[130]. If, however, parties fail to use the correct form or procedure, as occurred with the plaintiff’s discontinuance documentation, the court is not obligated to settle the document for him.

31. I am satisfied that costs should be awarded on an indemnity basis.

Quantum of costs

32. The defendant’s assessed figures are modest and should be substantially allowed, subject to the usual deduction made in accordance with the “rule of thumb” for deductions of the kind a costs assessor would make, as well as to make allowance for the benefits of a quicker result (Bobb v Wombat Securities Pty Ltd (No 2) [2013] NSWSC 863; Wollongong City Council v Phillips [2019] NSWLEC 64 at [57]). The general reduction made, even where the costs are on an indemnity basis, is around 30%.

33. In the present case, I would reduce these costs to $3,500, which is well below that percentage.

Orders

1. Pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), the plaintiff is to pay the defendant’s costs as a gross sum order in the sum of $3,500, such payment to be made in 28 days.