Dominello v Harbour Radio Pty Ltd t/as 2GB

Supreme Court of NSW|2019-08-16|Before: Garling J, Hoeben CJ

7 September 2017 - A Publication on the Radio

On 7 September 2017, the defendant, Harbour Radio Pty Ltd t/as 2GB ("2GB"), broadcast a short news item in these terms: "Finance Minister, Victor Dominello, has been referred to the Corruption Watchdog. The Herald reports that Mr Dominello has been accused of threatening and intimidating in order to have a 1,400 unit development approved. It's claimed he pressured a local councillor by linking her party pre‑selection with her vote on the development."
About an hour after that broadcast occurred, Mr Victor Dominello (the plaintiff) telephoned the defendant and, on air, corrected an incorrect aspect of the matter complained of, namely that he had opposed the development in question. According to correspondence from 2GB to the plaintiff's solicitors, in the 8am news bulletin, the plaintiff said, amongst other things, this: "When a General Manager expresses concerns about a billion dollar development, and whether the community is getting value for money, I'm absolutely going to fight for the community and yes, I did contact the liberal councillors and urge them not to vote for this development."
Subsequent news bulletins broadcast on that day contained statements that the plaintiff strongly refuted the allegations made against him.

18 October 2017 - Another Exchange of Views

Nothing further occurred between the parties for about a month. On 18 October 2017, the solicitors for the plaintiff wrote and recorded the previous exchange of correspondence on 15 September 2017, and expressed their disappointment that 2GB did not take up the proposed amended offer. The letter then said: "Even now, nearly six weeks rather than one week after the broadcast, the value of an apology will be significantly greater than if deferred for a longer period. We therefore invite you again to publish the apology contained in our email of 15 September 2017 in the manner proposed in your letter of 15 September 2017."
There was no response to that letter until 6 November 2017. On that day, 2GB responded, drawing attention to the fact that the correspondence of 15 September 2017 had not included any indication from the plaintiff as to whether the terms, other than the apology, were acceptable or accepted. The letter included the following: "To be clear, 2GB does not propose [to] entertain further discussion regarding the broadcast of an apology in the absence of your client's response to the other elements of 2GB's offer of amends. Assuming that is possible, and by way of response to your letter, my instructions are that the amendments you propose to the apology were not acceptable to 2GB. Addition of the first sentence in particular adds no content to the apology, and in the context of a short radio news bulletin, the addition of such a sentence would be considered unreasonable. Regarding the second sentence, whilst this is entirely a matter for your client, it is generally not preferred to repeat material about which a person has complained, even if only to correct or clarify that material. However, if your client nevertheless wishes to retain that sentence in the apology, and we are otherwise to agree on terms to finalise the matter, I will obtain instructions regarding the second and third sentences in your proposed apology."
Nothing further was heard from the solicitors for the plaintiff in response to that letter in 2017, and for over seven months in 2018.

31 August 2018 - Almost a Year has Passed Since the Publication

On Friday 31 August 2018, the solicitors for the plaintiff wrote to 2GB noting that the First Offer was not acceptable to their client and enclosing a Statement of Claim which, they informed 2GB, was proposed to be filed "early next week".
It was clear that by this stage that the 12 month limitation period would expire in the week following that letter.
The letter reminded 2GB that the plaintiff was a well-known politician of long standing and that the gravity of the allegations made by 2GB was extremely serious. The letter went on to say: "The imputations conveyed in your publication attacked the very essence of our client's commitment to public service and integrity. Generally speaking, the public already have a diminished view of politicians. Therefore the imputations would readily be accepted by a fatigued public. The conveyance is aggravated by dint of its characterisation as news and indeed published as part of your news bulletin. As you would appreciate, if our client is successful in defamation proceedings, given the extreme gravity of the imputations, he could receive in excess of $200,000 in damages. Our client is anxious to receive a proper apology. You have unreasonably resisted providing such an apology, and there was no reason for one not to have been provided when initially sought. An apology at this late stage is a degree of mitigation and of course may reduce the amount of damages awarded to our client if he is successful at trial. Our client requires an apology to be broadcast on air at an appropriate time as follows: 'We need to make a very important apology to the Finance Minister Victor Dominello. On Saturday 9 September 2017, we broadcast a news item suggesting that he had tried to influence a council vote on a large development in favour of the developer. We accept that that suggestion was completely false. We withdraw it and apologise unreservedly to Mr Dominello. Mr Dominello, we were wrong, we apologise'. "
The letter concluded by indicating that if the apology was provided now, the plaintiff would be willing to discuss an amount of compensation payable to him.
On 4 September 2018, 2GB responded, taking issue with certain matters in the letter to which reference has just been made. The letter made plain that if proceedings were commenced they would be vigorously defended because it was 2GB's view that politicians, or those with ample public profile and power, ought not be permitted to sue for defamation. 2GB said that it was prepared to defend any proceedings against it by, amongst other things, exploring the availability of a common law public figure or public interest defence within the implied constitutional protection of freedom of political speech.
The letter went on however to make an Amended Offer of Amends ("the Second Offer"). It did so through the mechanism recognised by statute of withdrawing the First Offer which had been made on 15 September 2017. The Second Offer was in the following terms: "1. Broadcast the following correction and apology during the 7am 2GB news bulletin on the Saturday that is no less than one business day after receipt of your client's acceptance of this renewed offer: 'On Saturday 9 September 2017, we broadcast a news item suggesting that Finance Minister Victor Dominello had tried to influence a council vote of a large development in favour of the developer. Mr Dominello corrected that suggestion on air in later bulletins that day and we accept that the suggestion was completely false. We withdraw the suggestion and apologise unreservedly to Mr Dominello.' If the other aspects of this renewed offer to make amends are acceptable to your client, but there is some aspect of this proposed correction and apology which your client would like 2GB to consider altering in some reasonable respect, please let me know so that I may obtain instructions. 2. Pay your client's expenses reasonably incurred prior to and in considering this renewed offer. 3. Take reasonable steps to ensure any person whom 2GB knows has received the bulletin, is told that the bulletin is or may be defamatory of your client. 4. By way of compensation, pay to a registered charity of your client's choice, a donation of $10,000 in his name."
The Second Offer was expressed to be open for acceptance by the plaintiff at any time until it was withdrawn.

6 September 2018 - Proceedings are Commenced and Served

On 6 September 2018, the plaintiff filed the Statement of Claim in these proceedings. The Statement of Claim was served on the defendant on that day.
On 8 September 2018, 2GB broadcast the correction and apology in the terms which it had described in the Second Offer. 2GB did not give any prior notice to the plaintiff that the apology would be broadcast.
The proceedings in this Court continued through the usual case management stages with the parties opposing each other, including on 5 April 2019 when the plaintiff applied to amend his Statement of Claim to include as defamatory imputations, the contextual imputations which the defendant had pleaded in its Defence. For the reasons which he explained, Hoeben CJ at CL refused that application ("the Lost Motion"): Dominello v Harbour Radio Pty Ltd t/as 2GB [2019] NSWSC 403. That judgment was published on 11 April 2019. No reference was made in the judgment to any costs order.

3 May 2019 - The Plaintiff Accepts an Offer to Make Amends

On 3 May 2019, the solicitors for the plaintiff wrote to the solicitors for 2GB referring to the Second Offer. The letter indicated that the plaintiff accepted that Second Offer. After drawing attention to two other matters, the letter then said this: "The plaintiff having been comfortably re-elected in the recent State election, can now be confident that your publication did no enduring harm to his reputation. You are nevertheless required to perform all the conditions of the offer. The donation of $10,000 in the plaintiff's name should be directed to: World Vision Australia."

Events After the Offer was Accepted

Mr Bourke, the solicitor for 2GB, deposed on 13 June 2019 in an affidavit, that by that time, 2GB had carried out Terms 1, 3 and 4 of the Second Offer. He was not cross-examined on that evidence. It ought to be accepted.
Term 2, which dealt with the payment of the plaintiff's reasonable expenses, has been the subject of a claim by the plaintiff, but not as yet the subject of any agreement between the plaintiff and the defendant.

Defamation Act 2005 - Relevant Provisions

Part 3 of the Act is entitled "Resolution of Civil Disputes without Litigation". Division 1 of that Part refers to "Offers to make Amends". Division 2 deals with the effect of making an apology in subsequent litigation. The provisions in that Division can be put to one side.
Sections 13 and 14 of the Act provide for the circumstances in which a publisher may make an offer to make amends, and when that offer is to be made.
Section 15 of the Act deals with the contents of any offer. Relevant here is the content of s 15(1)(f) which provides that an offer to make amends: "must include an offer to pay the expenses reasonably incurred by the aggrieved person before the offer was made, and the expenses reasonably incurred by the aggrieved person in considering the offer …"
It was not suggested in these proceedings that the Second Offer did not include such provisions, as it clearly did.
Section 15(3)(a) of the Act gives a Court the specific power to determine an amount of compensation offered as part of an offer to make amends.
Section 15(3)(b) of the Act gives to this Court a general power to determine "… any other question that arises about what must be done to carry out the terms of the offer" where an offer to make amends is accepted. Either the aggrieved person (here the plaintiff) or the publisher (here the defendant) can make application to the Court to exercise such power of determination.
The provisions of s 17 deal with the effect of acceptance of an offer to make amends. It is in the following form: "17 Effect of acceptance of offer to make amends (1) If the publisher carries out the terms of an offer to make amends (including payment of any compensation under the offer) that is accepted, the aggrieved person cannot assert, continue or enforce an action for defamation against the publisher in relation to the matter in question even if the offer was limited to any particular defamatory imputations. (2) A court may (but need not): (a) order the publisher to pay the aggrieved person the expenses reasonably incurred by the aggrieved person as a result of accepting the offer, and (b) order any costs incurred by the aggrieved person that form part of those expenses to be assessed on an indemnity basis. (3) The powers conferred on a court by subsection (2) are exercisable: (a) if the aggrieved person has brought proceedings against the publisher in any court for defamation in relation to the matter in question, by that court in those proceedings, and (b) except as provided in paragraph (a), by the Supreme Court."

Issues for Determination in these Proceedings

These proceedings were listed at the request of the defendant for argument on its contention that the proceedings should be discontinued and also that the Court ought assess the amount of the plaintiff's "reasonable expenses" as referred to in the Second Offer. In its submissions of 13 June 2019, the defendant also sought an order that the plaintiff pay the defendant's costs of the Lost Motion.
The defendant asserted by reason of the acceptance of the Second Offer that the plaintiff "must discontinue the proceedings". It sought its costs of the proceedings "…upon such discontinuance".
When the hearing commenced, counsel for 2GB identified two costs issues which arose. The first was that the Court was being asked to fix the amount of reasonable expenses which had arisen as a result of the acceptance of the Second Offer, and the second was that the defendant pressed for an order in its favour for the costs of the whole proceedings which had been commenced and which it contended ought to be discontinued.
During the course of the debate in Court, the question of which orders either party was seeking, and the positions of each of the parties seemed to shift, became rather confused and somewhat elusive.
After the proceedings concluded, the defendant made plain what the orders which it was seeking were by an email sent to the Court on 16 August 2019. They were listed as follows: 1. the defendant to pay the plaintiff's expenses reasonably incurred by the plaintiff before the making of the renewed offer to make amends on 4 September 2018 and his expenses reasonably incurred in considering that offer as agreed or assessed; 2. the plaintiff be restrained from asserting, continuing or enforcing an action for defamation against the defendant in relation to the matter complained of (as defined in paragraph 2 of the Statement of Claim); 3. the plaintiff pay the defendant's costs of the proceedings; 4. the plaintiff pay the defendant's costs of the Lost Motion.
In response to those orders, the plaintiff made plain what orders it sought that the Court ought make. It submitted the following: 1. Defendant's application is dismissed. 2. Defendant to pay the plaintiff's costs of the application. 3. Proceedings number 2018/273731 are dismissed. 4. Each party to the proceedings is to pay his or its own costs of the proceedings.
Having regard to the nature of those orders, some of which may not have been specifically articulated in the course of written and oral submissions, the Court sought an assurance from each party that their submissions were complete and that neither party wished to put on any further evidence or make any further submission to the Court. It was indicated to the parties that in the absence of such assurance, the proceedings would be relisted for further hearing.
The solicitors for the parties notified the Court that their submissions were complete and that neither party wished to put on any further evidence or submissions to the Court. Accordingly, the issues to be determined are those articulated by the orders claimed by the parties as set out immediately above at [38] and [39].
It is to be observed that the issues can be divided into two discrete areas: the first deals with the final disposition of any outstanding matters arising from the Second Offer; the second deals with the disposition of the substantive proceedings.

Issues Arising from the Second Offer

The principal issue arising from the Second Offer is the inability of the parties to agree as to what sum represents the reasonable expenses of the plaintiff. The Second Offer is notable for the fact that it did not include any mechanism for the resolution of any failure to agree on that sum.
Section 15 of the Act, makes mandatory the inclusion of such an offer to "pay the expenses reasonably incurred by the aggrieved person", but does not specifically provide for any mechanism to determine a dispute between parties as to the extent of those reasonable expenses.
However, it is clear that the general power contained in s 15(3)(b) of the Act provides this Court, on application by a party, with the power to determine "any other question that arises … about what must be done to carry out the terms of the offer".
It seems to me that this is a sufficient statutory basis for this Court to make an order with respect to the Second Offer, the effect of which would be to provide a default mechanism by way of an assessment of the plaintiff's expenses.
This is, in substance, the effect of the order sought by the defendant as notified to the Court via email on 16 August 2019. The competing submission of the plaintiff is that the Court should simply make no order and leave the matter to be determined by the parties, outside of the Court process.
It seems to me that to make no order would be to leave these parties in a position of continuing dispute. That serves no useful purpose. Nor would it be consistent with the overriding purpose in s 56 of the Civil Procedure Act 2005.
In all of those circumstances, it is appropriate to make an order generally in the form of that contended for by the defendant with respect to its offer to pay the plaintiff's expenses, as set out in the Second Offer.

The Substantive Proceeding Issues

Because the plaintiff has accepted the Second Offer, the plaintiff cannot, under s 17(1) of the Act, "… assert, continue or enforce an action for defamation against the publisher …". Here the action which is on foot in this Court dealt with the alleged defamatory imputations which were the subject of the Concerns Notice and the two offers to make amends.
Ordinarily, given the statutory effect of s 17(1), one would expect a plaintiff to discontinue the proceedings or, alternatively, seek, (with the consent of the defendant), orders which have the effect of finally disposing of the proceedings.
In the course of the oral submissions, the plaintiff gave no indication that he intended to discontinue the proceedings. However, in the orders submitted after the conclusion of the proceedings (which I have set out above at [39]), it appears that the plaintiff accepts that the Court ought dismiss the proceedings which he has brought for defamation.
Having regard to the fact that the plaintiff has accepted the Second Offer, then the proceedings must be brought to an end. The order proffered by the defendant would not finalise the proceedings. It would only prevent the further prosecution of them. The order proposed by the plaintiff would finalize the proceedings.
It is in the interests of justice to finalise the proceedings and to accede to the order proposed by the plaintiff.
That leaves the remaining issue of the costs of the proceedings.
The plaintiff argues that the Court should order that each party pay his or its own costs of the whole proceedings including the Lost Motion. The defendant argues that it is entitled to its legal costs of the proceedings in their entirety, and if not, at least to the costs of the Lost Motion.
The plaintiff's principal submission was that the Second Offer was completely silent as to what should happen with respect to the disposition of the proceedings litigated between the parties and, in particular, what should happen with respect to the costs of those proceedings. Counsel for the plaintiff submitted that the consequence of the Second Offer being silent on that question was that the Court ought take the proposition that each party should bear their own costs of the proceedings which were on foot, as inherent in the Second Offer.
It is to be noted that at the time the Second Offer was made, on 4 September 2018, although proceedings had been threatened, they had not been commenced. The terms of the Second Offer reflected the circumstances at the time it was made. The fact that it made no reference to proceedings which may be commenced is not a basis to infer that the defendant was making an offer to the plaintiff that in the event that proceedings were commenced, they could be brought to an end at any time by the acceptance of the Offer on the basis that each party would pay their own costs.
Counsel for the plaintiff cited no authority to support this startling proposition. I reject the submission. The Act which provides for the making of an offer does not include any provision of a kind which would support the submission. The fact that the proceedings were not on foot at the time the Second Offer was made suggests strongly that the costs of the uncommenced but threatened proceedings were not a consideration in the mind of 2GB at the time the second Offer was made. There is no other basis to conclude that inherent in the Second Offer was the term contended for by the plaintiff.
The defendant claims its costs of the proceedings on the basis that the Court has an abundant power to order costs of proceedings in a way which serves the interests of justice: s 98 of the Civil Procedure Act. Counsel for the plaintiff acknowledges that the provisions of r 42.1 of the Uniform Civil Procedure Rules 2005 ("UCPR") provide that ordinarily costs would follow the event unless "… it appears to the courts that some other order should be made as to the whole or any part of the costs".
The plaintiff submits that it was reasonable for the plaintiff to commence the proceedings as he did because, having regard to the nature and content of the defamation, and his position as a politician, he was entitled to vindicate his reputation through such proceedings. The plaintiff submits that the fact that the defendant published an apology without forewarning the plaintiff after the Statement of Claim had been served upon it and, without reference to the Second Offer, pointed to an acceptance by the defendant that the claim for defamation was one of substance.
Inherent in the plaintiff's submission was that the choice by the defendant to leave the Second Offer open until it was withdrawn meant that it could not be said to be unreasonable of the plaintiff to have conducted litigation up until the point in time when the offer was accepted. In effect, the plaintiff submitted that if the Offer remained open to be accepted, it ought be understood that the defendant accepted that the proceedings were reasonable and the defamation ought be resolved by its offer to make amends.
The defendant submitted that it was unreasonable of the plaintiff to have commenced proceedings at all. However, it accepted that if it was reasonable, particularly having regard to the imminent expiry of the limitation period, then the plaintiff ought to have accepted the Second Offer and ceased to prosecute the proceedings after a reasonable time, such as 28 days, had elapsed. In contrast, the defendant submitted that the plaintiff had pursued the litigation including by bringing the Lost Motion.
The defendant submitted that in all of the circumstances, costs ought follow the event because it had been wholly successful in circumstances where the plaintiff had ceased to prosecute the proceedings.
Both parties accepted that the relevant authority was the decision of McHugh J sitting as a single Judge in Re The Minister for Immigration and Ethnic Affairs Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
In that case, proceedings which were brought in the High Court of Australia for judicial review arising from the failure by the Commonwealth Minister to grant a protection visa were rendered otiose after they were commenced, because the Minister exercised his discretion under the legislation and granted a protection visa to the prosecutrix. Under the High Court Rules 1952, a question arose as to whether the Minister ought be ordered to pay the costs of the prosecutrix of the proceedings.
In the course of his judgment, McHugh J noted that, as r 42.41 UCPR records, ordinarily the power to order costs is exercised after a hearing on the merits. As a general rule, the successful party is entitled to his or her costs. His Honour noted that success in an action or on particular issues is the fact that usually controls the exercise of the discretion. His Honour noted, as the High Court had said in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543, that a successful party is prima facie entitled to a costs order. His Honour noted that where, as is here the case, there has been no hearing on the merits, a court is necessarily deprived of the principal factor that usually determines whether or how it will make a costs order.
At 624 and 625, his Honour said: "In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The Court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra curial action they had avoided. In some cases, however, the Court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings, and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the Court will make no order as to the costs of the proceedings. This approach has been adopted in a large number of cases."

Discernment

In light of the imminent expiry of the limitation period, and the nature and content of the defamation, it was reasonable for the plaintiff to have commenced the proceedings. The Second Offer was made after the proceedings were threatened, and before the proceedings were commenced. There was only a short period of time which elapsed by reason of those events.
The defendant pleaded both the First and Second Offers in its defence. The legislation required the Second Offer to remain open until the first day of trial if that defence was to be successful. No doubt that it is why the defendant had not withdrawn it. Put differently, the defendant sought to take commercial advantage of the making of the Second Offer, and the fact that it remained on foot until the first day of the trial. There is nothing unreasonable about this. It is entirely appropriate in light of the terms of the Act.
The defendant has apologised for the defamation which has given rise to the cause of action and has made an offer to make amends which it leaves open until the time of the trial is commenced. The plaintiff accepts that offer. That conduct is not at all unreasonable.
In those circumstances I am unable to see, with the exception of the Lost Motion issue to which I will presently come, that it has been demonstrated that either the defendant or the plaintiff acted unreasonably at any time in the course of the litigation. Applying the approach adopted by McHugh J in Li Quin, the appropriate order would seem to me to be that each party ought bear his and its own costs of the proceedings.
It is necessary before making an order finally to consider the submission by the defendant that with respect to the Lost Motion in which the plaintiff had been entirely unsuccessful, a specific order ought be made that the plaintiff pay the costs of that part of the proceedings.
I note that the Chief Judge at Common Law did not make any order for costs. It seems that he was not asked to, nor did he specifically reserve the question of costs.
However, this discrete part of the proceedings can obviously be said to be a component of the proceedings in which the plaintiff as the moving party was wholly unsuccessful. As the reasons of the Chief Judge demonstrate (at [49]), his Honour concluded that there was no proper basis for the amendments sought and that the application gave rise to an abuse of process. It was on that basis that he dismissed the application.
To the extent that the plaintiff brought such an application and it was disposed of in that way by the Chief Judge, it is appropriate to order that the costs of that application be paid by the plaintiff because the defendant had complete success and such an order reflects the conventional approach to costs, and, as well, best reflects the interests of justice.

Conclusion

I have concluded that I have the power to make an order, that with respect to the agreement of the parties to the terms of the Second Offer, the Court can make an order (and ought to do so in this case) that the costs are to be paid either as agreed or as assessed.
With respect to the proceedings, I have concluded that the appropriate order is that each party pay their own costs of the proceedings except that the plaintiff should pay the defendant's costs of the lost motion.
Finally, the plaintiff seeks an order for the costs of the application before me. In my view, the costs of that application ought be the costs of each party in the proceedings, meaning that each party will pay their own costs of the application before me.

Orders

I make the following orders: 1. Order the defendant to pay the plaintiff's expenses reasonably incurred before the making of the renewed offer to make amends on 4 September 2018, and his expenses reasonably incurred in considering that offer, as agreed or assessed. 2. Order that proceedings number 2018/273731, be and hereby are dismissed. 3. Order the plaintiff to pay the defendant's costs the application to amend the Statement of Claim dismissed by Hoeben CJ at CL on 11 April 2019. 4. Except for Order 3, order that each party to the proceedings is to pay his and its own costs of the proceedings, including this application.

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. Decision last updated: 20 September 2019

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