Geyer v Ghosn

District Court of NSW|2020-12-18|Before: Mr J

Judgment on interest and costs

The plaintiff commenced proceedings for defamation for two Facebook posts published on 4 March 2019. The sole basis for defence was denial of defamatory meaning and of publication. A jury of four persons found that the defendant had published the first (but not the second) of the two posts and that the following imputations were conveyed and defamatory: (i) The plaintiff was intimately involved in the Tyrone May sex scandal; (ii) The plaintiff is the girl in the Tyrone May sex video; (iii) The plaintiff is a person who has been exposed to viewers as the woman filmed having sex with Tyrone May.
Damages were assessed at $125,000: Geyer v Ghosn [2020] NSWDC 744. The remaining questions for determination are the orders to be made for costs and the calculation of interest.

Costs

The competing submissions are: 1. The plaintiff seeks orders for the defendant to pay the cost of the entire proceedings on an indemnity basis. 2. The defendant seeks orders that the defendant pay the plaintiff's ordinary costs in relation to the first matter complained of and that the plaintiff pay the defendant's ordinary costs in relation to the second matter complained of.

The relevant legislation

The starting point in relation to costs in defamation actions must be the application of s 40 of the Defamation Act 2005 (NSW), which provides: "Costs in defamation proceedings 40 Costs in defamation proceedings (1) In awarding costs in defamation proceedings, the court may have regard to - (a) the way in which the parties to the proceedings conducted their cases (including any misuse of a party's superior financial position to hinder the early resolution of the proceedings), and (b) any other matters that the court considers relevant. (2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise) - (a) if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff--order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff, or (b) if defamation proceedings are unsuccessfully brought by a plaintiff and costs in the proceedings are to be awarded to the defendant--order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the plaintiff unreasonably failed to accept a settlement offer made by the defendant. (3) In this section-- "settlement offer" means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made."
This provision reflects s 3(d) of the Defamation Act 2005 (NSW), which provides: "3 Objects of Act The objects of this Act are-- (a) to enact provisions to promote uniform laws of defamation in Australia, and (b) to ensure that the law of defamation does not place unreasonable limits on freedom of expression and, in particular, on the publication and discussion of matters of public interest and importance, and (c) to provide effective and fair remedies for persons whose reputations are harmed by the publication of defamatory matter, and (d) to promote speedy and non-litigious methods of resolving disputes about the publication of defamatory matter."
While costs in civil litigation in New South Wales "follow the event" as a general rule, pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") Pt 42 r 1 and s 98 of the Civil Procedure Act 2005 (NSW), these rules must take into account the policy directives in ss 3 and 40 of the Defamation Act, both of which underline the special role played by settlement offers in terms of costs orders in defamation proceedings. As a result, indemnity costs orders may be made (or not made) in defamation proceedings in circumstances where similar facts, in an action not governed by this legislation, would not result in such an order.

Did the defendant unreasonably fail to respond to, or make, an offer?

The relevant offers, for the purpose of s 40, are set out in my earlier judgment (at [89] - [95]) and are as follows: 1. The plaintiff's solicitors' letter dated 6 March 2019, seeking only an apology and removal of the first matter complained of; 2. The plaintiff's solicitors' Concerns Notice dated 22 March 2019 in relation to the first matter complained of.
Mr Rasmussen also draws to my attention to the plaintiff's brother's message to the defendant on the night of publication of both matters complained of, to which the defendant sent a dismissive reply. I also note that a Statement of Claim may be taken as a Concerns Notice (Mohareb v Booth [2020] NSWCA 49). Given the overwhelming impact of the correspondence above, it is unnecessary to consider these further.
The impact of s 40 on the entitlement to indemnity costs is not addressed in the defendant's written submissions.
The defendant not only failed to make any offer for the purposes of S 40(2)(a) but also, as I noted in my earlier judgment at [94], took the opportunity to post an offensive reply on the NRL Memes Facebook page for all the world to see, naming and insulting the plaintiff's father, and including a portion of the first matter complained of (although the name of the plaintiff had been blacked out).
It would be hard to imagine a more reasonable request than that made by the solicitors for the plaintiff in their letter of 6 March 2020. All that they sought was the taking down of the publication containing the photos and allegations about their client and publication of a retraction in fair and reasonable terms. It was an offer the defendant unreasonably failed to accept, especially after he had received a text message from the plaintiff's brother stating the plaintiff was not the girl in the video.
The letter of 6 March 2020 alone would warrant the making of an order for indemnity costs, if that were the only correspondence relied upon. The defendant was, however, given a second opportunity to respond, namely the concerns notice sent by the plaintiff's solicitors on 22 March 2020. He not only failed to do so, or to make an offer of his own, but later published the Statement of Claim, once again on the NRL Memes Facebook page, with the sneering heading "FAKE NEWS".
Faced with this kind of public derision in response, any prospect of negotiation by the plaintiff of the kind envisaged by ss 3 and 40 would be stopped in its tracks.
I am satisfied that the defendant unreasonably failed to agree to each of these settlement offers proposed by the plaintiff and, further, that he unreasonably failed to make a settlement offer at all, in circumstances where the publications were, whether or not he was the author of the second of them, indefensible, and known by him to be such as soon as he saw the plaintiff's brother's Messenger text in response to the first matter complained of.
In determining the s 40(2)(a) issue, I also take into account the fact that the plaintiff commenced proceedings unsuccessfully against the defendant as the publisher of the second matter complained of. However, this factor is not relevant because, as I noted in my earlier judgement, the letters of 6 and 22 March 2019 related only to the publication by "NRL Memes" and do not refer to the publication made by "Nrl Quality Memes."
As to s 40(2)(b), there was nothing to stop the defendant offering to publish an apology on the same Facebook page (NRL Memes) on which he had been prepared to post the statement of claim in these proceedings. It was unreasonable of him not to do so.
As the relevant correspondence was sent before the commencement of litigation, the indemnity costs order in relation to the first matter complained of should relate to the whole of the proceedings in relation to that claim.

The costs of the second matter complained of

The defendant was successful in relation to the second matter complained of. How does this success impact on the costs order I propose to make in relation to the costs of the first matter complained of?
Mr Rasmussen submits that the two defamatory publications were "inextricably part of the same substratum of facts and the evidence in respect of each cause of action was exactly the same" (written submissions, paragraph 10). Accordingly, they should be viewed as one event. Mr Cohen, in his written submissions, submits that his client is entitled to a generous costs order to reflect this success, namely the whole of his costs for this claim. In support of their submissions, both Mr Rasmussen and Mr Cohen referred to decisions predating the Civil Procedure Act and Defamation Act which relate to proceedings other than defamation.
Consideration of the relevant costs principles predating this legislation are of limited assistance. First, the approach to costs orders has changed significantly by reason of s 56 of the Civil Procedure Act. Second, defamation actions are notoriously complex, and the approach to the costs "event" involves determining, to use the famous observation of Sir Thomas Bingham MR, "who, as a matter of substance and reality, has won" (Roache v News Group Newspapers [1998] EMLR 161, cited in Gatley on Libel and Slander at [35.12]).
Loss of some of the pleaded imputations at a trial is a not uncommon result, but only in exceptional cases does this lead to costs being determined on this pleading issue rather than on the merits of the case (an example is Hockey v Fairfax (No 2) [2015] FCA 750, where the applicant received only 15% of costs after losing all but three claims, despite being awarded $200,000 for the remaining publications where he was successful). In practical terms, succeeding on some of the imputations is generally sufficient (Goldsworthy v Radio 2UE Sydney Pty Limited & Anor [1999] NSWSC 772 at [6]; note the plaintiff lost two of four imputations, a similar percentage to Ms Geyer).
However, loss of one or more actions on the merits, as occurred here, raises more complex issues as to which party has "won" (Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749: loss of 3 out of 9 actions). It may even be the case that a partly successful plaintiff may be ordered to pay part of the costs of the defendant: Ahmadi v Fairfax Media Publications Pty Ltd (No 2) [2010] NSWSC 1191.
Issues of this kind turn on the facts of each case. In these proceedings, the claim failed because the defendant was sued as the "owner" of the second website. (I note that, since the second matter complained of was a "share" of the first matter complained of, the plaintiff could have framed the second claim on Speight v Gosnay (1891) 60 LJQB 231 principles, but that is beside the point).
I am satisfied that the almost identical content of the two publications results in the factual issues being inextricably intertwined. In those circumstances, the defendant should not expect to be awarded full or even substantially full costs, although he is entitled to seek a percentage discount, conformably with the principles discussed by White J in Hockey v Fairfax (No 2).
Where a party has succeeded on one issue but not others, and a costs adjustment must be made, it is preferable to take the "broad axe" approach endorsed by Brereton J (as his Honour then was) by awarding a percentage of the costs, rather than leaving the complexities of issue-by-issue determination to the costs assessor: see the discussion of this approach in In the matter of Australasian Barristers Chambers Pty Ltd [2019] NSWSC 799 at [21], as adopted by Rees J in In the matter of J & Lee Property Investment Group Pty Limited (in liquidation) [2019] NSWSC 927 at [8]; see also the observations of Schmidt J in Saunders v Legal Profession Admission Board (No 2) [2016] NSWSC 27 at [22]. Greater care in determining that percentage should be taken in these proceedings, as the plaintiff is entitled to indemnity costs pursuant to s 40, whereas the defendant is not.
There is, however, an additional factor relevant to costs, namely the defendant's conduct of these proceedings, which Mr Rasmussen asserts warrants departure from the usual costs orders: s 40(1) of the Defamation Act; see also Oshlack v Richmond River Council (1998) 193 CLR 72 and Nazerali v Mitchell [2016] BCSC 2424.

The conduct of the litigation

In my previous judgment (at [99] - [110]), I set out the issues raised by the plaintiff in relation to the defendant's conduct of the litigation and explained why I considered these were relevant to costs rather than to aggravated damages.
An additional factor to those listed in that judgment is the extraordinary conduct of the defendant who, having had these proceedings transferred out of the Defamation List after the first return date by agreeing it was ready to go to the List Judge for a hearing date, then defaulted in a series of timetables which meant the proceedings were not ready and brought applications which inflated the costs. I will not set out all the orders the List Judges were obliged to make as a result, but I particularly note the following orders were made on 30 September 2020: "1.The motion is dismissed. 2. The defendant is to pay the plaintiff's costs of the motion on an indemnity basis in the sum of $4491.00. 3. The costs the subject of Order 2 are to be paid by the defendant to the plaintiff within 28 days of the completion of the jury trial commencing 9 November 2020. The costs are to be paid on that date notwithstanding any further hearings on other matters such as damages or the costs of the trial. The costs are to be paid notwithstanding any appeal process. 4. I also order that the defendant pay the costs of the hearings before Judges Wilson and Letherbarrow respectively (for which the plaintiff already has a "forthwith" order) in the total sum of $2600. If that payment is not made within 14 days, the defence is struck out without any further order being required."
As these orders show, Letherbarrow SC DCJ and Wilson SC DCJ, the List Judges in this court, had made gross sum costs orders on 22 June and 8 July 2020 after repeated listings in the General List and before the Judicial Registrar to correct these defaults. It is noteworthy that the 30 September 2020 orders set out above were made on an indemnity basis. (Both parties' written submissions are silent as to whether the sum of $4491.00, due on 11 December 2020, has been paid.)
The defendant's failure to comply with orders for discovery and production of documents was still a problem on the first day of the trial, requiring further orders for production.
This additional material confirms that the defendant's conduct of this litigation has inflated the costs of the proceedings in circumstances drawing criticism and special costs orders from three other judges in this court and that, conformably with the principles set out in Oshlack v Richmond River Council, the defendant should bear a greater percentage of the costs of the proceedings, and do so on the indemnity basis, conformably with s 40(1).
Taking all of the above into account, and drawing on the "broad axe" principles noted above, I consider that the entitlement of the plaintiff to indemnity costs should relate to 90% of the whole of the proceedings. The parties should each pay their own costs as to the remaining 10%.

Interest

I have read the submissions of the parties and consider that an appropriate rate, on the facts of this case, is 3%: see the discussion by Rothman J in Cosco v Hutley (No 3) [2020] NSWSC 1125 at [20] - [21] and McGaw v Channel Seven Sydney Pty Ltd [2007] NSWSC 1270. Mr Rasmussen has calculated this at $6,739.73.

Orders: 1. Vary order 1 of the orders dated 9 December 2020 to provide that the judgment sum of $125,000 include interest at the rate of 3% ($6,739.73), making a total of $131,739.73. 2. The defendant pay 90% of the plaintiff's costs of these proceedings on an indemnity basis; as to the remaining 10%, each party pay his or her own costs.

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: 18 December 2020

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