1 There are two applications before the Court this morning.

2 The first is an application made by summons filed 29 July 2013 by Virginia Giles ('Giles') for an extension of time in which to apply for leave to appeal, and for leave to appeal, from paragraph 2 of the orders of Pagone J made 23 May 2013 wherein his Honour ordered that 'the defendant is to pay the costs of the plaintiffs'. The order for costs was made in a proceeding for defamation brought by Mr David Jeffrey ('Jeffrey') and Mr Thomas Curnow ('Curnow'), as plaintiffs, in which Giles was the defendant.[1]

3 The order for costs made by Pagone J followed upon a determination made by him that Giles had defamed Jeffrey and Curnow by the inclusion of words on a website created by Giles. The defamatory words related to disputes about whether approval should have been given for a quarry to operate on land in Neerim North adjoining land owned by Giles and her husband. Jeffrey and Curnow were both directors of Casacir, a company that owned and operated the relevant quarrying business. A number of the disputes were ultimately resolved by proceedings at the Victorian Civil and Administrative tribunal ('VCAT') in favour of Casacir. The defamatory words included statements to the effect that Jeffrey and Curnow had perjured themselves in giving evidence before VCAT.

4 His Honour gave judgment for Jeffrey and Curnow in the defamation proceedings and, also on 23 May 2013, ordered Giles to pay damages in the amount of $12,000 to Jeffrey and damages in the amount of $8,000 to Curnow.

5 The second application before us today is made by Jeffrey and Curnow, by summons filed 12 August 2013, for an extension of time to appeal from the quantum of damages awarded by his Honour. No leave to appeal is required.

6 With respect to the summons filed by Jeffrey and Curnow, r 64.03 of the Rules of Court, provides that an appellant must serve a Notice of Appeal within 14 days from the date an order is made.[2] The Notice of Appeal thus ought to have been served on or before 6 or 7 June 2013. Jeffrey and Curnow have sought to explain the reason for the delay[3] by reliance upon an affidavit of Kenneth Edwin Smith sworn 23 August 2013 who deposed to remarks made by Pagone J at the time of delivery of judgment to the effect that he hoped that,

all the parties will, at some stage, take cognisance of the view that ending disputes is a good thing. Disputes cannot go on forever.

7 Mr Smith said that his clients then decided, notwithstanding their view as expressed to him that the damages awarded were inadequate, that they would not appeal in an attempt to bring finality to the litigation.

8 Since that time they have received the summons filed by Giles on 29 July 2013 by which Giles seeks leave to appeal his Honour's costs order, as described above. One of the grounds of appeal relied on by Giles is that, as set out in Ground 4 of the draft Notice of Appeal, which appears as Exhibit 'VG3' to an affidavit sworn by Giles on 27 July 2013:

Matters that are crucial to fairness and justice in relation to costs have not been heard.

9 A principal basis upon which Giles seeks to support this ground, as is apparent from her written submissions,[4] which were developed further orally, is that his Honour failed to ask if Giles had anything specifically to say in relation to costs and thereby failed to take into consideration her Offer of Compromise to Jeffrey and Curnow. Giles' Offer of Compromise was dated 28 November 2012 and was an offer to compromise the proceeding by paying to Jeffrey and Curnow the sum of $40,000 as the 'settlement sum'. The offer also acknowledged that by then Giles had removed the entirety of the website.

10 It is apparent from Giles' submissions, and her reliance upon r 26.08(3) of the Rules of Court governing the costs consequences of a failure to accept an offer of compromise, that one of the bases upon which she seeks to appeal is that the damages ultimately awarded to Jeffrey and Curnow were less favourable to them than Giles' Offer of Compromise. Indeed, Jeffrey and Curnow collectively received less than half the settlement sum proposed by Giles. Amongst the relief Giles seeks on the appeal is that Jeffrey and Curnow pay her costs from 29 November 2012.

11 Jeffrey and Curnow, on receiving Giles' summons and supporting materials, understood that Giles' application for leave to appeal, and her appeal, if leave is granted, will raise the question of the quantum of damages awarded.

12 It would appear that they understood at an earlier time, perhaps as early as 30 May 2012, seven days after his Honour delivered judgment, that Giles was aggrieved by the costs order his Honour had made and that she would seek to have it varied or overturned especially in light of her Offer of Compromise.

13 At a directions hearing before Daly AsJ on 15 July 2013, there was mention of two summonses, one of which related to costs. Nevertheless, attention was focused on the other application made by Giles at that time, namely an application made under s 29 of the Civil Procedure Act to which I will later refer.

14 When Jeffrey and Curnow were advised by their solicitor on 9 August of the receipt of Giles' summons for leave to appeal his Honour's order on costs, they gave immediate instructions, on 12 August, to appeal on the very same issue, the quantum of damages, but by then they were out of time.

15 I consider that Jeffrey and Curnow were justified in treating Giles' application as raising the question of the quantum of the award of damages. Giles' application seeks to do that by treating the figure awarded by Pagone J as the benchmark against which the consequences of the failure to accept the Offer of Compromise will be assessed. It is the relevance of that benchmark that arguably renders it unfair for his Honour to have failed to take that Offer of Compromise into account. It is apparent that the two matters are inextricably linked because if Jeffrey and Curnow succeed on the appeal (about which I express no opinion), they will have succeeded in changing the 'benchmark' against which their rejection of Giles' Offer of Compromise is to be judged. This could have an immediate impact on Giles' appeal on the order for costs, if leave to appeal were also to be granted.

16 In the light of all these matters, I also consider that there has been a reasonable explanation for the delay by Jeffrey and Curnow to commence their appeal.

17 It is apparent that the appeal is not without merit, insofar as this is relevant to assess for the purposes of an extension of time application. As Pagone J acknowledged, damages awarded for defamation serve three purposes: (1) consolation for the personal hurt and distress caused by the publications; (2) reparation for the harm done to a plaintiff's personal and, if relevant, business information; and (3) the vindication of a plaintiff's reputation.[5] The maximum amount of damages that could have been awarded to Jeffrey and Curnow for non-economic loss was $339,000.[6] Jeffrey and Curnow argue that his Honour failed to give sufficient weight to the evidence about the degree of personal distress, hurt and humiliation and harm done to their reputations as a result of the defamatory publications, failed to ensure the awards signalled a public vindication of Jeffrey and Curnow and failed to ensure there was an appropriate and rational relationship between the harm sustained and the amount of damages awarded, contrary to s 34 of the Defamation Act.

18 As I have mentioned, both men were directors of Casacir Pty Ltd. The company owned and operated a quarry business which had some 40 employees. Jeffrey was the third generation in a family construction, earthmoving and road building business that operated in the LaTrobe Valley. There was evidence that he had a good name in the region as part of a family that was honest and reliable. He found it biting that the website said, in effect, 'he was a crook'.[7] He was ashamed of what had been written about him.[8] He was a man of strong religious beliefs who placed great importance upon the giving of an oath on the Bible,[9] as he had done at VCAT. Mr Curnow gave evidence that the remarks offended him and made him feel fairly disgusted and really angry.[10] As well as being a director of Casacir, he also conducted a road building and stabilisation process through a group of companies that had some 200 employees across the Gippsland region. He was very concerned about the impact the defamatory words might have upon him and his reputation within the industry. It was argued that the award made by his Honour was so low as not to reflect the high value the law places on reputation, nor to reflect the fact that Jeffrey and Curnow's work and life depended upon their honesty and integrity. I consider that the proposed appeal by Jeffrey and Curnow is fairly arguable.

19 In my view, Jeffrey and Curnow ought be granted an extension of time in which to appeal.

20 With respect to the application made by Giles, it is also clear that she is out of time for seeking leave to appeal although, as I have noted, she made her intention to challenge the costs order known swiftly after that order had been made. The delay seems to be explained by reason of the pursuit by Giles of other procedural applications.

21 On 17 May 2013, before judgment had been delivered, Giles filed a separate application in the Supreme Court pursuant to s 29 of the Civil Procedure Act 2010 ('the s 29 application').[11] The application sought costs relating to contraventions of the 'overarching obligations' under the Civil Procedure Act by Jeffrey and Curnow during the defamation proceeding. The application appears to be still on foot and I understand that there is a directions hearing scheduled before Daly AsJ for 26 September 2013.

22 After judgment had been delivered by Pagone J in the defamation proceeding, Giles then filed a further Summons, dated 31 May 2013, to vary Pagone J's costs order. The s 29 application and the Summons dated 31 May 2013 to vary the costs order were the subject of direction hearings before Daly AsJ on 4 June 2013 and 15 July 2013, the latter is that to which I have already referred. However, it was not until the hearing on 15 July 2013 that Daly AsJ suggested, in relation to varying the costs order, that the matter should instead 'go by way of appeal' given that the order had 'been made, it's been perfected', as she said.[12] Giles' summons, returnable before the Court of Appeal, was then filed on 29 July 2013. Giles is self-represented and it would appear that insofar as there has been any delay, then the explanation for that delay is her unfamiliarity with procedures of the Court, which is understandable for a lay person.

23 There is a dispute between the parties as to whether Giles was given a reasonable opportunity to address Pagone J on the question of costs. Giles has submitted that she was not given such an opportunity, and, if she had been, there would have been a very different outcome on costs because of the rejection of her Offer of Compromise, as I mentioned before, and because his Honour failed to take into account the withdrawal by Jeffrey and Curnow of their injurious falsehood claims, and their misleading and deceptive claims. She also points to a failure by his Honour to consider that Jeffrey and Curnow amended their Statement of Claim no less than five times, and that this, and other conduct, caused significant unnecessary expense to Giles.

24 In response, Jeffrey and Curnow point to the precision with which his Honour crafted his order for costs given that he expressly excluded from the costs, which Giles was ordered to pay, any costs referrable only to the issue of aggravated damages unless there was some further order made in connection with the s 29

application. They also emphasise, in their written submissions, which have been further developed today in oral submissions, the discretionary nature of the power to award costs.

25 I consider that Giles' application for leave to appeal is not without some merit and that, taking into account the explanation for the delay, if there has been a delay, then she ought to be granted an extension of time in which to apply for leave to appeal.

26 However, I consider that a proper assessment of the merits of Giles' application for leave to appeal cannot be made in the absence of a determination on the appeal brought by Jeffrey and Curnow. I consider that Giles' application for leave to appeal ought be referred to the Bench that hears the appeal brought by Jeffrey and Curnow and that it ought be heard at the same time as that appeal.

(1) The application, made by summons filed 12 August 2013, in proceeding S APCI 2013 0120, for an extension of time, be granted;

(2) The application, made by summons filed 29 July 2013, in proceeding S APCI 2013 0113, for an extension of time, be granted;

(3) The application, made by summons filed 29 July 2013, in proceeding S APCI 2013 0113, for leave to appeal, be referred to the Bench hearing

the appeal in proceeding S APCI 2013 0120, to be heard at the same time as that appeal.

[1] David Jeffrey & Anor v Virginia Giles [2013] VSC 268 ('Reasons').

[2] Supreme Court (General Civil Procedure Rules) 2005 (Vic) r 64.03(1).

[3] See the factors identified as relevant in granting an extension of time: Jackmarra v Karkouer (1998) 195 CLR 516, 520, 542.

[4] Outline of Submissions in relation to the application for leave to appeal, dated 27 July 2013.

[6] Defamation Act 2005 (Vic) s 35(1) and (3). See Victorian Government Gazette, G25 (21 June 2012), 1293.

[12] Applicant's Outline of Submissions dated 27 July 2013 [12] ('Applicant's Submissions').