Green v Schneller [2000] NSWSC 1207 | Case summary

(2) Where - (a) in proceedings commenced on or before 28 September 1973, a plaintiff recovers a sum not more than $300; (b) in proceedings commenced after 28 September 1973 but on or before 31 October 1980, a plaintiff recovers a sum not more than $1,000; (c) in proceedings commenced after 31 October 1980, but on or before 31 March 1983, a plaintiff recovers a sum not more than $3,000; (d) in proceedings commenced after 31 March 1983, but on or before 30 June 1993, a plaintiff recovers a sum not more than $10,000; (e) in proceedings commenced after 30 June 1993, but on or before 1 October 1997, a plaintiff recovers a sum not more than $75,000; or (f) in proceedings commenced after 1 October 1997, where a plaintiff recovers: (i) in the case of proceedings that include a motor accident claim - a sum not more than $500,000; or (ii) in any other case - a sum not more than $225,000, the plaintiff shall not be entitled to payment of his or her costs of the proceedings unless, it appearing to the Court that the plaintiff had sufficient reason for commencing or continuing proceedings in the Court, the Court makes an order for payment. (3) Without limiting the generality of subrule (2), it shall be taken to be a sufficient reason if the plaintiff had reasonable grounds at the relevant time for expecting that he would recover an amount in excess of the amount prescribed by that subrule. (4) Subject to subrule (5) where, by or under the rules or any order of the Court, the plaintiff is entitled to his or her costs of any proceedings to which this rule applies, the amount of costs payable to him or to her shall - (a) in respect of proceedings commenced on or before 28 September 1973 - (i) where he or she recovers a sum more than $300 but not more than $1,000, be only one third of the amount (the "whole amount") which would be payable to him or her apart from this subrule; (ii) where he or she recovers a sum more than $1,000 but not more than $2,000, be only two thirds of the whole amount; (b) in respect of proceedings commenced after 28 September 1973 and on or before 31 October 1980 - (i) where he or she recovers more than $1,000 but not more than $3,000, be only a quarter of the whole amount; (ii) where he or she recovers a sum more than $3,000 but not more than $5,000, be only a half of the whole amount; (iii) where he or she recovers a sum, in respect of damages for personal injuries, more than $5,000 but not more than $7,500. Be only three quarters of the whole amount; (c) in respect of proceedings commenced after 31 October 1980, but on or before 31 March 1983 - (i) where he or she recovers a sum more than $3,000 but not more than $6,000, be only a half of the whole amount; (ii) where he recovers a sum, in respect of damages for personal injuries, more than $6,000 but not more than $7,500, be only three-quarters of the whole amount; (d) in respect of proceedings commenced after 31 March 1983, but on or before 30 June 1993, where he or she recovers a sum more than $10,000 but not more than $50,000, be only a half of the whole amount; (e) in respect of proceedings commenced after 30 June 1993, but on or before 1 October 1997, where he or she recovers a sum more than $75,000 but not more than $150,000, be only a half of the whole amount; and (f) in respect of proceedings commenced after 1 October 1997, where he or she recovers: (i) in the case of proceedings that include a motor accident claim - a sum more than $500,000 but not more than $750,000; or (ii) in any other case - a sum more than $225,000 but not more than $450,000, be only a half of the whole amount. (5) In a case to which subrule (4) applies, if it appears to the Court that the plaintiff had sufficient reason for commencing or continuing proceedings in the Court, the Court may order that the amount of costs payable to the plaintiff be some greater part or the whole of the amount which would be payable to him or her apart from that subrule. (6) Without limiting the generality of subrule (5), in a case referred to in subrule (4)(f)(ii) it shall be taken to be a sufficient reason if the plaintiff had reasonable grounds at the relevant time for expecting to recover an amount in excess of the amount prescribed by that subrule. 12 As r 33 presently stands, it establishes a regime for the award of costs recoverable by a successful plaintiff, determined by reference to the quantum of damages awarded and the date of commencement of the proceedings, designed to operate as a disincentive to the commencement of proceedings in this court where the amount claimed, or the amount in issue, or the amount likely to be awarded, or the amount ultimately awarded, is within the jurisdiction of the District Court or the Local Court. An overriding judicial discretion is retained in recognition of the circumstance that the factual or legal complexity of a proceeding is not necessarily or solely determined by the amount in issue, or the amount ultimately awarded. Put shortly, what the rule does is to preclude an award of costs to a successful plaintiff, where the amount recovered falls below a stipulated amount (that amount, in turn, varying according to the date of commencement of proceedings); or to permit recovery of only half the otherwise assessable costs, where the amount of damages awarded exceeds the figure that precludes any recovery, but does not exceed another stipulated sum (that sum also varying according to the date of commencement of proceedings). In either case, there is reserved to the court the discretion to relax or vary the operation of the rule. The circumstance in which the discretion may be exercised is expressed similarly in each case. The court is empowered, where sub r (2) applies, to depart from the prima facie rule where it appears to it "that the plaintiff had sufficient reason for commencing or continuing proceedings in the Court"; and, where sub rule 4 applies, the court is empowered, by sub rule (5), to order that the costs payable be greater than would otherwise be the case where "it appears to the Court that the plaintiff had sufficient reasons for commencing or continuing proceedings in the Court". 13 By reason of the amounts identified in r 33 (2), unless the discretion is exercised in favour of the present plaintiff, he would not be entitled to any order for costs. Counsel for the defendant urges that the discretion ought not to be exercised in the plaintiff's favour. 14 Counsel began his argument by acknowledging that past practice in this court has almost universally been to award full costs to a successful plaintiff in a defamation action. He referred to Toomey v John Fairfax & Sons Limited: see Ritchie: Supreme Court Procedure NSW, para 13,035, otherwise unreported, 22 May 1985; and John Fairfax and Sons Limited v Palmer (1987) 8 NSWLR 297. In the first of these cases the plaintiff was awarded damages that would, in the absence of the exercise of the court's discretion, have disentitled him to an order for costs; in the second, the plaintiff was awarded a sum of damages that would, in the absence of the exercise of discretion, have entitled him to only half of his costs. 15 In each of those cases, the discretion was exercised in favour of the plaintiff and full costs were awarded. In Palmer, that order was upheld on appeal. 16 The argument advanced on behalf of the defendant was that the potency of these cases has been diminished by reason of what he described as "a dramatic change" in r 33. There is, it will be seen, a considerable gap in the amounts which disentitle a plaintiff to an order for costs in relation to proceedings commenced between March 1983 and June 1993, and proceedings commenced between June 1993 and October 1997. The effect of these two paragraphs is that, in cases commenced between the first-mentioned dates, a plaintiff had only to recover $10,000 or more in order to be entitled to an order for costs; but in cases commenced (as was the present) between June 1993 and October 1997, it is necessary that the plaintiff recover $75,000 or more in order to secure that entitlement. The significant jump in the qualifying (or disqualifying) amount should be taken, so the argument ran, to signify an intention on the part of the rule makers to increase the deterrent effect of the rule, and to operate as a greater disincentive to the commencement of claims that in fact result in a small award of damages in this court. 17 When the sums for which provision is made are compared with the jurisdictional limit of the District Court the submission gains force. From April 1983 until June 1993, the District Court's jurisdictional limit for civil cases was $100,000. A plaintiff was not disentitled to a costs order under r 33 if damages of $10,000 or more were awarded. This equated with one tenth of the District Court's then limit. In other words, if, in the Supreme Court, a plaintiff recovered an amount of damages of one tenth or more of the District Court's jurisdictional limit, that plaintiff did not lose the entitlement to a costs order. 18 The proportions changed significantly (if not dramatically) from 1993. The jurisdictional limit of the District Court was increased to $250,000. The amount which a plaintiff has to recover in the Supreme Court in order to avoid the costs disentitlement is $75,000. That means that a plaintiff in the position of the present plaintiff must achieve a result of one third (or more) of the District Court limit or face the costs penalty. 19 In 1997 the District Court jurisdiction was again increased. In relation to claims other than claims arising from the use of motor vehicles, the limit was increased to $750,000. The amount which must be recovered before the costs penalty comes into effect is $225,000 - again, one third of the District Court's jurisdictional limit. 20 This does suggest, in my opinion, that the rule makers intended, as the defendant submits, to strengthen the disincentive to the commencement of small claims in this court, or the incentive to plaintiffs to avail themselves of the jurisdiction of the District Court. It may be assumed that the provisions of r 33 have remained constant since 1993. It should by now be well known to practitioners that a plaintiff who commences small claims in this court does so at the risk of a costs penalty. It is, however, to be borne in mind that the statement of claim in this matter was filed in late 1994. The experience of the last six years is not to be attributed to the solicitors who represented the plaintiff in 1994. Nevertheless, practitioners should by then have been aware of the change to the rules. 21 I am therefore prepared to proceed on the basis that the defendant is correct in her argument that a change was brought about in relation to issues of costs, and that this was done intentionally for the purpose of directing plaintiffs in suitable cases to the District Court. 22 However, the rule is not absolute. It recognises that there will be circumstances in which, notwithstanding the plaintiff's failure to achieve a verdict in an amount which would, prima facie, result in an award of costs, it is appropriate to exercise the discretion provided. As I have observed above, while the quantum of a verdict is taken as a bench mark, it is not always an accurate indicator of the complexity or importance of the issues to be determined. A very small claim may be seen as sufficiently important to warrant commencement in the Supreme Court. One example which springs to mind is a claim for a small amount of money, the decision in which will determine the outcome of a number of other cases raising similar issues. One consideration is the complexity of the factual or legal issues raised, and another the novelty of legal issues. 23 In Palmer it was held that defamation cases are not to be treated as in a class distinct from others and I bear this in mind. However, it is difficult to avoid the well-known circumstance that the variety and complexity of defences which may be raised in defamation cases have the capacity to place defamation cases more readily in the class of cases in which a costs order will be made notwithstanding the plaintiff's failure to achieve a verdict in the amount specified. 24 This was acknowledged in Palmer by Kirby P who observed that, in the nature of defamation claims, the discretion to permit a higher award of costs will more readily be exercised in the plaintiff's favour than might otherwise be the case. 25 The fact that vindication of reputation is sought is another factor that operates in the plaintiff's favour in this respect. So also is the existence of the special Defamation List in this court by which a form of case management has long been available to defamation cases. 26 In Palmer the court held that a consideration which is not relevant to the exercise of the discretion is an evaluation of a sum that the plaintiff might legitimately have expected to recover. This was probably directed to jury verdicts which are less predictable than a verdict given by a judge sitting as the tribunal of fact. In any event, that position has been reversed by the introduction of sub r (3) which expressly declares that a sufficient reason for the commencement of proceedings in this court is the existence of reasonable grounds for the plaintiff to expect to recover an amount in excess of the amount prescribed by the sub rule. 27 I do take into account that the plaintiff, at the time of filing the proceedings, could reasonably have expected a significantly larger verdict than that he actually recovered. There are a number of reasons for this. One is that, even when the assessment of damages is made by a judge and not by a jury, there is a wide range of verdicts that would not be held to be manifestly inadequate or manifestly excessive. Much depends upon the individual assessment of the evidence of the harm done to the plaintiff's reputation, the hurt to the plaintiff's feelings, and the judge's own view of the evidence as it is given in the hearing. It is not always easy to predict with any accuracy what impact the anticipated evidence might have. Secondly, it is only relatively recently that the assessment of damages has been committed to the judge rather than the jury. Although this was a case in which the parties were entitled to have that decision made by a jury if they so wished, it does not alter the fact that that there is relatively little past experience of judicial verdicts to guide the assessment, by the plaintiff (or the plaintiff's legal representatives), of the quantum of damages that might be expected. Particularly in defamation cases, a plaintiff might not know, at the time of filing, the extent of the publication. In mass media cases, the plaintiff is dependant upon the publisher for that information. Thirdly, a plaintiff cannot be expected to anticipate all the defences that may be raised in response to the claim, but it is well known, as I have noted above, that these can be factually and legally complex. Fourthly, in this case, the plaintiff had been defamed on national television, and this was a circumstance that could reasonably be seen as influencing the quantum of damages. Finally, one factor in my assessment of damages was what I described in the principal judgment as generous evidence given by the plaintiff; his evidence was that he wished to clear his name, and securing a large verdict was not his principal concern. Had he not taken this stance, the quantum of damages awarded may have been significantly greater. 28 In my opinion, therefore, the plaintiff had sufficient reason for commencing the proceedings in this court. 29 That does not entirely dispose of this issue. It is always open to a plaintiff to agree to transfer proceedings to the District Court, and it is appropriate that this be done if, at any time, it becomes apparent that the claim is one more suitably determined in that court. The rule expressly recognises this. Thus, if it were to appear that, because of the defences raised by the defendant, the issues will be comparatively simple, or that the damages likely to result will be lower than previously expected, the rule will operate against a plaintiff who, in the face of that knowledge, continues the proceedings in this court. 30 That compels an examination of the issues as they were defined in the pleadings. I set out those issues in detail in paragraphs 14 - 16 of the principal judgment and dealt with each of them in the paragraphs that follow. By reason of the large number of defences alone, together with the complexity of the evidence, I am satisfied that the plaintiff had sufficient reason for continuing the proceedings in this court, and not taking steps to transfer them to the District Court. 31 Accordingly, I propose to make an order for payment in accordance with Part 52A r 33(2). 32 That conclusion means it is necessary to consider the defendant's second proposal, that is, that the plaintiff be entitled only to half of the costs to which he would otherwise be entitled. The sub rule on which the defendant relies is r 33(4)(e). 33 That rule is inapposite. It relevantly provides as follows: Subject to sub rule (5) where, by or under the rules or any order of the Court, the plaintiff is entitled to his or her costs of any proceedings to which this rule applies, the amount of costs payable to him or her shall - (e) in respect of proceedings commenced after 30 June 1993, but on or before 1 October 1997, where he or she recovers a sum more than $75,000 but not more than $150,000, be only a half of the whole amount; … 34 This case does not come within the factual parameters stated. The plaintiff did not recover a sum more than $75,000. The rule is therefore inapplicable. 35 However, s 76 would permit an order of the kind proposed if it were otherwise appropriate to make it. I cannot see any reason why, if the plaintiff is entitled to an order for costs under sub r (2), there should be any diminution of the quantum of costs to which he is entitled. If it was appropriate (that is, if he had sufficient reason) to commence or continue the proceedings in this court, then I see no reason why he should not recover the whole of the costs incurred. I decline to make any order that would reduce the costs which the plaintiff should recover. 36 Accordingly, the defendant's notice of motion will be dismissed. 37 It is necessary now to consider the plaintiff's notice of motion, in which he seeks an order that the costs be assessed on an indemnity basis. 38 It was not contested that the terms of s 76 of the Supreme Court Act are wide enough to permit such an order to be made. 39 The basis on which a court may order that costs be assessed on an indemnity basis has been considered on many occasions. I was referred particularly to the decision of Badgery-Parker J in Rouse v Shepherd [No2] (1994) 35 NSWLR 277, in which his Honour undertook some review of the various circumstances in which such an order might be made. It is unnecessary to re-state what has been frequently stated. 40 The conduct of the party against whom the costs order is made is one obvious relevant circumstance. In particular, an order is available where a party persists in litigating an issue in which that party has no chance of success: see, for example, Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, cited by Badgery-Parker J in Rouse. It was on this principle that the plaintiff placed greatest reliance. A glance at the principal judgment will show that the defendant was unsuccessful in every defence raised. That, however, does not mean that the defences were, and should have been known to be, untenable. But the defendant sought to litigate a justification defence to all imputations, notwithstanding a concession that she was estopped by reason of the findings of fact in the Local Court proceedings in relation to three of the imputations. There is no suggestion that the concession was conveyed to the plaintiff's legal representatives at any time before the hearing, with the consequence that the plaintiff's legal representatives must have prepared to meet that defence. 41 In relation to the two imputations which were not the subject of an estoppel, the defendant was unable to adduce any evidence to support a defence of justification. 42 Counsel for the plaintiff referred to a number of paragraphs in the judgment to show that the manner in which the defence was conducted, and the defendant's persistence in defences which could not be substantiated, justify the order he seeks. The paragraphs referred to are those numbered 16, 31, 33, 39, 43, 46, 49 and 84. It is not necessary to re-state the conclusions contained in those paragraphs. 43 It probably does not help to single out any one of the defences as less tenable than any other. However, it may be observed that the defence which pleaded that the publication of the interviews was entitled to protection as a fair protected report of court proceedings was doomed from the start to failure. I leave the judgment in other respects to speak for itself as to the prospects of any of the defences succeeding. 44 Even if any defence had merit, it would have been defeated by the malice which I found established. 45 In my opinion the result of the plaintiff's claim was inevitable. There was no defence properly available to the defendant. She persisted in litigating defences which she (or her legal representatives) must have known would fail. 46 In response to the plaintiff's claim counsel for the defendant argued that she was entitled to rely on her defences, and that to hold otherwise would, in effect, be to hold that she was required to admit liability. I do not have any difficulty with this proposition. Just as a plaintiff should not, at the risk of costs penalties, commence or maintain untenable litigation, so a defendant should not initiate or maintain untenable defences. It is particularly to be observed that the defences raised all cast an onus on the defendant that she was unable to discharge. It was she who initiated these issues. 47 Counsel also argued that it is relevant to take into account the conduct of the trial on behalf of the plaintiff. He referred to the period of time over which the defendant was cross-examined. There is no doubt that the cross examination was extensive and prolonged. The case on behalf of the plaintiff could not be said to have been presented with economy. However, it must be recognised that there is a good deal of latitude allowed to accommodate differences of style, approach and personality in the cross-examination of witnesses. It must be borne in mind that had the defendant not raised those defences, there would have been no issue on which she stood to be cross-examined. I am not prepared to conclude that the manner in which the trial was conducted on behalf of the plaintiff disentitles him to an order if he is otherwise entitled to it. 48 Counsel also referred to the circumstance that the imputations were amended during the course of the trial but I see this as no more than an ordinary incident demonstrating the complexities of the law of defamation and the conduct of a trial of a claim for damages for defamation. 49 I am satisfied that the plaintiff has established his entitlement to an order that his costs be assessed on an indemnity basis. I propose so to order. 50 There is one other circumstance that is relevant to this question, although it arises in an unusual way, and is almost certainly not the subject of any authority. I would also observe that it was not raised by either counsel, and counsel have not been heard in relation to what I am about to write. In paragraph 96 of the judgment I referred to the evidence given by the plaintiff about his purpose in bringing the proceedings, and the absence of any intention on his part to make money from the litigation. In case it was not already plain, I make it plain now that this was one of a number of factors that led me to the assessment of damages that I made. In other words, the plaintiff's damages were assessed at a relatively low level as a result of his concession this respect. But it would be unfair to allow the reduction in the award of damages to operate against him by also inhibiting his entitlement to compensation for the costs incurred in the litigation. The fact that the damages were diminished for that reason is one factor pointing to making an award of costs on an indemnity basis. I would have reached this conclusion in any event, but the circumstance to which I now refer strengthens the view I would otherwise have taken. 51 The defendant has conceded that the plaintiff is entitled to interest on the amount of the verdict, in the sum of $2,735. I will make an order to that effect as well. 52 The orders I make are:

Green v Schneller

At a glance

Court

Decision date

Before

Source

Judgment (12 paragraphs)

Parties

Cases Cited (4)

Cited By (1)