Habib v Nationwide News Pty Ltd

Court of Appeal (NSW)|2010-11-08|Before: Hodgson JA, Tobias JA, McColl JA, McClellan CJ, Coll JA

CITATION: Habib v Nationwide News Pty Ltd (No 2) [2010] NSWCA 291 This decision has been amended. Please see the end of the judgment for a list of the amendments.

JUDGMENT OF: Hodgson JA at 1; Tobias JA at 1; McColl JA at 1

DECISION: Notice of motion dismissed with costs

Civil Procedure Act 2005 (NSW) Defamation Act 1974 (NSW) LEGISLATION CITED: Defamation Act 2005 (NSW Interpretation Act 1987 (NSW) Supreme Court Rules 1970 (NSW) Uniform Civil Procedure Rules 2005 (NSW)

Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218 Connolly v Sunday Times Publishing Co Ltd [1908] HCA 69; (1908) 7 CLR 263 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; (2008) 72 ATR 425 Diver v Neal [2009] NSWCA 115 DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226 Habib v Nationwide News Pty Limited [2010] NSWSC 924 Habib v Nationwide News Pty Ltd [2010] NSWCA 34 Habib v Nationwide News Pty Ltd [2008] NSWSC 181 CASES CITED: Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 276 Kekatos v Stafford [2009] NSWCA 219 Martin v Benson [1927] 1 KB 771 Pamplin v Express Newspapers Ltd (No 2) [1988] 1 All ER 282; [1988] 1 WLR 116 Roads and Traffic Authority of NSW v Palmer (No 2) [2005] NSWCA 140 Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 Saul v Lin [2007] NSWSC 782 Short v Crawley (No 42) [2009] NSWSC 1110 State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; (1982) 150 CLR 29 Sundararajah v Teachers Federation Health Ltd (No 3) [2010] NSWSC 471 Sydney City Council v Geftlick (No 2) [2006] NSWCA 374 Vaughan v Hoskovich (No 2) [2010] NSWSC 835 Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672

PARTIES: Mamdouh Habib - Appellant Nationwide News Pty Ltd - Respondent

COUNSEL: C A Evatt with R K Rassmussen - Appellant (Respondent on the motion) A Leopold SC with S Chrysanthou - Respondent (Applicant on the motion)

SOLICITORS: Peter Erman - Appellant (Respondent on the motion) Blake Dawson - Respondent (Applicant on the motion)

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC 20048/2005

LOWER COURT JUDICIAL OFFICER: McClellan CJ at CL

LOWER COURT MEDIUM NEUTRAL CITATION: [2008] NSWSC 181

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2008/289978

HODGSON JA TOBIAS JA McCOLL JA

Monday 8 November 2010 Habib v Nationwide News Pty Ltd (No 2) Judgment 1 The Court: The applicant, Nationwide News Pty Ltd ("Nationwide"), has applied pursuant to a notice of motion filed on 27 August 2010 to set aside a costs order made in the determination of an appeal to this Court by Mamdouh Habib, the respondent on the motion: Habib v Nationwide News Pty Ltd [2010] NSWCA 34 (the "appeal judgment"). 2 The background can be briefly stated. On 15 February 2005, Nationwide published an article in the Daily Telegraph newspaper captioned "Mr Habib, it's time to tell the full story". On 11 March 2005, Mr Habib commenced defamation proceedings against Nationwide in relation to that publication. At a trial pursuant to s 7A of the Defamation Act 1974 (NSW) (the "1974 Act") the jury determined that the article conveyed the imputation, "the plaintiff knowingly made some false claims" and that that imputation was defamatory of him. McClellan CJ at CL then determined the question whether any defence raised by Nationwide was made out: s 7A(4), 1974 Act. His Honour found Nationwide had established its defence of substantial truth under s 15, 1974 Act. He entered judgment and verdict for Nationwide and ordered Mr Habib to pay its costs: Habib v Nationwide News Pty Ltd [2008] NSWSC 181 (the "liability judgment"). 3 On his appeal to this Court Mr Habib's notice of appeal sought orders, inter alia, setting aside McClellan CJ at CL's judgment and orders and costs. It also asked this Court to assess damages or remit the matter to the primary judge or another judge to assess damages. We allowed the appeal with costs, set aside the primary judgment and in lieu thereof entered judgment for Mr Habib. We remitted the matter to the Common Law Division for the assessment of damages. Our fourth order was: "4. Respondent to pay the appellant's costs of the trial to date." 4 The Court's orders were entered in the Court's computer system on 16 March 2010, the day judgment was delivered and are, accordingly, taken to have been entered on that date: Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") 36.11(2). 5 At the trial of the damages issue McClellan CJ at CL found that Mr Habib was entitled to an award of $5,000: Habib v Nationwide News Pty Limited [2010] NSWSC 924 (the "damages judgment"). At the conclusion of his judgment, delivered on 19 August 2010, his Honour invited the parties to address him on costs and stood the matter over for that purpose. 6 Nationwide then moved this Court pursuant to the notice of motion to which we have referred. It seeks to have our fourth order set aside and replaced by the following order: "Costs of the trial to date to be at the discretion of the judge of the Common Law Division who assesses damages." 7 The parties filed written submissions concerning the application and agreed that it could be dealt with on the papers. 8 The nub of Nationwide's submission is that the fourth order (hereafter "Order 4") was made without knowledge of a matter, that the respondent recovered damages of "only" $5,000, which, if known, would have been a relevant consideration in the exercise of the discretionary power to order costs. 9 Two issues arise. The first is whether the Court has the power to make the order sought by Nationwide. It seeks to invoke UCPR 36.16(3) no doubt having regard to the fact this Court's orders were entered on 16 March 2010. The second issue is whether, if it has power to make the order, the Court ought to exercise it.

Legislative framework 10 UCPR 36.16 provides: " 36.16 Further power to set aside or vary judgment or order (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. (2) The court may set aside or vary a judgment or order after it has been entered if: (a) it is a default judgment (other than a default judgment given in open court), or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or (c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order. (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it: (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. (3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered. (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B)" (emphasis added) 11 Subject to the rules of court, to the Civil Procedure Act 2005 (NSW) (the "CP Act") or any other Act, the court has full power to determine by whom, to whom and to what extent costs are to be paid: s 98, CP Act. 12 The following rules found in the UCPR are relevant to the exercise of the discretion to award costs in this case. 13 First, subject to Pt 42 of the UCPR, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs: UCPR 42.1. 14 Secondly, defamation proceedings are expressly excluded from the court's power to decline to make a costs order where a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000: UCPR 42.34. 15 The question of costs in defamation proceedings is also dealt with expressly in s 48A(1) of the 1974 Act: " 48A Costs in proceedings for defamation

(1) In awarding costs in respect of proceedings for defamation, the court may have regard to the following matters: (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), (b) whether the costs in the proceedings may exceed the quantum of damages to be awarded in the proceedings, (c) such other matters as the court considers relevant." (emphasis added) 16 Section 48A continues to apply to the rights the parties to these proceedings acquired under the 1974 Act despite the repeal of that Act by s 46 of the Defamation Act 2005 (NSW) (the "2005 Act"): s 30(1)(c), Interpretation Act 1987 (NSW). Section 48A(1)(b) was not reproduced in s 40 of the 2005 Act which otherwise mirrors s 48A. The use of the word "may" both in the chapeau in s 48A(1) and in sub-s (1)(b) indicates that the power may be exercised or not, at the court's discretion: s 9, Interpretation Act. Submissions 17 Although Nationwide's submissions do not advert to the fact that the Court's orders have been entered, it clearly accepts that that is so because, as we have said, it seeks to invoke the Court's power to set aside or vary a judgment or order under UCPR 36.16(3), a power conferred on the Court in addition to the power available under UCPR 36.16(1) (a power available before entry of orders which is not this case), and in addition to the Court's power available under UCPR 36.16(2), the latter rule dealing with setting aside or varying a judgment or order after its entry - which is this case. 18 Nationwide submits that UCPR 36.16(3) empowers the Court to set aside Order 4 because an order awarding costs does not fall within the categories excluded from the Court's power under UCPR 36.16(3). It relies on Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 (at [10]) as elaborated in various judgments at first instance, including Short v Crawley (No 42) [2009] NSWSC 1110 to contend that "claim for relief" in UCPR 36.16(3) refers to the determination of substantive rights, and that an order for costs does not determine such rights. 19 As to whether Order 4 should be set aside, Nationwide submits first that the damages award is a "material change of circumstances" since Order 4 was made in the sense referred to in Sundararajah v Teachers Federation Health Ltd (No 3) [2010] NSWSC 471 (at [7]) by Davies J when considering the power to set aside interlocutory orders. 20 Secondly, Nationwide contends that the $5,000 awarded to Mr Habib is a "miniscule" amount, "barely in excess of nominal (or 'contemptuous') damages". It contends that had Mr Habib received only nominal damages he would in all likelihood have been ordered to pay its costs, referring to Connolly v Sunday Times Publishing Co Ltd [1908] HCA 69; (1908) 7 CLR 263. 21 Thirdly, Nationwide argues that the relevance of the amount of the damages to any costs order is reinforced by s 48A(1)(b) of the 1974 Act set out above. It contends that unless Order 4 is varied, McClellan CJ at CL will effectively be excluded from considering a matter designated by the legislature as relevant to the assessment of costs. It submits s 48A(1)(a) finds some reflection in the power in UCPR 42.4 to specify the maximum costs that may be recovered by one party from another. 22 Fourthly, Nationwide submits that this Court made Order 4 without hearing argument as to what costs orders should be made in relation to the liability trial were the matter to be remitted for a damages hearing. It asserts this question was not addressed by the parties because the notice of appeal did not specifically seek such an order. 23 Fifthly, Nationwide argues that it is not necessary that this Court decide whether a different costs order would be justified in circumstances where it contends it is seriously arguable that the trial judge might properly, in the exercise of his discretion, consider a costs order more favourable to it than Order 4. 24 Nationwide contends that any application it might have made following delivery of the appeal judgment (and presumably within the 14 days provided for application after entry of judgment in UCPR 36.16(3A)) to preserve the position as to the costs of the liability hearing would "almost certainly have been regarded as speculative". 25 Finally, Nationwide submits that the question of the costs of the entire proceedings should be left to the trial judge's discretion. 26 Mr Habib submits the notice of motion is premature, and should await the entry of final judgment by McClellan CJ at CL. He also submits that interest on the judgment has not yet been calculated, and could amount to as much as $2,500. Additionally, he foreshadows an appeal from the damages judgment, on quantum at least, which could, if successful, render a reversal of Order 4 on the basis contended for by the applicant otiose. Otherwise he states that he "does not accept and/or disputes" Nationwide's submissions.

Power to make the order sought 27 In Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 (at 530) Barwick CJ said: "Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed." 28 The Chief Justice's statement reflected "a central and pervading tenet of the judicial system … that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances": D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 (at [34]). As the plurality (Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ) explained in Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218 (at [15] - [16]) the principal qualification to the general principle of finality is provided by the appellate system; however, even allowing for that qualification, the D'Orta-Ekenaike tenet finds reflection in the restrictions on the re-opening of final orders after they have been formally recorded. In elaboration, their Honours stated: "[16] The third consideration of principle … is related to the second [the principle of finality in litigation]. It is that the principle of finality serves not only to protect parties to litigation from attempts to re-agitate what has been decided, but also has wider purposes. In particular, the principle of finality serves as the sharpest spur to all participants in the judicial process, judges, parties and lawyers alike, to get it right the first time. Later correction of error is not always possible. If it is possible, it is often difficult and time-consuming, and it is almost always costly." 29 The formal recording of the orders of a superior court of record is often referred to as the "perfecting" of that order. It marks the point at which the court's power to reconsider the matter is at an end and provides conclusive certainty about what was the end result in that court: Burrell (at [18], [20]). If there is any power to reopen an appeal and reconsider the orders made, that power must be found in "the text of the governing statutes and any express or implied powers to be seen therein": DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226 (at [43]); Burrell (at [22]). As we have said, that point was reached in this case on 16 March 2010 when the Court's orders were entered. 30 Nationwide accepted that this Court has no inherent power to set aside or vary a judgment or order once entered and so requires an express statutory power to do so: see Deputy Commissioner of Taxation v Meredith (No 2) [2008] NSWCA 133; (2008) 72 ATR 425 (at [15] - [16]) per Basten JA (with whom Giles and Ipp JJA agreed). 31 It should also be noted that even where a court has power to vary its orders, that power should be exercised cautiously taking into account the public interest in preserving the finality of concluded litigation: Diver v Neal [2009] NSWCA 115 (at [5]) per Allsop P, Ipp and Basten JJA, referring to State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 51; (1982) 150 CLR 29 (at 38) where Mason and Wilson JJ said of the exercise of such a power: "[I]t is a power to be exercised with great caution. There may be little difficulty in a case where the orders have not been perfected and some mistake or misprision is disclosed. But in other cases it will be a case of weighing what would otherwise be irremediable injustice against the public interest in maintaining the finality of litigation. The circumstances that will justify a rehearing must be quite exceptional. " (emphasis added) 32 The Court in Diver (at [6]) also referred to the following cases:

(a) Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672 (at 684) where the Court stated: "[T]he circumstances in which this Court will reopen a judgment which it has pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard. " (emphasis added)

(b) Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 (at 302 - 303), where Mason CJ (who dissented as to the outcome) referred to the passage set out above from Wentworth , and continued: "But these statements do not exclude the exercise of jurisdiction to reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders . So much was acknowledged by Brennan, Dawson, Toohey and Gaudron JJ in Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256 at 264-266 when their Honours said: 'if reasons for judgment have been given, the power is only exercised if there is some matter calling for review.' … However, it must be emphasised that the jurisdiction is not to be exercised for the purpose of reagitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing . The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to reargue their cases." (emphasis added) 33 The "general rule" as to costs is that, subject to UCPR 42, they follow the event unless it appears to the Court that some other order should be made in whole or in part: UCPR 42.1. The appeal was determined, and Order 4, (as well as the order as to the costs of the appeal) was made, on that basis. The effect of Nationwide's notice of motion is that it seeks a rehearing on the issue of the costs of the liability hearing. The principles of finality to which we have referred clearly bear on whether we should accede to that application. 34 We turn then to the question whether UCPR 36.16(3) gives the Court power to set aside a costs order which has been entered. There is no binding decision of this Court supporting the proposition that that rule provides the power for which Nationwide contends. It relies on Hancock (at [10]) where the Court (Ipp, McColl and Basten JJA) tentatively opined: "10 The precise scope of this provision [UCPR 36.16(3)] is unclear. Read literally, it might be thought to operate only in respect of orders which were not sought by any party. That reading seems implausible. Given its context, it is more likely that the distinction intended to be drawn is between substantive relief, to which the power does not extend, and ancillary or consequential relief, to which it does extend. On that understanding, a costs order would clearly fall within the latter category. Such a distinction would make practical sense because appropriate orders as to costs frequently depend upon the existence of offers of compromise which are properly not known to the Court until after substantive relief has been determined." (emphasis added) 35 However, on the facts of Hancock the Court did not have to determine whether UCPR 36.16(3) conferred the power for which Nationwide contends. Nor have subsequent decisions of this Court resolved that position. Rather they have created an unresolved tension. In Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (No 2) [2009] NSWCA 336 (at [8]), Campbell JA (McColl JA and Sackville AJA agreeing), described Hancock (at [9] - [12]) as "contemplat[ing] the possibility that a costs order could be varied notwithstanding that no notice of motion was filed within 14 days after the order was entered in the Court's computer system, if there had been an oral application to vary it within the 14 day period, and if either UCPR 36.16(3) or section 14 Civil Procedure Act 2005 were invoked." His Honour suggested, without the benefit of argument, that a costs order made in response to an application for such an order in the notice of appeal, was one that "determines any claim for relief", and accordingly that UCPR 36.16(3) was not applicable. 36 Campbell JA's view accords with Roads and Traffic Authority of NSW v Palmer (No 2) [2005] NSWCA 140 where the Court considered Pt 40 r 9(4) of the Supreme Court Rules 1970 (NSW), which was in substantially the same terms as UCPR 36.16(3). The Court (per Giles JA, Spigelman CJ and Handley JA agreeing) (at [20] - [21]) held that costs orders determined claims for relief, the relief claimed being orders disposing of the costs of the trial and of the appeals, and hence did not fall within the limited exception that rule afforded. Palmer has not been referred to in any of the decisions of this Court or the first instance judges referred to below in which the scope of the UCPR 36.16(3) power has been considered. 37 Nationwide referred to first instance decisions which it contended supported the proposition that a claim for costs was not a "claim for relief" within the meaning of UCPR 36.16(3): Saul v Lin [2007] NSWSC 782, Vaughan v Hoskovich (No 2) [2010] NSWSC 835, Short v Crawley and Sundararajah. 38 It might be noted that with the exception of a bald statement in Saul v Lin (at [13]) none of those cases (nor any decision of this Court to which Nationwide referred) have considered the question whether even if, assuming without deciding, a claim for costs was not a "claim for relief", it nevertheless "determines any question (whether of fact or law or both) arising on any claim for relief": UCPR 36.16(3). There is much to be said for the view that UCPR 36.16 is intended to apply to all claims for substantive relief and orders ancillary thereto, and that the exception UCPR 36.16(3) carves out reflects the court's power to set aside, vary or discharge an interlocutory order: see Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 (at 46) per McLelland J (as his Honour then was); Deputy Commissioner of Taxation v Meredith (No 2) (at [14]). 39 Giles JA's conclusion in Palmer formed part of the ratio of that decision and is binding on this Court in its consideration of UCPR 36.16(3) which, as we have said, is in substantially the same terms as the rule his Honour was considering. However Palmer was, and this case is being, decided on the papers without the benefit of oral argument. In those circumstances we would not wish to express a concluded view about the meaning of the rule. In any event, it is not necessary in our view for this Court to determine whether it has the power for which Nationwide contends. This is because there are a number of reasons why, even if it had that power, Nationwide's application should not be granted.

Whether the order sought should be made 40 First, it is not the case, as Nationwide contends, that Order 4 was not an order sought in the notice of appeal. That notice as we have said, sought to set aside the primary judge's orders, one of which awarded costs of the liability hearing to Nationwide, and a costs order. That notice of appeal clearly brought into play the issue of the costs of the liability hearing in the event the appeal was upheld. It was inevitable, as we explain below, that if the appeal succeeded the matter would have to be remitted for a damages hearing because the primary judge had not assessed damages on the contingency that his view on liability may have been erroneous. 41 As is apparent from the outline of Nationwide's submissions, at no stage during the hearing of the appeal or in its written submissions did Nationwide submit that the outcome of a remitted damages hearing might affect the order the Court made as to the costs of the liability hearing: cf Sydney City Council v Geftlick (No 2) [2006] NSWCA 374 (at [10]) per Mason P, Hodgson and Tobias JJA; Kekatos v Stafford [2009] NSWCA 219 (at [107]) per Allsop ACJ (Giles and Campbell JJA agreeing). Nor, as is self-evident from the chronology hitherto recited, did it move within 14 days of the entry of the Court's orders to have Order 4 set aside: cf UCPR 36.16(3A). 42 This is despite the fact that the Court made it clear that if the appeal succeeded the question of damages would depend upon views the tribunal of fact would form of Mr Habib and so that that question would have to be remitted for consideration, a position for which counsel for Nationwide contended in any event, going so far as suggesting it would have to be remitted to a judge other than the primary judge having regard to his Honour's adverse findings of credit: Transcript of Proceedings, Habib v Nationwide News Pty Ltd (NSW Court of Appeal, 22 May 2009) at 34.24-34.41, 87.10-87.23. In fact it was Mr Habib who invited the primary judge to appoint another judge to determine damages, but absent argument supporting that submission, his Honour declined to do so: damages judgment (at [6]). 43 Secondly, Nationwide's submission that it could not successfully have sought the alteration of Order 4 prior to the damages judgment (or, implicitly, have contended that in the event of the appeal succeeding costs of the hearing at first instance to date should be reserved for the trial judge's determination), because its attempt to do so would have been dismissed by this court as "speculative" should be rejected. It would have been open at that stage for Nationwide to contend: (1) that at least some of the issues of truth, on which it remained successful after the Court of Appeal decision, were severable and had added to the costs of the trial;

(2) that by reason of s 48A(1)(b) of the Defamation Act , there was a factor relevant to the exercise of the costs discretion that was as yet undetermined.

Those submissions may not have been successful, but they were certainly submissions that were then open to Nationwide. 44 Thirdly, it is by no means apparent that the primary judge's award of $5,000 damages was contemptuous or derisory. The authorities which refer to such damages tend to refer to amounts of one shilling (Connelly v Sunday Times), a farthing (Martin v Benson [1927] 1 KB 771 or a halfpenny (Pamplin v Express Newspapers Ltd (No 2) [1988] 1 All ER 282; [1988] 1 WLR 116). A comparable amount in Australia would be $1. 45 Contemptuous damages are tantamount to an expression of disapproval of, or contempt for, the plaintiff: Connolly v Sunday Times. The primary judge did not suggest that his award of $5,000 reflected such an attitude. Nor is it apparent from the damages judgment that Nationwide submitted that such an award was appropriate. The primary judge concluded (at [42]) that Mr Habib was entitled to "only minimal damages for hurt to his feelings" because as we understand his Honour's reasons, the matter complained of "extended well beyond" the imputation the jury found to have been conveyed. (It might be noted in this respect that his Honour had earlier commented (at [2]) that it was somewhat surprising that the jury had only found one of the seven imputations which Mr Habib had pleaded was conveyed.) 46 Fourthly, contrary to Nationwide's submission, it is appropriate for this Court to consider the order it might have made had it been expressly invited on hearing the appeal to consider departing from the general rule as to costs following the event or, at least, asked to reserve the issue of the costs of the liability hearing pending the outcome of the damages hearing. In such circumstances, in our view, it would have been open to the Court to consider that the liability issue was severable from the damages issue such that it was appropriate, whatever be the outcome of the damages inquiry, to order Nationwide to pay Mr Habib's costs of the trial of that issue: see James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (at [31] - [36]). 47 As is apparent from the appeal judgment the liability issue involved complex questions of fact and law arising from the defence of substantial truth Nationwide pleaded. The matter complained of appears to have stemmed from an interview Mr Habib gave to Channel Nine's 60 Minutes programme. The defence of substantial truth canvassed a large area of factual controversy, challenging Mr Habib on matters relating to his detention in Pakistan, Egypt and Guantanamo Bay. It involved calling ASIO officers and examining the transcripts of interviews of Mr Habib they had either conducted or in which they had participated in Pakistan and Guantanamo Bay. Nationwide relied upon interviews Mr Habib had given both before and after the publication of the matter complained of. Nationwide was entitled to defend the case on that basis, although of course as we have held, it was ultimately unsuccessful. However, having mounted a defence of that nature, it was not, in our view, an inappropriate costs outcome, whatever be the damages, that Mr Habib recover his costs of successfully establishing liability. The trial of the defence of substantial truth lasted from 26 November until 14 December 2007. In contrast, the damages hearing occupied two days of court time, from 28 until 29 July 2010. 48 Insofar as s 48A(1)(b) is concerned, we are of the view that this was a matter which should have been considered by Nationwide either prior to the Court delivering the appeal judgment or within the 14 days provided by UCPR 36.16(3A). It would, in any event, have been affected by the discretionary factors to which we have referred concerning the significance of the issues involved in the liability hearing. Bearing in mind the multi-factorial nature of the costs discretion, it is also relevant to bring to bear when considering Nationwide's submissions, the acknowledgement in UCPR 42.34 that the costs of defamation proceedings stand in a different category to the costs of other proceedings in which amounts of less than $500,000 are awarded. 49 A further factor relevant to the question of whether this Court's order should now be set aside is that it was open to Nationwide to have made an offer of compromise of a modest sum, and, if that sum had been over $5,000, to take advantage of the consequences provided by the UCPR where such an offer is not accepted. It chose not to do this, but rather to use its extensive resources to seek the complete defeat of Mr Habib's claim. Having failed in that endeavour, it is reasonable that it bear the costs of the liability hearing. 50 Finally, as a general proposition we refer again to the necessity that there be finality in litigation. As is apparent from our reasons Nationwide had the opportunity to make express application in relation to the costs of the liability hearing during the appeal. This Court did not proceed, in making Order 4, on any misapprehension of the facts or the relevant law as to the costs of the liability hearing. It applied UCPR 42.1 absent any submission to the contrary from Nationwide. 51 Nationwide's notice of motion should be dismissed with costs. **********

08/11/2010 - file number on cover sheet should be CA 2008/289978 - Paragraph(s) Front cover sheet

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.

Defamation Act 1974(NSW)

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Cases Cited (35)