Habib v Radio 2UE Pty Ltd

Relevant provisions in the Civil Procedure Act and Uniform Civil Procedure Rules 9The general principle is that costs of a motion await the final judgment of all issues between the parties: UCPR Pt 42 r 42.7. I accept the defendants' submission that there is a presumption against the making of an order for costs payable forthwith. Costs issues are resolved when the proceedings have been concluded and the rights of the parties have been finally determined: Brasington v Overton Investments Pty Ltd [2001] FCA 571 at [13] per Emmett J (concerning Federal Court Rules O 62 r 3). 10This is also the case in defamation proceedings: Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2010] NSWSC 962 at [22] per McCallum J. Gatley on Libel and Slander has, in the current and earlier editions, noted the different principles arising from policy considerations concerning defamation actions, and also to the care necessary when making costs orders against a defendant (see, for example, the 10 th edition at [35.15], citing Ritter v Godfrey [1920] 2 KB 47 at 53 per Lord Sterndale MR). These policy considerations and issues have been comprehensively reviewed by the NSW Court of Appeal in Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 142, where a plaintiff who succeeded on a justification defence (but lost the action) was nevertheless refused the substantial costs ($300,000) of successfully defeating the justification defence at the trial. 11In considering whether to make an order for costs to be assessed forthwith, the court should be guided by the principles set out in ss 56 and 58(1) Civil Procedure Act 2005 (NSW) and in particular: (a)The costs rules, notably UCPR Pt 42 r 42.7; (b)The degree of expedition with which the parties have approached the proceedings, including compliance with interlocutory activities (s 58(2)(ii)) and the principles in s 56. Since this matter has a trial date in October, this would include readiness for hearing; (c)The use that any party has made, or could have made, of any opportunity available in the course of the proceedings (s 58(2)(v)). (A belated application to vary a costs order was refused in Aktas v Westpac Banking Corp Ltd (No 2) (2010) 241 CLR 570; [2010] HCA 47); (d)Although it was common ground that the order could (and perhaps should) have been made by the Court of Appeal, no submission was made that UCPR Pt 36 r 36.16 applies. (However, the comments in Habib v Nationwide News Pty Ltd [2010] NSWCA 291 at [50] about finality may have some relevance, in my opinion).

An unsuccessful motion to strike out for abuse of process is brought 12A short procedural history of the motion is as follows. Although the defendants brought the application to strike out the proceedings as an abuse of process at the first opportunity, the application was not able to be heard for more than two years, in circumstances that were not the fault of the parties, and in particular not the fault of the defendants. The matter was fixed for argument on 13 December 2006. The defendants provided written submissions on 13 October 2006; these were the submissions to which both parties referred me when the argument eventually took place in March 2008. By reason of the outstanding applications in the Supreme Court (and later the High Court) the parties were not ready to argue the matter on the seven occasions when the matter was listed for argument in 2007. 13On 6 March 2008, the motion to strike out for abuse of process came back before me for argument, but the parties had not finalized the orders in the Supreme Court, and the argument was stood over to 27 March 2008. As I noted in my judgment (at [30]), the submissions on the application before me were very brief. I handed down my judgment three weeks later, on 16 April 2008. The plaintiff appealed successfully ( Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231) and an application for leave to appeal was refused ( Radio 2UE Sydney Pty Ltd v Habib [2010] HCATrans 98). 14The matter was then returned to this court for a s 7A jury trial in June 2010 before Levy DCJ. The jury trial did not proceed on that day because the plaintiff sought leave, on the day of the trial, to amend the statement of claim to add a large number of new imputations, and the hearing was adjourned with a costs order against the plaintiff: Habib v Radio Sydney 2UE Pty Ltd [2010] NSWDC 244. A s 7A hearing took place on 28 - 30 March 2011. There was a jury verdict in favour of the plaintiff for imputations 2(c), 4(a) and 6(a). Judgment for the defendants was entered for all remaining imputations. Orders were made for the filing of a defence and on 6 April 2011 the matter set down for hearing on 17 October for 5 days as well as for a timetable for a Reply, discovery and interrogatories.

The parties' submissions 15The plaintiff submits: (a)The plaintiff has not delayed in bringing this application, but has acted reasonably, and regard should be had to his limited financial capacity when considering what orders are appropriate; (b)The abuse of process application was a discrete issue in the litigation which is now complete: Fiduciary Ltd v Morningstar Research Pty Ltd [2002] NSWSC 432. The defendants' entitlement to set-offs for other costs, such as the costs of the aborted s 7A trial, are irrelevant; (c)The merits of the case are irrelevant; (d)Although these proceedings are listed for hearing on 17 October and may finish at that time, the likelihood is a long wait for the plaintiff for the judgment, further arguments and appeals; (e)The conduct of the defendants in not agreeing to the orders sought by the plaintiff warrants the making of an indemnity costs order. 16The defendants rely upon the following arguments in reply: (a)The plaintiff's delay in bringing this application, and the failure to make any such application to the Court of Appeal; (b)This is not a discrete issue by reason of the complexity of defamation actions. The court should also take into account the defendants' entitlement to set-offs for other costs orders, such as the costs of the aborted s 7A trial in June 2010; (c)The defendants' assertion of strong prospects of success at the trial, in particular in relation to the defence of justification; (d)The hearing is set down for trial on 17 October 2011 and these proceedings are therefore nearing conclusion; (e)The defendants' refusal to consent to these orders is reasonable and does not warrant the making of an indemnity costs order. 17I shall deal with each of these in turn.

(a) Delay in bringing the application 18Each of the parties accuses the other of delay in relation to the bringing of the abuse application, the unsuccessful appeals and, in the case of the plaintiff, delays asserted to arise by reason of a change of solicitors. These kinds of delays are common where there are problems arising from s 7A trial appeals, and this was one of the reasons for the replacement of the s 7A "mini trial" when uniform defamation legislation was introduced in 2005. These are not matters which should weigh with the court when considering the application. 19However, the reason for the plaintiff not bringing this application for costs before the Court of Appeal, or before the Defamation List Judge when these proceedings were returned to this court in early 2010, is unexplained. The plaintiff has had "ample opportunity" ( Aktas, supra, at [7]) to raise this matter when the Court of Appeal heard the application and made costs orders, including the costs order which the plaintiff now asks me to vary. 20The delay by the plaintiff is significant and is a strong argument against the granting of such an order.

(b) Discrete issues in litigation and entitlement to set-offs for other costs 21The principal basis upon which the plaintiff brings this application is the submission that the abuse of process motion is a discrete issue, and accordingly costs should be payable forthwith, as has been the case in other defamation actions such as Prebble v Australian Broadcasting Corporation (Supreme Court of NSW, Levine J, 11 July 1997). 22Actions to strike out as an abuse are clearly capable of being regarded as a discrete issue ( Johnson v Department of Community Services (No 2) [1999] NSWSC 1251 at [18] - [20]), but, as Rolfe J goes on to note in [20], each case will have its own particular factual characteristics, and the way in which the wide discretion in relation to costs is to be exercised will be a matter for the individual judge. 23The plaintiff referred me to Fiduciary Ltd v Morningstar Research Pty Ltd , where Barrett J took a number of other matters into account when making the order, including the fact that no hearing date had been fixed and that the interlocutory application had abnormally increased the costs. 24In the present case, the plaintiff has an entitlement to assess his costs now for the appeals in the Court of Appeal and the High Court. The lion's share of the costs would relate to these proceedings. As I noted in my judgment in these proceedings at [30], the application before me was very brief, and it was not put to me that the costs involved were costs of any great significance. In addition, as noted below, these proceedings have an imminent hearing date. 25Whether the costs of the application before me were large or small, they are still a part of the trial process and, absent a specific order to the contrary, would be assessed in the context of all other issues (including s 48A issues) at the end of the trial. This is the case in complex litigation generally ( All Services Australia Pty Ltd v Telstra (2001) 171 ALR 330 at 333) and defamation actions in particular (s 48A of the repealed 1974 Act), where a special costs regime may override even the fact of success in proceedings. 26The cases to which the plaintiff has referred me where the fact that a discrete issue has been resolved has been considered conclusive, such as Prebble v Australian Broadcasting Commission (Supreme Court of NSW, Levine J, 11 July 1997), were decided at a time prior to the enactment of the special costs rules in defamation proceedings. 27I do not, however, accept the defendants' submission that I should refuse to make an order for the costs to be assessable now because the defendants are entitled to a set-off from the costs to which they are already entitled. While such an order may be made in some circumstances ( Wentworth v Wentworth (Young J, Supreme Court of NSW, 12 December 1994); Wentworth v Wentworth (New South Wales Court of Appeal, 21 February 1996); Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347), Wentworth turns on its own facts, and does not support any general principle that there is a right of set-off which would operate to deny a party costs payable forthwith where that party would otherwise be entitled to such costs. The fact that there are substantial costs orders outstanding may be a factor making the court more cautious, but it is not of itself the determinative factor.

(c) Merits of the defences 28The defendants submit that the defences, in particular the defence of justification, have strong prospects of success at the trial. My attention was drawn to particulars of justification asserting that the plaintiff had received payments from Centrelink while travelling overseas (to which, it is asserted, he knew he was not entitled), and that the plaintiff was fit enough to run in the City to Surf race when at the same time he had applied for a disability pension. The plaintiff's Reply asserts that this particular is "reckless" (paragraph 2(c)). It is unclear from these particulars what the evidence of the plaintiff's alleged fitness is. I cannot draw anything from these particulars except that, given the desirability that particulars of justification be set out with the precision of an indictment, more specificity may be desirable. 29It is also not possible for me, on the present pleadings, to express any view about the defences of qualified privilege and comment. Both statutory defences are pleaded under the wrong legislation, as if they were defences under the Defamation Act 2005 rather than under the repealed 1974 Act, which applies to these proceedings by reason of the date of publication: Habib v Nationwide News Pty Ltd [2006] NSWCA 14. The Reply filed on 1 June 2011 gives only limited information about the malice relied upon in relation to the defences of qualified privilege and comment; the plaintiff does, however, note that the defendants have pleaded the wrong statutory defence concerning comment. 30The likelihood of success of either party in this litigation has accordingly played no part in my determination of the issue of whether the costs of 6 and 27 March 2008 should be payable forthwith.

(d) The proceedings are nearing a conclusion 31These proceedings are listed for hearing on 19 October. The importance of parties being ready to proceed on the day of the trial, particularly where a prior trial date has already been vacated, was the reason for the plaintiffs being refused leave to amend their Reply in Lee v Keddie [2011] NSWCA 2. 32The defendants submit the trial date is imminent and this hearing will soon be over; the plaintiff's written submissions, referring to the prior history of these proceedings, take a more pessimistic view (at [3]). 33As I have noted above, the defendants' pleadings rely upon defences under the Defamation Act 2005 (NSW) although this Act is not retrospective ( Habib v Nationwide News Pty Ltd [2006] NSWCA 14), and may require repleading. There are likely to be other issues upon which interlocutory rulings are sought. However, even if there are a number of issues requiring pre-trial resolution, there should be sufficient time for the parties, in the words of Benjamin J, to "turn the Titanic around in time" ( Irish v Michelle [2009] FAMCA 66 at [204]; Hale v Hale (No 2) FAMCAFMC 873 at [468]) in order to be ready by October 17. I am satisfied the trial date is imminent and unlikely to be adjourned (for the reasons enunciated in Lee v Keddie ) and that the issues between the parties will be the subject of resolution by the trial judge shortly thereafter.

Conclusions 34Had the plaintiff made this application to the Court of Appeal in 2009, he may have been successful. Given the imminence of the trial date, and the policy reasons behind the enactment of s 48A of the repealed 1974 Act, I am of the view that the success or failure of all parties on all trial issues are best left to the trial judge, Levy DCJ. 35The parties in this complex litigation have yet to comply with a timetable for discovery and interrogatories. Their attention is better directed to these aspects of this litigation rather than issues of costs being payable forthwith. This is particularly the case in circumstances where the plaintiff is able to assess his appeal costs now (which are the lion's share of the costs) and can look forward to a hearing and judgment in a matter of a few months. 36Accordingly the application is refused with costs.

(e) The plaintiff's application for indemnity costs 37The plaintiff submits the defendants should have agreed to these orders, rather than come before me to argue the matter. 38Although I have refused the plaintiff's application, I should briefly note the reasons why, if I had acceded to the application I would have refused to make the order for indemnity costs in any event. 39The entitlement of a party to costs payable forthwith involves the exercise of discretion of the court under r 42.7. The plaintiff needs to satisfy the court that it is in the interests of justice for such a step to occur. 40Furthermore, defending an application, without more, would rarely amount to conduct warranting an order for indemnity costs. The awarding of indemnity costs is an order sparingly made by courts, and generally in circumstances involving some kind of inappropriate conduct by the relevant party: Oshlack v Richmond River Council (1998) 193 CLR 72 at [44]. 41In addition, the plaintiff is asking this court for an indulgence, in that such an application could, and should, have been made to the Court of Appeal as part of the proceedings before that Court.

Orders (1) The plaintiff's application for the costs of 7 and 23 March and 16 April 2008 to be assessed forthwith refused with 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: 28 June 2011