Hennessy v Lynch

Hennessy v Lynch - [2008] NSWDC 15 - NSWDC 2008 case summary — Zoe

Parties

Applicant/Plaintiff:

Hennessy

Respondent/Defendant:

Lynch

Legislation Cited (5)

Defamation Act 1974(NSW)

Civil Procedure Act 2005(NSW)

Defamation Act 2005(NSW)

Supreme Court Rules 1970(NSW)

Uniform Civil Procedure Rules 2005(NSW)

Cases Cited (9)

CITATION: Hennessy v Lynch (No. 4) [2008] NSWDC 15

Antoniadis v TCN Channel Nine Pty Ltd (Supreme Court of New South Wales, 24 April 1997) Arian v Nguyen [2001] NSWCA 5 Cooper v Whittingham (1880) 15 Ch D 501 Dering v Uris [1964] 2 QB 669 Haertsch v Andrews and Ors (Ireland J, 1 December 2000) Hennessy v Lynch (No.3) [2007] NSWDC 268 Jones v Sutton (No.2) [2005] NSWCA 203 Morgan v Wallis (1907) 33 TLR 495 CASES CITED: Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 National Auto Glass Supplies (Aust) Pty Ltd v Nielsen & Moller Auto Glass (NSW) Pty Ltd (No.9) [2007] FCA 1826 Packer v Meagher [1984] 3 NSWLR 486 Ritter v Godfrey [1920] 2 KB 47 Roache v News Group Newspapers [1998] EMLR 161 Skalkos v Assaf [2002] NSWCA 14 Skalkos v T S Recoveries Pty Ltd [2004] NSWCA 281 Stevens v Sullivan [2002] 1 DCLR (NSW) 138 Williams v Ward (1886) 55 LJQB 556 West and Fortunate Investments Pty Ltd v Nationwide News Pty Ltd [2003] NSWSC 767

The plaintiff and the defendant each apply for costs orders following the handing down of my judgment in these proceedings: Hennessy v Lynch (No.3) [2007] NSWDC 268. I note that interest on the judgment debt has been mathematically agreed in the sum of $1,038.39.

This application for costs raises important questions concerning costs in defamation actions, and in particular concerning the ambit of s.48A Defamation Act 1974. Although this section has been in force since 17 February 2003, the only case in which its provisions have been considered and applied, following an application by a defendant, is the decision of Graham J in National Auto Glass Supplies (Aust) Pty Ltd v Nielsen & Moller Auto Glass (NSW) Pty Ltd (No.9) [2007] FCA 1826. No applications have previously been made by plaintiffs, although I have recently heard an application by a plaintiff in other proceedings in this court.

Section 48A is referred to in passing in Jones v Sutton (No.2) [2005] NSWCA 203, but the Court of Appeal (at [74]) noted that the provisions of this section were not relied upon and considered the costs application on common law principles. The plaintiff in those proceedings successfully appealed a judgment for the defendant but did not appeal the trial judge's assessment of $5,000 for three publications (two to one person and one to three persons). The costs for this action were well over $1 million (Hansard, 12 October 2005, p, 18518) and it was because of his concern that costs were "massively out of proportion to the damages" that Mr David Barr MLA introduced the Defamation Amendment (Costs) Bill in 2002 which, although unsuccessful, led to the enactment of s.48A.

I have set this out in some detail because the problems described by Mr Reid have a familiar ring today. Defamation cases are often "combative", to use Levine J's description of the multiple trials in Antoniadis v TCN Channel Nine Pty Ltd (Supreme Court of New South Wales, 24 April 1997); Levine J awarded indemnity costs at the third trial of these proceedings to the plaintiff for an offer of compromise of $5,000, noting the two earlier trials had been discharged by "the fault of the defendant" (at 11). Even where the extent of publication is limited, defamation actions still result in very substantial legal costs. In Skalkos v Assaf [2002] NSWCA 14, where there were two limited publications (one to one person), the costs certificate for the trial totalled $941,444.77: Skalkos v T S Recoveries Pty Ltd [2004] NSWCA 281.

Despite the introduction of s.48A, and the inclusion of an almost identical provision in s.40 Defamation Act 2005, it is not generally referred to in costs applications. In West and Fortunate Investments Pty Ltd v Nationwide News Pty Ltd [2003] NSWSC 767 Simpson J awarded damages totaling $50,000 but awarded the plaintiff only three-quarters of the costs because the damages fell so far below the threshold ($225,000) in Part 52A r.33 Supreme Court Rules; consequently, the action could have been commenced in, or transferred to, the District Court. In its summary of the case the Gazette of Law and Journalism (GLJ Archives, "Costs - October 2003") noted that one week after this "costs contortion", Part 52A r.33 Supreme Court Rules was amended to exempt defamation cases from this requirement.

On behalf of the plaintiff, Mr Connell submitted that the provisions of s.48A must prevail over the Uniform Civil Procedure Rules concerning offers of compromise, as the latter are mere regulations. The Court has a wide discretion in relation to offers of compromise and should exercise it in favour of the party who, in reality, had won: Roache v News Group Newspapers [1998] EMLR 161; this discretion had been exercised generously in a number of defamation cases. The plaintiff did make offers, although above the sum awarded and just before the trial, and s.48A(2) should prevail over the offer of compromise regulations. The plaintiff should be entitled to his costs for the whole of the trial, including the cost of senior counsel. In particular, the plaintiff should have his costs of the s.7A jury trial, where the defendant did not give evidence, and where the plaintiff was successful. The defendant could have waived the need for a s.7A jury trial.

[2004] NSWCA 281

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (29 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (9)