Costs of the appeal
10It is not disputed that the power to award costs is discretionary and that, in the ordinary course, costs follow the event (Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW)). Both parties recognise that the discretion is a broad one (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72).
11Logically, Mr Trad's submission that there should be no order at all as to the costs of the appeal should be dealt with before determining whether any costs so ordered should be paid on the indemnity basis.
No order as to costs at all?
12Mr Trad's submission to this effect is put on a number of bases.
13First, that this is appropriate to reflect the fact that the appellants succeeded on only a limited number of the grounds of appeal that they had raised. Reference is made to the principles summarised by Toohey J (then sitting in the Federal Court of Australia) in Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 as to when it may be appropriate to depart from the general rule, that costs follow the event, by reference to the outcome on separate issues in the proceedings.
14In Elite Protective Personnel Pty Limited v Salmon (No 2) [2007] NSWCA 373 this Court said (at [6]) that, where there are multiple issues in a case, the court does not generally attempt to differentiate between those issues on which a party is successful and those on which it fails, unless a particular issue or group of issues is clearly dominant or separable. (See also Waters v P C Henderson (Australia) Pty Ltd NSWCA unreported 6 July 1994.)
15Ms Nomchong SC, for Mr Trad, submits that the grounds which were either not pressed (ground 6) or not successfully pressed (grounds 1, 2(a) and (b), 3, and 8) by the appellants on the appeal, occupied a significant part of the proceedings in this Court, both in written and oral submissions.
16The relevant grounds of appeal fell within three groups: first, grounds relating to the finding of the respective elements of the contravention (i.e., whether the broadcast involved a "communication to the public" on the part of Mr Jones - ground 1; whether the Appeal Panel had misconstrued the word "incite" in one or other of three ways - ground 2; and whether the Appeal Panel misconstrued the meaning of the phrase "on the ground of the race of the person or members of the group" - ground 3); second, grounds relating to the application of the statutory exceptions relied upon by Harbour Radio - grounds 4 and 5); and, third, a ground in relation to the relief ordered by the Appeal Panel - ground 8. Ground 6, which was not pressed, also related to the question of the relief ordered by the Appeal Panel in respect of damages to Mr Trad on the basis that he was not a "hoon" referred to in the Schedule A broadcast.
17Although not all of the challenges made in the first group were successful, those grounds on which the appellants did not succeed (grounds 1, 2(a) and (b) and 3) were not in my opinion so dominant, clearly defined or separate as to warrant separate consideration being given to them in relation to the costs orders now to be made. What this Court was considering was the construction of the separate elements of the contravention by reference to the circumstances of the case. There was no attempt made to point to the time occupied on the appeal by those grounds on which the appellants were unsuccessful in the first group compared to those on which they were successful. Ground 8, which went to the power of the Tribunal to make the orders relating to training and review of policies, was one on which little time was spent in argument on the appeal.
18It has been said that the discretion to apportion costs as between different issues is one that should be exercised only in the most exceptional of circumstances (Trade Practices Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 42 FLR 213). I am not persuaded that this is such a case having regard to the interrelationship between the respective issues in the appeal.
19Second, it is submitted for Mr Trad that, although the proceedings were commenced by him in his own name, at the heart of the litigation is the public interest in the admonition against racial vilification. Ms Nomchong submits that this Court should have regard to the effect of a costs order against an individual complainant who is effectively making a complaint in the public interest, referring to Tu v University of Sydney (No 2) [2002] NSWADTAP 25 at [39] where recognition was given to the "chilling effect" of too readily awarding costs against unsuccessful applicants in a jurisdiction that seeks to protect and provide the observance of fundamental human rights.
20Third, reference is made by Ms Nomchong to the fact that, when the Tribunal dealt with costs of the Tribunal proceedings (Trad v Jones (No. 5) [2013] NSW ADT 127), the Tribunal did not accept the appellants' arguments that they had reasonably rejected an offer by Mr Trad to settle the Tribunal proceedings, at an early stage on the basis of an "on air" and written apology.
21Neither of the second and third bases put forward by Ms Nomchong persuades me that costs of the appeal ought not follow the event. As to the second basis, there is no doubt that there was a significant public interest in the subject matter of the proceedings - namely, the protection of the fundamental human right to live free from racial vilification. Further, I accept that, by reason of his position with the Lebanese Muslim Association, Mr Trad was, in effect, bringing the proceedings to vindicate the rights of the Lebanese Muslim community in general. That said, Mr Trad also maintained that the broadcasts vilified him personally. As to the third basis, the rejection by the appellants of the settlement offer in relation to the Tribunal proceedings was explained, in correspondence some considerable time later, on the basis that the apology required a full admission of guilt in circumstances where liability was denied (the letter is reproduced at [48] of the Tribunal's costs judgment). Whether or not the proceedings could have been disposed of by an apology at that stage, Mr Trad pressed for the additional relief obtained and resisted the appellants' challenge to the Appeal Panel decision, seeking to maintain the findings against the appellants, no doubt aware of the potential costs consequences of so doing. The only offer of compromise put before this Court as one that Mr Trad was prepared to accept was a capitulation by the appellants by way of consent to the dismissal of the appeal.
22Fourth, Ms Nomchong notes that the effect of the appellants' success is that Mr Trad will be put to further expense in the on-going litigation on the hearing of the remittal. This seems to me to be a non sequitur. The complaint in relation to the Schedule A broadcast was a complaint made by Mr Trad. If he does not wish to incur further expense in pursuing that complaint it would presumably be open to him to discontinue the Tribunal proceedings.
23Taken individually or separately, the bases on which Ms Nomchong submits that there should be no order for the costs of the appeal do not in my view warrant a departure from the ordinary rule that costs follow the event. Mr Trad unsuccessfully resisted the relief sought by the appellants on this appeal even though it was accepted by Mr Trad (on appeal and before the Appeal Panel) that the Tribunal had failed to consider Harbour Radio's reliance on s 20C(c) at all, or the grounds on which the matter was ultimately remitted by this Court to the Tribunal. There is no reason for the usual costs consequences of a successful appeal not to follow.
24The next question is the basis on which those costs should be ordered.
Application for indemnity costs
25The proceedings in this Court were commenced on 2 January 2013. The appellants' offer to settle the proceedings was made by letter dated 7 March 2013 headed "Without prejudice, except as to costs". The offer was not expressed as a formal offer of compromise and the letter did not state that the offer was made in accordance with Rule 20.26 or 51.47 of the Uniform Civil Procedure Rules, which deal with such offers. Moreover, the offer did not comply with the relevant Rules since it was open for acceptance only for 7 business days.
26The letter referred to comments said to have been made by Mr Trad's Counsel at a directions hearing the day before as to Mr Trad's ability to satisfy any costs order; and to the time that had passed since the broadcast and the fact that an apology had been ordered (and broadcast).
27In the letter, the appellants offered to settle the appeal proceedings on the basis that the appeal be discontinued and that each party bear its own costs of each of the appeal in this Court, and of the Appeal Panel and Tribunal proceedings.
28The offer was rejected by Mr Trad, by his solicitors' letter of 19 March 2013 under cover of which Mr Trad served a formal offer of compromise for the proceedings to be settled on the basis that the appeal be dismissed and each party pay its own costs.
29At this stage, no costs orders had been made in respect of either the Appeal Panel proceedings or the Tribunal proceedings. Submissions had been served by the appellants in relation to the appeal but not, at that stage, by the respondent.
30Ms Nomchong submits that the 7 March letter was not a valid offer of compromise in accordance with the Rules because it did not state that it was an offer made pursuant to the Rules (referring to Uniting Church in Australia Property Trust (NSW) v Takacs (No 2) [2008] NSWCA 172 at [6]); because it did not involve a genuine offer of compromise; and because it was not more favourable than the ultimate result.
31As to the formal requirements for a valid offer of compromise, there was no statement that this was an offer made pursuant to the Rules, though that would not necessarily preclude the application of the Rules. However, there is nothing in the letter to suggest that the appellants were there invoking the offer of compromise procedure under the Rules and it was not open for the mandatory 28 days so failed to comply strictly with the Rules.
32The appellants therefore cannot invoke the special offer of compromise rules.
33The appellants then seek to rely on the offer taking effect as a Calderbank offer, relying on the clearly expressed intention, in the final paragraphs of the letter, of the appellants to rely on the offer in the determination of costs (Ziliotto v Hakim [2013] NSWCA 359 at [129]). Logically, if it was not a purported formal offer of compromise at all, this (and the header to the letter) could objectively only have been intended to call in aid the Calderbank principles.
34In Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379; [1983] 3 All ER 153, Megarry VC, at 1383, in a passage cited by Beazley JA, as her Honour then was, in her dissenting judgment in Old v McInnis and Hodgkinson [2011] NSWCA 410, said:
Whether an offer is made "without prejudice" or "without prejudice save as to costs," the courts ought to enforce the terms on which the offer is made so as to encourage compromises and shorten litigation. The latter form of offer has the added advantage of preventing the offer from being inadmissible on costs, thereby assisting the court towards justice in making the order as to costs.
35In Commonwealth of Australia v Gretton [2008] NSWCA 117, the public policy considerations that underpin the making of favourable costs orders where a Calderbank offer has been made were recognised, by reference to what was said by Santow JA in Leichhardt Municipal Council v Green [2004] NSWCA 341 at [14], namely that such offers facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible and of discouraging wasteful and unreasonable behaviour by litigants.
36The question then is whether it involved a genuine element of compromise, in the sense referred to in The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706 at [8] and Leichhardt Municipal Council v Green at [23]-[24].
37The appellants point to the fact that the offer provided for the discontinuance of the appeal altogether. They contend that this appeal should be regarded as an "all or nothing" appeal, in the sense referred to in Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [29], being an appeal confined to issues of statutory construction, where what is in essence a "walkaway" offer may nevertheless involve a genuine element of compromise. Ms Nomchong rejects that characterisation and maintains that there was scope for different outcomes on different issues.
38The significance of whether the appeal is an "all or nothing" appeal harks back to what this Court said in In Regency Media Pty Ltd v AAV Australia Pty Ltd, at [29], about such cases:
As is usually the case in proceedings turning on an issue of contractual interpretation, this was an all or nothing case. The claims did not involve a process of evaluation or assessment in which the end result could vary over a range. Either one party or the other party was correct. Whilst a marginal difference between the offer and the result may constitute a real and genuine offer of compromise in a personal injury context, that is not generally true in an all or nothing case. (See Anderson Group supra at [9]; Robb Evans supra at [18].) (my emphasis)
39At [31], their Honours also went on to say that:
An offer which is in substance an invitation to surrender can result in the successful triggering of the indemnity costs mechanisms under the rules. (See r 20.26(2); Leichhardt Municipal Council supra at [36]-[37], [40].) However, as Basten JA suggests in Robb Evans supra at [20], the claim or defence would have to approach something of the character of being frivolous or vexatious for that to be the case. (See also Hancock v Arnold supra at [17].) If it were otherwise, the public policy to encourage settlement would rarely be served, in an all or nothing case. ... (my emphasis)
40Here, the appeal was not in my view all or nothing in the sense that the potential outcomes, if the appellants succeeded, could vary as between the two appellants and as to whether the matter was remitted for further determination or the Tribunal decision set aside outright. However, that does not mean that the offer did not involve a sufficient element of compromise.
41Ms Nomchong submits that the offer sought a bargain whereby Mr Trad would abandon his then pending costs applications in the Tribunal and the Appeal Panel. She submits that, in circumstances where the litigation was to enforce the racial vilification laws and not for personal financial gain, a proposal directed to Mr Trad withdrawing his application for costs was not directed to a true compromise of the issues in the proceedings.
42However, the offer made on 7 March was not an invitation for Mr Trad to surrender the judgment he had obtained as to the breach of the anti-vilification provisions, the enforcement of which is said to have been Mr Trad's primary objective. Mr Trad would still have retained the benefit of that judgment and the apology and the damages that had been awarded in relation to it. It was an offer by the appellants to give up the prospect of success on their appeal (which might have led to the complete dismissal of the Schedule A broadcast claims or, as transpired, to the remittal of those claims for re-determination by the Tribunal). I consider that there was the necessary element of compromise in exchange for Mr Trad giving up the prospect of favourable costs orders.
43As to whether the outcome of the appeal is more favourable to the appellants than the offer made in the 7 March 2013 letter, they have succeeded in having the matter remitted to the Tribunal, with the prospect of success in defeating the claim in relation to the Schedule A broadcast, whereas acceptance of the offer would have led to the disposal of the appeal altogether. Comparison of the offer having regard to the position in relation to costs is more complicated. Had the offer been accepted, the appellants would have borne all of their costs of the respective proceedings (but none of Mr Trad's costs), thus giving up the prospect of any favourable costs orders in circumstances where they had succeeded on the Schedule B broadcast claims, whereas the outcome of the appeal is that, even if the appellants' submissions on the existing costs orders are accepted, the appellants will be exposed to the uncertainty of a costs order against them in the Tribunal proceedings.
44On balance, I consider the outcome of the appeal is more favourable to the appellants since it offers the prospect, however likely or unlikely that prospect might be said to be, of success on the remittal.
45However, the making of a Calderbank offer does not automatically result in a favourable costs order simply because that the judgment is more favourable to the party making the offer than the terms of the offer. The question is whether failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs (SMEC Testing Services Pty Ltd v Campbelltown City Council per Giles JA at [37]). The onus is on the party making a Calderbank offer (here, the appellants) to satisfy the court that it should exercise the costs discretion in its favour (Evans Shire Council v Richardson (No 2) [2006] NSWCA 61). Not only must the offer invoke a genuine element of compromise, it must be one which was unreasonable for the offeree not to accept (Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375 at [4]-[5]; Leichhardt Municipal Council v Green at [21]-[24], [36]).
46Ms Nomchong submits that it has not been established that it was unreasonable for Mr Trad to refuse the 7 March offer. She notes that no part of the appeal was directed to setting aside the existing costs orders and therefore, that those orders were not part of the matters against which Mr Trad was required to assess at the time of the proposal.
47Ms Nomchong submits that Mr Trad was not in a position to understand the nature and extent of the orders at the time the offer was made. Ms Nomchong also points to the fact that the offer was only open for 7 business days, a significantly shorter time than that applicable to offers of compromise under the Rules and notwithstanding that it was made at the time when the hearing was some five months away.
48I consider that there was a genuine element of compromise in the 7 March offer but that it was not established that it was unreasonable for Mr Trad to reject it at the time it was made.
49Therefore, I consider that the costs of the appeal should be ordered only on the ordinary basis. I would make one qualification to that, namely that the respondent should not bear the costs of the appellants' unsuccessful application for redaction of the published reasons.