Lehrmann v Network Ten Pty Limited

1. Pursuant to ss 23, 37P(2) and 43 of the Federal Court of Australia Act 1976 (Cth), the orders made on 10 May 2024 be varied such that the costs payable by the applicant in favour of the respondents be quantified in a fixed sum and Order 3 made on 10 May 2024 be vacated.
2. Judgment be entered in favour of the first respondent in the amount of $2,000,000 representing its costs of the proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

(Delivered ex tempore, revised from the transcript)

LEE J: 1 For the reasons set out in Lehrmann v Network Ten Pty Limited (Costs) [2024] FCA 486 (costs judgment), I made a number of orders as to costs in relation to these proceedings, including Order 1 made 10 May 2024, which was in the following terms: 1. The applicant pay the respondents' costs of the proceeding on: (a) the ordinary basis for the costs incurred in relation to the defence of statutory qualified privilege pursuant to s 30 of the Defamation Act 2005 (NSW) (Defamation Act); and (b) the indemnity basis for any other costs of or incidental to the proceeding (including the costs referred to in Order 2 made on 23 November 2023). 2 In Order 3, I indicated the quantification of costs payable pursuant to Order 1 be referred to a referee for inquiry and report, with the terms of the reference to be settled by the Court. 3 Like all discretions which involve matters of practice and procedure, the requirements of Pt VB of the Federal Court of Australia Act 1976 (Cth) dictate that it be exercised in such a way as to facilitate the promotion of the overarching purpose, being the just disposition of disputes according to law and as quickly, inexpensively, and efficiently as possible. 4 It is common ground that Mr Lehrmann is a man of modest means. It is not suggested that there is any real likelihood he will be able to pay a substantial costs order. In those circumstances, I raised with the parties whether it would better facilitate the overarching purpose to fasten upon a lump sum or fixed amount for costs, being an amount which, on any view of it, would be payable pursuant to the costs order, and to which Network Ten Pty Limited (Network Ten) (one of the respondents entitled to the costs order) would restrict its claim for costs against Mr Lehrmann. This course would spare the further expense and delay of a reference. This suggestion was taken up and an application is made today for the costs payable by Mr Lehrmann to Network Ten to be quantified in the amount of $2 million. 5 In support of that application, the affidavit of Ms Marlia Ruth Saunders, a partner at Thomson Geer (the solicitors acting on behalf of Network Ten), affirmed on 20 June 2024, was read. In that affidavit, Ms Saunders, a highly experienced solicitor who has been involved in the day-to-day running of forty different defamation litigation matters, gives evidence of the fact that she has undertaken a close review of the invoices issued by the solicitors for the costs and disbursements of running these proceedings up until the time of the making of the costs order. 6 It is unnecessary for me to go into the details of that affidavit, save to note the following. 7 A total amount of $3,668,420.83 was invoiced and paid by Network Ten in relation to these proceedings. From this amount, Ms Saunders excluded various incurred costs including: amounts relating to any pre-litigation correspondence; costs associated with a notice to produce (which was set aside); costs associated with the cross-claim between the respondents; and the affidavits in respect of which I disallowed costs (as referred to in the costs judgment). 8 Having ascertained this amount, Ms Saunders, in turn, undertook a process by which she ascertained which of the identified costs and disbursements is Network Ten entitled to recover on: (1) an indemnity basis; or (2) a party-party basis (pursuant to the existing costs order). After identifying those figures, an amount of 100% has been allowed in respect of those costs the subject of the indemnity award, and 70% in respect of those costs the subject of the party-party award. 9 A total sum was then ascertained and, following that process, a further discount was applied of 35%, which resulted in a figure of approximately $2 million. This was said to reflect a discount to ensure that the amount ultimately claimed is obviously lower than the amount that would likely be recoverable pursuant to a taxation. 10 Mr Lehrmann neither consents nor opposes me approaching the identification of a fixed figure of costs in a broadbrush way. 11 Mr Svilans (the solicitor acting for Mr Lehrmann in the proceedings) has, with his characteristic courtesy, appeared to assist the Court, and has raised several issues for the Court's consideration. I can deal with these issues shortly. 12 The first relates to the number of solicitors at Network Ten who have worked on the matter. The second relates to the amount charged by leading counsel for Network Ten on a per diem basis. The third relates to work that was conducted by the solicitors following the delivery of Lehrmann v Network Ten Pty Limited (Trial Judgment) [2024] FCA 369 on 15 April 2024 (trial judgment). 13 In relation to the first of these matters, it seems to me that I ought conclude that the division of work within Thomson Geer has been done appropriately to reflect the differing types of work required to be done by solicitors at different levels of seniority within the firm. I have also been told by counsel appearing on behalf of Network Ten, Ms Graus, that there has been no duplication of perusal time for external communications, notwithstanding the number of solicitors that have undertaken work on the matter. 14 Secondly, in relation to the per diem rate of Mr Collins KC being $11,000. I am cognisant of the facts that: (1) there is a significant disparity between the higher daily rate able to be charged by leaders of the commercial bar and those of the defamation bar; and (2) the daily rate of Mr Collins is at the top of the range of fees charged by members of the inner defamation bar. But given his seniority, experience, and his high reputation in defamation law, the fact Mr Collins' fees are at the top of this limited range is to be expected. It certainly does not strike me as a rate that would not be appropriately recoverable. 15 The third point relates to work following the delivery of the trial judgment. Ms Graus has taken me through the relevant invoices. A significant amount of that money relates to disbursements in the form of counsel fees, which have been charged at the conclusion of the proceeding. 16 I am entitled to proceed on the basis that an experienced solicitor has undertaken the job referred to in the affidavit of identifying recoverable costs conscientiously and, in any event, the figures both charged to the client (of $3,668,420.83) and sought to be recovered (of $2 million), do not seem to me to be particularly large given the scope and complexity of this matter. The discounted $2 million figure, seems to me clearly to be recoverable pursuant to the terms of the costs order, given the significant quantum of those costs that would be payable on an indemnity basis. Indeed, I think it likely that the figure of $2 million is a real discount, perhaps a significant discount, on the amount that would be recoverable should the matter proceed to a reference. 17 Although this is a "broadbrush" assessment, for the reasons I have explained, it is appropriate to save the further expenditure of unnecessary costs. Accordingly, I propose to quantify the amount of costs payable as being $2 million. 18 Accordingly, I will enter a judgment for a fixed amount of $2 million in favour of Network Ten against Mr Lehrmann. 19 This, however, has not resolved all the outstanding issues concerning costs between the respondents, nor has it resolved any liability that Mr Lehrmann may have to Ms Wilkinson pursuant to the costs order. Mr Elliott SC, who appeared for Ms Wilkinson today, indicated to the Court that it was thought sensible to defer the quantification of any costs as between Mr Lehrmann and Ms Wilkinson, given the high likelihood Mr Lehrmann will not be in a position to pay the adverse costs order quantified in favour of Network Ten. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.