Mond v The Age Company Pty Limited

(a) the judgment sum exceeded the quantum of the offer;

(b) the offer did not include interest;

(c) the offer was said to have been made "for purely commercial reasons" and therefore the applicant did not consider that the proffered apologies were sincere and did not assuage his hurt to feelings;

(d) the offer was conditional on the parties entering into terms of settlement and there was no clarity or certainty about the nature of those terms;

(e) the applicant was entitled to seek the vindication of a court judgment; and

(f) the offer was made at a relatively early stage and the applicant was entitled reasonably to believe that he would do better in a later phase of the negotiations or at trial.

1. In relation to the respondents' 16 July 2023 offer of $176,000 plus the special conditions as to the costs of the fourth respondent, the applicant submitted that this feature of the offer was controversial, and was the basis upon which the applicant reasonably rejected the offer.

1. The respondents submitted that it was unreasonable for the applicant not to accept each of the respondents' Calderbank offers. The respondents submitted that -

(a) they should pay 50% of the applicant's party and party costs to 6 April 2023, or alternatively to 16 July 2023, reflecting the respondents' success on the 5 May 2021 articles and the partial justification of the other articles;

(b) the applicant should be ordered to pay the respondents' party and party costs from 6 April 2023, or alternatively 16 July 2023, to reflect the unreasonableness of the applicant having rejected the respondents' Calderbank offers; and

(c) alternatively, there should be no order as to costs in respect of the periods after the applicant's rejection of the respondents' Calderbank offers.

1. In relation to the 6 April 2023 offer, the respondents submitted that it was unreasonable for the applicant to refuse the offer for the following reasons -

(a) the offer included 100% of the applicant's party and party costs up until that point, which the respondents submitted the applicant was now not entitled to by reason of the apportionment that the respondents sought;

(b) the offer contained fulsome apologies that would have been published in print and online, and which would have directly addressed the stings that were found to be conveyed by the 13 December 2021 and 18 February 2022 articles and which would have given the applicant substantial vindication much earlier than at the conclusion of the trial;

(c) the offer would have resulted in the removal of the 5 May 2021 articles, which the applicant has not achieved at trial;

(d) the respondents offered to take further steps, including contacting Google; and

(e) the applicant's unrecoverable costs would have been far less at the date of this offer than following the 10 day trial.

1. The respondents acknowledged that the 6 April 2023 offer did not include an amount for interest, but submitted that this was inconsequential to the assessment of reasonableness because of the applicant's decision to incur the "enormous costs" involved in running a 10 day trial. The respondents submitted that the rejection of the 6 April 2023 offer could not be justified as having been reasonable unless the applicant, at the time the offer was made, expected to be awarded a significantly higher sum. The respondents submitted that at the time they made the 6 April 2023 offer, the applicant was significantly overstating the seriousness of the defamation and the likely result at trial, which was evident from the terms of the applicant's offers of 23 March 2023.
2. In relation to the respondents' 16 July 2023 offer, it was submitted that the applicant's rejection of this offer was "plainly unreasonable", on the ground that the terms of this offer were "substantially better than the outcome achieved at trial". The respondents submitted that this was the case because the 16 July 2023 offer would have given the applicant $56,000 more in damages than what was awarded at trial, and it otherwise included all the benefits to the applicant noted in relation to the 6 April 2023 offer.
3. Further, the respondents submitted that the applicant's success at trial against the fourth respondent did not result in any additional vindication of the applicant's position, nor a higher damages sum. In the respondents' submission, the applicant "would have been substantially better off, from a financial perspective" if the applicant had accepted the 16 July 2023 offer and would have achieved complete vindication, as opposed to the partial vindication he achieved at trial.
4. Finally, the respondents submitted that the fact the applicant came close to accepting the 16 July 2023 offer, before imposing additional "details" which resulted in no agreement being reached supports the conclusion that it was unreasonable for the applicant to reject the offer.

1. I regard the applicant as the substantially successful party who prima facie is entitled to an award of costs on the basis that ordinarily costs should follow the event: see Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship [2013] HCA 53; 251 CLR 322 at [241] (Kiefel and Keane JJ); Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 at [25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).

1. I am not persuaded to reduce the costs to which the applicant would otherwise be entitled on account of the claim by the respondents that he failed on some issues, including the publication of the 5 May 2021 articles, and the partial justification of the other articles to the extent that they referred to a negative and unfair email that the applicant sent in August 2021 that made disparaging references to Mr Adam Slonim.
2. There is no rule or presumption that costs should be apportioned on an issues basis: Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd (Costs) [2025] FCAFC 29 at [15] (Katzmann, Wheelahan and Hespe JJ). Everything depends upon the circumstances of the particular case. Defamation proceedings often involve mixed success in relation to different imputations and arguments, which is a product of the fact that the law of defamation is one of the more complex areas of law with which an individual might have to engage: see Hardie v The Herald and Weekly Times Pty Ltd (No 2) [2016] VSCA 130 at [17] (Ashley, Tate and Beach JJ), and Bauer Media Pty Ltd v Wilson (No 3) [2018] VSCA 164 at [12] (Tate, Beach and Ashley JJ). It is not just that the law is so complex, but that there are often factual issues such as the meaning of words, whether the serious harm element has been established, whether the words conveyed fact or opinion, and whether the publisher reasonably believed that publication was in the public interest, that call for decisions on factual issues on which minds might reasonably differ. In all these circumstances, the object of a defamation proceeding to give vindication might be significantly undermined if a "scorecard" approach to costs was taken.
3. The applicant is to be regarded as the prima facie successful party in this matter because he successfully obtained vindication in relation to a number of defamatory imputations, but in particular imputations that he had failed to consult the Rabbi of the Caulfield Hebrew Congregation in relation to a decision in which he participated to host a video presentation by a convicted spy, Jonathan Pollard, at a Jerusalem Day event at the Shule. I found that this claim, which was a prominent component of the 13 December 2021 and 18 February 2022 articles, was false.
4. However, the applicant failed to show that the consultation sting was conveyed by either of the 5 May 2021 articles. Notwithstanding that I found that the imputations alleged by the applicant in relation to the 5 May 2021 articles were not conveyed, I do not consider that it was unreasonable for the applicant to include those articles, and in particular the online article, as part of his pleaded claims. I am mindful of the fact that the decision that those articles were not defamatory in the way claimed turned on questions of impression upon which reasonable minds might have differed. The applicant alleged that the 5 May 2021 articles conveyed imputations including that he failed to consult the Rabbi over the Pollard matter. The online 5 May 2021 article expressly stated, using the passive tense, that the Rabbi was not consulted. Further, the 5 May 2021 articles were the backdrop for the writing of the subsequent articles, as the reasons for judgment explained.
5. As for the suggestion that the applicant failed in relation to the issues relating to the August 2021 email that he sent to Congregation members that was disparaging of Mr Slonim, I do not see that as an entirely separate issue on which the applicant failed. The references to the applicant's email about Mr Slonim were essential and prominent components of the 13 December 2021 and 18 February 2022 articles. The facts underlying those references had to be proven as true by the respondents in order to maintain their defences of honest opinion and fair comment. As it happened, those defences were not made out because I held that the relevant claims the subject of those defences were assertions of fact rather than opinion, and because the respondents failed to establish that the applicant had not consulted the Rabbi in relation to the Pollard matter. The relevance of the truth of the claims relating to the applicant's email that referred to Mr Slonim was therefore to the assessment of damages, and in particular to mitigation, and that was always going to be an issue that could not be severed. For these reasons, I do not regard it as a discrete issue the outcome of which should result in a reduction of the applicant's costs.
6. There were other issues on which the applicant failed, including his claim for aggravated damages. However, as I explained in the primary judgment aggravated damages are not a separate head of damage, and are usually difficult to assess because there is much overlap with the claim for damages for non-economic loss generally, which may take account of a respondent's conduct up until the time of judgment. I do not see the applicant's failure on this issue to warrant a reduction in his party and party costs. My reasons include the fact that, as the applicant contended at trial in support of the claim of aggravation, the respondents had failed to provide complete and accurate assumptions to Rabbi Elton for the purposes of his expert report, and the respondents did make a submission in final address that lacked foundation. The factual basis for these elements of the claim were therefore established.

1. The offers that were made by the parties occurred within the framework of s 40 of the Defamation Act 2005 (Vic), the discretionary powers as to costs under s 43 of the Federal Court of Australia Act 1976 (Cth), and the case law that has developed which guides the Court's discretion as to costs. No party relied on the non-acceptance of an offer of compromise. Had an offer of compromise been in play, then the consequences of non-acceptance would be governed by r 25.14 of the Federal Court Rules 2011 (Cth), subject to the Court's overriding power under r 1.35 to make an inconsistent order.
2. Section 40 of the Defamation Act is an important provision. It is picked up in this Court in defamation proceedings for the reasons given by Bromwich J in Hayson v The Age Company Pty Ltd (No 3) [2020] FCA 1163; 280 FCR 139 at [21]-[40]. Although as ultimately argued no party relied specifically on s 40 as a foundation for their submissions as to costs, it forms part of the context in which the parties' offers of settlement were made. Section 40 provides -
   1. Costs in defamation proceedings

(1) In awarding costs in defamation proceedings, the court may have regard to -

(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); and

(b) any other matters that the court considers relevant.

(2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise) -

(a) if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff - order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or

(b) if defamation proceedings are unsuccessfully brought by a plaintiff and costs in the proceedings are to be awarded to the defendant - order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the plaintiff unreasonably failed to accept a settlement offer made by the defendant.

(3) In this section -

settlement offer means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made.

1. Section 40(2) mandates costs orders on an indemnity basis, unless the interests of justice otherwise require, in two situations. The first situation is where a plaintiff is successful and the defendant unreasonably failed to make a reasonable offer. The second situation is where a plaintiff is unsuccessful, and had unreasonably failed to accept a reasonable offer made by the defendant. The combination of these factors places an incentive on defendants to make reasonable offers. This is an important feature of the legislation in circumstances where an object of the Act is to provide for effective and fair remedies for persons whose reputations are harmed by the publication of defamatory matter, where defamation proceedings are often complex, where the costs of prosecuting them are notoriously high, and where there are statutory limits on damages for non-economic loss which may have the consequence that any damages awarded have the potential to be swamped by unrecoverable solicitor client costs.
2. The respondents' reliance on their Calderbank offers called in aid the Court's overall discretion as to costs, which is subject to the requirement in s 37M(3) of the Federal Court of Australia Act to exercise the civil practice and procedure provisions in the way that best promotes the overarching purpose. The principles that guide the discretion as to costs where a Calderbank offer has been made are well known. In Calderbank v Calderbank itself, the Court of Appeal held in a matrimonial proceeding that the husband had been made an offer which he ought to have accepted, and because he received by way of judgment a lump sum that was less than the value of what had been offered, the right order was that he have his costs up to the time of the offer, but thereafter the wife have her costs. Cutts v Head, on which the respondents also relied in their Calderbank letters, involved an order for costs made in favour of a successful plaintiff in respect of the period following the making of an offer by the plaintiff which the trial judge erroneously did not examine, and where the plaintiff had been awarded only half his costs.
3. Neither Calderbank v Calderbank nor Cutts v Head involved an application for indemnity costs: see Hill v Forteng Pty Ltd [2019] FCAFC 105; 138 ACSR 344 at [75] (Kerr, Bromwich and Wheelahan JJ). That issue arose in Hazeldene's Chicken Farm on which the respondents relied in their Calderbank letters, where it was held that the mere rejection of an offer to settle an appeal that was more favourable than the result did not give rise to a presumption that there was an entitlement to an order for indemnity costs. Rather, the Victorian Court of Appeal held that the rejection of an offer may support an order for indemnity costs where the rejection was unreasonable in the circumstances. A Full Court of this Court had earlier reached much the same conclusion in Black v Lipovac [1998] FCA 699; (1998) 217 ALR 386 at [217]-[223], where it was held that an award of indemnity costs may be made if an offer was "unreasonably or imprudently refused".
4. In this case, the respondents do not seek indemnity costs. The terms of the respondents' Calderbank offers were premised on the respondents obtaining a judgment equal to or more favourable than the terms of the offers. This directs attention to the judgment of the Court, which was a monetary judgment in the sum of $132,600.

1. There was no suggestion that s 40(2)(a) of the Defamation Act was engaged on the ground that the respondents had unreasonably failed to make a reasonable offer. The respondents' offer of 6 April 2023 was objectively a reasonable offer. However, the applicant achieved judgment in a monetary sum greater than the value of the offer. The respondents' offer of $120,000 made no allowance for pre-judgment interest which, under s 51A of the Federal Court of Australia Act, the Court must include in the sum for which judgment is given unless good cause is shown to the contrary.
2. I consider it important to give effect to the basis on which the respondents' 6 April 2023 offer was made, and to make an objective comparison between what was offered, and the result that the applicant achieved, so far as that is possible. To do otherwise might result in unfairness to the parties. The offer was expressly put on the basis that it would be relied on if the respondents achieved a judgment equal to or more favourable than the terms of the offer. I am not satisfied that the respondents have achieved that result. The monetary component speaks for itself. As for the other terms of the offer, it is not easy to compare the worth of published apologies and the vindication that a judgment of the Court gives a successful applicant. There are some situations, of which Murphy v Nationwide News Pty Ltd (No 2) [2021] FCA 432 is an example, where the vindication of the Court is a vastly superior outcome than some anodyne "correction" in a newspaper.
3. The apologies that were offered by the respondents were generous in their coverage, and addressed the imputations that I found were conveyed, together with additional acknowledgements that the applicant did not condone treason, which was directed to an imputation which I found was not conveyed. The applicant was critical of the terms of the 6 April 2023 Calderbank offer, because the apologies were proffered "purely for commercial reasons" which the applicant considered indicated that they were not sincere. I can see why the applicant who sought vindication and to have his hurt feelings assuaged might reasonably have regarded apologies that were offered for the sake of commercial expediency to be inferior. I give some weight to that consideration in comparing the Court's vindication to the basis on which the apologies were offered. Apologies given "purely for commercial reasons" can always be undermined or explained away by those giving them. A Court's vindication stands as a binding decision that the applicant was defamed, and that the defamation was not justified. While I would not be critical of respondents in reasonably advocating the perceived strengths of their case, and taking a negotiating position, the qualified basis on which the apologies were offered is material when comparing them to the vindication that the applicant achieved by the damages award. As will appear, the reasonableness of the respondents' position will become relevant in relation to their second Calderbank letter.
4. In the result, I am not persuaded that the apologies offered by the respondents "for purely commercial reasons" and the agreement to take down all the articles were superior to the vindication that the applicant obtained from the Court's monetary judgment. I am not satisfied that these other terms should outweigh the vindicative effect of the monetary judgment, which is the principal remedy available to an applicant. The applicant also sought permanent injunctions, but this relief fell away upon the respondents taking down the 13 December 2021 and 18 February 2022 articles following judgment. Therefore, I am not satisfied that, in the terms of the 6 April 2023 Calderbank offer, the respondents obtained a judgment more favourable than the terms of the offer.
5. It was also argued that the applicant had acted unreasonably in not accepting the 6 April 2023 Calderbank offer, and that this should result in orders that the applicant pay the respondents' costs from the date of the offer, or alternatively that there should be no order as to those costs. Whether the applicant acted unreasonably in not accepting the 6 April 2023 Calderbank offer is not to be assessed in hindsight after the conclusion of a lengthy trial, but is to be assessed in light of the circumstances that existed at the time. It is to be assessed in the context of other choices open to the applicant at the time the offer was made, including the making of counteroffers.
6. There was one feature of the case that had a significant effect on the assessment of the applicant's damages. The applicant failed in relation to the publication of the 5 May 2021 articles. Had the applicant succeeded in relation to those publications, then it was arguable that the scale imposed by s 35 of the Defamation Act in relation to publications occurring after 1 July 2021 would not have applied to the assessment of damages in relation to those publications. In any event, whether or not the scale applied, success in relation to the 5 May 2021 articles would likely have resulted in a materially higher award of damages. While the offer that the respondents made was reasonable, I do not consider that the applicant acted unreasonably in rejecting it, and in seeking to negotiate a higher amount. Particularly in relation to the online 5 May 2021 article, it was open to the applicant to think that the Court might find that some imputation involving the applicant's failure to consult the Rabbi in relation to the Pollard matter was conveyed. The mitigating effect of the email that the applicant sent concerning Mr Slonim was also relevant to the assessment of damages. However, I find that the prospect of mitigation should have been reasonably apparent to the applicant and those advising him at the time the offer was made.

1. I have held that the respondents' offer of 6 April 2023 was reasonable. I do not regard the respondents' offer of 16 July 2023 in the same light.
2. The applicant was successful in establishing that the fourth respondent was a publisher of the articles. However, through the correspondence the respondents persistently claimed that the fourth respondent was not a publisher of the articles. This led to much debate between the parties' solicitors. The supposed risk that the applicant might fail against the fourth respondent was deployed by the respondents as a negotiating tool. In their Calderbank letter of 16 July 2023, the respondents' solicitors asserted that -

(a) the claim against the fourth respondent was "baseless" and would fail;

(b) upon the claim against the fourth respondent failing, costs would follow the event in the usual way, and the applicant would be ordered to pay the fourth respondent's costs;

(c) the fourth respondent's costs would be approximately 25% of the total common costs incurred by the respondents, plus all of the costs directly related to the claim against the fourth respondent;

(d) the applicant would not recover his costs of the claim against the fourth respondent;

(e) it was likely that the applicant would be ordered to pay the fourth respondent's costs on an indemnity basis; and

(f) the actual costs invoiced to date for all four respondents was approximately $250,000, being about $62,500 for each respondent.

1. It is upon the above premises that the value of the respondents' offer of 16 July 2023 of $176,000 plus the special conditions as to the fourth respondent's costs falls to be determined.
2. In his offer of compromise of 23 March 2023, the applicant quantified his party and party costs as $135,000 based upon actual costs incurred of $190,000. In their letter of 16 July 2023, the respondents' solicitors estimated the applicant's actual costs at that point to be approximately $240,000, while expressing the view that costs at this level were unreasonably high, notwithstanding that the respondents' own costs were stated to be $250,000. Using 60% as a rough estimate of the applicant's party and party costs at this point, it would have been reasonable for the applicant to perceive them to be about $144,000. And based on the information provided by the respondents' solicitors in their letter of 16 July 2023, it would have been reasonable for the applicant to perceive that the respondents' total party and party costs were about $150,000.
3. The respondents' offer of 16 July 2023 of $176,000 plus the special conditions as to the fourth respondent's costs had several features that made it reasonable for the applicant to reject it.
4. First, the offer would not have brought about a quelling of the disputation between the parties, but would likely have prolonged it. The offer was based upon the contestable assumption that the applicant would be liable for the fourth respondent's costs, and on the further contestable assumption that this would include 25% of the common costs incurred by the respondents. It is not clear that a liability for a portion of common costs would have arisen had the applicant been unsuccessful against the fourth respondent, which might involve an apportionment or division of the common costs: see Smith v Madden [1946] HCA 19; (1946) 73 CLR 129 at 136 (Dixon J).
5. Secondly, attributing costs to particular issues, or to particular parties where they are jointly represented, and then taxing them, is notoriously difficult and can be time consuming, costly, and oppressive. That is why it is usually better to fix upon a percentage of costs rather than to require a taxation or assessment of costs to proceed on an issues basis. The respondents proposed in their letter of 16 July 2023 that the costs attributable to the fourth respondent would be the subject of taxation or assessment in default of agreement. This would involve the assessment of the respondents' costs as well as the applicant's costs in order to work out what deductions were to be made to each on account of the claims against the fourth respondent. There would have been no reason to think that the respondents would not continue to maintain their assertions about the quantification of the costs attributable to the claims against the fourth respondent when it came to taxation. It is doubtful that this course would have accorded with the overarching object on s 37M of the Federal Court of Australia Act.
6. Thirdly, in addition to the further disputation about costs which acceptance of the offer would have invited, it was open to the applicant reasonably to think that the offer was a reduction on the respondents' previous offer of $120,000 plus costs and apologies of 6 April 2023. Taking the figures to which I referred at [38] as a rough indication, 25% of the party and party costs of all parties was $73,500. This sum comprised party and party costs which, on the respondents' position, the applicant was either liable to pay or was not entitled to recover. This would amount to an effective reduction in the monetary value of the 16 July 2023 offer to about $102,500. Therefore, the 16 July 2023 offer made by the respondents was in fact a reduced offer compared to the offer of 6 April 2023 but was disguised as a larger offer, with the nominal money sum of $176,000 being illusory.
7. For the above reasons, it was not unreasonable for the applicant to reject the respondents' 16 July 2023 offer. Further, and for the same reasons, the respondents have not established within the terms of their 16 July 2023 Calderbank letter that they obtained a judgment more favourable to them than the terms of the offer. The offer is therefore not a factor that bears upon the applicant's application for party and party costs.

1. There will be an order that the respondents pay the applicant's costs of the proceeding on a party and party basis to be assessed by a Registrar on a lump sum.
2. I will also make procedural orders for the preparation of a costs summary, a response, and submissions in accordance with paragraphs 4.10 to 4.15 of the Costs Practice Note (GPN-COSTS). I will hear the parties in relation to timing.

I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.