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BARKER J: 1 This judgment deals with the question of costs of the primary proceeding, WAD316/2010. 2 My judgment in Nyoni v Shire of Kellerberrin (No 10) [2018] FCA 1576, dealt with the assessment of damages following the remittal to the trial judge, by the Full Court, of that question in relation to the tort of misfeasance in public office. The trial judge having retired from the Court, the task of assessing damages fell to me. The judgment in Nyoni (No 10) sets out something of the history of the matter. 3 When the Full Court remitted the question of damages to the trial judge, by para (3) of the orders the Full Court made, not only were the proceedings remitted to the trial judge to assess damages, but also the "questions of costs as between the applicant and first and second respondents" were remitted. 4 Following the delivery of my judgment on the question of damages I ordered that: 5. The Court will deal with the question of costs on the papers unless any party indicates in writing to the Associate of Barker J by 4pm 7 November 2018 that they wish to be heard orally on the question of costs in the event of which the Court will list the question for an oral hearing. 5 Pursuant to the orders I made the first respondent, the Shire of Kellerberrin, filed submissions on costs together with the affidavit of Mr Simon David Hubbard made 18 October 2018 and his further affidavit dated 25 October 2018; and the second respondent, Mr Darren Friend, filed submissions together with the affidavit of Mr Alen Sinanovic, made 25 October 2018. 6 Each of the Shire and Mr Friend propose that the following orders on costs should be made: (1) The applicant pay 80% of their costs of the proceedings up to 11am on 17 June 2014; alternatively, that there be no order as to costs as between them in respect of the period up to 11am on 17 June 2014. (2) The applicant pay their costs of the proceedings on an indemnity basis from 11am on 17 June 2014. (3) Conditional upon them lodging a bill of costs for assessment within 14 days of this order, the stay in para 2 of the orders made by the Hon Justice Barker on 19 October 2018 continue to operate pending the issue of the resulting certificate of assessment. (4) The award of damages made by para 1 of the orders made by the Hon Justice Barker on 19 October 2018, and the costs determined in favour of them in accordance with the certificate of assessment referred to in para (3) of these orders, be set-off against one another. (5) The net amount after the set-off provided for in para (4) be paid by the applicant to them, or by them to the applicant as the case may be, within 14 days of the issue of the certificate of assessment referred to in para (3) of these orders. 7 As will be seen by reference to the evidence below, the Shire and Mr Friend, together with the third and the fourth respondents, on 13 June 2014, jointly served a Notice of Offer to Compromise on Mr Nyoni under Pt 25 of the Federal Court Rules 2011 (Cth). 8 Rule 25.14(1) of the Rules provides that: (1) If an offer is made by a respondent and not accepted by an applicant, and the applicant obtains a judgment that is less favourable than the terms of the offer: (a) the applicant is not entitled to any costs after 11.00 am on the second business day after the offer was served; and (b) the respondent is entitled to an order that the applicant pay the respondent's costs after that time on an indemnity basis. 9 The Shire, in its submission on costs, relies on the affidavits of Mr Hubbard referred to above and adopts the submissions made on behalf of Mr Friend. 10 Mr Friend relies on the affidavit of Mr Sinanovic. 11 Mr Friend makes the following submissions: 8. By the Offer of Compromise, the respondents offered to compromise Mr Nyoni's claims by a payment of $50,000 and by waiving their entitlement to various costs orders made in their favour in these and other proceedings. 9 The costs orders the subject of the offer, as pertain to Mr Friend, amounted to $42,309 (Sinanovic Affidavit AS-3, AS-4, AS-5 - each of which Certificate of Taxation were issued prior to Mr Nyoni's rejection of the offer). 10 Mr Nyoni rejected the Offer of Compromise and counteroffered to accept $20,000,000 (Sinanovic Affidavit AS-2 at pages 11-12). 11 Mr Nyoni has been awarded damages of $30,000 and accordingly obtained a judgment that is less favourable than the terms of the Offer of Compromise. 12 Mr Friend is accordingly entitled to costs from Mr Nyoni on an indemnity basis from 11am on 17 June 2014 (FCR Rule 25.14(1)(b)). 12 The Mr Friend deals with the costs prior to 11am on 17 June 2014 and makes the following submissions: 13 In relation to the costs of the proceedings not within the ambit of RSC Rule 25, it is trite that costs are in the Court's discretion, and that fairness dictates how that discretion is to be exercised. 14 These proceedings commenced in October 2010, and proceeded to a lengthy 12 day trial in July 2014 for the determination of five causes of action (Nyoni v Shire of Kellerberrin (No 10) [2018] FCA 1576 at [33]) including one which should never have been made (Nyoni v Shire of Kellerberrin (No 6) [2015] FCA 1294 at [258]). Those causes of action concerned claims that: (a) Mr Peczka and the Shire acted in concert with Mr Robert Bateman, a senior investigating officer of the Health Department, in trespassing upon Mr Nyoni's pharmacy property in October 2007 (2007 Trespass Claim); (b) The Shire, by one or more of its agents or officers (including Mr Friend), had made disparaging statements about Mr Nyoni's business and, thereby, engaged in misleading or deceptive conduct and/or malicious falsehood (Malicious Falsehood Claim); (c) The Shire and two of its officers (including Mr Friend) were liable as joint tortfeasors with Mr Peter Mitchell in trespassing upon Mr Nyoni's property in the course of disconnecting the electricity supply to Mr Nyoni's pharmacy in March 2010 and in October 2010 (2010 Trespass Claim); (d) The conduct of two of the Shire's officers in relation to the disconnection of the electricity supply to Mr Nyoni's pharmacy, amounted to misfeasance in public office (Misfeasance Claim); and (e) The Shire engaged in misleading or deceptive conduct by publishing the minutes of a Shire Council meeting which disparaged Mr Nyoni's pharmacy business (Misleading and Deceptive Conduct Claim). 15 The trial examined factual matters principally spanning the period 2007 to October 2010 (Nyoni v Shire of Kellerberrin (No 6) [2015] FCA 1294 at [39] - [138]). Mr Nyoni succeeded, on appeal, on only one of those five causes of action, pertaining to a period between January and October 2010 (Nyoni v Shire of Kellerberrin (No 10) [2018] FCA 1576 at [49]). 16 The claim in respect of which Mr Nyoni succeeded (the Misfeasance Claim) overlaps with the 2010 Trespass Claim but otherwise is distinct from the other claims pressed by Mr Nyoni in these proceedings. 17 The development of the law on the question of apportioning costs between the parties, with reference to those aspects of the case on which they were successful, was considered and the authorities canvassed in a recent decision of this Court (Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750 at [84] - [91]). 18 The principles revealed in that review included that the overriding question is fairness in the exercise of the costs discretion; that an apportionment approach does not require arithmetical precision and will often be rough and ready; and that apportionment has the virtues of both fairness and reasonableness, which are often lacking in the application of the traditional rule (Ibid, at [89], quoting Finkelstein and Gordon JJ in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [3]-[5]). 19 In context of the disproportionate costs expenses already incurred in this matter it is submitted that a fair and reasonable exercise of the costs discretion would be achieved by awarding 80% of the costs incurred prior to 11am on 17 June 2014 in favour of Mr Friend. 20 Alternatively, should this Court not be inclined to deal with the costs on an apportionment basis, it is submitted that there should be no order as to costs as between Mr Friend and Mr Nyoni for the period prior to 11 am on 17 June 2014, on the basis that Mr Nyoni was substantially unsuccessful in this litigation. 21 In any event, Mr Nyoni was self-represented, having dispensed with pro bono counsel provided to give him legal assistance under O 80 of the FCR (Nyoni v Shire of Kellerberrin (No 6) [2015] FCA 1294 at [19]), and in consequence would have incurred no or negligible costs. 13 I reject the primary submission made by the respondents that they should be awarded 80% of the costs incurred prior to 11am on 17 June 2014. 14 While it is obviously true that one cause of action should not have been brought and others were dismissed by the trial judge, the causes of action upon which Mr Nyoni succeeded were not insubstantial and raised questions in effect concerning the animus of relevant respondents at material times. That fact was reflected in the award I have made of not only general damages against these respondents, but also aggravated and exemplary damages against them. 15 In my view, having regard to the acknowledged power of the Court to award costs, and to achieve the fairest outcome, in the circumstances, and also to avoid an unnecessary delay in the assessment of costs and the associated additional expense of assessing those costs, I would accept the alternative submission made by the respondents that there should be no order as to costs as between the applicant and the Shire and Mr Friend in respect of the period up to 11am on 17 June 2014. 16 The next question raised by these respondents concerns their claim for a set-off of costs against the award of damages. 17 In this regard, Mr Friend submits: 22 It is submitted that any costs awarded and taxed in favour of Mr Friend should be set-off against the damages awarded in favour of Mr Nyoni. 23 Set-off of judgments for costs, against judgments for damages, has long been allowed, and does not depend upon the statutes of set-off, or the general equitable jurisdiction, but on the control a court exercises over its own proceedings (Williamson (as the trustees in bankruptcy of the bankrupt estate of Clifford) v Rumsley [2015] FCA 1246 at [16] per Gilmour J, quoting White J in Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd (2006) 230 ALR 184). 24 In consequence of the matters set out in paragraphs 14 and 15 above, it will be apparent that the respondents, including Mr Friend, have been put to very considerable expense in defending Mr Nyoni's claims. 25 It is also apparent that the respondents, including Mr Friend, had no prospect of resolving Mr Nyoni's claims by compromise in view of Mr Nyoni's unrealistic expectations (Nyoni v Shire of Kellerberrin (No 10) [2018] FCA 1576 at [26] ($100m); Sinanovic Affidavit AS-2 at pages 11-12 ($20m)), despite attempting to do so (See paragraph 6 of these submissions). 26 Mr Nyoni was made bankrupt by orders made on 17 February 2017. In a recent decision of this Court (Nyoni v Pharmacy Board of Australia (No 6) [2018] FCA 526, handed down by White J on 28 August 2018), security for costs was ordered against Mr Nyoni on the basis that he is an undischarged bankrupt and impecunious and in his own words 'there wouldn't be any possibility' of him satisfying a costs order (Ibid, at [14], [20]). 27 Further, Mr Nyoni has '…had frequent access to the courts at unrecompensed expense to respondents and defendants…' (Ibid, at [37], [39]) 28 If Mr Friend's costs entitlement is not set off against Mr Nyoni's damages entitlement, it is apparent that there is no prospect of recovering any part of the very considerable expense to which Mr Friend and the other respondents have been put (and which they could not avoid by seeking to settle Mr Nyoni's claims). 29 It is submitted therefore that in the circumstances of this case it is appropriate, and necessary to do justice between the parties, to order that the entitlement to costs and the entitlement to damages be set off against one another. 18 There can be no doubt that the Shire and Mr Friend are entitled to an order for their costs on an indemnity basis from 11am on 17 June 2014 having regard to Mr Nyoni's totally unrealistic rejection of the offer of compromise made as of that time. 19 There is almost no need to say that the counter-offer that Mr Nyoni made, demanding a payment of $20 million in his favour in order to settle the case, was absurd. 20 I would apply R 25.14(1) of the Rules and consider there is no basis upon which either of the first and second respondents is disentitled to an order that the applicant pay the costs of each of them after the time of the offer, which was rejected on an indemnity basis. 21 The question that is raised by the further submissions of these respondents is that there should be a set-off of the damages I recently awarded against those costs. 22 In my view, the principles identified by them in their above submissions are correct. 23 It is entirely appropriate, in all of the circumstances, the offer of settlement having been rejected by Mr Nyoni, that he should not now be able to take the damages awarded in his favour but ignore the costs that he was always going to incur if he failed to better the damages offers made by the respondents. 24 The situation is made even more stark by the fact that Mr Nyoni is now bankrupt and there is no likelihood, it would seem, of the respondents recovering assessed costs from him, should a set-off order not be made. 25 It is, in the circumstances, entirely appropriate, fair and reasonable and desirable to avoid an abuse of process, that the set-off order proposed by the Shire and Mr Friend be made. 26 They further submit that there be a continuation of the stay order I have made in respect of the payment of the damages on 19 October 2018. They make the following submissions in that regard: 30 Paragraph 2 of the orders made by the Hon. Justice Barker on 19 October 2018 stayed the obligation to pay the damages awarded in favour of Mr Nyoni pending further order. 31 It is submitted that this is an appropriate case to warrant the continuation of that stay until Mr Friend's costs entitlement has been determined, so as to allow the operation of the set off sought in these submissions. 32 It is well established that a respondent needs only to demonstrate a reason or an appropriate case to warrant a favourable exercise of the discretion (Steggles Ltd v Yarrabee Chicken Co Pty Ltd (No 2) [2011] FCA 1097 at [8] per Yates J), and that this Court, in exercising its discretion on whether or not to grant the stay, will weigh considerations including the balance of convenience and the competing rights of the parties before it (Fair Work Ombudsman v Priority Matters Ltd [2016] FCA 1415 at [20] per Markovic J). 33 The matters addressed at paragraphs 22 to 29 of these submissions concerning the appropriateness of an order setting off awarded costs against awarded damages, are equally applicable to considering whether the stay should continue until that costs entitlement has been determined. 34 The Court has control over the operation of set-off of costs against damages by staying enforcement of the judgment on the claim (Suncorp Metway Insurance Ltd v Piccone (No 2) [2005] FMCA 648 at [27] quoting Gertig v Davies & Anor (2003) 85 SASR 226). 35 Unless there is a continuation of the stay, it is apparent that there is no prospect of recovering the costs entitlement. 36 It is submitted that the circumstances of this case plainly warrant the exercise of the Court's discretion to make and give effect to the orders sought by Mr Friend in paragraph 4 above. 27 Having regard to the finding I have made concerning the appropriateness of set-off, it is also entirely appropriate that the stay that I ordered in respect of the payment of the damages in favour of Mr Nyoni be further stayed to enable the crystallisation of the indemnity costs that I have ordered. 28 If there is then an assessed sum less than the damages I have ordered, there will be a liability in the first and second respondents to pay that sum to Mr Nyoni. If the assessed costs exceed the damages I have awarded, then they will not be liable to pay any sum on account of the damages in favour of Mr Nyoni and Mr Nyoni will have no entitlement to recover any sum by way of the damages order, as a result.