© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the official source for authoritative text.
[2009] ACTSC 67
Supreme Court of the ACT
2009-06-18
Original judgment source is linked above.
CIVIL LAW - defamation action - plaintiff's claim based on publication of media release on defendant's website - media release annexed to plaintiff's statement of claim was not media release in fact published - two media releases differed in significant respects - defendant mistakenly admitted publication of incorrect media release in defence to statement of claim - mistake only identified on second day of trial.
PRACTICE AND PROCEDURE - defendant in defamation action mistakenly admitted publication of draft media release - mistake only identified on second day of trial - plaintiff sought leave to discontinue action - plaintiff undertook to pay defendant's costs until date defendant admitted publication of incorrect media release - plaintiff claimed withdrawal of defendant's mistaken admission left it "irreparably prejudiced" - application to discontinue opposed by defendant on grounds that the substance of the plaintiff's claims should be tested through trial process - leave to discontinue given by consent on basis no equivalent claims could be made by plaintiff in the future.
COSTS - action finalised by making of consent orders including leave to plaintiff to discontinue - all previously made costs orders confirmed - each party seeks costs order in its favour in relation to outstanding costs.
COSTS - making of costs order when leave given to discontinue - court's discretion to order costs unfettered, but must be exercised judicially - applicable legislation - no legislative presumption that costs will be awarded to one or another party - Court Procedures Rules 2006 (ACT), r 1163(2).
COSTS - factual matrix - relevant considerations - conduct/knowledge of plaintiff during proceedings - whether imputations drafted by reference to published media release - how plaintiff's actions were affected by defendant's conduct.
COSTS - matters to be considered - unreasonableness of parties - unreasonable behaviour does not conclusively determine the exercise of costs discretion or exclude consideration of other matters - both parties acted unreasonably during course of proceedings, but plaintiff's actions outweighed defendant's unreasonable conduct.
COSTS - matters to be considered - surrender by plaintiff - usual outcome is costs order against party surrendering.
COSTS - matters to be considered - futility or supervening event - court may decide to make no order as to costs depending on behaviour of parties up until litigation is settled or becomes futile - distinction is to be drawn between a hopeless case and a pointless case, where supervening event or other change in circumstances rendering action futile - no "futility" or supervening event in this matter - plaintiff's case, if hopeless, was hopeless from the outset.
COSTS - matters to be considered - Calderbank offers - defendant made two offers of settlement prior to hearing - trial not resolved by any decision on the merits - offers made by defendant did not address substantive issues, only costs - no comparison possible between substantive resolution offered and that achieved - Calderbank offers considered in context of reasonableness but do not operate directly to entitle defendant to an advantageous exercise of court's costs discretion.
COSTS - unreasonableness of parties - unreasonable conduct of defendant before proceeding instituted - defendant's conduct may have provoked action - conduct inappropriate for government regulator - defendant not entitled to all its costs despite plaintiff's surrender.
Australian Prudential Regulation Authority Act 1998 (Cth), s 8
Judiciary Act 1903 (Cth), s 55ZG(3)
Court Procedures Rules 2006 (ACT), r 1163, r 1614
Land and Environment Court Act 1979 (NSW), s 69(2)
Uniform Civil Procedure Rules 2005 (NSW), r 42.20(1)
Calderbank v Calderbank [1975] 3 All ER 333
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Jones v John Fairfax Publications Pty Ltd [2005] NSWSC 1133; (2005) 67 NSWLR 434
Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302 (16 October 2003)
One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548
Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 (15 December 2006)
Smith v Airservices Australia [2005] FCA 997; (2005) 146 FCR 37
Bucknell v Robins [2004] QCA 474 (6 December 2004)
Neill v Mann [2000] FCA 1680 (29 November 2000)
Beazley J, "Calderbank offers" (Paper presented to Australian Lawyers Alliance Conference, Hunter Valley, 14-15 March, 2008)
BETWEEN: RURAL & GENERAL INSURANCE BROKING PTY LIMITED (ACN 093483928)
AND: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
1. Except as set out in Order 2 below, all costs orders previously made in this matter are confirmed.
2. In respect of the costs covered by the Master's costs order made on 30 August 2007, Broking is to pay one-third of APRA's costs.
3. Broking is to pay 75% of APRA's costs in the period from 20 July 2004 (other than costs already covered by an order confirmed under Order 1 above) on a party and party basis.
1. This matter, which involved actions for defamation and injurious falsehood, was finalised, five years after the publications concerned, by consent orders made at the end of the first week set down for the trial of the matter. Those consent orders also dealt with costs relating to part of the proceedings, and confirmed all previously made costs orders. Each party seeks an order in its favour in relation to the outstanding costs.
2. Fortunately, it is not necessary to recite the entire history of this sorry affair. However, many of the significant features of this matter do need to be set out to explain my decision about costs.
3. The defendant is the Australian Prudential Regulation Authority (APRA), an agency established under the Australian Prudential Regulation Authority Act 1998 (Cth), for purposes that, under s 8 of that Act, include the regulation of "bodies in the financial sector". Among other things, this involves regulating the activities of bodies covered by Commonwealth insurance legislation.
4. The plaintiff is Rural and General Insurance Broking Pty Ltd (Broking), an insurance broker carrying on business in Australia. In August 2002, Broking entered into an agency agreement with Rural and General International Insurance Ltd (International), which operates pursuant to a licence as an exempt insurer in Vanuatu. This arrangement was set up after the activities of an Australian insurance company, Rural and General Insurance Ltd (RGI), were, in the words of the plaintiff's counsel, "circumscribed as a result of a decision by APRA". That decision was to refuse RGI re-authorisation under new insurance legislation, so that from 1 July 2002 RGI was not able to write any new business and could only pay claims under previously written policies.
5. Under the agency agreement between Broking and International, Broking would receive insurance proposals, and issue insurance cover, on behalf of International. Under a separate agreement between RGI and Broking, clients formerly insured by RGI would be referred to Broking as agents for International, and Broking also contacted RGI's clients offering to arrange insurance with International. Also in 2002, RGI transferred some of its assets to Broking, and rented its premises to Broking.
6. Some of Broking's activities were apparently of concern to APRA. These concerns arose partly as a result of information provided to APRA by the Australian Securities and Investments Commission, including shortly before 15 April 2003.
7. In April 2003, APRA staff prepared a media release aimed at consumers and commenting on certain insurance activities involving International and Broking. The media release went through several drafts within APRA. One of those earlier drafts, the preliminary draft, is set out at Appendix A to this judgment.
8. In the afternoon of 15 April 2003, a legal officer with APRA faxed a draft media release to Broking for comments. The message confirmation sheet apparently relating to this fax seems to show a dispatch time of 4:05 pm, and this is confirmed in an APRA answer to an interrogatory tendered by counsel for Broking. It is clear from other evidence that the fax was received by Broking shortly after it was sent. This faxed media release, the draft media release, is also set out at Appendix A. The fax cover sheet said:
Please find enclosed a copy of a press release that APRA proposes to issue this afternoon. Should you have any submissions in relation to the release, you should submit them by facsimile or e-mail no later than 4:30 pm today, Australian Eastern Standard Time. The appropriate e-mail and facsimile reference are listed above.
9. Apart from what might be seen as implicit in the invitation to comment included on the cover sheet, the media release was not identified in any way as a draft.
10. Within the 25 minutes allowed by APRA, a person with an indecipherable signature responded on behalf of Broking as follows:
We refer to your intended Press Release at 4:30 pm.
You will note, that the time given to respond is entirely inadequate.
We have forwarded your intended Press Release to a solicitor and we have been advised he is in the process of replying.
We would ask you refrain from sending the press release at 4:30 pm and await correspondence from the Solicitor, Warren wells [sic]. You can expect that correspondence shortly.
We would also take this opportunity to advise you that the purported facts you intend to release are untrue, misleading and deceptive.
Our firm is likely to suffer a major and detrimental impact as a result of the release of your press release.
11. As well as the response sent by Broking, Broking's then solicitors, Balmain Lawyers, sent faxes to APRA during the afternoon as follows:
(a) at 4:17 pm, advising receipt of a copy of the APRA fax and that "I am presently preparing a response to you that will be in your hands shortly. Having regard to the lateness of your notice I would expect that you will give me a reasonable time to respond before making the release.";
(b) at 5:36 pm, providing two pages of comments about the contents of the media release and associated matters;
(c) at 6:34 pm, confirming the contents of a telephone conversation the solicitor had had at around 5.00 pm with an APRA staff member.
12. At 5:47 pm that day, APRA issued a media release by publishing it on its website. The final media release is also set out at Appendix A.
13. Within the next few weeks, several media organisations re-published the media release issued by APRA, including the Gold Coast Bulletin on 21 April, the Daily Telegraph on 29 April and the Adelaide Advertiser on 12 May 2003. Those re-publications are set out in Appendix B.
14. In setting out the detail about the steps taken, and in particular the timing of them, I have, where there are discrepancies, relied on APRA's answers to interrogatories, and other documents, tendered at the costs hearing, rather than the submissions of counsel at that hearing.
15. In April 2003, Broking initiated defamation proceedings in the District Court of New South Wales in respect of the publications of the media release. In July 2003, this action was discontinued, with costs orders in favour of APRA; Broking's counsel explained that the action was discontinued because Broking as a corporation with at least 10 employees did not have standing to take the action.
16. In July 2003, Broking initiated proceedings in the ACT Supreme Court in respect of publications by APRA and the three newspapers, referring, except in the case of the Gold Coast Bulletin, to the material having been published "throughout the Commonwealth". The actions included claims of defamation where available and, as a result of later amendments, injurious falsehood.
17. The imputations pleaded were identical for each of the four alleged publications; the imputations pleaded in respect of the APRA publication are set out in Appendix C.
18. On 1 June 2004, an amended statement of claim (annexing the four alleged publications in the same form as set out in the initial - and all subsequent - statements of claim) was filed by the plaintiff. Annexure A was an APRA media release. On 19 July 2004, APRA lodged a defence in which, among other things, it admitted publication of Annexure A to the amended statement of claim.
19. The progress of the matter over the next four years, until April 2008, included the following events:
(a) The statement of claim was amended twice more, and one further defence was filed.
(b) APRA sought security for costs and was unsuccessful. It sought leave to appeal out of time from that refusal, and was again unsuccessful; costs were awarded against it.
(c) APRA sought to have the proceedings struck out; the application was apparently dismissed by consent, but orders requiring Broking to provide answers to interrogatories, and evidence of damages, were made, and a costs order was made in favour of APRA.
(d) On 30 August 2007, the Master made a costs order, on an application that APRA answer interrogatories to which it had objected, that two-thirds of the costs of the application be Broking's costs in the cause and one-third of those costs be APRA's costs in the cause.
(e) A trial date in 2006 was vacated, and a costs order was made in favour of APRA in respect of the vacation of the trial date.
(f) The action was stayed for some months until an expert's report on economic loss suffered by Broking was filed.
(g) Several orders were made relating to Broking's particulars or evidence of economic loss, and much correspondence was exchanged about this issue.
(h) An expert report about economic loss was filed by Broking, but Broking's failure to provide the factual material on which the report was based led APRA to warn that such material would be objected to if it were only produced at the trial.
(i) Broking purported to discover thousands of documents, but in a way which APRA claimed was unacceptable (for instance, by giving access to rooms full of documents).
(j) Broking engaged new solicitors three times. The fourth solicitor, who took over in June 2006, redrafted the imputations significantly, and enlarged on Broking's claim that APRA had been motivated by malice or bad faith.
20. Eventually a trial date of 28 April 2008 was fixed.
21. On 14 April 2008, two weeks before the trial date, APRA provided further particulars of the truth defence that it relied on.
22. In the week before the trial date, Broking indicated an intention to discontinue the proceedings, but shortly thereafter indicated that it would seek leave to file and serve a third further amended statement of claim. The document foreshadowing discontinuance was dated after the document seeking leave to amend the statement of claim, but there was no disagreement at the hearing that in fact Broking had first foreshadowed discontinuance and then sought leave to amend the statement of claim.
23. On the trial date, 28 April, Broking formally sought leave to amend the statement of claim, on the basis that it wanted to narrow the terms of the imputations pleaded in response to the further particulars of the truth defence that had been provided by APRA two weeks earlier.
24. This application was accompanied by a proposal that APRA then be given time to prepare an amended defence, and that the trial date should therefore be vacated. APRA did not object to the amendment to the statement of claim, but only on the basis that the amendment did not result in vacating the trial date. APRA asserted that amending its defence could be done very quickly (since the effect of redrafting the imputations was to narrow the scope of the action), and that the trial should go ahead as scheduled.
25. For nearly two days counsel for Broking resisted starting the trial, among other things by arguing about the need to review all particulars and strike out any that might no longer be relevant having regard to the redrafted imputations and any changes that would be made to the defence. In other circumstances such a review of particulars might have been sensible, and conducive to an efficient trial, but in this context proposing such a review appeared to be no more than an attempt to delay the trial, and I ruled that claims for particulars to be struck out would be dealt with if and when they were made in the course of the trial.
26. Late on the second day set for the trial, counsel for Broking opened his case. In his opening remarks he read from the APRA media release annexed to all versions of the statement of claim. Only then, apparently, did APRA realise that this was different from the media release that APRA had published. Overnight this was raised with Broking, and next morning, counsel for APRA advised the court that the version of the media release annexed to each version of the statement of claim since 2003, and the publication of which had been admitted by APRA, was not in fact a media release that had been published by APRA. Rather, it seemed to be the draft media release that had been sent to Broking with an invitation to comment within the following 25 minutes.
27. APRA produced a copy of the media release which it asserted was the published version (this was the final media release set out in Appendix A). It differed in significant respects from the draft media release, which had not been published in Australia except to Broking and whose publication would therefore not provide a cause of action. APRA indicated that it would not oppose the grant of any leave to file the third further amended statement of claim with the correct media release attached, and that if this were filed APRA would in its amended defence admit publication of that media release.
28. Despite my indication that leave would be granted to file the amended statement of claim with the final media release attached, Broking persisted in seeking to file the third further amended statement of claim with the draft media release attached. I granted that leave, noting that APRA would file an amended defence by right.
29. Broking then applied for leave to file a notice of discontinuance on the basis that it would pay APRA's costs to 19 July 2004 (when APRA had first incorrectly admitted publication of the draft media release) and APRA would pay Broking's costs thereafter, on the basis that the change to APRA's admission as to publication left Broking "irreparably prejudiced".
30. APRA opposed leave for Broking to discontinue, and sought judgment in the proceedings, or discontinuance with prejudice, and a costs order in favour of APRA. APRA's counsel pressed the claim that before leave to discontinue was given on any basis, the substance of Broking's claims should be tested through a process similar to the process that would have been undertaken in the trial; in effect, that the court should run the trial to determine how costs would be assigned now that the trial would not take place.
31. In the circumstances I was not disposed to engage in an inquiry into the merits of the plaintiff's case, and in due course I made, by consent, orders giving leave for discontinuance (on the basis that no further action could be taken on the publications), and limited costs orders, and reserved other costs for further argument. Those consent orders are set out in Appendix D.
32. As a result of the consent orders, the only outstanding matter to be resolved was the payment of costs, other than costs in respect of the proceedings before 19 July 2004 and costs already the subject of any existing costs order. One costs order (mentioned in [19(d)] above) was to operate differently depending on which party was ultimately successful - I shall deal with that order specifically in my final costs orders.
33. Before making the consent orders, I had invited the parties to consent to an order that each party bear its own costs to the extent that costs orders had not already been made, but APRA refused to consent to such an order.
34. The parties accordingly returned on 18 June 2008 to argue liability for the outstanding costs. Broking applied for an order that APRA pay Broking's costs from 20 July 2004 (under the consent orders, Broking was already liable for APRA's costs before that date). APRA applied for an order that Broking pay APRA's costs of and incidental to the proceedings from 20 July 2004 until 28 September 2006 on a party and party basis, and thereafter on a solicitor and client basis (28 September 2006 was the date of the first of two offers of settlement made by APRA - see [41] below).
35. The plaintiff's application for the defendant to pay its costs from July 2004 was made on the basis that the defendant, which was supposed to be a model litigant, had behaved unreasonably since 19 July 2004, the date on which it had incorrectly admitted publication of the draft media release, by making and then maintaining this incorrect admission and by repeating it in answers to interrogatories. The identification of this mistake after the trial began in April 2008 was, counsel for Broking asserted, a supervening event which made the trial futile, among other things, because Broking was now unable to prove the contents of the published media release (an assertion which seems both unlikely and irrelevant). Broking asserted that it should therefore not be liable for any of APRA's costs other than those already the subject of orders, despite:
(a) having persisted for five years with an action based on an alleged publication that had never taken place;
(b) having refused an invitation to amend the statement of claim to refer to the publication that had in fact taken place; and
(c) finally, having been granted leave to discontinue the action only on the basis that no equivalent claims could be made in the future.
36. I mention for completeness, although the matter was not raised on behalf of APRA, that I do not consider the two throw-away references to model litigants by Broking's counsel to be impermissible allegations of non-compliance with a Legal Services Direction for the purposes of s 55ZG(3) of the Judiciary Act 1903 (Cth).
37. APRA claimed that, despite having confirmed, repeatedly over four years, that the alleged publication had taken place, it was entitled to have its costs from Broking. APRA based its claim on the following arguments.
38. Argument 1: That Broking did not act reasonably in commencing the action, because the publication was substantially true and, so far as required by applicable defamation laws, for the public benefit. In the event, I saw no need to examine or make any findings on the merits of Broking's action (as distinct from findings about the effect of APRA's withdrawal of its admission on the merits of Broking's action).
39. Argument 2: That Broking, after litigating for some time, had simply surrendered. APRA noted that the action had been discontinued in respect of all four "publications". However, three of them, namely the press re-publications, had contents that were and remained undisputed, and APRA argued that it was therefore clear that there was no supervening event that led Broking to discontinue.
40. Argument 3: That the conduct of Broking during the proceedings had not been reasonable.
41. Argument 4: That APRA's offers to settle entitled it to its costs in the matter. APRA made two offers to settle, by letters dated respectively 28 September 2006 and 23 November 2007 (both are set out in Appendix D). APRA argued that the plaintiff had not obtained a better outcome than offered in either of those letters, and that under the Calderbank approach (Calderbank v Calderbank [1975] 3 All ER 333) and what counsel for APRA described as "the usual principles", Broking's failure to accept an offer entitles APRA to indemnity costs from the date of the offer.
42. In determining this matter I have applied r 1163 of the Court Procedures Rules 2006 (ACT) (the ACT Rules) in conjunction with principles set out below.
_(1) A party who discontinues or withdraws is liable to pay - _
(a) the costs of the party to whom the discontinuance or withdrawal relates up to when the notice of discontinuance or withdrawal is served on the party; and
(b) the costs of another party or parties caused by the discontinuance or withdrawal up to when the notice of discontinuance or withdrawal is served on the party.
(2) If a party discontinues or withdraws with the court's leave, the court may make the order for costs it considers appropriate.
Note Pt 6.2 (Applications in proceedings) applies to an application for an order under this rule.
44. Under r 1163(1), where a party discontinues unilaterally (that is, without being given leave by the court), the party must pay the costs of the other parties.
45. If a party seeks and is granted leave to discontinue, the court granting leave must also "make the order for costs it considers appropriate" (r 1163(2)).
46. The court's power to make costs orders is unfettered, but must be exercised judicially (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 (Oshlack)). In that case Gaudron and Gummow JJ said at [22], in relation to a New South Wales provision (s 69(2) of the Land and Environment Court Act 1979 (NSW)) specifying that "costs are in the discretion of the court":
The terms of s 69(2) contain no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations, the discretion conferred is, to adapt the words of Dixon J, unconfined except in so far as "the subject matter and the scope and purpose" of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be "definitely extraneous to any objects the legislature could have had in view" [reference omitted].
47. In the same case, McHugh J, in dissent and with whom Brennan CJ was in "general agreement" at [3], said at [51]:
Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation [reference omitted].
48. Thus, all members of the court agreed to the effect that the discretion in question is broadly stated, but it cannot be exercised capriciously and must be exercised judicially; if extraneous considerations are taken into account the discretion will miscarry. McHugh J's dissent related to the identification as extraneous of particular considerations that are not relevant here, not to the basic attributes of the discretion.
49. The existence of r 1163(2) makes it clear that in the ACT the court has a discretion as to the award of costs when leave to discontinue is granted. Counsel for APRA argued that there should be a presumption that if leave is sought and given, the plaintiff will pay the defendant's costs unless the court is persuaded to make a different order: that is, he submitted that my starting point should be that costs would be awarded against the party discontinuing the action unless I was persuaded to make some other order.
50. In support of this submission he cited Jones v John Fairfax Publications Pty Ltd [2005] NSWSC 1133; (2005) 67 NSWLR 434 (Jones) as authority for the proposition that in a case such as the current one, the court should refuse leave to discontinue and instead enter judgment for the other party; because costs would follow the event, this would mean that the discontinuing party would pay the costs of the other party.
51. In Jones, the plaintiff sought leave to discontinue part of his claim in a defamation matter, being the part of the claim in respect of alleged publication outside NSW. This leave was sought after a jury had reached a verdict about whether the imputations pleaded had been conveyed by the publication complained of. The main issue argued was whether, under the applicable court rules, discontinuance was available at all given that the rule permitted discontinuance "before the beginning of the trial or hearing of the proceeding on the claim (but not otherwise)", and there had already been a jury verdict about the imputations pleaded. However, Simpson J separately considered how she would have exercised her discretion to permit discontinuance if a discretion had been available to her. She said at [34]:
Discontinuance does not necessarily produce finality. In theory, at least, it would be open to the plaintiff to re-commence proceedings on the interstate claims. While that might seem to be most unlikely ... the fact remains that the defendants had claims made against them which they have gone to some lengths to defend. They are entitled to judgment one way or the other on those claims. Should the plaintiff not wish to proceed with those claims then he must suffer judgment against him on them.
52. Her Honour's view about leave to discontinue was expressed in the context of a contest between the parties about whether discontinuance was available at all, having regard to the applicable rules and the stage that the proceeding had reached. There was, at least as recorded in her Honour's judgment, no argument made about the availability of discontinuance by reference to the impact or possible impact of any discontinuance on liability for costs. Her Honour's view about whether discontinuance should be permitted in the exercise of a discretion related to the impact of discontinuance on the other party's claim to have finality in the matter. It was not aimed at achieving a particular costs outcome and nor did it seem to be affected by any consideration of the costs impact.
53. For those reasons, I do not think Simpson J's view can be read as carrying the implication that costs should be awarded against the party seeking to discontinue even in a case like this one, in which the aim of ensuring finality has already been achieved without entering judgment against that party. In other words, Simpson J took the view that judgment should be entered against the party seeking to discontinue to achieve one result of entering judgment (namely finality in the matter); she did not address or decide the question whether judgment should be entered in such a case in order to ensure that the discontinuing party paid the other party's costs, and she certainly did not choose between discontinuance and entering judgment in order to resolve a costs argument.
54. Accordingly, I do not consider that the submission made by counsel for APRA in relation to Jones is soundly based. I am not prepared to find on the basis of Jones that for the purpose of the exercise of my discretion under r 1163(2), I should start from the position that the plaintiff, as the discontinuing party, should pay the defendant's costs unless the plaintiff can establish that a different order ought to be made. Rather, it seems to me that the discretion is, as indicated in Oshlack, and in the words of r 1163(2), unfettered (subject of course to being exercised judicially, not capriciously, and by reference to matters connected with the litigation). The kinds of matters that might appropriately be considered in exercising that discretion are discussed below.
Matters to be considered on discontinuance with leave
55. The matters that may be considered for the purpose of exercising the costs discretion where leave to discontinue is granted are, relevantly, the behaviour of the parties up to the time leave to discontinue is sought, and the reasons for discontinuing.
Behaviour before discontinuance - both parties reasonable
56. If both parties have behaved reasonably in the period leading up to discontinuance, it seems that their behaviour during that period is not an element that needs to be weighed in the costs decision. In Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 (Lai Qin), McHugh J said:
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.
57. McHugh J did not expand on the meaning of "futile" in his comments, but it is clear from the context that he used the word to mean "pointless" rather than "doomed to fail".
Behaviour before discontinuance - unreasonable behaviour
58. If there has been unreasonable behaviour by one or both parties, then that behaviour may be considered in the exercise of the costs discretion but does not either determine the exercise of discretion or exclude consideration of other matters. In Oshlack, McHugh J (in dissent, as mentioned at [47] and [48] above) referred at [67] to the "usual order as to costs" as embodying:
... the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour.
The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [[1951] 1 All ER 873 at 874], Devlin J formulated the relevant principle as follows:
"No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct."
"Misconduct" in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute [references omitted].
60. If behaviour within these exceptions may disentitle a successful party to the beneficial exercise of the costs discretion, it seems logical that such behaviour may also be relevant (although not determinative) where the action has not been concluded but has been discontinued by leave. In such a situation I consider that it would be appropriate for any relevant conduct of either party to be scrutinised.
61. In Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302 (16 October 2003) (Edwards Madigan), Davies AJA (with whom Mason P and Meagher JA agreed) commented at [5] that costs orders could be difficult or even impossible to make where a matter comes to an end without a determination after trial. He went on:
If the judge does make an award, it will generally be because the judge is satisfied that one party has had a substantial victory and the other a substantial loss, or that there has been a market difference in the reasonableness of the actions taken by the parties, so that one party should be rewarded for its reasonable actions and the other party should suffer a detriment in costs.
62. Davies AJA adopted the comments of Burchett J in One.Tel Ltd v Commissioner of Taxation ((2000) [2000] FCA 270; 101 FCR 548) (One.Tel) quoted at [66] and [67] below, and the comments of McHugh J in Lai Qin quoted at [56] above.
63. Davies AJA then (at [15]) noted the factors taken into account by the trial judge in refusing to make an order for the plaintiff to pay the appellant's costs from a specified date, even though judgment had been entered in favour of the appellant. Relevantly, these included:
(a) that the trial judge "was satisfied that, at the very least, the plaintiff had an arguable case against" the appellant; and
(b) that "the complexity, duration and expense of litigation could have been considerably reduced" if the appellant had taken a different approach to the proposed settlement of the matter and in particular, if the appellant "had not had an over-inflated view of the righteousness of its cause".
64. Davies AJA went on to find (at [17]-[19]), that:
... the facts which his Honour took into account were relevant to his assessment of costs. The order which he made was an order that was open to him. Of particular importance is the point that, once the litigation had reached the point that no purpose would be served by determining the liability of defendants other than four defendants who were prepared to accept judgment against them, his Honour had to make an assessment of costs in the absence of a finding of liability.
In the present case, when all parties, including [the appellant], joined in the making of orders which brought the proceedings to an end, there was no prima facie entitlement on the part of [the appellant] to costs merely because the proceedings were to be dismissed against [the appellant]. The position at that stage was that the parties had effectively settled the substance of the case leaving it to the trial Judge to make whatever order as to costs he thought was appropriate. His Honour would have been entitled to order that [the appellant] bear its own costs of the proceedings. [The appellant] was in the same position as all the other defendants who were dismissed from the action. They had agreed that they should bear their own costs.
Had [the appellant] had a prima facie entitlement to costs, then it may be that the grounds on which his Honour relied to express his disapproval of [the appellant's] actions would not have been sufficient to deprive [the appellant] of the costs to which it was otherwise entitled. However, in the context that his Honour's discretion was at large, it seems to me that the factors, which his Honour took into account, were relevant and were appropriately expressed.
65. I note in particular the distinction drawn by Davies AJA between the case where one party has a prima facie entitlement to costs and the case where the court's discretion is at large, and the recognition that the court's disapproval of a party's conduct may have different consequences in those two different cases, in that conduct deserving of disapproval may not be enough to overturn a prima facie entitlement but might appropriately be taken into account in the exercise of a discretion at large.
66. If the discontinuing party has simply surrendered, then the usual outcome would be a costs order against that party. In One.Tel Burchett J said at [6]:
In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party.
Reason for discontinuing - futility or supervening event
67. If the action has been discontinued due to a "supervening event" or because the action has become "futile", then the court may decide to make no order for costs. Burchett J in One.Tel went on at [6]:
It is the latter type of case [involving a supervening event or settlement] which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs.
68. McHugh J's comment in Lai Qin (quoted at [56] above) refers to the case where the further prosecution of the litigation becomes "futile" as a case in which the proper exercise of the costs discretion would "usually mean that the court will make no order as to the cost of the proceeding".
69. Counsel for APRA submitted that the Lai Qin approach was not applicable in this case, and referred me to Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 (15 December 2006) (Australiawide Airlines). In that case the NSW Court of Appeal upheld an appeal against a costs order made by the trial judge, after proceedings had been dismissed by consent, that the defendant pay the plaintiff's costs relating to early stages of the proceedings and there be no order as to the costs of either party in the later stages. This appeal related to the proper interpretation of r 42.20(1) of the Uniform Civil Procedure Rules 2005 (NSW) (the NSW Rules). Bryson J, with whom McColl J agreed, concluded (at [48]) that McHugh J's statement in Lai Qin (quoted at [56] above) is "not readily applicable" to decisions under that rule, and that the rule "is not entirely consistent with McHugh J's observation that the proper exercise of the costs discretion will usually mean that the Court will make no order as to costs". Basten J agreed with the other members of the court (at [64]) that the NSW rule did not reflect the approach proposed by McHugh in Lai Qin.
70. The choice between the Australiawide Airlines approach and the Lai Qin approach depends on an interpretation of the several rules involved.
71. Order 71, r 39 of the High Court Rules 1952 (Cth), which applied in Lai Qin, is as follows:
When for any reason the further prosecution of a proceeding becomes unnecessary, except for the purpose of determining by whom the costs of the proceeding should be paid, any party may apply to the Court or a Justice to determine that question, and thereupon the Court or Justice may make such order as is just.
72. Rule 42.20(1) of the NSW Rules, in the form in which it was in issue in Australiawide Airlines, is as follows:
(1) If the Court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or any part of any claim, then, unless the Court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed.
73. The current case involves r 1163 of the ACT Rules, which is set out at [43] above. I note that the ACT Rules post-date the NSW rule considered in Australiawide Airlines (although not the decision in that case), and it is reasonable to assume that the ACT rule was adopted with knowledge of the form of the NSW rule (the Explanatory Statement for the ACT Rules made in June 2006 says that the new Rules "take into account contemporary best practice from across Australia, especially uniform rules adopted recently by Queensland and New South Wales").
74. It is apparent that the relevant part of the ACT rule (r 1163(2)), under which the court may make "the order for costs it considers appropriate" where leave to discontinue is given, is much closer in effect to the High Court rule than to the NSW rule. The High Court rule covers cases where "the further prosecution of a proceeding becomes unnecessary"; in such a case the Court or a Justice may make "such order [as to costs] as is just". The NSW rule deals with cases where the court dismisses proceedings; in such a case, "unless the Court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings".
75. The NSW provision sets up a presumption, where proceedings are dismissed, in favour of costs being met by the party whose action has been dismissed. In contrast, the High Court and ACT rules apply where a proceeding comes to an end, not because it is dismissed but because it becomes unnecessary, or because leave is given to discontinue. In such a case the court has a discretion to make the costs order it considers "just" or "appropriate", unconstrained by any particular presumption as to the outcome.
76. For this reason, I consider that the Lai Qin approach remains relevant to the exercise of power under the ACT rule, and that Australiawide Airlines does not require or justify a different approach to the ACT rule. I note, however, that the Lai Qin conclusion, that "the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings", depends on finding continuing reasonable behaviour by both parties until the litigation is settled or becomes futile - my finding that Lai Qin rather than Australiawide Airlines is relevant to decisions under r 1163(2) of the ACT does not imply a finding that the Lai Qin preconditions are satisfied in this case.
77. In Smith v Airservices Australia [2005] FCA 997; (2005) 146 FCR 37 (Smith), Stone J, having found that in the case she was dealing with "the award of costs is in the discretion of the Court", considered futility as a basis for discontinuing proceedings, and noted at [51] that:
... futility is not a matter of objective or subjective belief but a matter of fact; either the proceedings were futile or they were not. It follows that, in the absence of extrinsic circumstances such as are described as [47] and [48], where there has been no hearing on the merits of the case, it is not possible to say with certainty that the proceedings have become futile even where discontinuation is an acknowledgement of likely defeat.
78. She then went on (at [52]) to refer to the Queensland Court of Appeal decision in Bucknell v Robins [2004] QCA 474 (6 December 2004), which in turn mentioned Finn J's comment in O'Neill v Mann [2000] FCA 1680 (29 November 2000) at [13], that in a case:
... where the discontinuance can be said to be an acknowledgement by an applicant of likely defeat or where no objective circumstance provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made.
79. It is important to distinguish the situation in which a proceeding has been overtaken by a "supervening event" or has "become futile" (that is, pointless) from the situation in which a proceeding might always have been futile in the sense of being doomed to fail. With the benefit of hindsight (especially as to the evidence that is given), many concluded legal actions may be seen as having been futile from the beginning, in the sense that if everything had been known before the trial, the plaintiff could not have hoped to succeed in the action. The fact that the plaintiff has chosen to institute what over time reveals itself as a hopeless action, one that is doomed to fail, is clearly not a basis for allowing that plaintiff the benefit of discontinuance without prejudice when the hopelessness of the case becomes fully apparent.
80. The "supervening event" concept includes the notion that circumstances have changed since the proceeding was begun; this is also implicit in references to a proceeding "becoming futile" (as distinct from having always been futile in the sense of hopeless). The distinction may be summarised as between an action that has become pointless and one that has always been hopeless. This distinction is the same as that between actions that have become futile as used by McHugh J in Lai Qin (see [56] above) and those in which a party simply surrenders.
81. In Smith, Stone J went on at [59] to find that, while it was not possible to say that the proceedings concerned were, as a matter of fact, futile, and while the plaintiff's genuine belief that they had become unnecessary was not objectively reasonable, she accepted that "the reasonableness of the plaintiff's belief is relevant in the consideration of the reasonableness of his actions overall". She concluded that:
... while ... the absence of demonstrated futility and of an objectively reasonable belief in the futility of continuing the proceeding is an important factor to be taken into consideration in exercising my discretion in relation to costs, it is not determinative but must be weighed with other relevant factors.
82. The legal principles discussed above can be summarised for present purposes as follows:
(a) The costs discretion to be exercised under r 1163(2) where a party is given leave to discontinue is at large, but must be exercised judicially.
(b) There is no presumption that under r 1163(2) costs will be awarded to one or other party. There is no entitlement to costs against the discontinuing party arising simply because in some cases it may be preferable in the interests of finality to enter judgment against the party rather than giving leave to discontinue.
(c) In the exercise of the costs discretion, it is appropriate to have regard to:
(i) whether the behaviour of each party was reasonable until the point when discontinuance was sought; and
(ii) whether seeking to discontinue reflects a surrender by the discontinuing party in a hopeless case or a supervening event or other change in external circumstances that has rendered the action "futile" or pointless.
(i) whether a party has "by its lax conduct effectively invite[d] the litigation";
(ii) whether either party has unnecessarily protracted the proceedings;
(iii) whether the successful party has succeeded on a point not argued before a lower court;
(iv) whether a party has prosecuted the matter solely to increase the costs recoverable;
(v) whether a party has obtained only the relief previously offered by another party in settlement offers;
(vi) whether a discontinuing plaintiff had "an arguable case" against the other party;
(vii) whether the "complexity, duration or expense of the litigation could have been reduced if either party had taken a different view of the case".
(e) In relation to the reason for seeking to discontinue:
(i) a surrender will usually leave the surrendering party to pay the other party's costs; and
(ii) discontinuance for futility will sometimes mean that no costs order is made.
83. There are various factual issues on which findings are needed before the legal principles set out above can be applied to resolve the question of costs. They relate generally to what Broking knew at various stages in the proceedings, how Broking conducted itself during the proceedings, and how Broking's actions were affected by APRA's conduct of its defence.
What did the plaintiff know about the final media release?
Possession of, or access to, the final media release
84. Before APRA's admission in the defence filed on 19 July 2004, Aaron Stevenson (Managing Director of Broking) had on 3 October 2003 sworn an affidavit that attached a letter that in turn attached a copy of the final media release published by APRA. Whether or not Mr Stevenson had read the attachment properly, or indeed even looked at it, seems to me to be irrelevant, as does the question whether Broking's then solicitors had read or even looked at the published media release at any point. It is clear that Broking knew that a media release had been published, and not just in draft form to it (otherwise there would have been no basis for any action against APRA). It is clear that from at least 3 October 2003, there was a copy of that media release in Broking's possession. In the absence of evidence to the contrary, I am willing to assume that Broking or its legal advisers also knew how to access, from the APRA website, the media release that had been published. If in fact neither Broking nor its lawyers bothered to check the APRA website and print a copy of the media release for the files before initiating proceedings, and if in fact neither Mr Stevenson nor his lawyers bothered to read the media release attached to the letter attached to Mr Stevenson's October 2003 affidavit, that is not APRA's problem nor this court's problem.
85. In 2006, Barrie Goldsmith of Goldsmiths Lawyers took over as Broking's solicitor, and Broking's allegations of malice and bad faith by APRA were revised and expanded. The new allegations were set out in a letter dated 22 September 2006 to the Australian Government Solicitor, and included as particulars of malice the claims:
(a) that the media release published by APRA was in a different form from that provided for comments earlier on the day of publication;
(b) that APRA did not give Broking any chance to comment on the published media release; and
(c) that the media release actually published was more damaging than the draft provided for comments.
86. It is clear that there was knowledge on behalf of Broking that there were two versions of the media release, and a belief that the published media release was different from a draft media release. This of itself does not establish which two versions Broking knew about, but evidence of that emerged at the costs hearing.
87. Mr Goldsmith was called as a witness by Broking. He sought to explain the claim of malice and bad faith added to Broking's statement of claim in 2006 as follows:
(a) Initially, he asserted that he believed the draft media release provided to Broking on 15 April 2003 was in fact the media release that had been published, and that the draft he referred to was a draft dated 14 April 2003 (the preliminary draft media release set out in Appendix A) that had been considered by APRA but not sent to Broking at that time.
(b) When it was pointed out to Mr Goldsmith in cross-examination that Broking could not have seen the 14 April 2003 draft media release until after it was discovered by APRA in April 2007, some time after the revised malice claim was made in September 2006, Mr Goldsmith withdrew his first explanation and said that he must have drafted the claim on the basis of Broking's instructions (and possibly some unspecified documents to which he did have access which might have included the draft media release of 15 April). He asserted that he had not seen the final media release before 30 April 2008 (the day on which it was produced in court), and in particular insisted that "at no time, at no time whatsoever, have I ever, ever accessed the defendant's website in relation to the plaintiff".
88. Mr Goldsmith was not an impressive witness, and his evidence on this matter was not convincing. An argument could be made that Mr Goldsmith would not have made such apparently damaging admissions about the performance of his responsibilities as Broking's solicitor unless they were true, but in spite of this I do not accept either of his explanations about how the imputations came to be drafted.
89. I find on the balance of probabilities that Broking had a copy of the final media release, and was also able to access the electronic copy of it, at all relevant times, and in particular both before and after APRA made the incorrect admission about what had been published. I refrain from making any finding about whether anyone actually looked at the final media release on behalf of Broking, either in hard copy or in electronic form, at any time before the document was produced in court on 30 April 2008.
90. The three relevant versions of the media release are set out at Appendix A, and the three press re-publications at Appendix B; the imputations pleaded in respect of the publication on the APRA website are at Appendix C.
91. The imputations pleaded in respect of each press re-publication are identical with those set out at Appendix C.
92. A comparison of the imputations with the later two versions of the media release (the draft media release and the final media release) suggests that, although the draft media release may have been considered in the drafting of the imputations, it is highly likely that the final media release was available to whoever drafted the imputations.
93. The following table compares the wording of the three documents in relevant respects:
to insure any risks ... or to solicit insurance business from the public
has been active in offering and providing insurance ... in Australia
to solicit insurance business from the Australian public
to offer insurance to the public in either Vanuatu or Australia
to solicit insurance business from the public within or beyond Vanuatu
offered and provided insurance to the Australian public
offering and providing insurance to Australian consumers
94. The imputations listed in Example 1 could have been drawn from the draft media release, but their terms are not inconsistent with the terms in the final media release. The imputations listed in Example 2 refer to soliciting insurance business, a phrase which is used in the final media release but not in the draft one (nor, it is worth mentioning, in the preliminary draft media release set out in Appendix A) The imputations listed in Example 3, in using the expression "the Australian public", seem to reflect original thought by whoever drafted the imputations, since they use an expression not used in the relevant context in either version of the media release.
95. The nature of the discrepancies is also significant. The expression "offer insurance to the Australian public" as used in imputations (a), (a)1, (b) and (b)1 is arguably little more than a restatement of the concept of offering insurance in Australia, which is mentioned in the final media release. On the other hand, the expression "solicit insurance business from the ... public", used in imputations (e) and (f), is not just a different way of referring to offering insurance as mentioned in the draft media release. Instead, it refers to a different concept (soliciting business from the public) which is not mentioned at all in the draft media release but is mentioned explicitly in the final media release.
96. The normal way to draft the imputations alleged to be carried by a defamatory publication would be by reference to the defamatory publication itself. It is therefore not surprising either that the imputations specified in the pleadings are consistent with the contents of the final media release, or that they contain some references not readily referable to the contents of the draft media release that was Annexure A to the statement of claim. However, it was fundamental to Broking's claim for costs that Broking had no knowledge of the contents of the final media release until it emerged at the beginning of the trial, and Broking denied that the imputations had been drafted by reference to the final media release.
97. Two possible explanations were canvassed for the obvious similarities between the final media release and the imputations as pleaded.
98. First, in evidence, Mr Goldsmith suggested that the pleadings had been prepared by reference to the draft media release but that counsel in doing so had quite coincidentally happened to use, in the imputations, expressions that appeared in the final media release but not in the draft media release.
99. The other possible explanation canvassed at the costs hearing was that the imputations were drafted by reference to one of the media re-publications (rather than the APRA website publication) and then copied for the other three publications without being checked against those individual publications. This would suggest, at best, an unprofessional approach on the part of Broking's solicitors at the time (and would suggest that Broking apparently considered the press re-publications also to be worth taking action on, even though they were different from what Broking claims to have believed was the original APRA publication, and even though they were very similar to the publication that the plaintiff now says cannot sustain a defamation action).
100. Neither of the possible explanations for how the imputations could have been drafted without access to the final media release and emerged bearing such a resemblance to that final media release is helpful to Broking. The explanation based on coincidence I find unconvincing. The explanation that the imputations were drafted by reference to the re-publications, even if accepted, does not help Broking. This is because, whether the final media release was used in the drafting of the imputations from the beginning, or was only indirectly the source of the imputations (via the media re-publications), the link between the final media release and the imputations as pleaded is clear, and is not affected by whether Broking was actually aware of the contents of the final media release shortly after the media release was issued, shortly before Broking sought leave to discontinue, or at any time in between.
101. I find on the balance of probabilities that the imputations pleaded in respect of the media release were not drafted solely by reference to the draft media release but were drafted wholly or in part by reference to the final media release, probably directly by reference to that media release, but possibly indirectly by reference to one or more of the press re-publications of that final media release.
Did the plaintiff know the wrong document was annexed?
103. There is, however, no evidence whether Broking actually knew that the wrong document had been annexed to the statement of claim.
104. In the absence of such evidence, I consider that it would be inappropriate to make, and accordingly I refrain from making, any finding that anyone had actual knowledge, on behalf of Broking, that the wrong document had been annexed to the statement of claim. Instead, I find that the annexing of the wrong document was, at best, the result of incompetence or carelessness by a person or persons acting on behalf of Broking.
What was the significance to the plaintiff's claim of the defendant denying publication?
105. Counsel for Broking asserted that APRA's incorrect admission, while not deliberate, had been misleading and deceptive.
106. Broking's solicitor, Mr Goldsmith, gave evidence that, after clarification of which media release had in fact been published, he had advised Broking that its chance of establishing that the imputations pleaded were carried by the final media release was significantly worse than the chance of establishing this in relation to the draft media release. This contrasts with the September 2006 claim that malice was demonstrated by the fact that the published media release was more defamatory than the draft provided for comment. However, having regard to the inconclusive evidence given by Mr Goldsmith about which two versions of the media release were actually referred to in his claim of malice, it seems both unnecessary and unproductive to attribute any significance to the contrast.
107. I note first that Mr Goldsmith's evidence about the advice he gave, if accepted, establishes only that he gave that advice. It does not establish whether that advice was correct, and I make no finding on the actual capacity of either version of the media release to carry the imputations pleaded. However, it would not be surprising if Mr Goldsmith's advice as claimed were correct; it is quite likely that APRA, having received even the brief initial comments that the plaintiff's solicitors were able to make about the draft media release, revised the media release before it was published with a view to making it generally less provocative and reducing the risk that it was defamatory.
108. However, I have already found that all the imputations were in fact drafted by reference (directly or indirectly) to the final form of the media release (see [101] above). This means that Mr Goldsmith's advice, if correct, would only suggest that the plaintiff's claim had always been ill-advised or even hopeless (which is not the same as futile or pointless, see [79] above).
109. APRA's incorrect admission of publication of the draft media release does not reflect well on APRA or on its legal representatives. However, this does not mean that it was necessarily misleading or deceptive or that APRA must be held responsible for the continuation of the matter for the four years after that admission.
110. I have already noted the unfortunate fact that the draft media release was not clearly identified as a draft. Nevertheless, it is clear that Broking was initially responsible for the confusion caused by annexing the draft media release to the statement of claim; in the absence of evidence that Broking deliberately annexed the wrong media release to the original statement of claim, I have found this was a result of incompetence or carelessness (see [104] above).
111. From 2003 onwards, Broking and its advisers failed to take any of their many opportunities to discover the mistake and correct it; those opportunities included receiving the letters used by Mr Stevenson in his security for costs affidavit, and each change of solicitor, especially the change that saw all the imputations rewritten substantially by Mr Goldsmith in consultation with counsel.
(a) that Broking had at all relevant times a copy of, and access to, the final media release (see [89] above); but
(b) that Broking may not have known that a document other than the final media release had been incorrectly annexed to the statement of claim (see [104] above).
113. As long as Broking had access to the final media release (and therefore either knew or should have known its contents), then APRA's incorrect admission to publication of the draft media release could not have misled or deceived Broking. This is because Broking either must have assumed without checking that what was annexed to the statement of claim was the final media release (in which case APRA's admission of publication would have been expected and unsurprising and would not have induced Broking to believe anything it did not already believe due to its own carelessness) or must have known that what was annexed was not the final media release (in which case APRA's admission of publication might have surprised Broking but would not have misled or deceived it).
114. Accordingly, I find that APRA's conduct in admitting publication for nearly four years was careless and unhelpful but it was not misleading or deceptive.
Would the plaintiff have discontinued earlier if the defendant had denied earlier publication?
115. It might appear that APRA could have brought the proceedings to a close four years earlier if it had corrected Broking's mistake about publication at the first opportunity, namely when APRA filed its first defence.
116. However, I have already found to the effect that the imputations pleaded were referable to the media release actually published (see [101] above) and, as mentioned in [27] above, Broking could have corrected its statement of claim and proceeded with the action on the basis of the imputations as pleaded. In those circumstances, Broking's response to the withdrawal of APRA's admission at the trial is not fully explicable. To the extent that the withdrawal of APRA's admission did not seem to provide any particular reason for the plaintiff to seek to discontinue in April 2008, it would not obviously have provided such a reason four years earlier if the mistake had been pointed out then, and I do not feel obliged to infer that Broking would have discontinued proceedings at that earlier point. It is entirely possible that at that stage Broking would simply have corrected the statement of claim and gone on with the action.
117. Accordingly, I decline to find that Broking would have discontinued its action in 2004 if APRA had in its original defence denied publication of the draft media release annexed to the statement of claim.
118. Each party made allegations of unreasonable conduct by the other party over the five years before the proceeding was discontinued.
119. APRA provided the following examples of unreasonable behaviour by Broking:
(a) Broking's "constant changes of position" in the course of proceedings, which among other things involved at least six different versions of the statement of claim, several changes of solicitors, many allegedly unnecessary directions hearings, and other examples of uncooperative approaches to the processes of resolving this matter;
(b) Broking's conduct in relation to the claim for damages;
120. As an example of the generally unsatisfactory nature of Broking's conduct of the proceedings, counsel for APRA referred me to processes that had taken place between the abandonment of the trial in early May 2008 and the start of the costs hearing in mid-June 2008.
121. At the end of the hearing in which the consent orders had been made, I directed APRA to give Broking copies of the documents on which it proposed to rely at the costs hearing. As well, it was agreed that the costs argument would need only three days of the second five days that had been set aside for the trial, and could begin on the Wednesday (18 June) instead of the Monday of the week concerned.
122. On 23 May APRA provided the documents on which it proposed to rely and asked Broking to advise it of any objections. At the directions hearing on 11 June 2008, counsel for APRA told the court that there had been no objection to the documents, and he was therefore confident that the matter could be completed in the three days that had been set aside. In spite of this, at the beginning of the costs hearing Broking's counsel objected to APRA's proposed reliance on the documents.
123. At the same directions hearing, counsel for Broking objected to the three-day costs hearing starting on the Wednesday of the week concerned (rather than the Monday). His objections were only withdrawn on the production of a transcript from the end of the earlier hearing week showing that Broking had already agreed to the rescheduling of the hearing.
124. In relation to the matter of damages, APRA drew attention to Broking's failure to provide proper particulars of economic loss to found its claim in defamation. Counsel for APRA asserted, and this was not challenged, that it took APRA four years to get particulars of the economic loss claimed by Broking. In September 2005 Higgins CJ took what counsel for Broking conceded was the unusual step of ordering Broking to file its evidence in the form of affidavits. Broking's failure to comply with that order led to the vacation of a trial date in mid-2006. Eventually Broking had provided an expert's report, but only after proceedings had been stayed until such a report was produced. However, Broking repeatedly failed to provide details of the evidence relied on in producing that report, and was warned by APRA on several occasions that such evidence would be objected to if produced only at trial.
125. As to Broking's conduct in relation to discovery, counsel for APRA referred me to various items of correspondence, including as an example a covering letter from Broking's solicitor enclosing "a copy of my client's response to your request for further discovery, which is self-explanatory"; Broking's response includes the following paragraphs:
(i) We don't have any list of RGIL policy holders, we assume that they are held by the voluntary administrator.
(ii) The agency agreement has already been discovered and there are no other documents relating to such as the negotiations were verbal.
(iii) There are some 5,000 or so policies with approximately 6 or so pages on each one, thus, we are looking at having to provide more than 30,000 pages, this not even including what more pages would be in the other related material.
(iv) The bank statements for premiums banked during the period 1 January 2003 - 31 December 2004, are available for inspection. They can choose to have them copied should they so wish and they can pay for the 1,000 or so pages.
As I said in the last letter, if they want to have a look at all the business transaction [sic], then they can have a look at the policy files, but they better be ready to give us a cheque for around $20,000 to get the stuff copied.
127. Counsel for Broking referred several times to general unreasonable behaviour by APRA, but the only specific example of such behaviour provided was APRA's incorrect admission of publication of the draft media release. Counsel also referred to letters from or on behalf of Broking asserting unreasonable behaviour by APRA, but was not able to point to other specific examples of unreasonable behaviour by APRA, or to interlocutory orders reflecting a judicial assessment of APRA's behaviour as unreasonable. These letters were mainly raised by way of response to some of APRA's allegations of unreasonable conduct in relation to proof of damage and discovery, and did not go far towards establishing any particularly inappropriate conduct by APRA. Counsel for Broking also pointed out that not all the interlocutory applications made by APRA had been successful, but seemed to concede that each of the unsuccessful ones had been dealt with through appropriate costs orders.
128. Both parties have been remarkably careless in their conduct of the litigation.
129. Broking has been careless, for instance in annexing the wrong media release to its statement of claim and, on the evidence of its own solicitor, in permitting its legal representatives to redraft the imputations without examining the original publications.
130. APRA was undoubtedly careless in admitting the publication of the draft media release, and maintaining that admission for four years as well as in confirming that incorrect admission in interrogatories. I note that apart from a brief reference to APRA's responsibility to be a model litigant (see [35] above), the question whether APRA as an arm of government (and possibly a better-resourced litigant) had a responsibility to be less careless than the average litigant was not argued and I do not pursue this question. On the other hand, I have already concluded that it could not be assumed that Broking would have discontinued the proceedings four years earlier if APRA's first defence had denied publication.
131. In other respects Broking's conduct, for instance its approach to discovery, and its persistent failure to provide particulars of economic loss, was not conducive to a speedy resolution of the real issues in the case. In the absence of a careful comparison of the conduct of Broking and APRA during the five years before the matter came before me, I refrain from a finding that Broking behaved unreasonably throughout the proceeding, but on the basis of Broking's approach to the proof of economic loss, and to the costs hearing, I find that during the conduct of the litigation, there were incidents of unreasonable conduct by Broking.
132. I find that both parties acted unreasonably in their failure to conduct the proceedings with appropriate care.
133. I find that there may have been other instances of unreasonable conduct by APRA in the course of the proceedings, but that these are outweighed by Broking's unreasonable actions, including those I observed in the period from the scheduled trial date up to and including the date of the costs hearing.
134. Two offers of settlement, the first explicitly identified as a Calderbank offer and the second effectively so identified, were made by APRA.
135. The first (dated 28 September 2006 and open until 13 October 2006), was an offer of settlement on the basis that:
(b) all existing costs orders (at that stage amounting to over $90,000) would be vacated; and
(c) the plaintiff would pay the defendant $10,000 towards its legal costs.
136. The second (dated 23 November 2007 and open for 14 days) was an offer of settlement on the basis that:
(b) the previous costs orders (by then amounting to $100,000) would be vacated; and
137. A Calderbank offer is an offer of settlement that in certain circumstances may justify a departure from the usual approach that costs follow the event (if the offer is rejected and the matter proceeds to a determination). Those circumstances are, in general terms, when the resolution that was offered is more favourable to the recipient party than the ultimate outcome of the matter. However, the fact that such an offer was made does not automatically entitle the offering party to any particular costs order. Rather, it "may entitle a party to a different costs order, other than that costs follow the event. To that extent, the order made will be [an] advantageous costs order." (Beazley J, "Calderbank offers" (Paper presented to Australian Lawyers Alliance Conference, Hunter Valley, 14-15 March, 2008) at [16]).
138. In this case, the matter has not been resolved by any decision on the merits, so the question whether the outcome of the case for Broking is more or less favourable than either of the settlements proposed by APRA is not easy to assess, and may not even be a meaningful question.
139. APRA claimed that in accordance with what counsel called "the usual principles", it should be entitled to indemnity costs from the date of the first of the two offers. Broking submitted that the Calderbank offers should be completely disregarded because its responses to them were based on a false premise (that the draft media release had in fact been published), which false premise:
(a) gave an unjustifiably optimistic view of Broking's prospects of success; and
(b) was, at the time the offers were made, believed by Broking through the fault of APRA.
140. I have already found (see [114] above) that Broking was not in fact misled or deceived by APRA's incorrect admissions. I further find that if Broking's rejection of the offers was based on misconceptions held by it about its chances of success, and if APRA had played any role at all in confirming those misconceptions, those misconceptions were nevertheless Broking's responsibility to such a great extent, and APRA's responsibility to such a minor extent, that they should be disregarded in assessing the impact of the Calderbank offers.
141. APRA's offers both seem to have been "walk-away" offers, in the sense that they offered Broking a chance to walk away from the action with little or no liability for APRA's costs but with no award of damages or vindication of reputation. The question whether as such they were offers of a genuine compromise (Beazley J, op cit, at [32] and [33]) was not raised, and I make no finding on it.
142. The "walk-away" nature of the offers, and the similar nature of the consent orders that finalised this matter, mean that there are no proposed and actual substantive resolutions of the matter to be assessed as more or less favourable outcomes. The consent orders that were made ensure that Broking can bring no further action arising out of the publications concerned. The entry of judgment for APRA (proposed in the second Calderbank offer) would also have ensured this, but the dismissal of the proceedings offered in the first Calderbank offer would not have had that effect (see r 1614 of the ACT Rules). Thus, in that respect Broking is worse off under the consent orders than it would have been under the first offer but in the same position as it would have been under the second offer.
143. Apart from the termination of the proceedings, both offers dealt only with the fate of the interim costs orders. Since the relevance of a Calderbank offer is to the ultimate determination of costs in the finalised proceeding, examining the interim costs orders made in the course of the proceeding does not provide an answer to the question whether the final outcome for Broking is better or worse than it would have been under the offers. However, it is appropriate to note that the consent orders preserved the costs orders already made against Broking, and included a new order unfavourable to Broking, about APRA's costs until July 2004; to that extent the costs outcome in the matter must be less favourable to Broking than that proposed in the second offer in relation to costs, and is almost certainly less favourable to Broking than the outcome proposed in the first offer.
144. However, the final costs determination is still open. My determination on the reserved costs could in theory be that APRA should pay all Broking's outstanding costs, and it is possible that those costs would exceed the costs for which Broking is already liable. If that were the case, then the final outcome on costs could be more favourable to Broking than that proposed in either of the Calderbank offers (depending on the amount of the costs incurred at different stages of the proceeding). The problem with this analysis is, of course, that if the Calderbank offers can only properly be compared with the final outcome after the final costs decision is made, there is no point in considering them, because the only reason to compare them with the final outcome is for the purpose of determining the final costs decision.
145. Accordingly, I shall have regard to the Calderbank offers in considering reasonableness more broadly, but I do not consider that those offers as such can operate directly to entitle APRA to an advantageous exercise of the costs discretion.
146. APRA's claim for costs included a claim for costs on a solicitor and client basis from the date of the first Calderbank offer. Having decided that the Calderbank offers can have no determinative or even direct impact on the allocation of costs in this case, I cannot see that they could justify the making of the final costs order on a solicitor and client basis. No other basis for such a costs order was argued or even mentioned.
Was there any significance in the plaintiff's frequent changes of lawyers?
148. Broking had retained four different firms of solicitors in the course of the proceedings, but no explanation was provided for any of the changes in solicitors. This was mentioned by APRA as an example of unreasonable behaviour in Broking's conduct of the proceedings, whereas Mr Goldsmith and counsel for Broking appeared to see it as providing some sort of excuse for various inadequacies in the conduct of the proceedings. For instance, this was mentioned by Mr Goldsmith as the reason for his inability to provide a proper explanation of the source of the imputations, and Broking's inability to confirm the chronology and other documents sought to be tendered by APRA in the costs hearing was explained on the ground that Broking's solicitor "doesn't have access to the ... prior solicitor's files".
149. In the absence of evidence explaining the changes in solicitors and why the current solicitors didn't have access to the earlier files, the fact that Broking's original solicitors were no longer involved with the proceeding, or that Broking did not have access to all the files concerning the action, does not preclude me from finding that Broking, not APRA, must take primary responsibility for the mistaken annexure of the draft media release to the original statement of claim. The absence of subsequent solicitors equally does not provide any excuses for Broking in any aspect of its conduct of the proceedings; among other things, the several changes in solicitors should have made it more likely, not less likely, that the error in the original statement of claim would come to light as members of each newly-engaged firm of solicitors familiarised themselves with the details of the matter.
150. In the absence of any explanation, I refrain from finding that the unexplained changes in Broking's legal representation amounted to unreasonable conduct on Broking's part. However, I find that those changes do not provide any excuse for inadequacies in Broking's conduct of this matter that may have contributed to other findings of unreasonable conduct.
151. The first question is whether the plaintiff discontinued because of some kind of supervening event or other circumstance as a result of which the proceeding had become futile, or simply surrendered. If I find no supervening event or other ground of futility, I must take the plaintiff to have surrendered.
152. Counsel for Broking submitted that APRA's withdrawal of its 2004 admission of publication was a supervening event which rendered Broking's proceedings futile.
154. First, the fate of Broking's action was not determined by APRA's withdrawal of its admission. On the face of it, discontinuing a defamation action or an injurious falsehood action would seem unavoidable once it became apparent that the alleged defamatory or injurious material had not been published. However, in this case, discontinuance was not such an obvious outcome, given that:
(a) there was in fact a relevant publication in somewhat similar terms to the mistakenly asserted publication, and the plaintiff was given the option of correcting the mistaken assertion of publication and pleading the correct publication; and
(b) the imputations appear to have been drafted on the basis of the correct publication - the problem of attaching the draft media release might only have been a clerical error that could be easily corrected, with possible consequences in costs but not so as to change the fundamental nature of the plaintiff's claims.
155. Secondly, the action did not "become" futile within the meaning of the relevant authorities. Even if APRA's withdrawal of its admission had completely deprived Broking of a publication on which to take action, this would not have meant that the action became futile as described in [79] above as a result of APRA's withdrawal of the admission. If Broking's action was doomed to fail after APRA withdrew its original admission, it had always been so, and there was no supervening event or other extrinsic circumstance that contributed to that. APRA's action in correcting the record did not change the landscape in which Broking's action was being pursued - at most it alerted Broking to the fact that the landscape had never been as Broking claimed, and claimed to believe.
156. Broking's action could have continued on the basis of the statement of claim as corrected, and could have continued with minimal changes to other aspects of each party's case. The action would have continued with the same prospect of success that it originally had, or perhaps more. The possibility of a higher chance of success arises because of my finding that the imputations were drafted directly or indirectly by reference to the final media release (see [101] above). If the case had proceeded to finality on the basis of the pleadings and without the mistake ever coming to light, the plaintiff might have had slightly less chance of establishing that the imputations as drafted were carried by the draft media release than it would have had in respect of the actual APRA publication, the final media release.
157. Thus, if Broking's action was hopeless after APRA withdrew its admission, it was always hopeless. This was because of weakness in the action, not because of a change in the environment in which the action was commenced that rendered the action pointless.
158. I find that the action was no more doomed to fail than it was when it was initiated, and therefore it did not become futile in the Lai Qin sense, as a result of the defendant withdrawing its original admission to the publication and advising that the actual publication was in a different form. Nor was APRA's change of position a supervening event in the One.Tel sense.
159. In these circumstances, it is impossible to make any finding other than that the plaintiff simply surrendered when the action finally came to trial. In such a case, the plaintiff would "ordinarily" (see [78] above) be ordered to pay the defendant's costs.
160. However, in this case it cannot be said that both parties behaved reasonably until the proceedings were discontinued (see [56] above), so there is scope to consider their conduct in reaching a final view on costs.
161. As mentioned above, I declined the invitation of counsel for APRA to examine the merits of Broking's claims and APRA's defences (in relation to either version of the media release), and made no findings about whether Broking had "an arguable case" against APRA. I note the advice given by Mr Goldsmith to Broking, after the final media release was produced at the trial, that its chances of succeeding against APRA in a proceeding in respect of the final media release were not as good as its chances of succeeding on the draft media release. However, noting both that Mr Goldsmith was not Broking's solicitor when the proceedings began, and that when Mr Goldsmith was first engaged he appears to have given more encouraging advice to Broking about its prospects of success (although possibly without looking at any version of the media release), I refrain from finding that Broking was unreasonable in bringing the action.
163. Given Broking's concessions made during the 2008 hearings about the likelihood of succeeding in its claim based on the published media release, and the likelihood that APRA had reached similar conclusions much earlier, I find that the two Calderbank offers indicated a genuine wish on APRA's part to bring the matter to finality by offering Broking a way out of a potentially expensive proceeding, and were a reasonable attempt to bring the litigation to a close. However, having refrained from finding that Broking was unreasonable in beginning the proceedings, I also find that Broking was not unreasonable in rejecting the offers, given its apparent belief, underpinned by the advice of its then solicitor Mr Goldsmith, in the strength of its case.
164. I consider that there is also scope for examining the conduct of the parties before the litigation commenced, having regard to the comments of McHugh J in Oshlack at [69] (quoted at [59] above) about cases in which there is "conduct of the successful party which disentitles it to the beneficial exercise of the [costs] discretion". Noting that I have already found that the action was terminated when Broking surrendered, rather than as a result of any supervening event or extrinsic circumstance, and that both parties have been to some extent unreasonable in the conduct of the proceedings but that more elements of unreasonable conduct have been identified against Broking, the balance would appear to be tipped towards making a costs order in favour of APRA in respect of all outstanding costs. However, the question remains whether there is anything in APRA's conduct that would tip the balance away from such an order by disentitling it to any extent to that beneficial exercise of the costs discretion.
165. Despite the best efforts of counsel for APRA, the substance of APRA's concerns about Broking's activities in the provision of insurance cover was not canvassed at the hearing, and it would have been impossible to make any useful findings about those activities in the course of a costs hearing. Evidence about aspects of APRA's conduct in the preparation and issue of the media release was, however, not in dispute, and I propose to examine that conduct in general terms. For the purposes of considering that conduct I assume that APRA had a genuine reason to be concerned about Broking's activities.
166. At [82] above I have listed circumstances identified by McHugh J in Oshlack and Davies AJA in Edwards Madigan as ones in which the court may "properly depart from the usual order as to costs". Several of the factors listed in [82(d)] above have already been mentioned, namely whether either party has unnecessarily protracted the proceedings, the significance of offers of settlement, and whether the plaintiff had an arguable case. Several of the other factors are not relevant in this case. However, it is necessary to consider the position "when the successful party by its lax conduct effectively invites the litigation".
168. In the absence of any specific argument on this matter, I expressly do not find that APRA acted in bad faith or was actuated by malice in its original handling of the draft media release. However, in its dealing with the plaintiff over the draft media release, I consider that APRA was verging on arrogant in its disregard for the rights of those subject to its regulatory regime. Offering Broking an opportunity to be heard on the contents of a potentially damaging media release was in the abstract an appropriate attempt to provide procedural fairness (whether or not this was expressly required). It might also have been a sensible precaution, in APRA's own interests, against the risk of issuing a damaging but inaccurate document. However, offering Broking 25 minutes to comment on the draft media release that was faxed to it undermines any claim that this was a genuine attempt at giving procedural fairness, rather than a cynical pretence of doing so. Nor does issuing the final media release 11 minutes after receiving two pages of comments about the draft media release from Broking's solicitors suggest a genuine attempt to consider Broking's comments (even accepting that APRA was not obliged to act on Broking's comments if it did not accept or agree with them). As such, APRA's behaviour was not appropriate for a government regulator, whatever it believed about the justice of its cause and the need to protect consumers from inappropriate behaviour in the insurance sector.
169. No submissions were made about why APRA made the draft media release available to Broking at all, so it is not clear whether or not this was pursuant to some kind of legal or policy requirement. In 2004, Broking's particulars of malice were said, in a letter from its then solicitors, to be based on facts including that APRA gave Broking "insufficient notice of the media release of 15 April 2003 ... thereby preventing [Broking] from taking steps to restrain same or object to its contents". I make no finding on the accuracy of this "fact", but note that if APRA genuinely believed that the proper performance of its functions was likely to be impeded by giving Broking an advance copy of the media release (for instance, because Broking might have taken action aimed at preventing publication), it should have looked for a legitimate way to issue the media release without any kind of consultation. If there was at that time no legitimate way to do this, then the proper approach was not to engage in a cynical attempt to minimise the consequences of complying with its obligations but to pursue with its political masters the possibility of an exemption from procedural fairness requirements in appropriate cases.
170. It is hard to rule out the possibility that Broking's action was commenced, or pursued with such determination over so many years, partly as a reaction to the arrogance displayed by APRA in its dealings with Broking. In making this comment, I do not overlook the possibility that the action was commenced or pursued in the hope of inhibiting APRA's subsequent dealings with Broking. Nor do I question the genuineness of any belief held by APRA that the plaintiff was operating outside the law, or at least in such a way as to mislead innocent consumers to their detriment. However, while such cases might arise in some contexts, I do not consider that this is a case in which it was appropriate for a government agency charged with preventing or punishing unacceptable behaviour in the community to adopt the values and tactics of those who would engage in such behaviour.
171. I would not regard APRA's conduct as "lax", nor would I say that it "effectively invited" the litigation. Rather, I find that its dealings with Broking over the media release were objectionable in a more deliberate way than is implied by "lax", and that its conduct might have "provoked" rather than "invited" the litigation. Neither of these distinctions would seem to remove APRA's conduct from the category of conduct identified by McHugh J as possibly justifying a departure from "the usual order" as to costs. Thus, I consider that this conduct by APRA is relevant to the exercise of the costs discretion, and I have taken it into account in reaching my decision.
(a) that Broking simply surrendered when the matter came to trial, and there was no supervening event or extrinsic circumstance that rendered the proceeding futile or pointless; and
(b) that Broking was unreasonable in aspects of its conduct of the proceedings; and
(c) that despite Broking's surrender, and its unreasonable conduct, APRA's conduct before the litigation commenced, and to a minor extent its unreasonableness in its conduct of the litigation, disentitles APRA to a costs order against the plaintiff for the full amount of its outstanding costs; and
(d) that neither the Calderbank offers nor any other aspect of this matter entitles APRA to have those costs that will be paid by Broking on anything other than a party and party basis.
173. Given my findings about the conduct of each of the parties in this proceeding, one possible costs order would have been to require each party to pay a proportion of the other party's costs. Counsel for each party urged me not to adopt such an approach, which would have multiplied the work required to determine and finalise the amounts required to be paid under the costs orders. I agree that while partial costs orders against both parties might more accurately reflect the role of the parties in what I have already described as a sorry affair, there is no point in further increasing the total cost and inconvenience generated by this proceeding. Accordingly, the partial costs order to be made against Broking reflects a rough balancing or setting-off of orders that might have been made against each party.
174. For the reasons set out above, I have concluded that no costs order should be made against APRA, but that Broking should pay only 75% of APRA's outstanding costs, on a party and party basis. The orders are:
1. That except as set out in Order 2 below, all costs orders previously made in this matter are confirmed.
2. That in respect of the costs covered by the Master's costs order made on 30 August 2007, Broking is to pay one-third of APRA's costs.
3. That Broking is to pay 75% of APRA's costs in the period from 20 July 2004 (other than costs already covered by an order confirmed under Order 1 above) on a party and party basis.
I certify that the preceding one hundred and seventy four (174) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Justice Penfold.
Counsel for the defendant: Mr S Wheelhouse SC with Mr G McCarthy
Solicitor for the defendant: Australian Government Solicitor
A.1 Preliminary draft media release (dated 14 April 2003; discovered by APRA 18 April 2007)
APRA ISSUES CONSUMER ALERT ON UNAUTHORISED INSURER
The Australian Prudential Regulation Authority (APRA) today issued a warning to consumers on Rural & General International Limited, which is licensed in Vanuatu as an exempt general insurer and is not approved to offer insurance in either Vanuatu or Australia under the conditions of its authorisation.
APRA is concerned that Rural & General International Limited has been active in offering and providing insurance to Australian consumers via Rural & General Broking Pty Limited in Australia and that consumers have not been made fully aware of the facts.
Current legislation allows insurance brokers or registered foreign insurance agents to offer and provide consumers with access to insurance products sourced from unauthorised foreign insurers. Current legislation requires that the insurance broker or foreign agent provide the consumer with appropriate notification and disclosure regarding the placement of business with an unauthorised foreign insurer.
A list of all companies authorised to conduct insurance business in Australia appears on APRA's website at www.apra.gov.au. For further information contact the APRA call centre on 1300 13 10 60.
A.2 Draft media release (faxed by APRA to Broking 15 April 2003 at 4:05 pm)
APRA ISSUES CONSUMER ALERT ON UNAUTHORISED INSURER
The Australian Prudential Regulation Authority (APRA) today issued a warning to consumers buying insurance policies with Rural & General International Insurance Limited.
Rural & General International Insurance Limited is registered in Vanuatu as an exempt general insurer and is not authorised to offer insurance to the public in either Vanuatu or Australia under the conditions of its registration.
The regulator's warning stems from concerns that Rural & General International Insurance Limited has been active in offering and providing insurance to Australian consumers via Rural & General Broking Pty Limited in Australia.
APRA encourages consumers to review the list of all companies authorised to conduct insurance business in Australia. The list is available on APRA's website at www.apra.gov.au.
For further information, please contact the APRA call centre on 1300 13 10 60.
A.3 Final media release (published by APRA on its website 15 April 2003, 5:47 pm)
APRA issues consumer alert on unauthorised insurer
Tuesday, 15 April 2003
No. 03.38
For Immediate Release
The Australian Prudential Regulation Authority (APRA) today issued a warning to consumers buying insurance policies with Rural & General International Insurance Limited.
Rural & General International Insurance Limited is registered in Vanuatu as an exempt general insurer and is not authorised to insure any risks within Vanuatu or to solicit insurance business from the public within or beyond Vanuatu.
The regulator's warning stems from concerns that Rural & General International Insurance Limited has been active in offering and providing insurance via Rural & General Broking Pty Limited in Australia.
APRA encourages consumers to review the list of all companies authorised to conduct insurance business in Australia. The list is available on APRA's website at www.apra.gov.au.
For further information, please contact the APRA call centre on 1300 13 10 60.
THE Australian Prudential Regulation Authority (APRA) has issued a warning over Vanuatu-registered Rural & General Insurance.
The company is an exempt general insurer and is not authorised to insure risks in Vanuatu or to solicit insurance business within or beyond Vanuatu.
APRA is concerned that the company has been offering and providing insurance via Rural & General Broking in Australia. A list of authorised insurers is available on APRA's website at www.apra.gov.au.
The Australian Prudential Regulation Authority has issued a warning over Vanuatu-registered Rural & General International Insurance. The company is an exempt general insurer and is not authorised to insure risks in Vanuatu or to solicit insurance business within or beyond Vanuatu. APRA is concerned that the company has been offering and providing insurance via Rural & General Broking in Australia. A list of authorised insurers is available on APRA's website at www.apra.gov.au.
THE Australian Prudential Regulation Authority has issued a warning over Vanuatu-registered Rural & General International Insurance.
The company is an exempt general insurer and is not authorised to insure risks in Vanuatu or to solicit insurance business within or beyond Vanuatu.
APRA is concerned that the company has been offering and providing insurance via Rural & General Broking in Australia.
A list of authorised insurers is available on APRA's website at www.apra.gov.au.
Imputations pleaded in third further amended statement of claim, dated 30 April 2008, in respect of publication by APRA
(a) The Plaintiff has offered and provided insurance to the Australian public on behalf of a company, Rural & General International Insurance Ltd, which company is not lawfully permitted under Vanuatu law to offer insurance to the Australian public (paragraphs 2 and 3).
(a)1 The Plaintiff was suspected by the Defendant on reasonable grounds of having offered and provided insurance to the Australian public on behalf of a company, Rural and General International Insurance Limited, which company is not lawfully permitted under Vanuatu law to offer insurance to the Australian public (paragraphs 2 and 3).
(b) The Plaintiff has offered and provided insurance to the Australian public on behalf of a company, Rural & General International Insurance Ltd, which company is not authorised under Vanuatu law to offer insurance to the Australian public (paragraphs 2 and 3).
(b)1 The Plaintiff was suspected by the Defendant on reasonable grounds of having offered and provided insurance to the Australian public on behalf of a company, Rural and General International Insurance Limited, which company is not authorised under Vanuatu law to offer insurance to the Australian public (paragraphs 2 and 3).
(c) The Plaintiff has been knowingly involved in the unlawful conduct of Rural & General International Insurance Ltd, which company has offered and provided insurance to the Australian public when it was not lawfully permitted under Vanuatu law to do so (paragraphs 2 and 3).
(c)1 The Plaintiff was suspected by the Defendant on reasonable grounds of having been knowingly involved in the unlawful conduct of Rural and General International Insurance Limited, a company which was suspected by the Defendant on reasonable grounds of having provided insurance to the Australian public when it was not permitted under Vanuatu law to do so.
(d) The Plaintiff has been knowingly involved in the unauthorised conduct of Rural & General International Insurance Ltd, which company has offered and provided insurance to the Australian public when it was not authorised under Vanuatu law to do so (paragraphs 2 and 3).
(d)1 The Plaintiff was suspected by the Defendant on reasonable grounds of having been knowingly involved in the unauthorised conduct of Rural and General International Insurance Limited, a company which was suspected by the Defendant on reasonable grounds of having offered and provided insurance to the Australian public when it was not authorised under Vanuatu law to do so (paragraphs 2 and 3).
(e) The Plaintiff assists an unauthorised insurance company, Rural & General International Insurance Ltd, to solicit insurance business from the Australian public in breach of Vanuatu law (paragraphs 2 and 3).
(f) The Plaintiff assists a foreign insurance company, Rural & General International Insurance Ltd, to solicit insurance business from the Australian public when that company is not authorised under Vanuatu law to do so.
The plaintiff not institute proceedings or make any further claim of any kind based on:
(i) The allegations and claims contained in and made by the third further amended statement of claim filed on 30 April 2008;
(ii) The publication by the defendant made on or about 15 April 2003 and thereafter, being a document amended [sic] to the defence to the third further amended statement of claim and marked "D1" (annexure "D1"); or
(iii) Any republication in any form of annexure "D1".
# Rural & General Insurance Broking Pty Limited (CAN 093483928)
Australian Prudential Regulation Authority \[2009\] ACTSC 67
(1998) 193 CLR 72
(2005) 67 NSWLR 434
(1997) 186 CLR 622
(2000) 101 FCR 548
(2005) 146 FCR 37