West & Anor v Nationwide News Pty Ltd [2003] NSWSC 767 | Case summary

JUDGMENT 1 HER HONOUR: On 15 August I delivered reasons for judgment in these proceedings: West & Anor v Nationwide News Pty Ltd (t/as Cumberland Newspaper Group) [2003] NSWSC 505, unreported. The proceedings involved claims in defamation brought by the plaintiffs against the defendant. Pursuant to s7A of the Defamation Act 1974, a jury had earlier decided that four imputations defamatory of each plaintiff had been conveyed by the publication upon which the plaintiffs sued. In relation to four imputations (two in respect of each plaintiff) I held that defences of contextual truth had been made out, and, in relation to those imputations, gave verdicts for the defendant. In relation to the remaining imputations I rejected all defences. I awarded the first plaintiff damages in the sum of $20,000, and the second plaintiff $30,000. 2 The plaintiffs now seek an order that the defendant pay their costs of the proceedings. In doing so, they must confront the hurdle that is placed in their way by SCR Part 52A Rule 33. That rule, relevantly, provides that, in proceedings commenced after 1 October 1997, where a plaintiff recovers a sum of not more than $225,000, that plaintiff shall not be entitled to payment of his or her costs of the proceedings unless, it appearing to the court that the plaintiff had sufficient reason for commencing or continuing proceedings in the court, the court makes an order for payment (r33(2)). By sub-r(3) a sufficient reason for the commencement or continuation of the proceedings in this court is the existence of reasonable grounds for the plaintiff to expect that he/she/it would recover an amount in excess of the amount prescribed by sub-r(2). 3 For completeness, sub-r(4) should also, so far as it is relevant, be noted. That sub-rule provides that, in respect of proceedings commenced after 1 October 1997, where a plaintiff recovers a sum of more than $225,000 but not more than $450,000, that plaintiff is entitled to the payment of costs of only a half of the whole amount that would otherwise be assessed. Again, by sub-r(5), if it appears to the court that the plaintiff had sufficient reason for commencing or continuing proceedings in the court, the court is empowered to order that the amount of costs payable to the plaintiff be some greater part of the whole of the amount which would be payable to him, her, or it apart from the sub-rule. And again, by sub-r(6), a sufficient reason for the commencement or continuation of proceedings in this court is the existence in the plaintiff of reasonable grounds for expecting to recover an amount in excess of the amount prescribed by sub-r(4). 4 The plaintiffs' claim, is, therefore, in effect, for the exercise, in their favour, of the discretion conferred by sub-r(2) to make an order for payment of their costs notwithstanding that the verdict sums do not reach the threshold, or anywhere near it. 5 Given the quantum of each verdict, it is not necessary to pause to consider whether the two claims should be treated individually, or could be treated globally. Even if they were to be treated as a composite sum, the total verdict amount falls well below the threshold. 6 On behalf of the defendant, which opposes the order sought, I was referred to an earlier decision of my own: Green v Schneller [2000] NSWSC 1205, 15 December 2000, unreported. There I discussed the purpose of r33, which I described as designed as a disincentive to the commencement of small or non-complex claims in this court. 7 I was also referred to an earlier decision of the Court of Appeal: John Fairfax and Sons Ltd v Palmer (1987) 8 NSWLR 297. There Kirby P (as his Honour then was) identified the considerations relevant to the exercise of the discretion. His Honour disavowed any special principle applicable to defamation cases, but acknowledged that, by reason of their special circumstances, the policy of the rule is, in such cases, more difficult to enforce. 8 Relevant to the exercise of the discretion is the underlying purpose of a claim for damages for defamation - the vindication of reputation. Also relevant was (the past tense should be noted) the existence in this court of a specialist defamation list. That did not then (but does now, and has since 2000, well before the commencement of these proceedings) exist in the District Court. Finally, the complexities of law and fact involved in any particular case, and that commonly attend the determination of defamation proceedings, are relevant considerations. 9 Counsel for the defendant argued that, since 1987 when Palmer was decided, considerable changes have been wrought in relation to the conduct of defamation proceedings, and that these all favour the defendant's position on the present application. In particular, he pointed to the extensive changes that were made to the Defamation Act by the Defamation (Amendment) Act 1994. As a result of these amendments, the role of the jury in defamation proceedings was severely curtailed. A jury now decides only the issues mentioned in s7A(3) of the Defamation Act: that is, whether a pleaded imputation or imputations has or have been conveyed of and concerning the plaintiff, and, if so, whether it is defamatory. Also implicitly included in the s7A(3) matters are any questions of identification, where the plaintiff has not been named in the matter complained of. But all other matters, significantly all matters raised in defence, and quantification of damages where no defence succeeds, are committed to a judge sitting alone. 10 As counsel pointed out, this circumstance has a significant impact on the complexities of the conduct of a defamation trial. I think the point is well made. Where once a jury had to be given quite complex directions of law (depending on what defences were raised) the decision maker is now a judge who can be taken to have a readier, and more sophisticated, appreciation of the law. The complications of a jury trial have been removed from this part of the proceedings. 11 As a result of those legislative changes, judges of the District Court have routinely dealt with matters of complexity, including matters involving claims for defamation. 12 Further, in 1997, approximately coordinate with the amendments to the Defamation Act, other significant legislative changes came about. The District Court jurisdiction was enlarged, in cases other than claims for damages arising out of motor vehicle accidents, to $750,000. In motor vehicle accident cases, its jurisdiction became unlimited. 13 There has also been an expansion of the equitable jurisdiction, but this, in my opinion, is of only marginal present relevance. It does demonstrate that the intention of the legislature is that the District Court will, as a matter of practice, deal with a broader range of matters than was previously the case. 14 There is, in my opinion, one matter which is, if not peculiar to defamation cases, at least of greater significance in those cases. The range of defences available to a defendant is extremely wide, and can (even when decided by a judge sitting alone) be of considerable complexity. A plaintiff filing a statement of claim has no way of knowing what defences will be raised. It is not unusual to see a wide variety of defences initially pleaded, although it is also not unusual to see a number of those abandoned as the preparation for trial proceeds. 15 It is also to be borne in mind that r33 is applicable not only to the commencement of proceedings, but also to the continuation of proceedings. The rule envisages that, if a time arrives when it becomes apparent that the damages the plaintiff can expect to be awarded, if any, will fall below the threshold, the proceedings may readily be transferred to the District Court. Thus, in my opinion, to the extent that the rule penalises the plaintiff, the penalty applies not only to the commencement of proceedings, but also to the continuation of the proceedings. 16 There was nothing in the evidence before me, either in the trial, or in the present argument, that would enable the pinpointing of a time, or an event, of which it might be said that prudence dictated the transfer of proceedings to the District Court. So far as the plaintiffs were concerned, so far as I am able to ascertain, there was no point at which I could say that that was the case. As I remarked in the judgment ([4]), the defendant initially pleaded virtually every defence known to the defamation law. Indeed, it pursued all except one (comment) of these defences. I understand that the defence of comment was abandoned only at a very late stage. 17 Thus, the application of the complexities of law and fact under consideration favours the plaintiffs' case on costs: at the time of commencement, it was not unreasonable for them to anticipate some complexities in the proceedings; that anticipation would have been confirmed on receipt of the defence and the particularisation thereof. 18 On the other hand, and favouring the defendant's case, is the circumstance, which was always known to the plaintiffs, that neither was named in the matter complained of. This fact necessarily limits the reach of the defamatory imputations. Publication of imputations defamatory of them is only made to that class of individuals who are able to identify the plaintiffs by reference to facts and circumstances known to them. 19 During the course of argument I raised with counsel for the defendant the question of the relevance of the failure of the defendant itself to seek transfer of the proceedings to the District Court. Counsel strenuously argued that that was not a relevant consideration. His most powerful argument in this respect concerns the difficult position in which that would place the legal advisors of a defendant. Should they advise their client to seek transfer to the District Court, in which case, if they were successful in that application, and the plaintiff succeeded at trial, the defendant would almost necessarily become liable for costs? Or should they take no such action, in which case, assuming the plaintiffs succeeded but did not reach the costs threshold, they would (unless the court otherwise ordered) be able to take advantage of r33(2)? 20 I recognise that that poses a dilemma for a defendant's legal representatives, but that does not, to my mind, render the failure to make a transfer application irrelevant. Had the defendant made such an application, but failed under the opposition of the plaintiff, that would be a most relevant circumstance. While I am of the view that the defendant's failure to make any such application is a relevant consideration, it is not one of determinative significance. It is merely that - one circumstance to be taken into account. 21 Counsel for the defendant identified a number of factors which, he argued, should have alerted the plaintiffs to the likelihood of an award of damages falling well below the figure mentioned in sub-r(2). These were: · neither plaintiff was named; · the precise address of the development central to the claim and central to the identification of the plaintiffs was not given (although counsel did recognise that a good deal of information concerning the location of the development was contained in the publication); · the second plaintiff (a company) was created for the purposes of the development and therefore had no prior reputation to be damaged by the publication; · there were problems lying in the plaintiffs' way in proving identification, which, I held, was very limited and short-lived; · the newspaper in which the matter complained of was published was a suburban publication; · the general context of the article was to do with the express concerns of local government councillors with respect to the residential development of the plaintiffs; · there was no claim for special damages. 22 Accordingly, counsel argued, this was never going to be a large damages award. 23 He contrasted that with the factual circumstances of Green, in which I acknowledged that the plaintiff could legitimately have anticipated a significantly larger award of damages than was ultimately made. 24 Counsel also relied upon the four imputations which the defendant successfully defended, resulting in verdicts for the defendant on the causes of action so constituted. He argued that the appropriate order is an order that each party pay his or its own costs. 25 Counsel for the plaintiffs put his argument principally by reference to the history of defamation cases in this court, particularly those decided since the 1995 amendments. Although he did not put the primary material before me, no issue was taken as to the assertions that he made. There were two points made in this respect. The first was that, since 1995, no verdict in this court has exceeded $225,000. (In fact, I believe that to be in error: in Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739, unreported, 7 September 2001, in respect of three separate publications, the plaintiff was awarded, before interest, a total of $420,000.) 26 Nevertheless, the point counsel seeks to make remains valid: if r33 is strictly applied, then it will be all but impossible for plaintiffs to commence proceedings in this court. This court would, so counsel argued, effectively be denied jurisdiction in claims for defamation. This is, in part, because a plaintiff would be unable to anticipate whether, assuming success in the claim but a verdict of less than $225,000, a variation to the prima facie position provided by r33 would be made. 27 The threat to this court's jurisdiction in defamation matters is not, in my opinion, a relevant factor. If the rule-makers wish to make a special exception in cases of defamation, it is open to them to do so. They have not. The rule must be given its full weight. Indeed, as I observed in Green, deterring plaintiffs from commencing small or non-complex cases in this court is the very purpose of the rule. 28 The other point made by counsel concerned an analysis of the verdicts awarded and the subsequent cost orders made. The verdicts referred to ranged from $13,500 to $150,000. In each case, according to counsel, a full costs order was made. This gave rise to a legitimate expectation in plaintiffs that they could commence proceedings in this court and, even if they failed to secure a verdict in the requisite sum, expect to be reimbursed for their costs (provided that they did receive a verdict). 29 There is a difficulty in this argument also. At worst, it represents a complete subversion of the rule. What was suggested, in effect, was that a plaintiff bringing defamation proceedings could safely ignore the rule, which, on its face, applies equally to defamation proceedings as to any other proceedings. However, the fact, as I accept it to be, that a pattern has emerged in this court of making an award of costs in full, notwithstanding the quantum of the verdict, must have some impact on my decision. I was not taken to the reasons given by the various judges in these proceedings for their decisions. 30 I raised with counsel the possibility of making an order for costs to be assessed as though proceedings had taken place in the District Court. Two circumstances militate against taking such a course. Firstly, I was told that there is no practical difference, these days, between the assessment of costs in the District Court and in this court, and such an order would have the effect of giving the plaintiffs their full costs of the proceedings. The second is that, to the extent that there is any difference in the quantum of costs to be awarded in the two courts, so to order would, again, be effectively to subvert the rule. 31 On the other hand, in my opinion, the plaintiffs having been successful in their claims (in part), it would be unfair to deprive them altogether of their costs. In this respect, it is to be recognised that, in post-s7A defamation proceedings, almost all issues litigated are those on which the onus lies upon the defendant. In this case the defendant advanced defences which were almost, but not wholly, unsuccessful. The entirety of the hearing time was taken up with those issues. Some of the defences were, in my opinion, simply untenable: for example the defences under ss13 and 24 of the Defamation Act. 32 The number of defences is, as I have already mentioned, also relevant. That added to the length and complexity of the proceedings. 33 In my opinion the competing arguments are extremely finely balanced. However, in the end, justice must, to the extent that I am able to do it, prevail. It would be unjust for the plaintiffs to be deprived of any costs of their successful litigation. I will order that the defendant pay three quarters of the plaintiffs' costs of the proceedings. 34 The other remaining outstanding issue is interest. The parties have agreed that the first plaintiff is entitled to interest on the award of damages in the sum of $826, and the second plaintiff in the sum of $1,239. 35 The orders I make are: in respect of the causes of action constituted by imputations (a), (b), (f) and (i):

West & Anor v Nationwide News Pty Ltd

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