Collier v Country Women's Association of NSW (No 2)

[2017] NSWSC 1729

Supreme Court

New South Wales

Medium Neutral Citation:

Collier v Country Women’s Association of NSW (No 2) [2017] NSWSC 1729

Hearing dates:

On the papers

Date of orders:

12 December 2017

Decision date:

12 December 2017

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

In proceedings 2016/122571:

 

(1) Order the plaintiff, in accordance with r 42.15A of Uniform Civil Procedure Rules 2005 (NSW), to pay the defendant’s costs of the proceedings up to and including 23 October 2017 on the ordinary basis and from 24 October 2017 on an indemnity basis.

 

In proceedings 2017/72463:

(2) Order the plaintiff, in accordance with r 42.15A of Uniform Civil Procedure Rules 2005 (NSW), to pay the defendant’s costs of the proceedings up to and including 23 October 2017 on the ordinary basis and from 24 October 2017 on an indemnity basis.

Catchwords:

COSTS – whether it is in the interests of justice to order the plaintiff to pay the defendant’s costs in the defamation proceedings on an indemnity basis since she unreasonably failed to accept the defendant’s offer – HELD – not in the interests of justice – appropriate that she be ordered to pay the defendant’s costs of both the defamation proceedings and the equity proceedings on an indemnity basis after the date of the offers

Legislation Cited:

Defamation Act 2005 (NSW), s 40
Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.15A

Cases Cited:

Collier v Country Women’s Association of NSW [2017] NSWSC 1573

Category:

Costs

Parties:

Marion Louise Collier (Plaintiff)
Country Women’s Association of New South Wales (Defendant)

Representation:

Counsel:
Plaintiff in person
S Chrysanthou/ B Dean (Defendant)

  Solicitors:
Mills Oakley (Defendant)

File Number(s):

2016/122571; 2017/72463

Judgment

Introduction

1. On 17 November 2017 I made orders and published reasons in proceedings No 2016/122571 (the Defamation Proceedings) and proceedings No 2017/72463 (the Equity Proceedings) which were heard together: Collier v Country Women’s Association of NSW [2017] NSWSC 1573.

2. I reserved costs and directed that any application for costs be made in writing to my associate within 7 days and that any response be provided within a further 7 days. The Country Women’s Association of NSW (CWA, or the defendant) made a written application on 23 November 2017 for indemnity costs of the whole of the proceedings pursuant to s 40 of the Defamation Act 2005 (NSW). In the alternative, the CWA submitted that Marion Collier (the plaintiff) ought be ordered to pay the CWA’s costs on an indemnity basis by reason of the offers of compromise and Calderbank offers it had made to the plaintiff to resolve the proceedings. The plaintiff has not responded to the application within the time allowed, or, indeed, at all.

Relevant statutory provisions

3. Section 40 of the Defamation Act provides:

“40 Costs in defamation proceedings

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

(a) the way in which the parties to the proceedings conducted their cases (including any misuse of a party’s superior financial position to hinder the early resolution of the proceedings), and

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

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

. . .

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

(3) In this section:

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

4. Rule 42.15A of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) relevantly provides:

“42.15A Where offer not accepted and judgment no less favourable to defendant

(1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.

(2) Unless the court orders otherwise:

(a) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and

(b) the defendant is entitled to an order against the plaintiff for the defendant’s costs in respect of the claim, assessed on an indemnity basis:

(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made

. . .”

Offers relied on by the defendant

5. The evidence relied on in support of the CWA’s application is contained in the affidavit of its solicitor, Adrian Papaianni sworn 20 November 2017. He deposed to the making of the following offers, each of which was made on 23 October 2017.

Offers to resolve Defamation Proceedings

Calderbank offer

6. In a letter expressed to be “without prejudice except as to costs” the CWA offered to settle the Defamation Proceedings on the basis that there would be a judgment for the defendant with no order as to costs. In the letter the CWA’s solicitor informed the plaintiff that the defendant had already incurred more than $45,000 in costs and expected to incur significantly more in preparation for the trial and at the trial. The author of the letter outlined what the defendant contended were weaknesses in the plaintiff’s case in the Defamation Proceedings. The offer was expressed to remain open until 5pm on 2 November 2017.

Offer of Compromise

7. In an Offer of Compromise, the plaintiff offered to settle the Defamation Proceedings on the basis that there would be a judgment for the defendant with no order as to costs. The Offer of Compromise was expressed to be open for acceptance until 2 November 2017 and was said to be made in accordance with UCPR, r 20.26.

Offers to resolve Equity Proceedings

Calderbank offer

8. In a letter expressed to be “without prejudice except as to costs” the CWA offered to settle the Equity Proceedings on the basis that there would be a judgment for the defendant with no order as to costs. In the letter the CWA’s solicitor informed the plaintiff that the defendant had already incurred more than $40,000 in costs and expected to incur significantly more in preparation for the trial and at the trial. The author also outlined the reasons why the defendant contended that the plaintiff would be unsuccessful in the Equity Proceedings. The offer was expressed to remain open until 5pm on 2 November 2017.

Offer of Compromise

9. In an Offer of Compromise, the plaintiff offered to settle the Equity proceedings on the basis that there would be a judgment for the defendant with no order as to costs. The Offer of Compromise was expressed to be open for acceptance until 2 November 2017 and was said to be made in accordance with UCPR, r 20.26.

Consideration

The Defamation Proceedings

10. The basis for the defendant’s application for indemnity costs of the whole Defamation Proceedings was expressed to be the plaintiff’s unreasonable failure to accept the defendant’s Calderbank offer or offer of compromise in those proceedings. The principal obstruction to a conclusion that the plaintiff’s failure to accept the defendant’s offers was unreasonable is, in my view, that the offers required, in effect, almost complete capitulation of the Defamation proceedings. The matters pointed out in the defendant’s Calderbank letter in the Defamation Proceedings said little more than was alleged in its defence. The letter enumerated the defences relied on: qualified privilege, justification and contextual truth, each of which was subsequently made out. However, the offer of compromise and Calderbank offer contained a sufficient element of compromise in that the defendant offered to forego the costs already incurred, which were substantial.

11. The matter complained of was obviously highly defamatory of the plaintiff. The only real matters in issue were whether the defences could be made out. That the matter complained of was published in a context which was covered by qualified privilege ought to have been plain at the time of publication. No proper basis for the allegation of malice (which would have defeated the defence of qualified privileged) was ever articulated, much less proved. However, these matters, while highly germane to the question whether the proceedings ought to have been commenced at all, do not determine the question whether the plaintiff’s failure to accept the offers (whether Calderbank or offer of compromise) was unreasonable within the meaning of s 40(2)(b) of the Defamation Act.

12. Although I am satisfied that the plaintiff’s failure to accept the defendant’s offers in the Defamation Proceedings was unreasonable within the meaning of s 40(2)(b) of the Defamation Act I consider that the interests of justice require that she not be liable to pay the defendant’s costs on an indemnity basis from the commencement of the proceedings. It was only when the offers were actually made that the plaintiff was on specific notice that costs on an indemnity basis would be sought by the defendant (although the risk was present by reason of s 40 of the Defamation Act).

13. The time frame allowed by the defendant in making the two offers in the Defamation Proceedings was sufficient. Indeed, the evidence revealed that the plaintiff rejected the offers by return email.

14. I consider the appropriate order in the Defamation Proceedings to be that the plaintiff pay the defendant’s costs on the ordinary basis to 23 October 2017 and on an indemnity basis thereafter. This order arises from UCPR, r 42.15A because the defendant has made an offer which has not been accepted by the plaintiff and the defendant obtains judgment on the claim which is not less favourable to it than the terms of the offer. I am not satisfied that it is appropriate to order otherwise.

The Equity Proceedings

15. Section 40 of the Defamation Act does not apply to the Equity Proceedings. The offer of compromise and Calderbank offer contained a sufficient element of compromise in that the defendant offered to forego the costs already incurred, which were substantial. The time frame allowed by the defendant in making the two offers in the Defamation Proceedings was sufficient. Indeed, the evidence revealed that the plaintiff rejected the offers by return email.

16. I consider the appropriate order in the Equity Proceedings to be that the plaintiff pay the defendant’s costs on the ordinary basis to 23 October 2017 and on an indemnity basis thereafter. This order arises from UCPR, r 42.15A because the defendant has made an offer which has not been accepted by the plaintiff and the defendant obtains judgment on the claim which is not less favourable to it than the terms of the offer. I am not satisfied that it is appropriate to order otherwise.

17. Although it is not necessary to make orders, having regard to the terms of UCPR r 42.15A, I consider that in the particular circumstances of the present case, it is appropriate to do so, in order that the parties are in no doubt as to the plaintiff’s obligation to pay the defendant’s costs and on what basis such costs are to be assessed.

Orders

18. For the foregoing reasons, I make the following orders.

In proceedings 2016/122571:

1. Order the plaintiff, in accordance with r 42.15A of Uniform Civil Procedure Rules 2005 (NSW), to pay the defendant’s costs of the proceedings up to and including 23 October 2017 on the ordinary basis and from 24 October 2017 on an indemnity basis.

19. In proceedings 2017/72463:

1. Order the plaintiff, in accordance with r 42.15A of Uniform Civil Procedure Rules 2005 (NSW), to pay the defendant’s costs of the proceedings up to and including 23 October 2017 on the ordinary basis and from 24 October 2017 on an indemnity basis.

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Decision last updated: 13 December 2017