Conroy's Port Pirie Abattoirs v Channel Seven Adelaide (No 3)
[2005] SADC 110
•25 August 2005
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CONROY'S PORT PIRIE ABATTOIRS v CHANNEL SEVEN ADELAIDE (No 3)
Reasons of His Honour Judge Lunn
25 August 2005
PROCEDURE - COSTS
Held s42(2) of District Court Act not aqpplicable as the action which included a claim for a permanent injunction could not have been brought in the Magistrates Court - held on its proper interpretation a letter of offer from the plaintiffs was more favourable to the plaintiffs than the final judgment and so was irrelevant - held as the plaintiffs had failed on their claims except one they should receive only 75% of their costs.
CONROY'S PORT PIRIE ABATTOIRS v CHANNEL SEVEN ADELAIDE (No 3)
[2005] SADC 110REASONS ON ORDERS FOR COSTS
On 20 July 2005 I delivered reasons [2005] SADC 85 for my findings on the trial of this action. These reasons need to be read against the background of those earlier reasons. In general I found that the defendant had justified most of the defamatory imputations, but not the one that the plaintiffs “had turned a blind eye” to the substantial practice of marijuana smoking by some meat workers before work and in their breaks at the 1st plaintiff’s Abattoirs in the few weeks prior to the broadcasts. I gave judgment for each plaintiff for $8,100, being $7,000 damages plus $1,100 pre-judgment interest. The issue of costs was adjourned for further argument. The plaintiffs have applied for an order for the costs of the action in their favour as between solicitor and client and the defendant has applied for an order that it should receive 80% of the costs of the action.
Whether the plaintiffs are to be deprived of costs under s42(2) of the District Court Act and DCR 101.02A(f)
I reject the defendant’s submission that the plaintiffs should receive no costs, or reduced costs, by virtue of s42(2) of the District Court Act 1991 and DCR 101.02A. I find those provisions do not apply in the circumstances of this action.
Section 42(2) of the District Court Act 1991 provides:
(2) If –
(a) an action for the recovery of damages or any other monetary sum is brought in the Court;
(b) the action might have been brought in the Magistrates Court; and
(c)the plaintiff recovers less than an amount fixed by the Rules for the purposes of this paragraph
no order for costs will be made in favour of the plaintiff unless the court is of the opinion that it is just in the circumstances of the case that the plaintiff should recover the whole or part of the costs of action.
DCR 101.02A provides:
… For the purposes of s42(2) of the Act the amounts fixed below are the amounts in respect of which no order for costs will be made in favour of a plaintiff unless the court otherwise orders: …
(f)in an action instituted prior to, or after the commencement date where the claim is for damages for defamation - $7,500.
Section 42(2), and therefore DCR 101.02A(f), do not apply because subs (2)(b) is not satisfied that “the action might have been brought in the Magistrates Court”. For this purpose it is necessary to consider exactly what constituted this action.
The summons, when issued on 24 August 2001 (in which the 1st plaintiff was the only plaintiff), was not supported by a Statement of Claim. It was endorsed that the following orders were sought:
1.That (the defendant) be and is hereby restrained from publishing any matter relating to the Today Tonight story promoted by them on Friday, 17 August 2001, Saturday, 18 August 2001 and Sunday, 19 August 2001, concerning the alleged consumption of marijuana by meat workers.
2.Damages for defamation. …
As related in my earlier reasons in the course of the applications before Judge Muecke for interim and interlocutory injunctions the defendant put forward a version of the story which it wished to broadcast which did not contain some of the alleged defamatory allegations in the earlier promos. On 31 August Judge Muecke granted an interlocutory injunction until further order against the defendants broadcasting its proposed story. When the 1st plaintiff filed its first Statement of Claim on 25 September 2001 it pleaded the whole of the proposed story, alleged that it was defamatory and sought a permanent injunction that the defendant be restrained from broadcasting it. The Statement of Claim also pleaded the promos and sought damages for defamation in relation to them and an injunction against them being repeated. The Defence admitted that the defendant intended to broadcast the proposed story in the terms pleaded by the plaintiff, but asserted that it was not defamatory or it was justified. That remained the position until relatively late in the trial. During the cross examination of Graham Archer I raised with counsel that I was minded to ask him whether the defendant still intended to broadcast the proposed story in the terms pleaded as it had become somewhat ancient history in the three years which had elapsed since the events in question. The defendant’s counsel took instructions and later amended the Defence to withdraw the admission of the terms of the proposed broadcast. He informed the Court that the defendant no longer intended to cast that precise story but after my judgment would seek to broadcast some similar story whose content would depend on my findings. It was agreed that the issue in the trial about any permanent injunction against the defendant would be left until after I had published my reasons. (The upshot of this was that on 3 August 2005 I published my reasons No 2, [2005] SADC 95, refusing any further interlocutory injunction or any permanent injunction.)
The plaintiffs could not have mounted this action in the Magistrates Court as it was beyond the civil jurisdiction of that court. That civil jurisdiction is confined by s8(1) of the Magistrates Court Act 1991, which provides:
(1) The court has jurisdiction –
(a) to hear and determine an action (at law or in equity) for a sum of money where the amount claimed does not exceed –
…
(ii) in any other case - $40,000.
…
(d) to grant any form of relief necessary to resolve a minor civil action.
(This was not a minor civil action as the damages, as both claimed and awarded, exceeded $6,000.) The claim in this action for a permanent injunction against the broadcast of the proposed story was a claim for equitable relief. The reference in s8(1)(a)(i) of the Act to “in equity” is confined to an action in equity for a sum of money such as an indemnity: Ron Kingham Real Estate Pty Ltd v Edgar [1999] 2 Q d R 439 at 444-5. In City of Victor Harbor v Roeger (2002) 82 SASR 140 it was held that s8 did not confer equitable jurisdiction on the Magistrates Court for a claim of specific performance. By parity of reasoning it does not confer jurisdiction for a claim in Equity for a final injunction. Sections 25 and 26 of that Act merely confer powers for granting interlocutory injunctions as incidental relief but not final injunctions. Here the claim for the injunction was not merely incidental to the claim for damages, but was a substantial head of claim in its own right. It was not a baseless claim to take the action out of the jurisdiction of the Magistrates Court. Likewise ss30 and 31 of that Act do not confer any additional jurisdiction on the Magistrates Court over and above that conferred by s8: City of Victor Harbor v Roeger (above).
This is sufficient to dispose of the application under s42(2) of the District Court Act 1991 and DCR 101.02A. It is not necessary for me to deal with the submissions made on:
·Whether the amount of $7,500 in DCR 101.02A(f) is confined to damages or includes any pre-judgment interest.
·Whether s42(2)(a) of the District Court Act 1991 is impliedly confined in its operation to actions where only the recovery of damages or a monetary sum is sought.
·Whether in the circumstances of the litigation as a whole it would have been appropriate to have exercised some discretion in favour of the plaintiffs to award them costs even if DCR 101.02A(f) had applied.
Plaintiffs’ letter of offer of 28 August 2001
On 28 August 2001 the plaintiffs’ solicitors delivered a letter to the defendant’s solicitors making a without prejudice offer of settlement which was only to remain open until 5pm on that day. The relevant part of that letter read:
I have been instructed by my client to put an offer to the defendant in an attempt to resolve all matters at this time.
Upon the basis of the defendant agreeing to an order for a permanent injunction on the proposed “dope smoking meat workers” story, in addition to paying the plaintiffs reasonable legal costs and an additional $3,000 to compensate the plaintiff for aggravation and the loss of executive time to date, the plaintiff would be prepared to discontinue its defamation proceedings in relation to the promotional material which has already been extensively published.
I advise that this offer is made in an endeavour to resolve matters at this early stage, and will not be made again.
This letter was ambiguous in its reference to “an order for a permanent injunction on the proposed ‘dope smoking meat workers’ story”. As the opening sentence of the letter referred to “an attempt to resolve all matters” I interpret that what was to be injuncted was the proposed story or anything contained in it. It did not mean the proposed story only as a whole so that the defendant would have been at liberty, if it had accepted the offer, to broadcast a different story based on the same material. Thus, if the defendant had accepted the offer, it would have been precluded from broadcasting a number of matters relating to health and safety of the 1st plaintiff’s workers, the 1st plaintiff’s knowledge of the marijuana smoking and “turning a blind eye to it” up to early August 2001 which I have found to be justified. Accordingly, an acceptance of that offer by the defendant would have been more favourable to the plaintiffs than my final judgment. Hence the offer is irrelevant for the purposes of costs. I need not go into the further issues of whether any acceptance of the offer would have precluded the defendant from pursuing the public health issues raised in the promos but not repeated in the proposed broadcast, whether it would have precluded the 2nd plaintiff from pursuing his separate claim for defamation and whether the terms of the offer, including the necessity to accept it by 5pm on the day it was made, meant that it is not an offer to which effect should be given on the criteria recently enunciated by the majority of the Full Court in Morris v McEwen, 29/7/05, Jud No [2005] SASC 284, unreported.
Exercise of the discretion on costs
The starting point is Rule 102.02(1) that the costs are to follow the event unless the Court otherwise orders. It is to be borne in mind that the defendant could have protected itself against an adverse order for costs by making an offer under R40 at an early stage of the proceedings. Albeit with the value of hindsight, the defendant should have been aware from early on in the proceedings that it ran a substantial risk of losing on the lone point on which the plaintiffs ultimately succeeded. It made no such offer for a sufficient amount.
The defendant submitted that it should be allowed the costs of a number of major issues in the long trial on which it succeeded. I take the law on this topic to be that which was accepted and applied by the Full Court in Robinson v Australian Association of Social Workers Ltd (2000) 210 LSJS 73. The principle is that in exercising the judicial discretion as to costs the Court, where it is just to do so, may disallow the plaintiffs the costs of discrete issues on which they lost, and it may in addition give the costs of those issues to the defendants, where the plaintiffs have unreasonably or improperly raised those issues and where the evidence on the issues was not otherwise needed for the proper presentation of other issues, including on credit, for which the plaintiffs should have their costs. The Full Court endorsed the note of “cautious disapproval”, enunciated by Jacobs J in Cratazzo v Lombardi (1975) 13 SASR 4 at 16, on applications by a party against which judgment was given being allowed the costs of particular issues on which it was successful.
The issue of the effectiveness of the 1st plaintiff’s MSQA System to eliminate any risk to public health occupied a substantial amount of trial time. The plaintiffs ultimately lost on it. However, the plaintiffs did not unreasonably or improperly raise the issue. Their contentions were supported by the expert evidence of Dr Andriessen and they had to call the AQIS employees “on the blind” as Departmental policy precluded those witnesses from speaking to the plaintiffs’ solicitors in advance of giving their evidence. Even though the defendant won on this issue, there is no proper basis to give it its costs of it.
Considerable evidence was led from various meat workers as to the extent of the marijuana smoking in the Abattoirs and knowledge of it by management. Again while the defendant won on these issues the plaintiffs did not act unreasonably or improperly in contesting them. Thus there is no basis for any order for costs in the defendant’s favour on those issues.
While the defendant succeeded on almost all of the issues on justification it lost on the issues of fair comment and qualified privilege which would otherwise have defeated the plaintiffs’ claim. It is not a case where the plaintiffs failed on every issue but the single issue on which they succeeded.
While the plaintiffs are entitled generally to their costs of the action, and the defendants are not entitled to any costs, nevertheless it is a proper exercise of the judicial discretion on costs to reduce the amount which the plaintiffs are to recover by reason of the total judgment of $16,200, including pre-judgment interest, being out of any reasonable proportion to the costs involved in the trial which lasted for 58 hearing days. While the length of the trial and the complexity of the issues are not necessarily related to the amount of the judgment, here the plaintiffs fought the case on the basis that hundreds of thousands of dollars were at stake, which would have justified the costs, but they just scraped in with a modest award of $16,200., Some recognition should be given to the defendant having been put to very considerable expense in mounting a defence which was largely successful, but which failed to a small degree. Although it was a somewhat different case, there is some authority for this approach in Wenpac Pty Ltd v Allied Westralian Finance Ltd (1994) 123 FLR 1. The plaintiffs are to recover 75% of their costs of action as agreed or taxed and as between party and party.
The plaintiffs’ written submissions sought an order that its costs should include all reserved costs.
Reserved costs do not necessarily follow the event of the action, although the event is likely to be a relevant factor. If orders are sought for reserved costs, a further application will need to be made identifying each instance in which such costs were reserved.
The further orders of the Court made today are:
1.The plaintiffs are to recover from the defendant 75% of their costs of action as agreed or taxed.
2. There be no order as to the other 25% of the costs.
3.Further consideration of any reserved costs be adjourned to a date to be fixed.
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