Cornes v The Ten Group Pty Ltd (No 2) - [2011] SASC 141

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CORNES v THE TEN GROUP PTY LTD AND ORS (NO. 2)
[2011] SASC 141
Judgment of The Honourable Justice Peek
31 August 2011
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
INTEREST - RATE OF INTEREST AND COMPOUND INTEREST
Application by plaintiff for costs of action on an indemnity basis and for interest on judgment sum at the rate of 4% per annum.
Whether defendants unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff – s 38(2)(a) Defamation Act 2005 (SA) – whether plaintiff should pay the first defendant’s costs of the proceedings – whether the usual rate of interest of 4% per annum should be reduced to 2%.
Held: the second to fifth defendants are to pay the plaintiff’s costs of the action on an indemnity basis – defendants unreasonably failed to make a settlement offer to the plaintiff under first limb of s 38(2)(a) – defendant’s only monetary offer to pay the plaintiff the all inclusive sum of $35,000 with a confidentiality clause was unreasonable in light of the damages awarded at trial – plaintiff’s failure to plead a true innuendo case as at time of defendants’ monetary offer was not fatal to the plaintiff’s claim for costs on an indemnity basis – defendants also failed to make a reasonable settlement offer in light of the plaintiff’s offer of 20 May 2009 – defendants did not unreasonably fail to agree to any of the three settlement offers proposed by the plaintiff under the second limb of s 38(2)(a) – no order as to costs of the first defendant as all defendants were part of the same economic entity and the work done by the first defendant was adopted and made use of by the other defendants – it is appropriate to somewhat reduce the rate and period of interest and award an amount of $8,000 for interest.
Defamation Act 2005 (SA) ss 38, 38(2), 38(2)(a), referred to.
Davis v Nationwide News Pty Ltd [2008] NSWSC 946; Manefield v Child Care NSW (No 2) [2011] NSWSC 104, applied.
Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358; John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131; Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, considered.

CORNES v THE TEN GROUP PTY LTD AND ORS (NO. 2)
[2011] SASC 141

PEEK J: This is an application by the plaintiff for interest and costs on an indemnity basis.
On 5 July 2011 I published my reasons for judgment for the plaintiff in her defamation claim.[1] The plaintiff now applies for an order seeking her costs of the proceedings on an indemnity basis and interest on the judgment sum at the rate of 4% per annum.
[1] Cornes v The Ten Group Pty Ltd [2011] SASC 104.
Background
On 29 June 2008, the second, third and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] SASC 141
Decision Date: 31 August 2011

CaseChat Overview and Summary

Cornes v The Ten Group Pty Ltd (No 2) involved a defamation claim brought by the plaintiff against multiple defendants for broadcasting defamatory statements during a television program. The plaintiff sought an order for her costs on an indemnity basis and interest on the judgment sum at the rate of 4% per annum. The central legal issues were whether the defendants unreasonably failed to make a settlement offer or accept a settlement offer proposed by the plaintiff, and the appropriate rate and period for interest on the judgment sum. The court considered the conduct of the parties and other relevant matters in deciding these issues. It found that the defendants unreasonably failed to make a settlement offer or accept a settlement offer proposed by the plaintiff, and that the interests of justice did not require otherwise. Accordingly, the court ordered the defendants to pay the plaintiff's costs of the action on an indemnity basis. Additionally, the court fixed the amount of interest at $8,000, taking into account the need for fairness and propriety in the circumstances of the case. The final orders included judgment for the plaintiff against the second, third, fourth, and fifth defendants in the amount of $93,000, inclusive of the interest, and no order as to costs regarding the first defendant. The court also certified the trial as fit for Senior Counsel.

Orders

Orders of the court

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Background

Background to the litigation

On 5 July 2011 I published my reasons for judgment for the plaintiff in her defamation claim.[1] The plaintiff now applies for an order seeking her costs of the proceedings on an indemnity basis and interest on the judgment sum at the rate of 4% per annum.[1] Cornes v The Ten Group Pty Ltd [2011] SASC 104.Background On 29 June 2008, the second, third and fourth defendants broadcast the programme Before the Game which included a live interview with panel members and a guest, Stuart Dew. During the interview, the fifth defendant alleged that the plaintiff had had sexual intercourse with Dew in a timeframe such that a substantial number of viewers would have known that the plaintiff was then married to Graham Cornes. The plaintiff commenced her action in the Supreme Court on 15 January 2009. The case was set down for trial for November 2010, but due to a late application by the plaintiff for the defendant to answer written questions, the trial was vacated. The trial commenced on 18 April 2011 and occupied three sitting days. In its final form, the statement of claim alleged that the words spoken by the fifth defendant conveyed that the plaintiff committed adultery, that she was unfaithful to her husband and that she was a promiscuous woman. I held that the words complained of were not capable of conveying the third meaning. As to the first two meanings, I found that there was no relevant difference between them and that the ordinary reasonable viewer would have understood the fifth defendant’s words to mean that Dew had had sexual intercourse with the plaintiff. I therefore found that, in relation to those viewers who were aware that the plaintiff was married to Graham Cornes at the relevant time, the meaning of adultery as complained of by the plaintiff was made out. Indemnity costs in defamation proceedings Pursuant to s 38 Defamation Act 2005 (SA) (“the Act”), the Court must award indemnity costs against an unsuccessful defendant where that defendant has unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff unless the interests of justice require otherwise. Section 38 is as follows:38—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)—(a)if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or(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.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I note that in Amalgamated Television Services Pty Ltd v Marsden[7] and in Davis v Nationwide News Pty Ltd[8] the remarks of McHugh JA have been acknowledged but it was emphasised that rather than applying a purely arithmetical approach to the calculation of interest it is necessary always to consider what is “fair and proper” in the circumstances of the particular case. In all the circumstances, I will make an appropriate reduction in both the rate and period of interest. I fix the amount of interest in the sum of $8,000. [7] [2002] NSWCA 419.[8] [2008] NSWSC 946.Conclusions and orders In these circumstances I consider that the following orders should be made:1There be judgment for the plaintiff against the second, third, fourth and fifth defendants in the amount of $93,000 inclusive of the amount of $8,000 for interest.2 There be judgment for the first defendant against the plaintiff.3 There be no order as to costs regarding the first defendant.4Subject to any specific orders for costs relating to interlocutory applications in the action, the second, third, fourth and fifth defendants do pay the plaintiff’s costs of the action on an indemnity basis.5 I certify the trial as fit for Senior Counsel.

Ratio Decidendi

Legal Principle Established

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