Courtney v Maguire (costs ruling)
[2024] VCC 982
•2 July 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
DEFAMATION LIST
Case No. CI-21-02057
Case No. CI-21-03242
| THOMAS COURTNEY | Plaintiff |
| v | |
| PHILIP MAGUIRE | Defendant |
- AND –
| PHILIP MAGUIRE | Plaintiff |
| v | |
| THOMAS COURTNEY | Defendant |
---
JUDGE: | HER HONOUR JUDGE CLAYTON | |
WHERE HELD: | Melbourne | |
DATE OF RULING: | 2 July 2024 | |
CASE MAY BE CITED AS: | Courtney v Maguire (costs ruling) | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 982 | |
RULING
---
Subject:COSTS - DEFAMATION
Catchwords: Concurrent defamation claims – jury trial –- successful party in both proceedings seeks indemnity costs – unsuccessful party in both proceedings seeks indemnity costs of both proceedings – unsuccessful party’s pre-trial offers of settlement beaten at trial – whether special circumstances exist to warrant an indemnity costs award – whether conduct of either party justifies an award of indemnity costs
Legislation Cited: Civil Procedure Act 2010; Defamation Act 2005; Supreme Court Act 1986; Penalty Interest Rates Act 1983; County Court Act 1958.
Cases Cited:Courtney v Maguire [2023] VCC 2280.
Ruling: Costs awarded to Mr Courtney on standard basis for both proceedings - Indemnity costs thrown away by way of adjournment of trial date.
---
APPEARANCES: | Counsel | Solicitors | |
| For Mr Maguire | A Meagher with T Burn Francis | Strongman & Crouch | |
| For Mr Courtney | J Castelan | Harding Stenning & Co Lawyers | |
HER HONOUR:
1These proceedings were heard concurrently in October 2023 before a jury.
2On 23 October 2023 the jury returned a verdict in both matters.
3On 18 December 2023 I assessed Mr Courtney’s damages at $125,000 including aggravated damages.[1]
[1] Courtney v Maguire [2023] VCC 2280.
4On 20 December 2023 I made orders by consent that the question of costs would be determined on the papers and made timetabling orders for submissions, affidavits and reply submissions, to be filed by the end of February 2024. If either party sought an oral hearing on costs, they were to notify the Court by 1 March 2024. No such oral hearing was sought.
5I have had regard to the following documents:
(a) Outline of submission by Thomas Courtney in relation to costs dated 16 February 2024;
(b) Affidavit of Roy Stenning dated 16 February 2024;
(c) Maguire’s Costs Submissions dated 16 February 2024;
(d) Affidavit of Jonathan Leung dated 16 February 2024;
(e) Reply submission by Thomas Courtney in relation to costs dated 26 February 2024; and
(f) Maguire’s costs submissions in reply dated 26 February 2024.
6Mr Courtney succeeded in his defamation claim against Mr Maguire. Mr Maguire failed in his defamation claim against Mr Courtney. Therefore, Mr Courtney can be considered to have been wholly successful and Mr Maguire, wholly unsuccessful. Notwithstanding this result, both parties make application for their costs of both proceedings on an indemnity basis.
Background facts
7Mr Courtney issued his proceedings on 20 May 2021 in relation to three publications in September 2020 (“the Courtney proceeding”).
8Mr Maguire issued his proceedings on 4 August 2021 in relation to four publications in July 2020 (“the Maguire proceeding”).
9Mr Courtney made no offer to settle the Courtney proceeding. I do not consider general observations by Mr Courtney’s solicitor that “our client is happy to resolve the matter subject to an offer from your client that reflets the severity of the defamation against our client” to be an offer, nor was it submitted by Mr Courtney that this was an offer. An invitation by Mr Courtney for Mr Maguire to make an offer at the “upper range” of the prescribed limit, likewise, does not constitute a settlement offer.
10Mr Courtney made one offer to settle the Maguire proceedings. On 1 December 2021 Mr Courtney filed an “offer of compromise” that Mr Maguire pay him $32,000.
11Mr Maguire made three offers to resolve the proceedings.
12The first offer (“Maguire first offer”) was on 28 June 2022. Mr Maguire offered to settle the Courtney proceeding for damages of $37,000 plus costs of $62,500 and an apology.
13The second offer (“Maguire second offer”) was also made on 28 June 2022 and was conditional upon Mr Courtney’s acceptance of the Maguire first offer. This was an offer that Mr Maguire would settle the Maguire proceeding for payment by Mr Courtney of $51,000 inclusive of costs and an apology.
14The third offer (“Maguire third offer”) was made on 27 July 2023 and was an offer to settle both the Courtney proceeding and the Maguire proceeding for $180,000 inclusive of costs.
Did either side make an offer of settlement which they “beat” in Court?
15Mr Courtney was awarded $125,000 in damages after trial. Without considering any component for interest on those damages, the Maguire third offer represents an offer of costs limited to $55,000. It is obvious that, at the time of the Maguire third offer, Mr Courtney’s costs would have far exceeded $55,000. As much is recognised by the fact that $62,500 was offered for costs in the Maguire first offer, 12 months earlier.
16Even without adding any interest to his damages, Mr Courtney was awarded damages in excess of any of the offers made to him.
17There can be no suggestion that Mr Courtney did not beat the offers made by Mr Maguire.
18Mr Courtney did not make any offer to settle his proceeding. His offer to settle the Maguire proceeding for payment of what, at the time it was made, would have been the entirety of his indemnity costs amounts to an offer of capitulation. It is, rightly in my view, not relied on as a basis for Mr Courtney to submit that he is entitled to indemnity costs of the Maguire proceeding.
19Neither side made an offer of settlement that was beaten by the other side.
20In those circumstances the presumption is that the successful party is entitled to his costs on a standard basis.
Are there special circumstances warranting an order for indemnity costs?
21Both Mr Courtney and Mr Maguire made lengthy submissions as to why the usual rule ought not apply and why each is entitled to indemnity costs of both proceedings.
22Mr Courtney says categories of cases where special circumstances might warrant the Court to exercise its discretion to award indemnity costs include:
(a) where there are false or irrelevant accusations of fraud;
(b) where there was conduct which caused loss of time to the Court and other party;
(c) where proceedings have been commenced or continued for an ulterior motive;
(d) where there has been conduct which amounts to a contempt of court; or
(e) where proceedings have been commenced or continued in wilful disregard of known facts or clearly established law.
23Mr Courtney was compensated for Mr Maguire’s allegations by the award of damages including aggravated damages.
24I accept the submission that Mr Maguire’s conduct in relation to the vacation of the trial date on 14 August 2023 and his subsequent application to adjourn the trial on 15 August 2023 caused a loss of time to the Court and the other party. The timing of Mr Maguire’s presentation to the hospital in circumstances where he clearly had a long standing and chronic back injury raises a question as to whether it was designed to obtain a forensic advantage by adjourning the trial. The piecemeal manner in which unsatisfactory medical material came before the Court resulted in additional hearings and wasted time for both the Court and Mr Courtney.
25The surgery he underwent, being a C5/6 anterior cervical discectomy and fusion is rarely, to my knowledge, performed as emergency surgery.
26At the time of the adjournment applications I reserved Mr Courtney’s application for costs thrown away by reason of the adjournment in order to provide Mr Maguire with additional time to put on medical evidence. I was concerned not to do Mr Maguire an injustice by making a costs order against him until he had an opportunity to satisfactorily explain why the trial date had to be vacated at such late notice. The medical evidence provided on 4 September 2023 shed very little light on the circumstances surrounding Mr Maguire’s presentation to hospital and the subsequent vacation of the trial date.
27Mr Courtney is entitled to his costs thrown away by reason of that adjournment on an indemnity basis. I am not persuaded that his conduct in relation to the vacation of the trial date enlivens an entitlement to indemnity costs of the entirety of both proceedings.
28Apart from this, I am not satisfied that any of Mr Maguire’s conduct ought to result in an order for indemnity costs in Mr Courtney’s favour. I am not persuaded that there is sufficient evidence to establish that Mr Maguire issued his proceedings for an ulterior purpose, being leverage against Mr Courtney.
29I am not persuaded that Mr Maguire’s conduct was a contempt of court, nor that the proceedings were commenced in wilful disregard of known facts and established law. If such was the case then an application for summary judgment ought to have been brought.
30If Mr Courtney wanted to obtain indemnity for his legal costs, he could have made an offer to settle his proceeding. He elected not to do so. Other than in relation to the costs thrown away by reason of the adjournment, Mr Courtney is not entitled to indemnity costs of either proceeding.
31Mr Maguire says he is entitled to costs on an indemnity basis because:
(a) Mr Courtney made no constructive effort to settle proceedings;
(b) Mr Maguire’s offers were reasonable;
(c) Mr Courtney unreasonably failed to accept a reasonable offer;
(d) Mr Courtney sought an unreasonable settlement figure at the “upper range” but did not achieve such an outcome;
(e) Mr Courtney used the litigation to threaten and intimidate Mr Maguire;
(f) Mr Courtney failed to use reasonable endeavours to resolve the dispute pursuant to s22 of the Civil Procedure Act 2010;
(g) Mr Courtney’s breaches of his obligations under the Civil Procedure Act constitute special circumstances sufficient to award indemnity costs;
(h) Mr Courtney’s breaches of his obligations under the Civil Procedure Act are inconsistent with the principles established in respect of s40 of the Defamation Act 2005. The “exercise of the discretion that best promotes the overarching purpose pursuant to the CPA is an award of indemnity costs in Mr Maguire’s favour”;[2]
(i) Mr Courtney had an ulterior purpose in pursuing both proceedings which was to “intimidate and use[d] the proceedings to inflict maximum financial damage possible to Mr Maguire”.[3]
[2] Maguire Costs Submissions paragraph 29
[3] Maguire Costs Submissions paragraph 32
32This “kitchen sink” approach to a costs application is unhelpful. In the absence of Mr Maguire having made an offer of compromise that Mr Courtney did not beat, he would need to establish extraordinary conduct on the part of Mr Courtney to persuade the Court that an indemnity costs order in his favour was warranted. He has not done so.
33To submit that Mr Courtney had an ulterior purpose in pursuing the Maguire proceeding is a breathtakingly audacious allegation. This is a proceeding that Mr Maguire chose to initiate and pursue.
34To assert that it was unreasonable for Mr Courtney not to accept Mr Maguire’s offers in circumstances where Mr Courtney obtained a significantly better result at trial is without merit. To further submit that this constitutes a breach of Mr Courtney’s overarching obligations under the Civil Procedure Act likewise is without merit. Parties are entitled to assert, even forcefully, that their case is strong, bound to succeed, and likely to attract damages at the high end of the range, without contravening those obligations. Nothing in Mr Courtney’s conduct prevented Mr Maguire from making settlement offers. Had Mr Maguire made a settlement offer that exceeded the damages Mr Courtney was ultimately awarded, his would have strong grounds for his application for indemnity costs. He did not do so and trying to weaponise the provisions of the Civil Procedure Act to assert a basis for an indemnity costs order misconstrues the requirements of the provisions of that Act, wastes court time and is generally unhelpful.
35Mr Maguire makes an alternative submission that he pay Mr Courtney’s costs of both proceedings on a standard basis until 27 July 2023 and that Mr Courtney pay his costs of both proceedings on an indemnity basis thereafter.
36I have already found that Mr Courtney beat the offer of 28 July 2023. I am not persuaded that anything arising from that offer amounts to special circumstances that warrant an indemnity costs order after that time.
What is the appropriate costs order?
37Mr Maguire puts a further alternative position which is that he should pay Mr Courtney’s costs of both proceedings on a standard basis, to be taxed in default of agreement.
38In circumstances where:
(a) Neither side made an offer in their own proceeding which the other side “beat”;
(b) Mr Courtney’s “Offer of Compromise” in the Maguire proceeding was an offer of complete capitulation and did not represent a compromise at all;
(c) Mr Courtney succeeded in both his claims;
(d) Neither party has established special circumstances such as to warrant a departure from the usual orders;
the appropriate order is that Mr Maguire pay Mr Courtney’s costs of both proceedings on a standard basis, to be taxed in default of agreement, save that Mr Maguire pay Mr Courtney’s costs thrown away by reason of the vacation of the trial date on an indemnity basis.
Interest
39Mr Courtney claims interest on damages at 4% per annum from the date of publication. He submits that the major and most severe damage to reputation occurred around the time of the publication of the posts in September 2020 and there was aggravating conduct by Mr Maguire over the course of litigation and at trial.
40Mr Maguire points to my determination that:
the letters Mr Courtney wrote support a conclusion that personal hurt is a lesser concern for Mr Courtney than vindicating his reputation. In his own mind, at least, that vindication is achieved by proving in court that Mr Maguire was wrong. The fact of his victory before a jury will, I expect, go a long way to achieving the vindication he seeks. [4]
[4] Courtney v Maguire at [68].
41He submits that “evidently, on the basis of that determination, while Mr Courtney sought vindication to alleviate his anger, the court did not find he suffered considerable personal harm from the date of publication or at all”.[5]
[5] Maguire Costs Submissions in Reply at 8
42I did not find that Mr Courtney sought vindication to “alleviate his anger”, but that his primary concern was to vindicate his reputation. I did not find that he did not suffer personal harm, but personal hurt was a lesser consideration.
43Damages are awarded in defamation cases for a number of purposes. Personal hurt can be one. But where there is no damage to reputation, regardless of the degree of personal hurt, the tort will not be made out and no damages will follow.
44The is no force in the submission that Mr Courtney is not entitled to interest on damages because he did not suffer personal hurt.
45Mr Maguire submits that some of the conduct which aggravated the damages did not occur until after the date of publication, and therefore the damage to reputation did not all arise as at the date of publication, or even at the date of commencement of proceedings. Mr Maguire says the appropriate rate of interest on damages is 2%-3%.
46Section 60 of the Supreme Court Act 1986 which, by virtue of s50 of the County Court Act 1958 applies to proceedings in the County Court of Victoria, provides that the Court must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rated fixed under the Penalty Interest Rates Act 1983 as it thinks fit, from the commencement of the proceeding to the date of the judgment over and above the damages awarded.
47Interest on damages for vindication has generally been considered to apply in defamation cases from the date of publication, not the date of the proceeding, due to the unique nature of defamation claims.
48A ‘purely arithmetical approach’ is not required. Instead, an assessment of what is fair and proper in the circumstances of the particular case is required.[6]
[6] Davis v Nationwide News Pty Ltd [2008] NSWCA 946, [14].
49In this case I consider that most of the damage to reputation was done at the time of publication, but aggravating features of the conduct after publication ought not be the subject of an award of interest.
50Taking this into account I consider it appropriate to award interest from the date of the proceeding rather than the date of publication, and further set the interest rate at 3.75%, which adequately reflects an appropriate award given the circumstances of this case.
ORDERS:
Courtney v Maguire:
1.The defendant pay the plaintiff’s costs of the proceeding, including any reserved costs save for the costs reserved in relation to the vacation of the trial date, on a standard basis, to be taxed in default of agreement;
2.The defendant pay the plaintiff’s indemnity costs thrown away by reason of the vacation of the trial date, such costs to be taxed in default of agreement.
3.The defendant is to pay interest on the damages at the rate of 3.75% from the date of the proceeding.
Maguire v Courtney
1.The plaintiff pay the defendant’s costs of the proceeding, including any reserved costs save for the costs reserved in relation to the vacation of the trial date, on a standard basis, to be taxed in default of agreement;
2.The plaintiff pay the defendant’s indemnity costs thrown away by reason of the vacation of the trial date, such costs to be taxed in default of agreement.
0