DE POI v ADVERTISER-NEWS Weekend Publishing Company Pty Ltd (2) - [2015] SADC 25

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DE POI v ADVERTISER-NEWS WEEKEND PUBLISHING COMPANY PTY LTD (2)
[2015] SADC 25
Reasons for Decision of Her Honour Judge McIntyre
4 March 2015
PROCEDURE - COSTS
On Thursday 26 February 2015 the plaintiff’s claim against the defendant for damages in defamation arising out of an article published by the defendant on 28 March 2010 was dismissed.
The plaintiff has failed to better any of the defendant’s settlement offers. The defendant submits that it is entitled to indemnity costs under s.38 of the Defamation Act 2005 because the plaintiff was unsuccessful, acted unreasonably in the conduct of the proceedings and unreasonably failed to accept settlement offers made by the defendant. In the alternative the defendant seeks solicitor client costs on Calderbank principles.
Held:
1. The defendant’s offers were reasonable.
2. The plaintiff unreasonably refused to accept the defendant’s offers.
3. The plaintiff ought pay the defendant’s costs of and incidental to these proceedings on an indemnity basis.
The Defamation Act 2005 s38; District Court Act 1991 s42; District Court Rules R263(1), referred to.
Forlyle Pty Ltd v Tiver & Anor (2007) SASC 464; Calderbank v Calderbank 3 All ER 333; The Ten Group Pty Ltd v Cornes (2012) 114 SASR 46 at 125-6; Pirrotta v Citibank Ltd & Others (1998) 72 SASR 259, considered.

DE POI v ADVERTISER-NEWS WEEKEND PUBLISHING COMPANY PTY LTD (2)
[2015] SADC 25
Introduction

On Thursday 26 March 2015 the plaintiff’s claim against the defendant for damages in defamation arising out of an article published by the defendant on 28 March 2010 was dismissed.
The defendant seeks costs of and incidental to the proceedings on an indemnity basis or at the least on a solicitor/client basis. The plaintiff on the other hand submits that there should be no order as to costs or failing that the plaintiff submits that costs should be awarded to the defendants:
·on a party/party basis for the whole of the action; or
·on a party/party basis to 1 January 2014 and thereafter on a solicitor/client basis; or
·in the further alternative on a party/party basis to 1 January 2014 and thereafter on an indemnity basis.
Relevant Law
Costs are awarded in the discretion of the Court but that discretion must be exercised judicially.[1] The defendant has succeeded in its defence of the action and in the ordinary course of events would be entitled to party/party costs to be taxed or agreed.[2]
[1] Section 42 District Court Act 1991
[2] Forlyle Pty Ltd v Tiver & Anor (2007) SASC 464; District Court Rule 263(1)
The defendant has not filed any offers in accordance with the District Court Rules 2006 but has made a number of offers under the principles set out in Calderbank v Calderbank.[3] The making of Calderbank offers is a matter relevant to the exercise of the general discretion in relation to costs.[4]
[3] [1975] 3 All ER 333
[4] Pirrotta v Citibank Ltd & Others (1998) 72 SASR 259
This case was a defamation claim and accordingly s38 Defamation Act 2005 SA (“The Act”) is relevant. That section provides as follows:
(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.
Plaintiff’s Arguments
The plaintiff has advanced no proper basis upon which the defendant ought to be deprived of its costs. I reject the arguments put forward by the plaintiff predicated on the fact the plaintiff had filed an offer at court which was open to the defendant to accept. That offer was not reasonable in the circumstances and moreover the arguments put do not appear to place any weight upon the fact that the defendant was wholly successful in its defence and the plaintiff was wholly unsuccessful. I do not consider that the filing of an offer by the plaintiff provides a basis upon which I could make the various costs orders sought by the plaintiff.
In my view the defendant is entitled to an order for costs, the question is upon what basis.
Defendant’s offers
The defendant made a number of offers of compromise as follows:
·21 December 2011 – the defendant offered to resolve the proceedings with each party bearing its own costs. That offer was subject to a confidentiality clause.
·26 October 2012 a written Calderbank offer was made by the defendant again that each party bear their own costs although on this occasion that included the defendant offering to forego the benefit of a costs order arising out of an interlocutory dispute concerning pleadings.
·20 November 2012 the defendant made a further written offer to resolve pleadings on a walk away basis again offering to waive the benefit of the costs order.
·17 December 2013 the defendant made a written offer of $30,000 to the plaintiff in settlement of her claim comprising $15,000 in damages and $15,000 towards her costs. That offer to be subject to the requirement of confidentiality. The offer was specifically rejected by the plaintiff.
·6 August 2014 the defendant made a written offer of $35,000 to the plaintiff in settlement of her claim comprising $20,000 in damages and $15,000 towards costs subject to confidentiality. That offer was rejected by the plaintiff.
·2 December 2014 the defendant made a written offer to pay $50,000 to the plaintiff in settlement of her claim comprising $20,000 in damages and $30,000 in costs.
The plaintiff has failed to better any of those offers. The defendant submits that in accordance with the principles set out in Calderbank[5] the court should at a minimum order that the plaintiff pay the defendant’s costs of the proceedings on a solicitor/client basis. However, the defendant further submits that it is entitled to indemnity costs under s.38 of the Act because the plaintiff was unsuccessful, acted unreasonably in the conduct of the proceedings and unreasonably failed to accept settlement offers made by the defendant.
[5] supra
Were the offers reasonable?
The plaintiff says that the offers were unreasonable because they were subject to a requirement of confidentiality and because there was no reference to correction or apology.
Having considered the offers as provided to me, it appears that only the offers of 21 December 2011, 17 December 2013, 6 August 2014 and 2 December 2014 were subject to a confidentiality clause. The plaintiff relies upon the decision Ten Group Pty Ltd & Others v Cornes[6] in which a term as to confidentiality was found to be “a clear indication of unreasonableness”[7]. The situation in Cornes was however somewhat different. In that case a finding had been made by the Court that the plaintiff had been defamed. The reason a confidentiality clause was found to be an indication of unreasonableness was the fact that it would not have vindicated the plaintiff’s reputation:
A settlement of a defamation claim when the terms of the settlement may be published, including the disclosure of the payment of a monetary sum, offers a significant vindication of reputation. If there cannot be a full disclosure when the level of vindication will be reduced then the level of vindication will be reduced. The appellant’s offer in the present case allows the plaintiff only to refer to the fact of settlement being reached. Such limited disclosure would offer little or no vindication of reputation.[8]
[6] (2012) 114 SASR 46
[7] Paragraph 120
[8] Paragraph 122
In the present case the plaintiff has been unsuccessful and accordingly the judgment does not provide a vindication of reputation. In those circumstances a settlement term requiring confidentiality is not, in my view, a clear indication of unreasonableness as it was in the matter of Cornes. A similar point can be made in relation to the failure to offer an apology or correction. I note in passing that the defendant’s letter of 9 October 2010 states that the defendant was unaware of any factual matters that were misstated or inaccurate but nevertheless invites the plaintiff to let the defendant know if she was of the view that any of the factual matters were inaccurate.
Having considered the various offers made by the defendant I do not consider any of them to have been unreasonable either as to their conditions, timing or quantum given the circumstances obtaining at the time they were made. Further having regard to the final outcome of the plaintiff’s claim it is clear that the offers were, objectively assessed, reasonable.
Was the plaintiff’s refusal of the offers unreasonable?
I have considered the plaintiff’s reasons for rejecting or not accepting the defendant’s various offers as reflected in the correspondence and submissions. In essence those reasons related to the plaintiff’s view that the offers were unreasonable in the light of her view as to the merits of her claim. The plaintiff did not apparently consider the merits of the defendant’s position in forming her view. I have found that they were, in the circumstances, reasonable offers.
I have also had regard to the procedural history of the matter which included the plaintiff incurring costs orders at an interlocutory stage.[9] The defendant thereafter incorporated a release from that obligation in its offers which the plaintiff also rejected. The plaintiff could have avoided further cost and delay by accepting any one of the defendant’s offers and in each case this would have represented a better outcome for her than the current position. The plaintiff failed to enter into further negotiations regarding settlement in response to indications by the defendant that it was open to such negotiations. This in my view was unreasonable conduct.[10]
[9] Orders 12 October 2012 Stretton, DCJ
[10] The Ten Group Pty Ltd v Cornes (2012) 114 SASR 46 at para 125-6
Taking all of these matters into account I consider that there has been an unreasonable failure by the plaintiff to accept one or more of the defendants offers as contemplated by s.38 of the Act. No submissions were made as to the interests of justice nor do I see any basis upon which the interests of justice require otherwise than to order the plaintiff to pay the defendant’s costs of the proceedings on an indemnity basis.
The plaintiff submitted that, if I were minded to order costs on an indemnity basis, I ought to order the defendant to provide a schedule of costs to the plaintiff and that the plaintiff have liberty to apply to me to make an assessment of the reasonableness or otherwise of those claimed costs. I do not consider that these are appropriate orders in the circumstances. The procedure for determining costs is set out under the Rules and reasonableness of the costs claimed under the terms of this order are properly a matter to be determined by a Master of this court.
Orders
I order that the plaintiff pay the defendant’s costs of and incidental to these proceedings to be assessed on an indemnity basis. Such costs to be agreed or taxed in accordance with the District Court Rules.