Eustice v Channel Seven Adelaide Pty Ltd (No 2) - [2020] SASC 35

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
EUSTICE v CHANNEL SEVEN ADELAIDE PTY LTD & ORS (No 2)
[2020] SASC 35
Judgment of The Honourable Justice Nicholson
6 March 2020
DEFAMATION - ACTIONS FOR DEFAMATION - COSTS - INDEMNITY COSTS
The plaintiff failed in a claim for defamation against the defendants.
In early March 2018 and prior to trial, the defendants reached a settlement with two other original plaintiffs. Following this settlement, the defendants made six further offers and one invitation to treat directed to the one remaining plaintiff, which were refused. The defendants now seek the following orders with respect to costs:
1.      The plaintiff is to pay the defendants’ costs of the proceedings, including where such costs have previously been reserved.
2.      The plaintiff is to pay the defendants’ costs, whether such costs are the subject of these or any earlier orders, on an indemnity basis.
3.      As to those costs incurred by the defendants prior to and including 7 March 2018, the defendants are only to recover as to one third of the costs otherwise assessed.
4.      The plaintiff is to pay interest on the costs [of] the proceedings, applying the rate in Supreme Court Civil Rules 2006 Rule 261(3) and Supplementary Rule 217, on and from 14 December 2018.
The plaintiff did not oppose orders in terms of proposed orders 1 and 3 on a party and party basis but argued against proposed orders 2 and 4.
Held:
1.      The plaintiff is to pay the defendants’ costs of the proceedings, including where such costs have previously been reserved.
2.      The plaintiff is to pay the defendants’ costs, whether such costs are the subject of these or any earlier orders, on an indemnity basis.
3.      As to those costs incurred by the defendants prior to and including 7 March 2018, the defendants are only to recover from the plaintiff as to one third of the costs otherwise assessed.
Defamation Act 2005 (SA) s 23, s 24, s 28, s 29, s 31, s 38; Defamation Act 2005 (NSW) s 40; Supreme Court Act 1935 (SA) s 40; Supreme Court Civil Rules 2006 (SA) r 261, r 263, r 264; Supreme Court Civil Supplementary Rules 2014 (SA) r 217, referred to.
Haddon v Forsyth (No 2) [2011] NSWSC 693, discussed.
Eustice v Channel Seven Adelaide Pty Ltd [2020] SASC 4; Szanto v Melville [2011] VSC 618; Osborne v Kelly (1999) 75 SASR 392; Cretazzo v Lombardi (1975) 13 SASR 4; Calderbank v Calderbank (1975) 3 All ER 333, considered.

EUSTICE v CHANNEL SEVEN ADELAIDE PTY LTD & ORS (No 2)
[2020] SASC 35
Civil: Application
NICHOLSON J.
Introduction

Following a trial before me, the plaintiff in this matter failed in his claim for defamation against the defendants. The background to and the nature of the proceedings together with my reasons for dismissing the plaintiff’s claim can be found in my reasons for judgment in Eustice v Channel Seven Adelaide Pty Ltd & Ors.[1]
[1] [2020] SASC 4.
The defendants now seek the following orders with respect to costs and in doing so rely, inter alia, on the sixth affidavit of the defendants’ solicitor, Peter Campbell, sworn on 23 January 2020 (FDN 124).
1.The plaintiff is to pay the defendants’ costs of the proceedings, including where such costs have previously been reserved.
2.The plaintiff is to pay the defendants’ costs, whether such costs are the subject of these or any earlier orders, on an indemnity basis.
3.As to those costs incurred by the defendants prior to and including 7 March 2018, the defendants are only to recover as to one third of the costs otherwise assessed.
4.The plaintiff is to pay interest on the costs [of] the proceedings, applying the rate in Supreme Court Civil Rules 2006 Rule 261(3) and Supplementary Rule 217, on and from 14 December 2018.
The need for an order referable to only a proportion of the defendants’ costs incurred prior to and including 7 March 2018 (proposed order 3 above) arises because of the terms on which the defendants and two other original plaintiffs settled their dispute before trial. That settlement was reflected in a deed of settlement which, inter alia, resolved two thirds of the party-party costs in the proceedings incurred by all parties to the deed. The plaintiff at trial was not a party to the deed. Nevertheless, it will be necessary to ensure that any order against the plaintiff at trial would not result in an element of double recovery for the defendants. The defendants maintain that the appropriate order based on their construction of the deed, would be that the plaintiff at trial be liable to pay the defendants’ full costs for this period on an indemnity basis provided that the defendants not be entitled to enforce any such order to the extent of two thirds of their party and party costs during that period.
However, in order to forestall the need for further argument at any costs adjudication stage including as to the proper construction of the deed in this respect, the defendants agreed during the argument before me that they would limit their claim for costs for this period, as against the plaintiff, to one third of their costs incurred during this period and whether I were to order party and party costs or indemnity costs.
The plaintiff did not oppose orders in terms of proposed orders 1 and 3 on a party and party basis but argued against indemnity costs and proposed orders 2 and 4.
The issues to be resolved are as follows.
A.Whether, in the circumstances of this matter, the defendants should be allowed their costs for the proceedings on an indemnity basis by virtue of section 38 of the Defamation Act 2005 (SA).
B.Whether, if indemnity costs are ordered in reliance on section 38, earlier interlocutory costs orders made in favour of the defendants on a party and party basis should be varied to reflect an indemnity basis.
C.If section 38 does not apply, whether in the Court’s discretion available under section 40 of the Supreme Court Act 1935 (SA) and rules 263 and 264 of the Supreme Court Civil Rules 2006 (SA) costs on an indemnity basis for some or all of the proceedings should be ordered in any event.
D.Whether the defendants are entitled to an order for interest on the costs of the proceedings pursuant to subrule 264(7).
The defendants’ factual basis for their claim to have indemnity costs
The proceedings had a very length interlocutory history. Ultimately, the trial proceeded in accordance with the eighth statement of claim and fifth defence. Further amendments to both pleadings were allowed during the trial. Well before trial, on 7 December 2017, the plaintiff provided the defendants with a formulated claim amounting to $875,000. The plaintiff commenced the trial seeking, by his pleading, unspecified general damages and unspecified damages for economic loss. In closing submissions, the plaintiff particularised his damages as: $300,000 for non-economic loss, $100,000 for aggravated damages and $200,000 for economic loss.
The defendants raised a number of defences to the plaintiff’s claim: they put the plaintiff to proof of publication; they put the plaintiff to proof of the various imputations relied upon; they relied successfully on the defence of justification;[2] and relied unsuccessfully on the excuse defences of qualified privilege,[3] fair comment at common law, honest opinion under statute[4] and triviality.[5] The defence of contextual truth[6] and a number of issues relating to damages were also canvassed during the trial and in the judgment, but were left unresolved.
[2] At common law and pursuant to section 23 of the Defamation Act 2005 (SA).
[3] At common law and pursuant to section 28 of the Defamation Act 2005 (SA).
[4] Section 29 of the Defamation Act 2005 (SA).
[5] Section 31 of the Defamation Act 2005 (SA).
[6] Section 24 of the Defamation Act 2005 (SA).
Notwithstanding the multiplicity of issues raised, the dispute, from the outset and throughout the trial, was very substantially a factual dispute concerning the defendant’s justification defence. Ordinarily, costs should follow the event. I see no reason why the defendants should not be entitled to an order for their costs of the proceedings as a whole and no argument to the contrary was put on behalf of the plaintiff. This is not a case where I would modify a general order for costs according to the issues with respect to which the parties succeeded or failed.[7]
[7] Cf; Cretazzo v Lombardi (1975) 13 SASR 4.
The defendants succeeded comprehensively with their justification defence. Numerous findings critical of the plaintiff’s credit and reliability were made and the plaintiff’s evidence was rejected in a number of critical aspects.[8]
[8] See, for example, Eustice v Channel Seven Adelaide Pty Ltd [2020] SASC 4 at [81]-[83], [107], [127], [143], [147], [156], [166], [170], [172], [173], [257], [258], [271] and [273].
Further, I agree with the defendants’ submission to the effect that the Court made adverse findings concerning the plaintiff’s conduct relating to the justification defence in terms that the plaintiff must have realised at an early time in the proceedings were very likely to be made. Yet the plaintiff put the defendants to the substantial effort and expense of establishing their justification defence. I also agree with the submission that significant time and costs were devoted by the defendants in order to address unsustainable factual assertions by the plaintiff relating to the justification defence and the plaintiff’s largely unsustainable economic loss claim.
Prior to early March 2018, and whilst all three plaintiffs were parties, the defendants obtained 11 interlocutory costs orders on a party and party basis against the plaintiffs and costs were reserved or ordered to be in the cause on another eight occasions. The plaintiff did not obtain any costs orders.
After the settlement (early March 2018), the defendants obtained two interlocutory costs orders on a party and party basis against the plaintiff, on one occasion there was no order as to costs and costs were reserved or ordered to be in the cause on another six occasions.[9] The defendants were ordered to pay the plaintiff’s costs on a party and party basis on one occasion during this period.
[9] Including on 9 December 2019, when the defendants’ application to re-open their case on damages was refused.
It is against this background that the multiple opportunities to resolve the litigation that were available to the plaintiff are to be assessed. Exhibit PAC24 to the sixth Peter Campbell affidavit is a table summarising offers to settle made by the defendants and the plaintiff. Exhibit PAC25 is the relevant correspondence, including the full terms of the various offers.
There were three offers by the defendants seeking to settle the dispute at a time when all three original plaintiffs were parties. These were joint offers. I have had no regard to these offers for present purposes. However, the fact that the defendants’ correspondence with respect to these joint offers set out in some detail the perceived weaknesses in the three plaintiffs’ cases and the defendants’ commercial rationale for making the offers is of some relevance.
After the defendants settled with two of the original plaintiffs, leaving the plaintiff at trial as the sole plaintiff, the defendants made six further offers and one invitation to treat directed to the plaintiff alone.
(i)On 14 March 2018 (some days after resolution of the claim by the other two original plaintiffs) the defendants offered to settle on a “walk away” basis with no order as to costs. The offer was open until 16 March 2018 on the basis that the trial was (then) due to start on 22 March 2018. The letter of offer was expressed to be one in accordance with the principles outlined in Calderbank v Calderbank[10] “as applied in Australia” and the plaintiff was also notified that if the offer were not accepted, the defendants would seek to rely on subsection 38(2)(b) of the Defamation Act 2005 (SA).
The defendants in this letter briefly summarised why, in their view, the plaintiff’s claim was “doomed” to fail and summarised the financial advantages of the offer, in particular, the foregoing of a number of costs orders already made in favour of the defendants, the avoidance of the plaintiff incurring future substantial costs and the elimination of the risk of a future adverse costs order against the plaintiff. There can be no doubt that as events have transpired, the plaintiff would have been very substantially better off by accepting at this relatively early stage this “walk away” offer.
(ii)On 19 March 2018, the defendants rejected a counter-offer by the plaintiff ($300,000 inclusive of costs) noted that its earlier offer had lapsed and advised that they would still consider settling on a “walk away” basis if that offer were to be put by the plaintiff.
(iii)On 21 August 2018, one week before the commencement of the trial,[11] the defendants made another “Calderbank” offer to pay the plaintiff $45,000 all inclusive and to release the plaintiff from all costs entitlements including prior costs orders in favour of the defendants. The offer was expressed to be open until 9.15 am on 23 August 2018 “given the imminent trial”. The defendants provided further information in support of their assertion that the plaintiff’s claim was “doomed” to fail and again drew attention to subsection 38(2)(b).
(iv)By letter dated 27 August 2018 (the day prior to the first day of trial), the defendants rejected a counter-offer by the plaintiff (in the amount of $450,000 all inclusive) and put a further counter-offer in the same terms as in (iii) above but increasing the amount payable to $60,000 all inclusive. This offer was expressed to be open until 10.00 am on 29 August 2018. That offer was not accepted and it was at the end of the day on 29 August 2018 that the plaintiff became ill and the trial was adjourned part way through the plaintiff’s cross-examination. The plaintiff returned to the witness box and his cross-examination resumed on 3 December 2018.
(v)On 7 September 2018 during the adjournment of the trial part heard, the defendants again offered to resolve the action on a “walk away” basis with no order as to costs. The defendant provided additional detail with reference to documents in their possession, the plaintiff’s evidence to date and foreshadowed evidence, as to why they were likely to succeed with their defence. Reference was again made to subsection 38(2)(b) and the offer was expressed to be open until 5.00 pm on 14 September 2018.
(vi)On 28 September 2018, the plaintiff lodged with the Court a formal offer pursuant to rule 187 of the Supreme Court Civil Rules 2006 (SA) seeking $125,000 plus costs.
(vii)On 4 October 2018 (still during the adjournment period), the defendants restated the 7 September 2018 “walk away” offer (paragraph (v) above) open until 25 October 2018.
(viii)On 13 December 2018, the plaintiff again offered to settle on the same terms as the 28 September 2018 formal offer.
(ix)On 14 December 2018, by which time the evidence for all parties had been completed, the defendants offered an all inclusive payment of $25,000.
[10] (1975) 3 All ER 333.
[11] The trial was originally listed for 22 March 2018. However, following the partial settlement, the trial was adjourned to commence 28 August 2018.
It is clear that the plaintiff, following the resolution of the claims of the other two original plaintiffs, had at least six opportunities to resolve the litigation on terms that as events have transpired were far more favourable than the situation he now faces. It is true that each offer would have left him exposed to a liability for his own legal costs. Nevertheless, had he accepted any of the offers he would have been saved the very substantial costs (on any analysis) which he will be liable to pay the defendants. Furthermore, three of the offers would have resulted in a payment to him, free of any obligation concerning the defendants’ costs, of $45,000 (one week before the commencement of trial), $60,000 (one day before the commencement of the trial) and $25,000 (as at the end of the evidence called in the trial).
Section 38 of the Defamation Act 2005 (SA) – Issues A and B
Section 38 is in these terms.
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.
The defendants rely on subsection 38(2)(b). The requirement to order costs against a plaintiff on an indemnity basis is mandatory should the necessary preconditions be satisfied. Those preconditions are:
(i)the plaintiff was unsuccessful in defamation proceedings;
(ii)costs in the proceedings are to be awarded to the defendant; and
(iii)the Court is satisfied that the plaintiff unreasonably failed to accept a settlement offer made by the defendant.
Notwithstanding the satisfaction of these three conditions, there remains a discretion in the Court not to order indemnity costs if the interests of justice require otherwise. The conditions in (i) and (ii) are satisfied. Condition (iii) and the interests of justice require further consideration.
The defendants submitted that each of the various offers made were reasonable and that, in the circumstances, each was unreasonably refused by the plaintiff. The defendants further submitted that an assessment as to the reasonableness of each offer and unreasonableness of any refusal was able to be made by the plaintiff at the time of each offer.
The plaintiff submitted that the “walk away” offers should not be seen as offering any benefit to the plaintiff, that is, as I apprehend the submission, as not being reasonable and not representing a genuine attempt to settle.
It was also submitted that at the time the offers were considered (apart from the last one) the plaintiff had an expectation that Derek Sheldon and Tom Eustice would be called in the plaintiff’s case and the second defendant, Frank Pangallo, and the third defendant’s mother would be called in the defendant’s case.

I am not persuaded by this second submission. Ultimately, the fact that Derek Sheldon and Tom Eustice were not subpoenaed to give evidence was a matter for the plaintiff. Both the third defendant’s mother and Frank Pangallo would have had little, if anything, to add with respect to the issue of justification. Further, the third defendant’s mother was not notified as a potential witness on the defendants’ rule 159 notice provided well before the trial. If the plaintiff had been relying on these two witnesses to assist with his justification case he must have taken a very dim view of its prospects for success.
In fairness, counsel submitted that Frank Pangallo was necessary to enable the defendants to press their excuse defences and that “having no intention of calling [him they knew] that those defences could never be made out” so as thereby to waste the plaintiff’s and the Court’s time. There are a number of answers to this. First, the excuse defences did not take up much time at all during the trial nor, I infer, as part of the parties’ preparation; second, I am not persuaded that the excuse defences had no prospect of success from the beginning unless Frank Pangallo were to give evidence; and third, I am not at all satisfied that the defendants never intended to call Frank Pangallo, there was no evidence to this effect and my understanding during the trial from exchanges with and between counsel was that the defendants left the matter open during the trial and made a forensic decision not to call him based on forensic decisions made by the plaintiff.
Leaving aside the other opportunities to settle this litigation, I am satisfied that the plaintiff unreasonably failed to accept each of the $45,000 all inclusive offer and the $60,000 all inclusive offer (numbers (iii) and (iv) above). I accept that the mere facts that the plaintiff was unsuccessful at trial and that an unaccepted offer would have been a better outcome for him as compared with the trial outcome, will not always be a sufficient basis for a finding of unreasonableness. I also have taken into account that each of these two offers were open for only a very short period of time. Nevertheless, I base my finding of unreasonableness on the following matters.
(i)From the outset, the primary issue was that of justification. The matters relied on by the defendants concerned the behaviour and character of the plaintiff as to which he was on notice. He should have been well aware of the real likelihood that the justification defence would be made out.
(ii)Each of the offers at the time they were made would have effected a sensible commercial resolution of the parties’ respective legitimate interests.
(iii)Each offer, whilst open for only a short time, was supported by adequate explanations of the defendants’ case as to why it would succeed with its justification defence and in demonstrating that the plaintiff’s damages would be modest in any event. Such explanations were given on a number of earlier occasions in the context of other offers made to the plaintiff and to all three plaintiffs. In other words, the plaintiff was well placed to make a prompt decision within the time frame allowed for each offer.
(vi)The offers were made before the commencement of what was likely to be a lengthy and expensive trial, that is, at a time when the plaintiff’s own costs were relatively contained, and such that $45,000 or $60,000 should have been seen, in the circumstances, as an acceptable contribution to those costs.
(v)When assessing the weight to be accorded to (i) to (iv), it is relevant that the plaintiff, at all times, was represented by solicitors, and senior counsel experienced in defamation matters.
(vi)It is almost certainly the case, as the defendants would have recognised prior to and throughout the trial, that at all material times the plaintiff’s financial circumstances, as apparent from evidence available to the defendants and adduced at trial,[12] were such as would preclude the defendants from achieving any costs recovery of substance from the plaintiff. The plaintiff must have been aware of his own extremely poor financial position such that all risk with respect to the defendants’ costs and his own costs lay with the defendants and his own advisers or other persons such as family who might choose to assist him. I infer that this more likely than not informed, at least in part, his attitude to settlement.
[12] Eustice v Channel Seven Adelaide Pty Ltd [2020] SASC 4 at [369]-[399].
Section 38(2)(b) where operational requires the Court to “order costs of and incidental to the proceedings to be assessed on an indemnity basis” (emphasis added). In Haddon v Forsyth (No 2),[13] Simpson J made this observation with reference to the cognate provision in the New South Wales legislation.[14]
To the extent that there are differences between the various provisions, particularly UCPR 42.15A and Defamation Act, s 40, a question arises as to which ought take precedence over the other. In my opinion, because of its specific application to defamation proceedings, it is s 40. The interesting difference between the two is that, while UCPR 42.15A envisages a calculation of costs on an indemnity basis only from an appropriate time after an offer of compromise is made, s 40 does not draw any such distinction: s 40(2)(b) is open to the interpretation that, if the plaintiff is unsuccessful in the proceedings and, if the pre-condition (that the plaintiff unreasonably failed to accept a settlement offer made by the defendant) is met, then a calculation of costs on an indemnity basis applies to the whole of the costs of the defendant(s). It is not limited to a time relevant to the time when the offer is made. That that is the correct interpretation is supported by a consideration of the purpose for which the legislature made specific provision for costs in defamation proceedings. That purpose is to oblige parties to defamation proceedings to take a reasonable approach to settlement negotiations: see Davis v Nationwide News Pty Ltd [2008] NSWSC 946 at [27]. The sanction against failure to take that reasonable approach is the risk of an award of indemnity costs. Why that sanction ought to apply to defamation cases as distinct from others is not stated.
[13] [2011] NSWSC 693 at [4].
[14] Defamation Act 2005 (NSW), section 40.
In Szanto v Melville,[15] Kaye J referred to Simpson J’s observation that any order for indemnity costs would relate to costs from the outset of the proceeding without any apparent animadversion.[16] I agree that the words of the section require such an order to be in this form and to have this effect.
[15] [2011] VSC 618 at [10].
[16] In neither Haddon nor Szanto was an order for indemnity costs under the respective Defamation Acts ultimately made.
The considerations in (i) to (vi) above are also relevant to the interests of justice consideration. In my view, they strongly militate against declining to make an order for indemnity costs on interests of justice grounds. However, before arriving at a final conclusion in this respect, I need to consider the extent to which the following matters might inform the interests of justice.
(i)Would such an order deprive the plaintiff of the benefit of the interlocutory order for costs made in his favour after the early March settlement? Indeed, would the defendants now be entitled to their costs on an indemnity basis?
(ii)Would such an order also operate to render the large number of interlocutory costs orders made in favour of the defendants to be assessed on an indemnity basis rather than a party and party basis as earlier ordered?
(iii)Would such an order operate as an order that all interlocutory costs, previously ordered to be reserved or to be costs in the cause, now be the defendants’ costs on an indemnity basis?
(iv)Included in (iii) above, are the reserved costs concerning the defendants’ unsuccessful application, made after judgment had been reserved, for permission to re-open the defence case on the question of the plaintiff’s damages.
I take the view that the order required by subsection 38(2)(b), if made, would, according to its terms, operate such that the answers to (i) to (iv) above are “yes”.
However, any disadvantage to the plaintiff flowing from (i) would be minimal in the overall scheme of things. Similarly, in the circumstances of this case, any disadvantage to the plaintiff flowing from (ii), (iii) and (iv) would be relatively moderate. On any analysis, the defendants would be entitled to their party and party costs with respect to the interlocutory events falling within (ii) and (iii) (with the exception of that referred to in (iv)). Each event would involve a relatively low taxed costs award. The events included matters such as applications to strike out pleadings, failures to comply with interlocutory orders in a timely manner and wasted attendances. A fortiori the uplift in each case to an indemnity basis would be of little consequence in the context of the costs of the proceedings as a whole.
As far as the matter in (iv) above is concerned, if unconstrained by any order under subsection 38(2)(b), I would have ordered that there be no order as to costs. There was substantial merit in the application but it was refused on discretionary grounds.[17] I accept that the effect of an order pursuant to section 38(2)(b) would be that the plaintiff is to pay the defendants’ costs of its unsuccessful action to re-open on an indemnity basis to the disadvantage of the plaintiff.
[17] See Eustice v Channel Seven Adelaide Pty Ltd & Ors [2020] SASC 4 at [358]-[368].
Whilst I have identified various disadvantages to the plaintiff relating to costs orders made on a party and party basis or reserved at an earlier time, these are really no more than the necessary outcome of an order under subsection 38(2)(b). The parties, certainly given that they were legally represented, can be expected to understand that a failure to act reasonably during settlement negotiations (in the manner described in section 38) may have these consequences.
In my view, the matters I have just canvassed are not such as, in this case, would lead to a finding that the interests of justice require otherwise than an order for indemnity costs be made. The plaintiff in his submissions did not raise any other matters directed to the interests of justice.
Section 40 of the Supreme Court Act 1935 (SA) and the Rules concerning costs – Issue C
It is not necessary that I decide this issue. However, if I were to be wrong in having made the order under section 38 of the Defamation Act 2005, I indicate that, for broadly analogous reasons, I would have applied Calderbank principles and ordered that: the plaintiff pay the defendants’ costs of the proceedings (including all reserved costs) prior to and including 23 August 2018 (the expiry of the $45,000 offer) on a party and party basis and thereafter on an indemnity basis. I would exclude from this order, the costs of the defendants’ unsuccessful application to re-open and make no order as to costs in that respect. Any previously determined interlocutory costs orders whether in favour of the defendants or plaintiff would remain to be adjudicated on a party and party basis, as previously ordered.
Interest on costs – Issue D
Subrule 264(7) of the Supreme Court Civil Rules 2006 provides as follows.
The Court may include in an award of costs an amount representing interest.
The discretion whether or not to award interest on costs is a broad one but one to be exercised judicially having regard to the relevant facts.[18] An interest award is intended to be compensatory for the period that a party is kept out of its money. I have no evidence concerning legal costs that have been paid or when they might have been paid. The determination of any entitlement to interest and any assessment of the amount is likely to entail a factual enquiry best undertaken by a taxing Master. I am not in a position to rule on this aspect of the defendants’ application which is therefore refused. However, this does not preclude the defendants from re-agitating the application before a Master upon an adjudication of their costs, if not otherwise agreed.
[18] Osborne v Kelly [1999] SASC 486; (1999) 75 SASR 392.
Conclusion
The defendants are entitled to an order that the plaintiff pay their costs of and incidental to the proceedings on an indemnity basis but subject to the defendants’ concession with respect to the period up to and including 7 March 2018. I make orders in terms of the proposed orders 1, 2 and 3 in paragraph [2] above but with the phrase “from the plaintiff” inserted after the word “recover” in order 3. Proposed order 4 in paragraph [2] above is refused.