Fisher v Channel Seven Sydney Pty Ltd (No 5)

[2014] NSWSC 1873

Supreme Court

New South Wales

Medium Neutral Citation:

Fisher v Channel Seven Sydney Pty Ltd (No 5) [2014] NSWSC 1873

Hearing dates:

15 December 2014

Decision date:

31 December 2014

Before:

Rothman J

Decision:

1.Orders (3), (4), (5) and (6) issued by the Court in these proceedings on 17 November 2014 are hereby vacated;

2.The defendants shall pay, in addition to the award of damages, interest on the amount of said damages, pursuant to s 100 of the Civil Procedure Act 2005, at the rate of 3% from 6 June 2011 until 17 November 2011 and thereafter, until satisfaction of the said judgment, at the rate prescribed by the Uniform Civil Procedure Rules 2005 for interest after judgment;

3.The defendants shall pay the plaintiff's costs of and incidental to the proceedings, as agreed or assessed, on a party/party basis, up to and including 6 February 2014;

4.The defendants shall pay 85% of the plaintiff's costs of and incidental to the proceedings, as agreed or assessed, on an indemnity basis, on and from 7 February 2014;

5.Proceedings otherwise dismissed.

Catchwords:

DEFAMATION - Costs and interest - Offers made by plaintiff not accepted - Indemnity costs payable - Interest on damages at 3% - Most damage occurred on publication

Legislation Cited:

Civil Procedure Act 2005
Defamation Act 2005
Uniform Civil Procedure Rules 2005

Cases Cited:

Fisher v Channel Seven Sydney Pty Ltd (No 4) [2014] NSWSC 1616
MBP (SA) Ltd v Gogic; [1991] HCA 3; (1991) 171 CLR 657

Category:

Costs

Parties:

Brian Fisher (Plaintiff)
Channel Seven Sydney Pty Ltd (First Defendant)
David Richardson (Second Defendant)

Representation:

Counsel:
C. Evatt with R. Rasmussen & M. Fozzard (Plaintiff)
M. Richardson (First and Second Defendants)
Solicitors:
Michael Kreveld Legal (Plaintiff)
Addisons Lawyers (First and Second Defendants)

File Number(s):

2011/408095

Publication restriction:

None

Judgment

1. ROTHMAN J: The issues with which the Court is required to deal relate to the assessment of any interest to be paid in relation to judgment and the question of costs, each of which arises from the judgment issued in relation to this matter on 17 November 2014.

1. The costs issue with which the Court is required to deal relates to an application by the plaintiff for costs to be assessed on an indemnity basis, which, it is said, arises from the effect of an offer made by the plaintiff to settle the matter for a sum less than that awarded by the Court.

1. The defendant's submissions on the appropriate rate of pre-judgment interest arise, in part, from comments of the Court in the reasons for judgment of 17 November 2014: see Fisher v Channel Seven Sydney Pty Ltd (No 4) [2014] NSWSC 1616. In those reasons for judgment, the Court said, at [109] - [110]:

"Generally, in defamation cases, the appropriate interest rate is often thought to be half of the interest rate applicable in other areas of law: see John Fairfax & Sons Ltd v Kelly; McGaw v Channel Seven Sydney Pty Ltd [2006] NSWSC 1270. The pre-judgment interest is payable from the date of publication to trial.

As discussed by me in McGaw, it is important when determining the interest rate not to apply a formula mathematically without assessing the appropriateness of the interest rate based on that which is fair and proper. Current prescribed interest rates under the Uniform Civil Procedure Rules 2005 are 6.5%. The interest rates have varied since the date of the defamation from 8.75% through to 6.5%. I will, on a preliminary basis, assess the rate of pre-judgment interest to be paid for the whole of the period at 3.75%."

1. The foregoing statement was intended to ensure that neither the Court nor the parties treated the applicable rate for pre-judgment interest as either automatic or formulaic.

Costs

1. On 6 February 2014, the plaintiff issued an offer of compromise in accordance with the Uniform Civil Procedure Rules 2005 (UCPR) that the matter be resolved by the defendants paying the plaintiff an amount of $40,000, excluding costs. The defendants issued no response to that offer.

1. Somewhat oddly, the plaintiff's primary application is for indemnity costs from the date of the service of the offer. The plaintiff's alternative is for indemnity costs for the entirety of the proceedings, pursuant to the terms of s 40 of the Defamation Act 2005. The issue between the parties is the question of the extent to which and the basis upon which costs are to be assessed.

1. As can be seen from the reasons for judgement issued on 17 November 2014, some of the imputations for which the defendant has been held liable in defamation depend significantly on matters that, on their face, do not seem to impact upon the character of the plaintiff. For example, the defendant was rendered liable for damages in relation to the imputation that the plaintiff drove a school bus containing children whilst using a mobile phone. There is little doubt, on the evidence, that the plaintiff conducted himself in that way. The imputation, however, accepted by the jury, was that the conduct occurred "on a notorious stretch of outback road", which the jury must have held did not occur.

1. The truth or otherwise of the imputations conveyed by the impugned broadcast was a matter upon which reasonable people might differ. The assessment of the truth of the imputations involved a very fine line.

1. The provisions of s 40 of the Defamation Act allows the Court to have regard to the manner in which the parties have conducted their respective case and, in determining the basis upon which costs will be assessed, the Court is required to have regard to the unreasonable failure of the defendants to make a settlement offer or unreasonably to agree to a settlement offer proposed by the plaintiff.

1. If the Court were satisfied of those aspects, the provision, summarised above, requires the Court to award that costs be assessed on an indemnity basis for the entirety of the proceedings.

1. Because of the issues discussed in the substantive reasons for judgment, the Court is not satisfied that the failure to agree to the settlement offer proposed by the plaintiff was unreasonable. As earlier stated, much depended upon the view taken of the imputations and the evidence to be accepted. It was not unreasonable, within the meaning of s 40 of the Defamation Act, for the defendants not to agree to the offer of compromise of 6 February 2014.

1. The effect of the Uniform Civil Procedure Rules is different. Pursuant to the provisions of r 42.14, where a plaintiff issues an offer of compromise, which is not accepted, and the proceedings result in a more favourable outcome than the offer of compromise, the plaintiff is entitled to costs assessed on the ordinary basis up to, relevantly, the day after the date of offer, and on an indemnity basis from that time onwards. The reasonableness of the offer is not ordinarily an issue impacting upon the operation of this rule because necessarily the offer must be less than the verdict.

1. The Uniform Civil Procedure Rules operate to encourage resolution of issues between parties on a commercial basis, which would be defeated if factors such as the defendant's genuine belief in the truth or otherwise of the allegations made were to qualify the operation of the rule. A jury has determined the liability of the defendants. The jury has determined what was the truth of the matter before the Court; the imputations that arise; any contextual imputation and its truth; and, ultimately, the liability of the defendants.

1. The offer of compromise issued by the plaintiff was a reasonable offer that was commercially appropriate. The fact, which I accepted, that the defendants genuinely believed the imputations to be true (or outweighed by the contextual imputation) does not qualify the ordinary rule in relation to offers of compromise by a plaintiff who succeeds to a greater extent than an acceptance of the offer of compromise would have provided.

1. Nevertheless, issues arise as to the manner in which the proceedings were conducted by the plaintiff. As already stated, the plaintiff was not forthcoming or truthful (at least in significant respects) during the course of his evidence. This was a matter discussed in the judgment of 17 November 2014.

1. Whether or not the plaintiff was truthful, he was defamed and he has been awarded damages as a consequence. Costs are neither awarded as a punishment; nor as a reward. Costs are intended as compensation for the requirement to enforce one's rights or to defend against the assertion of another's rights.

1. The nature of the evidence of the plaintiff adduced in the proceedings did not significantly add to the duration of the proceedings. It did, however, add a little to the duration of the proceedings. Moreover, the plaintiff's case involved no cross-examination of some defence witnesses on some factual issues to which the plaintiff had adhered.

1. Counsel's conduct of the proceedings thereby ameliorated what might otherwise have been a significant prolongation of the evidence. That conduct is to be applauded. Ultimately, some allowance must be made for the effect of the plaintiff's false evidence on the duration of the proceedings, but that effect should not be overly significant.

1. The Court will order that costs be paid on an ordinary basis up to and including 6 February 2014 and 85% of costs on and from 7 February 2014, assessed on an indemnity basis.

Interest

1. I have already recited a passage relating to interest from the reasons for judgment of 17 November 2014. I have also already commented that the expression of intention in that passage was that neither the Court nor the parties would take for granted an order for interest or the rate at which it would be calculated.

1. I have, in previous judgments, referred to the practice of the Court of awarding a rate of interest on damages in defamation proceedings that is calculated by halving the ordinary rate of interest for pre-trial non-economic loss. The rationale for such an approach is well established and relates to the circumstance that defamation damages do not occur at a time that is confined to the date of publication, but continue thereafter. As a consequence, the "date" from which interest would run is not the date of the publication but a variable date between publication and the date of judgment.

1. In MBP (SA) Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657, the High Court adopted 4% as the appropriate compensation to a plaintiff for the deprivation of damages for pre-trial non-economic loss. In defamation proceedings, the practice, therefore, has been to award between 2% and 4% as the rate of interest on pre-trial non-economic loss damages.

1. The assessment of the rate within that range depends on an assessment of the degree to which all or most of the damage was suffered on the date of the publication or sometime later. If the time at which damage was suffered were equally on the date of publication and subsequent thereto, then a figure of 2% is usually selected. If, on the other hand, all or most of the damage occurred at the date of publication, a figure higher than 2% is the basis for the calculation of interest. It is exceptional in defamation for an interest rate of 4% to be awarded.

1. There were some unusual aspects of the claim for damages in these proceedings. In the reasons for judgment of 17 November 2014, I rejected any damage associated with the plaintiff's divorce or separation, his loss of licence and the loss of his business. The publication cannot be the cause of, or a substantial contributing factor to, those losses.

1. As a consequence of the rejection of those heads of damage, the most significant aspect of the damages arose on publication and not thereafter. Nevertheless, I accepted that the damage continued to arise from the date of publication until the date of judgment, at which time the plaintiff was vindicated to the extent appropriate.

1. I accepted the defendants' submission that 3.75% is at the top of the range within which interest may be awarded. I also accepted, as previously stated, that most of the damage that the plaintiff suffered occurred on or about the date of publication. I shall award pre-judgment interest of 3% on the damages.

Conclusion

1. The Court makes the following further orders:

(1)   Orders (3), (4), (5) and (6) issued by the Court in these proceedings on 17 November 2014 are hereby vacated;

(2) The defendants shall pay, in addition to the award of damages, interest on the amount of said damages, pursuant to s 100 of the Civil Procedure Act 2005, at the rate of 3% from 6 June 2011 until 17 November 2011 and thereafter, until satisfaction of the said judgment, at the rate prescribed by the Uniform Civil Procedure Rules 2005 for interest after judgment;

(3)   The defendants shall pay the plaintiff's costs of and incidental to the proceedings, as agreed or assessed, on a party/party basis, up to and including 6 February 2014;

(4)   The defendants shall pay 85% of the plaintiff's costs of and incidental to the proceedings, as agreed or assessed, on an indemnity basis, on and from 7 February 2014;

(5)   Proceedings otherwise dismissed.

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Decision last updated: 31 December 2014