Flegg v Hallett

Case [2015] QSC 315

SUPREME COURT OF QUEENSLAND

CITATION:

Flegg v Hallett [2015] QSC 315

PARTIES:

BRUCE STEPHEN FLEGG

(plaintiff)

v
GRAEME NORMAN HALLETT

(defendant)

FILE NO/S:

BS No 11629 of 2012

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

6 November 2015

DELIVERED AT:

Brisbane

HEARING DATE:

15, 16, 17, 20, and 22 October, 20, 25, and 26 November 2015

JUDGE:

Peter Lyons J

ORDER:

The defendant pay the plaintiff’s costs of and incidental to the action, including reserved costs, on the indemnity basis.

CATCHWORDS:

DEFAMATION – ACTIONS FOR DEFAMATION – COSTS – INDEMNITY COSTS – where, on three occasions, the defendant made statements that were defamatory of the plaintiff – where general damages, including aggravated damages, were assessed at $275,000, and special damages at $500,000, against the defendant – where the allegations extended beyond those which were the subject of the proceedings – where, on 18 December 2012, the plaintiff offered to settle proceedings on the basis that, amongst other things, the defendant publish an apology by similar methods to those used for the publication of the defamatory statements, and pay the defendant $125,000 as compensation and reimbursement of the plaintiff’s legal costs – where the apology was to extend to those allegations not the subject of the proceedings – where, on 24 December 2012, following the defendant’s counter-offer, the plaintiff offered to settle the proceedings on similar terms, but reducing the amount payable to $20,000, and including a non-disparagement clause – where the defendant submitted that the inclusion of a non-disparagement clause could “never be an obligatory condition in a settlement agreement because no person can be expected to give away their right of free speech in the future” – where the defendant submitted that there were “extreme aspects” to the apology which required him to “humiliate himself”– whether the defendant unreasonably failed to agree to the settlement offers proposed by the plaintiff

ACN 074 971 109 Pty Ltd (as Trustee for Argot Unit Trust) v National Mutual Life Association of Australasia (No 2) [2012] VSC 177, cited.
Alves v Patel [2005] NSWSC 841, cited.
Davis v Nationwide News Pty Ltd [2008] NSWSC 946, cited.
Love v State of Victoria (No 2) [2009] VSC 531, cited.

Orleans Investments Pty Ltd v MindShare Communications [2009] NSWCA 40; (2009) 254 ALR 81, cited.

Defamation Act 2005 (Qld), s 13, s 14, s 15, s 40

COUNSEL:

N Ferrett with M May for the plaintiff

S Keim SC with R Gordon for the defendant

SOLICITORS:

Cooper Grace Ward for the plaintiff

Guest Lawyers for the defendant

  1. I gave judgment in this proceeding on 18 June 2015, determining that the defendant had defamed the plaintiff, and assessing general damages (including aggravated damages) at $275,000 and special damages at $500,000.

  2. The plaintiff has now applied for his costs on the indemnity basis.

    Background

  3. On 12 November 2012, the defendant announced to journalists that he would be holding a media conference (conference announcement).  On…

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Flegg v Hallett [2015] QSC 315
Case
[2015] QSC 315
Decision Date

CaseChat Overview and Summary

In the case of Flegg v Hallett, the plaintiff sought an order for costs on an indemnity basis following a successful defamation action. The defendant had made three defamatory statements about the plaintiff, resulting in general damages of $275,000 and special damages of $500,000. The plaintiff had made several settlement offers, including publishing an apology and paying compensation, which the defendant refused. The plaintiff argued that the defendant unreasonably failed to accept these offers, entitling the plaintiff to indemnity costs under the Defamation Act 2005 (Qld). The court considered whether the defendant's refusal to accept the settlement offers was reasonable, taking into account the humiliation and constraints involved in the proposed apology and retraction.

The court examined the statutory provisions for costs in defamation proceedings, focusing on Section 40 of the Defamation Act 2005 (Qld), which allows for indemnity costs if the defendant unreasonably failed to make or accept a settlement offer. The court noted that the defendant's submissions did not demonstrate any reason why the interests of justice would require a different order. The plaintiff's proposals for the apology and retraction were designed to achieve a level of publicity commensurate with the defamatory statements, aiming to effectively redress the harm caused. The court found that the defendant's refusal to accept these reasonable settlement offers was unreasonable, despite the potential humiliation involved. Therefore, the court ordered that the defendant pay the plaintiff's costs of and incidental to the action, including reserved costs, on the indemnity basis.

Orders

Orders of the court

The defendant pay the plaintiff’s costs of and incidental to the action, including reserved costs, on the indemnity basis.

Background

Background to the litigation

The plaintiff has now applied for his costs on the indemnity basis.Background On 12 November 2012, the defendant announced to journalists that he would be holding a media conference (conference announcement). On 13 November 2012, he held a media conference, and later that day participated in a radio interview. I held that statements made by the defendant on each of these three occasions were defamatory of the plaintiff. The general damages related to the effect of the publications taken together. The special damages related to financial loss suffered by the plaintiff as a consequence of his resignation from his position as the Minister for Housing and Public Works on 14 November 2012. It is relevant to note that the publications extended beyond those which were the subject of the proceedings, and included allegations relating to the plaintiff continuing to practise medicine while a Minister of the Crown (medical practice allegations). It should also be noted that the plaintiff commenced these proceedings on 4 December 2012, his statement of claim of that date claiming the sum of $339,000 for general damages, $500,000 for aggravated compensatory damages, and unspecified special damages (relating to his resignation as a Minister).Statutory provision for costs Section 40 of the Defamation Act 2005 (Qld) is as follows:-“40 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.” It will be apparent from s 40(2)(a) that the making of a settlement offer is a relevant consideration for an order for costs under s 40. The expression extends to “an offer to make amends”, a matter referred to earlier in the Act. It is convenient to set out the relevant provisions:-“13 Publisher may make offer to make amends(1)The publisher may make an offer to make amends to the aggrieved person.(2)The offer may be—(a) in relation to the matter in question generally; or(b)limited to any particular defamatory imputations that the publisher accepts that the matter in question carries.(3)If 2 or more persons published the matter in question, an offer to make amends by 1 or more of them does not affect the liability of the other or others.(4)An offer to make amends is taken to have been made without prejudice, unless the offer provides otherwise.14 When offer to make amends may be made(1) An offer to make amends can not be made if —(a)28 days have elapsed since the publisher was given a concerns notice by the aggrieved person; or(b)a defence has been served in an action brought by the aggrieved person against the publisher in relation to the matter in question.(2)A notice is a concerns notice for the purposes of this section if the notice—(a)is in writing; and(b)informs the publisher of the defamatory imputations that the aggrieved person considers are or may be carried about the aggrieved person by the matter in question (the imputations of concern).(3)If an aggrieved person gives the publisher a concerns notice, but fails to particularise the imputations of concern adequately, the publisher may give the aggrieved person a written notice (a further particulars notice) requesting the aggrieved person to provide reasonable further particulars about the imputations of concern as specified in the further particulars notice.(4)An aggrieved person to whom a further particulars notice is given must provide the reasonable further particulars specified in the notice within 14 days (or any further period agreed by the publisher and aggrieved person) after being given the notice.(5)An aggrieved person who fails to provide the reasonable further particulars specified in a further particulars notice within the applicable period is taken not to have given the publisher a concerns notice for the purposes of this section.”15 Content of offer to make amends(1) An offer to make amends—(a) must be in writing; and(b)must be readily identifiable as an offer to make amends under this division(c)if the offer is limited to any particular defamatory imputations— must state that the offer is so limited and particularise the imputations to which the offer is limited; and(d)must include an offer to publish, or join in publishing, a reasonable correction of the matter in question or, if the offer is limited to any particular defamatory imputations, the imputations to which the offer is limited; and(e)if material containing the matters has been given to someone else by the publisher or with the publisher’s knowledge — must include an offer to take, or join in taking, reasonable steps to tell the other person that the matter is or may be defamatory of the aggrieved person; and(f)must include an offer to pay the expenses reasonably incurred by the aggrieved person before the offer was made and the expenses reasonably incurred by the aggrieved person in considering the offer; and (g)may include any other kind of offer, or particulars of any other action taken by the publisher, to redress the harm sustained by the aggrieved person because of the matter in question, including (but not limited to) —(i)an offer to publish, or join in publishing, an apology in relation to the matter in question or, if the offer is limited to any particular defamatory imputations, the imputations to which the offer is limited; or(ii)an offer to pay compensation for any economic or non-economic loss of the aggrieved person; or(iii)the particulars of any correction or apology made, or action taken, before the date of the offer.(2)Without limiting subsection (1)(g)(ii), an offer to pay compensation may comprise or include any 1 or more of the following—(a) an offer to pay a stated amount;(b)an offer to pay an amount to be agreed between the publisher and the aggrieved person;(c)an offer to pay an amount determined by an arbitrator appointed, or agreed on, by the publisher and the aggrieved person;(d)an offer to pay an amount determined by a court.(3)If an offer to make amends is accepted, a court may, on the application of the aggrieved person or publisher, determine—(a)if the offer provides for a court to determine the amount of compensation payable under the offer—the amount of compensation to be paid under the offer; and(b)any other question that arises about what must be done to carry out the terms of the offer.(4) The powers conferred on a court by subsection (3) are exercisable—(a)if the aggrieved person has brought proceedings against the publisher in any court for defamation in relation to the matter in question, by that court in those proceedings; and(b)except as provided in paragraph (a), by the Supreme Court.”Settlement offers

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The defendant’s submissions did not identify any matter of substance to show that the interests of justice require some order other than that provided for in s 40(2)(a).Conclusion I propose to order that the defendant pay the plaintiff’s costs of and incidental to the action, including reserved costs, on the indemnity basis.

Ratio Decidendi

Legal Principle Established

The plaintiff’s submissions in reply pointed out that there was no evidence as to the defendant’s means. They took issue with the criticisms of the proposed means of publication of the apology and retraction, pointing out their relationship to the way in which the defamatory publications (other than the radio interview) were made, so as to achieve the same publicity as those publications. Moreover, the defendant had been prepared to agree both to the method of publication and the terms of the apology. It was submitted that the non-disparagement clause was enforceable, by reference to Orleans Investments Pty Ltd v MindShare Communications Ltd[15]; and that contracts routinely restrict the rights of parties to speak on particular topics. The defendant had given no evidence to explain his refusal to accept the plaintiff’s offers. The defendant’s approach to early resolution of the dispute was unreasonable.[15] (2009) 254 ALR 81.Consideration I accept that there was some element of humiliation involved in compliance by the defendant with the settlement proposals made by the plaintiff. It seems to me there is frequently an element of humiliation associated with a public apology. That is because an apology will usually involve an expression of regret for the publication, an unqualified acknowledgment of the falsity of the defamatory imputations, and a withdrawal of them[16]. A defendant’s failure to accept a settlement offer may well be unreasonable, notwithstanding that performance of its terms may result in some humiliation. [16] See Tobin and Sexton, Australian Defamation Law and Practice, LexisNexis Butterworths, [22,130]. The humiliation would have been increased by the constraints proposed by the plaintiff, and by the fact that the proposed method of publication of the apology reflected the manner in which the defamatory publications were initially made. The defendant may well have considered that there was an element of “eating crow” involved in the plaintiff’s proposal. On the other hand, the proposal could also be regarded as a means of securing a similar level of media attention for the apology as the defendant secured for the defamatory publications in the conference announcement and the media conference. I accept that any humiliation associated with a public apology is to be considered in determining whether a defendant unreasonably refused to agree to a settlement offer. However, it seems to me that this factor will often attract little weight, when the public apology seeks to redress the effects of a defamation which has done significant damage to a plaintiff’s reputation, and has caused substantial hurt to a plaintiff’s feelings. It seems to me that the manner of publication of the retraction and apology which the plaintiff proposed, and the limitations on what the defendant might say, were designed to ensure that the apology attracted substantial publicity broadly commensurate with the publicity which the defamatory statements were given; and to avoid dilution of the effect of the apology. In the circumstances, they do not seem to me to have extreme aspects. It is difficult to accept that they would make it reasonable for the defendant to refuse an otherwise reasonable offer.