Hoser v Herald and Weekly Times Pty Limited & Anor (Ruling as to Costs)
[2023] VCC 209
•22 February 2023
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| Defamation List |
Case No. CI-22-02847
| RAYMOND TERRENCE HOSER | Plaintiff |
| v | |
| HERALD AND WEEKLY TIMES PTY LIMITED (ACN 004 113 937) | First Defendant |
| and | |
| PAUL SHAPIRO | Second Defendant |
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JUDGE: | HER HONOUR JUDGE CLAYTON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 February 2023 | |
DATE OF RULING: | 22 February 2023 | |
CASE MAY BE CITED AS: | Hoser v Herald and Weekly Times Pty Limited & Anor (Ruling as to Costs) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 209 | |
RULING AS TO COSTS
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Subject:CIVIL PROCEDURE – COSTS
Catchwords: Costs – costs in defamation proceedings – indemnity costs – whether plaintiff’s refusal of settlement offers was unreasonable – interests of justice
Legislation Cited: Defamation Act 2005, s3, s12A, s12B, s40; Civil Procedure Act 2010, s10
Cases Cited:Hoser v Herald and Weekly Times Pty Limited & Anor (Ruling) [2022] VCC 2213; Wilson v Bauer Media Pty Ltd [2017] VSC 521
Ruling: The plaintiff is ordered to pay the defendants’ costs of and incidental to the proceedings on an indemnity basis.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | The plaintiff appeared in person | - |
| For the Defendants | Mr S Mukerjea | Thomson Geer |
HER HONOUR:
1On 14 December 2022, summary judgment was entered for the defendants in this matter.[1] Pursuant to s40 of the Defamation Act 2005 (“the Act”), the defendants seek indemnity costs of and incidental to the proceeding on the basis that the plaintiff unreasonably failed to accept two settlement offers. The defendants rely on an affidavit of Alexander Croft dated 29 September 2022.
[1]Hoser v Herald and Weekly Times Pty Limited & Anor (Ruling) [2022] VCC 2213
2The plaintiff opposes any costs order in favour of the defendants.
3For the reasons set out below, I find that the plaintiff unreasonably failed to accept a settlement offer made by the defendants. Accordingly, the plaintiff is ordered to pay the defendants’ costs of and incidental to the proceedings on an indemnity basis.
Background
4In Hoser v Herald and Weekly Times (Ruling),[2] summary judgment was entered for the defendants because:
(a) the first purported concerns notice served by the plaintiff on 8 July 2022 was not a valid concerns notice within the meaning of s12A of the Act and, accordingly, the plaintiff commenced this proceeding on 12 July 2022 in contravention of s12B(1)(a) and s12B(b) of the Act;
(b) the second purported concerns notice served by the plaintiff on 21 July 2022 was also not a valid concerns notice and thus did not remedy the plaintiff’s failure to comply with s12B(1)(a) and s12B(1)(b) of the Act; and
(c) even if the purported concerns notices were valid concerns notices in contravention of s12B(c) of the Act, the plaintiff commenced this proceeding prior to expiry of the “applicable period” for an offer of amends and the circumstances did not warrant the grant of leave pursuant to s12B(3).
[2] Ibid
Section 40 of the Act
5Section 40 of the Act requires that, where defamation proceedings are successfully brought by a plaintiff and costs of the proceeding are to be awarded to the defendant, a court must (unless the interests of justice require otherwise) 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]
[3] Section 40(2)(b) of the Act
6In awarding costs in defamation proceedings, the court may have regard to 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 any other matters that the court considers relevant. [4]
[4] Section 40(1) of the Act
Settlement Offers
7The defendants made two settlement offers on 5 August 2022[5] and 16 September 2022 respectively.[6]
[5] Affidavit of Alexander Croft affirmed 29 September 2022; exhibit AC-1, page 18
[6] Affidavit of Alexander Croft affirmed 29 September 2022; exhibit AC-1, page 22
8The first offer was:
(a) to remove the article complained of from webpages operated by News Corp Australia and publish an amended editor’s note in place of the article in the following terms:
“The Monash Leader previously published on this page a court report concerning a charge of using a mobile phone while driving against Raymond Hoser. The Monash Leader accepts that at all times Mr Hoser protested his innocence, and that on appeal the County Court of Victoria dismissed the charge against Mr Hoser. We apologise to Mr Hoser for any hurt and embarrassment caused by the article previously published.”
(b) to arrange for the removal of any Facebook post on pages operated by News Corp Australia that links to the article;
(c) take reasonable steps to request that any entity not associated with News Corp Australia, who may have republished the article online, remove that reproduction, on the basis of copyright grounds or otherwise;
(d) pay $5,000 for costs and in lieu of damages.
9The defendants informed the plaintiff that they would rely on this offer pursuant to s18 of the Act, which provides that an offer to make amends can be a defence to a claim, and rely on the letter in support of an application for indemnity costs pursuant to s40 of the Act.
10The plaintiff responded to this offer by letter dated 24 August 2022 and informed the defendants he was rejecting the offer because the offer:
(a) did not provide a proper apology;
(b) made no serious attempt to restore his reputation, in particular, because it did not refer to the fact that Mr Hoser had been found “not guilty”;
(c) did not provide reasonable compensation.
11He enclosed, with his letter, a copy of the Writ and Statement of Claim he had filed on 12 July 2022.
12On 16 September 2022, the defendants responded by letter, informing Mr Hoser that the purpose of their letter was to put him on notice that his claim was statute barred and liable to be dismissed.
13It set out in detail the sequence of events and referred Mr Hoser to s12B of the Act, which prohibits a person from issuing proceedings in a court until twenty-eight days have elapsed since the serving of a concerns notice. The defendants pointed out that Mr Hoser was in breach of that section.
14The defendants then made a further offer to resolve the matter. This offer was:
(a) To remove the article on each of the publications referred to in the Statement of Claim and any reproduction of the article on websites operated by News Corp Australia;
(b) To publish an article (“further article”) on the Herald Sun website which, among other things, noted that on appeal, charges against Mr Hoser had been dismissed, “meaning Mr Hoser has been found not guilty” and that “Hoser has trademarked the title ‘Snakeman’ and is one of Australia’s most prominent snake catchers and reptile experts. He has named over 200,000 reptile species and is active in wildlife conservation”;
(c) To publish the further article on a unique URL within the Monash Leader section of the website for a period of at least one year;
(d) To link to the further article on the Monash Leader, with a thumbnail photograph of Mr Hoser “in the same manner as other news stories are promoted” for a period of seven days, such link to be within the first twelve stories for a period of 24 hours and, thereafter, to decrease in prominence in accordance with the usual news cycle;
(e) To take reasonable steps to comply with s15(1) of the Act; and
(f) To pay Mr Hoser the sum of $10,000, noting that he had not incurred any costs of obtaining legal representation.
15The defendants reserved their rights to rely on the offer as a defence to the proceeding, as well as for the purposes of seeking costs.
16The defendants informed Mr Hoser that the costs payable as a result of a failed defamation action were likely to be in the hundreds of thousands of dollars.
17On 19 September 2022, Mr Hoser responded to the offer by informing the defendants that “while the filing of court documents in this matter may have been outside of the timelines dictated by the defamation act (as alleged by you) the proceeding was materially commenced only when I served court documents on you”.[7]
[7] Affidavit of Alexander Croft dated 29 September 2022 Exhibit AC-1 at page 27
18He informed the defendants that he would likely succeed in an application under s12B(b).
19He rejected the defendants’ settlement offer.
Defendants’ submissions
20The defendants submit that this was unreasonable. The proceeding had not been properly commenced and was bound to fail. This ought to have been plain to the plaintiff from 21 July 2022, when the defendants brought s12A to the plaintiff’s attention, but was certainly plain by 16 September 2022, when the defendants became aware that the plaintiff had issued proceedings that were in breach of s12B, and informed him of this.
21The dismissal of the plaintiff’s claim entitles the defendants to their costs in the ordinary course, but the defendants submit that s40 of the Act is brought into operation in this case.
22There was no reason why the plaintiff could not have complied with the provisions of s12A and 12B. His failure to do so rendered the proceedings incompetent and destined to fail. A plaintiff who, despite having those defects clearly explained, nevertheless fails to accept a reasonable offer, is clearly acting unreasonably.
23The defendant says the offer of 16 September 2022 was a reasonable offer and this is illustrated by a subsequent offer from the plaintiff on substantially the same terms.
24The defendants say the interests of justice do not require any other order to be made and, if anything, would favour an indemnity cost order. The provision of s12A and 12B go to the heart of changes to the Act. They are designed to compel a plaintiff to stop and think before issuing proceedings. The plaintiff has failed to provide any adequate explanation as to why he did not comply with those provisions and there was no impediment to him doing so. At the time the failure to comply was pointed out to him, he was still within time to issue fresh proceedings and would not have been prejudiced.
25The defendants rely on the reasons set out in Hoser v Herald and Weekly Times Pty Limited & Anor (Ruling),[8] at paragraphs 14 to 16 and 100 to 107, and submit the interests of justice favour an award of indemnity costs.
[8] Supra
Plaintiff’s submissions
26The plaintiff relied on two sets of written submissions as well as oral submissions at the hearing of the application.
27His submissions were in support of his argument that no costs order should be made against him, as well as his argument that indemnity costs should not be awarded.
Not unreasonable to reject settlement offer
28The plaintiff submits that s40 is not enlivened because it was not unreasonable for him to refuse to accept a settlement offer.
29The plaintiff submits that it was reasonable for him to not accept either offer because the offers made were not reasonable and, in fact, were deliberately unreasonable so as to render them unacceptable.
30The plaintiff says that, in particular, the defendants’ offer to publish an amended editor’s note[9] would have “made things worse and would have seen the plaintiff held up for even more hatred and ridicule”[10] because it suggested he had named over 200,000 species of reptile, when the real figure is over 200 species.
[9] Affidavit of Alexander Croft affirmed 29 September 2022; Exhibit AC-1, page 19
[10] Plaintiff’s written submissions dated 1 February 2023, page 4
31He says the defendants’ claim that he ought to have been aware of the requirements of s12 of the Act is “rubbish” and there is a perfectly reasonable explanation as to why he did not know that detail. He submits this is because he was extremely busy when he accessed the legislation and the version he accessed did not have the amended s12.
32I understand this submission to be that, because he was extremely busy, it would be unreasonable to expect him to be aware that he was accessing an out-of-date version of legislation. Having looked at a version of the legislation which did not contain s12A, it was reasonable for him to reject the defendants’ offers.
33He re-agitated his submission, made in the primary application, that a proceeding is not commenced until served. I understand this submission to be that, despite being told by the defendants that his proceeding was defective, it was reasonable for him to consider it had been properly commenced, as he believed commencement occurred upon service, which was 24 August 2022, more than twenty-eight days after the service of the purported concerns notice on 8 July 2022. Given that he reasonably believed himself to be compliant with the legislation, it was not unreasonable to reject the defendants’ offers.
Interests of justice
Merits of the case
34Mr Hoser submits that it is not in the interests of justice to order costs against him, as his underlying case is meritorious, was dismissed only for technical reasons and can be distinguished from other cases dismissed for non-compliance with s12A or s12B.
Legal ambush and late amendment
35Mr Hoser submitted he had been subject to “legal ambush” by News Corp Australia, because its letter dated 16 September referred only to s12B and did not mention s12A. The plaintiff says this amounts to a “late amendment”, and relies on a number of authorities for the proposition that a late amendment by a plaintiff which substantially alters the case a defendant is required to meet may entitle a defendant to its costs up to the date of amendment.[11]
[11]The plaintiff relies on Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137 at 154, citing Anglo-Cyprian Trade Agencies Ltd v PaphosWine Industries Ltd [1951] 1 All ER 873 and Lipkin Gorman v Karpnale Ltd [1989] 1 WLR 1340; see also Murrihy v Radio 2UE Sydney Pty Ltd [2000] NSWSC 318
36The purpose of costs orders is to compensate the person in whose favour it is made, not punish the person against whom the costs order is made.[12] The plaintiff says a costs order would punish him and is therefore not appropriate.[13]
[12]Plaintiff’s Supplementary Submissions for Hearing About Costs on 2 Feb 2023 dated 2 February 2023, page 3, citing Northern Territory v Sangare (2019) 265 CLR 164 at paragraph [25]; Ohn v Walton (1995) 36 NSWLR 77 at paragraph [79]; Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33 at paragraph [34]
[13]Plaintiff’s Supplementary Submissions for Hearing About Costs on 2 Feb 2023 dated 2 February 2023, page 3
Disentitling conduct
37The plaintiff says the general principle that costs should follow the event is modified where the successful party has, by their conduct, “unfairly, improperly or unnecessarily increased the costs”.[14]
[14]ibid
38In this case, News Corp Australia “by their conduct brought the matter to court”[15] by failing to publish a correction in March 2022. He submits this failure, together with a refusal to offer a reasonable settlement, “did effectively invite the litigation”.[16] He says the defendants pursued the matter solely for the purpose of increasing the costs recoverable and this amounts to disentitling conduct.
[15]Plaintiff’s Supplementary Submissions for Hearing About Costs on 2 Feb 2023 dated 2 February 2023, page 4
[16]Ibid
Public interest
39Finally, in relation to the interests of justice, he says that it is a matter of public interest that news organisations should publish accurate articles and corrections when required. It is not in the interests of justice for an organisation which has defamed him and had his claim struck out due to the technical operations of the legislation to be rewarded with a costs order. Such an order would “embolden” the defendants to continue to “stonewall” when they are “in the wrong”. The interests of justice are not served by “destroying the life of a person in wildlife conservation”.
Was the offer reasonable?
40Section 40 is concerned with the unreasonableness of the refusal to accept an offer, rather than the reasonableness of the offer itself; however, the two are related. A plaintiff who refuses an unreasonable offer is far less likely to have acted unreasonably in doing so than a plaintiff who refuses a reasonable offer.
41Therefore, it is necessary to undertake an assessment of whether the offer was reasonable. Although there are two offers, the second offer is the relevant offer to consider for the purposes of this analysis.
42The offer included:
(a) a retraction of the original offending article;
(b) the publication of a new article, which included an apology, a statement that the finding of the County Court on appeal meant Mr Hoser was not guilty of the original charge, and an acknowledgment of Mr Hoser’s role as one of Australia’s most prominent snake catchers and reptile experts, and that he has named a large number of species and is active in wildlife conservation;
(c) compensation in the amount of $10,000.
43The Act aims to provide effective and fair remedies for persons whose reputations are harmed by the publication of defamatory material.[17] The law has recognised that defamation proceedings are intended to restore the victim’s reputation, and provide vindication and financial compensation for harm done, including for hurt and embarrassment.[18]
[17]See s3 of the Act
[18] Wilson v Bauer Media Pty Ltd [2017] VSC 521 at paragraph [59]
44This offer, while unacceptable to Mr Hoser, provides for retraction of the offending article, and an attempt to restore any damage done by that article, by acknowledging Mr Hoser’s experience and expertise. It provides vindication by identifying his “significant win” in the County Court, where charges were dismissed, resulting in him being found not guilty. It also offers a significant sum of compensation. The obvious typographical error in terms of the number of species identified does not detract from the substance of the offer and was readily correctable.
45The offer addressed the intentions of the law of defamation – restoration, vindication and compensation. This is not to suggest that an offer must address each of these matters in order to be reasonable. An offer of “withdraw and each party bear own” costs might be a reasonable offer, as might an offer of money without retraction or apology. The circumstances will dictate; however, the fact that this offer did address these three aspects strengthens the argument that it was a reasonable offer. An assessment of the content of the offer demonstrates it was plainly reasonable.
Was the failure to accept the offer unreasonable?
46The fact that Mr Hoser did not accept a reasonable offer does not necessarily mean Mr Hoser acted unreasonably. An assessment of the reasonableness of refusal requires an analysis of the circumstances.
47In this case, Mr Hoser refused a reasonable offer in the following circumstances:
(a) he had issued proceedings in breach of s12B of the Act;
(b) that breach had been brought to his attention by the defendants;
(c) this rendered his proceedings bound to fail and liable to be dismissed;
(d) he had been informed that a failure to accept an offer would expose him to significant risk of costs against him and that the offer could be used to seek costs on an indemnity basis.
48I do not accept Mr Hoser’s submissions that it was unreasonable to expect him to be aware of the changes to the Act and that therefore, he could not have known that his case was doomed to fail. As dealt with in my primary ruling, despite being a self-represented litigant, Mr Hoser is well aware of the various websites which make legislation available to members of the public. The fact that he had been specifically alerted to the existence of s12A should have prompted further investigation if, in fact, he accessed a version of the legislation which did not contain s12A. It was unreasonable for him not to conduct further investigations to ensure he was in compliance with the legislative requirements of the Act, particularly in circumstances where his attention had been drawn to those requirements.
49In this case, the defendants went further than merely drawing Mr Hoser’s attention to the changes to the legislation. Their letter of 16 September 2022 set out the terms of the relevant section, dealt with the possible alternative argument (that Mr Hoser’s original letter of 8 July 2022 constituted a concerns notice for the purposes of the legislation), and noted that, in breach of s12B, Mr Hoser had commenced proceedings four days after serving that purported concerns notice. The defendants told Mr Hoser that “whichever way you look at it, you have not complied with the provisions of s12B of the Act”.[19]
[19]Affidavit of Alexander Croft dated 29 September 2022, exhibit AC-1
50It was not reasonable for Mr Hoser to think he was compliant with s12B because of his stated belief that a proceeding does not commence until service is effected. As dealt with in my first ruling, the law and rules are unequivocal as to what constitutes the commencement of a proceeding. There is no reasonable basis for Mr Hoser to have concluded that commencement of a proceeding occurred when service was effected. Indeed, such a conclusion is illogical, given that Mr Hoser is well aware of the twelve-month time limit for commencing a proceeding. If a proceeding was commenced only upon service, matters filed on the final day before expiry of the limitation period would be rendered out of time if service could not be effected that same day. Coming to an unreasonable conclusion does not render conduct based on that conclusion reasonable.
51In those circumstances, I am satisfied it was unreasonable for the plaintiff to refuse the offer. Accordingly, the operation of s40 is enlivened.
52I turn now to consider whether the interests of justice require an order other than that the plaintiff pay the defendants’ costs on an indemnity basis.
Do the interests of justice require an order other than for indemnity costs?
53Section 12A has been inserted to promote the resolution of claims prior to trial. The provisions of s12B are mandatory and designed to ensure that plaintiffs must consider carefully their prospects of establishing serious harm and defendants must be afforded an opportunity to make amends prior to proceedings commencing.
54These provisions affect both plaintiffs and defendants. A failure by a defendant to make a reasonable offer to make amends will deprive a defendant of a potential defence available to it. A defendant can only assess the reasonableness of an offer to make amends if the concerns notice adequately particularises the information required by s12A.
55Further, s40 penalises an unsuccessful defendant who, separate from an offer to make amends, unreasonably fails to make offers of settlement to a successful plaintiff, by requiring the defendant to pay the plaintiff’s indemnity costs.
56Section 40 is intended to put pressure on both plaintiffs and defendants in defamation proceedings to act reasonably in both making and accepting offers to settle.
57The interests of justice favour a promotion of the purposes of the Act, as well as promotion of the overarching obligations pursuant to the Civil Procedure Act 2010. That is, to ensure quick, cheap and just disposition of the real issues in dispute.[20]
[20] Section 10 of the Civil Procedure Act 2010
58The plaintiff’s submission that he was the subject of legal ambush or late amendment is without merit. He was advised in writing that he had failed to comply with s12A, and subsequently s12B. It is difficult to see what more the defendants could have done to point out to Mr Hoser the deficiencies of his case. The cases he relies on in relation to late amendment are not apposite.
59Mr Hoser correctly states that costs ought not be a punishment to the losing party. An award of costs is intended to compensate the defendant for the costs incurred in defending a claim that has not succeeded. An award of indemnity costs recognises that the costs actually incurred by parties are almost inevitably greater than “standard” costs. The terms of s40 of the Act coincide with the overarching obligations under the Civil Procedure Act, by providing an additional incentive for parties to act reasonably to resolve matters.
60Making an order for indemnity costs does no more than acknowledge that standard costs orders do not meet the actual costs incurred. Indemnity costs do not provide a windfall to a defendant. Because indemnity costs are greater than standard costs, the legislation recognises that they should only be used in circumstances where there is unreasonable behaviour by one or other party. To the extent that the plaintiff in this case experiences the costs as a punishment, that is a consequence of his own conduct in acting unreasonably.
61The submission that the defendants engaged in disentitling conduct, and essentially brought the matter to court by virtue of their conduct, is without merit. The defendants engaged in a genuine attempt to resolve the dispute as late as 16 September 2022, despite being aware by that time of the weakness of the plaintiff’s position at law. The argument that they have unnecessarily increased costs is similarly without merit. They brought the application to strike the matter out at the earliest opportunity, having identified to the plaintiff, in bald terms, their assessment of his position and the prospect of cost orders against him.
62The plaintiff identifies the public interest in news organisations publishing accurate articles and submits that the prospect of a costs order being made against him would have a dampening effect on members of the public holding media organisations to account. Further, the plaintiff says that it would be against the public interest to award costs against him, given the relative financial positions of the parties.
63I accept the submission that there is a public interest in news organisations publishing accurate articles. I do not accept that a costs order, in this case, would have a dampening effect. A costs order against the plaintiff in this case would have the effect of promoting proper compliance with the legislation and careful consideration of the new requirements of the Act.
64While it is true that there is enormous disparity in the financial positions of the parties, this is not a case where the defendant has used its superior financial position to hinder the early resolution of the proceeding, or to intimidate an opponent into silence or submission.
65Finally, the merits of the case have not been determined; however, even the most meritorious case must be properly commenced in accordance with the legislative requirements and the rules.
66The interests of justice would have to clearly favour making an award other than on an indemnity basis to avoid the mandatory nature of s40 of the Act.
67The interests of justice do not clearly require an order other than in accordance with s40(2)(b) and, accordingly, I order that the plaintiff pay the defendants’ costs of and incidental to the proceeding to be assessed on an indemnity basis in default of agreement.
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