Iskander v Barcos (Ruling as to Costs)
[2023] VCC 2123
•23 November 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| DEFAMATION LIST |
Case No. CI-23-00381
| MICHAEL ISKANDER | Plaintiff |
| v | |
| DAVID BARCOS | Defendant |
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JUDGE: | HER HONOUR JUDGE CLAYTON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | In Chambers | |
DATE OF RULING: | 23 November 2023 | |
CASE MAY BE CITED AS: | Iskander v Barcos (Ruling as to Costs) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 2123 | |
RULING AS TO COSTS
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Subject:COSTS
Catchwords: Costs – defamation – indemnity costs
Legislation Cited: Defamation Act 2005
Cases Cited:Iskander v Barcos [2023] VCC 2074
Ruling: Costs awarded on standard basis.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Awad (Solicitor) | M Joseph & Associates Lawyers |
| For the Defendant | No appearance | Self represented |
HER HONOUR:
1On 15 November 2023, I handed down my assessment of damages after judgment was entered in default of appearance.[1] I awarded the plaintiff, Mr Iskander, the sum of $90,000 in damages.
[1] Iskander v Barcos [2023] VCC 2074
2In the normal course of events, a successful party is entitled to a costs order on a standard basis. In some circumstances, the court may determine that an order other than the usual costs order is appropriate.
3However, s40 of Defamation Act 2005 (“the Act”) provides that a court must order costs 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.[2]
[2] Defamation Act 2005, s40
4In awarding costs in defamation proceedings, the Court may have regard to the way in which the parties to the proceedings conducted their cases.[3]
[3] (ibid) s40(1)(a)
5The solicitor for Mr Iskander makes application for his costs on an indemnity basis on the grounds that “the defendant has hinder[ed] an early resolution of the proceedings” in that he did not respond to the Concerns Notice, and did not file a defence or attend Court.
Plaintiff’s offer to settle
6On 23 December 2022, Mr Iskander’s solicitor sent a Concerns Notice to Mr Barcos. In that Concerns Notice, the solicitor set out a “Proposal of resolution of this matter and invitation to make an offer of amends”.[4]
[4] Concerns Notice, page 7
7That proposal read (verbatim) as follows:
“… For any offer to be acceptable to us. It should include:
1. You undertake to cease and to desist from publishing, disseminating or otherwise exploiting the defamatory publication in any other form, or ever communicating defamatory publication (sic) to other persons, about our client.
2. You undertake to remove all published defamatory publications in this Concern[s] Notice, on all social media platforms and other platforms and the BNB products Facebook Page.
3. You sign the undertaking, the retraction, and the apology contained in Annexure ‘B’ of this letter.
4. You publish [a] signed apology and retraction on [the] BNB Product Facebook page for at least 6 months as [a] pinned post.
5. You provide us with a list of all known persons including on social media that have your publications communicated to or shared with.
6. You pay our client the sum of $500,000.00 by way of damage[s].
7. An appropriate offer to compensate our client for any damage caused in addition to an appropriate offer to compensate our client for special damages.
8. You pay our client reasonable legal costs in finalising this matter, as required by The Act and according to the Supreme Court of Victoria scale of costs.
We invite you to accept our client’s terms and offer to settle this matter. If it be accepted and once performed, this matter will be at an end. Under the Act, an offer of amends cannot be made if 28 days elapsed from the date of the Concerns Notice.
…
Annexure B
Subject: Retraction
Dear all,
Before and on 13th April 2022 and 3rd November 2022 and onwards, I published comments on social media and various websites concerning Mr Michael Iskander.
Those statements were offensive and untrue.
Among other things, my comments suggested Mr. Michael Iskander is a scammer and runs unreliable business (sic).
To paint her (sic) as such is unfair and incorrect. Mr. Michael Iskander is a reputable member of the Victorian community and excellent businessman and worker.
I regret and withdraw all my comments and publications about Mr. Iskander without qualification. And I unreservedly apologise to Mr. Iskander for any comments I made about him.
Regards,
David Barcos.”[5]
[5] Concerns Notice, page 25
Did the Defendant unreasonably fail to agree to a settlement offer?
8The amendments to the Act, which came into effect on 1 July 2021, require an aggrieved person to serve a concerns notice and to wait until a publisher has had an opportunity respond, before issuing proceedings.[6]
[6] Defamation Act 2005, s12B(1)
9These changes curtail the automatic right of an aggrieved person to come to court for adjudication.
10The intention of the legislature was to reduce the number of comparatively minor claims clogging up the court. In such cases legal costs can easily exceed any damages awarded and take considerable court time.
11The cost provisions of s40 of the Act impose a potential heavy penalty on a party who fails to engage in reasonable attempts to resolve proceedings.
12The defendant became aware of the plaintiff’s claims through the Concerns Notice sent by the plaintiff’s solicitor. The defendant did not respond to that Concerns Notice.
13The question is whether, pursuant to s40(2)(a) of the Act, the defendant was unreasonable in failing to agree to a settlement offer proposed by the plaintiff. The offer stated in the Concerns Notice sought compensatory damages in the amount of $500,000, exceeding the statutory maximum for compensatory damages. Further the plaintiff sought additional, unquantified “special damages”, and compensation for “any damage caused in addition” to special damages and compensatory damages. It is unclear what those damages could be.
14The intention of the concerns notice process is to require parties to engage in genuine and reasonable attempts to resolve the dispute. Any attempt at resolution is likely to involve negotiation and an opening gambit that does not necessarily reflect the end position. However, the concerns notice process is not a mechanism for a party, or a party’s solicitor, to make a plainly unreasonable offer and to then claim an entitlement to indemnity costs pursuant to s40 of the Act, on the basis that the other party failed to respond.
15The plaintiff obtained a result on a trial assessment, where there was no contradictor and where the Court was required to accept the truth of the pleaded allegations that was less than one fifth of the offer proposed by his solicitor.
16The offer bore no relationship to any realistic assessment of the plaintiff’s prospects at trial and was not a reasonable offer. It was not unreasonable for the defendant not to accept a plainly unreasonable offer.
Did the Defendant unreasonably fail to make a settlement offer?
17In circumstances where an offer in a concerns notice bears no relationship to what a plaintiff might reasonably expect to obtain by way of a court verdict, it is not only not unreasonable for a publisher not to accept the offer, but it may be reasonable for a publisher not to make an offer of settlement in response.
18When met with such an unrealistic offer in the Concerns Notice, the publisher was entitled to conclude that there was little point in attempting a negotiation by making a reasonable offer in response.
19Solicitors should be discouraged from treating the concerns notice process as a mechanism for making wildly inflated ambit claims. Such conduct risks the prospect of their client obtaining costs on an indemnity basis.
20In this case, had a reasonable offer been made, the plaintiff would likely have been entitled to costs on an indemnity basis.
21For the avoidance of doubt, nothing in these reasons should be seen as preventing an aggrieved person from providing, in a concerns notice, information to a publisher about the potential costs of legal proceedings, or informing a publisher that failing to a resolve a matter could result in significant additional legal costs. Nor should these reasons be seen as preventing a plaintiff from pointing out the statutory maximum or the solicitor’s reasonable assessment of the likely damages that a court might award; however, the information provided must bear some relationship to reality.
22The defendant did not unreasonably fail to agree to a settlement offer proposed by the plaintiff. Because the offer made by the plaintiff was so unreasonable, I do not consider it was unreasonable for the defendant not to respond.
Orders
23The Court is not required to order costs on an indemnity basis.
24There is no other basis upon which an indemnity costs order is appropriate. Accordingly, I order that the defendant pay the plaintiff’s costs of the proceeding on a standard basis, to be taxed in default of agreement.
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