Johnston v Aldridge (No 2)
[2018] SADC 72
•27 June 2018
District Court of South Australia
(Civil)
JOHNSTON v ALDRIDGE (NO 2)
[2018] SADC 72
Ruling of His Honour Judge Brebner (ex tempore)
27 June 2018
DEFAMATION - ACTIONS FOR DEFAMATION - COSTS
Action in defamation. Plaintiff successful on all issues. No reason why ordinary rule as to costs should not apply. Plaintiff sought indemnity costs pursuant to s 38 Defamation Act 2005 on basis that defendant acted unreasonably in rejecting formal offer to settle the proceedings. Quantum of damages awarded significantly greater than amount plaintiff prepared to accept.
Held: Disproportion relevant. Defendant acted unreasonably in failing to accept plaintiff's offer. Interests of justice do not require award of costs of other than on indemnity basis.
Defamation Act 2005 s 38, referred to.
Cornes v The TEN Group Pty Ltd and Ors (No.2) [2012] SASCFC 106, considered.
JOHNSTON v ALDRIDGE (NO 2)
[2018] SADC 72
This is an application for costs on an indemnity basis.
The plaintiff brought an action in defamation. He succeeded on each pleaded imputation and on each evidentiary issue in contention. The defendant failed on each defence pleaded. I ultimately awarded the plaintiff damages in the amount of $100,000 inclusive of aggravated damages awarded on the basis, inter alia, of the exacerbation of the hurt suffered by the plaintiff arising out of the defendant's knowledge that that which he published was untrue.
Prior to the institution of the proceedings the plaintiff served a number of letters of concerns on the defendant calling on him to make amends in the manner particularised in the letters. There was then an exchange of letters and formal offers by way of settlement negotiations.
The demands made in the letters of concerns were plainly reasonable however, the defendant did not make amends or otherwise mitigate the circumstances and the relevant publications were still extant at the time the trial commenced.
There was nothing in the way in which the plaintiff conducted his case which could justify a departure from the general rule that costs follow the event. In particular, the way he conducted his case was not productive of any real waste or inefficiency. By virtue of s 38 of the Defamation Act 2005, the plaintiff is entitled to an award of costs on an indemnity basis if the defendant unreasonably failed to make an offer of settlement, or unreasonably failed to agree to a settlement offer proposed by the plaintiff unless the interests of justice demand otherwise.
The history of the settlement negotiations and formal offers is set out in an affidavit of the plaintiff's solicitor. The various letters of negotiation are annexed. The defendant does not dispute the contents of the affidavit however, he supplemented the history of the negotiations by informing me that he was prepared to meet the plaintiff's final offer in so far as it related to quantum, but not as to costs.
In any event, the final sum he was prepared to put on the table was $17,000. This is significantly less than the amount of $100,000 I ultimately awarded. The extent of any disproportionality between the amount the defendant is prepared to offer and the quantum of damages ultimately awarded is relevant to the determination of whether the parties have acted reasonably for the purposes of s 38: Cornes v The TEN Group Pty Ltd and Ors (No.2) [2012] SASCFC 106 at [14]. Moreover, impecuniosity does not provide an answer to a failure to accept a reasonable offer.
When viewed in the light of my assessment, the plaintiff's final offer is plainly reasonable, if not generous, and the defendant's rejection of that offer is not. The material before me satisfies the pre-conditions of the operation of s 38 and there is nothing which makes it imperative in the interests of justice that costs be ordered other than on an indemnity basis. I do not however, think that the defendant should be penalised in costs for participating in negotiations which ultimately failed, irrespective of the cause of that failure.
The defendant is to pay the plaintiff's costs on a party/party basis from the commencement of the action up until 18 March 2017, and on an indemnity basis thereafter in an amount to be either agreed or fixed by a Master of the Court.