Lehrmann v Network Ten Pty Limited [2024] FCA 1226
File number(s):
NSD 701 of 2024
Judgment of:
ABRAHAM J
Date of judgment:
23 October 2024
Catchwords:
PRACTICE AND PROCEDURE – defamation – security for costs application – stay application – where respondents seek security for costs for appeal – where appellant seeks stay on costs orders below pending outcome of appeal – where appellant impecunious – where notices of contention filed – where findings against appellant below are serious – where grounds of appeal are arguable – whether appeal is in the public interest – the appellant’s right of appeal – security for costs refused – stay granted
Legislation:
Bankruptcy Act 1996 (Cth) s 60 Federal Court of Australia Act 1976 (Cth) ss 23, 24, 37P, 43, 56 Federal Court Rules 2011 (Cth) rr 36.08, 36.09 Defamation Act 2005 (NSW) ss 25, 30 International Covenant on Civil and Political Rights, opened for signature 19 December 1996, 999 UNTS 171 (entered into force 23 March 1976) art 14
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Lehrmann v Network Ten Pty Limited [2024] FCA 1226
Case
[2024] FCA 1226
Decision Date
CaseChat Overview and Summary
The case of Lehrmann v Network Ten Pty Limited involved an application for security for costs by the respondents, Network Ten and Ms Wilkinson, against the appellant, Mr Lehrmann, for an appeal in a defamation case. The court was tasked with determining whether the respondents should be granted security for the costs of the appeal, given the appellant's impecuniosity and the arguability of the grounds of appeal. The court also had to decide whether to grant a stay on the costs orders pending the outcome of the appeal.
The key legal issues were whether the appeal was in the public interest, considering the appellant's right of appeal and the potential impact on his financial situation. The court considered the principles of security for costs and the stay of costs orders, which require a discretionary approach based on the specific circumstances of each case. Factors such as the promptness of the application, the impecuniosity of the appellant, and the arguability of the appeal were crucial in making these determinations.
The court found that the balance of convenience favoured granting a stay on the costs orders. It concluded that the respondents' application for security for costs was not established because of the appellant's impecuniosity and the arguability of the grounds of appeal. The court noted that the appeal, while not strong, contained arguable grounds, and an order for security could stultify the appeal. Therefore, the application for security for costs was dismissed, and the stay of the costs orders was granted. This decision ensured that the appellant's right to appeal was not unduly hindered by financial constraints.
The court's final orders included dismissing the respondents' application for security for costs and staying the order for the appellant to pay $2,000,000 in costs until the appeal was determined. This ruling allowed the appeal to proceed without the immediate financial burden on the appellant, preserving his right to challenge the primary judgment.
Orders
Orders of the court
1. The interlocutory application of the respondents dated 21 June 2024 be dismissed.
2. Order 2 of the primary judge made on 27 June 2024 in proceeding NSD 103 of 2023, by which the appellant is to pay the first respondent $2,000,000, be stayed until the appeal in proceeding NSD 701 of 2024 is determined.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
On 6 September 2024, at a further case management hearing, the order for filing an amended notice of appeal was extended to 13 September 2024. An amended notice of appeal was filed that day.Evidence relied on In support of the security application, the respondents read an affidavit of Ms Saunders affirmed on 21 June 2024 ([15(b)] was not read) and a second affidavit of Ms Saunders affirmed on 13 September 2024. The appellant read the affidavit of Ms Burrows affirmed 6 September 2024. In support of the stay application, the appellant read a second affidavit of Ms Burrows affirmed 1 August 2024. The respondents read the aforementioned affidavit of Ms Saunders affirmed 13 September 2024. No objections were taken to any affidavit.Relevant legal principles The principles upon which security for costs may be ordered and a stay may be granted are well established.Security for costs In Etnyre v Australian Broadcasting Commission [2021] FCA 610 at [6]-[17], I summarised principles relevant to an application of this nature. That summary has since been adopted: see, e.g., Tickle v Giggle for Girls Pty Ltd [2023] FCA 553 at [66]; Karis v Digital CC Management Pty Ltd (No 3) [2024] FCA 738 (Karis) at [39]. I rely on that summary here, and in so far as it is relevant to the circumstances of this application, repeat it below, with some additions. Section 56 of the FCA Act relevantly provides:(1)The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her.(2)The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs. Rule 36.09 of the Federal Court Rules 2011 (Cth) (FCR) relevantly provides:(1) A party may apply to the Court for an order that:(a)the appellant give security for the costs of the appeal, and for the manner, time and terms for giving the security; and(b) the appeal be stayed until security is given; and(c)if the appellant fails to comply with the order to provide security within the time specified in the order—the appeal be stayed or dismissed. The power to order security is discretionary and has been described as “broad”: James v Australian and New Zealand Banking Group Ltd (No 1) [1985] FCA 539; (1985) 9 FCR 442 at 444; Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 (Madgwick) at [6]; Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418 (Stapleton) at [6]-[7]. The discretion “is to be exercised in light of the facts and circumstances of the particular case”: Stapleton at [6], quoting Botsman v Bolitho [2018] VSCA 111 at [36]. The issue is essentially one of risk management: East Grace Corporation v Xing (No 1) [2005] FCA 219 at [6]. Against that background, the authorities reflect the type of factors which have been considered as relevant on such applications, which have included the following. First, whether the application for security for costs has been brought promptly: KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 197.
Decision
Reasons for decision
In the circumstances, I am satisfied that the balance of convenience favours the granting of a stay of the costs order.Conclusion The respondents’ application for security for costs of the appeal is not established, and accordingly the application is dismissed. The appellant’s application for a stay of the costs order below is granted.
Ratio Decidendi
Legal Principle Established
The second respondent supported the first respondent’s submissions on the stay application and made no separate submissions.ConsiderationSecurity for costs Against the background of the relevant principles, I make several observations. First, the respondents estimate the appeal will take three days, and initially sought $200,000 in security. Each have filed notices of contention. Network Ten’s notice of contention addresses issues already covered in Mr Lehrmann’s grounds. The same cannot be said in respect to Ms Wilkinson’s notice of contention, which substantially broadens the appeal. It contains three grounds alleging thirty particulars, including a ground not raised by Network Ten in relation to the defence of qualified privilege, which was rejected by the primary judge. It would significantly increase the length of the hearing, and the costs involved. During the oral hearing, the respondents submitted that the arguments relating to the appellant’s grounds, and the related grounds in the respondents’ notices of contention, would take about one-and-a-half days. Network Ten explained that of that time they would require half a day to put their submissions in opposition. The remaining time in the three-day estimate related to the additional grounds in Ms Wilkinson’s notice of contention. Ms Wilkinson properly accepted in oral submissions that the appellant ought not be required to pay security in respect to that aspect of her notice of contention. On that basis, Network Ten reduced the amount of security sought to $180,000 for a two-day hearing on the notice of appeal (and its overlapping grounds in the notices contention) or $170,000 to cover one-and-a-half days of hearing on that aspect. Second, there is no dispute that Mr Lehrmann is impecunious. Although there was some debate as to whether the respondents contributed to that impecuniosity, that is unnecessary to determine to resolve this application. Further, to state the obvious, he is a natural person: see [23] above. Third, the respondents accepted that an order for security would likely stultify the appeal given the appellant’s impecuniosity. Fourth, the respondents accept that there are grounds of appeal that are at least arguable. Ms Wilkinson separately submitted that the prospects of success against her are lower in relation to the first ground. Although Network Ten submitted orally that the appellant’s grounds of appeal ranged from “hopeless” to “faintly arguable”, it later accepted that it was not submitting that “the notice of appeal is so hopeless that there’s nothing to go to an appeal court”, but that rather it was simply pointing out that, on its submission, it is not a strong case. Any consideration of the merits of the appeal could not be undertaken on the scant material before the Court in these applications. That practical limitation became readily apparent as the respondents advanced submissions on this topic during the oral hearing (which included matters broader than the primary judgment), which they appeared to accept. In that circumstance, speculation as to the prospects of success is inappropriate. Neither respondent challenged that position.