Lehrmann v Network Ten Pty Limited (Costs)

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FEDERAL COURT OF AUSTRALIA

Lehrmann v Network Ten Pty Limited (Costs) (No 2) [2024] FCA 706

File number: NSD 103 of 2023
Judgment of: LEE J
Date of judgment: 27 June 2024
Catchwords: COSTS – where applicant previously ordered to pay costs on an ordinary and indemnity basis – where quantification of costs to be referred to a referee for inquiry and report – facilitation of the overarching purpose – where calculation of lump sum costs appropriate – quantification of lump sum costs – broadbrush approach – costs order in the amount of $2 million made in favour of the first respondent against the applicant – orders made
Legislation: Federal Court of Australia Act 1976 (Cth) Pt VB
Cases cited:

Lehrmann v Network Ten Pty Limited (Costs) [2024] FCA 486

Lehrmann v Network Ten Pty Limited (Trial Judgment) [2024] FCA 369

Division: General Division
Registry: New South Wales
National Practice Area: Other Federal Jurisdiction
Number of paragraphs: 19
Date of hearing: 27 June 2024
Counsel for the applicant: Mr P Svilans (solicitor advocate)
Solicitor for the applicant: Mark O’Brien Legal
Counsel for the first respondent: Ms Z Graus
Solicitor for the first respondent: Thomson Geer Lawyers
Counsel for the second respondent: Mr M Elliott SC
Solicitor for the second respondent: Gillis Delaney Lawyers

ORDERS

NSD 103 of 2023
BETWEEN:

BRUCE LEHRMANN

Applicant

AND:

NETWORK TEN PTY LIMITED

First Respondent

LISA WILKINSON

Second Respondent

ORDER MADE BY:

LEE J

DATE OF ORDER:

27 JUNE 2024

THE COURT ORDERS THAT:

1.Pursuant to ss 23, 37P(2) and 43 of the Federal Court of Australia Act 1976 (Cth), the orders made on 10 May 2024 be varied such that the costs payable by the applicant in favour of the respondents be quantified in a fixed sum and Order 3 made on 10 May 2024 be vacated.

2.Judgment be entered in favour of the first respondent in the amount of $2,000,000 representing its costs of the proceedings.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT
(Delivered ex tempore, revised from the transcript)

LEE J:

  1. For the reasons set out in Lehrmann v Network Ten Pty Limited (Costs) [2024] FCA 486 (costs judgment), I made a number of orders as to costs in relation to these proceedings, including Order 1 made 10 May 2024, which was in the following terms:

    1.        The applicant pay the respondents’ costs of the proceeding on:

    (a)the ordinary basis for the costs incurred in relation to the defence of statutory qualified privilege pursuant to s 30 of the Defamation Act 2005 (NSW) (Defamation Act); and

    (b)the indemnity basis for any other costs of or incidental to the proceeding (including the costs referred to in Order 2 made on 23 November 2023).

  2. In Order 3, I indicated the quantification of costs payable pursuant to Order 1 be referred to a referee for inquiry and report, with the terms of the reference to be settled by…

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Details
Case
[2024] FCA 706
Decision Date

CaseChat Overview and Summary

In the matter of Lehrmann v Network Ten Pty Limited (Costs), the Federal Court of Australia was tasked with determining the costs incurred by the respondents in the course of the proceedings. The primary issue was the method and amount of costs that the applicant, Mr. Lehrmann, should pay to the respondents, particularly Network Ten, one of the respondents. The court had previously ordered Mr. Lehrmann to pay the respondents’ costs on an ordinary and indemnity basis, with a subsequent reference to a referee for the quantification of these costs. However, considering Mr. Lehrmann's limited financial means, the court explored whether a lump sum or fixed amount for the costs would better serve the overarching purpose of a just, quick, inexpensive, and efficient resolution of the dispute.

The court deliberated on whether to adhere to the previous order for a detailed quantification of costs by a referee or to adopt a lump sum approach to avoid further expense and delay. Ultimately, the court found the latter approach more appropriate, given the financial constraints of the applicant. The affidavit of Ms Marlia Ruth Saunders, a partner at Thomson Geer, provided evidence supporting the fixed sum of $2 million for the costs payable by Mr. Lehrmann to Network Ten. This sum was arrived at after excluding certain costs such as pre-litigation correspondence and disallowed affidavits from the total invoiced amount of $3,668,420.83.

In light of the arguments and evidence presented, the court varied the previous orders to quantify the costs payable by Mr. Lehrmann in a fixed sum of $2 million in favour of the first respondent, Network Ten. This decision was aimed at facilitating the overarching purpose of the court, ensuring a just and efficient resolution of the matter. The court vacated the previous order for a referee's inquiry and entered a judgment in favour of Network Ten for the specified amount.

Orders

Orders of the court

1. Pursuant to ss 23, 37P(2) and 43 of the Federal Court of Australia Act 1976 (Cth), the orders made on 10 May 2024 be varied such that the costs payable by the applicant in favour of the respondents be quantified in a fixed sum and Order 3 made on 10 May 2024 be vacated.

2. Judgment be entered in favour of the first respondent in the amount of $2,000,000 representing its costs of the proceedings.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

For the reasons set out in Lehrmann v Network Ten Pty Limited (Costs) [2024] FCA 486 (costs judgment), I made a number of orders as to costs in relation to these proceedings, including Order 1 made 10 May 2024, which was in the following terms: 1. The applicant pay the respondents’ costs of the proceeding on: (a)the ordinary basis for the costs incurred in relation to the defence of statutory qualified privilege pursuant to s 30 of the Defamation Act 2005 (NSW) (Defamation Act); and (b)the indemnity basis for any other costs of or incidental to the proceeding (including the costs referred to in Order 2 made on 23 November 2023). In Order 3, I indicated the quantification of costs payable pursuant to Order 1 be referred to a referee for inquiry and report, with the terms of the reference to be settled by the Court. Like all discretions which involve matters of practice and procedure, the requirements of Pt VB of the Federal Court of Australia Act 1976 (Cth) dictate that it be exercised in such a way as to facilitate the promotion of the overarching purpose, being the just disposition of disputes according to law and as quickly, inexpensively, and efficiently as possible. It is common ground that Mr Lehrmann is a man of modest means. It is not suggested that there is any real likelihood he will be able to pay a substantial costs order. In those circumstances, I raised with the parties whether it would better facilitate the overarching purpose to fasten upon a lump sum or fixed amount for costs, being an amount which, on any view of it, would be payable pursuant to the costs order, and to which Network Ten Pty Limited (Network Ten) (one of the respondents entitled to the costs order) would restrict its claim for costs against Mr Lehrmann. This course would spare the further expense and delay of a reference. This suggestion was taken up and an application is made today for the costs payable by Mr Lehrmann to Network Ten to be quantified in the amount of $2 million. In support of that application, the affidavit of Ms Marlia Ruth Saunders, a partner at Thomson Geer (the solicitors acting on behalf of Network Ten), affirmed on 20 June 2024, was read. In that affidavit, Ms Saunders, a highly experienced solicitor who has been involved in the day-to-day running of forty different defamation litigation matters, gives evidence of the fact that she has undertaken a close review of the invoices issued by the solicitors for the costs and disbursements of running these proceedings up until the time of the making of the costs order. It is unnecessary for me to go into the details of that affidavit, save to note the following. A total amount of $3,668,420.83 was invoiced and paid by Network Ten in relation to these proceedings. From this amount, Ms Saunders excluded various incurred costs including: amounts relating to any pre-litigation correspondence; costs associated with a notice to produce (which was set aside); costs associated with the cross-claim between the respondents; and the affidavits in respect of which I disallowed costs (as referred to in the costs judgment).

Ratio Decidendi

Legal Principle Established

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