Lehrmann v Network Ten Pty Ltd (Costs)

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FEDERAL COURT OF AUSTRALIA

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

File number: NSD 103 of 2023
Judgment of: LEE J
Date of judgment: 10 May 2024
Catchwords: COSTS – applicant unsuccessful in claim for defamation – where defence of substantial truth established – where no real winners in the litigation – assessment of the conduct of the respondents in exercise of discretion as to costs – facts relating to settlement – Calderbank offer – relevant principles – overarching purpose to civil litigation – where conduct of Network Ten relating to publication of the programme in counterfactual far from reasonable – where conduct not sufficiently severable to deprive Network Ten of its costs in relation to statutory qualified privilege defence – where Network Ten entitled to costs on the indemnity basis but otherwise on the ordinary basis in relation to statutory qualified privilege defence – where same considerations apply mutatis mutandis to Ms Wilkinson – orders made
Legislation:

Federal Court of Australia Act 1976 (Cth) Pt VB, ss 37M(1), 37M(3), 37N(1), 37N(4), 43

Defamation Act 2005 (NSW) ss 40, 40(1)(a)
Cases cited:

Abigroup Limited v Abignano (1992) 39 FCR 74

Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309; (2014) 9 BFRA 524

Evolution Precast Systems Pty Ltd v Chubb Insurance Australia Limited [2020] FCA 1690

Firma C-Trade SA v Newcastle Protection & Indemnity Association (The Fanti) [1991] 2 AC 1

Hamod v New South Wales [2002] FCAFC 97; (2002) 188 ALR 659

Lehrmann v Network Ten Pty Limited (Cross-claims) [2024] FCA 102

Lehrmann v Network Ten Pty Limited (Limitation Extension) [2023] FCA 385

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

Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 247 FCR 61

Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116

Roberts-Smith v Fairfax Media Publications Pty Limited(No 45) [2023] FCA 1474

Siemens WLL v BIC Contracting LLC (costs) [2024] FCA 201

Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245

Total Oil Products (Australia) Pty Ltd v Robinson [1970] 1 NSWR 701

Transport Workers’ Union of Australia v Qantas Airways Limited [2021] FCA 873; (2021) 308 IR 244
Division: General Division
Registry: New South Wales
National Practice Area: Other Federal Jurisdiction
Number of paragraphs: 76
Date of hearing: 1 May 2024
Counsel for the applicant: Mr D Helvadjian
Solicitor for the applicant: Mark O’Brien Legal
Counsel for the first respondent: Dr M Collins KC with Mr T Senior and Ms Z Graus
Solicitor for the first respondent: Thomson Geer Lawyers
Counsel for the second respondent: Ms S Chrysanthou 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:

10 MAY 2024

THE COURT ORDERS THAT:

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

(a)the ordinary basis for the…

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Details
Case
[2024] FCA 486
Decision Date

CaseChat Overview and Summary

Lehrmann v Network Ten Pty Ltd (Costs) involves the applicant, Mr Bruce Lehrmann, who unsuccessfully sought damages for defamation against the respondents, Network Ten Pty Ltd and Ms Lisa Wilkinson. The respondents successfully defended the claim on the basis of statutory qualified privilege. The dispute now focuses on the allocation of costs between the parties. The primary issue before the court was to determine the appropriate costs order to be made between the parties, considering the unsuccessful nature of the applicant's claim and the conduct of the parties during the litigation. The court was required to assess the conduct of the respondents in the exercise of its discretion as to costs, particularly in light of their conduct relating to the publication of the defamatory content and the settlement negotiations. The court noted the lack of a real winner in the litigation and the conduct of the parties, which did not align with the overarching purpose of civil litigation.

The court found that the conduct of Network Ten in relation to the publication of the defamatory content was unreasonable and did not sufficiently sever their entitlement to costs for the statutory qualified privilege defence. The court ruled that Network Ten was entitled to costs on the indemnity basis for any other costs of or incidental to the proceeding and on the ordinary basis for the costs incurred in relation to the statutory qualified privilege defence. The same considerations applied to Ms Wilkinson. The court also made specific orders regarding the non-recoverable costs for certain affidavits. The quantification of the costs payable was referred to a referee for inquiry and report.

The court ordered that the applicant pay the respondents’ costs of the proceeding on the ordinary basis for the costs incurred in relation to the defence of statutory qualified privilege and on the indemnity basis for any other costs of or incidental to the proceeding. The court also specified certain affidavits whose costs would not be recoverable by the respondents against the applicant. The quantification of the costs was to be referred to a referee for inquiry and report, with the terms of the reference to be settled by the Court.

Orders

Orders of the court

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. Notwithstanding Order 1, no costs are to be recoverable by the respondents against the applicant in relation to the following affidavits:

(a) Affidavit of Ms Lisa Wilkinson affirmed 2 February 2024.

(b) Affidavit of Ms Tasha Smithies sworn 25 January 2024.

(c) Affidavit of Ms Lisa Wilkinson affirmed 16 January 2024.

(d) Affidavit of Ms Lisa Wilkinson affirmed 5 December 2023.

(e) Affidavit of Mr Craig Campbell sworn 18 October 2023.

(f) Affidavit of Mr Angus Llewellyn affirmed 21 September 2023.

(g) Affidavit of Mr Christopher Bendall affirmed 28 July 2023.

(h) Affidavit of Ms Laura Binnie affirmed 28 July 2023.

(i) Affidavit of Ms Lisa Wilkinson affirmed 28 July 2023.

(j) Affidavit of Mr Peter Meakin sworn 28 July 2023.

3. Pursuant to ss 37P(2) and 54A of the Federal Court of Australia Act 1976 (Cth), the quantification of costs payable pursuant to Order 1 (as qualified by Order 2) be referred to a referee for inquiry and report, with the terms of the reference to be settled by the Court at the case management hearing listed at 9:30am on 27 May 2024.

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

Background

Background to the litigation

Before addressing these three questions, it is necessary to make some additional factual findings and briefly indicate the principles relating to costs, which are not in dispute. These reasons, obviously enough, assume familiarity with the judgment. B THE FACTS RELEVANT TO SETTLEMENT GENERALLY Only one offer of settlement was made. When one has regard to the evidence adduced at the hearing, the reason for this seemed clear. In Lehrmann v Network Ten Pty Limited (Cross-claims) [2024] FCA 102 (cross-claims judgment), I refer (at [38]) to the fact that on 7 March 2023, Ms Higgins instructed her solicitor to send an email to the solicitors acting on behalf of Network Ten (Thomson Geer) (Ex X1 (at 1172)) which asserted, among other things, the following: … Brittany cannot give, and has not given, any party an assurance that she will be able to provide a witness statement or swear an affidavit or provide an outline of her evidence or give oral evidence at a civil trial and subject herself to further cross examination. And if she is subpoenaed to give evidence by any party, she may make application to be relieved from compliance with it … Brittany currently intends to instruct me to assist your client(s) in their defences as much as she reasonably can. As you know we have developed a strong and respectful professional relationship with you personally as a result of the Rush defamation trial. And your client(s) [sic] senior counsel, Dr Matt Collins, is regarded by us as one of the leading defamation advocate [sic] in Australia with whom we also share a strong professional and personal relationship. Knowing [Dr Collins] well, I also have great confidence in his ability to respectfully, elegantly and carefully engage with Brittany. But it is important for your client(s) to appreciate that Brittany is doing so on the basis that your client(s) will not offer Lehrmann a payment of damages or a retraction of the defamatory statements or an apology or costs (or any other relief) to settle the civil claims commenced by Lehrmann against your clients.For the avoidance of any other misunderstandings, Brittany has instructed me not to assist lawyers and Counsel currently retained by [Ms Wilkinson] to defend civil claims commenced by Lehrmann against [Ms Wilkinson]. I am not prepared to work with [Ms Wilkinson’s] current senior Counsel, under any circumstances … (Emphasis added) It is worth putting these stipulations of Ms Higgins into context. This email came a few days after Thomson Geer had received a letter from Ms Wilkinson’s solicitors, Gillis Delaney, on 3 March 2023 (Ex X1 (at 1147–48)) where Ms Wilkinson was asserting that it: seems plain that Network 10 is seeking to punish Ms Wilkinson for choosing to be independently represented in these proceedings, and to put pressure on her to abandon that path. Such conduct on the part of Network 10, which has been ongoing since Ms Smithies’ email on 15 February 2023, is unconscionable.Merely by way of example, the following indicates clearly that the interests of our client and Network 10 do not coincide.Your client’s complaint about Ms Wilkinson’s choice of senior counsel is, frankly, absurd. As you would be aware, Ms Chrysanthou has appeared in many defamation matters for defendants, including media defendants, over nearly 20 years, with a considerable degree of success. The objection to Ms Chrysanthou acting against the interests of Network 10 is surprising for a number of reasons. First, the very point of separate representation is that it be independent from Network 10, and second, because of the operation of the cab rank rule. The notion that barristers permanently take sides is simply wrong.The email itself is evidence of why Ms Wilkinson needs to be separately represented – those who instruct your firm in these proceedings cannot bring an impartial mind to the matter and be relied upon to give instructions, when required, which are in Ms Wilkinson’s interests. For many months Ms Wilkinson has been concerned about the conflicted position of lawyers who have purported to act in Ms Wilkinson’s interest who, to her observation, have not done so where those interests do not align with those of Network 10.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Of course, with the predictability of an atomic clock, partisans have focused solely on those parts of the judgment (Lehrmann v Network Ten Pty Limited (Trial Judgment) [2024] FCA 369 (judgment or J)) that happen to align with preconceived notions. But the reality of mixed findings has also been somewhat obscured in the public statements of the respondents and their submissions as to costs, which advance the assertion that they “won” the litigation and that costs should axiomatically follow the event. Understandably, strong criticisms of Mr Lehrmann in his conduct of the litigation have featured prominently in the written submissions filed on this application and do assume decisive importance. However, at the urging of all parties, I dealt with all pleaded issues rather than simply deciding what turned out to be the determinative justification defence. At the risk of repeating matters canvassed at length in my judgment, it is appropriate to commence these reasons by making two points relevant to the conduct of the respondents. First, in Section K of the judgment, I explained why the conduct of both Network Ten and Ms Wilkinson in publishing the Project programme (in its character of conveying the defamatory imputations as to Mr Lehrmann) was unreasonable. Contrary to the assertions of Network Ten, the examination of the respondents’ conduct was not devoid of, nor divorced from, reality; nor did it involve picking apart and dissecting the respondents’ conduct by reference to a standard of perfection. Anyone taking the trouble to read the judgment would conclude I did not consider the evaluative assessment required by the statutory qualified privilege defence to be a close-run thing. I also explained that although the respondents legally justified their imputation of rape, their conduct was not justifiable in any broader sense. The material in evidence is replete with recognition by the Project team that the major theme of the broadcast was the publication of what Mr Sharaz (the promoter of the “Project” and the regular conduit between Ms Higgins and Mr Llewellyn) had “pitch[ed]” to Ms Wilkinson (see Ex R105). The credulous approach taken as to the allegations pitched by Mr Sharaz – and as to Ms Higgins’ credit generally – lacked both rigour and objectivity. None of this can be separated from the approach taken to the publication of the imputation of rape on the material then in the possession of the respondents. Contrary to the recent assertions of Network Ten, a publication is not reasonable simply because it turns out to be true in some respects. Secondly, there is the behaviour of Network Ten justifying aggravated damages, being the conduct relating to Ms Wilkinson giving the Logies speech for the reasons it was given. I will come back to this issue briefly below. Against the background of all my findings (and not just the findings critical of Mr Lehrmann), it is now necessary to deal with the balance of issues that require resolution before this Court’s involvement in this controversy concludes. This involves answering the following three questions: (1)Should Network Ten obtain a costs order and, if so, what should it be?(2)Should Ms Wilkinson obtain a costs order and, if so, what should it be? (3)What orders should be made to resolve the costs position as between the respondents?

Ratio Decidendi

Legal Principle Established

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