Lesses v Maras (No 3)

Case [2017] SASCFC 154

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

LESSES v MARAS (NO 3)

[2017] SASCFC 154

Judgment of The Full Court

(The Honourable Justice Blue, The Honourable Justice Parker and The Honourable Justice Hinton)

21 November 2017

DEFAMATION - ACTIONS FOR DEFAMATION - COSTS

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - WHERE MONEY PAID INTO COURT OR OFFER OF COMPROMISE MADE

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - PARTIAL SUCCESS

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - NATURE OF PROCEEDINGS - DAMAGES RECOVERED SMALL - ACTION WHICH SHOULD HAVE BEEN BROUGHT IN INFERIOR COURT

Appeal against judgment awarding damages for defamation. Issues of costs.

A District Court Judge awarded judgment in favour of the respondent in respect of two pleaded imputations, namely that three documents published by the appellant to members of the Greek Orthodox Community of South Australia (GOCSA) conveyed the imputation that the respondent is untrustworthy and that one of the publications (the flyer) contained the imputation that he does not care about GOCSA churches.  The Judge assessed damages at $75,000.

On appeal, this Court allowed the appeal in respect of the untrustworthy imputation, upheld the judgment in respect of the “does not care” imputation, dismissed the respondent’s cross-appeal on costs and assessed damages at $25,000: Lesses v Maras [2017] SASCFC 48 and Lesses v Maras (No. 2) [2017] SASCFC 137.

The appellant seeks an order that the respondent pay his costs of appeal and of the cross-appeal on a party/party basis and that the respondent pay his costs of action or alternatively a proportion thereof on an indemnity basis. The respondent seeks an order that the appellant pay a proportion of his costs of appeal and the cross-appeal or alternatively that there be no order as to those costs and that the trial Judge’s order that the appellant pay 90% of his costs of action on an indemnity basis be preserved.

When the action was instituted in the District Court, the combined operation of s 42 of the District Court Act 1991 and rule 263 of the District Court Civil Rules 2006 was that costs in a defamation action were not generally recoverable unless the plaintiff obtained judgment for damages exceeding $7,500. That amount was later increased to $20,000 and then to $25,000 several weeks before the trial commenced.

Before the action was commenced or served, there were negotiations between the parties concerning potential resolution of the matter on the basis of an agreed apology and payment of costs during which each of the appellant and respondent made offers that they contend were reasonable.

Held by the Court:

1. Subsection 42(2) and rule 263(2)(f) prima facie apply so as to deprive the respondent of an entitlement to an order for the costs of action in his favour if he would otherwise be entitled to such an order (at [35]-[39]). However, given the imminence…

Continue reading Lesses v Maras (No 3)

Sign in free to access the full text

Details
AGLC
Lesses v Maras (No 3) [2017] SASCFC 154
Case
[2017] SASCFC 154
Decision Date

CaseChat Overview and Summary

This matter concerned an appeal regarding costs following a defamation action between Mr Maras (appellant) and Mr Lesses (respondent). The dispute arose from an email circulated by Mr Lesses to members of GOCSA in June 2011, which Mr Maras alleged was defamatory. The appeal court, comprising Blue, Parker and Hinton JJ, was required to determine how the costs discretion should be exercised in light of the parties' conduct during settlement negotiations, the mixed success of the parties on various issues, and whether the costs incurred were disproportionate to the value of the dispute.

The court considered whether Mr Maras should be deprived of his costs due to the operation of section 42 of the District Court Act 1991 (SA) and rule 263(2)(g) of the District Court Civil Rules 2006 (SA), and whether subsection 38(2) of the Defamation Act 2005 (SA) mandated indemnity costs for either party. The judges also had to assess the impact of the parties' mixed success on the overall costs order and how to exercise the costs discretion in respect of both the costs of the action and the costs of the appeal.

The court reasoned that a significant factor contributing to the litigation costs was Mr Maras' insistence on an unqualified apology concerning an imputation of untrustworthiness, which the court found did not arise from the email. The judges concluded that had Mr Maras not insisted on this unqualified apology, the matter likely would have been resolved in 2012, thereby avoiding substantial litigation costs. While subsection 38(2) of the Defamation Act did not entitle either party to indemnity costs, the court held that the parties' conduct and attitudes during settlement negotiations were relevant to the general exercise of the costs discretion. The court also acknowledged the principle that where there is mixed success, costs may be reduced or apportioned, considering factors such as the separateness, value, proportion, and absolute amount of costs associated with the unsuccessful issues, as well as the merit of the successful party's case on those issues.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

These reasons address issues of costs. The parties’ submissions raise five partially overlapping issues:1.Should Mr Maras be deprived of his costs of action (if otherwise to be awarded in his favour) by the operation of section 42 of the District Court Act 1991 (SA) (the District Court Act) and rule 263(2)(g) of the District Court Civil Rules 2006 (SA) (the Rules)?2.Were the costs incurred disproportionate to the value of the dispute and if so does this bear on the exercise of the costs discretion?3.Does subsection 38(2) of the Defamation Act 2005 (SA) (the Act) require the making of an order in favour of either party for indemnity costs and if not does the conduct of the parties in settlement negotiations otherwise affect the appropriate costs order?4.Does the mixed success of the parties of the issues bear on the exercise of the costs discretion?5.How should the costs discretion be exercised in respect of each of the costs of action and costs of appeal?Background The Flyer was emailed in mid June 2011 to 78 GOCSA members. On 28 November 2011 Mr Maras’ solicitors sent to Mr Lesses a concerns notice under the Act. Mr Lesses’ solicitors responded requesting particulars and on 23 December 2011 Mr Maras’ solicitors provided the particulars. On 25 January 2012 Mr Lesses’ solicitors wrote to Mr Maras’ solicitors offering to resolve the matter on the basis of a draft apology that Mr Lesses was prepared to issue to Mr Maras and payment of a contribution towards Mr Maras’ legal costs. The letter said that the terms of the draft apology were subject to negotiation. The draft apology included a statement:If anyone has drawn an inference from the newsletters to the effect that Mr Maras does not care about GOCSA churches, I regret this. No such inference was intended, and I apologise for the misunderstanding. On 23 February 2012 Mr Maras’ solicitors replied offering to resolve the matter on the basis of an apology containing seven amendments to the draft apology proposed by Mr Lesses (without actually drafting the seven amendments required), distribution thereof to every GOCSA member and church, publication in three Greek newspapers and payment of Mr Maras’ legal costs and disbursements in full (said to be approximately $3,000). One amendment related to the does not care imputation and the remaining amendments related to the untrustworthy imputation or other matters. The letter did not expressly say that the seven amendments were not negotiable, but this might be implied from statements in the letter “if your client is agreeable to this proposal, and if agreement can be reached as to the exact form of an amended apology to be drafted according to the points set out above, our client will accept such resolution in full and final settlement of his claim … If resolution cannot be reached on these terms, our client will … issue proceedings”. A subsequent letter from Mr Maras’ solicitors expressly said that the 23 February letter was not intended to be taken as a negotiable position.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Considered holistically, a material cause of the costs of the litigation being incurred was the insistence by Mr Maras on an unqualified apology in respect of the alleged untrustworthy imputation which we have concluded did not arise. Our assessment is that but for that insistence the matter would have resolved in 2012 and the costs of the litigation would not have been incurred. Conclusion on section 38 Subsection 38(2) does not operate to entitle either party to costs of action on an indemnity basis. However, the conduct and attitudes of the parties in settlement negotiations is a matter that can be taken into account more generally and is addressed further below.Mixed success When there has been mixed success at first instance or on appeal, a court may in appropriate circumstances reduce the costs ordered in favour of the overall successful party, and further may order that party to pay the opponent’s costs, in respect of such issues.[13] When the court considers that the discretion should be so exercised, it will usually make an order for payment of a proportion of one party’s costs by the other party reflecting a broad axe assessment, even when it considers that the successful party should pay the opponent’s costs in respect of such issues.[13] Robinson v Australian Association of Social Workers Ltd [2000] SASC 239, (2000) 210 LSJS 73 at 81-82 per Martin J (with whom Prior and Williams JJ agreed); Ruddock v Vadarlis (No 2) [2001] FCA 1865, (2001) 115 FCR 229 at [11] per Black CJ and French J; A, DC v Prince Alfred College Inc (No 2) [2016] SASCFC 27 at [5] per Kourakis CJ, Gray and Peek JJ. In Ruddock v Vadarlis (No 2),[14] Black CJ and French J said:Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:· Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.· Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.· A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.[15][14] (2001) 115 FCR 229.[15] At [11]. Without limiting the factors relevant to exercise of the discretion, it is more likely to be exercised to make a costs order reflecting mixed success:· the more separate and distinct the issue on which the successful party failed (a separateness assessment);· the greater the relative value and importance of the issue on which the successful party failed (a value assessment);· the greater the proportion of costs of the issue on which the successful party failed (a relativity assessment);· the greater the amount of costs of the issue on which the successful party failed (an absolute assessment);· the less the merit of the successful party’s case on the unsuccessful issue (a merit assessment).[16][16] See Australian Trade Commission v Disktravel [2000] FCA 62 at [3] per French, Kiefel and Mansfield JJ; Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [3]-[6] per Finkelstein and Gordon JJ.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.