Lesses v Maras (No 3)

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.