McIntosh v Peterson [No 3] - [2024] WASC 446

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   MCINTOSH -v- PETERSON [No 3] [2024] WASC 446
CORAM:   QUINLAN CJ
HEARD:   25 NOVEMBER 2024
DELIVERED          :   27 NOVEMBER 2024
FILE NO/S:   CIV 2202 of 2021
BETWEEN:   ANDREW MICHAEL PATRICK MCINTOSH
First Plaintiff
KAY ELISSA MCINTOSH
Second Plaintiff
FOR PAWS AND FEATHERS PTY LTD TRADING AS BICTON VETERINARY CLINIC
Third Plaintiff
AND
NATASHA JANE PETERSON
First Defendant
JACK HIGGS
Second Defendant
V-GAN BOOTY PTY LTD
Third Defendant

Catchwords:

Defamation – Costs – Whether costs should be assessed on an indemnity basis – Defamation Act 2005 (WA), s 40(2) – Defendants unreasonably failed to make a settlement offer – Whether in the interests of justice not to award indemnity costs – Conduct of party's case – Where action successful against some defendants and unsuccessful against other defendant – Special costs orders

Legislation:

Defamation Act 2005 (WA), s 40
Legal Profession Uniform Law Application Act 2022 (WA), s 141(3)

Result:

Costs orders made

Category: B

Representation:

Counsel:

First Plaintiff	:	D E Swain & M Douglas
Second Plaintiff	:	D E Swain & M Douglas
Third Plaintiff	:	D E Swain & M Douglas
First Defendant	:	J MacLaurin SC & J O'Hara
Second Defendant	:	J MacLaurin SC & J O'Hara
Third Defendant	:	J MacLaurin SC & J O'Hara

Solicitors:

First Plaintiff	:	Bennett
Second Plaintiff	:	Bennett
Third Plaintiff	:	Bennett
First Defendant	:	McNally & Co
Second Defendant	:	McNally & Co
Third Defendant	:	McNally & Co

Cases referred to in decision:

Calderbank v Calderbank [1975] 3 All ER 333
Cardaci v Cardaci [2023] WASCA 158
Cardaci v Filippo Primo Cardaci as executor of the estate of Marco Antonio Cardaci [No 5] [2021] WASC 331 (S)
De Kauwe v Cohen [No 4] [2022] WASC 35 (S)
Frigger v Lean [2012] WASCA 66
Jensen v Nationwide News Pty Ltd & Anor [2019] WASC 451 (S)
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
McIntosh v Peterson [No 2] [2024] WASC 428
Medical Board of Australia v Kemp [2018] VSCA 168; (2018) 56 VR 51
Rayney v Roberts [2022] WASC 360 (S)
Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd [2007] VSCA 309
Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Spotless Group Ltd v Premier Building & Consulting Pty Ltd (recs apptd) [2008] VSCA 115
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388
Wagner v Nine Network Australia (No 2) [2019] QSC 309

Table of Contents

Introduction

Costs – the parties' positions

Plaintiffs' position on costs

Defendants' position on costs

Costs – legal principles

General discretion as to costs

Section 40 of the Defamation Act

Additional facts relating to costs

Offers made prior to trial

Offer from defendants to plaintiffs – 1 March 2022

Offer from plaintiffs to defendants – 15 March 2022

Offer from defendants to plaintiffs – 21 April 2022

Offer from plaintiffs to defendants – 11 May 2022

Offer from plaintiffs to defendants – 12 January 2024

Offer from plaintiffs to defendants – 22 March 2024

Effect of unfair cross-examination of Ms Peterson

Costs – disposition

Some general matters

Section 40 of the Defamation Act

Did Ms Peterson and Mr Higgs unreasonably fail to make a settlement offer or agree to a settlement offer proposed by the plaintiffs?

Do the interests of justice require otherwise?

Discretionary considerations – apportionment

Special costs orders

Conclusion

QUINLAN CJ:

Introduction

On 25 November 2024, I delivered judgment in this action brought by the plaintiffs (Mr Andrew McIntosh, Dr Kay McIntosh and For Paws and Feathers Pty Ltd (Clinic)) against the defendants (Ms Natasha Peterson, Mr Jack Higgs and V‑Gan Booty Pty Ltd).[1]
[1] McIntosh v Peterson [No 2] [2024] WASC 428 (McIntosh v Peterson [No 2]).
I entered judgment to the following effect:
1.Judgment be entered for:
(a)the first plaintiff in respect of his claim in defamation against the first and second defendants in the sum of $110,000;
(b)the second plaintiff in respect of her claim in defamation against the first and second defendants in the sum of $150,000;
(c)the third plaintiff:
(i)in respect of its claim in defamation against the first and second defendants in the sum of $10,000; and
(ii)in respect of its claim in trespass against the first and second defendants in the sum of $10,000.
2.The third plaintiff's claims of injurious falsehood and civil conspiracy be dismissed.
3.The plaintiffs' action against the third defendant be dismissed.
4.The first and second defendants pay prejudgment interest at the rate of 4.5% per annum from 24 September 2021 until 25 November 2024 on the sums contained in orders 1(a), 1(b) and 1(c)(i) above, to the respective plaintiffs entitled to judgment under those orders.
5. The first and second defendants pay prejudgment interest at the rate of 6% per annum from 24 September 2021 until 25 November 2024 on the sum contained in order 1(c)(ii) above, to the third plaintiff.
The terms of these orders, including the appropriate orders in relation to prejudgment interest, were agreed between the parties.
Following written and oral submissions in relation to costs, I reserved the issue of costs to be determined on the papers.
For the reasons that follow, I now make final orders in relation to the costs of the proceedings in the following terms:
1.The first and second defendants pay two-thirds of the plaintiffs' costs of the proceedings to be assessed if not agreed.
2.Pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) the costs in order 1 are to be assessed on the basis that:
(a)the limits, as to time only, set out in item 19 of Table B of the Determinations (Preparation of case) be removed; and
(b)the hourly rate for counsel provided for in item 22 of Table B of the Determinations (Trial) be increased in the case of Martin Lawrence Bennett only to $781 (GST incl).
3.For the purposes of order 2, the 'Determinations' means the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020, the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 and the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2024.

Costs – the parties' positions

The parties were a long way apart in relation to the appropriate orders as to costs.

Plaintiffs' position on costs

The plaintiffs' primary position was that Ms Peterson and Mr Higgs pay the plaintiffs' costs of the action on an indemnity basis, save to the extent that such costs were unreasonably incurred or of an unreasonable amount, to be assessed unless agreed.
In the alternative, the plaintiffs sought an order that Ms Peterson and Mr Higgs pay the plaintiffs' costs of the proceedings without regard to the hourly rates for Mr Bennett (who appeared as counsel for the plaintiffs) or the limits imposed by the relevant costs determinations, pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) (Legal Profession Uniform Law Application Act).
The plaintiffs had a third alternative costs order, by which Ms Peterson and Mr Higgs would pay indemnity costs (or costs assessed without reference to the determination limits) in relation to the defamation actions, costs on an indemnity basis in relation to the trespass claim from 12 January 2024, and no order as to costs in relation to the Clinic's claims of injurious falsehood and civil conspiracy and the plaintiffs' action against V‑Gan Booty Pty Ltd.
In support of its primary position, the plaintiffs submitted that they were entitled to an order for indemnity costs pursuant to s 40 of the Defamation Act 2005 (WA) (Defamation Act). In that regard they submitted, in summary:
(a)the defendants unreasonably failed to make a settlement offer and unreasonably failed to agree to a number of settlement offers made by the plaintiffs (Defamation Act, s 40(2)(a));
(b)the 'interests of justice' do not require otherwise (Defamation Act, s 40(2)); and
(c)the costs referred to in the Defamation Act, s 40(2)(a) relate to the 'proceedings' brought by the plaintiff, as a whole, and are not confined to the causes of action for defamation.

Defendants' position on costs

The defendants' position was that there should be an order that Ms Peterson and Mr Higgs pay 50% of Dr McIntosh and Mr McIntosh's costs to be assessed if not agreed, and that the plaintiffs should pay V‑Gan Booty Pty Ltd's costs of the action on an indemnity basis.
In support of its position, the defendants submitted, in summary:
(a)the defendants did not unreasonably fail to make a settlement offer or unreasonably fail to agree to an offer made by the plaintiffs. The defendants identified a number of the circumstances surrounding the various officers in relation to the assessment of their 'reasonableness';
(b)it was not in the interests of justice to award indemnity costs having regard to the way in which the plaintiffs ran their case, including by 'unfair, misleading and baseless cross-examination' of Ms Peterson;
(c)it was not in the interests of justice to award indemnity costs as the plaintiffs failed in their claims of injurious falsehood and civil conspiracy and their focus on Ms Peterson's financial affairs; and
(d)V‑Gan Booty Pty Ltd was successful and it should have been obvious that the case against it was doomed to fail.
Before turning to the additional material relied upon in relation to costs, I can briefly summarise the relevant legal principles.

Costs – legal principles

General discretion as to costs

Subject to any statutory provision to the contrary, the Court has a wide discretion in respect of the orders for costs in proceedings.[2] The discretion to award costs is to be exercised judicially but it is otherwise unconfined.[3] Ultimately, the discretion must be exercised to achieve what is fair and just between the parties according to the circumstances of the particular case.[4]
[2] Supreme Court Act 1935 (WA) (Supreme Court Act), s 37; Supreme Court Rules 1971 (WA) (Rules) (O 66, r 1).
[3] Frigger v Lean [2012] WASCA 66 [53] (Allanson J; Newnes & Murphy JJ agreeing).
[4] Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 558.
Without limiting the Court's wide discretion as to costs, the starting point in relation to the awarding of costs is that the Court will generally order that the successful party to the action or matter may recover their costs. It is incumbent on an unsuccessful party to satisfy the Court that there are good reasons why it should not pay the successful party's costs.[5]
[5] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 (Strzelecki Holdings) [49] (Murphy, Mitchell & Pritchard JJ).
What constitutes 'success' in proceedings is to be determined by the reality of the circumstances involved in the case. The Court may depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or the failure of that party on one or more specific issues.[6] An order that a successful party should recover only a portion of its costs where it has not been successful in relation to particular issues, however, should not be made as a matter of course.[7]
[6] Strzelecki Holdings [50] (Murphy, Mitchell & Pritchard JJ).
[7] Strzelecki Holdings [51] (Murphy, Mitchell & Pritchard JJ).
Where the Court decides, in the exercise of its discretion, to modify the usual costs orders to reflect the limited success of the successful party, that power will be exercised broadly, and as a matter of impression, and without any attempt at mathematical precision (which is likely to prove illusory in any event). That approach reflects the fact that it may be difficult to separate the factual and evidentiary substratum of different issues, the fact that some issues are more important than others, and the fact that some issues are subsidiary to others.[8]
[8] Strzelecki Holdings [52] (Murphy, Mitchell & Pritchard JJ).
This broad approach may have particular resonance in a case, such as the present, where there are multiple related plaintiffs and multiple related defendants, each of which are represented by a single set of legal representatives. In such a case, a 'pragmatic approach' may be adopted, as summarised by Le Miere J in Cardaci v Cardaci [No 5]:[9]
The more usual approach in circumstances like this case is the 'pragmatic approach' described by Redlich JA, with whom Dodds‑Streeton JA agreed in Spotless Group Ltd v Premier Building & Consulting Pty Ltd (recs apptd) where his Honour said:
In certain cases it is apposite for a trial judge to apportion costs having regard to the multiplicity of parties, actions, issues and the mixed success enjoyed by the plaintiffs. Under r 63.04, the judge may award costs in relation to particular questions or parts of the proceeding. The rules of court are wide enough to permit an apportionment of costs according to issues or causes of action, which enable a court to look at the realities of the case and attempt to do substantial justice [14].
Thus a pragmatic approach may be taken in cases where no party is wholly successful and there are practical difficulties in awarding costs on an issue by issue basis. In exercising its discretion as to costs the court is entitled to take into account the failure of a party on certain 'issues'. 'Issue' is not used in the technical pleading sense, but refers to any disputed question of fact of law. In Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd the Victorian Court of Appeal observed:
In cases where neither party is wholly successful there are clearly practical difficulties in awarding costs on an issue by issue basis which would involve making separate costs orders. His Honour took a pragmatic approach, which has much to commend it, of apportioning the costs between the parties [89]. (footnotes omitted)

Section 40 of the Defamation Act

[9] Cardaci v Filippo Primo Cardaci as executor of the estate of Marco Antonio Cardaci [No 5] [2021] WASC 331 (S) [93] ‑ [94] (Le Miere J), citing Spotless Group Ltd v Premier Building & Consulting Pty Ltd (recs apptd) [2008] VSCA 115 & Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd [2007] VSCA 309. An appeal from Le Miere J in Cardaci v Cardaci [2023] WASCA 158 did not address with these principles.

The broad principles I have discussed above are subject to the specific statutory provisions in the Defamation Act in relation to costs. In that regard, s 40 of the Defamation Act provides:
40. Costs in defamation proceedings
(1) In awarding costs in defamation proceedings, the court may have regard to –
(a)the way in which the parties to the proceedings conducted their cases (including any misuse of a party's superior financial position to hinder the early resolution of the proceedings); and
(b)any other matters that the court considers relevant.
(2)Without limiting subsection (1), a court must (unless the interests of justice require otherwise) –
(a) if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff – order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or
…
(3)In this section –
settlement offer means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made.
I discussed a number of issues concerning s 40 in Jensen v Nationwide News Pty Ltd.[10] I need not repeat what I said there.
[10] Jensen v Nationwide News Pty Ltd & Anor [2019] WASC 451 (S) (Jensen v Nationwide News Pty Ltd) [33] - [61] (Quinlan CJ).
In Wagner v Nine Network Australia Pty Ltd (No 2), Applegarth J discussed a number of matters relevant to the determination of whether the conduct of the defendant was reasonable:[11]
In determining questions of reasonableness under s 40(2)(a), a few matters warrant attention. First, whether or not the defendant made a 'settlement offer' is determined according to whether the offer was 'a reasonable offer at the time it was made.'
Second, in a case in which liability is in issue, there is scope for different, but reasonable, predictions about the plaintiff's prospects of success. There also will be a variety of reasonable predictions about quantum.
Third, the issue of whether an offer was a reasonable one at the time it was made and the issue of whether the defendant unreasonably failed to agree to an offer proposed by the plaintiff should not be affected by hindsight bias in relation to liability or quantum.
Finally, an offer is not necessarily unreasonable because it is possible to imagine a better and more reasonable offer which therefore had better prospects of being accepted. An offer to settle will not be a reasonable offer at the time it was made if it did not reflect a reasonable and realistic assessment of the plaintiff's prospects of success on liability and the probable quantum of an award in the event of success and the findings which would be made by the Court in determining contentious issues.
[11] Wagner v Nine Network Australia (No 2) [2019] QSC 309 [9] - [12] (Applegarth J).
In addition to their reliance on s 40 of the Defamation Act, the plaintiffs also relied upon the fact that the offers made by them referred to the principles in Calderbank v Calderbank.[12] In that regard, the factors relevant to the reasonableness of a party, while not closed, include:[13]
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed to the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree's prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for indemnity costs in the event that the offeree rejected it.
[12] Calderbank v Calderbank [1975] 3 All ER 333.
[13] Rayney v Roberts [2022] WASC 360 (S) [15] (Hill J).

Additional facts relating to costs

The parties each adduced additional evidence in relation to the issue of costs. That evidence broadly relates to two issues: (a) the offers made prior to trial; and (b) the plaintiffs' conduct of the litigation.
That evidence may be relevantly summarised as follows.

Offers made prior to trial

Other than the Concerns Notice, which was served on Ms Peterson and Mr Higgs around 4 October 2021, there were a number of offers of settlement between the parties. Each of the offers sets out in detail why, in the offeror's view, the offer was a reasonable one. I will not set out the contents of the offers in full but will summarise their general effect.
Before turning to each offer, it may be noted that all of the offers made by the parties in this case were made by the plaintiffs, collectively, to the defendants, collectively, or vice versa. That is, each offer did not distinguish between the individual entitlements of the three plaintiffs or the individual responsibility of the three defendants for any settlement offer. In that regard, insofar as an offer was made to, or by, the defendants, it was capable of operating for the benefit of Ms Peterson and Mr Higgs, if accepted.

In the absence of any party having sought clarification of the offers in that respect, I have approached the offers on the basis that their reasonableness is to be assessed, insofar as they were made to, or by, Ms Peterson and Mr Higgs (as the defendants ultimately found liable). That is, while the offers included V‑Gan Booty Pty Ltd (the successful defendant) they could have been made or accepted by Ms Peterson and Mr Higgs.

Offer from defendants to plaintiffs – 1 March 2022

By letter dated 1 March 2022, the defendants' solicitors made an offer to the plaintiffs in full and final settlement of all claims.[14] The offer was to the following effect:
(a)the defendants would provide a statement of apology and retraction;
(b)the defendants would pay $2,000 to the plaintiffs, half of which would be directed, on the plaintiffs' behalf, to the charity Animals Australia. The offer observed that the plaintiffs at that time had access to $13,000 from their GoFundMe page, which was sufficient to cover the plaintiffs' reasonable legal costs, with a surplus;
(c)the proceedings be dismissed with no order as to costs; and
(d)the parties otherwise make no public comments about the settlement.

Offer from plaintiffs to defendants – 15 March 2022

[14] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-3'.

By letter dated 15 March 2022, the plaintiffs' solicitors made an offer to the defendants.[15] The offer was to the following effect:
(a)the defendants would immediately remove the Facebook Post (together with all comments) and provide a written undertaking to refrain from publishing or republishing the Facebook Post or anything similar thereto;
(b)the defendants would publish a statement of apology and retraction;
(c)the defendants would pay $160,000 to the plaintiffs, representing $130,000 for loss and damage (general, aggravated and special) and $30,000 for party/party costs;
(d)the defendants contact 22 persons listed in the Statement of Claim and request that they remove the Facebook Post from publication;
(e)the proceedings be dismissed with no order as to costs; and
(f)other than the apology and retraction, the settlement remain confidential.

Offer from defendants to plaintiffs – 21 April 2022

[15] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-4'.

By letter dated 21 April 2022, the defendants' solicitors made an offer to the plaintiffs.[16] The offer was to the following effect:
(a)the defendants would immediately remove the Facebook Post (together with all comments) and provide the written undertaking requested by the plaintiffs;
(b)the defendants would publish the statement of apology and retraction requested by the plaintiffs subject to a proposed amendment;
(c)the defendants would pay $2,000 to the plaintiffs without any condition;
(d)the defendants would agree to use their best endeavours to make the request of the persons identified by the plaintiffs;
(e)the proceedings be dismissed with no order as to costs; and
(f)other than the apology and retraction, the settlement remain confidential.

Offer from plaintiffs to defendants – 11 May 2022

[16] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-5'.

By letter dated 11 May 2022, the plaintiffs' solicitors made an offer to the defendants.[17] The offer accepted all the non-financial terms of the defendants offer of 21 April 2022, but rejected the offer to pay $2,000 to the plaintiffs. The plaintiffs advised that they were prepared to accept $150,000, representing $100,000 for loss and damage (general, aggravated and special) and $50,000 for party/party costs.

Offer from plaintiffs to defendants – 12 January 2024

[17] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-6'.

By letter dated 12 January 2024, the plaintiffs' solicitors made an offer to the defendants.[18] The offer was to similar effect as the previous offer save for the financial component. The plaintiffs advised that they were prepared to accept $260,000, inclusive of costs (noting that the plaintiffs' solicitor/client costs exceeded $190,000).

Offer from plaintiffs to defendants – 22 March 2024

[18] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-7'.

By letter dated 22 March 2024, the plaintiffs' solicitors made an offer to the defendants.[19] The offer was again to similar effect as the previous two offers save for the financial component. The plaintiffs advised that they were prepared to accept $285,000, inclusive of costs (noting that the plaintiffs' solicitor/client costs exceeded $212,000).

Effect of unfair cross-examination of Ms Peterson

[19] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-8'.

In my reasons for decision I referred to a serious attack made by the plaintiffs on Ms Peterson's character and credibility which was unfair and without any foundation. In particular, counsel put to Ms Peterson that, in effect, she had declared $70,000 in receipts from OnlyFans in her 30 June 2022 tax return when her actual receipt was $385,000.[20]
[20] McIntosh v Peterson [No 2] [44] – [45] (Quinlan CJ). Counsel, I stress, was not counsel who appeared for the plaintiffs on the costs application.
That cross-examination was, as I said in my reasons, unfair and misleading. In fact, for the 30 June 2022 financial year Ms Peterson had declared approximately $133,000 in OnlyFans receipts in her personal tax return and approximately $251,000 in OnlyFans receipts in the tax return of V‑Gan Booty Pty Ltd. I specifically found that all of the OnlyFans income for that year was properly declared and accounted for.[21]
[21] McIntosh v Peterson [No 2] [46] (Quinlan CJ).
The defendants adduced evidence as to the effect of that cross‑examination in the form of media reporting of the trial of the action.[22] That media reporting included an online article in The West Australian, dated 12 June 2024, with the headline:[23]
Tash Peterson: Notorious WA vegan declared fewer than 20 per cent of her earnings.
[22] Affidavit of Georgina Rae Conti affirmed on 22 November 2024.
[23] Affidavit of Georgina Rae Conti affirmed on 22 November 2024, page 9.
The body of the article included the following:[24]
Notorious vegan Tash Peterson earned more than $400,000 by the end of the 2022 financial year – most of which came from her OnlyFans account – but only declared $70,000 in business earnings to the Australian Tax Office.
That is what the WA Supreme Court was told as the outspoken animal rights activist was cross-examined during her defamation trial.
[24] Affidavit of Georgina Rae Conti affirmed on 22 November 2024, page 10.
Both the headline and this content of the article were completely false. That false picture was wholly a consequence of the misleading cross‑examination of Ms Peterson.
The following day, on 13 June 2024, during the continuation of Ms Peterson's cross-examination, when I realised that V‑Gan Booty Pty Ltd had declared a significant amount of income in its 30 June 2022 tax return, I raised with counsel for the plaintiffs (in Ms Peterson's absence) my significant concerns as to the fairness of the cross‑examination.[25] Counsel was asked whether he formally withdrew the suggestion that Ms Peterson was dishonest in her tax returns and he did not do so, maintaining that there remained a credibility issue 'if she wasn't honest on her tax return'.[26] In that context counsel said that there was a 'missing one hundred and thirty-odd thousand'.[27]
[25] Ts 465 ‑ 467.
[26] Ts 470.
[27] Ts 469.
That was how the issue was reported the following day under the headline 'Tash Is Able to Cash In':[28]
The McIntoshs' lawyer, Martin Bennet, said there was still about $130,000 'missing' from that year and the issue went to Ms Peterson's credibility.
[28] Affidavit of Georgina Rae Conti affirmed on 22 November 2024, page 20.
As I recorded in my reasons, there was, in truth, nothing 'missing' from the tax returns. The suggested remaining 'discrepancy' was explained by the fact that counsel's original questions had referred to 'net business income' of $70,126 in the tax return rather than the gross OnlyFans receipts for that year of $132,948.[29]
[29] Exhibit 165, pages 4, 5, 12.
The true position in relation to Ms Peterson's declared earnings ought to have been immediately obvious to any practitioner taking a modicum of care in reading the tax returns. It took me, for example, between five and 10 minutes to review and properly understand Ms Peterson's 30 June 2022 tax return.
The material produced by the defendants demonstrates the serious adverse impact of a party using the absolute privilege afforded by legal proceedings to make serious allegations of misconduct concerning a party or a witness, where those allegations are without any reasonable foundation.
I turn then to my conclusions in relation to costs.

Costs – disposition

Before turning to s 40 of the Defamation Act, and the discretionary considerations in relation to costs, it is necessary to identify a number of general matters that impact on the question of costs.

Some general matters

First, it is correct to say that the plaintiffs were largely successful in their action against Ms Peterson and Mr Higgs. Each of Dr McIntosh, Mr McIntosh and the Clinic obtained an award of damages against Ms Peterson and Mr Higgs. The starting position, therefore, is that the plaintiffs are entitled to their costs, subject to there being good reason to modify those costs orders.
Secondly, however, it is clear that there were significant respects in which the plaintiffs were not successful in the proceedings including the following:
(a)all three plaintiffs sued V‑Gan Booty Pty Ltd in defamation and, in the case of the Clinic, also in injurious falsehood. That claim was wholly unsuccessful and V‑Gan Booty Pty Ltd was entitled to judgment in its favour;
(b)the inclusion of V‑Gan Booty Pty Ltd (which was not incorporated until after the original publication of the Facebook Post) as a defendant involved an elaborate case to the effect that Ms Peterson's animal rights activism was a ploy for making money and that it could be inferred that V‑Gan Booty Pty Ltd had taken responsibility for Ms Peterson's Facebook page. As I said in my reasons for decision, this allegation (the business model allegation) was a theme that permeated the plaintiffs' case.[30] That case failed;
(c)in addition to the case against V‑Gan Booty Pty Ltd failing in its entirety, the Clinic failed in its claims under two distinct causes of action, injurious falsehood and civil conspiracy. Those failed causes of action were not merely distinct 'issues'; they were whole causes of action. While there were overlapping issues between the various issues in those causes of action and the other causes of action, the inclusion of them inevitably contributed to the overall complexity of the proceedings; and
(d)the plaintiffs sought, under three causes of action, exemplary damages. At least one of the purposes of the proceedings was therefore to punish the defendants. That purpose also failed.
[30] McIntosh v Peterson [No 2] [123] ‑ [124] (Quinlan CJ).
Thirdly, the claims by the Clinic, which brought claims in all four causes of action, were (relative to the jurisdiction of this Court) very minor claims. Ultimately, the Clinic was awarded $10,000 for the defamation and $10,000 for trespass. Collectively, those claims were well within the monetary jurisdiction of the Magistrates Court. Indeed, taken individually, those claims fell within the Minor Claims jurisdiction of the Magistrates Court.
The relatively minor nature of the Clinic's claims is reflected in the fact that the Clinic's claim for actual damage (which was the same in all four causes of action) amounted to no more than $8,480.31. That claim failed on the evidence. Indeed, the claim for special damages presented at trial appears to have been a late change in litigation strategy. As revealed in the plaintiffs' offer of 12 January 2024, the plaintiffs were, until 2024, alleging that the Clinic had suffered a reduction in revenue and that it would be adducing expert evidence to substantiate that claim.[31] The Clinic never did adduce such expert evidence and it did not maintain a case that it had lost revenue. I expressly found that it had lost none.[32]
[31] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-7', page 33.
[32] McIntosh v Peterson [No 2] [533] (Quinlan CJ).
Significantly, both the claims in injurious falsehood and civil conspiracy required proof of actual damage as the gist of the action. Those claims were wholly dependent upon success of the claim for special damages of $8,480.31, which failed.
Fourthly, relevant to assessing the reasonableness of the parties' offers and responses to those offers, is the nature of the loss and damage for which the plaintiffs ultimately obtained a substantial award of damages. Both Dr McIntosh and Mr McIntosh have been awarded substantial compensatory damages in the form of general damages and aggravated damages, of $150,000 and $110,000 respectively. As set out in my reasons, in my assessment the significant part of those awards is attributable to the injured feelings and personal effect of the defamatory matter on Dr McIntosh and Mr McIntosh. The impact on their marriage, as a consequence of Mr McIntosh's obsessive reaction to the Facebook Post was, as I found, a significant part of the harm done to them.[33]
[33] McIntosh v Peterson [No 2] [465], [467] (Quinlan CJ).
As I said in my reasons for decision, this case was truly one in which the harm caused to Dr McIntosh and Mr McIntosh by the publication of the Facebook Post lay more in their own feelings about what others are thinking of them than in any actual change manifest in the attitude of others towards them.[34] I found that the actual reputational harm to Dr McIntosh and Mr McIntosh was, given the nature of the publication, likely to be relatively short‑lived.[35]
[34] McIntosh v Peterson [No 2] [463] (Quinlan CJ).
[35] McIntosh v Peterson [No 2] [519], [522] (Quinlan CJ).
This feature of the case is relevant to an assessment of the reasonableness of the parties' offers and the responses to those offers because of the need to avoid hindsight bias in relation to a party's assessment of liability and quantum at the time of an offer.[36]
[36] See [21] above.
I start first with s 40 of the Defamation Act .

Section 40 of the Defamation Act

The plaintiffs submitted that, notwithstanding that the plaintiffs pursued four separate causes of action in the present case, that the reference in s 40(2)(a) of the Defamation Act to 'costs of and incidental to the proceedings' is a reference to the entirety of the proceedings. In that regard, the plaintiffs submit that the 'proceeding' is the entire action commenced by the writ. Without finally deciding the point, particularly in relation to the expression 'defamation proceedings' as it appears elsewhere in the Defamation Act,[37] I am inclined to agree that that is the case. It is certainly consistent with the use of 'proceedings' in other contexts to refer to 'the engagement of some form of legal or judicial process'.[38]
[37] The application of s 35(1) of the Defamation Act to all claims for non-economic loss in defamation proceedings to a case in which the proceedings also included substantial claims for personal injuries, for example, would produce an absurd result and thus seem to be an unlikely construction.
[38] Medical Board of Australia v Kemp [2018] VSCA 168; (2018) 56 VR 51 [70] (Niall JA with Maxwell P & Tate JA agreeing).
For this reason, as the parties accepted before me,[39] I will proceed upon the basis that, insofar as s 40 of the Defamation Act is engaged, it is engaged in relation to the entire action. At the same time, to the extent that the proceedings in the present case involved other causes of action, some of which were unsuccessful, and indeed one defendant that was wholly successful, those matters may nevertheless be relevant to the assessment of 'the interests of justice' in the chapeau to s 40(2) and 'reasonableness' in s 40(2)(a). Indeed, the multiplicity of causes of actions is, in my view, a matter which the Court could consider relevant in s 40(1)(b) in awarding costs.
[39] Ts 690 - 693.
I turn then to s 40(2)(a) and whether I am satisfied that Ms Peterson and Mr Higgs unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiffs.

Did Ms Peterson and Mr Higgs unreasonably fail to make a settlement offer or agree to a settlement offer proposed by the plaintiffs?

The settlement offers in this matter, as a whole, provide a sobering picture of the failure of attempts at early resolution of proceedings that ought to have been resolved at an early stage and before any significant damage was done. Indeed, as I will come to, the evidence as to those offers expose the anatomy of a lost opportunity at resolution and, to multiply the medical metaphors, the metastatic effect that legal costs have on the prospect that proceedings can sensibly be resolved.
In particular, in my view, none of the offers made by the parties (either the plaintiffs or the defendants) in the first half of 2022 were reasonable offers at the time that they were made. In that regard, it may reasonably be supposed, in my view, that the harm suffered by Dr McIntosh and Mr McIntosh at that time was substantially less than ultimately proved to be the case. In particular, the significant strain on Dr McIntosh and Mr McIntosh's marriage relationship as a consequence of Mr McIntosh's obsession with the Facebook Post, which Dr McIntosh described as having occurred in the six months prior to trial, would not have occurred. In those circumstances, given what I have found to be the lack of any real impact on the Clinic's business, the proceedings ought to have been resolved by Ms Peterson removing the Facebook Post, apologising and paying a relatively modest, but reasonable, amount by way of compensation and costs.
As it was, the defendants' two offers, dated 1 March 2022 and 21 April 2022, while ultimately (in the second offer) agreeing to remove the Facebook Post and make an apology acceptable to the plaintiffs, only ever offered to contribute to a financial settlement in the sum of $2,000. That sum, even at that early stage, given that the plaintiffs would already have suffered some adverse effect and incurred some costs was, in my view, simply unreasonable. Neither of those offers, not being reasonable offers at the time that they were made, was, in my view, a 'settlement offer' within the meaning of s 40(3) of the Defamation Act.
From the plaintiffs' perspective, their two offers, dated 15 March 2022 and 11 May 2022, sought a financial settlement amount of $160,000 and $150,000 respectively. Those offers maintained that the Clinic had suffered 'an immediate downturn in revenue' and that 'economic loss will be awarded'.[40] That proposition was not correct then, and it was not maintained at trial. In my assessment, it was unlikely that, at the time that these offers were made, the harm caused to the plaintiffs would have resulted in an assessment of damages (for all of the plaintiffs combined) in excess of $100,000. In my view, it would likely have been much less. In that regard, I infer that the significant harm that was done to the plaintiffs, in terms of the impact on Dr McIntosh and Mr McIntosh and their marriage had not yet occurred.
[40] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 Attachment 'LMC-4', page 21.
In any event, as at March and May 2022, it was not unreasonable for Ms Peterson and Mr Higgs to fail to accept those offers from the plaintiffs. In my view, Ms Peterson and Mr Higgs could not reasonably have foreseen, at that time, that the effect of the Facebook Post would have resulted in the assessment of damages that I made.

Hence the significant, and tragic, lost opportunity to resolve these proceedings at an early stage and before the legal costs became an obstacle. Tragic because it was all so unnecessary. If the proceedings had been resolved at that time, they could, and should, have been resolved for a far more modest sum and, more importantly, the hurt and harm caused to Dr McIntosh and Mr McIntosh could have been avoided. Given the large disparity between the parties' positions at that time, they each bear some responsibility for that failure.
Nevertheless, it remains the case that the offers made by Ms Peterson and Mr Higgs (dated 1 March 2022 and 21 April 2022) were not reasonable settlement offers at the time that they were made and so did not meet the definition of 'settlement offer'. In the circumstances, the defendants having not increased the monetary component of their offers above $2,000, I conclude that Ms Peterson and Mr Higgs 'unreasonably failed to make a settlement offer' within the meaning of s 40(2)(a) of the Defamation Act.
As a result, the plaintiffs' prima facie entitlement to indemnity costs for the proceedings is enlivened (subject to the 'interests of justice' requiring otherwise).
In those circumstances, it is not strictly necessary for me to reach a conclusion as to whether the offers made by the plaintiffs in 2024, dated 12 January 2024 and 22 March 2024, were 'reasonable' settlement offers or whether Ms Peterson and Mr Higgs were unreasonable in failing to accept those offers. I will nevertheless consider them as being relevant to the overall interests of justice and the broader discretionary considerations in relation to costs.
Certainly, by the time of those offers, the amounts identified as being (broadly) attributable to damages reflected a reasonable assessment of the plaintiffs' prospects on liability and quantum. Those amounts (once costs were subtracted from the lump sum offers) were $70,000 and $73,000 respectively. Certainly, if offers had been made reflecting those amounts at a much earlier time, and before costs had been increased, those offers would have been reasonable.
As is clear, however, by 2024 the costs incurred by the plaintiffs had massively increased, to $190,000 and $212,000 respectively. The costs were, in each case, approximately three quarters of the total sum offered. At the hearing, I expressed some surprise at how the plaintiffs could have accumulated such costs in relation to a matter involving a single publication and witnesses from whom a competent solicitor could have taken a proof of evidence in a single day. The plaintiffs referred to complexities in drafting the republications and the detailed work in relation to the business model allegation.[41]
[41] Ts 701 - 702.
Whether my initial reaction to the size of the legal fees prior to trial was justified, in my view, it would have been reasonable for the recipient of the offer to have regarded them as disproportionate to the matters that should have been in issue in the proceedings. In those circumstances it is clear, in my view, that by 2024 it was legal costs that were going to stand in the way of a sensible resolution of the proceedings.
It is, therefore, difficult to conclude that the defendants were unreasonable in not accepting those offers at that stage. In that regard, the defendants had a number of defences in relation to liability (including their arguments as to defamatory meaning). While the defendants' defence of the proceedings was unsuccessful the defences were not all hopeless. In particular, the defendants ran a number of legitimate arguments in relation to defamatory meaning and their defences of honest opinion, qualified privilege and triviality were not wholly without merit. In addition, at the time of the offers the plaintiffs were persisting in their claim for loss of revenue (together with the prospect of expert evidence). That claim was ultimately abandoned.
In the end, while the offers made in 2024 may have been reasonable (as to their overall quantum), in all of the circumstances, in my view, it was not unreasonable for the defendants to fail to accept them at that time.
Nevertheless, as I have said, as a consequence of Ms Peterson and Mr Higgs' failure to make a reasonable settlement offer themselves, the plaintiffs' prima facie entitlement to indemnity costs for the proceedings is enlivened, subject to the 'interests of justice' requiring otherwise.
I now turn to that question.

Do the interests of justice require otherwise?

For the reasons that follow, I am satisfied that it is not in the interests of justice that the plaintiffs be awarded indemnity costs and it is not in the interests of justice that the plaintiffs recover the entirety of their costs of the proceedings. I am positively satisfied that the interests of justice require otherwise.
First, s 40(1)(a) of the Defamation Act expressly provides that, in awarding costs in defamation proceedings, the court may have regard to 'the way in which the parties to the proceedings conducted their cases'.
In the present case, the plaintiffs brought proceedings to vindicate their reputations. The way in which they conducted their case, however, was not merely to seek to vindicate their own reputations. They (through their counsel) set out to attack the character and credibility of Ms Peterson, including by making – and persisting with – a line of cross‑examination intended to demonstrate that she was dishonest in her tax affairs. That cross‑examination, as was inevitable, was reported precisely to that effect. It was a serious attack on Ms Peterson's character which, in effect, alleged what would have been an offence against Commonwealth taxation law. It was an attack which was unfounded and based on a misleading presentation of Ms Peterson and V‑Gan Booty Pty Ltd's financial records. And it was never formally withdrawn.[42] As I have said, the true position in relation to Ms Peterson's declared earnings ought to have been immediately obvious to any practitioner taking a modicum of care in reading those financial records.
[42] The highest that it was put in closing was that the allegation was 'not included in our outline' and there was to be no submission to the effect that Ms Peterson was dishonest in her tax affairs (ts 554).
The unfounded cross‑examination of Ms Peterson in relation to her tax affairs was the most conspicuous, but not the only, example of the plaintiffs' case being directed to Ms Peterson's character, beyond what was reasonably required for the plaintiffs to establish their claims and vindicate their own reputations. I referred to a number of other matters in my reasons for decision, including the significant focus on Ms Peterson's financial affairs and V‑Gan Booty Pty Ltd's OnlyFans business, which permeated the plaintiffs' case,[43] and the plaintiffs' censorious approach to Ms Peterson in that regard.[44] In other words, the misleading cross‑examination in relation to Ms Peterson's honesty in her tax affairs was not an isolated aspect of the plaintiffs' case; it was part and parcel of its significant focus on Ms Peterson's financial affairs.
[43] McIntosh v Peterson [No 2] [122] (Quinlan CJ).
[44] McIntosh v Peterson [No 2] [503] - [505] (Quinlan CJ).
To an extent the plaintiffs continued that approach in submissions before me in relation to costs. The plaintiffs produced evidence of Ms Peterson's social media posts around the time of the trial in which Ms Peterson responded to what she described as media articles 'filled with falsehoods about my identity, my actions, and even my financial situation' and in which she queried why cross‑examination in relation to her financial records 'had anything to do with the litigation against me for defamation'.[45] As well she might. It is, in my view, unsurprising that Ms Peterson would wish to respond to what, ultimately transpired, were unjustified imputations about her.
[45] Affidavit of Laura Margaret Cohn affirmed on 25 November 2024 Attachments 'LMC1', 'LMC-3'.
The plaintiffs, however, submitted that her response demonstrated that 'although it had a negative impact on Ms Peterson's reputation, she leveraged it for notoriety to the ultimate benefit of the cause she passionately believes in'.[46] To be clear, the concern I expressed during the hearing, and express again, is not whether Ms Peterson was able to 'leverage' an unfair attack on her reputation; my concern is as to the use of the Court's processes, and the absolute privilege afforded in cross-examination, to make that unfair attack.
[46] Ts 710.
In my view, it is not in the interests of justice that the plaintiffs, having conducted their case in a way that involved an unfair, unfounded and misleading attack on Ms Peterson, should be awarded indemnity costs in respect of the proceedings. A party that conducts proceedings in that way should expect that it has costs consequences. Insofar as there may be any issue as to the responsibility for those consequences as between the party and their legal representatives, that is a matter to be dealt with between them.
Secondly, it is not in the interests of justice for the plaintiffs to be awarded indemnity costs for the proceedings, in circumstances in which they were wholly unsuccessful in their action against the third defendant, V‑Gan Booty Pty Ltd, and were wholly unsuccessful in relation to two separate causes of action. While I accept, for the purposes of s 40(2), that 'proceedings' includes the entirety of the proceedings, it is relevant, in my view, that the plaintiffs chose to bring proceedings for multiple causes of action, including against a defendant in relation to which the action was, at best, speculative.
In that regard, it was clear from the very outset that V‑Gan Booty Pty Ltd was not incorporated at the time that Ms Peterson posted the Facebook Post. There was no direct evidence that the company ever assumed ownership or responsibility for the Facebook page after its incorporation and the plaintiffs' case that it was so responsible was based on inferences from an elaborate case to the effect that Ms Peterson's animal rights activism was a ploy for making money. The plaintiffs accepted that the business model allegation was key to their case on publication against V‑Gan Booty Pty Ltd.[47] That case, which occupied a significant portion of the trial, was in my view weak and, of course, ultimately failed.
[47] Ts 707.
Prima facie, V‑Gan Booty Pty Ltd, as a successful defendant is entitled to a costs order in its favour (as was the defendants' primary position). Ultimately, at the hearing in relation to costs, both the plaintiffs and defendants accepted that, given their joint representation and the need to avoid a lengthy and complex costs assessment, it was open to take account of the success of V‑Gan Booty Pty Ltd (and its prima facie entitlement to costs) by way of a reduction in the costs payable to the plaintiffs. As I will come to, that is what I propose to do.
The success of V‑Gan Booty Pty Ltd is also, however, relevant to whether indemnity costs are appropriate. To provide an indemnity for all work done in the proceedings, including its claim against the successful defendant, is not in the interests of justice. The plaintiffs met that proposition by submitting that the business model allegation, upon which their case against V‑Gan Booty Pty Ltd rested, was not only relevant to that case, but also to the plaintiffs' case for aggravated damages, its pleading of malice, its allegation of injurious falsehood and its claim for exemplary damages.[48]
[48] Ts 707 - 708.
The difficulty with that submission, of course, is that the plaintiffs' case failed in all of those other respects as well. The submission simply illustrates that the significant focus on Ms Peterson's financial affairs, unrelated to the Facebook Post, and the significant cost that that focus would inevitably have involved, permeated the plaintiffs' case. That significant focus having failed to bear any fruit, including so as to entitle a defendant to judgment, it is not in the interests of justice that the plaintiffs should be awarded indemnity costs for the proceedings as a whole.
For these reasons, I am satisfied that the interests of justice require otherwise than that the plaintiffs be awarded indemnity costs for the proceedings pursuant to s 40(2) of the Defamation Act.
For the same reasons, in my view, this is not an appropriate case to award indemnity costs in relation to the proceedings pursuant to the Court's general discretion in relation to costs, including by reference to the principles in Calderbank v Calderbank. In that context, in my view, it is also relevant that both the plaintiffs and the defendants bear some responsibility for the failure of these proceedings to be resolved when they ought to have been (see [64] above).
It is necessary then to turn to the general discretion in relation to costs, reflected in the Supreme Court Act, the Rules and s 40(1) of the Defamation Act.

Discretionary considerations – apportionment

In addition to my conclusion that it is not in the interests of justice to award indemnity costs, I am also of the view that this is an appropriate case, in the exercise of discretion, to modify the usual costs orders to reflect the multiplicity of parties, actions, issues and the mixed success enjoyed by the plaintiffs, rather than make potentially 'competing' costs orders as proposed by the defendants.
In that regard, I have taken into account, and do not repeat, the general matters set out at [47] to [50] above.
Most significant, in that respect, as I have already addressed, is the success of V‑Gan Booty Pty Ltd. In that regard, given the joint representation of the defendants and the need to avoid a lengthy and complex costs assessment, I will take account of the success of V‑Gan Booty Pty Ltd (and its prima facie entitlement to costs) by way of a reduction in the costs payable to the plaintiffs.
Similarly, and relatedly, in my view, the costs payable to the plaintiffs should be adjusted to reflect the failure of their causes of action in injurious falsehood and civil conspiracy. Those failures were not merely failures of issues, but failures of entire causes of action which were brought, at least in part, to make an 'end run' around the prohibition, in s 37 of the Defamation Act, on exemplary damages being awarded for defamation. By those causes of action, the plaintiffs sought to introduce, as elements of their causes of action, allegations as to the motivation, and alleged malice, of Ms Peterson.
Notwithstanding the difficulty of separating the factual and evidentiary substratum underlying the allegations concerning Ms Peterson's motivations in the different causes of action (and the fact that they served more than one forensic purpose), it remains the case that those allegations were, first, unnecessary for the plaintiffs to establish their real complaint and to vindicate their rights, and, secondly, that those allegations failed in any event.
By bringing the additional causes of action, and the substantial issues that came with them, the plaintiffs significantly increased the cost of the proceedings. The failure of those matters should be reflected in a reduction in the costs payable to the plaintiffs. My conclusion in that regard is reinforced by the fact that, as I have concluded above, the focus on Ms Peterson's financial affairs, motivations and alleged malice, was conducted in a way that was unfair and unjustified. I accept, in that regard, however, that there was a substantial overlap between the issues and evidence relevant to those causes of action and the case against V‑Gan Booty Pty Ltd generally.
Consistent with what the Court of Appeal said in Strzelecki Holdings, in my view, it is appropriate to exercise the power to modify the costs payable to the plaintiffs, in light of all of these considerations, broadly, and as a matter of impression, and without any attempt at mathematical precision.[49] Not only is that approach consistent with the overlap of evidence and issues involved in this case, it also avoids the added complexity and uncertainty of requiring a costs assessment that would involve parsing the work undertaken in relation to different issues.
[49] Strzelecki Holdings [52] (Murphy, Mitchell & Pritchard JJ).
Even adopting this approach the parties were far apart as to their positions in relation to the appropriate adjustment. The defendants' position, given their primary position (i.e. 50% of the plaintiffs' costs and costs in favour of V-Gan Booty Pty Ltd), was a reduction of the plaintiffs' costs that would be significantly less than 50% of those costs.[50] The plaintiffs', by contrast, submitted that an appropriate reduction on this approach would be 'within the realm of 90 to 80 per cent of our costs'.[51]
[50] Ts 728 - 730.
[51] Ts 740.
In my view, the defendants' position gives insufficient account to the plaintiffs' overall success in their defamation action, which was, realistically, always the primary action. While the joinder of V-Gan Booty Pty Ltd, and the issues associated with that claim undoubtedly had a significant impact on the proceedings, they are nevertheless properly regarded as subsidiary, having regard to the significant issues (including many defences) to be determined in the defamation claims. By the same token, a reduction in the realm of 10 to 20% posed by the plaintiffs does not properly recognise the success of V-Gan Booty Pty Ltd and its prima facie entitlement to its own costs.
In all of the relevant circumstances, in my view, a fair and just allowance for the costs of the proceedings is that Ms Peterson and Mr Higgs pay two-thirds of the plaintiffs' assessed costs of the proceedings.
In that context it is finally necessary to address the plaintiffs' alternative case that, for the purposes of any assessment, the limits imposed by the relevant costs determinations be removed, pursuant to s 141(3) of the Legal Profession Uniform Law Application Act.

Special costs orders

The principles in relation to s 141(3) of the Legal Profession Uniform Law Application Act are well-established.[52] I need not repeat them all. Critically:
(a)the court must form the view that the maximum amount allowable under the relevant scale item is inadequate in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant cost determination; and
(b)the court must also form the opinion that the inadequacy of the costs allowable under a costs determination arises because of the 'unusual difficulty, complexity or importance of the matter'.
[52] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) [11] - [16] (Buss P, Murphy & Beech JJA).
The plaintiffs submitted that I should remove the limits on hourly rates for Mr Bennett and all of the other limits imposed by the relevant costs determinations. In relation to Mr Bennett, the plaintiffs adduced evidence that his charge out rate for these proceedings was $1,375 (GST incl) per hour until 11 April 2022 and $1,100 (GST incl) per hour thereafter.[53] Otherwise, the plaintiffs did not seek to adduce any evidence in relation to the costs incurred in the proceedings, other than what appeared in the settlement offers for the purposes of determining the two matters set out at [100](a) and (b) above.[54]
[53] Affidavit of Laura Margaret Cohn affirmed on 22 November 2024 [14].
[54] Ts 737 ‑ 738.
On the basis of the issues involved in these proceedings, including the substantial number of defences in relation to the defamation actions, I am satisfied that there is a fairly arguable case that the preparation for the case may properly have exceeded 130 hours (the maximum amount allowed under Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2024, Table B, item 19). I am also satisfied that if such an amount of time was required, it would be because of the complexity of the matter. In that respect, defamation proceedings are complex and there were a number of complex legal issues that needed to be addressed in preparation for trial.

I am not, however, satisfied that there is sufficient evidence to support, or otherwise a basis for inferring, that the scale items for the hourly rates of a senior practitioner for that preparation was inadequate because of any such complexity. For that reason I will remove the limits, as to time only, set out in item 19 of Table B of the relevant costs determinations. Whether the time allowed for preparation of the case is, in fact, assessed as more than 130 hours is, of course, a matter for the taxing officer.
In relation to Mr Bennett's counsel fees, the plaintiffs submitted that I should simply remove the limits on counsel rates and leave the appropriate rate to the taxing officer, as Le Miere J did in De Kauwe v Cohen [No 4].[55]
[55] De Kauwe v Cohen [No 4] [2022] WASC 35 (S) (De Kauwe v Cohen [No 4]) [152] (Le Miere J).
While I am prepared to increase the hourly rate for Mr Bennett (for the purposes of item 22 of Table B of the relevant costs determinations only), I am not prepared to simply remove the limits on counsel rates entirely. That is for two reasons.
First, the evidence before me is that Mr Bennett's charges are approximately twice the rate for counsel provided for in the relevant costs determinations and indeed well in excess of the hourly rate for senior counsel. It is not apparent from Le Miere J's reasons in De Kauwe v Cohen [No 4] whether there was evidence before his Honour as to the rates actually charged, other than them being 'more than the scale rate'.[56] There is, however, specific evidence before me as to the actual rates charged. In those circumstances, I would not wish any decision of mine to remove the limits entirely to be understood as some form of imprimatur that a bill of costs should be appropriately taxed at those rates.
[56] De Kauwe v Cohen [No 4] [149] (Le Miere J).
This leads to the second reason. Any discretion in relation to costs should be exercised so as to serve the 'due administration of justice by limiting the allowable scope for legal costs'. The interests of justice include the need to keep the costs of litigation generally within reasonable bounds.[57] Within the legal limits of freedom of contract, a party may agree to pay their lawyers at whatever rates they choose. It is not, however, a matter that the courts should underwrite, or endorse, by allowing party/party costs to be assessed by reference to rates well in excess of the rates determined as appropriate by the responsible statutory authority.
[57] Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151 [20] (Quinlan CJ).
I accept, in all of the circumstances, that it was appropriate for the plaintiffs to be represented at trial by an experienced counsel, with expertise in the area of defamation. That, in my view, is properly recognised by allowing an hourly rate in line with the current hourly rate applicable to senior counsel of $781 (GST incl). I will therefore allow the hourly rate for counsel provided for in item 22 of Table B of the relevant determinations (the item for Trial) to be increased, in the case of Mr Bennett only, to $781 (GST incl).
I am not otherwise satisfied that I should remove or modify the limits in the determinations for the purposes of the assessment of costs in this case.

Conclusion

For the forgoing reasons, I make the following final orders in relation to costs:
1.The first and second defendants pay two-thirds of the plaintiffs' costs of the proceedings to be assessed if not agreed.
2.Pursuant to s 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA) the costs in order 1 are to be assessed on the basis that:
(a)the limits, as to time only, set out in item 19 of Table B of the Determinations (Preparation of case) be removed; and
(b)the hourly rate for counsel provided for in item 22 of Table B of the Determinations (Trial) be increased in the case of Martin Lawrence Bennett only to $781 (GST incl).
3.For the purposes of order 2, the 'Determinations' means the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020, the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 and the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2024.

I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
KT
Principal Associate to the Hon Chief Justice Quinlan
27 NOVEMBER 2024