Nikolic v Nationwide News Pty Limited (Costs)

[2024] VSC 531

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

S ECI 2019 02003

GORAN NIKOLIC	First Plaintiff
IDAZ09 PTY LTD (ACN 166 845 647)	Second Plaintiff
v
NATIONWIDE NEWS PTY LIMITED TRADING AS THE AUSTRALIAN (ACN 008 438 828)	Defendant

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JUDGE:	GRAY J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers, date of last submission 21 July 2024
DATE OF JUDGMENT:	30 August 2024
CASE MAY BE CITED AS:	Nikolic v Nationwide News Pty Limited (Costs)
MEDIUM NEUTRAL CITATION:	[2024] VSC 531

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APPEALS — Practice and procedure — Refusal of application for extension of time in which to appeal from orders of an Associate Judge granting summary judgment to the defendant and dismissing the proceeding — Costs — Indemnity costs — Supreme Court Act 1986 s 24(1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Self-represented
For the Defendant	Mr A Anderson	Thomson Geer

HIS HONOUR:

1. On 1 July 2024 I refused the plaintiffs’ application for an extension of time in which to appeal from a judgment of Daly AsJ and delivered reasons for those orders.[1]

   [1]Nikolic v Nationwide News Pty Limited [2024] VSC 380.

1. I granted leave to the defendant, Nationwide News, to file and serve any affidavit material, and any submissions, on which it relies on the question of costs incurred in or incidental to this proceeding since the beginning of September 2022, and leave to the plaintiffs to file and serve responding affidavit material and submissions.

1. Nationwide News filed an affidavit that exhibited a letter sent on its behalf to the plaintiffs dated 21 October 2022. It pointed out defects in the plaintiffs’ attempted appeal in some detail, and concluded:[2]

We put you on notice that Nationwide News will seeks its costs of the appeal on an indemnity basis given it is clear the appeal was commenced in breach of the Settlement Agreement, that our client has full defences to the appeal, and in any event, the appeal itself is entirely misconceived, incomprehensible and bound to fail.

[2]Affidavit of Samantha de Bussey McGeoch affirmed 15 July 2024, exhibit SDM-2, pp 5–8.

1. The affidavit also exhibited the plaintiffs’ letter in response, dated 22 October 2022. It did not respond in any way to the criticisms of the attempted appeal that had been made on behalf of Nationwide News.[3]

   [3]Affidavit of Samantha de Bussey McGeoch affirmed 15 July 2024, exhibit SDM-2, pp 11–15.

1. Nationwide News also filed and served written submissions applying for an indemnity costs order against the plaintiffs from when the plaintiffs purportedly commenced the appeal (10 September 2022), or alternatively an order for its costs of an incidental to the appeal on the standard basis from 10 September 2022, and on an indemnity basis from 21 October 2022.

1. The plaintiffs filed an affidavit of Mr Nikolic dated 21 July 2024 stating that it was ‘pursuant to’ my orders on 1 July 2024. However, the affidavit did not respond to Nationwide News’ affidavit or engage with any costs issues. The plaintiffs filed a submission likewise said to be ‘pursuant to’ my order on 1 July 2024. The affidavit and submission contained references to evidence previously filed and went further, providing a detailed explanation of aspects of that evidence and a matter that, the plaintiffs contended, I should have expressly addressed and determined. The submission also criticised Daly AsJ’s judgment. In effect, the submission, and to some extent the affidavit, developed one or more matters that, it appears, the plaintiffs might seek to raise on any application for leave to appeal from my order refusing them an extension of time. It is, however, too late to adduce that evidence and to make that submission, seeking to agitate or re-agitate such matters before me. I have already made the order refusing the plaintiffs’ application to extend time in which to appeal. The only matter I am considering now, and for which I granted leave to the plaintiffs to make further submissions, is costs.

1. The plaintiffs’ affidavit and submission do not engage with Nationwide News’ material or their submission on costs. The plaintiffs do not advance any specific reason why they should not pay the costs of and incidental to their failed application (whether on the standard or an indemnity basis), aside perhaps from attempting to re-agitate the merits of that application.

1. I have decided to order the plaintiffs to pay Nationwide News’ costs on the standard basis from 10 September 2022, and on an indemnity basis from 22 October 2022, being the date they wrote in response to Nationwide News’ letter the day before.

1. In brief terms, my reasons for this decision are as follows.

1. The ordinary rule is that costs follow the event, unless there are circumstances justifying the departure.[4] There is no reason to depart from the usual rule that costs follow the event here. The real question is whether, and from when, Nationwide News should receive an order for its costs on an indemnity basis.

   [4]Oshlack v Richmond River Council (1998) 193 CLR 72, [67] (McHugh J); Northern Territory v Sangare (2019) 265 CLR 164, [25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ); Chen & Ors v Chan &Ors [2009] VSCA 233, [10(1)].

1. The Court’s discretion as to costs under s 24(1) of the Supreme Court Act 1986 is conferred in unfettered terms, but it falls to be exercised having regard to the circumstances of the case. Ordinarily costs are taxed on the standard basis,[5] rather than the indemnity basis provided for in r 63.30.1 of the Rules. The principles that guide the Court’s discretion whether or not to impose an indemnity costs order are well established, and were set out by Harper J in Ugly Tribe Co Pty Ltd v Sikola.[6] I respectfully adopt his Honour’s summary of the principles (omitting citations):[7]

   [5]Supreme Court (General Civil Procedure) Rules 2015 (Rules) r 63.31.

   [6][2001] VSC 189, [7]–[11].

   [7][2001] VSC 189, [7]–[9].

… Special circumstances must be present to justify such a departure … . These include:

(i) The making of an allegation, known to be false, that the opposite party is guilty of fraud: …

(ii) The making of an irrelevant allegation of fraud: …

(iii) Conduct which causes loss of time to the Court and to other parties: …

(iv) The commencement or continuation of proceedings for an ulterior motive: …

(v) Conduct which amounts to a contempt of court: …

(vi) The commencement or continuation of proceedings in wilful disregard of known facts or clearly established law: …

(vii) The failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided, the trial: ...

The categories of special circumstances are not closed: … The cases must not, therefore, be read ‘in an endeavour to establish a set of inflexible guidelines which should thereafter be determinative of the manner in which the Court’s discretion is to be exercised [for this] would be to fetter the Court’s discretion”: …

At the same time, the courts should, I think, be astute to avoid a wilderness of single instances. …

1. The key principle of relevance here is the sixth principle enumerated by Harper J: that indemnity costs might be imposed where the losing party continued the proceeding in wilful disregard of known facts or clearly established law.

1. Another principle of relevance might be the making of unsupported allegations ‘known to be false’ or that are ‘irrelevant’, although the allegations made by the plaintiffs here were not of ‘fraud’ per se.

1. As to the sixth principle, ordinarily, the Court will not lightly draw an inference that a self-represented litigant should have appreciated that their case was a weak one. There is no rule against imposing an indemnity costs order on a self-represented litigant, but due allowance must be made for the fact that they did not have access to legal expertise.[8]

   [8]Raptis v City of Melbourne [2017] VSC 448, [27] (Raptis) and the authorities there cited, including Vink v Tuckwell [2008] VSC 316, [105]–[107] and Macedon Ranges Shire Council v Thompson [2009] VSCA 209, [17]; cf Bhagat v Royal and Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159, [13].

1. The plaintiffs should have appreciated that their case was a weak one at least from the time they received the letter on behalf of Nationwide News dated 21 October 2022.

1. I agree in this regard with the submission by Nationwide News that the circumstances are analogous to the warnings given to the self-represented litigant in Raptis[9] and the letter given to the self-represented litigant in Quach.[10] I agree that the plaintiffs ‘did not heed the reasonable warning’ from Nationwide News that the application and appeal ‘was doomed to fail’ and that this ought to have been apparent to them.[11]

   [9]         See footnote 8.

   [10]          Quach v Health Care Complaints Commission (No 2) [2015] NSWCA 311.

   [11]Nationwide News’ submissions on costs dated 15 July 2024, [16].

1. The plaintiffs’ responding letter dated 22 October 2022 leads me to conclude that, at least from that time, they were continuing their application and attempted appeal in wilful disregard of its defects in fact and law.

1. Nationwide News also sought indemnity costs on the basis that the application and attempted appeal were accompanied by baseless accusations of serious wrongdoing against various legal practitioners acting for Nationwide News and against deponents. This potentially engages the first and second principles identified by Harper J in Ugly Tribe. Although not accusations of fraud per se, they were equivalent in their potential to affect those individuals. They were certainly made in breach of s 18 of the Civil Procedure Act 2010 (CPA), which I address separately, below. The plaintiffs’ accusations were entirely without foundation and should not have been made. It is, however, not entirely clear that the plaintiffs knew those accusations to be false. Perhaps they did know this, in the sense that this should be inferred from the fact that there was no reasonable foundation for the accusations. However, the plaintiffs may not, subjectively speaking, have had a belief that they were false. Again, probably the accusations were ‘irrelevant’ in the sense that they had no reasonable foundation and could not lead to a successful appeal, but again I am not sure that the plaintiffs had a subjective understanding of this.

1. Ultimately, I have decided that I do not need to reach a conclusion on the issues mentioned in the preceding paragraph. I will simply rely on the sixth principle in Ugly Tribe.

1. Nationwide News also sought indemnity costs on the basis that the plaintiffs breached the CPA, ss 18, 24 and 25, and that this enlivened power under s 29 to impose indemnity costs. Nationwide News rightly pointed out that this was the outcome in Raptis.[12] There were three limbs to this submission, namely that the plaintiffs breached those provisions by:

   [12]See Raptis, [32].

(a)   persisting with appeal grounds that did not, on the factual and legal material available to the appellants at the time of pursuing the Appeal, have a proper basis (s 18);

(b)  making allegations of serious misconduct without proper basis that the lawyers acting for the respondent and people who made affidavits on behalf of the respondent misled the Court or perjured themselves (s 18); and

(c)   persisting with an appeal that was:

(i)     an abuse of process as a result of the Settlement Agreement[13] (s 18);

[13]Nationwide News referred to its submission filed 27 January 2023, [4.1]–[4.20] and the authorities there cited, which included Seidler v University of New South Wales [2011] FCA 640, [79]; and Scaffidi (by her next friend Public Trustee) v Perpetual Trustees Victoria Ltd [2011] WASCA 159, [59].

(ii)  in contravention of the obligation to ensure costs are reasonable and proportionate (s 24); and

(iii)             in contravention of the obligation to minimise delay (s 25).

1. I am not satisfied that the plaintiffs breached ss 24 and 25 of the CPA.

1. I agree with Nationwide News’ submissions that the plaintiffs breached s 18, but my conclusion in this regard is that they are only to be made liable to an indemnity costs order under s 29, as a result of this breach, on and from 22 October 2022.

1. I have reached this conclusion for substantially the same reasons I have already given in relation to the sixth principle identified by Harper J in Ugly Tribe.

1. I am satisfied that, for the purposes of s 29, an order for indemnity costs from 22 October 2022 will be sufficient to do justice in the case, and it will also best meet the other factors in the overarching purpose in s 7 of the CPA. The difference between standard and indemnity costs incurred by Nationwide News in the period 10 September 2022 to 21 October 2022 is unlikely to have been very great in any event. This is not the occasion for a detailed consideration of the legal issues raised by the intersection of s 18 and s 29 of the CPA, or by the uncertainties I have identified in paragraph 18, above.

1. The outcome I have reached is therefore the same, whether supported by application of the sixth principle in Ugly Tribe and s 24(1) of the Supreme Court Act 1986, or by application of s 29 the CPA.

1. I will order that the plaintiffs pay Nationwide News’ costs of and incidental to the application and appeal on the standard basis from 10 September 2022 to 21 October 2022, and on an indemnity basis from 21 October 2022 onwards.

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