Peterson v Simopoulos (Ruling as to Costs)

[2021] VCC 1456

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

DEFAMATION LIST

Case No. CI-20-00643

COLIN FRANCIS PETERSON	Plaintiff
v
APHRODITE SIMOPOULOS	Defendant

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JUDGE:	HER HONOUR JUDGE CLAYTON
WHERE HELD:	Melbourne
DATE OF HEARING:	15 September 2021
DATE OF RULING:	5 October 2021
CASE MAY BE CITED AS:	Peterson v Simopoulos (Ruling as to Costs)
MEDIUM NEUTRAL CITATION:	[2021] VCC 1456

RULING AS TO COSTS
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Subject:COSTS

Catchwords:              Costs – defamation – standard costs

Legislation Cited:      Defamation Act 2005; County Court Civil Procedure Rules 2018

Cases Cited:Peterson v Simopoulos [2021] VCC 1080; John Fairfax & Sons Ltd v Palmer (1987) 8 NSWLR 297; Goucher v Hii [2008] VCC 1645; Defteros v Google LLC (Costs) [2020] VSC 324

Ruling:  Standard costs ordered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Sowden with Mr D Mence	Ken Smith & Associates
For the Defendant	Mr J Castelan	Rostran Carlyle Rojas Lawyers (incorporating Goldsmiths Lawyers)

HER HONOUR:

1On 13 August 2021, I handed down Judgment in the trial of this proceeding.[1]  Mr Peterson succeeded in relation to two of the four claims he made in defamation against Ms Simopoulos.  He was awarded $40,000 in damages.

[1]        Peterson v Simopoulos [2021] VCC 1080

2Both parties agree that Mr Peterson is entitled to interest on the damages at the rate of 3 per cent from the date of the proceedings.

3The plaintiff submits that, in accordance with s40(2)(a) of the Defamation Act 2005, he is entitled to his costs of the proceeding on an indemnity basis.

4The defendant submits that, as Mr Peterson was awarded less than half the jurisdictional limit of the Magistrates’ Court, costs ought to be taxed in accordance with Rule 63A.24 of the County Court Civil Procedure Rules 2018 (“the Rules”). The defendant further argues that costs ought to be apportioned having regard to the mixed success that the plaintiff achieved and that those costs ought only be awarded on a standard basis.

5For the reasons below, I am satisfied that Mr Peterson is entitled to his costs of the proceeding on the County Court Scale, on a standard basis.

Application of Rule 63A.24 of the Rules

6Rule 63A.24 relevantly provides:

“(1)Where in a proceeding for debt or damages the plaintiff recovers by judgment or otherwise an amount (exclusive of costs) not exceeding one-half of the amount of the jurisdictional limit of the Magistrates’ Court in a civil proceeding (at the time the proceeding commenced), the plaintiff shall, unless the Court otherwise orders, be entitled only to the costs to which the plaintiff would have been entitled if the plaintiff had brought the proceeding in the Magistrates’ Court less an amount equal to the additional costs properly incurred by the defendant by reason of the proceeding having been brought in the County Court instead of the Magistrates’ Court, but shall not be required to pay to the defendant any amount by which the additional costs exceed the costs payable to the plaintiff.

… .”

7The jurisdictional limit of the Magistrates’ Court is $100,000 and therefore the award of damages of $40,000 is less than half the jurisdictional limit.  The defendant says that this means that Mr Peterson is only entitled to costs on the Magistrates’ Court Scale, less any additional amount incurred by the defendant, because the claim was brought in the County Court.  The defendant says, given the limited publication of the defamatory material to only 14 people and the fact that there was no claim for special damages and no evidence that the defamation had caused any actual loss to the plaintiff, the range of damages was always likely to be within the jurisdictional limits of the Magistrates’ Court.  The plaintiff submitted the range of appropriate damages was $80,000 to $120,000 and would have appreciated that the likely actual award, if he were successful, would be under $100,000.  Further, there was no particular complexity in the circumstances of the case or the law to be applied that would render it inappropriate for a magistrate to determine.  There is no basis upon which the Court should deviate from the requirement of the Rule.

8Mr Peterson says the Court has discretion to “otherwise order”.  In determining whether it is appropriate to “otherwise order”, the Court should have regard to the complexity of the litigation and the existence of a specialist list for defamation in the County Court, and the absence of such a list in the Magistrates’ Court.  Further, Mr Peterson says that damages are only one element of a claim in defamation, and that vindication of reputation is also recognised as a legitimate purpose.  Consequently, determining the appropriate jurisdiction based solely on the quantum of damages that might be awarded fails to recognise the other purposes for which litigation can be deployed in defamation cases.  The plaintiff relies on the case of John Fairfax & Sons Ltd v Palmer[2] in which the complexity of the case, entitlement to a trial by jury, and existence of a specialist list were factors in favour of the matter being brought in the Supreme Court notwithstanding the jurisdictional threshold of the lower court.   Similarly in Goucher v Hii,[3] Judge Wodak considered that the complexity of a medical negligence claim and the likelihood that judges in this Court would have greater familiarity with the issues than would magistrates, justified bringing the claim in the County Court notwithstanding the jurisdictional limit of the Magistrates’ Court.  In that case, the plaintiff had sought a trial by jury and, though the matter had settled before trial, his Honour expressed the view that the choice of mode of trial should not be arbitrarily taken away.  Further, his Honour considered that a litigant was “entitled to cho[o]se to have his or her case decided in the Court with a special list” and that this was a factor that should be weighed up with other factors in deciding the appropriate scale.

[2] (1987) 8 NSWLR 297

[3] [2008] VCC 1645

9In this case, the plaintiff did not request a jury and therefore the availability of a jury trial in the County Court is not a relevant consideration. However, I am persuaded that the claim was sufficiently complex to entitle Mr Peterson to choose to have it determined in a Court with a specialist list for management purposes and in a Court where judges would likely have greater familiarity with the issues. Accordingly, I am satisfied that I should make an order other than the order required pursuant to Rule 63A.24 of the Rules. Costs should be assessed in accordance with the County Court Scale of Costs.

Application of Section 40(2) of the Defamation Act 2005

10Section 40 of the Defamation Act 2005 provides:

(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

(b)     …

(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.”

11The effect of s40(2) is to impose a significant cost consequence on a party who unreasonably fails to at least attempt to settle a proceeding.

12The question in this case is whether I can be satisfied that the defendant either unreasonably failed to make a settlement offer, or agree to a settlement offer proposed by the plaintiff.

13The wording of the legislation is specific and deliberate.  It does not require that the defendant must, to avoid a cost penalty, make a “reasonable” settlement offer, but rather that the defendant must not unreasonably fail to make a settlement offer.  A settlement offer that is so far from reasonable that it could not possibly be accepted might be considered not to be a settlement offer at all.  But otherwise the reasonableness or otherwise of the offer by the defendant is not a matter for determination.

14The defendant also must not unreasonably fail to agree to a settlement offer proposed by the plaintiff.  Whether the defendant’s conduct in agreeing to a settlement offer is unreasonable will clearly require an analysis of the reasonableness of the offers made.  A refusal to accept an outrageous offer would be unlikely to satisfy the requirement that the defendant must have “unreasonably failed” to accept an offer.   

15In this case, each of the parties made a number of offers of settlement at various times.  These are set out in detail in the affidavit of Nicola Alford dated 13 September 2021.  With the benefit of hindsight, the defendant would have been well advised to have accepted a number of those offers.  However, this does not necessarily mean that the defendant acted unreasonably in not doing so.  The reasonableness or otherwise of an offer depends on a number of factors, including the point in the proceedings at which it was made, and the state of knowledge of each party at the time of the offer.  

16The defendant argues that the first offer made by the plaintiff, which was for an apology, an undertaking to cease and desist from further harming the plaintiff’s reputation and the payment of $5,000 in legal fees, was not an offer capable of being accepted, as the terms of the apology were not settled and the terms of the undertaking were unclear.  The plaintiff says that, even if the offer was not an offer capable of acceptance, it was at the least an invitation to treat, and the defendant’s failure to respond to it was an unreasonable failure to make a settlement offer.

17The legislation provides that a settlement offer can include an offer made prior to the commencement of the proceedings, and up until the determination of the proceeding.  An offer to settle for an apology, an undertaking and the payment of $5,000 in legal fees was a reasonable offer.  However, at the time it was made, prior to proceedings being instituted and prior to discovery, it is not clear to me that the defendant acted unreasonably in not accepting that offer.  The defendant subsequently made settlement offers.  It cannot be said that she unreasonably failed to make a settlement offer, nor that her settlement offers were so unreasonable as to not constitute a real settlement offer.  At least one, the offer of 3 December 2020, was a reasonable offer, albeit one which was understandably not attractive to the plaintiff. 

18I do not think that the outcome at trial was so obvious as to make it unreasonable to refuse a reasonable offer.  There is a difference between failing to agree to a reasonable settlement offer and unreasonably failing to agree to a settlement offer.  In the former, the reasonableness relates to the offer.  In the latter, the reasonableness relates to the conduct.

19In this case, the defendant refused reasonable settlement offers, but the plaintiff also refused at least one reasonable settlement offer.  Neither behaved unreasonably in doing so.  A party is entitled to “chance their hand” at litigation if, on reasonable grounds, they consider there is a real prospect that they will do better than the offer.  The failure to do better does not render the rejection of the offer unreasonable.  The circumstances will determine whether the rejection was unreasonable.  If the intention of the legislature was to ensure that a failure to accept a settlement offer that was subsequently “beaten” by an award of damages would result in an award of costs on an indemnity basis, then this would be reflected in the wording and no assessment of “reasonableness” would be required. 

20In this case, although the plaintiff won, the case was, in my view, complex and the outcome was not obvious. I do not consider that the defendant unreasonably failed to make a settlement offer, nor unreasonably failed to agree to a settlement offer proposed by the plaintiff, and therefore do not consider that I must order the costs to be assessed on an indemnity basis pursuant to s40(2)(1) of the Defamation Act 2005.

Offer of Compromise

21The plaintiff submits that his offer of 22 April 2021 which was in the form of an Offer of Compromise either entitles him to indemnity costs from the date of that offer, or is at least a factor for the Court to consider in determining whether indemnity costs should be ordered. The Rules provide that an offer of compromise may be served at any time before verdict or judgment and may be limited by time, but that “the time expressed shall not be less than 14 days after [the date the offer is served]”. The plaintiff’s offer was expressed as open until 4.00pm on 23 April 2021, which means that it clearly does not fall within the terms of the Rules. It was, therefore, not an offer of compromise for the purposes of the Rules but is simply another offer that was made in the proceeding.

22I accept that this offer is one that I can consider when determining the appropriate costs order.  However, there is nothing about this offer that takes it outside the analysis I have applied to the other offers that were made, which is that the defendant did not unreasonably fail to accept this offer.  The making of and rejection of that offer does not render the defendant exposed to an indemnity costs order.

23Accordingly, the appropriate assessment of costs is on a standard basis.

Apportionment

24Finally, the defendant argues that, as the parties had mixed success, the costs ought to be apportioned between them.  The defendant proposes that paying in the order of 60 per cent of the plaintiff’s costs represents an appropriate apportionment.

25Whilst I accept the defendant’s submission that it is open to the Court to apportion costs, and accept that there are cases in which this has been done,[4] I am not persuaded that it is appropriate in this case.

[4]        Defteros v Google LLC (Costs) [2020] VSC 324

26In this case, although the defendant was successful in her defence in relation to two of the four statements, I do not accept that it is possible to parse the evidence that was required in relation to only those statements.  She raised a defence of qualified privilege which called for a close examination of all the circumstances of the case, and would have required all the evidence to be heard regardless of whether the plaintiff had pursued claims in relation to the two statements in which he was not successful.  I am not persuaded that, had the plaintiff pursued only those two claims in which he was successful, there would have been any savings of time or expense in the preparation for or running of the trial.  This is not a case where distinct causes of action were pleaded, some of which succeeded and some of which failed.  There was a single cause of action arising from a single email and an examination of the content of that email and all the circumstances that gave rise to the email was always going to be necessary.

27Accordingly, I am satisfied that the defendant is liable for the entirety of the plaintiff’s costs, on the County Court Scale, on a standard basis, to be taxed in default of agreement.

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