Plenty v Dickson - [2009] SASC 9

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
PLENTY & ANOR v DICKSON & ANOR
[2009] SASC 9
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Vanstone and The Honourable Justice Anderson)
19 January 2009
DEFAMATION - DAMAGES - GENERAL DAMAGES - REVIEW OF ASSESSMENT
DEFAMATION - DAMAGES - SPECIAL DAMAGES
Appeal against award of damages for defamation - whether award was manifestly inadequate - whether Judge should have concluded that the defendants had acted with malice - whether Judge erred in failing to award aggravated or exemplary damages.
Held: facts do not justify a finding of express malice - no evidence so support an award of aggravated or exemplary damages - appeal dismissed.

PROCEDURE - COSTS - APPEALS AS TO COSTS - MISTAKE OF LAW OR FACT
Cross appeal - whether Judge erred in awarding costs to the appellants.
Held: Judge acted under a misunderstanding of the terms of the former rule - discretionary order of the Judge in regard to costs of the defamation proceedings needs to be revisited - discretion exercised by Full Court reaching same result as Judge - cross-appeal dismissed.
Supreme Court Civil Rules 2006 (SA) R 8, R 263; Supreme Court Civil Rules 1987 (SA) R 101.02A.b; Local and District Court Act 1926 (SA) s 42; Supreme Court Act 1935 (SA) s 40; Statutes Amendment (Jurisdiction of Courts) Act 1981 (SA) s 5; Statutes Amendment (Courts) Act 1985 (SA), referred to.
Plenty & Anor v Seventh Day Adventist Church & Anor [2006] SASC 361; Gray v Motor Accident Commission (1998) 196 CLR 1; Cassell & Co Ltd v Broome [1972] AC 1027; Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327; Silverblade v Nelson (1980) 24 SASR 310; Bunker v James (1980) 26 SASR 286; Stevens v Chandler (1988) 46 SASR 541, considered.

PLENTY & ANOR v DICKSON & ANOR
[2009] SASC 9
Full Court Gray, Vanstone and Anderson JJ
GRAY J.

This appeal and cross-appeal arise from the publication of defamatory material.
Sydney Graham Plenty and Deanne Plenty claimed damages against The South Australian Conference of the Seventh Day Adventist Church and Alex Raymond Dickson, its Communications Director. The defamation was made by the publication, in the Advertiser newspaper on 29 February 1980, of a letter written by Mr Dickson to the editor of the Advertiser.
Proceedings were issued on 4 November 1980.[1] Consent judgments were entered on 22 May 1991 in the proceedings, in favour of Mr and Mrs Plenty, for damages to be assessed. In 2006, the trial Judge assessed the damages for each plaintiff in the amount of $10,000.[2] The Judge later awarded each plaintiff $10,070 by way of interest.[3] As a result, Mr and Mrs Plenty each recovered damages and interest totalling $20,070. The Judge made an order for the costs of the proceedings in favour of Mr and Mrs Plenty. Judgment was not formally entered until 17 May 2007.
[1]    Supreme Court Action 3169 of 1980.
[2]    Plenty & Plenty v Seventh Day Adventist Church of Port Pirie; Plenty & Plenty v Dickson [2006] SASC 361.
[3]    Plenty & Plenty v Seventh-Day Adventist Church of Port Pirie; Plenty & Plenty v Dickson (Unreported, Supreme Court of South Australia, Duggan J, 17 May 2007).
Mr and Mrs Plenty both complained that the awards of damages were manifestly inadequate. It was complained that the Judge should have concluded that the defendants had acted with malice. Further, it was said that the Judge erred in failing to award aggravated or exemplary damages.
The Port Pirie Church cross-appealed with respect to the costs orders made by the trial Judge.
The Appeal
In the course of his reasons the learned Judge set out the text of the defamation letter:
Church action
Sir – I refer to “The Advertiser” 20/2/80, concerning the dismissal of Mrs. Plenty from the membership of the Seventh Day Adventist Church at Port Pirie.
As reported, the article gives inference by Mrs. Plenty that she was dismissed because of a court magistrate’s attitude to her evidence in a case of sex discrimination.
It is unfortunate that this has been implied. The facts are that Mrs. Plenty and her husband were dismissed from church membership, because of continuing attitudes and actions which were felt contrary to church standards of behaviour.
Mr. and Mrs. Plenty appealed to the church authorities for reconsideration of the action taken by the Port Pirie Church Board, and their appeal will be considered in the near future.
A. R. DICKSON
Communications Director SA Conference of Seventh Day Adventists
The Judge then set out the letter in response from Mrs Plenty:
Church action
Sir – I refer to the letter “Church action” written by A. R Dickson, Communications Director of the SA Conference of Seventh Day Adventists (“The Advertiser,” 29/2/80).
I am deeply saddened at the necessity of writing this letter to correct the gross inaccuracies and hurtful innuendo made against myself and my husband.
It is a pity that Mr. Dickson did not take the opportunity of first acquainting himself with the facts before disputing the accuracy of “The Advertiser’s” articles which stated that I was disfellowshipped from the church as a consequence of the discrimination by the magistrate in my husband’s case of assault.
The facts are, that the Port Pirie SDA Church has, in writing, accused me of telling “wilful and habitual falsehood at the time of Mr. Plenty’s court case”, and my husband and I were deprived by circumstances of offering any form of defence against this abusive, untrue statement. Without being heard, we were immediately disfellowshipped.
I am shocked and hurt by Mr. Dickson’s letter, and the inhumane actions of the church, as no-one has ever come to either my husband or myself and told us of any unchristian-like behaviour. In fact only weeks before, the Port Pirie minister had asked me to teach several new young people coming to our church, and only a few days before I was asked to go collecting for our missions in the business centre of Port Pirie.
MRS. D. PLENTY
Port Pirie
The Judge then proceeded:[4]
The statement of claim asserts that the letter implies that false information was supplied by Mrs Plenty. It is also claimed that the statement in the letter that the plaintiffs “were dismissed from church membership because of continuing attitudes and actions which were felt contrary to church standards of behaviour” is false and reflects in a serious way on the characters of the plaintiffs.
On 22 May 1991, a master made a consent order in the defamation action that the plaintiffs have judgment against the defendants for damages to be assessed.
[4] Plenty & Anor v Seventh Day Adventist Church & Anor [2006] SASC 361 at [162]-[163].
The trial Judge rejected the claim that he should award for aggravated or exemplary damages. The Judge observed that any aggravating features could be taken into account in the award of compensatory damages.
The trial Judge set out the circumstances of the defamation and his conclusions about their effect on Mr and Mrs Plenty:[5]
[5] Plenty & Anor v Seventh Day Adventist Church & Anor [2006] SASC 361 at [164]-[171].
Mrs Plenty said in evidence that she was horrified when she read the letter in the newspaper because it was not true. She said it was not correct to say that she and her husband were dismissed from church membership because of “continuing attitudes and actions which were felt contrary to church standards of behaviour”. She added that she and her husband were never told that this was the reason for their disfellowshipping.
Earlier in these reasons, I set out the events leading to the disfellowshipping of the plaintiffs. The particulars of the charges which were notified to the plaintiffs are set out in that summary. Prior to the church meeting at which the disfellowshipping took place, the charges were amended so as to allege:
Disorderly conduct which brings reproach upon the cause of God eg. letters written to the newspapers containing exaggerated accusations.
Attitude towards those in authority.
When the plaintiffs were advised by letter dated 2 December 1979 that they had been disfellowshipped, they were told that their membership of the church had been terminated for “disorderly conduct which brings reproach upon the cause of God” and “attitude towards those in authority”.
The article in The Advertiser stated that Mr Plenty had been cut off from membership for assaulting a policeman. This was one of the original charges and it is understandable that Mrs Plenty may have been under the impression that it was a matter which led to his disfellowshipping. The broad and somewhat ambiguous reasons subsequently given by the church for the disfellowshipping could well have been understood by the plaintiffs to include the charge of assault. I have said that they were not at the meeting at which the vote was taken to disfellowship them.
However that may be, the church and Mr Dickson decided to correct what they understood to be a misstatement of the reasons for the disfellowshipping which had appeared in the newspaper article. Mr Dickson’s letter stated that Mr and Mrs Plenty were dismissed from membership “because of continuing attitudes and actions which were felt contrary to church standards of behaviour”.
Looked at from the point of view of the church, this may have appeared to be a correct statement. However, I referred in my earlier judgment on the declaration application to the ambiguity of the wording of the charges and the letter advising of the disfellowshipping. Despite the perceived need for the church to correct the statement in the newspaper article which appears to have emanated from Mrs Plenty, it was unwise to attempt a description of the conduct for which the plaintiffs had been disfellowshipped.
Members of the church are committed to a strict code of behaviour and the plaintiffs were disfellowshipped for an alleged failure to abide by that code. However, Mr Dickson’s letter has to be judged from the position of the average reasonable reader. To such a reader, the phrase “continuing attitudes and actions which were felt contrary to church standards of behaviour” could well imply conduct more serious than the allegations which led to the disfellowshipping.
It is relevant to take into account the circulation of the newspaper and the effect which the publication appears to have had on the plaintiffs. It is of some relevance to note that Mr Dickson’s letter referred to the fact of an appeal against the decision.
Express Malice
Counsel for Mr and Mrs Plenty submitted that a conclusion that the defamation was published with express malice should be inferred from three matters. It was said that the letter was written at a time when Mr Dickson was aware that Mr and Mrs Plenty had appealed against their disfellowshipping and that that appeal was to be fully investigated by the executive committee of the South Australian conference of the Seventh Day Adventist Church. It was pointed out that Mr Dickson was one of the three members of the executive committee who was involved in that investigation in March 1980. Finally, it was said that the letter was written by Mr Dickson against the advice of the Port Pirie Church.
In my view these matters would not justify, of themselves, a finding of express malice. They may raise grounds of suspicion, they may raise the possibility of malice, but they do not establish malice on the balance of probabilities. Further, there were factors that weighed against any finding of malice. As the Judge pointed out, from the point of view of the Church the statement in the letter may have appeared to be a correct statement. Further, as the Judge noted, there was ambiguity in the wording of the charges and in the letter advising of the disfellowshipping. It is also relevant that Mr Dickson’s letter referred to the fact that there was an appeal against the decision. In all the circumstances, I reject the submission that there should have been a finding of express malice.
Aggravated and Exemplary Damages
Circumstances may arise where the behaviour of a defendant may have increased the injury to a plaintiff’s feelings, flowing naturally from the publication of the defamatory matter itself. Authorities speak of how high handed, oppressive, insulting or contumelious behaviour by a defendant can aggravate damages. If such conduct does occur, then it may be appropriate to include in the award of damages an element of aggravated damages. However, the damages are to be assessed having regard to the matter of aggravation, as a single sum, and are intended as compensation for the plaintiff and not as a form of punishment for the defendant.
Exemplary damages, on the other hand, are punitive, and they may be awarded in particular circumstances including those where a defendant has deliberately committed the tort of defamation with the intention of gaining some advantage which is calculated to outweigh any sum which will have to be paid to the plaintiff by way of compensation. There has been a degree of divergence in the approach to be taken on the availability of exemplary damages between the English and Australian courts. The position was summarised by Gleeson CJ, McHugh, Gummow and Hayne JJ in Gray v Motor Accident Commission:[6]
[6]    Gray v Motor Accident Commission (1998) 196 CLR 1 at [14]-[15], [18]-[19] (footnotes omitted).
Because the kinds of case in which exemplary damages might be awarded are so varied, it may be doubted whether a single formula adequately describes the boundaries of the field in which they may properly be awarded. Nevertheless, the phrase adopted by Knox CJ in Whitfeld v De Lauret & Co Ltd of “conscious wrongdoing in contumelious disregard of another’s rights” describes at least the greater part of the relevant field.
In considering whether to award exemplary damages, the first, if not the principal, focus of the inquiry is upon the wrongdoer, not upon the party who was wronged. (The reaction of the party who is wronged to high-handed or deliberate conduct may well be a reason for awarding aggravated damages in further compensation for the wrong done. But it is not ordinarily relevant to whether exemplary damages should be allowed.) The party wronged is entitled to whatever compensatory damages the law allows (including, if appropriate, aggravated damages). By hypothesis then, the party wronged will receive just compensation for the wrong that is suffered. If exemplary damages are awarded, they will be paid in addition to compensatory damages and, in that sense, will be a windfall in the hands of the party who was wronged. Nevertheless, they are awarded at the suit of that party and, although awarded to punish the wrongdoer and deter others from like conduct, they are not exacted by the State or paid to it.
...
In Uren this Court declined to adopt the limitations on the award of exemplary damages stated by the House of Lords in Rookes v Barnard. In Rookes v Barnard it was held that exemplary damages could be awarded only in three kinds of case :
-      oppressive, arbitrary or unconstitutional acts by government servants;
-where the defendant's conduct had been calculated to make a profit which might well exceed the compensation payable to the plaintiff; and
-      where expressly authorised by statute.
It was said that there are three considerations that should always be borne in mind when awards of exemplary damages are being considered:
-they can be awarded only if the plaintiff was the victim of the punishable behaviour;
-the power to award exemplary damages is not only a weapon that can be used in defence of liberty, it is a weapon that can be used against liberty; and
-the means of the parties, and all matters which aggravate or mitigate the conduct are relevant to the assessment of such damages.
The limitations on the availability of exemplary damages stated in Rookes v Barnard have been criticised in England and elsewhere . The United Kingdom Law Commission, in its report Aggravated, Exemplary and Restitutionary Damages, concluded that the boundaries set in Rookes v Barnard were not “consistent with either sound principle or sound policy”. It said that its recommendations (for expanding the availability of exemplary damages) were guided by five aims which, it may be assumed, the Commission thought were not fulfilled by application of Rookes v Barnard:
“First, exemplary damages should be an exceptional remedy, rarely-awarded and reserved for the most reprehensible examples of civil wrongdoing which would otherwise go unpunished by the law. Secondly, their availability (and assessment) must be placed on a clear, principled basis. Thirdly, although flexibility is necessary, unnecessary uncertainty as to the availability and assessment of the remedy must be avoided. Fourthly, defendants must not be unfairly prejudiced. Fifthly, the impact on the administration and funding of civil justice should not be adverse.”
The last four of those aims are not controversial (although the way in which they are to be implemented may be). The first may excite more debate but it will serve as a useful framework for considering some of the issues that arise in this case.
In the present proceeding, there was no evidence to justify an award of exemplary damages. On the hearing of the appeal, these matters were barely addressed. The Judge was correct to make no allowance on this account. Equally, there was no evidence to support an award of aggravated damages. The defamation contained in Mr Dickson’s letter did not warrant any award for aggravated or exemplary damages.
Manifestly Inadequate Damages
The basic rule of common law is that damages are awarded as compensation for injury, not as punishment for wrongdoing. This is the general rule applying in actions for defamation. The purpose of a compensatory award is to restore the plaintiff, as far as money can do, to the position that he or she would have been in if the defamation had not been committed. This is described as the principle of restitutio integrum.
A difficulty arises in actions for defamation because the assessment of damages will necessarily include a subjective element – distress and damages to reputation are not readily convertible by the use of any yardstick into a sum of money. No conventional scale has been developed for the award of damages for defamation cases. It is difficult to draw a fair comparison between awards. The significant subjective element makes comparison between cases generally unhelpful.
It has also been recognised that damages in a defamation action may fall within a wide bracket. In Cassell & Co Ltd v Broome,[7] Lord Reid observed:
Damages for any tort are or ought to be fixed at a sum which will compensate the plaintiff, so far as money can do it, for all the injury which he has suffered. Where the injury is material and has been ascertained it is generally possible to assess damages with some precision. But that is not so where he has been caused mental distress or when his reputation has been attacked – where, to use the traditional phrase, he has been held up to hatred, ridicule or contempt. Not only is it impossible to ascertain how far other people’s minds have been affected, it is almost impossible to equate the damage to a sum of money. Any one person trying to fix a sum as compensation will probably find in his mind a wide bracket within which any sum could be regarded by him as not unreasonable – and different people will come to different conclusions. So in the end there will probably be a wide gap between the sum which on an objective view could be regarded as the least and the sum which could be regarded as the most to which the plaintiff is entitled as compensation.
It has been recognised that this causes significant difficulty for parties seeking to challenge awards of damages made by judges.
[7] Cassell & Co Ltd v Broome [1972] AC 1027 at 1085.

In Rogers v Nationwide News Pty Ltd,[8] the High Court had occasion to consider the complaint that manifestly excessive damages had been awarded in a defamation proceeding. Hayne J observed:[9]
[8] Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327.
[9] Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 at [66]-[70] (footnotes omitted).
In searching for the standard against which manifest excess of an award of damages for defamation can be judged, account must be taken of three basic propositions. First, damage to reputation is not a commodity having a market value. Reputation and money are in that sense incommensurable. Secondly, comparisons between awards for defamation are difficult. Every defamation, and every award of damages for defamation, is necessarily unique. Thirdly, because the available remedy is damages, courts can and must have regard to what is allowed as damages for other kinds of non-pecuniary injury. It is necessary to say something about each of these propositions.
The worth of reputation
Defamation may cause identifiable economic consequences for the person who is defamed. This was not said to be the case in this matter. In the present, as in so many cases of defamation, the wrong that was done to the appellant was alleged to have caused him personal distress and hurt and to have caused harm to his personal and his professional reputation; it was not alleged that his professional earnings had diminished by an identified amount. Assigning a money sum as sufficient to remedy those harms and to vindicate the appellant's reputation translates losses which have no market value into amounts of money. Of course, defamation is not the only area of the law in which this is done. Damages for pain and suffering suffered in consequence of personal injury or for the loss of liberty brought about by wrongful imprisonment are two other cases in which this is done. But in neither defamation nor in other cases of non-pecuniary loss can any standard of evaluation be employed except one that is described in qualitative and therefore necessarily imprecise terms. The damages that may be awarded “are such as the jury may give when the judge cannot point out any measure by which they are to be assessed, except the opinion and judgment of a reasonable man”.
The measure of what is reasonable compensation, if not supplied by the collective wisdom of a jury, must be distilled from within the transactions of the law. That is, the standard against which an allegation that damages for defamation are manifestly excessive must be judged is a standard which is to be found within the administration of the law. It is not some external standard supplied, for example, by transactions within a market. Because reputation is not bought and sold, it is only in the courts that money values are assigned to the consequences of infliction of harm to reputation.
Comparisons between awards for defamation
Two of the three purposes served by an award of damages for defamation are to provide consolation to the person defamed for the personal distress and hurt which has been done, and reparation for the harm done to that person’s reputation. Necessarily, then, the amount awarded for defamation should reflect the effect which the particular defamation had on the individual plaintiff. It follows that the drawing of direct comparisons between particular cases is apt to mislead, just as the drawing of direct comparisons in personal injury cases can also mislead. Comparison assumes that there is sufficient identity between the effect which each defamation had on the particular plaintiff, whereas in fact circumstances alter cases. The amount allowed in each case should reflect the subjective effect of the defamation on the plaintiff. Unless that is recognised, the courts fall into “that form of the judicial process that Cardozo J deprecated, the mere matching of the colours of the case in hand against the colours of samples spread out upon a desk”. The consideration of other cases can yield no norm or standard derived from the amounts awarded in those other specific cases. Nonetheless, as Windeyer J said in relation to the assessment of damages for personal injuries:
“Of course no two cases are exactly alike ... One award is never really a precedent for another case. But we would I think be ignoring facts if we were to say that judges when asked to consider whether a particular verdict is beyond the bounds of reason -- either excessive or inadequate -- are unmindful of what was done in other cases, similar or dissimilar. If we were to say that, we would I consider deceive ourselves, as well as belie statements in judgments of high authority.”
Damages for defamation and other non-pecuniary losses
What is the use that is to be made of “what was done in other cases, similar or dissimilar”? Assessment of whether an award of damages for defamation is manifestly excessive will necessarily invite attention to what was done in other defamation cases. But the inquiry cannot stop there. In Carson, the majority of the Court said that an appellate court hearing appeals in both defamation and personal injury cases needs to ensure that there is an appropriate or rational relationship between the scale of awards in the two classes of case. As three members of the Court later said in Theophanous v Herald & Weekly Times Ltd:
“That relationship stands on the foundation represented by the scale of awards for general damages in cases of serious physical injuries which, in their severity and disabling consequences, may transcend injury to reputation.”
As earlier observed, Mr and Mrs Plenty complained that the separate awards of $10,000 to each of them were, in any event, manifestly inadequate. There was little evidence led about the reputation of Mr and Mrs Plenty. The evidence before the Court suggested that, in a number of respects, they did not have a good reputation prior to the publication. The picture that emerged from the evidence was of the litigious nature of Mr and Mrs Plenty and of their unwillingness and unpreparedness to accept any adverse comment or criticism. This was manifest both through the history of their legal proceedings in Western Australia and their conduct within the Port Pirie Church. The Judge’s assessments were in my view entirely reasonable. In the circumstances, it cannot fairly be said that the awards were manifestly inadequate.
Cross-Appeal
The defendants, by cross-appeal, sought to set aside the orders for costs made in favour of Mr and Mrs Plenty. It was said that the Judge had misunderstood the effect of an amendment to the Rules of Court and as a consequence had exercised his discretion on a misunderstanding of the law.
The Judge, when addressing costs, reasoned:[10]
Attention was also drawn to the fact that, pursuant to the transitional provisions in the rules of court, 2006, the new rules relating to costs apply to proceedings commenced before, on or after the commencement date of the rules subject to a direction by the court to the contrary. The relevance of this to the present case is that rule 6 SCR 263(2)(g) provides an exception to the general rule that costs follow the event by stating that:
(g) in an action founded on a claim for defamation, general costs of action are not to be awarded in favour of the successful plaintiff unless the damages exceed $25,000.
However, this sub-rule does not apply if the court orders to the contrary.
In my view, there is good reason to direct that this sub-rule should not apply to the present case. The defamation action was commenced on 28 June 1982. Judgment was entered for damages to be assessed on 11 June 2003.
It was considered appropriate to delay the assessment until it could be joined with the second stage of the hearing of the disfellowshipping action. In the special circumstances of this case, I think it would be unfair to deprive the plaintiffs of costs by reason of a change in the rules at a late stage in these lengthy proceedings.
[10] Plenty & Plenty v Seventh-Day Adventist Church of Port Pirie; Plenty & Plenty v Dickson (Unreported, Supreme Court of South Australia, Duggan J, 17 May 2007) at [10]-[12].
Although the defamation proceedings commenced in 1980, the Supreme Court Civil Rules 2006 (SA) apply in relation to costs. In particular Rule 8 relevantly provides:
(1)     The general principle is that the old rules continue to apply to –
(a)     a primary action commenced before the commencement date; and
(b)     a secondary action introduced into a primary action commenced before the commencement date; and
(c)     appellate proceedings commenced before the commencement date.
(2)The general principle is, however, subject to the following exceptions and qualifications –
(a)     Chapter 12 (Costs) applies, from the commencement date, to an action or appellate proceedings commenced before, on or after the commencement date unless proceedings for the adjudication of costs in the relevant action or proceedings had been commenced before the commencement date; and
(b)     the Court may, in a particular case, give a direction displacing the general principle to the extent the Court thinks fit.
Rule 263 provides the Court with discretion as to costs, and is relevantly in the following terms:
(1) As a general rule, costs follow the event.
(2)The general rule is, however, subject to specific rules to the contrary and also to the following exceptions (which apply subject to the Court’s order to the contrary) –
In accordance with rule 263(1), the general rule is that costs follow the event. However, this general rule is subject to specific exceptions. Relevant to this case is rule 263(2)(g), which provides that:
[I]n an action founded on a claim for defamation, general costs of action are not to be awarded in favour of the successful plaintiff unless the damages exceed $25,000.
It is to be observed that the award of damages, including interest, in respect of the claims of Mr and Mrs Plenty were each in a total sum of less than $25,000. In the reasons of the Judge set out above, he concluded that it would be unfair to deprive Mr and Mrs Plenty of an order for costs because of a suggested change in the rules.
The former rule, being rule 101.02A.b of the Supreme Court Civil Rules 1987 (SA), provided:
Except in relation to proceedings under section 11 of the Criminal Assets Confiscation Act 1996 for the purposes of Section 40(2) of the Supreme Court Act 1935 the amounts fixed below are the amounts in respect of which no order for costs will be made in favour of a plaintiff unless the Court otherwise orders:
(a) Where the claim is for damages or compensation for injury, damage or loss caused by, or arising out of, the use of a motor vehicle - $150,000;
(b) Where the claim is for damages in actions for defamation - $25,000;
(c) In any other case to which Section 40(2) applies - $75,000.
This rule was introduced into the former rules by an amendment in 1992. When the history of the rules is understood, it is clear that since 1992 a party suing in defamation and recovering less than $25,000, as a general rule, would recover no costs.
Having regard to the foregoing matters, the discretionary order of the Judge in regard to costs of the defamation proceedings needs to be revisited. The Judge acted under a misunderstanding of the terms of the former rule.
At the time the defamation proceedings were issued, there was no special rule with respect to the costs of defamation proceedings. As earlier observed, the special rule with respect to such costs was introduced in 1992 as Rule 101.02A.b of the 1987 Rules. This rule was then continued as Rule 263(2)(g) of the 2006 Rules.
The present proceedings were issued in this Court without Mr and Mrs Plenty being exposed to a special order for costs. Interlocutory judgments for damages to be assessed were entered before Rule 101.02A.b came into operation.
Mr and Mrs Plenty could have made an application to transfer the proceedings to the District Court, however they were under no obligation to do so. As events have shown, it was appropriate to hear the defamation proceedings at the same time as the disfellowshipping proceedings. Having regard to these circumstances, the discretion that exists under section 263(2)(g) should be exercised in favour of Mr and Mrs Plenty. An order should be made in their favour for the costs of their proceedings. I would exercise my discretion and make the same order as the trial Judge. In these circumstances, there is no point in setting aside the trial Judge’s order. The respondent’s cross-appeal should be dismissed.
As Vanstone J has observed in her reasons, section 42 of the Local and District Court Act 1926 (SA) provided a statutory limitation on the recovery of costs by a claimant in the event that less than half of the jurisdictional limit was recovered. However section 42(2) provided a discretion in the Court to make such cost order as thought appropriate. Section 42 provides:
(1)Except where the action has been removed into the Supreme Court by the defendant, in any action in the Supreme Court for any cause of a kind that is within the jurisdiction of a local court, where –
(a) …
or
(b) the plaintiff recovers in an action founded on tort a sum that does not exceed one-half of the amount of the local court jurisdictional limit, the plaintiff shall have judgment to recover that sum only and no costs, unless the Judge trying the action or, if there was no trial, a Judge of the Supreme Court in chambers otherwise orders.
(2)If such Judge is of opinion that having regard to all the circumstances of the case it is just that the plaintiff should recover the whole or any part of the costs of the action, he may order the defendant to pay such costs to the plaintiff as he deems just.
Section 42 was not referred to by the trial Judge, and was not referred to by counsel on the hearing of the appeal. In my view, the same reasoning that compels the exercise of a discretion under Rule 263(2)(g) of the 2006 Rules would also compel the exercise of the discretion under section 42(2), were that an appropriate discretion to be exercised.
Conclusion
I would dismiss the appeal and the cross-appeal.
VANSTONE J: I agree that no error in the approach taken by the learned trial judge to the question of damages has been demonstrated and that the quantum of damages awarded is within the available area of discretion. I have nothing to add to the reasons of Gray J on those matters.
I turn to the cross-appeal against the orders for costs made in the plaintiffs’ favour.
Section 40 Supreme Court Act 1935 and r 263 Supreme Court Civil Rules 2006 (SA) (“the 2006 Rules”) governed the exercise of the judge’s discretion as to costs. The 2006 Rules apply to actions and appellate proceedings commenced prior to the commencement of those rules: r 8. However, the court is given a discretion to “give a direction displacing the general principle”: r 8(2)(b). Section 40(1) Supreme Court Act provides that costs shall be in the discretion of the court. Section 40(2) provides that where a plaintiff’s damages fall short of the relevant amount, he will not recover any costs unless the justice of the circumstances dictates otherwise. Its terms are as follows:
40—Power of court with regard to costs
(1) …
(2) If—
(a)an action for the recovery of damages or any other monetary sum is brought in the court; and
(b)the action might have been brought in the District Court; and
(c)the plaintiff recovers less than an amount fixed by the rules for the purposes of this paragraph,
no order for costs will be made in favour of the plaintiff unless the court is of the opinion that it is just, in the circumstances of the case, that the plaintiff should recover the whole or part of the costs of action.
As contemplated by s 40(2), r 263 of the 2006 Rules fixes amounts, which vary depending on the nature of the claim. It provides, relevantly,
263—Court's discretion as to costs
(1) As a general rule, costs follow the event.
(2)The general rule is, however, subject to specific rules to the contrary and also to the following exceptions (which apply subject to the Court's order to the contrary)—
…
(g)in an action founded on a claim for defamation, general costs of action are not to be awarded in favour of the successful plaintiff unless the damages exceed $25 000;
…
In his reasons the judge referred to the “transitional provisions” in the 2006 Rules. I take that to be a reference to r 8. He noted that the new rules were to apply “subject to a direction by the court to the contrary”. His Honour then referred to r 263(2)(g) observing that it did not apply if the court ordered to the contrary. The learned trial judge then found that there was “good reason to direct that r 263(2)(g) should not apply to the present case”. In support of that view, the judge cited the date of commencement of the action as 28 June 1982. (The original writ was dated 4 November 1980.) He observed that judgment was entered on 11 June 2003. He referred to circumstances which justified the subsequent delay in undertaking the assessment. He said that in “the special circumstances of this case, I think it would be unfair to deprive the plaintiffs of costs by reason of a change in the rules at a late stage in these lengthy proceedings”.
The first question is whether the judge should have directed that r 263(2)(g) of the 2006 Rules not apply.
It seems to be implicit in his Honour’s reasoning that, but for the recent changes in the Rules, the plaintiffs would not have come up against any impediment to securing an order for costs to follow the event. Otherwise, there would be little or no point in emphasising the chronology of the claim. But, in fact, the position is otherwise. Rule 101.02A of the earlier generation of rules, the Supreme Court Rules 1987 (SA) (“the 1987 Rules”) fixed amounts below which no order for costs would be made in favour of a plaintiff, unless the court otherwise ordered. The amount fixed in respect of a defamation claim was $25,000. That rule came into effect on 2 July 1992: Supreme Court Act s 40(2) and Supreme Court Rules 1987, Amendment No 33, Gazette 2 July 1992. Even so, evidently the learned judge had in mind that the plaintiffs’ action had been commenced much earlier. Nonetheless, at that time too, the statutory regime presented a substantial hurdle to a plaintiff seeking damages for defamation who failed to gain damages in excess of a specified amount.
At that time the relevant provision was s 42 Local and District Criminal Courts Act 1926 (SA). That section provided as follows:
42.(1)     Except where the action has been removed into the Supreme Court by the defendant, in any action in the Supreme Court for any cause of a kind that is within the jurisdiction of a local court, where –
(a)     …
or
(b)the plaintiff recovers in an action founded on tort a sum that does not exceed one-half of the amount of the local court jurisdictional limit,
the plaintiff shall have judgment to recover that sum only and no costs, unless the Judge trying the action or, if there was no trial, a Judge of the Supreme Court in chambers otherwise orders
(2)     If such Judge is of opinion that having regard to all the circumstances of the case it is just that the plaintiff should recover the whole or any part of the costs of the action, he may order the defendant to pay such costs to the plaintiff as he deems just.
The jurisdictional limit to which s 42(1)(b) referred changed from time to time. In the period 1974 to 1981 the jurisdictional limit was $20,000 and, therefore, the trigger for operation of the subparagraph was $10,000. By the Statutes Amendment (Jurisdiction of Courts) Act 1981 (SA), s 5(b), the jurisdictional limit was increased to $40,000. That Act came into operation on 1 February 1982. Later, by the Statutes Amendment (Courts) Act 1985 (SA), which came into operation on 1 August 1985, the jurisdictional limit was increased to $100,000.

Furthermore, provisions such as these have traditionally been interpreted with some rigidity. In Silverblade v Nelson (1980) 24 SASR 310, Cox J described the terms of s 42 as “very strict”. In circumstances where the now repealed s 42 Local and District Criminal Courts Act did not discriminate between actions founded on different torts, it was held that in exercising the discretion, there was no special rule for defamation cases: Bunker v James (1980) 26 SASR 286. In the same case, Cox J at 307 made the observation that even where a successful plaintiff had managed to “scramble over the half-way mark”, it would not necessarily follow that he would get his full Supreme Court costs. In Stevens v Chandler (1988) 46 SASR 541 at 543, King CJ described the policy underlying s 42 as being to discourage litigants whose claims should be lodged in the District Court from bringing them in the Supreme Court. His Honour went on to say that the purpose was not only to protect the defendant against being brought into the more expensive environment of this court, but was also to encourage plaintiffs to use the District Court in appropriate cases.
Inasmuch as the learned judge’s decision rested on an incorrect assumption, it should be revisited. Had it been brought to the attention of the judge that the changes effected by the 2006 Rules amounted to no more than a later incarnation of the same statutory policy which had prevailed at all relevant times, his decision not to apply r 263(2)(g) 2006 Rules might well have been different. I would consider that question anew.
The question then is whether, for any reason, it is appropriate to exercise the discretion to award costs to the plaintiffs, notwithstanding the policy underlying s 40 Supreme Court Act and r 263(2)(g) of the 2006 Rules. The plaintiffs’ counsel did not point to any factor, additional to the time issue, to justify a departure from the exception governing the circumstances. In my view that issue does not justify such a departure. These proceedings were commenced before the separate disfellowshipping proceedings taken by the plaintiffs in this court, and so that could not present a complicating factor. Moreover, the way in which the plaintiffs have allowed this action to run for over two decades is no encouragement to this court to find that a different course would be “just”, in terms of s 40 Supreme Court Act.
I would consider the discretion afresh and would make no order in favour of the plaintiffs for costs in relation to the defamation action.
Accordingly, the orders I would make are:
1. dismiss the appeal;
2. allow the cross-appeal;
3.set aside order number 4 of the trial judge made 31 July 2007 in respect of the hearings on 9 June 1994, 29 July 1994, 24 January 1995, 23 February 1995, 20 April 1995, 25 May 1995 and 2 June 1995 and, in its place, make no order as to costs of the hearings on those dates.
ANDERSON J: I agree that the judge’s assessments of damages were reasonable. I agree that the appeal should be dismissed for the reasons given by Gray J.
In relation to the cross-appeal, I also agree with Gray J and I would dismiss the cross-appeal for the reasons he gives.