Poniatowska v Channel Seven Sydney Pty Ltd (No 5) - [2021] SASCFC 41

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
PONIATOWSKA v CHANNEL SEVEN SYDNEY PTY LTD (No 5)
[2021] SASCFC 41
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, the Honourable Justice Blue and the Honourable Justice Nicholson)
14 October 2021
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - RELEVANT CONSIDERATIONS GENERALLY
In August 2021 the Court delivered reasons for judgment dismissing an application by the appellant to vary the Court’s previous judgment (Poniatowska v Channel Seven Sydney Pty Ltd (No 2) [2020] SASCFC 5) assessing damages for defamation against the respondents: Poniatowska v Channel Seven Sydney Pty Ltd (No 4) [2021] SASCFC 32.
The respondents seek an order that the appellant pay their costs of the application on an indemnity basis.
Held (by the Court):
1There is no reason to depart from the principle that costs ordinarily follow the event (at [8]).
2The costs ordered should be on the standard costs basis (at [16]).
3The costs ordered will be payable forthwith after the quantum has been fixed by taxation or agreement (at [17]).
4Order that the appellant pay the respondents’ costs of the appellant’s interlocutory application dated 31 March 2021 (FDN 148) on the standard costs basis (at [18]).

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Pascoe Limited (in Liquidation) v Lucas (1999) 75 SASR 246; Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; Sheahan v North Australia Land & Agency Co (Supreme Court of South Australia, (Full Court, 18 December 1995, unreported), considered.

PONIATOWSKA v CHANNEL SEVEN SYDNEY PTY LTD (No 5)
[2021] SASCFC 41

THE COURT: In August 2021 the Court delivered reasons for judgment dismissing an application by the appellant, Malgorzata Poniatowska, to vary the Court’s previous judgment[1] assessing damages for defamation against the respondents Channel Seven Sydney Pty Ltd and Channel Seven Perth Pty Ltd (collectively Channel Seven).[2]
[1] Poniatowska v Channel Seven Sydney Pty Ltd (No 2) [2020] SASCFC 5.
[2] Poniatowska v Channel Seven Sydney Pty Ltd (No 4) [2021] SASCFC 32.
Channel Seven seek an order that Ms Poniatowska pay their costs of the application on an indemnity basis. Ms Poniatowska resists any order for costs (contending that there should be no order as to costs) and opposes any costs ordered being awarded on an indemnity basis.
Application for costs
The starting point is that, while costs are in the discretion of the Court, absent other relevant factors, costs ordinarily follow the event. Channel Seven were successful and ordinarily Ms Poniatowska would be ordered to pay their costs of her unsuccessful application.
First, Ms Poniatowska contends that the involvement of Channel Seven in her application was very minimal and was restricted to two hearings in June and August 2021. This understates somewhat the work necessarily undertaken by Channel Seven in response to Ms Poniatowska’s application but in any event the mere fact that the work undertaken or the costs incurred may have been relatively small is not a reason to deprive Channel Seven of an order for their costs if the appropriate exercise of the discretion otherwise is to order that Ms Poniatowska pay their costs.
Secondly, Ms Poniatowska refers to a submission by Channel Seven that, if the Court’s previous judgment were reopened at all, the reopening would or should not be confined to the assessment of damages but should encompass liability issues as well. Ms Poniatowska contends that Channel Seven’s attendance at the hearings and participation on her application was partly to advance their own purposes of seeking to reopen their case on liability; it is difficult to distinguish between costs incurred by them for this purpose from costs incurred for the purpose of opposing her own application to reopen the assessment of damages; and in the circumstances there should be no order as to costs. We express no view concerning Channel Seven’s foreshadowed contention that any reopening would have involved a reopening of all matters. That question was never reached because we concluded that Ms Poniatowska had not justified a reopening of the assessment of damages. The mere fact that Channel Seven foreshadowed that contention is no reason to deprive them of their costs of Ms Poniatowska’s application which was dismissed.
Thirdly, Ms Poniatowska contends that she had a reasonable basis to file her application to reopen her case on the assessment of damages. In support of that contention, she makes detailed submissions elaborating on the complaints about our reasons for judgment in Poniatowska v Channel Seven Sydney Pty Ltd (No 2)[3] that we addressed in Poniatowska v Channel Seven Sydney Pty Ltd (No 4),[4] including by reference to the latter reasons for judgment. The reasonableness of Ms Poniatowska’s application is addressed below in the context of Channel Seven’s application for indemnity costs. Assuming for the time being (without deciding) that Ms Poniatowska had a reasonable basis for making her application, that affords no reason why costs should not follow the event. The mere fact that an unsuccessful party may have had a reasonable basis for a contention on which they were unsuccessful is not ordinarily a ground for depriving the successful party of an order for their costs.
[3] [2020] SASCFC 5.
[4] [2021] SASCFC 32.
Fourthly, and allied to her third contention, Ms Poniatowska contends that, because our assessment was the first and only assessment of her damages (the trial Judge not having actually assessed damages), she did not have an opportunity to appeal to the Full Court against a first instance assessment of her damages. We observe incidentally that this was the result of our acceptance of Ms Poniatowska’s contention, opposed by Channel Seven, that this Court should itself assess damages rather than remitting the assessment to a single Judge for assessment. In any event, assuming hypothetically that our assessment of damages had been undertaken by a single Judge and Ms Poniatowska had appealed against that assessment, the hypothetical appeal would have been dismissed and an order for costs would have been made against Ms Poniatowska in respect of the costs of that appeal.
There is no reason why costs should not follow the event and Ms Poniatowska should not be ordered to pay Channel Seven’s costs of her unsuccessful variation application.
Application for indemnity costs
The starting point is that, while costs are in the discretion of the Court, absent other relevant factors, costs are ordinarily ordered on the standard costs basis.[5]
[5] Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 153 per Black CJ and 158 per Cooper and Merkel JJ.
Channel Seven seek an order that their costs of Ms Poniatowska’s application be assessed on an indemnity basis on the ground that Ms Poniatowska’s application was wholly misconceived and bound to fail.
Indemnity costs may be awarded where a party, properly advised, should have realised that it had no chance of success.[6]
[6] Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401 per Woodward J; Sheahan v North Australia Land & Agency Co (Supreme Court of South Australia, Full Court, 18 December 1995, unreported) per Olsson J (with whom Mohr and Nyland JJ agreed); Pascoe Limited (in Liquidation) v Lucas [1999] SASC 519, (1999) 75 SASR 246 at [313] per Lander J (with whom Millhouse and Duggan JJ agreed).
In assessing this question, it is relevant to take into account any warning by the opposite party that it considers that this criterion is satisfied and particularly if the opposite party identifies why that is so. However, the mere fact of the existence of such a warning, or of reasons advanced by the opposite party for it, is not sufficient in itself to justify an award of indemnity costs: it is necessary for the Court to be satisfied on an objective assessment that, properly advised, the unsuccessful party should have realised that it had no chance of success.
In the present case, Channel Seven’s solicitors wrote to Ms Poniatowska on 16 and 19 April 2021 contending that there was no basis for the orders sought by her in her application and warning that, if she pressed her application, they would seek an order for indemnity costs. However, they did not refer to the specific grounds advanced by Ms Poniatowska in her application or address why they considered that those grounds were bound to fail.
In general terms, there is a continuum in terms of prospects of success of applications to, or proceedings in, a court. It is a matter of judgment to distinguish between a contention that is rejected but was reasonably arguable and a contention that had no chance of success or was bound to fail. In the case of Ms Poniatowska’s application, some of her grounds were more arguable than others. Assessed as a whole, it cannot be said that, properly advised, Ms Poniatowska should have realised that her application had no chance of success.
Channel Seven in their submissions observe that Ms Poniatowska’s application was misconceived to the extent that she relied on authorities in relation to the setting aside of unperfected orders. That is so but Ms Poniatowska also relied on the power of the Court to vary or set aside a judgment pursuant to rule 186.1 of the Uniform Civil Rules 2020 (SA).
This is not a case in which it is appropriate to order that the unsuccessful party pay the successful party’s costs on an indemnity basis. The costs ordered should be on the standard costs basis.
Payment forthwith
Channel Seven seek an order that the costs be payable forthwith. There is no need to make such an order. Rule 194.4(8) creates a presumptive cost rule that costs ordered to be paid “are not to be taxed and do not become payable until the final determination of a proceeding, including final costs orders being made”. In this case, the “final determination of the proceeding” within the meaning of that rule occurred in May 2020 when final orders were made on the appeal. Ms Poniatowska’s variation application postdates the final determination of the appellate proceeding within the meaning of rule 194.4(8). It follows that a costs order made in respect of Ms Poniatowska’s application will be payable forthwith after the quantum has been fixed by taxation or agreement (under rule 194.4(7)).
Conclusion
We order that the appellant pay the respondents’ costs of the appellant’s interlocutory application dated 31 March 2021 (FDN 148) on the standard costs basis.