Poniatowska v Channel Seven Sydney Pty Ltd (No 5)

Ms Poniatowska initiated defamation proceedings against Channel Seven Sydney Pty Ltd and Channel Seven Perth Pty Ltd, following the broadcast of a story on the Today Tonight television program. The broadcast was found to be defamatory, leading to a dispute over the costs associated with the proceedings. The defendants argued that Ms Poniatowska unreasonably failed to accept their settlement offers, while she contended that the offers were inadequate. The court was tasked with determining whether the defendants' settlement offers were reasonable, whether Ms Poniatowska unreasonably rejected them, and whether the interests of justice required the denial of indemnity costs.

The court examined the settlement offers made by the defendants, which included payments of $20,000 and $50,000 plus costs. The court found that these offers were reasonable, considering the context and the outcome of the defamation case. Ms Poniatowska's rejection of these offers without counter-proposals or engagement in negotiations was deemed unreasonable. Furthermore, the court concluded that the interests of justice did not necessitate the denial of indemnity costs, as Ms Poniatowska had wholly failed in her defamation claim. Therefore, the court ruled that Ms Poniatowska must pay the defendants' costs on an indemnity basis.

The reasoning of the court was grounded in section 38(2)(b) of the Defamation Act, which mandates an indemnity costs order unless the interests of justice require otherwise. The court found that Ms Poniatowska's failure to accept reasonable settlement offers was unreasonable, and that the interests of justice did not preclude the award of indemnity costs. This decision aligns with the legislative intent to encourage the resolution of defamation disputes through settlement, while also providing a remedy for defendants who are forced to defend such claims.