Randwick Labor Club Limited v Amalgamated Television Srvices Pty Limited

[2000] NSWSC 1098

CITATION:	Randwick Labor Club Limited & Ors v Amalgamated Television Srvices Pty Limited [2000] NSWSC 1098
FILE NUMBER(S):	SC 20024/98
HEARING DATE(S):	29/11/00
JUDGMENT DATE:	29 November 2000
PARTIES :
JUDGMENT OF:	James J at 1

COUNSEL :	R A Campbell - Plaintiff K Rees - Defendant
SOLICITORS:	Messrs Bowen & Gerathy - Plaintiffs Mallesons Stephen Jaques
DECISION:	Defendant to pay plaintiffs' costs on a party party basis

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

JAMES J

WEDNESDAY 29 NOVEMBER 2000

20024/98 - RANDWICK LABOR CLUB LIMITED & ORS v AMALGAMATED TELEVISION SERVICES PTY LIMITED

JUDGMENT - on costs

1   HIS HONOUR: In this matter I delivered a reserved judgment on 18 September 2000. In para 274 of that reserved judgment I stated the amounts which I had decided that I should award to the various plaintiffs. In para 275 of the judgment I said that I would not immediately enter any verdicts because interest might have to be added to the amounts stated in para 274 in order to arrive at the amounts for which verdicts should be entered. I also noted that there was the outstanding question of the costs of the proceedings.

2   The parties have been able to agree on the amounts of interest to which the various plaintiffs are entitled in their verdicts and I have earlier today entered the following verdicts:

Randwick Labor Club $26,708
Mr Murray $96,150
Mr Scott $74,783
Mr Ford $96,150
Mrs Bridge $74,783
Mr Bell $74,783
Mr Riordan $96,150
Mr Bridge $96,150

3 Although the amounts the individual plaintiffs have recovered are less than $225,000, it appears to me that the plaintiffs had sufficient reason for commencing and continuing the proceedings in this court and accordingly I am of the opinion that the plaintiffs should be entitled to payment of their costs of the proceedings, notwithstanding Pt 52A r 33 subrule (2) of the Supreme Court Rules. All of the plaintiffs sued in the one set of proceedings and in my opinion the appropriate comparison is between the total amount recovered by all of the plaintiffs and the figure of $225,000 and not a comparison between the amount recovered by any individual plaintiff and the sum of $225,000.

4   Counsel for the plaintiffs has submitted that an order for costs on an indemnity basis should be made in favour of the plaintiffs. An affidavit by a solicitor in the employ of the solicitors for the plaintiffs has been filed in support of this application for indemnity costs and it is necessary for me to refer to some of the history of the negotiations and other communications between the solicitors for the parties, as disclosed in the annexures to this affidavit. I have taken into account all of the contents of the affidavit, even if I do not expressly refer to some of them in this judgment.

5 On 3 March 2000 the solicitors for the defendant made an offer of compromise. By the offer of compromise the defendant offered the first plaintiff a judgment of $10,000 plus costs and each of the second to eighth plaintiffs a judgment of $20,000 plus costs. This offer of compromise was an offer complying with Pt 22 of the Supreme Court Rules.

6   On 16 March 2000 the solicitors for the plaintiffs made an offer of settlement in the following terms:

"1. The first plaintiff to receive $24,000 plus costs;
2. The seven individual plaintiffs to each receive $45,000 plus costs;
3. A suitably worded apology to be broadcast during the Weekly News on Channel 7."

7   A form of apology was suggested in the letter.

8 It was common ground that this offer did not comply with Pt 22 of the Supreme Court Rules and hence did not come within Pt 52 r 22 of the Supreme Court Rules.

9   At the end of March 2000, a trial pursuant to s 7A of the Defamation Act was held and at that trial the jury found that certain defamatory imputations were conveyed by the publication complained of about each of the plaintiffs.

10   On 30 May 2000 the solicitors for the plaintiffs wrote to the solicitors for the defendant inquiring whether the defendant would be maintaining the defence of qualified privilege.

11   On 23 June 2000 the solicitors for the defendant wrote to the solicitors for the plaintiff saying that the defendant did not intend to withdraw its defence of qualified privilege and that the defendant's solicitors were preparing for the trial on that basis.

12 On 29 June 2000 the solicitors for the defendant made an offer in accordance with Pt 22 of the Supreme Court Rules whereby the defendant offered the first plaintiff a judgment of $20,000 plus costs and each of the individual plaintiffs a judgment of $30,000 plus costs.

13   On 3 August 2000 the solicitors for the defendant made on offer to the solicitors to the plaintiffs to settle the proceedings in the following terms:

"1. That the defendant pay the first plaintiff the sum of $25,000;
2. That the defendant pay each of the individual plaintiffs the sum of $60,000;

14   3. That the defendant pay the plaintiff's costs as agreed or assessed."

15 The solicitors for the defendant said in addition the defendant would be prepared to broadcast an apology and to read the apology in open court. A suggested form of apology was included in the letter making the offer. The solicitors for the defendant made it a term of the offer that the provisions of any settlement should not be disclosed, except for the purpose of giving effect to the term about an apology. This offer made by the solicitors for the defendant did not comply with Pt 22 of the Supreme Court Rules.

16   On 8 August 2000 the solicitors for the plaintiffs made an offer of settlement in the following terms:

1. Verdict for the first plaintiff in the sum of $95,000 inclusive of costs;
2. Verdicts for each of the individual plaintiffs in the sum of $145,000 inclusive of costs;
3. Term number 2 not to be disclosed;
4. An apology in the form set out in the schedule to the letter to be broadcast by Channel 7 as part of its 6pm News broadcast.

17 This offer was stated to be open only until midday on 9 August. This offer did not comply with Part 22 of the Supreme Court Rules.

18   On 9 August the solicitors for the defendant wrote to the solicitors for the plaintiffs stating that the offer of 8 August was not acceptable to the defendant, saying that apart from any other consideration, it was difficult properly to assess and compare the offer of 3 August, which had been made on the basis of separate verdicts and separate payment of costs as agreed or assessed, and the offer of 8 August in which the amounts in paras 1 and 2 of the offer were expressed to be inclusive of costs.

19 The application by counsel for the plaintiffs for an order for indemnity costs was based on the sending of the letter of 16 March 2000. In support of the application, counsel for the plaintiffs, while conceding that the offer of 16 March 2000 made on behalf of the plaintiffs was not an offer of compromise in accordance with Pt 22 of the Supreme Court Rules, submitted that the offer made on 16 March was an offer to settle the proceedings on terms less favourable than the amounts of the verdicts ultimately obtained by the plaintiffs. Counsel submitted that, if the offer of 16 March had been accepted by the defendant, the very considerable costs which had been incurred since 16 March would not have been incurred.

20   As regards the reasonableness or unreasonableness of the conduct of the defendant, counsel for the plaintiffs also referred to the fact that the solicitors for the defendant had informed the solicitors for the plaintiffs that the defence of qualified privilege would be maintained and had not informed the solicitors for the plaintiffs that the defence of qualified privilege would not be relied on until only very shortly before the commencement of the hearing before me.

21   Counsel for the plaintiffs also submitted that it was significant that the offer made by the solicitors for the defendant on 3 August included a term that the provisions of any settlement not be disclosed, thus preventing the plaintiff from having the vindication of an open public verdict announced by this court.

22 Counsel for the defendant pointed out that it was common ground that the offer made by the solicitors for the plaintiffs on 16 March was not an offer of compromise in accordance with Pt 22 of the Supreme Court Rules and hence Pt 52A r 22 of the Supreme Court Rules was inapplicable. She submitted, and I accept, that the application for indemnity costs was brought principally on the basis that the letter of 16 March from the solicitors for the plaintiffs should be regarded as a Calderbank letter and that the proper approach in determining whether an entitlement to indemnity costs has arisen from the writing of the Calderbank letter and the later obtaining by the party sending the Calderbank letter of a result more favourable to it than the offer of settlement in the Calderbank letter, is that set out by Powell JA, with whom the other members of the Court of Appeal agreed, in Nobrega v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney Court of Appeal unreported 21 May 1999.

23   Counsel for the defendant also submitted that it could not be said that the ultimate result of the proceedings was more favourable to the plaintiffs than the terms on which the plaintiffs were prepared to settle on 16 March, because the offer of settlement of 16 March included a requirement for the publication of an apology. I am, however, of the opinion that it can properly be said that the result ultimately obtained by the plaintiffs, consisting of the verdicts entered by me and the publication, even if belatedly, of an apology by the defendant, was more favourable to the plaintiffs than the terms on which they were prepared to settle on 16 March.

24   It was not disputed that the principles set out by Powell JA in Nobrega v The Trustees for the Roman Catholic Church, a recent decision of the Court of Appeal of this state, are principles which I should apply in the determination of the present application.

25   In his judgment Powell JA said inter alia at para 20:

"Even if the offer which had been contained in one or more of the letters written by the respondent's solicitors had been made the subject of a formal offer of compromise delivered pursuant to the provisions of the Supreme Court Rules Pt 22, the court would have retained a discretion not to order the appellant to pay the respondent's costs of the appeal... on an indemnity basis."

26   At para 22 his Honour referred to what Sheppard J said in Sanko Steamship Co Ltd v Sumitomo Australia Ltd to the effect that there was no authority supporting the proposition that the mere writing of a Calderbank letter would justify an order for costs in favour of the successful party being taxed on solicitor and client or an indemnity basis.

At para 21 of his judgment, Powell JA also said:

"The ordinary rule is that costs when ordered in adversary litigation are to be recovered on the party and party basis. Any attempt to disturb that situation needs to be carefully considered. It should only be departed from where the conduct of the party against whom the order is sought, is plainly unreasonable."

27   In Nobrega itself his Honour said that it was very difficult to reach a conclusion that either party had acted unreasonably.

28   I have earlier in this judgment outlined what appear to me to be the more salient parts of the history of the negotiations and communications between the solicitors for the parties. In accordance with the principle stated in Nobrega, I have to ask myself whether the conduct of the defendant, being the party against whom the order is sought, is plainly unreasonable. It does not seem to me that I should reach the conclusion that the conduct of the defendant was plainly unreasonable. It is to be borne in mind that there was no offer of compromise made on behalf of the plaintiffs in accordance with Pt 22 of the Supreme Court Rules and I am bound by the authority of the Court of Appeal to proceed on the basis that the mere writing of a Calderbank letter does not justify an order for costs on an indemnity basis.

29   I refuse the application for indemnity costs. I make an order that the defendant pay the plaintiffs’ costs on a party and party basis. I make an order that the defendant pay the plaintiffs’ costs of this application on a party and party bases.

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Last Modified: 12/18/2000