Rivkin v John Fairfax Publications P/L

[2004] NSWSC 671

CITATION:	Rivkin v John Fairfax Publications P/L [2004] NSWSC 671
HEARING DATE(S):	22/07/04
JUDGMENT DATE:	30 July 2004
JURISDICTION:	Common Law Division Defamation List
JUDGMENT OF:	Kirby J
DECISION:	1. The plaintiff (Mr Rivkin) should pay two-thirds of the defendant's costs in respect to the first s7A trial on a party and party basis; 2. The plaintiff (Mr Rivkin) should pay the defendant's costs of the second s7A trial from 10 September 2003 to 14 May 2004 on a party and party basis; 3. The application for indemnity costs in respect to the first and second trials is refused; 4. The defendant should pay two-thirds of the plaintiff's (Mr Rivkin's) costs in respect of this application before me.
CATCHWORDS:	DEFAMATION - s7A trial - successful appeal - appeal to High Court - partial retrial ordered - consent judgment for defendant on retrial - application by defendant for indemnity costs and costs of first trial.
LEGISLATION CITED:	Supreme Court Act 1970 Defamation Act 1974
CASES CITED:	R v Rivkin [2004] NSWCCA 7 John Fairfax Publications P/L v Rivkin (2003) 201 ALR 77 Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748
PARTIES :	Rene Rivkin (Resp) John Fairfax Publications Pty Limited (Appl)
FILE NUMBER(S):	SC 20084/98
COUNSEL:	R G McHugh (Resp) T Blackburn SC (Appl)
SOLICITORS:	Gilbert & Tobin (Resp) Freehill Hollingdale & Page (Appl)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

KIRBY J

Friday 30 July 2004

20084/98 RENE RIVKIN v JOHN FAIRFAX PUBLICATIONS PTY LIMITED

JUDGMENT

1 KIRBY J: Application is made on behalf of John Fairfax Publications Pty Limited ("John Fairfax") (the defendant) for indemnity costs against Mr Rene Rivkin. The application arises out of defamation proceedings brought by Mr Rivkin against John Fairfax. The proceedings ultimately terminated with a verdict for the defendants.

2 An understanding of the issues requires a description of the proceedings before their termination.

The first trial.

3 Mr Rivkin commenced an action for defamation against John Fairfax in respect of three articles in newspapers published by that company in February and March 1998. The Statement of Claim alleged a number of imputations arising out of each article. In July 1998 Levine J heard objections by the defendant to the plaintiff's imputations. He made certain rulings. He ordered that each party should pay their own costs.

4 In September 1998 Levine J heard further objections raised by the defendant. Again, he made certain rulings. He ordered the defendant to pay the plaintiff's costs. The defendant sought leave to appeal. In May 1999 leave was refused. Costs were awarded against the defendant.

5 On 17 April 2001 a s7A trial commenced before Simpson J and a jury. On 23 April 2001 the jury found that none of the imputations had been conveyed. The jury was therefore not required to consider whether any of those imputations were defamatory. Simpson J entered a verdict for the defendant. She ordered Mr Rivkin to pay the defendant's costs.

6 On 18 May 2001 the plaintiff appealed against the jury verdict. He also sought leave to appeal against certain interlocutory rulings made by Levine J. On 26 March 2002 the Court of Appeal unanimously upheld the plaintiff's appeal (Meagher JA, Foster AJA and Grove J). Whilst the verdict on nine of the imputations pleaded was "reasonable", the verdict on the remaining six imputations was "perverse". An order was made that there should be a new trial on all imputations. The judgments entered after the trial were set aside. The defendant was ordered to pay the plaintiff's costs of the appeal. At the same time the Court refused the plaintiff leave to appeal against Levine J's interlocutory rulings. The plaintiff was ordered to pay the costs of John Fairfax in respect of those applications.

7 The defendant then went to the High Court. The appeal was argued on 11 and 12 March 2003. Judgment was reserved. In the meantime Mr Rivkin stood trial before Whealy J and a jury in the Supreme Court on a charge of insider trading under the Corporations Law. On 29 April 2003 the jury returned a verdict of guilty. On 29 May 2003 Mr Rivkin was sentenced to nine months imprisonment to be served by way of periodic detention, such sentence to commence on 6 June 2003.

8 The events thereafter are matters of some notoriety. They were the subject of almost daily press comment. The only reference to these events was in the affidavit of Mr O'Brien, the solicitor for Mr Rivkin, who said this:

"11. Between the date of sentence and February 2004, the Plaintiff was medically unfit to attend periodic detention, as so certified by various medical practitioners."

9 I raised with the parties how I should regard these notorious facts, which include the fact that Mr Rivkin was reported to have undergone surgery. They seemed to me potentially relevant, since the medical condition of Mr Rivkin at the time the proceedings were terminated (May 2004) was a matter of some importance. Mr McHugh of counsel, appearing for Mr Rivkin, made the sensible suggestion that the Court could have regard to the judgments of this Court, insofar as they dealt with these matters. Mr Blackburn SC, appearing for John Fairfax, did not suggest otherwise.

10 The Court of Criminal Appeal, in the appeal by Mr Rivkin against his conviction ([2004] NSWCCA 7), dealt with certain complaints by Mr Rivkin concerning his fitness to stand trial and matters taken into account by the sentencing Judge when passing sentence. In respect of those issues the Court said this:

"264. The presence of the brain tumour emerged shortly after 7 June 2003, the day on which the appellant presented himself at Silverwater gaol for his first period of detention. On the following day he collapsed and was admitted to the Sydney Psychiatric Clinic.
265. Following this admission cerebral magnetic resonance imaging was conducted by Dr Michael Hovany, on 17 June 2003. It was reported as having revealed a moderate sized tumour (a meningioma) located in the floor of the anterior cranial fossa to the left of the midline."

11 On 28 June 2003 Dr Teo, neurosurgeon, carried out surgery on Mr Rivkin. The CCA described the surgery as follows:

"268. ... That surgery involved a craniotomy accompanied by the removal of a meningioma the size of a golf ball, which had eroded through the base of the skull and infiltrated into the sinuses of the nasal cavity. Some follow-up surgery was performed five days later to repair a leakage of cerebral spinal fluid through the nose."

12 On 10 September 2003 the High Court gave judgment in respect of the appeal ((2003) 201 ALR 77). The Court determined that it was inappropriate to order a completely new trial, although the rejection by the jury of all imputations was astonishing and gave rise to an impression of unreasonableness. A new trial was appropriate in respect of certain imputations, where the view of the jury was one which no reasonable jury could have reached. The Court made no order as to costs.

13 In respect to the issue of costs, Callinan J said this:

"218. Because both parties have had their successes and their failures in this Court I would make no orders as to costs."

14 Gleeson CJ agreed with the order proposed by Callinan J (para 9), Kirby J agreed that there should be no order for costs (para 171). Heydon J did not refer to costs (para 225). McHugh J dissented.

The second trial.

15 After the High Court ordered a partial retrial, steps began to prepare the matter for a second trial. A Further Amended Statement of Claim was filed, incorporating the imputations that had survived.

16 One of the imputations was in these terms:

"4. The First Matter Complained Of in its ordinary and natural meaning bore the following imputations, each of which is defamatory of the Plaintiff:
(b) that in May 1995 the Australian Securities Commission had reason to suspect that the Plaintiff had engaged in unlawful conduct in connection with the affairs of Offset Alpine Press Group;"

17 The article in the Australian Financial Review of 21-22 February 1998 (being one of the matters complained of), dealt with a public company said to have been controlled by Mr Rivkin, Offset Alpine Press Group, and a fire on Christmas Eve 1993 at the premises of that company, which had resulted in a substantial insurance payout. The major beneficiaries of that payout were two Swiss companies. The article made reference to the "mystery owners" of the shareholding on those companies.

18 On 30 October 2003 the defendant published a number of articles in The Australian Financial Review under the heading "AFR Special Investigation". The first article was headed: "Rivkin's Swiss bank scandal". The opening paragraphs were as follows:

"Swiss prosecutors have unmasked the figures behind one of the great corporate mysteries of the 1990s and revealed a network of Swiss bank accounts used to secretly trade the Australian sharemarket.
Stockbroker Rene Rivkin, former cabinet minister Graham Richardson and Qantas director Trevor Kennedy have been identified as the owners of a 38 per cent controlling stake in controversial printing group Offset Alpine.
Rivkin also told the Zurich District Attorney that he had traded Australian shares through Swiss accounts on behalf of Richardson and Kennedy, according to information sighted by The Australian Financial Review.
'These Offset Alpine shares, which this [account] was originally all about, were held, for the most part, let's say 81 per cent, by me, and about 7 per cent by Richardson and 12 per cent by Kennedy,' Rivkin said, while identifying a $1.4 million deposit in a sub-account operated by Richardson. 'These figures may not be exact.'
Offset Alpine shareholders enjoyed a $53 million windfall after fire destroyed its printing plant on Christmas Day 1993.
The old plant, valued at just $3 million, was insured at replacement cost of $42 million and the total insurance payout amounted to $53 million.
The Australian Securities & Investments Commission spent years trying to find the ultimate owners of the Offset Alpine stake, held in the name of two Swiss banks, but they were thwarted by the impenetrable Swiss banking laws."

19 Further articles dealing with the same issue followed on 31 October 2003 and 1 November 2003 (Exhibits 1, 2 and 3 to the affidavit of Diana Gillian Brown of 12 July 2004).

20 On 14 November 2003 the s7A defamation trial was listed for call-over before the List Judge. It was set down for hearing on 17 May 2004 with an estimate of 2 to 3 days.

21 On the 5 February 2004 the Court of Criminal Appeal dismissed the plaintiff's appeal against his conviction. Mr Rivkin then presented himself, as required by the order of periodic detention. He was admitted to the Long Bay Gaol Prison Hospital. The affidavit of Mr O'Brien, the solicitor for Mr Rivkin, said this:

"13 I am informed by Dr Keith Roberts treating the Plaintiff, and by the Plaintiff's wife Gail Rivkin, that:
(a) during February and March 2004, the Plaintiff received electro convulsive shock therapy treatment which left him mentally destabilised and significantly disorientated;
(b) the Plaintiff continues to receive heavy medication: and
(c) the Plaintiff has very great difficulty in focusing on any legal issues, including these proceedings. (I have observed this myself in my dealings with the Plaintiff.)."

22 Mr O'Brien was therefore instructed "to either settle the proceedings or to discontinue the action". On 23 April 2004 he wrote to the solicitors for John Fairfax making a Calderbank offer in these terms:

"We advise that our client offers to settle these proceedings (including all appeals arising from these proceedings) on the following basis:
(a) the proceedings are discontinued;
(b) all previous costs orders in these proceedings (including all costs orders in all appeals arising from these proceedings) vacated;
(c) subject to (b) above, there be no order as to costs; and
(d) our client releases your client from any claim, action or demand he may have against your client in respect of the subject matter of the proceedings."

23 The offer was expressed to be open until 7 May 2004. It will be remembered that the s7A trial was set down for 17 May 2004 (estimate 2 to 3 days).

24 On 28 April 2004 Freehills, solicitors for John Fairfax, wrote in these terms:

"We are currently obtaining instructions from our client in relation to your client's settlement offer, and will respond as soon as possible. In the meantime, assuming the matter is not able to be resolved, is it still your client's intention that the s7A retrial proceed on 17 May 2004?"

25 On 6 May 2004 Mr O'Brien responded by a letter in these terms:

"We anticipate that if our settlement offer is rejected, we shall be instructed to proceed with a 7A re-trial on 17 May 2004.
We note that our offer of 23 April 2004 expires tomorrow."

26 On 13 May 2004 Mr O'Brien spoke to Ms Diana Brown, solicitor of Freehills, by telephone. Ms Brown's account of that conversation was as follows:

"O'Brien: I have instructions to file a motion for leave to discontinue the proceedings, and we would propose that the motion be heard in the June defamation motions week.
(Ms Brown): Does that mean you need me to seek some instructions about whether Fairfax will consent to vacate the hearing for Monday, then?
O'Brien: No, I am just advising you that today we will give the Court notice of our client's intention to seek leave to discontinue. We don't need your client's consent.
(Ms Brown): I will inform my client of what you have told me."

27 This prompted a letter from Ms Brown the same day, as follows:

"Further to our telephone conversation this morning in which you advised that your client proposed to file a motion for leave to discontinue the proceedings, we make the following comments:
1. The defendant will oppose the plaintiff being granted leave to discontinue the proceedings at any time; and
2. As the mere filing of a motion for leave to discontinue will not vacate the hearing fixed for Monday 17 May 2004, we propose to continue preparations and will be ready to proceed with the trial on that day."

28 Mr O'Brien wrote back immediately, as follows:

"We informed you by telephone this morning that the Plaintiff did not intend to proceed with this matter and that, in accordance with the Rules, we intended to file a Notice of Motion for leave to discontinue. We also informed you that, in our view, it would be appropriate for such Notice of Motion to be dealt with in the next defamation motions list in the week commencing 7 June 2004. At the ... hearing of such a Motion, the Defendant may argue for any orders to compensate for the prejudice, if any, to the Defendant in the discontinuance of the proceedings.
We are therefore amazed at your insistence that the matter proceed for trial on 17 May 2004. In view of such stance, we shall seek leave on 17 May 2004 to file in Court the Notice of Motion for discontinuance, a copy of which is enclosed. It will be our further application that the proceedings be stood over for the Motion to be heard in the defamation motions list commencing 7 June next, and we see no prejudice to the Defendant in such a course. If you contend that the Defendant would be prejudiced please explain why.
We note that you propose to continue preparing the matter for trial on 17 May 2004 and we give notice that we shall oppose any recovery of such additional costs incurred by your client, given that we have informed you that the Plaintiff does not intend to proceed."

29 The Notice of Motion which accompanied that letter sought the following orders: (Annexure G, affidavit Mark O'Brien of 4 June 2004)

"1. The proceedings be discontinued.

2. No order as to costs."

30 On 14 May 2004 the matter was discussed between counsel and settled upon the following basis, confirmed by letter of the same date:

"1. Judgment for the Defendant in respect of imputations 1(a), (b), 3(c)(i), 3(c)(ii) and 3(d).
2. The question of costs be reserved for later argument.
3. The proceedings be stood over to the Defamation Motions List on 7 June 2004."

31 On 18 May 2004 orders were made in those terms by consent.

The issue on costs.

32 On 21 May 2004 the solicitors for Mr Rivkin wrote to the solicitors for John Fairfax identifying the position of their client in respect of costs. They would argue for the following costs orders:

"1. No order for costs of the first trial.
2. The plaintiff pay the Defendant's costs of the second trial from the date of the High Court Judgement to the date on which you were notified that the Plaintiff did not intend to proceed."

33 John Fairfax, on the other hand, sought indemnity costs in respect of both the first trial and the second trial. During the course of argument, the position of Mr Rivkin changed to some degree in respect of the costs associated with the first trial, and the appeals which followed. It is convenient to postpone that issue to deal first with the defendant's broad submission, that the case was one appropriate for indemnity costs.

Indemnity costs.

34 Part 52 of the Supreme Court Rules makes provisions for orders as to costs. The usual order is that costs follow the event (Pt52 r11). Costs, in this context, are party and party costs, unless the Court otherwise orders (Pt52 r23(1)). The rules specifically provide that indemnity costs may be ordered in two situations:

· First, where an offer of compromise has been made and the judgment entered is no less favourable than the terms offered (Pt52 r17); and

· Secondly, if the defendant has disputed a fact which is later proved or admitted (cf Badgery-Parker J in Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 at 279).

35 The application by the defendant does not fall into either category. There is, nonetheless, an inherent jurisdiction to award costs on an indemnity basis (s76 Supreme Court Act 1970). Badgery-Parker J, in Rouse v Shepherd (No 2) (supra), noted that the Courts have tended to avoid unduly widening the cases in which indemnity costs will be awarded. In Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225, Shepherd J reviewed the relevant common law principles as follows: (at 233)

"4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (1887) 39 Ch D 133 at 141 said the Court had a general and discretionary power to award costs as between solicitor and client 'as and when the justice of the case might so require'. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1981] 3 WLR 619) at 637 namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice."

36 Although the categories are not closed, it is useful to examine the circumstances in which such awards have been made. Shepherd J said this: (at 233)

"5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152); evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo ); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata ) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (1993) 46 IR 301); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata ); an imprudent refusal of an offer to compromise ..."

(emphasis in original)

37 In Rosniak v Government Insurance Office (1997) 41 NSWLR 608, Mason P (which whom Clarke AJA agreed) said this: (at 618)

"Later cases have emphasised that the discretion to depart from the usual 'party and party' basis for costs is not confined to the situation of what Gummow J described as the 'ethically or morally delinquent party' ( Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 at 415): see Baltic shipping Co v Dillon, 'Mikhail Lermontov' (1991) 22 NSWLR 1 at 32; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233-234. Nevertheless the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule-maker: Huntsman Chemical Co Australia Ltd v International Pools Australia Ltd (1995 36 NSWLR 242 at 248."

38 Mr Blackburn SC (for John Fairfax) identified two bases which made it appropriate to award indemnity costs for the whole of the proceedings. Both rested upon the same foundation, namely, that no "proper explanation" had been given by Mr Rivkin as to why he stopped the action and consented to judgment (T3). He stopped the action "for no apparent reason" (T7). The issue arises, according to Mr Blackburn: Why did he stop? The inference, he suggested (being the first basis of his application), is that the revelations made by John Fairfax in the Financial Review articles of late October and early November 2003 meant that the issue had got "a little too hot" (T7). The Court should infer that there must be some merit or some truth in the matters raised by John Fairfax in these articles. The Court, in these circumstances, should form the view that the proceedings had "no real prospect of success and should never had been brought" (T2).

39 The alternative inference (being the second basis of the defendant's application) called for what was described "a less serious inference". Given that no reason had been provided for Mr Rivkin's action in consenting to judgment, the Court should at least infer that, whether true or not, Mr Rivkin recognised that the matters raised in the Financial Review Special Investigation in October and November 2003 created difficulties which would provide an inhibition to his success. He recognised that, if he were to succeed in the s7A trial, and the defendant were to plead justification, "he was going to have a lot more trouble in the subsequent conduct of the proceedings than he had anticipated" (T6). On Mr Blackburn's argument, if that is the appropriate inference, he should have discontinued the proceedings in September 2003, after a partial retrial was ordered by the High Court. Indemnity costs should at least be awarded for the second trial.

40 Mr McHugh of counsel, appearing for Mr Rivkin, referred to the first basis as requiring a "colossal inference". The inference invited is that Mr Rivkin should never have brought the proceedings because he knew, or should have known, that the imputations involving Offset Alpine Press were true and would be demonstrated to have been true. In Mr McHugh's submission, there was no adequate basis for such an inference (T11). Had that been Mr Rivkin's thinking, one would have expected him to settle immediately after the publication of the October/November articles, not wait until the eve of the trial.

41 The second basis was also, according to Mr McHugh, without foundation. There was no evidence that Mr Rivkin knew the case (which involved multiple imputations) was hopeless, such that he should have stopped in September 2003. As to both bases, the obvious explanation, according to Mr McHugh for Mr Rivkin's change of instructions, emerged from Mr O'Brien's affidavit. He was unwell. He had undergone electro convulsive therapy in February and March 2004. He was not able to focus on legal issues.

42 In my view the defendant has not established that Mr Rivkin, in commencing and maintaining (after September 2003) the defamation proceedings, was behaving unreasonably, so as to warrant an award of indemnity costs. This Court held that the articles were capable of giving rise to the imputations. Leave to appeal against that decision was refused. The Court of Appeal, after verdict, held that it was perverse for the jury to have held that six of the imputations did not arise. The High Court by majority agreed. It ordered a partial retrial in respect of those imputations. In my view, the affidavit of Mr O'Brien, in the context of the "notorious facts", provided an explanation for Mr Rivkin's decision to bring the proceedings to a close. He had undergone serious surgery. He was having electro convulsive therapy. He was unwell.

43 I see that explanation as far more plausible and less problematical than either inference advanced by the defendant. I should add that I doubt (although it is unnecessary for me to decide) that the findings which underpinned Mr Blackburn's second basis would justify a characterisation of Mr Rivkin's conduct as "unreasonable", warranting an award of indemnity costs. A person may commence an action for defamation which he or she intends to pursue. The course of proceedings before September 2003 (when the High Court gave judgment) leave no doubt as to Mr Rivkin's resolve to proceed. The defendant then published a series of articles at the end of October and the beginning of November 2003. Mr Rivkin, in the meantime, had undergone brain surgery to remove a benign tumour. He presumably had been diagnosed with depression, such that he was given electro convulsive therapy in February and March 2004. He remained on medication. He had difficulties in focusing. Why, in these circumstances, should a decision to end the proceedings be characterised as unreasonable, simply because he may have recognised that, his opponent was determined and victory was likely to be more difficult and take longer? A party may, in the face of a determined (but in the view of that party, a wrong headed) opponent, decide that the battle is simply not worth the "aggravation", especially if, through illness, they are in a weakened state. They may (still believing themselves to have been wronged) determine to cut their losses and settle on the best terms available. That does not make their conduct in commencing the action unreasonable. Nor does it suggest that they recognised that defeat was inevitable. It simply means that an assessment has been made and a decision taken to end the case. In my view, unless there was something else, there would be no warrant for awarding indemnity costs in that circumstance.

44 Nonetheless, as the plaintiff acknowledged, the defendant should have the costs of the second trial (on a party and party basis) from the date of the High Court judgment (10 September 2003) to the date that the plaintiff settled on the terms set out in para 30 above (14 May 2004).

The first trial.

45 The more difficult issue concerns the cost of the first trial. Mr McHugh said that, as matters stood, the position in respect of the first trial was as follows:

· Mr Rivkin received a costs order from Levine J in September 1998 after an argument on the imputations.

· He received a further order in May 1999 when the Court of Appeal refused the defendant leave to appeal.

· Mr Rivkin was awarded costs after a decision of the Court of Appeal (in respect to the s7A trial).

· However the Court of Appeal ordered him to pay the costs of his unsuccessful challenge to the interlocutory rulings of Levine J, which was heard at the same time.

46 Mr McHugh submitted there should be no order for costs in respect of the first trial. He obtained instructions that, lest it be a complication in sorting out the costs of the first trial, his client undertook not to enforce the costs order in his favour against John Fairfax made after the appeal. He suggested that the matter should be approached upon that basis. It may be thought unfair if Mr Rivkin retained his award of costs in the Court of Appeal, and yet the defendant recovered no costs in respect of the first trial. I assume that the submission and the undertaking are linked, such that if the submission (that there should be no costs on the first trial) is rejected, Mr Rivkin should not be held to his undertaking. If a different order were made, the position on the costs on appeal would depend upon a construction of the ambit of the High Court's costs order (which I will deal with below).

47 Mr Blackburn, on behalf of John Fairfax, pressed his client's application for costs in respect to the first trial (other than the appeal, that being a matter in respect of which I had no power).

48 Under s9 of the Defamation Act 1974 the cause of action is the imputation arising from the material published. Each imputation is a separate cause of action. When Simpson J entered a verdict for the defendant after the s7A trial, it was an entitlement to judgment in respect of each imputation and costs. The Court of Appeal then determined that nine of the imputations were "reasonable" but six were "perverse". It nonetheless ordered a new trial in respect of all imputations. It followed that Mr Rivkin was entitled to costs. The High Court then (by majority) determined that the new trial should be confined to the imputations which were perverse. The verdict of the jury on the other imputations should stand. It made no order as to costs. That requires some interpretation. Was it confined (as Mr McHugh's argument suggested) to the costs in arguing the High Court appeal? Did it overturn (by implication) the costs order in Mr Rivkin's favour in the Court of Appeal?

49 Before dealing with that issue, it is instructive to ask what would have been the appropriate costs order in the Court of Appeal, had it reached the same conclusion as the High Court? Had that occurred, the Court of Appeal would have allowed the appeal in part. It would not have disturbed the costs order by Simpson J in respect of those imputations recognised as "reasonable". It would have ordered a new trial as to the remaining imputations. The appellant (Mr Rivkin) would have been entitled to his costs on the appeal, at least in part.

50 The matter had to go to the High Court to achieve that outcome. There were therefore additional costs to both parties in appearing before the High Court. In the High Court, as Callinan J said, both had their victories and their losses. The High Court had the power to make the order that ought to have been made by the Court of Appeal. It had the power, therefore, to make an order in respect of the costs which had been awarded to Mr Rivkin by the Court of Appeal. My feeling is that the Court's order (that there should be "no order as to costs") encompassed the entire appellate process, both the Court of Appeal and the High Court. It would be unfair if, having won in part in the High Court, the order for costs in favour of Mr Rivkin against John Fairfax were to stand. Such an order could only be justified had Mr Rivkin overturned the jury verdict in respect of all imputations. The High Court however ordered otherwise.

51 However that may be, and guided by the question of fairness (cf Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748, per Toohey J), the appropriate orders in respect of the first trial are as follows:

· First, the costs orders made by Levine J in September 1998 and by the Court of Appeal in May 1999 in favour of Mr Rivkin should stand.

· Second, the costs order made by the Court of Appeal against Mr Rivkin (in respect of his challenge to interlocutory orders made by Levine J) should stand.

· Third, the defendant (John Fairfax) should have two-thirds of its costs on the first trial (on a party and party basis), reflecting its success (ultimately restored in the High Court) in respect of a number of imputations.

The costs of this application.

52 The substantial issue, argued upon this application, which occupied most of the hearing, concerned the defendant's entitlement to indemnity costs. I have rejected that application. However, the plaintiff resisted an award of costs to the defendant in respect of the first trial. On that issue, the defendant has been successful in part. Weighing, in a broad brush way, victories and losses, I believe the defendant should pay two-thirds of Mr Rivkin's costs on this application.

Order.

53 I therefore make the following orders:

1. The plaintiff (Mr Rivkin) should pay two-thirds of the defendant's costs in respect to the first s7A trial on a party and party basis.

2. The plaintiff (Mr Rivkin) should pay the defendant's costs of the second s7A trial from 10 September 2003 to 14 May 2004 on a party and party basis.

3. The application for indemnity costs in respect to the first and second trials is refused.

4. The defendant should pay two-thirds of the plaintiff's (Mr Rivkin's) costs in respect of this application before me.

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Last Modified: 08/03/2004