Sands v Channel Seven Adelaide Pty Ltd (No 2) - [2009] SASC 365

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
SANDS v CHANNEL SEVEN ADELAIDE PTY LTD & ANOR (No 2)
[2009] SASC 365
Judgment of The Honourable Justice Bleby
25 November 2009
DEFAMATION - ACTIONS FOR DEFAMATION - COSTS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - WHERE MONEY PAID INTO COURT OR OFFER OF COMPROMISE MADE - OFFER OF COMPROMISE MADE
Application for indemnity costs by successful defendants - plaintiff's claim in defamation against both defendants dismissed - consideration of effect of informal offers of settlement made by defendants - whether plaintiff's case so weak that he ought to have known he had no chance of success.
Costs awarded in favour of defendants on party and party basis - plaintiff's refusal of offers not imprudent or unreasonable - plaintiff's case against each defendant was not objectively so weak as to justify indemnity costs.

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF ISSUES
Whether costs in favour of first defendant should be limited - plaintiff succeeded on some issues - first defendat's successful defence of justification not formulated until action had been on foot for almost four years - first defendant entitled to its costs without any reduction for these matters.

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - CO-DEFENDANTS
Whether costs against second defendant should be limited - trials of claims against both defendants ordered to be heard together, over objection from plaintiff - evidence relating to first defendant's defence of justification occupied the majority of the time at trial - whether second defendant's representation excessive - second defendant entitled to its costs without any reduction for these matters.
Supreme Court Rules 1987 (SA) r 40; Supreme Court Civil Rules 2006 (SA) r 8, r 187, r 188, r 263, referred to.
Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425, not followed.
Morris v McEwen (2005) 92 SASR 281, discussed.
Sands v Channel Seven Adelaide Pty Ltd [2009] SASC 215; S, DJ v Channel Seven Adelaide Pty Ltd (2008) 253 LSJS 468; Channel Seven Adelaide Pty Ltd v S, DJ (2007) 248 LSJS 75; Channel Seven Adelaide Pty Ltd v S, DJ (2006) 94 SASR 296; Sands v Channel Seven Adelaide Pty Ltd (2005) 91 SASR 466; State Government Insurance Commission v Lane (1997) 68 SASR 257; Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Pozzan v Gibbons (No 2) (2006) 244 LSJS 442; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Krix v Citrus Board of South Australia (2003) 87 SASR 229; Bates v Nelson (1973) 6 SASR 149; Pirrotta v Citibank Ltd (1998) 72 SASR 259; Glenmont Investments Pty Ltd v O'Loughlin [1999] SASC 504; Jacomb v Australian Municipal, Administrative, Clerical and Services Union [2004] FCA 1600; John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201; Commissioner of Taxation v Evenfont (No 2) (2009) 223 FLR 28; Rule Chambers Pty Ltd v Badge Constructions (SA) Pty Ltd [2009] SASC 70; Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519; J-Corp Ltd v Australian Builders Labourers Federated Union of Workers (No 2) (1993) 46 IR 301; Brander v Ryan (No 2) (2000) 206 LSJS 295; Cretazzo v Lombardi (1975) 13 SASR 4, considered.

SANDS v CHANNEL SEVEN ADELAIDE PTY LTD & ANOR (No 2)
[2009] SASC 365
Civil

BLEBY J. On 27 July 2009 I dismissed the plaintiff’s claim in defamation against the defendants, Channel 7 Adelaide Pty Ltd (“Channel 7”) and the Australian Broadcasting Corporation (“ABC”).[1] Both defendants now apply for an order for costs of the action on an indemnity basis.
[1] Sands v Channel Seven Adelaide Pty Ltd [2009] SASC 215.
Background
On 14 and 15 May 2004, Channel 7 broadcast a promotion for its “Today Tonight” program which contained a reference to the plaintiff as “a suspect in a murder case”. Another person who was identified in the same promotion sought and obtained an injunction restraining the broadcast of the program. The ABC published radio and internet reports on proceedings in the District Court relating to the injunction. These reports made reference to the Judge’s concerns that Channel 7 had named the plaintiff as a murder suspect.
The plaintiff commenced his action against both defendants on 21 May 2004. There have been a number of interlocutory applications and appeals from interlocutory orders in the proceedings. I will refer to them only where relevant. The trial commenced in February 2009 and occupied 13 sitting days.
In its final form, the statement of claim included a plea that the Channel 7 publication bore the imputation that the plaintiff was a suspect in a particular murder case, and that there were reasonable grounds for that suspicion. Channel 7 denied that the publication bore the pleaded imputation, and in addition relied on the defences of justification and extended qualified privilege. I found that the publication did bear the pleaded imputation and that the defence of extended qualified privilege was not made out. However Channel 7 succeeded in its defence of justification.
The plaintiff pleaded that the ABC publications bore the imputation that the plaintiff “is and was” a person suspected of murder, and that there are grounds to so suspect him which are reasonable. The ABC relied on the defence of absolute privilege attaching to a fair and accurate report of court proceedings. I found that the pleaded imputation was not made out, as the reports did not suggest that the plaintiff “is” a murder suspect but only that he was once a murder suspect, and because the reports did not convey the imputation that there were reasonable grounds to so suspect him. Finally, I found that the defence of absolute privilege was established.
Indemnity costs
Generally speaking, the court will only depart from the usual rule that costs are to be awarded on a party and party basis when there is some special or unusual feature of the case.[2] One such circumstance may be the imprudent refusal of an offer of settlement.[3] Another is when
it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success.[4]
[2]    State Government Insurance Commission v Lane (1997) 68 SASR 257, 265.
[3]    Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233; Pozzan v Gibbons (No 2) [2006] SASC 182, (2006) 244 LSJS 442.
[4]    Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 401; Krix v Citrus Board of South Australia [2003] SASC 387, [76], (2003) 87 SASR 229, 245-246.
Both defendants submitted that indemnity costs ought to be awarded in their favour, either because the plaintiff’s case had no chance of success, or because each defendant made an offer of settlement, or because of a combination of those two factors.
There was some discussion of whether the applicable rules relating to the costs consequences of offers of settlement in this action are contained in the Supreme Court Rules 1987 (SA) (“the 1987 Rules”) or the Supreme Court Civil Rules 2006 (SA) (“the 2006 rules”). The rules setting out the consequences of filed offers are r 40 of the 1987 Rules and r 187-188 of the 2006 Rules. This action was conducted under the 1987 Rules. The costs provisions in Chapter 12 of the 2006 Rules clearly apply to this action by virtue of the transitional provision in r 8(2)(a) of the 2006 Rules. However, r 187 and r 188 are not contained in Chapter 12. This point was not fully argued before me and in any event it is not necessary to decide which of the provisions relating to filed offers apply.
This is because, first, neither the ABC nor Channel 7 filed an offer of settlement. Therefore the Rules of Court relating to filed offers can have no direct application. In any event neither the 1987 nor the 2006 Rules direct that a defendant who files an offer of settlement and is wholly successful in the action is necessarily entitled to indemnity costs. The court is, however, entitled to have regard to the offers in considering the question of costs. This is the situation at common law[5] and is made explicit in r 263(3) of the 2006 Rules. A Calderbank letter may be the basis for awarding indemnity costs if rejection of the offer is unreasonable in all the circumstances.[6] It was common ground that regard ought only be had to an informal offer if it complies with the spirit and intent of the rules regarding filed offers.[7]
[5]    Bates v Nelson (1973) 6 SASR 149, 158; Pirrotta v Citibank Ltd (1998) 72 SASR 259; Glenmont Investments Pty Ltd v O’Loughlin [1999] SASC 504.
[6]    See, eg, Pozzan v Gibbons (No 2) [2006] SASC 182, (2006) 244 LSJS 442; Jacomb v Australian Municipal, Administrative, Clerical and Services Union [2004] FCA 1600.
[7]    Morris v McEwen [2005] SASC 284, (2005) 92 SASR 281.
Channel 7’s application for indemnity costs
The offer of settlement upon which Channel 7 relies is contained in a letter dated 4 April 2006 from Channel 7’s solicitors to the plaintiff’s solicitor. The letter is headed “Without prejudice, save as to costs”. It refers to a letter from the plaintiff’s solicitors dated 14 February 2006 and apparently containing an offer of settlement. The letter continues:
Our client is not prepared to settle this matter on terms set out in the offer. Our client maintains the view that your client will be wholly unsuccessful in his claim. Even if successful, the measure of damages payable to your client would be nominal, having regard to the imputation pleaded by him and the fact that he is on his own admission a murder suspect, irrespective of the quality of the grounds for such suspicion.
We note that the parties are currently negotiating your client’s claim for costs in satisfaction of the order made by the Full Court on 20 January 2006 (“the current costs claim”).
We are instructed to offer to your client the sum of $20,000.00 inclusive of costs in full and final settlement of all issues arising in the proceedings and the publication complained of, including your client’s foreshadowed claim for special damages. The inclusion of costs in this offer is made subject to our client satisfying its portion of the current costs claim (whether by way of agreement or taxation) such that any amount payable in respect of the current costs claim shall be in addition to the offer now made.
In accordance with the principles pertaining to informal offers, we note that the costs component of this offer is $2,000.00 and the offer is made without an admission of liability.
In respect of the claim for special damages, we note that your client has made the same claim for special damages against a further defendant in separate proceedings. Accordingly, this offer is made with the intention that it represents a full and final resolution of all issues as between our respective clients and on the condition that the settlement agreement embody terms to the following effect:
1.your client must refrain from joining our client in respect of the said damages claim;
2.in the event that our client is joined by any other party in any other proceedings in respect of the claim for special damages, your client agrees to indemnify our client in respect of that claim, and, in particular,
a.    any contribution payable by our client shall be agreed by your client to have been fully satisfied upon the payment of the settlement sum offered herein; and
b.    your client agrees to forego any claim for costs it might otherwise be entitled to make against our client within those proceedings; and
c.    in the event that your client makes any claim for costs against the other party and the other party in turn makes a claim for contribution against our client, your client agrees to forego his costs to the extent of the contribution that would otherwise be payable by our client.
As you would appreciate, costs would be recoverable against your client in the District Court proceedings [relating to the injunction]. In those proceedings, your client joined on a wholly unsuccessful application for an injunction … The costs of those proceedings (which would be substantial) are presently reserved. In the circumstances, there can be no doubt an order would be made in favour of our client. In making this offer, our client has taken these costs into account on the basis that, if the offer is accepted, our client will forego any entitlements our client may otherwise have against your client in respect of those costs.
Naturally, nothing in this proposed settlement would prevent our client from reporting matters concerning your client’s involvement with the police, including any statement to the effect that he is a suspect in a murder case. It is for your client to seek his own advice as to whether any such subsequent publications by our client are actionable.
This offer shall remain open for a period extending to 7 days prior to trial, unless withdrawn beforehand.
At the time this offer was made the action had been on foot for just under two years. In January 2006 the Full Court had ruled that the publications were capable of bearing the pleaded imputation.[8] At that time Channel 7’s pleadings contained a plea of justification. It gave particulars of justification for the first limb of the imputation, many of which were later relied on unsuccessfully as justification for the second limb, but no particulars of justification for the second limb. It was justification of the second limb which ultimately became crucial to Channel 7’s defence. A substantially amended version of that pleading was subsequently struck out,[9] as was a further amended defence of justification.[10] The defence as it stood in April 2006 also included pleas that the promotion constituted fair comment on a matter of public interest, and that it constituted a discussion of government and political matters. The fair comment defence was later struck out.[11]
[8] Channel Seven Adelaide Pty Ltd v S, DJ [2006] SASC 10, (2006) 94 SASR 296.
[9] Channel Seven Adelaide Pty Ltd v S, DJ [2007] SASC 117, (2007) 248 LSJS 75.
[10] DJ v Channel Seven Adelaide Pty Ltd [2008] SASC 60, (2008) 253 LSJS 468.
[11] Channel Seven Adelaide Pty Ltd v S,DJ [2007] SASC 117, (2007) 248 LSJS 75.
Channel 7’s submission was that it should be awarded indemnity costs on the basis of this offer, or because of the objective weakness of the plaintiff’s case, or because of a combination of both those factors.
As to whether the plaintiff’s refusal of the offer was unreasonable, there is authority in New South Wales that there should be a prima facie presumption that, in the event of a Calderbank type of offer not being accepted and the recipient of the offer not obtaining a result more favourable than the offer, the party rejecting the offer should pay the other’s costs on an indemnity basis.[12] On the other hand, that approach has not been adopted in other jurisdictions. Rather, the existence of the letter is one of a number of relevant factors to be considered by the Court in exercising its discretion.[13] That is the view so far taken by this Court with which I respectfully agree.
[12] Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425, 451.
[13] See, for example, John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 and the discussion of this and other cases by Debelle J in Pirrotta v Citibank Ltd (1998) 72 SASR 259, 262-266.
In Morris v McEwen[14] White J, with whose reasons Debelle J was in substantial agreement, said:[15]
In considering whether to give a Calderbank letter the same effect as an offer lodged pursuant to r 40, a number of matters will be relevant. These will include: whether or not an offer could have been lodged pursuant to r 40; any difficulties associated with the framing of an appropriate offer; any difficulties occurring because of the involvement of other parties in the litigation; the proximity of the trial at the time when the offer was made and the time available to the plaintiff in which to consider the offer; the commitments to which the plaintiff may be subject at that time; and the extent to which, if at all, the circumstances of the offer, or its terms and conditions, differ from the circumstances, or terms and conditions, of an offer lodged in accordance with r 40. This is not intended to be an exhaustive list of the matters which may be relevant.
[Footnotes omitted]
Besanko J, although dissenting in the result, described a Calderbank offer as “a relevant consideration”, even if an offer could have been filed under the Rules of Court, and held that it did not create a presumption in favour of the offeror.[16]
[14] [2005] SASC 284, (2005) 92 SASR 281.
[15] Ibid [75], 300-301.
[16] Ibid [34], 289-290.
In this case the offer, although remaining open until seven days prior to trial, was not of the same effect as an offer under r 40 of the Supreme Court Rules 1987 (SA). The costs component was fixed; the offer was subject to a number of conditions; it was made at a time when, as subsequent events showed, the defence of justification was not in a form which could have succeeded, the defence of fair comment on a matter of public interest was unsustainable and the defence of extended qualified privilege was doomed to fail. The limitation on costs meant that the offer was, in a sense, time limited. It required a judgment by the plaintiff at that time as to his prospects of success. In the then state of the pleadings I consider that its rejection at that time was not unreasonable.
Furthermore, I am not prepared to conclude that the plaintiff’s case was so weak as to justify an award of indemnity costs. At trial, I found that Channel 7’s publications did bear the pleaded imputation that the plaintiff was a murder suspect and that there were reasonable grounds so to suspect him. Absent any defence, that is a defamatory statement which could give rise to a substantial award of damages. I rejected Channel 7’s defence of qualified privilege. Had it not been for the success of the defence of justification, Channel 7 may well have been liable to the plaintiff in an amount far exceeding $20,000.
Evidence relating to the defence of justification occupied the majority of the Court’s time at trial. It was clearly the major, although not the only, issue in dispute between the plaintiff and Channel 7. Many of the factual matters relevant to this issue were in dispute. My findings and conclusion on this issue turned on an assessment of the credit of the plaintiff and of other witnesses. Counsel for Channel 7 submitted, in this application for costs, that those findings were natural and inescapable, and that this would have been apparent to the plaintiff and those advising him at the time Channel 7 made its offer. I cannot accept that submission. My findings on credit depended on a number of factors including the answers that the plaintiff gave to questions asked in cross-examination, his demeanour in the witness box, and the evidence given by witnesses called by Channel 7. These matters, let alone the conclusions that the trial Judge would draw from them, cannot have been known to the plaintiff or his advisors in April 2006. Nor would they necessarily have become obvious as the matter drew closer to trial.
That the plaintiff’s case was not, in April 2006, objectively a weak one becomes even clearer when one considers that Channel 7 had not at that time formulated the justification defence which was ultimately successful. The particulars of justification as they stood at that time were later struck out. The particulars in their final version did not appear in the pleadings until 16 May 2008.[17]
[17] The history of various applications by Channel 7 to amend its defence of justification is set out in my reasons for judgment [2009] SASC 215, [78]-[84].

Channel 7 submitted that, even if the plaintiff had been successful in his claim, he would have been entitled only to nominal damages. This submission relates to my finding that any loss he suffered, including his loss of his employment and damage to his reputation, was caused by the fact that he was a murder suspect, and by other factors, and not by Channel 7’s publications. That finding, however, is related to various findings of fact made at trial, including the finding that there were in fact reasonable grounds to suspect him. If I had made a different finding on that point I may well have had difficulty concluding that the plaintiff’s loss was not attributable to Channel 7’s publications.
In summary the offer was made at a time when the plaintiff had a prima facie claim in defamation against Channel 7, when the plaintiff was challenging Channel 7’s defence, and when the plaintiff, if successful, might have been awarded significant damages. By this time it can be assumed that the parties had incurred substantial legal costs. In these circumstances, an offer to settle the action for $20,000, with a component of $2,000 for costs, may not have appeared particularly attractive. This is especially so given that the offer expressly reserved Channel 7’s right to publish further statements that the plaintiff was a murder suspect. The offer also contained a condition that the plaintiff indemnify Channel 7 in the event that Channel 7 was joined as a party to the plaintiff’s claim against the ABC.
Because the offer remained open until seven days before the trial commenced, it is necessary to consider whether the plaintiff’s continued refusal to accept the offer was reasonable. As the matter drew closer to trial the plaintiff’s legal costs would have increased. For this reason the offer of $20,000 inclusive of costs would have remained unattractive even after Channel 7’s justification defence appeared in its final form.
In hindsight it is easy to see that the plaintiff would have been far better off had he accepted the offer. But at the time it was made, I do not consider that it was unreasonable for the plaintiff to choose not to accept the offer. By the time that the issues for trial had crystallized, the costs component of the offer did not justify acceptance. Nor do I consider that the plaintiff’s case, either at the time of the offer or at the time of trial, was so weak that indemnity costs ought to be awarded against him.
The ABC’s application for indemnity costs
Like Channel 7, the ABC argued that it should be awarded indemnity costs either because of the offer it made, or because of the objective lack of merit in the plaintiff’s case against it.
The ABC’s offer
On 26 May 2004, just five days after the filing of the summons, the ABC’s then solicitors wrote to the plaintiff’s solicitor raising a number of matters, including the following:
Our position is that this action is bound to fail. Apart from the issue of whether the imputations fairly arise from the material complained of, an obvious defence is that our client has done no more than report what the judge had to say. Further, subject to the final form of the plaintiff’s imputations, there is the issue of truth.
In that light, we invite your client to discontinue his proceedings at an early stage. This will serve to avoid unnecessary costs being incurred. In the event your client chooses to press on, we will rely upon this correspondence in due course in relation to solicitor/client costs.
The plaintiff’s solicitor wrote a letter in response taking issue with the matters raised in the letter and making an offer of settlement.
The letter of 26 May 2004 does not contain any offer of settlement and the ABC did not argue that it did. That letter was referred to by way of context only. The offer upon which the ABC relies is contained in a letter dated 7 January 2005. That letter contained the following passages:
Our client would be prepared to see the parties dispute resolved on the basis that the action would be dismissed with no order as to costs, and each party bearing their own costs incurred to date. This would be in full settlement of action 543 of 2004 (which would be dismissed by consent), and the matters complained of in those proceedings.
Please advise your instructions within 14 days.
Without prejudice.
In December 2004 a Master had made an order striking out the paragraphs of the amended statement of claim containing the pleaded imputations in respect of the publications by both the Channel 7 and the ABC. Those orders were later set aside on appeal.[18] At the time the offer was made, the ABC had not yet filed a defence.
[18] Sands v Channel Seven Adelaide Pty Ltd [2005] SASC 182, (2005) 91 SASR 466; Channel Seven Adelaide Pty Ltd v S, DJ [2006] SASC 10, (2006) 94 SASR 296.
A “walk away” offer can in some circumstances be regarded as a genuine offer of compromise that can be taken into account when considering the question of costs.[19] By the time the ABC made this offer, each of the parties had no doubt incurred quite significant costs. The matter had been called on in court five times. There had been substantial argument on pleadings. The Master had ordered that the plaintiff pay the ABC’s costs of the pleadings arguments. I accept that the ABC’s offer to bear its own costs involved a genuine element of compromise. Furthermore, I note that at that stage of proceedings the plaintiff’s claim had struck a major obstacle in that the pleaded imputations had been struck out.
[19] See, eg, Commissioner of Taxation v Evenfont (No 2) [2009] NSWSC 9, (2009) 223 FLR 28.
However, by this stage the plaintiff had already filed a notice of appeal against the judgment of the Master striking out the pleaded imputations. As noted previously, that appeal was ultimately successful. The plaintiff had no real notice of the defence or defences that the ABC intended to rely upon. While the letter of 26 May 2004 from the ABC’s solicitors contained a reasonably clear indication that the ABC would rely on the defences of fair and accurate report of court proceedings and/or justification, the plaintiff did not at this stage have any indication of how those defences would be formulated. While the ABC’s offer to bear its own costs was a significant offer, it had the effect of disposing of the plaintiff’s claim without the plaintiff receiving any compensation. The plaintiff was given only five days to respond to the offer. In these circumstances I do not consider that it was unreasonable for the plaintiff to decline the offer of settlement.
The ABC sought to rely on a second offer, made on 25 February 2009 during the course of the trial. A letter delivered to the plaintiff’s solicitor by facsimile that day indicated that the ABC was prepared to “walk away bearing its own costs on the basis that the claim against it be dismissed.” The offer was open until midday on 26 February 2009. This offer clearly fails to comply with the spirit and intent of the rules on filed offers, whether the 1987 or the 2006 Rules apply. Both sets of Rules require offers to be filed no later than 21 days before trial. The ABC’s second offer was made once the trial was well underway. Furthermore it was open for only one day. The Rules do not appear to contemplate costs consequences attaching to offers which are open for a limited period.[20] I am not prepared to take that offer into consideration.
[20] Rule Chambers Pty Ltd v Badge Constructions (SA) Pty Ltd [2009] SASC 70, [24]; Morris v McEwen [2005] SASC 284, (2005) 92 SASR 281.
The merit of the plaintiff’s case against the ABC
The ABC submitted that the plaintiff’s case against it was objectively a weak one, and noted that the claim against the ABC had effectively failed in three respects. First, the pleaded imputation was not made out; secondly, the ABC was entitled to rely on the defence of fair and accurate report; and thirdly, the plaintiff’s case on damages was deficient and flawed.
The plaintiff pleaded that the ABC publications conveyed the imputation that the plaintiff “is and was” a murder suspect. I found that none of the publications bore the imputation that the plaintiff was, at the date of publication, a murder suspect. The plaintiff argued that the pleaded imputation encompassed the lesser imputation that the plaintiff had at one time been a murder suspect.[21] The argument relied on by the ABC at trial based on the tense of the publications is not an argument that was advanced in any of the earlier interlocutory arguments on pleadings. While the ABC was not required to advance their argument at that stage, in the circumstances I am not prepared to hold that the plaintiff’s case was rendered hopeless by reason of this issue alone. Similarly, the issue of whether the publications bore the imputation that there were reasonable grounds to suspect the plaintiff involved a detailed consideration of each publication and my conclusion was not so inevitable that the plaintiff’s case could be said to have no chance of success.
[21] Relying on Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519.
On the issue of the defence of fair and accurate report, the plaintiff’s case was to some extent misconceived in that he sought to rely on some popular notion of fairness to the subject of the report. It was submitted that no report of the proceedings in the District Court could have been complete without a mention of the fact that the plaintiff foreshadowed an application for an order suppressing publication of his identity. I found that this was merely a secondary issue in the proceedings and was therefore immaterial to the question of the fairness and accuracy of the report. Nevertheless this point was not entirely without merit and the fact that I found against the plaintiff on this point does not mean that his case had no prospect of success.
The ABC submitted that, even if the plaintiff had made out his case on liability, his case on damages was “plagued by deficiencies in the evidence, and was in any event flawed”. These submissions depended to some extent on certain findings I made about the causes of the plaintiff’s distress and the deterioration in his social relationships. The ABC also submitted that no damages could have been awarded against it given that Channel 7’s defence of justification was successful. Justification was the major issue at trial and, as stated earlier, my conclusions on this defence depended to a large extent on my assessment of the evidence of the plaintiff and other witnesses at trial. I cannot accept a submission that the claim against the ABC was objectively hopeless because of the ultimate success of the justification defence.
In conclusion, while aspects of the plaintiff’s claim against the ABC were not strong, I am not satisfied that the claim was so weak as to be the basis for an award of indemnity costs.
The plaintiff’s submissions on costs
The plaintiff seeks the following orders:
1.That Channel 7 have its costs of trial limited to a fee on brief and seven refreshers.
2.That Channel 7 have its costs of action from 5 March 2008.
3.That the plaintiff have his costs of action against Channel 7 to 5 March 2008.
4.That the ABC have its costs of action and trial, but that the costs of trial be limited to a fee on brief and three refreshers.
Against Channel 7
The plaintiff says that Channel 7’s costs of trial should be limited to a fee on brief and seven refreshers. This is because the plaintiff was successful on some of the issues at trial. There were, in very broad terms, three issues in dispute between the plaintiff and Channel 7. The first issue was whether Channel 7’s publications bore the imputation pleaded by the plaintiff. The second was whether Channel 7 could rely on the defence of extended qualified privilege. The third issue was the defence of justification. I found in favour of the plaintiff on the first two issues. However, the majority of the trial was occupied by evidence that was primarily relevant to the defence of justification. Mr Archer of Channel 7 gave evidence that was relevant to extended qualified privilege. This evidence occupied less than half a day. Aside from this, the issues of imputation and extended qualified privilege primarily involved legal argument.
While in some cases it may be appropriate to apportion costs based on the fact that particular issues have been decided in favour of particular parties,[22] courts should be cautious in exercising this approach.[23] While a number of matters were in dispute at trial, the major issue was justification. On that major issue, and in the action as a whole, the plaintiff was unsuccessful. Channel 7 was entitled to oppose the plaintiff’s submissions on imputation, and to raise the defence of extended qualified privilege. Full argument on those matters did not significantly increase the length of the trial. The plaintiff is not entitled to any costs concession on the basis that he succeeded on some issues but not others.
[22] J-Corp Ltd v Australian Builders Labourers Federated Union of Workers (No 2) (1993) 46 IR 301; Brander v Ryan (No 2) [2000] SASC 12, (2000) 206 LSJS 295.
[23] Cretazzo v Lombardi (1975) 13 SASR 4, 16.
The plaintiff also submitted that he should have his costs of action against Channel 7 up to 5 March 2008. The reason put forward for this was that it was on 5 March 2008 that Channel 7 made application to file a third further amended defence containing the particulars of the defence of justification which ultimately succeeded. Prior to that date, Channel 7 had had its defence of justification struck out by the Full Court twice.[24]
[24] Channel Seven Adelaide Pty Ltd v S, DJ [2007] SASC 117, (2007) 248 LSJS 75; S, DJ v Channel Seven Adelaide Pty Ltd [2008] SASC 60, (2008) 253 LSJS 468.
There were extensive interlocutory arguments in this action. On occasions when the plaintiff was successful in an interlocutory matter he was given the benefit of the costs of that application. While the defence of justification did not appear in its final form until the action had been on foot for almost four years, it is not unusual for the issues to change and evolve as a matter draws closer to trial. There is no reason in this case to depart from the usual rule that costs should follow the event. This will not detract from any orders for costs made against Channel 7 in respect of interlocutory applications and appeals on which it failed.
Against the ABC
The plaintiff submitted that the ABC should have its costs of action and trial, provided that the costs of trial be limited to a fee on brief and three refreshers. The basis for this submission was that the ABC’s representation throughout the trial was said to be excessive. The majority of the trial was occupied by evidence which was primarily relevant to Channel 7’s defence of justification. This was not a defence upon which the ABC relied. The evidence called by the ABC occupied only half a day of sitting time.
In a related submission, the plaintiff argued that the costs to be awarded in favour of the ABC ought to be limited because in the plaintiff’s submission, the trials of the actions against the ABC and Channel 7 ought to have been heard separately. The summons by which the plaintiff commenced this action named the ABC and Channel 7 as defendants. On 17 March 2006, a Master ordered that there be separate trials of the two claims. These orders were made by consent, but it appears from correspondence exchanged between the parties’ solicitors that it was the ABC that initiated the separation of the trials. It appears to have done so on the reasonable assumption that the case against Channel 7 would be heard first, for if Channel 7’s plea of justification were to succeed, it would have an inevitable effect on any damages that might be awarded against the ABC.
In October 2007, the plaintiff applied for an order that the trial in the action against the ABC be set down for trial. The ABC opposed this course and applied for leave to issue a contribution notice against Channel 7. Leave was granted, and the notice was filed, on 29 November 2007. On 26 May 2008 White J declined to order that the action against the ABC be set down for trial, and also set aside the Master’s order that there be separate trials of the two actions. The plaintiff argued that, since the trials had been joined over the plaintiff’s objection, he should not have to pay for the ABC’s legal representatives to attend while Channel 7 ran its case. The fact is, however, that the series of events justifying that order was precipitated by the plaintiff seeking to advance the separate trial against the ABC. For whatever reason, an order was made that the trials be heard together. It is not relevant to consider whether the plaintiff opposed or consented to this course. It is relevant to consider whether there is any factor relating to the conduct of the trial which would justify reducing the costs to which the ABC is entitled.
The trial occupied some 13 days, finishing on the morning of the 13^th day. On three of these days, senior counsel for the ABC was present for only part of the day, while on four days senior counsel was absent altogether. Junior counsel for the ABC attended on every day of the trial. In addition, a solicitor for the ABC was present for much of the trial.
The ABC submits that it had an interest in the issue of justification because, if that defence were successful but I found against the ABC, that might be relevant to the quantum of damages payable by the ABC. It also points to the fact that Channel 7 sought to defend a contribution notice filed against it by the ABC by relying on the defence of justification. Finally, the ABC had foreshadowed an application to amend its defence to include a plea of justification in the event that it was not permitted to rely upon the evidence of justification by way of mitigation. The ABC also submits that, although much of the cross-examination of the plaintiff by counsel for Channel 7 was directed to the issue of justification, portions of it were relevant to the issue of damages, and the cross-examination was interspersed with arguments on various evidentiary matters, some of which the ABC had an interest in.
I accept the submissions of the ABC on this point. It was reasonable for the ABC to be represented by senior counsel while the plaintiff was giving evidence. This is especially so since counsel for the ABC was entitled to cross-examine the plaintiff and presumably would have done if there were matters relevant to the ABC’s case which were not raised in cross-examination by counsel for Channel 7. The plaintiff gave evidence for approximately three days at the beginning of the trial, and for just over half a day as part of his case in rebuttal. Senior counsel for the ABC was absent for much of the remainder of Channel 7’s justification evidence. It was reasonable for the ABC to maintain a limited presence during that time. No reduction should be made to the costs to which the ABC is entitled on this ground.
Reserved costs order
I requested that the parties identify any reserved costs orders made during the course of these proceedings. Channel 7 and the ABC each identified only one such order, which was made on 21 May 2004. On that day, Justice Perry heard and dismissed an application by the plaintiff for an injunction restraining Channel 7 from further broadcasting any promotion for “Today Tonight” featuring the plaintiff; and restraining both defendants from “broadcasting any programme featuring the plaintiff in the context of his involvement with a murder charge.” Issues relevant to that application were closely connected with the issues that I eventually had to determine at trial. There is no reason why the respective defendants should not be awarded the costs of that hearing on a party and party basis.
Orders

For these reasons I order that, subject to any specific orders for costs relating to interlocutory orders and appeals therefrom, the plaintiff pay the defendants’ costs of action on a party and party basis, including the costs of and incidental to the application filed by the plaintiff on 21 May 2004. I will hear the parties as to the costs of these applications.