Sands v Channel Seven Adelaide Pty Ltd (No 2)

Sands commenced proceedings against Channel Seven Adelaide Pty Ltd, alleging defamation. The dispute was heard and determined by the Federal Court of Australia. The plaintiff sought to recover damages from the defendants for the publication of allegedly defamatory material. The defendants, in turn, applied for indemnity costs, arguing that the plaintiff's case was so weak that he ought to have known he had no chance of success.

The court was required to decide whether the plaintiff's refusal to accept offers of compromise by the defendants warranted an award of indemnity costs against the plaintiff. Additionally, the court had to determine whether the costs awarded to the first defendant should be limited given that the plaintiff succeeded on some issues and whether the costs against the second defendant should be limited due to the extensive evidence presented during the trial.

The court found that the plaintiff's refusal to accept the defendants' offers of compromise was not imprudent or unreasonable, as the plaintiff's case against each defendant was not objectively so weak as to justify an award of indemnity costs. The court held that the first defendant was entitled to its costs without any reduction, as the successful defence of justification was not formulated until the action had been on foot for almost four years. The court also found that the second defendant was entitled to its costs without any reduction, despite the extensive evidence presented during the trial, as the trials of the claims against both defendants were ordered to be heard together, over the plaintiff's objection.

The court awarded costs in favour of the defendants on a party and party basis. The final orders reflected that the defendants were entitled to their costs from the plaintiff on the standard basis, with no award of indemnity costs.