Saxena v Singh and Ors (Ruling as to Costs)

[2024] VCC 274

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

DEFAMATION LIST

Case No. CI-21-04879

AMREESH SAXENA	Plaintiff
v
MANJOT SINGH	First Defendant
and
AASHU MAHNA	Second Defendant
and
RAHUL MAHNA	Third Defendant

---

JUDGE:	HER HONOUR JUDGE MYERS
WHERE HELD:	Melbourne
DATE OF HEARING:	1 March 2024
DATE OF RULING:	19 March 2024
CASE MAY BE CITED AS:	Saxena v Singh and Ors (Ruling as to Costs)
MEDIUM NEUTRAL CITATION:	[2024] VCC 274

RULING AS TO COSTS
---

Subject:DEFAMATION – COSTS – INTEREST

Catchwords:              Costs – defamation – scale of costs – indemnity costs – rate of interest on damages

Legislation Cited:      Defamation Act 2005 (Vic); County Court Civil Procedure Rules 2018, r63A.24(1); Magistrates’ Court Act 1989 (Vic), s 100

Cases Cited:Saxena v Singh and Ors [2024] VCC 2; Fong-Jones v Flow Chemical Pty Ltd [2023] VSC 770; Glare v John Fairfax Publications Pty Ltd [2000] VSC 493; O’Doherty v McMahon [1971] VR 625; Calderbank v Calberbank [1975] 3 All ER 333; Hardie v Herald and Weekly Times Pty Ltd (No 2) [2016] VSCA 130

Ruling:  Interest at the rate of 3 per cent ordered and costs awarded on the County Court scale on an indemnity basis.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T J Sowden	Contact Lawyers Pty Ltd
For the Defendant	Mr J G Levine	Matrix Legal

HER HONOUR:

Introduction

1On 24 January 2024, I handed down my Judgment in this proceeding.[1]   Dr Amreesh Saxena, the plaintiff, succeeded in his claims against each of the defendants, Mr Manjot Singh, Ms Aashu Mahna, and Mr Rahul Mahna. 

[1]Saxena v Singh and Ors [2024] VCC 2

2Dr Saxena was awarded $30,000 damages from Mr Singh, and $40,000 damages from Ms Mahna and Mr Mahna.

3Two issues remain unresolved, namely the appropriate rate of interest on the damages awarded, and costs:

(a)   The parties agreed that Dr Saxena is entitled to interest on the damages awarded from the date of issue of the proceeding.  Dr Saxena submitted that interest should be at the rate of 4 per cent per annum.  Mr Singh, Ms Mahna and Mr Mahna submitted the appropriate rate was 3 per cent per annum;

(b)   Dr Saxena sought an order for costs to be assessed on the County Court scale on an indemnity basis.  Mr Singh accepted that costs follow the event.  However, he submitted that as Dr Saxena was awarded less than half the jurisdictional limit of the Magistrates’ Court against him, Dr Saxena ought only to recover the costs he would have been entitled to if the proceeding had been brought in the Magistrates’ Court (less an amount equal to the additional costs properly incurred by him because the proceeding was in the County Court instead of the Magistrates’ Court).  Mr Singh submitted that costs should be on a standard basis.  Ms Mahna and Mr Mahna made the same costs submissions as Mr Singh.

4For the reasons that follow, I find that Dr Saxena is entitled to interest at the rate of 3 per cent per annum from the date of issue of the proceeding.  I find that the appropriate award of costs is that Dr Saxena’s costs of the proceeding be paid by the defendants, on the County Court scale, on an indemnity basis.

Should interest on the damages be at a rate of 3 per cent or 4 per cent?

5Dr Saxena submitted that interest should be awarded at the rate of 4 per cent “to allow for recent rises in interest rates”.  He relied upon a recent decision of Fong-Jones v Flow Chemical Pty Ltd[2] in which Efthim AsJ allowed a figure of around 4 per cent.

[2][2023] VSC 770 at paragraphs [47]-[49]

6Mr Singh, Ms Mahna and Mr Mahna submitted the appropriate rate of interest was 3 per cent.

7The purpose of an award of interest on damages is to compensate a plaintiff for being kept out of the money.  The rate ought to reflect the market rate.

8The parties agreed that generally interest is awarded at about 3 per cent. 

9I am not persuaded that a higher rate is appropriate, and order interest to be paid at the rate of 3 per cent from the date of issue of the proceeding.

Should costs be pursuant to the Magistrates’ Court scale or County Court scale?

10Rule 63A.24(1) of the County Court Civil Procedure Rules 2018 (“the Rules”) provides:

“Where in a proceeding for debt or damages the plaintiff recovers by judgment or otherwise an amount (exclusive of costs) not exceeding one‑half of the amount of the jurisdictional limit of the Magistrates’ Court in a civil proceeding (at the time the proceeding commenced), the plaintiff shall, unless the Court otherwise orders, be entitled only to the costs to which the plaintiff would have been entitled if the plaintiff had brought the proceeding in the Magistrates’ Court less an amount equal to the additional costs properly incurred by the defendant by reason of the proceeding having been brought in the County Court instead of the Magistrates’ Court, but shall not be required to pay to the defendant any amount by which the additional costs exceed the costs payable to the plaintiff.”

11In Glare v John Fairfax Publications Pty Ltd,[3] Ashley J said the following, relevant to the discretion in r63.24 of the Rules:

[3] [2000] VSC 493

“4.In my opinion the following consideration are pertinent in the exercise of discretion:

(1) The ordinary regime set up by r.63.24(1) should apply unless there are some special circumstances associated with the case.

(2) Special circumstances include, but are not confined to, a case in which there is complexity of law or fact.  The presence of such complexity is usually a justification for an exercise of discretion in favour of a plaintiff.

(3) … Misjudgment of the amount likely to be recovered is not a pertinent consideration.

(4) In determining whether a case should be regarded as setting up complex issues of law or fact it is not irrelevant to consider the pleadings as a whole …

(5) In the case of a defamation action, the following passage in the judgment of Kirby P. in Fairfax v Palmer at 306 is in my respectful opinion pertinent:

‘Although it is not permissible to treat defamation cases as being in a class of their own (no such approach having been taken by the rules) it is appropriate to say that typically, such proceedings do raise complexities of a kind which will (simple cases apart) more readily warrant the initiation of proceedings in the Supreme Court than other damages actions. …

A second consideration must be mentioned which is peculiar to defamation cases.  As Allen J pointed out, the verdict of the jury represents, in part, a vindication of the plaintiff and of his reputation.  No such consideration normally applies in actions for debt or personal injury damages.  Thus, the very bringing in of a verdict in favour of the plaintiff represented, in this case, the achievement of one of the objects of the litigation.’

(6)     … In the same case, Samuels JA said this:

‘I agree with the President that one must be hesitant about elevating defamation cases to a particular status for which the rules do not provide.  But their nature and the fact that a special defamation list has been established in the Supreme Court to cater for them, support the conclusion that it is legitimate in such cases to exercise discretion under r24(4) with some liberality.  In particular, it is, I think, true that since an assessment of damages in defamation is intended to operate as a vindication of the plaintiff and thus has what one might describe as a symbolic element, a plaintiff may well be justified in seeking to have his action heard in the senior court of the State whose pronouncements, naturally enough, may be regarded as carrying more weight than those of other courts.’

… .”

12Section 100 of the Magistrates’ Court Act 1989 (Vic) relevantly provides as follows:

“100  Extent of jurisdiction

(1)     The Court has jurisdiction …

(a) to hear and determine any cause of action for damages … if the amount claimed is within the jurisdictional limit; … .”

13The jurisdictional limit of the Magistrates’ Court is, and relevantly was, $100,000 at the time this proceeding was issued.[4]

[4]Section 3(1) of the Magistrates’ Court Act 1989 (Vic)

14Mr Singh, Ms Mahna and Mr Mahna submitted that the regime in r63A.24 applied. Dr Saxena submitted that it did not apply in circumstances where he recovered $70,000 in the proceeding albeit apportioned between separate tortfeasors. Neither party was able to refer to an authority which considered the operation of r63A.24 in a circumstance such as the present.

15Rule 63A.24 refers to the amount of damages recovered by a plaintiff in a proceeding.  In this proceeding, Dr Saxena has recovered $70,000.

16Mr Levine, who appeared for Mr Singh, Ms Mahna and Mr Mahna, submitted that where the proceeding included two separate causes of action against separate defendants, the jurisdictional limit of the Magistrates’ Court was relevantly $100,000 for each cause of action. He submitted that r63A.24 was therefore enlivened because the plaintiff recovered less than half of $200,000.

17I do not accept those submissions. A plain reading of r63A.24 requires a comparison between the damages recovered by a plaintiff in the proceeding with one half of the jurisdictional limit of the Magistrates’ Court, that is, $50,000. 

18Dr Saxena recovered $70,000 in the proceeding.  That sum exceeds one half of the jurisdictional limit of the Magistrates’ Court. 

19I find that r63A.24 does not apply in this case.

20However, if I am wrong, and r63A.24 is applicable, I will consider whether this is a case in which it is appropriate to exercise the discretion to “otherwise order”.

21The purpose of r63A.24 of the Rules is “to protect the defendant against the unnecessary expense of higher costs in a court which is not appropriate for the case”.[5]

[5]O’Doherty v McMahon [1971] VR 625 at 628

22Mr Levine submitted that there were no special circumstances in this case that justified departing from the regime in r63A.24. It was submitted that there were no difficult questions of law or fact. Further, it was submitted that Dr Saxena knew that the award of damages would “not be significant” as he had been willing to accept $40,000 in his concerns notice.

23In my view, there are several reasons why it would not be appropriate to follow the ordinary regime in r63A.24 of the Rules in this case.

24First, there was sufficient complexity in this proceeding for Dr Saxena to choose to have it determined in this Court. 

25Second, this Court has a specialist defamation list, whereas the Magistrates’ Court does not.

26Third, vindication of Dr Saxena’s reputation was a legitimate purpose of the litigation.  Dr Saxena was entitled to take that step in this Court rather than the Magistrates’ Court.

27Fourth, the defendants had joint representation, and whilst there were separate tortfeasors, the overall damages awarded were $70,000.

28I find that if r63A.24 had application in this case, it would be appropriate to “otherwise order”.

29Dr Saxena’s costs are to be assessed on the County Court scale.

Should costs be on an indemnity basis?

30Dr Saxena sought indemnity costs in reliance on s40 of the Defamation Act 2005 (“the Act”).

31Section 40 of the Act provides:

“40    Costs in defamation proceedings

(1) In awarding costs in defamation proceedings, the court may have regard to—

(a) the way in which the parties to the proceedings conducted their cases (including any misuse of a party’s superior financial position to hinder the early resolution of the proceedings); and

(b) any other matters that the court considers relevant.

(2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise)—

(a) if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or

(b) …

(3) In this section—

settlement offer means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made.”

32In awarding costs, a relevant consideration is the way the parties conducted their cases.

33Section 40(2)(a) of the Act provides that unless the interests of justice require otherwise, a Court must order costs on an indemnity basis if satisfied that a defendant unreasonably failed to make a settlement offer or failed to agree to a settlement offer made by the plaintiff.

34Section 40 does not require that a settlement offer be made with any particular formality.

35The definition of “settlement offer” in the section is that it is a reasonable offer at the time it was made.

Did Mr Singh, Ms Mahna and Mr Mahna unreasonably fail to agree to a settlement offer proposed by Dr Saxena?

36Dr Saxena made a number of offers to settle his claims:

(a)   In the concerns notice dated 23 July 2021, sent to Mr Singh and Ms Mahna, Dr Saxena sought $40,000 damages plus costs, removal of the publications, undertakings, an apology and retraction, and a published apology and retraction;

(b)   On 7 August 2021, Dr Saxena verbally agreed to accept $15,000 from Mr Singh and Ms Mahna.[6]  In the circumstances, I find that offer was an “all in” figure and also included removal of the publications, undertakings, and an apology and retraction;

(c)   On 9 August 2021, Dr Saxena’s solicitors acknowledged receipt of a signed apology, retraction and undertakings from Mr Singh and Ms Mahna, and sought payment of $15,000 damages, together with the publication of a 5‑star Google review;[7]

(d)   On 9 September 2022, Dr Saxena’s solicitors made a “Calderbank”[8] offer to settle for $70,000 inclusive of costs, withdrawal of the Office of the Australian Integrity Commissioner (“OAIC”) complaints made against Dr Saxena, a mutual release and a promise not to further defame Dr Saxena;

(e)   On 27 July 2023, Dr Saxena’s solicitors made an offer to settle the proceeding for $65,000 damages, plus withdrawal of complaints made against Dr Saxena.  Read in context, that was an “all in” offer.

[6]        Saxena v Singh and Ors [2024] VCC 2 at paragraph [125]

[7]Plaintiff’s written submissions dated 23 February 2024.  The letter was not tendered in the proceeding or the costs application.  No issue was taken regarding evidence of the offer by Mr Levine.

[8]Calderbank v Calberbank [1975] 3 All ER 333

37A purpose of the concerns notice procedure is to require parties to make reasonable efforts to resolve their dispute.

38The concerns notice was only addressed to Mr Singh and Ms Mahna because they were the apparent authors of the relevant reviews. 

39Following receipt of the concerns notice, Ms Mahna engaged in negotiations with Dr Saxena with respect to both reviews.  Ms Mahna was negotiating on behalf of herself and Mr Singh. 

40By 9 August 2021, Mr Singh and Ms Mahna had provided a signed apology and retraction, and signed undertakings and had agreed to settle the dispute raised by the concerns notice for $15,000 inclusive of costs.  I am satisfied that if that sum had been paid, that would have been the end of the matter. 

41However, Mr Singh and Ms Mahna did not pay the $15,000.

42Dr Saxena has been awarded more by way of damages than the amount for which he offered to settle the dispute in August 2021, but that is just one consideration.

43Dr Saxena submitted that his offers to settle the proceeding were reasonable at the time they were made, and his conduct of the proceeding was appropriate, whereas the defendants persisted with defences which lacked merit. 

44Mr Levine submitted that each of the offers made by Dr Saxena included relief that was not, or could not, be claimed in the proceeding, such as the requirement for the publication of 5-star reviews, and withdrawal of OAIC complaints.  Mr Levine submitted that the value to Dr Saxena of those aspects of the offers could not be ascertained.

45I accept that there may be circumstances in which it can be difficult to compare what has been achieved by judgment with what was sought in various offers.  This was a difficulty noted by the Victorian Supreme Court of Appeal in Hardie v The Herald and Weekly Times Pty Ltd and Anor (No 2).[9] However, it is not necessary to resolve that issue in this case given my finding below regarding the 7 August 2021 offer.

[9][2016] VSCA 130, at paragraph [30]

46The question whether it was reasonable for Mr Singh and Ms Mahna to not resolve the dispute on those terms requires a consideration of all the circumstances of the case at the time the offer was made.  It is not a simple question of comparing whether Dr Saxena did better than the offer.

47I find that the settlement offer made by Dr Saxena on 7 August 2021 of $15,000 “all in”, together with removal of the publications, undertakings and an apology and retraction was a reasonable offer at the time it was made.  I take into account the gravity of the imputations and the extent of publication.  Further, it was reasonable to seek removal of the publications, and an apology and undertakings not to further defame Dr Saxena.  Also, the amount sought, inclusive of costs, is considerably less than Dr Saxena was awarded in this proceeding.

48I find it was unreasonable of Mr Singh and Ms Mahna not to resolve the dispute on the terms of that offer.  They had already removed the publications and provided the apology and undertakings, and the “all in” sum was reasonable given the lack of merit in the potential defences.

Did Mr Singh, Ms Mahna and Mr Mahna unreasonably fail to make a settlement offer?

49Mr Singh and Ms Mahna agreed to settle the matters raised by the concerns notice on 7 August 2021, but then failed to pay the agreed damages and purported to revoke their apologies. 

50Mr Mahna was not a party to those negotiations.  He was aware of them but did not wish to participate as he was of the view that he had simply provided a review of his experience of being treated by Dr Saxena.[10]  Given my findings in the proceeding, that failure by him to make any settlement offer at that time was unreasonable.

[10]Saxena v Singh and Ors [2024] VCC 2 at paragraph [355]

51Thereafter, no settlement offers were made by Mr Singh, Ms Mahna or Mr Mahna until shortly before the start of the trial. 

52Mr Levine submitted that Dr Saxena did not properly plead his case, and Dr Saxena’s reliance on his Google listing was not pleaded until 13 April 2022.  He submitted that absent that amendment, it was not unreasonable for the defendants to believe that Dr Saxena’s damages were “very limited”. 

53Whether or not that point has merit as to the likely amount of damages, the fact is that between September 2021 and June 2023, Mr Singh, Ms Mahna and Mr Mahna made no offer to resolve the proceeding on any basis.  I find that during that period they unreasonably failed to make a settlement offer.

54Less than two weeks before trial, Mr Singh, Ms Mahna and Mr Mahna made the following offers:

(a)   On 26 July 2023, they offered to resolve the proceeding by way of a payment of $30,000 “all in”, together with a withdrawal of all existing complaints against Dr Saxena, open for acceptance for 48 hours;

(b)   On 27 July 2023, they offered to resolve the proceeding by way of payment of $35,000 “all in”, together with a withdrawal of all complaints.  That offer was open for acceptance for 24 hours.

55Mr Levine submitted that the Court was not able to determine whether the offers made on 26 and 27 July 2023 were reasonable or not, because they included an offer to withdraw all complaints, and that element of the offers could not be valued. 

56In my view those offers were unrealistic at the time they were made. Given the likely costs incurred by Dr Saxena by July 2023, “all in” offers of $30,000 and $35,000 were wholly inadequate as to damages and costs, even if it was assumed that the withdrawal of the complaints was of significant value to Dr Saxena.

57For the above reasons, I find that Mr Singh, Ms Mahna and Mr Mahna unreasonably failed to make a settlement offer until 26 and 27 July 2023.  I do not find that the offers made on 26 and 27 July 2023 were reasonable at the time they were made.

Conclusion

58I order that interest on the damages awarded is to be paid at the rate of 3 per cent per annum from the date of issue of the proceeding.

59I am satisfied that Dr Saxena should have his costs assessed on the County Court scale.

60Mr Singh and Ms Mahna unreasonably failed to accept Dr Saxena’s settlement offer dated 7 August 2021. 

61Further, Mr Singh, Ms Mahna and Mr Mahna unreasonably failed to make a reasonable settlement offer.

62I am satisfied that this is a case in which it is in the interests of justice that Dr Saxena is awarded his costs of the proceeding on an indemnity basis to be assessed by the Costs Court in default of agreement.