Sheales v The Age Company Pty Ltd (Costs Ruling)
[2017] VSC 605
•6 October 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2015 06477
| DAMIAN SHEALES | Plaintiff |
| v | |
| THE AGE COMPANY PTY LTD & ORS | Defendants |
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JUDGE: | JOHN DIXON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 September 2017 |
DATE OF RULING: | 6 October 2017 |
CASE MAY BE CITED AS: | Sheales v The Age Company Pty Ltd (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2017] VSC 605 |
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PRACTICE AND PROCEDURE – Costs – Costs of proceeding up to and including trial – Indemnity costs – Offers of compromise – Calderbank offers – Settlement offers – Whether defendants unreasonably failed to agree to settlement offers proposed by the plaintiff – Whether defendants unreasonably failed to make settlement offers - Defamation Act 2005, s 40 – Supreme Court (General Civil Procedure) Rules 2015, rr 26.02 and 26.08.
PRACTICE AND PROCEDURE – Overarching obligations - Alleged failure to disclose documents critical to resolution of dispute – impact of failure on Court’s discretion as to costs - Civil Procedure Act 2010, ss 26, 28, 29.
PRACTICE AND PROCEDURE – Interest – Interest on defamation damages – Period over which interest to be paid – Entitlement to interest until judgment – Interest from the commencement of the proceeding – Whether good cause is shown to the contrary– Supreme Court Act 1986, s 60.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D P Gilbertson QC with Mr T Greenway | Lander & Rogers |
| For the Defendant | Dr M J Collins QC with Mr J C Hooper | Minter Ellison Lawyers |
HIS HONOUR:
Introduction
On 24 March 2017 the jury returned a verdict in favour of the plaintiff. On 29 June 2017 I awarded damages of $175,000 to the plaintiff.[1] I invited submissions as to costs and interest.
[1]Sheales v The Age Company Pty Ltd [2017] VSC 380.
On 26 October 2016, the parties mediated the proceeding, which did not resolve. The following day, the plaintiff served an Offer of Compromise in the sum of $139,000, plus costs on the standard basis. The trial commenced on 16 March 2017. Overnight on 17 March 2017, the defendants offered $100,000, including costs and expenses, and a statement to be published both online and in hard copy that neither engaged with the imputations alleged nor constituted an apology, which the plaintiff refused.
The plaintiff seeks:
(a) an order that the costs of the proceeding be paid by the defendants on an indemnity basis pursuant to s 40(2)(a) of the Defamation Act 2005 (‘Act’);
(b) alternatively an order that the defendants pay the plaintiff’s costs on a standard basis up to 11 am on 31 October 2016 and thereafter on an indemnity basis pursuant to r 26.08(2)(b) of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’);
(c) an award of interest pursuant to s 60 of the Supreme Court Act 1986 at a rate of 3% from the date of commencement of the proceeding.
The defendants submitted that the plaintiff had breached his overarching obligation under s 26 of the Civil Procedure Act 2010 (‘CPA’) and the court should order under s 29(1) of that Act that:
(a) the defendants pay the plaintiff’s costs and any reserved costs of and incidental to the proceeding to be assessed on a standard basis up to 26 October 2016 (being the date of mediation in this proceeding);
(b) the plaintiff pay the defendants’ costs and any reserved costs of and incidental to the proceeding to be assessed on a standard basis from 27 October 2016;
(c) alternatively, there be no order as to costs.[2]
[2]Citing Hardie v The Herald & Weekly Times Pty Ltd [2016] VSCA 130, [8]-[12], [14].
Should such an order be made the defendants submitted there would be ‘good cause’ for either not allowing interest at all, or only allowing interest from the date of the commencement of the proceeding until the date of mediation, 26 October 2016.
Alternatively, should the court not accept the defendants’ CPA submission, the defendants submitted that s 40 of the Act had not been engaged and that the plaintiff was not entitled to costs on an indemnity basis.
Costs
The plaintiff’s submissions
Section 40 of the Act is as follows:
(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)if defamation proceedings are unsuccessfully brought by a plaintiff and costs in the proceedings are to be awarded to the defendant—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the plaintiff unreasonably failed to accept a settlement offer made by the defendant.
(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.
The plaintiff submitted that the defendants:
(a) unreasonably failed to make a settlement offer within the meaning of s 40(2)(a); or alternatively,
(b) unreasonably failed to agree to a settlement offer proposed by the plaintiff.
The defendants’ offer of 17 March 2017 was not a ‘reasonable offer at the time it was made’.[3] In essence, this was because:
[3]Citing Holt v TCN Channel Nine Pty Ltd (No 2) (2013) 82 NSWLR 293, 305 [50]; Zoef v Nationwide News Pty Ltd (No 2) [2017] NSWCA 2, [59].
(a) the statement proposed as part of the offer did not address the sting of the defamatory imputation found by the jury to have been conveyed;
(b) no apology was offered;
(c) there was no offer for the online article to be taken down;
(d) the offer of $100,000 inclusive of costs was manifestly inadequate given the costs incurred, the seriousness of the imputation, and the scope of publication; and
(e) at the time the offer was made the defendants relied on defences of honest opinion and fair report, which were both withdrawn at the start of the defendants’ opening address.
As the offer was not ‘a reasonable offer at the time it was made’, it was not an offer for the purposes of s 40(3). Consequently, no offer falling within s 40 was made, and this failure to make any reasonable offer was unreasonable in the circumstances. In McMahon v John Fairfax Publications Pty Ltd (No 8) McCallum J observed, although this observation may have more particular relevance in NSW:
I am nonetheless satisfied that, in all the circumstances, the defendants unreasonably failed to make a settlement offer at that stage. That view might once have been considered heretical. Parties are entitled to have their causes determined by the court. There is no ordinarily obligation to negotiate with an opponent. But the special costs provisions in the Defamation Act2005 deliberately encroach on that comfortable domain, making it clear that a defendant in defamation proceedings who fails to engage in any process of negotiation does so at his or her own risk as to costs.
…
In my view, having regard to Mr McMahon's prospects of at least partial success in the proceedings and the likely disproportionate cost of the trial as it must have appeared at that stage, a reasonable approach with due regard to the objects of the Defamation Act required the defendants at least to engage with that willingness.[4]
[4][2014] NSWSC 673, [24], [26].
Further, the plaintiff submitted that it was unreasonable for the defendants not to have accepted the plaintiff’s offer of 27 October 2016 as:
(a) the plaintiff had reasonable prospects of success in the proceeding;
(b) the imputations alleged were alternatives;
(c) there was a real risk that the defendants’ defences of justification, fair report and honest opinion would be rejected by the jury; and
(d) having regard to the totality of the circumstances of the case, and the cap on general damages, the offer was relatively modest.
Further, although this offer did not refer to s 40, this is not essential for reliance to be placed upon that section,[5] and the offer was made to a major publisher represented by experienced defamation lawyers who may be presumed to be familiar with the terms of the Act.
[5]McMahon v John Fairfax Publications Pty Ltd (No 8) [2014] NSWSC 673, [18]; Hardie v The Herald & Weekly Times Pty Ltd [2016] VSCA 130, [29].
Alternatively to this submission, the plaintiff contended that an order should be made that the defendants pay the plaintiff’s costs on the standard basis until 31 October 2016 and thereafter on an indemnity basis.
The plaintiff’s offer of compromise served on 27 October 2016 was served pursuant to r 26.08 of the Rules. On 27 June 2017 the plaintiff obtained an award no less favourable that the terms of that offer of compromise. The prima facie consequence of this outcome, established by the Rule, should not be displaced.
The defendants’ submissions
The defendants first submitted that the plaintiff contravened his overarching obligation to disclose the existence of critical documents under s 26 of the Civil Procedure Act, by failing to disclose the existence of the following documents until after the commencement of the trial:
(a) an article entitled ‘KEDRC agrees on thresholds’ published in the Thoroughbred Daily News (‘the Scollay article’); and
(b) a letter from Minter Ellison on behalf of the Stewards of Racing Victoria Limited to Mark Kavanagh dated 26 July 2015 (‘the Stewards’ letter’).
The defendants submitted that it can be inferred that disclosure of either of these documents at the earliest reasonable time would likely have had a direct and appreciable impact on the defendants’ assessment of their prospects of success at trial and accordingly on their conduct of settlement discussions before, at the mediation on 26 October 2016 and thereafter. The late disclosure of critical documents is precisely the mischief that s 26 seeks to avoid because late disclosure necessarily constrains the forensic decisions available to a party, including the decision to resolve the proceeding and on what terms.[6]
[6]Civil Procedure Act2010, s 7(2).
Further, as the plaintiff gave no adequate explanation for his failure to disclose these documents at the earliest reasonable time, this failure should be taken into account by the court under s 28(2) of the Civil Procedure Act in exercising its discretion as to costs.
The Scollay article
The Scollay article was first revealed to the defendants on the second day of trial on 17 March 2017. The defendants submitted the Scollay article was critical for the following reasons:
(a) the plaintiff’s evidence was that he considered the Scollay article to be critical to the show cause proceeding;
(b) the pleadings indicate the Scollay article either was, or ought reasonably to have been considered by the plaintiff to have been a critical document;
(c) the first reference to the Scollay article was made by the plaintiff during cross-examination. The article was tendered in re-examination;
(d) significant reliance was placed by the plaintiff’s counsel on the Scollay article, which he did not refer to in opening, to support the plaintiff’s application that I withdraw the justification defence from the jury;
(e) the article was also relied on heavily in the plaintiff’s closing address. It was said to be the complete answer to the justification defence; and
(f) absent the findings reported in the Scollay article as made by Dr Scollay in her research, there was no scientific material to support the plaintiff's submission in the show cause hearing that ‘what science has been done … basically chuckles at a contention that it's performance enhancing’ and ‘in fact the studies say it doesn't, that it does not increase the red blood cell count, so it can't happen’.
I accept this submission. I am satisfied that the Scollay article was a critical document.
The defendants submitted that disclosure of the Scollay article during cross-examination put the defendants in the invidious position of having to determine how to use a document that they learned of at the same time as the jury. The only explanation offered, by the plaintiff when giving evidence, for his failure to disclose the Scollay article at an earlier stage was that it was ‘an oversight’. I do not accept this as a credible response, in the context of the pleadings, discovery, interrogatories, counsel’s opening and the evidence given about the article throughout the trial. Just as he did before the Stewards show cause hearing, the plaintiff withheld the article for forensic advantage. So much was clear, in the context I have just described, from its production in cross-examination in response to an open question from the cross-examiner.
The defendants invited the inference that had the Scollay article been disclosed at the earliest reasonable time, the defendants would have known that there was in fact a basis upon which the plaintiff made submissions at the show cause proceeding to the effect that there was no science to support the contention that cobalt is performance enhancing in horses; and their defence of justification (as well as their pleaded and subsequently withdrawn honest opinion defence) was seriously, if not irreparably, undermined.
The Stewards’ letter
The Stewards’ letter was brought to the defendants’ notice on the first day of trial, on 16 March 2017. The defendants submitted the Stewards’ letter was a critical document for the following reasons:
(a) the plaintiff considered the Stewards’ letter was critical to the show cause proceeding;
(b) the issues in dispute as evidenced in the pleadings indicate the Stewards’ letter would be critical;
(c) the plaintiff wanted the letter added to the court book on the morning of the hearing and heavily relied on it in examination-in-chief;
(d) the Stewards’ letter was heavily relied on by counsel for the plaintiff in closing address; and
(e) ‘in the absence of the Stewards' letter, the defendants had a stronger argument that the negligence imputation was protected by the justification, honest opinion or fair report defences’.
I accept this submission. I am satisfied that the letter was a critical document.
The defendants submitted that had the Stewards’ letter been disclosed at the earliest reasonable time, the defendants would have known before the mediation that the plaintiff made submissions at the show cause proceeding addressing the question of whether cobalt is performance enhancing in horses because of the parameters set by the Stewards in the Stewards’ letter; the third defendant was operating under a misapprehension when he wrote that the plaintiff missed the point by addressing performance-enhancement in horses because he was unaware of the Stewards’ letter; and their pleaded (and subsequently withdrawn) honest opinion and fair report defences were seriously, if not irreparably, undermined by the fact that the Stewards’ letter showed that the third defendant had misapprehended why the plaintiff was addressing the issue of performance enhancement in horses at the show cause proceeding.
Curiously, given its use at trial, the letter was not referred to in the pleadings, not discovered, not referred to in correspondence, and added to the court book for a reason. It was not opened in terms, but was soon addressed by the plaintiff in his evidence. It was a significant answer to the defences of fair report and honest opinion that were abandoned when the defendants opened their case.
Analysis
The defendants submitted, and I agree, that their failure to accept the plaintiff’s offer of compromise cannot be considered unreasonable in circumstances where the Scollay article and Stewards’ letter, which were ‘centrally relevant to the success of the plaintiff’s claim’ had not been disclosed. On the information available to them at the time the plaintiff’s offer was made, the defendants considered they had reason to consider they had a good prospect of successfully defending the proceeding. It was not unreasonable not to accept the offer in circumstances where they lacked information, known to and in the possession of the plaintiff, that would be critical to the assessment of their prospects of success at trial and accordingly the reasonableness of the plaintiff’s offer. Costs following that offer will not be awarded on an indemnity basis.
The defendants’ offer was made after the disclosure of the Scollay article and the Stewards’ letter. The terms of the offer are set out above. While the timing of the offer - it was made after disclosure of the two documents - may permit the inference that the disclosure was causative of some reassessment of the defendants’ position, the terms of the offer do not of themselves strongly suggest they were a direct response to the Scollay article or Stewards’ letter.
As the plaintiff contended, the statement offered by the defendants did not address the sting of the imputations alleged by the plaintiff despite the defendants present submissions that the Scollay article and Stewards’ letter gave the plaintiff’s conduct at the show cause hearing an entirely different complexion. Accordingly, substantially for the reasons given by the plaintiff outlined above at [9], in combination with the fact that at the time the offer was made the defendant was aware of the Scollay article and Stewards’ letter and the consequences of these matters for its defence, the defendant’s offer was not reasonable at the time it was made.
The consequence of this finding is that the defendants’ offer of 17 March 2017 was not a settlement offer within the definition of s 40(3) of the Act. I consider it was unreasonable for the defendants to fail to make a reasonable settlement offer once armed with the Scollay article and the Stewards’ letter. Consequently I am obligated to award the plaintiffs the costs of and incidental to this proceeding on an indemnity basis unless satisfied that the interests of justice require otherwise.
By reference to the plaintiff’s obligations under the Civil Procedure Act, I am satisfied that the interests of justice otherwise require in respect of the plaintiff’s costs incurred after he filed his affidavit of discovery.
The Civil Procedure Act
Section 26 of the Civil Procedure Act relevantly provides that:
26 Overarching obligation to disclose existence of documents
(1)Subject to subsection (3), a person to whom the overarching obligations apply must disclose to each party the existence of all documents that are, or have been, in that person's possession, custody or control—
(a) of which the person is aware; and
(b)which the person considers, or ought reasonably consider, are critical to the resolution of the dispute.
(2)Disclosure under subsection (1) must occur at—
(a)the earliest reasonable time after the person becomes aware of the existence of the document; or
(b) such other time as a court may direct.
I consider that, at the very least, the Scollay article was considered by the plaintiff to be critical to the resolution of the dispute. Section 26 of the Civil Procedure Act is not limited to an objective assessment of whether the Scollay article was in fact critical to the resolution of the dispute. If a person considers it to be so, that is sufficient. The plaintiff’s trial counsel did not appear to be aware of the document until the plaintiff placed reliance on it in cross-examination. Given the subsequent use of the document in the trial, I consider that from the time they became aware of it, counsel considered the Scollay article to be critical. It follows that it is probable that counsel would have led evidence from the plaintiff about the Scollay article had he been aware of its existence. So much is evident from the matters outlined above at paragraph [18], and from the comprehensive list of transcript references canvassed in the defendants’ submissions.[7] Alternatively, those references make out the defendant’s contention that the plaintiff ought reasonably to have considered the Scollay article to be critical to the resolution of the dispute.
[7]See T169.3-6; T169.11-13; T195.22-27; T121.12-14; T122.14-16; T147.23-27; T168.1-8; T173.17-30; T234.2-T236.6; T244.6-14; T235.30-236.4; T366.21-26; T370.1-3; T329; T381.
The plaintiff contended that the Scollay article was not a critical document as there was nothing in it that was not already raised by other material disclosed to the defendant.[8] I do not agree. The other material only went so far as to say that there was no evidence that cobalt had a performance enhancing effect on horses. The Scollay article alone went one step further stating there was evidence that cobalt had no performance enhancing effect on horses. The distinction is important. As the defendants’ counsel submitted, it is the difference between absence of evidence of a condition, and evidence of absence of the condition.
[8]Dr Kinobe ‘Pharmacological & Biochemical Effects of Cobalt in Horses: Known and Unknown Facts as of July 29, 2015’ (14 February 2017); H K Knych et al ‘Pharmacokinetics and selected pharmacodynamics of cobalt following a single intravenous administration to horses’ (2015); E N M Ho et al ‘Controlling the misuse of cobalt in horses’ (2014); A Mobasheri and C J Proudman ‘Cobalt chloride doping in racehorses: Concerns over a potentially lethal practice’ (2015).
That distinction was material in the context of the alleged imputations and the pleaded defences. The document was, as explained above, critical to the prospects of success of the defences of justification and honest opinion. The latter defence was withdrawn after disclosure of the article and the former defence was rejected by the jury after the plaintiff in final address relied, inter alia, on the Scollay article that he tendered into evidence in re-examination, presumably for precisely that purpose.
I am satisfied that because the Scollay article was withheld from the defendants prior to trial, the defendants were denied an opportunity to have altered their position in the proceeding. Although there has not been any close examination of the course of the mediation or of other settlement negotiations, it is reasonably open to me to infer, without that inquiry, that the lost opportunity was valuable because prudent and experienced legal advisers to a large media publisher are likely to reconsider the risk profile faced by the defendants whenever the evidence that may be led at trial is varied. This opportunity would have included making further or other offers to the plaintiff, particularly in the structured environment of court-ordered mediation, re-evaluating the defendants’ reliance on certain defences, or otherwise seeking to resolve the dispute.
It is not necessary for me to determine what would have happened. Being satisfied that there was an opportunity for the defendants to have altered their position in the proceeding had the Scollay article been brought to their attention at the earliest reasonable time, I find that the plaintiff breached his overarching obligation under s 26 of the Civil Procedure Act by his failure to disclose the Scollay article in his affidavit of discovery sworn on 1 June 2016. In the circumstances, that time was the proper occasion on which it would have been reasonable to have contemplated the issues in the proceeding and the documents that were material, including those that ought reasonably be considered critical to the resolution of the dispute. I propose to take this breach into account in the exercise of the costs discretion.
However, different circumstances affected the Stewards’ letter. It was a critical document for like reasons to those stated about the Scollay article. It was not discovered.[9] The defendants contended that the letter was important in their evaluation of their risk profile in the proceeding. Its particular importance was in supporting the plaintiff’s contention that his submissions to the show cause hearing were addressing the Stewards’ concerns and not expressions of his personal opinions. It should be recalled that the defendants’ publications did not attribute the plaintiff’s submissions to his clients as would ordinarily be understood about an advocate’s submissions.
[9]Although it was a letter sent by the defendants’ solicitors to the plaintiff’s solicitors and might be thought to fall within Schedule 1 Part 1 Item 2 of the plaintiff’s affidavit of documents, as I will later explain the letter was both written and received respectively by those solicitors when acting for others and was not specifically identified or, it would seem, produced for inspection.
The plaintiff gave no adequate explanation for his failure to discover this letter yet he clearly relied on it. There cannot be an adequate explanation for that failure because the letter was addressed to his solicitors in their capacity as solicitors instructing the plaintiff as counsel for the trainers. Not only did the plaintiff have effective possession, custody and control of the letter because it was in the possession, custody and control of his solicitors, he was, or ought to have been, advised by his solicitors about the discharge of his discovery obligations. As I have stated, I accept that it was a document that was critical in the resolution of the dispute, principally because it exposed a comment made by the third defendant in his article. Its importance to the resolution of the dispute should have been obvious to the plaintiff and to his solicitors.
Although the Stewards’ letter was drafted by the defendants’ solicitors in their possession in their capacity as solicitors for the Stewards, as the solicitors representing the defendant it was also in the defendants’ possession, custody or control. It is of no consequence to the court or to the defendants that it was in the possession of the solicitors in connection with a retainer by a client other than the defendants. If there were any consequences, such as an actual or potential conflict of interest, and I cannot make any finding in that regard, such consequences would be a matter for the defendants’ solicitors to resolve. It is not immediately apparent that the interests of the Stewards might have been compromised if the solicitors had made a copy of that letter available to the defendants.
The parties solicitors (on both sides) could have avoided the consequence that the letter only surfaced when it was produced during the plaintiff’s evidence. A legal practitioner representing a party is subject to the overarching obligations,[10] including s 26, and the overarching obligations prevail over any legal, contractual or other obligation,[11] subject to the limited extent of preservation of the duties or obligations of a legal practitioner to a client.[12] In these circumstances, each of the solicitors contributed to a want of knowledge of the letter on the part of the defendants and their counsel until the first day of the trial.
[10]Civil Procedure Act 2010, s 10(1)(b).
[11]Civil Procedure Act 2010, s 12.
[12]As to which, see Civil Procedure Act 2010, s 13. There was no basis to anticipate that any s 13 issues had arisen in connection with the letter.
I consider that the impact of the defendants’ failure to consider the letter prior to its revelation, at least to counsel and the defendants, during the trial in the context of alternative dispute resolution remains attributable to the plaintiff’s breach of his s 26 obligation by his failure to reveal the document in his affidavit of documents. I propose to take the plaintiff’s breach in this respect into account when exercising my discretion as to costs in the context of ss 28 and 29 of the Civil Procedure Act. What I said above, at [35]–[36], equally applies in respect of the letter.
Section 28 of the Civil Procedure Act permits the court to take into account the plaintiff’s breach of his overarching obligations with respect the two documents in exercising the costs discretion. Section 29 permits the court, if satisfied that, on the balance of probabilities, a person has contravened any overarching obligation, to order that the person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention if it considers such order to be appropriate in the interests of justice.
Conclusion
It is by no means certain that the defendants would have compromised the proceeding at mediation but for the plaintiff’s breach of s 26. At best it can be said that the opportunity for a more realistic assessment of their risk profile in the litigation was denied to them.
It cannot be said that the defendants would have offered to settle the plaintiff’s claim any earlier than the mediation and, on the basis that costs follow the event, the plaintiff is entitled to his costs up to the conclusion of the mediation. Further, the defendants cannot contend that, hypothetically, had the documents been discovered they would have made an offer to settle the proceeding on terms that the plaintiff could only have refused by acting unreasonably. The defendants’ offer of 17 March 2017, which I note was made late on a Friday night and only open to be accepted before 4:00pm on the following Sunday, was not a reasonable offer. In that regard I accept the plaintiff’s submission. However, the offer demonstrates that the course of the plaintiff’s evidence at trial caused a reassessment of the defendants’ prospects of success in the proceeding and prompted the defendants to make an offer. I can, and do, infer that the revelation of the critical documents contributed in some degree to that reassessment.
In the interests of justice, a discounted allowance should be made for the consequences of the plaintiff’s contravention of the overarching obligation under s 26. Having regard to the exigencies inherent in the circumstances and doing my best to assess the extent to which the contravention contributed to the loss to the defendants of the opportunity to settle the proceeding, I will order that the plaintiff is not entitled to tax his costs incurred after 1 June 2016, the date on which the critical documents should have been discovered, on an indemnity basis and I will discount the plaintiff’s costs incurred after the mediation, that is from 27 October 2016, by 25%.
Subject to any further submission as to the form of order that best reflects my reasons, the costs order will be that the defendants pay the plaintiff’s costs of and incidental to the proceeding, including reserved costs, to be taxed on an indemnity basis up to 1 June 2016 and thereafter on a standard basis, save that that plaintiff may only recover 75% of such costs as are incurred from 27 October 2016.
Interest
The plaintiff contended that he is entitled to interest from the date of commencement of the proceeding pursuant to s 60 of the Supreme Court Act 1986 at a rate of 3%, subject to good cause being show to the contrary. The plaintiff submitted that good cause had not been shown.
The defendants submitted that ‘injustice’ resulting from the plaintiff’s failure to disclose the existence of the Scollay document and the Stewards’ letter constituted ‘good cause’ for the purposes of s 60 of the Supreme Court Act 1986 for the court to refuse to award interest to the plaintiff. Alternatively, interest should only be awarded from the date of commencement of the proceeding until 26 October 2016.
For the reasons given in respect of costs, I award the plaintiff interest from the date of commencement of the proceeding to judgment at a rate of 3%, save that that plaintiff may only recover 75% of such interest for the period from 27 October 2016 to 29 June 2017.
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