Slater v Ecosol Pty Ltd (No 2)

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SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

SLATER v ECOSOL PTY LTD (NO 2)

[2024] SASC 29

Judgment of the Honourable Justice Blue  

DEFAMATION - ACTIONS FOR DEFAMATION - COSTS

DEFAMATION - ACTIONS FOR DEFAMATION - COSTS - INDEMNITY COSTS

DEFAMATION - ACTIONS FOR DEFAMATION - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF ACTION

Applications for costs.

A defamation action by the applicant Mathew Slater against Ecosol Pty Ltd and a cross action by Jeffery Smith against Mr Slater were dismissed: Slater v Ecosol Pty Ltd [2023] SASC 99.

Ecosol Pty Ltd and Mr Smith seek an order that Mr Slater pay their costs of Mr Slater’s action on an indemnity basis from the date of Calderbank offers made by them on the ground that Mr Slater unreasonably rejected the offers.

Mr Slater seeks an order that Mr Smith pay his costs of Mr Smith’s action on an indemnity basis on the ground that the action was an abuse of process. Alternatively he seeks an order that Mr Smith pay his costs of the action on an indemnity basis from the date of Calderbank offers made by him on the ground that Mr Smith unreasonably rejected the offers. In the alternative he seeks an order that Mr Smith pay his costs of the action on the ordinary basis when the action was in the District Court of New South Wales and on the standard basis, that is in accordance with the scale applicable in the Magistrates Court, since the action has been in the Supreme Court.

Held:

1       Discussion of costs principles when Calderbank offer not accepted (at [93]-[117]).

2It was not unreasonable for Mr Slater not to accept the 7 July 2021 offer and the discretion to order indemnity costs should not be exercised (at [136]).

3It was not unreasonable for Mr Slater not to accept the 17 August 2021 offer and the discretion to order indemnity costs should not be exercised (at [200]-[201], [204]).

4It was not unreasonable for Mr Slater not to accept the 22 July 2021 offer and the discretion to order indemnity costs should not be exercised (at [206]).

5It was not unreasonable for Mr Slater not to accept the 23 March 2022 offer and the discretion to order indemnity costs should not be exercised (at [213]).

6A single costs order should be made in favour of Ecosol Pty Ltd and Mr Smith that Mr Slater pay the costs of Mr Slater’s action on the Magistrates Court costs scale (at [234], [245]).

7Those costs should not be reduced due to the concurrent hearing of Mr Smith’s action or mixed success on trial or interlocutory issues (at [227]).

8It should be ordered that Mr Slater pay the costs of his action of Ecosol Pty Ltd and Mr Smith in accordance with the Magistrates Court costs (at [245]).

9It was not unreasonable for Mr Smith not to accept the 9 April 2020 offer and the discretion to order indemnity costs should not…

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Details
Case
[2024] SASC 29
Decision Date

CaseChat Overview and Summary

The case of Slater v Ecosol Pty Ltd (No 2) involves a legal dispute between Mr Slater and Mr Smith over defamation claims. Mr Slater initiated a defamation action against Ecosol and Mr Smith, which was initially filed in the Magistrates Court of South Australia. In parallel, Mr Smith filed a separate defamation action against Mr Slater in the District Court of New South Wales. Both parties were self-represented initially but later engaged legal counsel. Mr Slater sought indemnity costs for the Smith action from Mr Smith, arguing that the action was an abuse of process or that Mr Smith unreasonably rejected his settlement offers. The legal issues centred on whether Mr Smith should pay Mr Slater's costs on an indemnity basis, either due to the Smith action being an abuse of process or because of the unreasonable rejection of Slater's Calderbank offers.

The court examined the nature of the Smith action and Mr Smith's costs incurred, finding that Mr Smith had already incurred costs significantly exceeding the amount offered by Mr Slater. Given Mr Smith's substantial costs, the court determined that it was not unreasonable for him to reject Mr Slater's offer. The court also considered the Calderbank offers made by Mr Slater, but found that Mr Smith's rejection was not unreasonable considering the costs already incurred. Regarding indemnity costs, the court concluded that the Smith action was not an abuse of process and that Mr Smith's rejection of the offers was not unreasonable. Consequently, the court ruled against Mr Slater's request for indemnity costs.

The court ordered that Mr Slater pay the joint costs of Ecosol and Mr Smith for the Slater action in accordance with the Magistrates Court costs scale. The court also rejected Mr Slater's claims for indemnity costs in the Smith action, finding that Mr Smith's rejection of Mr Slater's offers was not unreasonable. The final orders included the direction that Mr Slater pay the costs of the Slater action to Ecosol and Mr Smith in accordance with the Magistrates Court costs scale. The court did not find merit in Mr Slater's request for indemnity costs for the Smith action.

Orders

Orders of the court

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Background

Background to the litigation

Mr Slater seeks an order that Mr Smith pay his costs of the Smith action on an indemnity basis on the ground that the Smith action was an abuse of process. Alternatively he seeks an order that Mr Smith pay his costs of the Smith action on an indemnity basis from the date of Calderbank offers made by him on the ground that Mr Smith unreasonably rejected the offers. He relies on rule 42.15 of the Uniform Civil Procedure Rules 2005 (NSW), in the alternative on common law principles and in the alternative on section 38 of the Defamation Act 2005 (SA) and/or section 40 of the Defamation Act 2005 (NSW). In the alternative Mr Slater seeks an order that Mr Smith pay his costs of the Smith action on the ordinary basis when the action was in the District Court of New South Wales and on the standard basis, that is in accordance with the scale applicable in the Magistrates Court, since the action has been in the Supreme Court.Background On 23 October 2019 Mr Smith instituted the Smith action in the District Court of New South Wales against Mr Slater for defamation claiming damages of $40,000. Mr Smith was initially self-represented. Mr Slater was also initially self-represented. On 11 November 2019 Mr Slater instituted the Slater action in the Magistrates Court of South Australia against Ecosol and Mr Smith for defamation claiming damages of $45,000. Mr Slater was at all times self-represented in that action. The Slater action was governed initially by the Magistrates Court (Civil) Rules 2013 (SA) (the Magistrates Court Rules). On 25 November 2019 Ecosol and Mr Smith, who were self-represented, filed a defence in the Slater action. In January 2020 Mr Slater engaged Gretsas & Associates to perform legal work in the background in respect of the Slater action and the Smith action. Gretsas & Associates never acted as solicitors on the record for Mr Slater in the Slater action but later (in July and August 2020) acted as solicitors on the record for Mr Slater in the Smith action. On 7 January 2020 the first directions hearing was conducted in the Slater action in the Magistrates Court. In February 2020 Mr Smith engaged FM Legal as solicitors to represent him in the Smith action. They briefed Roger Rasmussen as counsel and filed a notice of appointment of solicitor. On 16 March 2020 Gretsas & Associates issued their first invoice to Mr Slater for legal work in relation to the Slater and Smith actions. They subsequently issued invoices dated 2 April 2020, 3 June 2020, 6 August 2020, 7 December 2020, 8 February 2021, 8 April 2021 and 29 September 2021. On 8 April 2020 Ecosol (by its chairman Mr Smith) sent a Calderbank letter to Mr Slater offering to settle the Slater action on the basis that it be discontinued by Mr Slater with Mr Slater paying $2,000 towards Ecosol’s costs. It, and subsequent settlement offers made by the parties in 2020, did not contain a confidentiality term.[3][3] As appears below, offers made in 2021 and 2022 by the solicitors for Ecosol and Mr Smith in the Slater action included terms providing for discontinuance of the Smith action and confidentiality.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Mr Smith also contends that a separate costs order should be made in the Slater action that Mr Slater pay his costs of action up to the date of discontinuance and that Mr Slater pay Ecosol’s costs of action up to the date of judgment. It is not clear whether, if costs are to be ordered on the Magistrates Court costs scale, Mr Smith contends that the full amount under the costs scale should be payable by Mr Slater to each of Mr Smith and Ecosol or whether say 50 per cent of the amount under the costs scale should be payable to each of them. However, as they were jointly represented, the issues as between them and Mr Slater were identical and they incurred costs jointly, it is not appropriate to make separate costs orders. There should be a single order that Mr Slater pay the joint costs of the Slater action of Ecosol and Mr Smith.Conclusion An order should be made that Mr Slater pay the costs of the Slater action of Ecosol and Mr Smith in accordance with the Magistrates Court costs scale.Smith actionIndemnity costs claim The starting point is that ordinarily costs follow the event and are assessed in accordance with the relevant court’s costs scale. The starting point therefore is that Mr Smith pay Mr Slater’s costs of the Smith action while it was in the District Court of New South Wales on the ordinary basis and while it was in the Magistrates Court on the Magistrates Court costs scale. Mr Slater relies alternatively on the first to third Slater offers as justifying an indemnity costs order against Mr Smith.First Slater offer The first Slater offer was made on 9 April 2020. Its terms were:·payment of $1,500 to Mr Smith towards his costs of the Smith action; and·withdrawal by Mr Smith of the Smith action. Mr Slater contends that acceptance of the offer would have produced a better result for Mr Smith than the judgment by way of dismissal of his claim following trial. Mr Slater contends that it was unreasonable for Mr Smith not to accept the offer. In turn, Mr Smith contends that he had already incurred costs in the Smith action well exceeding $1,500 and this entailed that it was not unreasonable for him to reject the offer. Dealing first with Mr Smith’s contention, Mr Smith ultimately gave oral evidence that, as at 9 April 2020, he had incurred the following costs totalling $5,801 in the Smith action:·District Court invoice for filing fee $693·Process Servers invoice for service fee $142 ·FM Legal invoice 356 16.4.20 (fees to 27.3.20) $2,216·R Rasmussen invoice 18.2.20 $2,250·R Rasmussen invoice 26.3.20 $500 Mr Smith had earlier in his affidavit affirmed on 1 September 2023 exhibited these invoices together with the narrative of an FM Legal invoice for $2,739. In his email dated 27 November 2023, he had attached the front page of FM Legal invoice 354 dated 15 April 2020 for $2,739, which is consistent with the narrative exhibited to his affidavit. In the table contained in that email, he included FM Legal invoice 354 but not invoice 356.

Ratio Decidendi

Legal Principle Established

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