Srecko & David Lorbek v Peter King (Costs Ruling)
[2022] VSC 269
•25 May 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2017 4600
| SRECKO FELIX LORBEK | First Plaintiff |
| and | |
| DAVID PETER LORBEK | Second Plaintiff |
| v | |
| PETER LAWRENCE KING | Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 25 May 2022 |
CASE MAY BE CITED AS: | Srecko & David Lorbek v Peter King (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 269 |
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COSTS – Defamation – Defence of statutory qualified privilege established – Genuine offer of settlement – Whether plaintiffs’ refusal of defendant’s settlement offer was unreasonable – Whether defendant’s conduct in litigation justifies a departure from the usual rule that costs follow the event – Defamation Act 2005 s 40.
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HIS HONOUR:
On 5 May 2022 the Court delivered judgment, upholding the defendant’s defence of statutory qualified privilege. The parties were directed to file written submissions on the costs of the proceeding.
The defendant submits that the plaintiffs should be ordered to pay his costs on an indemnity basis pursuant to s 40(2)(b) of the Defamation Act 2005. The defendant submits that the plaintiffs acted unreasonably in failing to accept a settlement offer dated 7 March 2019. I reject this submission.
I accept that the offer of settlement of 7 March 2019 was a genuine offer of settlement. However, it was not unreasonable for the plaintiffs not to have accepted the offer. Under the terms of the offer the defendant offered to settle the proceeding on the following basis:
(i) To remove all publications from the internet concerning the plaintiffs;
(ii) Mutual non-disparagement obligations;
(iii) The plaintiffs to pay the defendant within 30 days the sum of $60,000 as a contribution to his legal costs.
As regards the payment of $60,000, the letter of offer stated that as at 7 March 2019 the defendant had spent $70,000 on legal fees defending the action.
The defendant offered to remove all publications from the internet concerning the plaintiffs. As at 7 March 2019 the defendant had posted 13 publications regarding the plaintiffs. The plaintiffs’ claim for defamation was based on four of these publications. Although the defendant’s offer extended beyond the four publications the subject of the plaintiffs’ claim, acceptance of the offer required the plaintiffs to abandon their claim for damages and to pay nearly all of the defendant’s costs. When considered in the context of the plaintiffs’ pleaded claim, acceptance of the defendant’s offer required the plaintiffs to capitulate.
In Charan v Nationwide News Pty Ltd (Costs Ruling)[1] J Forrest J observed that it is unusual for a court to conclude that a party has acted unreasonably in rejecting an offer to capitulate. His Honour concluded that notwithstanding the fact that the settlement offer to Mr Charan was an offer to capitulate, ‘a reasonable person in Mr Charan’s position, armed with his own unique knowledge of the “dodgy” practices at CTI and the prospective duration of the trial (even if only estimated at 15 days) would have accepted the offer and finalised the litigation’.[2] I do not consider that this reasoning is apposite to the present proceeding.
[1][2018] VSC 89 at [45].
[2]Ibid at [49].
The defendant’s letter of offer correctly contended that the fraud and criminal imputations were not conveyed by the four publications on which the plaintiffs sued. However, the three remaining imputations which the Court has concluded were conveyed by the publications reflected very adversely on the plaintiffs. The defences of honest opinion and fair comment were not made out in respect of these imputations.
Further, some of the matters relied upon by the defendant in the offer were factually incorrect: ‘Lorbek knew the vehicle was never roadworthy from the detailed pre-purchase inspection (in this regard, we note that we also know that Srecko Lorbek was personally advised of the issues that existed by email dated 29 April 2016, which email was not discovered by him)’. The ‘pre-purchase inspection report’ is a reference to the report prepared by a Porsche Centre Brighton technician dated 22 June 2016. This report was never provided to the plaintiffs or Lorbek Luxury Cars. The email dated 29 April 2016 does not relate to the vehicle purchased by the defendant, but rather a different Porsche Panamera which was in the possession of Porsche Centre Brighton. Thus, in two significant respects, matters relied upon by the defendant in support of his contention that the plaintiffs should have accepted the offer, were factually incorrect.
Contrary to the contentions set out in the letter of offer, the defendant did not have a defence of fair comment/honest opinion in respect of the third to fifth imputations conveyed by the impugned publications. Further, the letter of offer makes no direct reference to the defence of statutory qualified privilege which was the sole basis for the defendant’s successful defence. To the extent that the letter of offer refers indirectly to the defence of statutory qualified privilege, the plaintiffs had reasonable grounds for believing that this defence would be defeated by the defendant’s malice. Although I have ultimately concluded that the impugned publications were not actuated by malice, when the plaintiffs received the letter of offer on 7 March 2019 it was arguable that they would be able to establish that the defendant’s publications were actuated by malice. I reject the defendant’s submission that the plaintiffs should be ordered to pay his costs on an indemnity basis.
The plaintiffs contend that the circumstances of the present proceeding warrant a departure from the usual rule that costs follow the event. In this regard, the plaintiffs point to three matters:
(iv) The unreasonable failure of the defendant to offer/accept reasonable offers;
(v) The time wasting manner in which the defendant conducted his case;
(vi) The fact that the defendant succeeded at trial on only one ground of defence.
I reject the plaintiffs’ contention that the defendant acted unreasonably in failing to offer or accept reasonable offers of settlement. The defendant has succeeded in establishing a defence of statutory qualified privilege. There is no proper basis for imposing a cost liability on the defendant for failing to take steps to settle proceedings which he has successfully defended.
I am not satisfied that the manner in which the defendant conducted his defence, personally and through his legal advisors, warrants a departure from the usual rule that costs should follow the event. The trial was heard over 11 days. Having regard to the number of witnesses called by the parties, the substantial size of the Court Book at in excess of 3,000 pages, and the complexity of the issues which fell for determination, the case was concluded within a reasonable time frame.
The plaintiffs contend that many aspects of the defendant’s evidence were misleading. As set out in the principal judgment, I have made adverse findings regarding the defendant’s credit as a witness. However, I have also made unfavourable findings as to the credit of the second plaintiff. On the critical issue of what matters were discussed between the defendant and the second plaintiff regarding the condition of the vehicle on 13 July 2016, I have accepted the defendant’s evidence and rejected the evidence of the second plaintiff.
The plaintiffs contend that the defendant’s conduct of the proceeding ‘entailed significant time wasting and was often essentially contemptuous of the Court and its processes. This conduct was seemingly excused with a number of costs reserved orders made on wasted interlocutory hearings on the now apparently disingenuous basis of the defendant being self-represented. The nature of the shadow representation is unclear with counsel for the defendant declaring himself to be in the background.’[3]
[3]Plaintiffs’ submissions on costs at [36] and [37].
I do not propose to individually address the numerous criticisms of the defendant’s conduct advanced by the plaintiffs. I accept that, making due allowance for the defendant as a self-represented litigant, aspects of the manner in which he conducted the trial were unsatisfactory. Equally, aspects of the conduct of the litigation on behalf of the plaintiffs prolonged the length of the trial. The plaintiffs maintained throughout the trial, including during final submissions, that the vehicle was roadworthy.[4] The plaintiffs did so in the face of a substantial body of evidence which supported a finding that the vehicle was unroadworthy by reason of the front wheel rotor being below the minimum prescribed width. Time taken up during the trial addressing the issue of the roadworthiness of the vehicle could have been saved if the plaintiffs had accepted the veracity of documentary evidence which established that the vehicle was unroadworthy. Further, the plaintiffs failed to lead any direct evidence from Google My Business regarding the number of individuals who had accessed the defendant’s Google reviews. The failure to lead this evidence occurred notwithstanding the plaintiffs’ own expert witness having pointed to the availability of such evidence.
[4]Plaintiffs’ closing written submissions at [192].
The plaintiffs submit that the defendant should be ordered to pay the costs of two orders where costs were reserved: 20 August 2018 and 21 December 2018. The orders made by Daly AsJ on 20 August 2018 required the defendant to pay ‘the plaintiffs’ costs of and incidental to the hearing today’, and, ‘the parties’ costs be otherwise reserved.’ As such, the plaintiffs had the benefit of a costs order in respect of the summons heard on 20 August 2018. The order made by Clayton JR on 21 December 2018 was made by consent on the papers, the parties having filed a signed minute of consent order on 13 December 2018. No costs were incurred on 21 December 2018 as no appearance was necessary. The plaintiffs have failed to point to any material which justifies an order that the defendant pay the costs which were reserved on 20 August 2018 and 21 December 2018.
I do not consider that any of the matters relied upon by the plaintiffs justify a departure from the usual rule that costs should follow the event. I shall order the plaintiffs to pay the defendant’s costs, including reserved costs, on a standard basis to be taxed in default of agreement.
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