Stokes v Ragless

The appeal concerned a defamation proceeding brought by the appellant, Stokes, against the respondent, Ragless. The dispute arose from publications made by the respondent concerning the appellant, following a disagreement over the management of a local field and game association. After a trial, the primary Judge found in favour of the appellant, awarding substantial damages and an injunction. The appeal to the Full Court of the Supreme Court of South Australia primarily concerned the primary Judge's decision on costs.

The legal issues before the Full Court were whether the appellant was denied procedural fairness and whether the primary Judge erred in finding an obligation on a represented party to inform an unrepresented party of the implications of failing to accept a settlement offer. Specifically, the appellant sought indemnity costs under section 38(2)(a) of the Defamation Act, which generally mandates indemnity costs for successful plaintiffs unless the interests of justice dictate otherwise. The primary Judge had refused this application, awarding only party/party costs.

The Full Court held that the primary Judge had erred in law by introducing a requirement not present in the rules or legislation. The Court found that the primary Judge's reasoning, which focused on the appellant's failure to explain the implications of settlement offers to the unrepresented respondent, amounted to a denial of procedural fairness. The Court stated that there is no rule obliging a represented party to advise an unrepresented party on the consequences of settlement offers, and that the primary Judge had applied a wrong principle in refusing indemnity costs on this basis. The Court also noted that the issue of the respondent's knowledge of settlement offer implications was not raised by the primary Judge during submissions, nor was it a matter on which the parties were invited to make further submissions.

The Full Court allowed the appeal, set aside the primary Judge's order for costs, and remitted the question of costs to the primary Judge for redetermination according to law. The Court indicated that the primary Judge should consider whether the interests of justice otherwise required that costs not be awarded on an indemnity basis, without reference to the now-rejected principle concerning the explanation of settlement offers.