Wilks v Qu (Ruling No 5)

[2024] VCC 1348

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

DEFAMATION LIST

Case No. CI-21-04887

ROBERT LEWIS WILKS	Plaintiff
v
DORI QU	Defendant

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JUDGE:	HER HONOUR JUDGE CLAYTON
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	5 September 2024
CASE MAY BE CITED AS:	Wilks v Qu (Ruling No 5)
MEDIUM NEUTRAL CITATION:	[2024] VCC 1348

RULING
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Subject:COSTS – DEFAMATION – SERIOUS HARM APPLICATION

Catchwords:              Where defendant initially successful in application for pre-trial hearing of serious harm element of tort – where hearing subsequently vacated  - whether costs should follow the event – where serious harm element not yet determined – whether costs in preparing for serious harm hearing wasted - interests of justice

Legislation Cited:      Defamation Act 2005; Civil Procedure Act 2010

Cases Cited:--

Ruling:  The costs of, and incidental to, the defendant’s application for the serious harm element to be determined prior to trial, are costs in the proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	T Sowden	ALT Legal Associates
For the Defendant	T Mullen & M Jager	Maddocks

HER HONOUR:

1This is a ruling on applications for costs brought by both parties.  The circumstances are unusual.

2The plaintiff issued his proceedings on 17 November 2021.  On 1 July 2021 amendments to the Defamation Act 2005 came into effect. Those amendments imposed on the plaintiff an obligation to prove that he had suffered serious harm to his reputation as an element of his cause of action.

3Those changes also require that, if a party applies for the serious harm element to be determined before trial, a judicial officer is to determine the issue as soon as practicable before trial unless satisfied that there are special circumstances justifying the postponement of the determination to a later stage of the proceeding, including at trial.

4On 7 February 2022 the defendant applied to have the serious harm element determined before trial.  The application was opposed by the plaintiff.  I heard the application on 8 March 2022 and on 12 May 2022 I determined that there were no special circumstances and that therefore the serious harm element would be determined prior to trial.

5On 27 May 2022 the plaintiff submitted that the costs of and incidental to the defendant’s application for the serious harm element should be reserved until the determination of the serious harm element.

6On 6 June 2022 the defendant filed submissions supporting a claim for costs of her application that the serious harm hearing be determined prior to trial. 

7No ruling was made on the costs of the serious harm application at that time.

8I listed the hearing of the serious harm element on 13 and 14 September 2022.

9Prior to 13 September 2022 the parties were required to file affidavits of evidence and advise the opposing parties of any objections to evidence. 

10On 9 September 2022 I heard objections to the affidavit evidence.  Those objections were many, and could not be dealt with in one day. The objections hearing continued on 12 September 2022.

11During the course of the objections hearing, I determined that the way the plaintiff now put his case on serious harm might require me to make a finding of fact in relation to the defendant’s allegations.  The prospect that a finding of fact might be required had not been identified during the application hearing by the parties or by me. 

12If such a finding of fact was required, the hearing of the serious harm element would not be the appropriate forum in which to make that finding.  Accordingly, and on my own motion, on 12 September 2022 I adjourned the hearing of the serious harm element to the trial of the proceeding.

13The defendant appealed my decision, which was upheld by the Court of Appeal on 25 August 2023.

14The matter then came back before me for timetabling orders which included orders by consent for the parties to file submissions on costs relating to the serious harm application, and for the costs of that application to be determined on the papers.

Plaintiff’s submissions

15The plaintiff says that costs should follow the event and he should get his costs of the application and the costs of the objections hearings on 9 September 2022 and 12 September 2022.

16He says the defendant was wholly unsuccessful in her application and there is no reason why the usual rule should not apply.

17He submits he was vindicated on appeal and was awarded his costs on the appeal, and there is ‘no reason why the defendant should not be required to pay the plaintiff’s costs of the application below’.

Defendant’s submissions

18The defendant says she was successful in her application to have the serious harm element determined prior to trial.  This outcome was a discrete event and she is entitled to her costs of that application.

19The serious harm hearing was vacated on the Court’s own motion, but that does not change the original ‘event’ in which the plaintiff was successful.

20The plaintiff did not successfully oppose the relief sought in the defendant’s summons, but rather amended his statement of claim twice in response to the summons.

21He thereafter adopted a new and different formulation of his argument on the serious harm element, which had not been pleaded and which resulted in the adjournment of the serious harm hearing.

22The plaintiff’s case as pleaded on serious harm, which existed at the time of the summons and until he filed his third amended statement of claim on 1 November 2023, demonstrates that the defendant was justified in bringing her summons for pre-trial determination of the serious harm question.

23The plaintiff was not vindicated on appeal as there has been no finding in relation to serious harm.

24Further, whether the plaintiff is able to establish serious harm is hotly contested and may yet resolve in favour of either party.

25Most of the preparatory steps undertaken by the parties in preparation of the serious harm hearing will not be wasted.

26It would be unjust for the defendant to have to bear the costs consequences of the plaintiff’s change of case.  The court should reserve those costs, make no order as to costs or order that costs be in the cause.  Alternatively if the court considers that substantial costs have been wasted by reason of the court’s decision to adjourn the serious harm hearing, it should order that the plaintiff pay 50% of the defendant’s costs of and incidental to the aborted serious harm hearing on the basis they are costs thrown away by reason of the plaintiff’s various amendments to his statement of claim.

Ruling

27I will deal first with the costs of 9 September and 12 September 2022 and the costs incurred by the parties in preparing for the serious harm hearing.

28The hearing was aborted on my own motion because of concerns that I had in relation to the way the plaintiff put his case in the objection hearings prior to the serious harm hearing.

29This was not the way that the plaintiff had previously argued his case, and essentially amounted to a claim that, because the defendant was lying about her allegations, a natural and probable consequence of her lies was that the plaintiff would have to take all steps available to him to defend and protect his reputation, including issuing proceedings.

30As a result, the consequences of the media exposure were a natural and probable consequence of the defendant’s own conduct by making false allegations about the defendant.  On the plaintiff’s case the serious harm caused by the media exposure was a direct result of the falsity of the allegations.

31The defendant had never denied that the plaintiff had suffered serious harm to his reputation. However, she  disputed that it was her allegations that had caused the harm, as opposed to the plaintiff’s own conduct, and in particular his conduct in issuing proceedings against the defendant which prompted media coverage of the matter.  The defendant maintained that the plaintiff must establish all elements of the tort, including serious harm, prior to having an entitlement to bring proceedings.  Therefore the consequences of the media exposure cannot be relied upon to establish serious harm.

32I make no finding about whether or not the plaintiff is entitled to rely on the harm caused by the media exposure as forming an element of serious harm, or whether that exposure goes only to damages.  However the prospect that it might, and that the necessity for the plaintiff to take legal action depended in any way on the truth or falsity of the allegations, raised a sufficient concern that I determined that “special circumstances” existed such that a pre-trial determination of serious harm was not appropriate.

33At the time of making my finding I noted that the situation had arisen through no fault of the parties. To my knowledge, my ruling on 12 May 2022 was the first time that the provisions of s10A of the Defamation Act 2005 had been considered in Australia and, at that time, there had been no determination of what constituted serious harm pursuant to the legislation. There had also been no judicial consideration of what comprised “special circumstances” pursuant to s10A.

34The work done by the parties in preparing for the serious harm hearing has not all been wasted.  It has no doubt focused both parties’ minds on their respective cases, and I note that each side has subsequently amended their pleadings.

35The affidavit evidence may still be relied on and relevant to trial. The outcome of the serious harm element is unknown.  Ultimately, the work done in preparation for the serious harm element hearing is likely to have largely been necessary regardless of whether the element was determined prior to, or at, the trial.

36Inevitably there will be some wasted costs but the portion of those costs wasted is currently unknowable.  Revisiting the question of those costs at the end of trial in order to finely parse what of the affidavit material and objection hearing was ultimately relevant to the trial so as to then apportion costs according to the outcome of the proceeding, or the outcome of the serious harm element (noting that the two will not necessarily be the same), would cause each party to incur additional costs and involve more time for parties and the court.   It is not in the interests of justice. My overarching obligation pursuant to the Civil Procedure Act 2010 is to ensure the just, timely, cost effective and efficient disposition of the real issues in dispute.

37In those circumstances I consider the appropriate order for the costs of and incidental to 9 and 12 September is an order that costs are in the proceeding.

38Turning now to the question of the costs of the application for the serious harm element to be heard and determined prior to trial. 

39On first principles, costs follow the event.  This could, on one view of the facts, mean that the defendant is entitled to her costs of a successful application.  However because of the unusual circumstances of this case, I am not convinced that is the appropriate or fair order.

40On another view of the facts, the plaintiff was successful in ultimately having the serious harm element determined at trial.  However I am not convinced that the plaintiff is entitled to his costs of the application.

41The defendant argues that the plaintiff twice amended his pleading of serious harm, and was only successful in having the serious harm hearing vacated when a new and different argument was raised on 12 September 2022.

42Although I accept that the argument upon which I vacated the pre-trial hearing had not been made earlier, in the context of an application on new provisions, where there was no Australian authority on what might or might not constitute serious harm, and where ultimately it was on my own motion that the hearing was vacated, it seems unduly harsh to punish the plaintiff by awarding costs against him.

43Similarly I am not persuaded that, because the plaintiff was ultimately successful in opposing the pre-trial determination of the serious harm element,  a fair result is to award costs against the defendant, given that she was successful on her application at first instance, and may not have pursued that application if the arguments which ultimately persuaded me to vacate the serious harm hearing had been raised at first instance.

44The parties do not dispute that the ordinary rule is that costs follow the event.  Their dispute is what constitutes “the event” in the circumstances of this case.

45The ordinary rule, however, is subject to the Court’s wide discretion as to costs pursuant to Order 63A of the County Court Civil Procedure Rules 2018.

46The discretion is to be exercised, in each case, according to the circumstances, judicially, and to achieve what is fair and just between the parties.

47It was reasonable for the defendant to apply for a determination of the serious harm element prior to trial on the face of the pleading at that time.  It was reasonable for the plaintiff to oppose that application and to subsequently submit that the costs of that application ought to be reserved until the outcome of the application, albeit that the plaintiff has now amended his position on those costs.

48Whether serious harm can be established will not be known until the trial of the proceeding.  If the defendant is successful in establishing that serious harm is not made out, the plaintiff will lose his case.  If the plaintiff is successful in establishing serious harm, the defendant still has a pathway to success in the trial.    

49Revisiting this costs application at the end of trial is not in the interests of justice as it will incur further cost and delay for all parties and further demands on the resources of the court. 

50In the unique circumstances of this case the appropriate order is that costs of the application, including the hearing on 8 March 2022, are costs in the proceeding.

51Accordingly I will order that the costs of and incidental to the application for the serious harm element to be determined prior to trial, including the costs of the hearing of that application on 8 March 2022 and the objections hearings on 9 and 12 September, and the costs of submissions on the question of costs, are costs in the proceeding.