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Nicol v Douglas

Nicol v Douglas

Case [2024] NZHC 3846 16 December 2024

Defamation Act 1992

Declaration

Indemnity Costs

Reasonableness of Costs

Limited Success

Jurisdiction

Admissibility of Evidence

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-230

[2024] NZHC 3846

BETWEEN
ANDREW MICHAEL NICOL

Plaintiff

AND

CRAIG DOUGLAS

First Defendant

JIMMIE KEVIN McNICHOLL

Second Defendant

Hearing: On the papers

Appearances:

S D Campbell for Plaintiff

G E Slevin for First Defendant

Judgment:

16 December 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

(Costs)

This judgment was delivered by me on 16 December 2024 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

NICOL v DOUGLAS [2024] NZHC 3846 [16 December 2024]

[1] The plaintiff (Mr Nicol) sued the first defendant (Mr Douglas) and second defendant (Mr McNicholl) alleging they had defamed him and sought only declarations and indemnity costs.1 Mr Nicol and Mr Douglas settled and Mr Nicol was granted a declaration that Mr Douglas had defamed him in a text message Mr Douglas sent to Rowan Robinson, asserting Mr Nicol was a serial rapist being prosecuted in a high-profile trial then before the Christchurch District Court and was almost certain to be imprisoned. Mr Douglas also provided an apology to Mr Nicol in an agreed form.2 Costs of this proceeding as between Mr Nicol and Mr Douglas are to be determined under s 24 of the Defamation Act 1992 (the Act). Mr Nicol’s claim against Mr McNicholl was discontinued.

[2] This judgment deals with the issue of costs as between Mr Nicol and Mr Douglas. Mr Nicol applies for solicitor and client costs (which I will refer to as indemnity costs) against Mr Douglas, which he says amount to $202,387.40. Mr Douglas argues that costs should lie where they fall.

[3]Broadly speaking, the primary issues that arise are:

(a)what costs did Mr Nicol incur in the proceeding;

(b)whether there are grounds to depart from the starting position under s 24 that Mr Nicol is entitled to indemnity costs; and

(c)if so, what order should be made in respect to costs.

Background

[4] I set out the facts in a judgment of 21 February 2024 (reissued 8 April 2024) which the parties agreed are accurate and appropriate.3 These are substantially reproduced in what follows, with some additional context.

1      Defamation Act 1992, s 24.
2      Nicol v Douglas [2024] NZHC 763.
3      Nicol v Douglas [2024] NZHC 250.

[5] Mr Nicol is a property developer, and is the managing director and shareholder of the Opes Partners group of companies which are concerned with property investment.

[6] Mr Douglas is a businessman and company director with several businesses, including a building company. Mr Douglas and Mr McNicholl are acquaintances and have had business dealings.

[7] Mr Robinson is a property developer and investor known to both Mr Nicol and Mr Douglas.

[8] Opes Group publishes podcasts. On 2 October 2021 and 7 February 2023, the podcasts included material Mr Nicol considered defamatory of him. This provides the background against which Mr Nicol came to suspect that Mr Douglas was spreading rumours about him as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Nicol v Douglas

Details

AGLC: Nicol v Douglas [2024] NZHC 3846
Case: [2024] NZHC 3846
Decision Date: 16 December 2024

CaseChat Overview and Summary

In Nicol v Douglas, the plaintiff (Mr Nicol) sued the defendants (Mr Douglas and Mr McNicholl) for defamation. The case centred on a text message sent by Mr Douglas to Mr Robinson, which Mr Nicol claimed was defamatory. The parties settled, resulting in a declaration that Mr Douglas had defamed Mr Nicol. This judgment addresses the issue of costs between Mr Nicol and Mr Douglas. Mr Nicol applied for indemnity costs against Mr Douglas, which he claimed amounted to $202,387.40. Mr Douglas argued that costs should lie where they fall.

The primary issues were whether Mr Nicol incurred the claimed costs in the proceeding, if there were grounds to depart from the starting position under section 24 of the Defamation Act 1992 that Mr Nicol was entitled to indemnity costs, and if so, what order should be made in respect to costs. Section 24 provides that where a plaintiff seeks only a declaration and costs, and the court makes the declaration sought, the plaintiff is entitled to indemnity costs against the defendant unless the court orders otherwise. The Court may exercise a discretion not to award indemnity costs despite making a declaration in favour of the plaintiff, and the authorities make this clear. The interests of justice will not be served if plaintiffs are awarded indemnity costs that are wholly disproportionate to any damage that has been suffered to their reputation. Section 24 is not intended to provide a plaintiff with a blank cheque for payment of any costs incurred, nor is it intended to be used as a means to punish a defendant.

Mr Nicol was successful in obtaining a declaration that Mr Douglas defamed him, and under section 24 the starting point is that he is entitled to indemnity costs unless the Court orders otherwise. However, the Court did not accept Mr Nicol's submission that he had achieved wholesale success and his stated goal of achieving vindication had succeeded. The declaration related to one text message sent by Mr Douglas to Mr Robinson. There has been no acknowledgment or finding that Mr Douglas made defamatory statements to anyone other than Mr Robinson, or that he acted in concert with Mr McNicholl to defame Mr Nicol. It is significant that Mr Nicol did not put Mr Douglas on notice of his intention to bring his claim as would normally be expected. The failure to do so may have costs consequences.

The amount claimed as indemnity costs was to the Court's mind very high, notwithstanding the involvement of senior counsel. While it was argued the litigation raised an unsettled question of law, there was in fact Court of Appeal authority on the issue in Craig v Slater. A review of the lawyers' time records suggested the approach taken was that no stone would be left unturned in pursuit of this claim and there were attendances that were not necessary. For example, following Mander J's refusal to grant injunctions and search orders, there were attendances preparing an appeal from that decision, which ultimately was not pursued. The amounts billed to Mr Nicol for that work were not insubstantial. Another example was that at the summary judgment hearing, Mr Nicol was represented by senior counsel (with which the Court took no issue) but also by junior counsel. Mr Douglas should not bear the cost of junior counsel, given the nature of the application and its relative lack of complexity.

The Court considered it would be unjust to award Mr Nicol indemnity costs in those circumstances. However, the Court also did not accept Mr Douglas's submission that costs should lie where they fall. The allegations made by Mr Douglas were outrageous. Mr Nicol had been successful in obtaining the declaration and a formal apology. It was open to Mr Douglas to offer the declaration that has now been made earlier but he did not do so. The step he took to seek summary judgment was an unfortunate one, causing both parties to incur significant costs that could have been avoided. The Court preferred to adopt the approach of Lang J in Dooley v Smith and award a percentage of Mr Nicol's actual costs. The assessment of what is fair and reasonable in all the circumstances is not capable of calculation with mathematical precision. The Court's best assessment was that an award of one third (33.33 per cent) of Mr Nicol's actual costs, rounded to $59,500 (inclusive of GST and disbursements), was just and appropriate.

Mr Nicol was awarded costs in the proceeding against Mr Douglas in the sum of $59,500 inclusive of GST and disbursements.

Orders