Harrington v Shoard (No 2)[2023] QDC 14

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The substantive judgment and reasons were delivered yesterday. 
2. [2]
   The parties had been told that they were required to attend judgment delivery and were to be prepared to make oral submissions as to costs.  Following the pronouncement of the substantive orders but prior to hearing oral submissions, the court was adjourned to enable the parties to consider the reasons. 
3. [3]
   In making oral submissions, the plaintiff sought an order for his costs of the proceedings on an indemnity basis including the costs of any applications in the proceedings.  The defendant agreed to the making of an order for the defendant to pay the plaintiff’s costs of the proceedings on a standard basis but sought an order for the plaintiff to pay his costs of the defendant’s application to reopen.
4. [4]
   There were two applications in the proceedings; the plaintiff’s application to reopen heard on 4 March 2022 and the defendant’s application to reopen heard on 2 February 2023.
5. [5]
   The plaintiff and the defendant through their counsel agreed that the order made on the application to reopen heard on 4 March 2022 was an order for the costs of the application to be each party’s costs in the cause. I will formalise that order in these reasons.
6. [6]
   It is appropriate to deal with the costs of the defendant’s application to reopen first.  The defendant sought its costs of that application on the basis that the application to reopen was successful. 
7. [7]
   Despite the initial submission, counsel for the plaintiff conceded that he did not seek the payment of the costs of the defendant’s application to reopen as the plaintiff’s costs in the proceedings and submitted that the plaintiff should not be required to pay the defendant’s costs of the application as the defendant was not entirely successful.  The plaintiff submitted that the court declined to make the order requiring the recall of the plaintiff and his wife to allow further cross-examination of them.
8. [8]
   I do not consider that this is a sufficient justification for not awarding the defendant his costs of the second application to reopen. The issue of the sale of the plaintiff’s house was raised during the course of the trial and if the plaintiff and his wife had answered truthfully the questions raised during the trial, the application would not have been necessary.  Once the issue was raised by the defendant in December 2022, the need for the application could have been avoided at that time if the plaintiff had agreed to the admission of the certificate of title into evidence.  The attitude of the plaintiff necessitated the application and it is appropriate that the plaintiff pay the defendant’s costs of that application.
9. [9]
   As to the costs of the proceedings, the issue is whether it is appropriate to make an order for indemnity costs; it being accepted by the defendant that he must pay the plaintiff’s costs of the proceedings. 
10. [10]
    Evidence was tendered as to the making of offers between the plaintiff and the defendant. 
11. [11]
    By letter dated 6 May 2021, the solicitor for Mr Harrington sent to Mr Shoard a Concerns Notice.  The notice, in significant detail, identified the four defamatory statements, each of which became the subject of the proceedings.  It referred to a decision of the District Court of Queensland to indicate the possible quantum of an award of damages.  It asked Mr Shoard to make an Offer to Make Amends within 28 days and indicated if an acceptable offer was not made then a claim will be filed without delay. 
12. [12]
    On the same date, Mr Harrington’s solicitor also sent a letter which was headed “Without Prejudice - Offer to Settle”.  The letter did not contain the terms of the offer but attached an Offer to Make Amends, which it was stated would be acceptable to Mr Harrington.
13. [13]
    The Offer to Make Amends required the defendant to:

1. make an unreserved apology for the comments made and acknowledge there was no basis including that the supposed victim and her parents deny that the plaintiff ever did anything that was sexual or otherwise inappropriate towards her.
2. promise to refrain from publishing or encouraging others to publish any defamatory comments.
3. agree to pay and enclose a cheque for $10,000 as compensation for the defamatory comments.
4. agree to pay and enclose a cheque for $2,600 for legal costs.

14. [14]
    The solicitor for Mr Shoard responded to the Concerns Notice and attached offer by letter dated 25 May 2021.  The solicitor said he had received instructions to act for Mr Shoard and was instructed to reject the offer.  The solicitor said he was instructed to invite Mr Harrington to issue proceedings and had instructions to defend the proceedings and institute a counterclaim. 
15. [15]
    Reference was made to correspondence sent to previous solicitors but I have not been provided with a copy of that correspondence.
16. [16]
    It appears there was no further discussion between the parties or their solicitors at that time.  The proceedings were instituted by the plaintiff on 21 July 2021.  By December 2021, the matter had been set down for a two-day trial commencing on 22 February 2022.^[1]
17. [17]
    On 11 February 2022, the defendant made an offer to settle in accordance with Ch 9 Pt 5 of the Uniform Civil Procedure Rules 1999 Qld (UCPR) in the following terms:

1. The defendant undertakes to the court to refrain from publishing statements to the effect that the plaintiff is, or ever has been, a paedophile.
2. The defendant pay to the plaintiff the sum of $10,000 for defamation, such payment to be made within 28 days in acceptance of this offer.
3. The defendant pay the plaintiff’s costs of the proceeding in the Magistrates Court party and to party scale.

18. [18]
    The offer was stated to be open for acceptance for a period of 14 days from the date of service. 
19. [19]
    A response was sent by email from the plaintiff’s solicitor to the defendant’s solicitor on 16 February 2022.  That response simply referred to the offer and stated, “We are instructed to reject that offer.”
20. [20]
    It would appear that no further attempts were made to discuss settlement.
21. [21]
    In making submissions on behalf of the plaintiff for the payment of indemnity costs, counsel for the plaintiff relied on s 40 of the Defamation Act 2005 (Qld) and/or r 360 of the UCPR.
22. [22]
    The Concerns Notice and the attached offer makes no reference to the UCPR.  As required by r 353 of the UCPR, it is not stated as an offer made under this part.  Nor could it have been because at the time the offer was made, there were no proceedings on foot.  Accordingly, the plaintiff did not make an offer under the rules and r 360 does not apply. 
23. [23]
    The Concerns Notice and the attached offer, however, is drawn in the style of a Calderbank offer, though no reference is made to that decision.^[2]  In Wiggins Island Coal Export Terminal Pty Limited v Civil Mining and Construction Pty Ltd,^[3] the Court of Appeal considered whether, and if so when, an offer to settle that does not comply with the requirements of Ch 9 Pt 5 can be considered in the exercise of the court’s general costs discretion as a Calderbank offer.  The court held that the question is whether “there is some reasonable basis regarding the offer as intended to have an effect independent of its operation under the rules.”^[4]
24. [24]
    Having regard to the terms of the Concerns Notice and the attached offer, whilst the offer does not refer to Calderbank, I am prepared to treat it as relevant to the exercise of the court’s general costs discretion.
25. [25]
    In making submissions, reliance was also placed on s 40 of the Defamation Act.
26. [26]
    Section 40 of the Defamation Act provides:

“40 Costs in defamation proceedings

1.  In awarding costs in defamation proceedings, the court may have regard to—

1.  the way in which the parties to the proceedings conducted their cases (including any misuse of a party’s superior financial position to hinder the early resolution of the proceedings); and

2.  any other matters that the court considers relevant.

2.  Without limiting subsection (1), a court must (unless the interests of justice require otherwise)—

1.  if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff; or

2.  if defamation proceedings are unsuccessfully brought by a plaintiff and costs in the proceedings are to be awarded to the defendant—order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the plaintiff unreasonably failed to accept a settlement offer made by the defendant.

3.  In this section—

settlement offer means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made.”

27. [27]
    If s 40(2)(a) or (b) is engaged, then unless the interests of justice require otherwise, a court must order costs of and incidental to a proceeding be assessed on an indemnity basis.
28. [28]
    Here, the defendant made a settlement offer, albeit that counsel for the plaintiff says that the offer was “too little, too late”.  For the purposes of s 40, however, the defendant’s offer was nevertheless an offer.
29. [29]
    The plaintiff further submits that the defendant failed to agree to a settlement offer proposed by the plaintiff; relying on the offer made attached to the Concerns Notice. I agree that the offer attached to the Concerns Notice was a settlement offer for the purposes of s 40.
30. [30]
    The issue is the reasonableness of the conduct of the defendant in not agreeing to the offer proposed by the plaintiff at the time that it was made.
31. [31]
    It is unfortunate that there was no discussion between the parties at the time of that offer and that the defendant did not make an offer until 10 days prior to the commencement of the trial. 
32. [32]
    However, it is also relevant that at the time that the defendant’s offer was made, the plaintiff simply rejected the offer.  The impression is that by that time, the plaintiff was determined to proceed with the litigation.
33. [33]
    Sadly, what then followed, was a prolonged piece of litigation involving 6 court days; being 3 days or part days of initial hearing, two applications to reopen and one further part day of evidence. The defence of triviality was proven in relation to three of the four defamatory statements and the remaining defamatory statement resulted in a relatively small award of damages as the statement had been made to only one person.
34. [34]
    Further, at the time the defendant made his offer he offered to give an undertaking to the court and to pay $10,000 by way of compensation; the same amount the plaintiff had sought by his offer. 
35. [35]
    The offer made by the defendant was for a higher amount with respect to costs than the offer made by the plaintiff as it made provision for the payment of costs on the Magistrates Court scale. Given that injunctive relief has been granted, ultimately the appropriate scale of costs is the District Court scale. 
36. [36]
    Nevertheless, at the time that the defendant’s offer was made, it is unfortunate that the plaintiff responded without making any attempt to discuss settlement further.  It was after the defendant’s offer was made that a significant proportion of the costs would have been incurred.
37. [37]
    In all of the circumstances, I do not consider that the conduct of the defendant in not accepting the plaintiff’s offer was so unreasonable as to entitle the plaintiff to indemnity costs under s 40 or in the general exercise of my discretion as to costs.  In any event, I consider that the interests of justice require the making of an order for costs to be paid on the standard basis.

Orders

38. [38]
    Accordingly, I make the following orders:

1. The costs of and incidental to the plaintiff’s application to reopen heard on 4 March 2022 be each party’s costs in the cause.

2. The plaintiff pay the defendant’s costs of and incidental to the defendant’s application to reopen heard on 2 February 2023, to be agreed, or in default of agreement, to be assessed on the standard basis.
3. The defendant pay the plaintiff’s costs of and incidental to the proceedings (excluding the costs of the defendant’s application to reopen heard on 2 February 2023) to be agreed, or in default of agreement, to be assessed on the standard basis.