Collier v Country Women’s Association of NSW (No 2)

On 17 November 2017 I made orders and published reasons in proceedings No 2016/122571 (the Defamation Proceedings) and proceedings No 2017/72463 (the Equity Proceedings) which were heard together: Collier v Country Women’s Association of NSW [2017] NSWSC 1573.

I reserved costs and directed that any application for costs be made in writing to my associate within 7 days and that any response be provided within a further 7 days. The Country Women’s Association of NSW (CWA, or the defendant) made a written application on 23 November 2017 for indemnity costs of the whole of the proceedings pursuant to s 40 of the Defamation Act 2005 (NSW). In the alternative, the CWA submitted that Marion Collier (the plaintiff) ought be ordered to pay the CWA’s costs on an indemnity basis by reason of the offers of compromise and Calderbank offers it had made to the plaintiff to resolve the proceedings. The plaintiff has not responded to the application within the time allowed, or, indeed, at all.

Section 40 of the Defamation Act provides:

Rule 42.15A of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) relevantly provides:

The evidence relied on in support of the CWA’s application is contained in the affidavit of its solicitor, Adrian Papaianni sworn 20 November 2017. He deposed to the making of the following offers, each of which was made on 23 October 2017.

In a letter expressed to be “without prejudice except as to costs” the CWA offered to settle the Defamation Proceedings on the basis that there would be a judgment for the defendant with no order as to costs. In the letter the CWA’s solicitor informed the plaintiff that the defendant had already incurred more than $45,000 in costs and expected to incur significantly more in preparation for the trial and at the trial. The author of the letter outlined what the defendant contended were weaknesses in the plaintiff’s case in the Defamation Proceedings. The offer was expressed to remain open until 5pm on 2 November 2017.

In an Offer of Compromise, the plaintiff offered to settle the Defamation Proceedings on the basis that there would be a judgment for the defendant with no order as to costs. The Offer of Compromise was expressed to be open for acceptance until 2 November 2017 and was said to be made in accordance with UCPR, r 20.26.

In a letter expressed to be “without prejudice except as to costs” the CWA offered to settle the Equity Proceedings on the basis that there would be a judgment for the defendant with no order as to costs. In the letter the CWA’s solicitor informed the plaintiff that the defendant had already incurred more than $40,000 in costs and expected to incur significantly more in preparation for the trial and at the trial. The author also outlined the reasons why the defendant contended that the plaintiff would be unsuccessful in the Equity Proceedings. The offer was expressed to remain open until 5pm on 2 November 2017.

In an Offer of Compromise, the plaintiff offered to settle the Equity proceedings on the basis that there would be a judgment for the defendant with no order as to costs. The Offer of Compromise was expressed to be open for acceptance until 2 November 2017 and was said to be made in accordance with UCPR, r 20.26.

The basis for the defendant’s application for indemnity costs of the whole Defamation Proceedings was expressed to be the plaintiff’s unreasonable failure to accept the defendant’s Calderbank offer or offer of compromise in those proceedings. The principal obstruction to a conclusion that the plaintiff’s failure to accept the defendant’s offers was unreasonable is, in my view, that the offers required, in effect, almost complete capitulation of the Defamation proceedings. The matters pointed out in the defendant’s Calderbank letter in the Defamation Proceedings said little more than was alleged in its defence. The letter enumerated the defences relied on: qualified privilege, justification and contextual truth, each of which was subsequently made out. However, the offer of compromise and Calderbank offer contained a sufficient element of compromise in that the defendant offered to forego the costs already incurred, which were substantial.

The matter complained of was obviously highly defamatory of the plaintiff. The only real matters in issue were whether the defences could be made out. That the matter complained of was published in a context which was covered by qualified privilege ought to have been plain at the time of publication. No proper basis for the allegation of malice (which would have defeated the defence of qualified privileged) was ever articulated, much less proved. However, these matters, while highly germane to the question whether the proceedings ought to have been commenced at all, do not determine the question whether the plaintiff’s failure to accept the offers (whether Calderbank or offer of compromise) was unreasonable within the meaning of s 40(2)(b) of the Defamation Act.

Although I am satisfied that the plaintiff’s failure to accept the defendant’s offers in the Defamation Proceedings was unreasonable within the meaning of s 40(2)(b) of the Defamation Act I consider that the interests of justice require that she not be liable to pay the defendant’s costs on an indemnity basis from the commencement of the proceedings. It was only when the offers were actually made that the plaintiff was on specific notice that costs on an indemnity basis would be sought by the defendant (although the risk was present by reason of s 40 of the Defamation Act).

The time frame allowed by the defendant in making the two offers in the Defamation Proceedings was sufficient. Indeed, the evidence revealed that the plaintiff rejected the offers by return email.

I consider the appropriate order in the Defamation Proceedings to be that the plaintiff pay the defendant’s costs on the ordinary basis to 23 October 2017 and on an indemnity basis thereafter. This order arises from UCPR, r 42.15A because the defendant has made an offer which has not been accepted by the plaintiff and the defendant obtains judgment on the claim which is not less favourable to it than the terms of the offer. I am not satisfied that it is appropriate to order otherwise.

Section 40 of the Defamation Act does not apply to the Equity Proceedings. The offer of compromise and Calderbank offer contained a sufficient element of compromise in that the defendant offered to forego the costs already incurred, which were substantial. The time frame allowed by the defendant in making the two offers in the Defamation Proceedings was sufficient. Indeed, the evidence revealed that the plaintiff rejected the offers by return email.

I consider the appropriate order in the Equity Proceedings to be that the plaintiff pay the defendant’s costs on the ordinary basis to 23 October 2017 and on an indemnity basis thereafter. This order arises from UCPR, r 42.15A because the defendant has made an offer which has not been accepted by the plaintiff and the defendant obtains judgment on the claim which is not less favourable to it than the terms of the offer. I am not satisfied that it is appropriate to order otherwise.

Although it is not necessary to make orders, having regard to the terms of UCPR r 42.15A, I consider that in the particular circumstances of the present case, it is appropriate to do so, in order that the parties are in no doubt as to the plaintiff’s obligation to pay the defendant’s costs and on what basis such costs are to be assessed.

For the foregoing reasons, I make the following orders.

In proceedings 2017/72463: