Federal Court of Australia Murphy v Nationwide News Pty Ltd (No 2) [2021] FCA 432 File number: NSD 1246 of 2020 Judgment of: LEE J Date of judgment: 21 April 2021 Catchwords: COSTS – applicant successful in claim for defamation – whether there should be a departure from costs following the event – Calderbank offer – offer more than sum awarded – offer subject to a number of obligations visited upon offeree – no vindication of reputation – fact that applicant was only successful in relation to one imputation unimportant – proceeding is one for defamation in respect of the article published – the imputations are not the cause of action – costs follow the event HIGH COURT AND FEDERAL COURT – Calderbank v Calderbank is reported in the authorised reports produced by the Incorporated Council of Law Reporting for England and Wales and is reported as [1976] Fam 93 – the authorised citation should be used in preference to the commercial report citation ([1975] 3 All ER 333) used in submissions – reference to the convention that the authorised report of a judgment be cited and provided to a court in preference to other versions as reflected in the Lists of Authorities and Citations Practice Note (GPN-AUTH) Legislation: Defamation Act 2005 (NSW) ss 4, 8, 40 Federal Court of Australia Act 1976 (Cth) s 43 Judiciary Act 1903 (Cth) s 79 Federal Court Rules 2011 (Cth) Pt 25 Australian Guide to Legal Citation (Melbourne University Law Review and Melbourne Journal of International Law, 4th ed, 2018) Lists of Authorities and Citations Practice Note (GPN-AUTH) Supreme Court of New South Wales: Practice Note SC Gen 20 – Citation of Authority Supreme Court of Northern Territory: Practice Direction No 2 of 2007 – Citation of Authorities Supreme Court of Queensland: Practice Direction No 16 of 2013 – Citation of Authority Supreme Court of South Australia: Consolidated Practice Directions Supreme Court of Tasmania: Practice Direction No 3 of 2014 – Citation of Judgments Supreme Court of Victoria: Practice Note SC Gen 3 – Citation of Authorities and Legislation Supreme Court of Western Australia: Consolidated Practice Direction, PD 2.1 Cases cited: Calderbank v Calderbank [1976] Fam 93 Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 Hayson v Age Company Pty Ltd (No 3) [2020] FCA 1163 Murphy v Nationwide News Pty Ltd [2021] FCA 381 Oshlack v Richmond River Council (1998) 193 CLR 72 Division: General Division Registry: New South Wales National Practice Area: Other Federal Jurisdiction Number of paragraphs: 24 Date of hearing: 21 April 2021 Counsel for the Applicant: Ms S T Chrysanthou SC with Mr C Parkin Solicitor for the Applicant: Mark O'Brien Legal Counsel for the Respondents: Mr D R Sibtain with Ms C M Roberts Solicitor for the Respondents: Ashurst ORDERS NSD 1246 of 2020 BETWEEN: MR CHRISTOPHER MURPHY Applicant AND: NATIONWIDE NEWS PTY LTD ACN 008 438 828 First Respondent MS ANNETTE SHARP Second Respondent order made by: LEE J DATE OF ORDER: 21 APRIL 2021 THE COURT ORDERS THAT: 1. Judgment be entered for the applicant against the respondents in the sum of $111,726. 2. The respondents pay the applicant's costs of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from the Transcript) LEE J: 1 In Murphy v Nationwide News Pty Ltd [2021] FCA 381 (principal judgment or J) (at [114]) I noted that I would hear further submissions concerning the form of relief and would formally enter judgment reflecting my award today. These reasons assume a familiarity with that judgment and will adopt its abbreviations. 2 The parties have agreed that it is appropriate that judgment be entered for the applicant against the respondents in the sum of $111,726. Further, for reasons touched upon in the principal judgment (at [112]), Mr Murphy no longer presses an application for relief by way of an injunction. 3 Accordingly, the only outstanding issue relates to costs. 4 The competing positions are as follows: (1) Mr Murphy contends that an order should be made that costs follow the event and that an earlier order that had been made relating to the costs of the reference process, which was expressly subject to further order, form part of that award of costs. (2) News and Ms Sharp contend that an order should be made that they pay 80 per cent of Mr Murphy's costs up until 4pm on 14 March 2021, but that after that date, the applicant pay the respondents' costs. 5 Before coming to the reason why that date assumes some significance in relation to the costs application, I should shortly note that the relevant approach as to costs was explained by Gleeson CJ, Gummow, Hayne and Crennan JJ in Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 (at 62–3 [25]–[26]). This can be stated as being that although there is "no absolute rule", one of the "general propositions" regarding an award of costs is that "the award is discretionary but generally that discretion is exercised in favour of the successful party": see also Oshlack v Richmond River Council (1998) 193 CLR 72 (at 88 [40]–[41] per Gaudron and Gummow JJ). 6 The principles guiding the exercise of the discretion to make orders for costs do not require repetition. It is trite that the Court has a broad power to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth). One complication in defamation matters is whether or not the provisions of s 40 of the Defamation Act 2005 (NSW) (Act) apply. The applicability or otherwise of s 40 and whether, as Bromwich J found in Hayson v Age Company Pty Ltd (No 3) [2020] FCA 1163 (at [39]), this provision is "picked up" under s 79 of the Judiciary Act 1903 (Cth), need not be further discussed. For present purposes, I would simply note that although the question of whether this provision is "picked up" in federal jurisdiction is not without complication (and is an issue upon which minds may legitimately differ), with respect, following the careful and comprehensive reasons of Bromwich J, it is difficult to see how his Honour's conclusion that the provision is applicable in federal jurisdiction could be characterised as being plainly wrong. 7 In any event, the basis upon which News and Ms Sharp seek a departure from what might be described as the "expected" result that costs follow the event emerges from an affidavit filed by Ms Cheeseman, a solicitor acting for News and Ms Sharp. It deposes to the fact that on 8 March 2021, a "without prejudice except as to costs" letter was sent to the solicitors for Mr Murphy. In short, it provided for a settlement sum of $120,000 "exclusive of [Mr Murphy's] legal costs and disbursements" in relation to the proceeding. Separately, however, this was qualified by News agreeing to "pay [Mr Murphy's] reasonable legal costs and disbursements in relation to the proceeding on a party/party basis, as agreed or assessed". Hence, the amount to be paid was $120,000 plus costs, which I will refer to as the Offer. The Offer was open to be accepted until 5pm on 14 March 2021. 8 The Offer was the subject of some conditions which I will touch upon shortly, but it was said: In the event that the Offer is not accepted by the deadline and our clients successfully defend the whole or part of the proceedings, this letter will be produced to the Court on the question of costs of the proceedings. Our client will apply for costs on an indemnity basis from the date of the letter in accordance with the principles in Calderbank v Calderbank (1975) 3 All ER 333 and/or pursuant to section 40(2)(b) of the Defamation Act 2005 (NSW). Further, in the unlikely event that our client is not successful at trial, our clients will rely on this letter in relation to section 40(2)(a) of the Defamation Act. 9 Before going on, it is worth pausing to say something incidental about the correct citation of Calderbank v Calderbank. As the Australian Guide to Legal Citation (a collaboration between the Melbourne University Law Review and the Melbourne Journal of International Law) provides, all authorised reports should be cited where available. In particular, when it comes to Modern English Reports, the Law Reports published by the Incorporated Council of Law Reporting for England and Wales are the authorised reports of cases in the High Court of Justice (the Queen's Bench Division, the Chancery Division and the Family Division), the Court of Appeal, the Supreme Court and the Privy Council and should be used where available: see Rules 2.2.2 and 24.1.2. In the present case, this means the authorised report ([1976] Fam 93) should be used rather than a citation from a commercially produced report ([1975] 3 All ER 333). This is the approach required by the Lists of Authorities and Citations Practice Note (GPN-AUTH) at any final hearing when authorities are referred to in submissions in this Court: see [2.5]. 10 This is not mere pedantry. There are reasons why this convention arose which is now reflected in various practice notes in superior courts: see, for example, Supreme Court of New South Wales: Practice Note SC Gen 20 – Citation of Authority (at [3]); Supreme Court of Tasmania: Practice Direction No 3 of 2014 – Citation of Judgments (at [3(a)]); Supreme Court of Victoria: Practice Note SC Gen 3 – Citation of Authorities and Legislation (at [5.1]); Supreme Court of Queensland: Practice Direction No 16 of 2013 – Citation of Authority (at [3(a)]); Supreme Court of South Australia: Consolidated Practice Directions (at [5.6.4]); Supreme Court of Western Australia: Consolidated Practice Direction, PD 2.1 (at [14]); and Supreme Court of Northern Territory: Practice Direction No 2 of 2007 – Citation of Authorities (at [39]). 11 Those reasons are twofold: first, it is because authorised reports are readily available and more accessible than commercially produced reports; and secondly, and potentially more importantly, as a general proposition, an authorised report of a judgment has usually been reviewed by the judge or the judge's staff prior to the publication in an authorised report. Accordingly, the authorised report can be considered to be an accurate record of the judgment. 12 Be that as it may, returning to the matter at hand, the Offer was subject to the condition that the parties agree to enter into a deed of release in the terms set out in a deed attached to the letter (Deed). 13 Although the amount payable pursuant to the Deed would have been in excess of the amount pursuant to which judgment is being entered, that does not reveal the true story. Apart from the critical fact that the Offer, if accepted, would have meant that Mr Murphy would have been unable to obtain the vindication of a judgment, the Deed, if executed, would have involved Mr Murphy being subject (or arguably being subject) to a number of obligations which, given the events that happened, he is not subject. 14 By way of illustration, these include the following: (1) Mr Murphy would be required to acknowledge that News and Ms Sharp have not made any admission of liability; (2) although a correction on the Daily Telegraph website was part of the Offer, the "correction" did not provide an acknowledgment that previous defamatory publications had been made concerning Mr Murphy; (3) 50 per cent of the sum of $120,000 was to be deferred for 21 days after the delivery of certain documents and, more importantly, was conditional upon Mr Murphy complying with a provision of the Deed which required him not to: (a) disclose the terms of the Deed; (b) make any representations as to any of the terms of the Deed; (c) permit any other person to disclose the terms of the Deed or make any representations as to any of the terms of the Deed; or (d) make, or cause any other person to make, any disparaging comments about the article, the proceeding or any other parties in connexion with the article or the proceeding; (4) the release sought required Mr Murphy to release News and Ms Sharp against all existing and future claims, including any republication of the article or the internet article by any person other than the releasee parties (being News and their associated entities); (5) the release was couched in very broad terms, involving a release in respect of matters "in any way connected with the Proceedings and/or" the article; (6) an indemnity was sought to be procured whereby Mr Murphy would indemnify News and Ms Sharp from and against any claim made by any third party arising out of or in any way connected to the article; and (7) upon a breach of any provision of the Deed which was not rectified within seven days of notification, Mr Murphy would be required to pay, upon demand, the entire amount of the settlement sum of $120,000 in liquidated damages to News, which was said to be a "genuine pre-estimate of the loss that flows from a breach of [the] Deed". 15 It might be said in passing that this last provision is a curious one; no doubt there could be an argument as to whether a provision couched in such terms could survive scrutiny as being unenforceable as a penalty at common law but, in any event, the attempt was made to procure such a promise. 16 What matters for present purposes is that the scheme of the Deed and the accompanying letter makes it evident that central aspects of the bargain proposed by News and Ms Sharp were: (a) the notion of confidentiality concerning the terms of the settlement; and (b) the non-admission of liability. 17 All of this is to be contrasted with the position that may have arisen in circumstances if an offer of compromise pursuant to Pt 25 of the Federal Court Rules 2011 (Cth) (FCR) had of been made to settle the proceeding (couched in terms which, upon acceptance, allowed entry of judgment or disclosure of the settlement and its terms). Unlike a Calderbank offer, the point of the offer of compromise regime is to create a presumptive entitlement. Indeed, if $120,000 and Mr Murphy's costs up until the date of the offer had been offered which allowed for the entry of judgment (or even the disclosure of the payments made upon acceptance), then the exercise of my discretion would have taken place in radically different circumstances and would likely have resulted in an order that Mr Murphy pay the costs of News from 11am on the second business day after the offer was served: FCR 25.14. 18 As I explained (at J[109]), Mr Murphy is entitled to vindication of reputation which is a central aspect of the law of defamation. The Offer, if it was accepted, would not have given him the vindication to which he is entitled and, moreover, would have imposed other obligations upon him. Accordingly, I do not consider the making of the Offer is a compelling reason to depart from an order that News pay Mr Murphy's costs of the proceeding. Put another way (and in more familiar terms), it was not unreasonable for Mr Murphy to reject the Offer in all the circumstances and, by doing so, he later obtained what objectively is a better result (given the importance of vindication and "nailing" the falsity of Imputation D) and he is also not subject to ongoing contractual obligations. 19 A further argument was raised in support of the contention that the respondents' costs prior to the date of the Offer should be reduced by some amount. It was said that a discount should be applied because Mr Murphy failed to establish that four of the five imputations on which he sued were conveyed – imputations that were not pleaded as alternatives. These imputations included what I considered (at J[16]–[17]) to be "strained or forced interpretations" of the article and, at least in respect of one imputation, put the matter "far too highly". 20 Having said that, the imputation is not the cause of action. The proceeding is one for defamation in respect of the article that was published: see ss 4 and 8 of the Act. In respect of the cause of action that Mr Murphy had against News and Ms Sharp, he was successful. 21 There may be cases in which an applicant is successful in the overall claim, but the act of pleading a number of unsustainable imputations could be considered contrary to the overarching purpose and involve a significant waste of time and resources. In such a case, it may be appropriate to order that an applicant be deprived of part of their costs. However, I do not consider that this is a case of that character. Meanings are "jury" questions. It is a question of fact upon which minds can legitimately differ until resolved by the tribunal of fact. Like I found the defence of News and Ms Sharp to have been conducted appropriately, I do not think the conduct of pleading the meanings to be anything other than what is to be expected in a case of this type and it did not involve any waste of costs. 22 Accordingly, I propose to make the following orders: (1) Judgment be entered for the applicant against the respondents in the sum of $111,726. (2) The respondents pay the applicant's costs of the proceeding. 23 I note that on 24 December 2020 I made an order in the following terms: Without affecting the powers of the Court as to costs, the parties are, in the first instance, to be jointly and severally liable to the Referee for the fees payable to both the Referee and Counsel Assisting. 24 In the light of the orders that I have made generally, and for the avoidance of doubt, I note that the fees payable to both the Referee and the Counsel Assisting form part of Order 2 as to costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee. Associate: Dated: 29 April 2021