Federal Court of Australia Selkirk v Hocking [2023] FCA 432 File number(s): VID 429 of 2022 Judgment of: O'CALLAGHAN J Date of judgment: 9 May 2023 Catchwords: DEFAMATION – application brought by respondents pursuant to s 10A(4) of the Defamation Act 2005 (Vic) for an order that the "serious harm element" of the cause of action for defamation brought against them by the applicant be determined before the trial of the proceeding commences – where unclear whether ss 10A(5) and (6) of the Defamation Act 2005 (Vic) is picked up by s 79(1) of the Judiciary Act 1903 (Cth) – where order to be made instead that certain questions, including the serious harm element question, be heard separately from any other questions pursuant to s 37P of the Federal Court of Australia Act 1976 (Cth) and r 30.01 of the Federal Court Rules 2011 (Cth) Legislation: Federal Court of Australia Act 1976 (Cth) ss 37M, 37N, 37P, 39, 43 Judiciary Act 1903 (Cth) s 79 Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 9(3) Federal Court Rules 2011 (Cth) r 30.01 Crimes Act 1900 (NSW) ss 192E, 193C, 254 Defamation Act 2005 (NSW) ss 21, 22, 40 Defamation Act 2005 (Vic) ss 10A, 29, 29A, 30 Evidence Act 1995 (NSW) s 191 Justice Legislation Amendment (Supporting Victims and Other Matters) Act 2020 (Vic) s 21 Explanatory Memorandum, Justice Legislation Amendment (Supporting Victims and Other Matters) Bill 2020 (Vic) cl 21 Victoria, Parliamentary Debates, Legislative Assembly, 14 October 2020 Cases cited: Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 560 Chartbrook Ltd v Persimmon Home Ltd [2009] 1 AC 1101 Crosby v Kelly (2012) 203 FCR 451 Federated Engine-Drivers and Firemen's Association of Australasia v The Broken Hill Proprietary Company Limited (1911) 12 CLR 398 Hayson v The Age Company Pty Ltd (No 3) (2020) 280 FCR 139 Newman v Whittington [2022] NSWSC 249 Rader v Haines [2022] NSWCA 198 Rana v Google Inc (2017) 254 FCR 1 Rizeq v Western Australia (2017) 262 CLR 1 Selkirk v Director of Public Prosecutions [2020] NSWSC 1590 Solomons v District Court (NSW) (2002) 211 CLR 119 Tepko Pty Ltd v Water Board (2001) 206 CLR 1 TVW Enterprises Ltd v Duffy (No 3) (1985) 8 FCR 93 Wing v Fairfax Media Publications Pty Ltd (2017) 255 FCR 61 Division: General Division Registry: Victoria National Practice Area: Other Federal Jurisdiction Date of hearing: 20 April 2023 Number of paragraphs: 47 Counsel for the Applicant: The applicant appeared in person Counsel for the Fifth and Sixth Respondents: Mr JA Castelan Solicitor for the Fifth and Sixth Respondents: MST Lawyers ORDERS VID 429 of 2022 BETWEEN: SIMONE SELKIRK Applicant AND: SEAN HOCKING First Respondent NAMEBRIGHT.COM INC Second Respondent NATHAN HOWARD (and others named in the Schedule) Third Respondent order made by: O'CALLAGHAN J DATE OF ORDER: 9 May 2023 THE COURT ORDERS THAT: 1. The proceeding be listed for a case management hearing on a date to be fixed. 2. The costs of the application of the fifth and sixth respondents pursuant to s 10A(4) of the Defamation Act 2005 (Vic) be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'CALLAGHAN J: 1 This is an application brought by the fifth and sixth respondents pursuant to s 10A(4) of the Defamation Act 2005 (Vic) (Defamation Act) for an order that the "serious harm element" of the cause of action for defamation brought against them by the applicant be determined before the trial of the proceeding commences. 2 As a result of amendments made to the Defamation Act in 2020, it is now "an element (the serious harm element) of a cause of action for defamation that the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person". See Justice Legislation Amendment (Supporting Victims and Other Matters) Act 2020 (Vic) s 21. 3 That amendment was made in Victoria and other jurisdictions (namely, New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory) with the objective of seeking to weed out trivial or frivolous defamation claims at the outset, and to encourage the early resolution of defamation proceedings by enabling the issue of serious harm to be dealt with as a "threshold issue". See Victoria, Parliamentary Debates, Legislative Assembly, 14 October 2020, 2662 (The Hon J Hennessy, MP, Attorney-General) and Explanatory Memorandum, Justice Legislation Amendment (Supporting Victims and Other Matters) Bill 2020 (Vic) cl 21. 4 Sub-sections 10A(1), (5) and (6) of the Defamation Act provide: (1) It is an element (the serious harm element) of a cause of action for defamation that the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person. ... (5) If a party applies for the serious harm element to be determined before the trial for the proceeding commences, the judicial officer is to determine the issue as soon as practicable before the trial commences unless satisfied that there are special circumstances justifying the postponement of the determination to a later stage of the proceeding (including during the trial). (6) The matters a judicial officer may take into account in deciding whether there are special circumstances for the purposes of subsection (5) include (but are not limited to) the following— (a) the cost implications for the parties; (b) the resources available to the court at the time; (c) the extent to which establishing the serious harm element is linked to other issues for determination during the trial for the proceeding. 5 Section 10A thus places the onus upon the applicant or plaintiff to prove as a necessary element of the cause of action that the relevant publication has caused or is likely to cause serious harm to his or her reputation. See Newman v Whittington [2022] NSWSC 249 at [47] (Sackar J). As his Honour also said at [69], "s 10A … has the effect of abolishing the common law rule that upon publication of a defamation, damage is to be presumed. The plaintiff is therefore obliged to prove serious harm as a fact in every case." 6 By her amended statement of claim dated 5 December 2022, the applicant, Ms Selkirk, alleges, among other things, that the fifth and sixth respondents published, including in the Australian Capital Territory and the Northern Territory, an online article entitled "Simone Selkirk appeals ruling after being found guilty of David Jones scam" on the website at www.MyLocalPages.com.au that was defamatory of her. 7 The fifth respondent, Mr Wyatt, is the managing director of the sixth respondent, Real Estate Online Pty Ltd, which owns the "MyLocalPages" website. 8 The article was in these terms (all errors in the original): Simone Selkirk appeals ruling after being found guilty of David Jones scam Consulting company director Simone Selkirk employed fake invoices to persuade staff members at David Jones to refund her a complete of $16,000 more than two years. A at the time significant-traveling law firm and advisor observed guilty of using a faux identity and receipts to swindle David Jones stores out of thousands of dollars has taken her circumstance to the NSW Supreme Courtroom. Simone Olivia Selkirk's sentencing for multiple counts of dishonestly obtaining monetary advantage by deception has been delayed as result. In a choice at Sydney's Downing Centre Local Courtroom in December, the Darling Stage woman was observed to have raked in $16,000 in refunds for dresses and bedding she returned to a number of David Jones outlets amongst July 2016 and August 2018. The court earlier heard the 45-year-outdated manufactured fake on the internet receipts, beneath the title of "Samantha Ellison", in the variety of email messages to dupe personnel at David Jones stores in Elizabeth Street, Barangaroo, Bondi Junction and Chatswood. She returned products together with Country Highway apparel and high priced mattress sheets, with refunds becoming made to her private credit card. Simone Olivia will attraction soon after remaining uncovered responsible. In which the objects originated from stays a thriller, with the court docket hearing last 12 months there were being no records of the apparel and bedding ever staying acquired from the office merchants. But before her first slated sentence date in February, Selkirk lodged an attraction above Magistrate Lisa Viney's final decision in the NSW Supreme Courtroom. Selkirk is the former director of consulting agency Marc1 and ran her very own design and life-style weblog as editor of MARC Manner. The eastern suburbs female was arrested in October 2018 and was later billed with dozens of offences including 34 counts of dishonestly receive fiscal edge by deception. She was also hit with 15 counts of dealing with the proceeds of criminal offense, which were being later on withdrawn. Selkirk entered a late guilty plea to 4 counts of dishonestly getting a monetary gain by deception ahead of reneging and unsuccessfully defending the prices at hearing. 9 The particulars of "serious harm" alleged by the applicant in her amended statement of claim include: The imputations are serious, the Applicant's professional reputation depends on her integrity as an admitted member of the legal profession. The imputations as alleged pose a serious risk to the Applicant's ability to obtain gainful employment in a legal or executive role. The matters complained of are likely to prejudice the Applicant[']s ability to obtain such employment. 10 The applicant also alleged that in its natural and ordinary meaning, the article was defamatory of the applicant and carried the following defamatory meanings, viz that the applicant: (a) is a fraudster; (b) is a scammer; (c) is guilty of defrauding David Jones; (d) is a criminal in that she dishonestly sought to deceive David Jones to obtain a financial advantage by returning goods without genuine receipts; (e) is a criminal in that she dishonestly sought to deceive David Jones to obtain a financial advantage by returning goods using fake receipts; (f) produced fake receipts when returning goods to David Jones so she could claim refunds; (g) is a criminal in that she falsified records of proof of purchase of goods she returned so that she could obtain a financial advantage by receiving refunds for those goods; (h) is guilty of dishonestly deceiving David Jones to obtain a financial advantage by obtaining refunds for goods returned using fake receipts; (i) is guilty of scamming David Jones by providing fraudulent proofs of purchase to obtain refunds for goods; (j) dishonestly deceived David Jones by providing fraudulent proofs of purchase to obtain refunds for those goods; (k) produced fraudulent proofs of purchase when returning goods to David Jones so she could claim refunds; (l) committed the crime of dishonestly obtaining financial advantage by deception; (m) is untrustworthy; and (n) is untrustworthy in that she sought to profit from dishonest conduct. 11 In their defences, the fifth and sixth respondents, among other things, plead defences of fair reporting of proceedings of public concern under s 29 of the Defamation Act, publication of a matter concerning an issue of public interest under s 29A of the Defamation Act and statutory qualified privilege under s 30 of the Defamation Act. 12 The fifth and sixth respondents rely on two main factual matters in support of their application, at the heart of which is the contention that this is an archetypal example of a frivolous claim that should be weeded out sooner, rather than later, and that no "special circumstances" exist that would warrant postponing the determination of the serious harm element until trial. 13 The first matter concerns a hearing before a Magistrate in the New South Wales Downing Centre Local Court in December 2019. 14 The case against the applicant at that hearing was that on 17 occasions (including an attempt) between July 2016 and August 2018 she had "returned" various goods to David Jones stores, presenting a falsified online purchase invoice email. The false details were: the proof of payment number; credit card details purportedly used for payment of the goods; and the name of the purchaser. The allegation was that the applicant received a "refund" of the price of the items she "returned" specified on the invoice which was credited to one of her three credit cards. None of her cards was the card nominated on the invoice as used for the online purchase. The "deception" specifically relied on was the falsified proof of purchase number which was derived from Ms Selkirk's mobile phone number. 15 The matter proceeded (including) by way of a statement of agreed facts under s 191 of the Evidence Act 1995 (NSW). The facts to which the applicant agreed included the following (in substance): (a) the applicant attended in person at David Jones stores on 17 occasions between 7 July and 26 August 2018 to obtain a refund for "returned goods"; (b) on each occasion she presented a false online purchase invoice email as proof of purchase (using numbers which were a derivative of her mobile phone number); (c) she knew that the proof of purchase numbers in each document were false; and (d) she had not used either of the credit cards to which refunds were credited for the purchase of the goods in question. 16 The applicant was found guilty of 16 counts of dishonestly obtaining a financial advantage by deception contrary to s 192E of the Crimes Act 1900 (NSW), one count of using a false document to attempt to obtain financial advantage contrary to s 254(b)(ii) of the Crimes Act and seven counts of dealing with property the proceeds of crime contrary to s 193C(2) of the Crimes Act. 17 The applicant appealed. See Selkirk v Director of Public Prosecutions [2020] NSWSC 1590 (Campbell J). The appeal was allowed on a ground that may fairly be said to be "technical", and which did not diminish the admissions of dishonesty made by the applicant in the statement of agreed facts. 18 The second matter on which the fifth and sixth respondents rely is the limited extent of the publication of the article. It is, of course, a matter for the applicant to prove, but the evidence thus far adduced by the fifth and sixth respondents is that the article was published to no more than three people, including (it may be assumed) the applicant. 19 Before turning to the application before me, it is necessary to deal with two anterior questions. The first is jurisdiction. The second is whether ss 10A(5) and (6) of the Defamation Act are picked up by s 79(1) of the Judiciary Act 1903 (Cth). The first question is straightforward. The second is not. 20 It is, of course, the first duty of every judicial officer is to satisfy themselves that they have jurisdiction. See Federated Engine-Drivers and Firemen's Association of Australasia v The Broken Hill Proprietary Company Limited (1911) 12 CLR 398 at 415 (Griffiths CJ). 21 As Robertson J (with whom Bennett J and Perram J agreed) explained in Crosby v Kelly (2012) 203 FCR 451 at 457-8 [29]-[35], s 9(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) has the effect of conferring upon the Federal Court original jurisdiction over a proceeding that would be within the jurisdiction of the Australian Capital Territory or Northern Territory Supreme Courts. See also Rana v Google Inc (2017) 254 FCR 1 at 8 [24] (Allsop CJ, Besanko and White JJ). 22 There was no suggestion by the respondent here that the assertion as to publication in the Territories made in the amended statement of claim was colourable (that is, that it was improper or lacked bona fides). Federal jurisdiction is thus invoked and remains. See, by way of example only, Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 560 at 571 [7] (Gleeson CJ, Gaudron and Gummow JJ). 23 As to the question whether ss 10A(5) and (6) of the Defamation Act is picked up by s 79(1) of the Judiciary Act, the issue arises as follows. 24 Once federal jurisdiction is engaged, as it is here, the entire matter is within federal jurisdiction, and there is no concurrent federal and State jurisdiction being exercised: Rana v Google Inc at 7 [20]. 25 The laws necessary to give effect to that jurisdiction in a case brought in a State (here, Victoria) apply by operation of s 79 of the Judiciary Act, because it is well-settled that State statutory laws, like the Defamation Act, do not apply of their own force in the exercise of federal jurisdiction. See Solomons v District Court (NSW) (2002) 211 CLR 119 at 134 [21] (Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ). 26 Section 79(1) of the Judiciary Act provides: The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. 27 As Bell, Gageler, Keane, Nettle and Gordon JJ explained in Rizeq v Western Australia (2017) 262 CLR 1 at 26 [63]: The incapacity of a State Parliament to enact a law which governs the exercise of federal jurisdiction by a court, whether it be a federal court or a State court, explains the necessity for s 79 of the Judiciary Act and is the key to understanding the nature and extent of its operation. Section 79 is a law, enacted under s 51(xxxix) of the Constitution, which serves to ensure that the exercise of federal jurisdiction is effective. The section fills a gap in the law governing the actual exercise of federal jurisdiction which exists by reason of the absence of State legislative power. The section fills that gap by picking up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction. The section has no broader operation. 28 The expression "surrogate federal law" has sometimes been used to describe the text as so "picked up", although the adjective adds nothing to the analysis. Rizeq v Western Australia at 32-33 [81]. 29 As Bromwich J explained in Hayson v The Age Company Pty Ltd (No 3) (2020) 280 FCR 139 at 145 [28]-[29]: The regime[] under … [s] 79 of the Judiciary Act [is] a convenient and flexible equivalent to the Commonwealth Parliament re-enacting the same words as used by State or Territory legislatures, but without the need to amend that legislation each time the local legislature does so. This operation of the Judiciary Act is subject to constitutional constraints because it is not a means by which the Commonwealth Parliament can exceed its powers. A statute or provision of a statute is not picked up if it is beyond the power of the Commonwealth Parliament … The operation of [s] 79 is also subject to constraints of a legislative nature, which operate somewhat akin to the interpretation of inconsistent Commonwealth statutes. Put simply, a State or Territory statute otherwise able to be picked up, is not picked up, or particular provisions are not picked up, to the extent that they are inconsistent with a Commonwealth statute. Thus, when it comes to this aspect of the operation of the Judiciary Act, no question of one Commonwealth provision prevailing over another arises, but rather legislation that has been enacted by the Commonwealth Parliament will stand in the way of State legislation, that would be inconsistent were it surrogate Commonwealth legislation, being picked up and applied in the first place. Thus any conflict to be resolved is between statutes having the same source, with the "law of a State of Territory which is to operate as surrogate law of the Commonwealth … to be measured beside other laws of the Commonwealth": Northern Territory v GPAO (1999) 196 CLR 553 per Gleeson CJ and Gummow J at [80]. … 30 In Wing v Fairfax Media Publications Pty Ltd (2017) 255 FCR 61, Allsop CJ and Besanko J held that there was a direct inconsistency between ss 39 and 40 of the Federal Court of Australia Act 1976 (Cth) and ss 21 and 22 of the Defamation Act 2005 (NSW) (NSW Defamation Act). As their Honours explained at 70-71 [24]-[29]: Section 39 of the Federal Court of Australia Act provides that, in the ordinary case and without an order of the Court, a civil action is tried by a judge without a jury. Section 40 of the Federal Court of Australia Act provides the Court with a broad discretionary power guided by the ends of justice to direct the trial with a jury of the civil action or of any issue of fact in the civil action. Section 21 of the Defamation Act provides that, subject to a contrary order, a plaintiff or a defendant in defamation proceedings may elect for the proceedings to be tried by jury. The New South Wales Court of Appeal has said that, upon a proper exercise of the power of election, the section gives rise to a vested or accrued substantive right which may be defeated only by an order properly made under ss 21(1) and 21(3) of the Defamation Act (Channel Seven Sydney Pty Ltd v Fierravanti-Wells (2011) 81 NSWLR 315 at [50] per McColl JA (with whom Giles JA agreed); at [138] per Handley AJA). By contrast, under ss 39 and 40 of the Federal Court of Australia Act a party to proceedings before this Court has no more than the ability to approach the Court for an order that the proceeding or an issue of fact in the proceeding be tried by a jury. Section 22 of the Defamation Act prescribes in mandatory terms a division of functions between jury and judicial officer in a proceeding to be tried by jury. The jury "is to determine" whether the defendant has published defamatory matter about the plaintiff and, if so, whether any defence raised by the defendant had been established and the judicial officer "is to determine" the amount of damages and any unresolved issue of fact and law relating to the determination of the amount. By contrast, s 40 of the Federal Court of Australia Act provides that the Court may direct the trial with a jury of the suit or of an issue of fact. The Court could order the trial with a jury of any issue of fact, including damages. There is direct inconsistency between ss 39 and 40 of the Federal Court of Australia Act, and ss 21 and 22 of the Defamation Act. In those circumstances, ss 21 and 22 of the Defamation Act could not be binding on the Court by reason of s 79 of the Judiciary Act. There is another way of analysing the circumstances in this case which leads to the same result. It is that the Defamation Act has substantive provisions such as s 30 and provisions such as ss 21 and 22 which are directed towards how an existing defamation matter is to be heard and determined. This Court hears and determines a matter such as the present matter in accordance with "independently existing substantive laws" (Australian Securities and Investments Commission v Edensor Nominees Pty Limited (2001) 204 CLR 559 at [55], [57] per Gleeson CJ, Gaudron and Gummow JJ). This includes any applicable statute law, including that of a State. This is because State laws are preserved by the Constitution (ss 106, 107 and 108) and not by reason of the operation of s 79 of the Judiciary Act (Rizeq v The State of Western Australia (2017) 91 ALJR 707 at [25] per Kiefel CJ; at [40]-[41] per Bell, Gageler, Keane, Nettle and Gordon JJ). Under this analysis, ss 21 and 22 of the Defamation Act would not operate according to their own terms, but only if they are "picked up" by s 79 of the Judiciary Act. They would not be picked up by s 79 of the Judiciary Act because a law of the Commonwealth (i.e., ss 39 and 40 of the Federal Court of Australia Act) otherwise provides within s 79 of the Judiciary Act (Northern Territory of Australia v GPAO (1999) 196 CLR 553 at [78]-[86] per Gleeson CJ and Gummow J, and Austral Pacific Group Limited (in liq) v Airservices Australia (2000) 203 CLR 136 at [17]- [28]). Under this approach, s 109 of the Constitution is not engaged because there is not otherwise an applicable State law. We do not need to choose between these approaches because under either approach, the result is the same. 31 In Hayson v The Age Company, on the other hand, Bromwich J held that s 40 of the NSW Defamation Act, dealing with costs in defamation proceedings, was not inconsistent with the costs provision contained in s 43 of the Federal Court Act. 32 Section 43 of the Federal Court Act relevantly provides that the court has jurisdiction to award costs in all proceedings before the court other than proceedings in respect of which that or any other Act provides that costs must not be awarded; that except as provided by any other Act, the award of costs is a matter of discretion, which discretion includes to "order that costs awarded against a party are to be assessed on an indemnity basis or otherwise". 33 Section 40 of the NSW Defamation Act provides: Costs in defamation proceedings (1) In awarding costs in defamation proceedings, the court may have regard to— (a) 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 (b) any other matters that the court considers relevant. (2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise)— (a) 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 (b) 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. 34 His Honour reasoned as follows (at 146-48 [32]-[43]): As the operation of s 79 of the Judiciary Act in relation to the Defamation Act does not give rise to the possibility of a clash between State and Commonwealth legislation, s 109 of the Constitution does not apply to this situation, and no occasion arises for the service of s 78B notices. The High Court has been quite blunt about this, in stating that within the field in which s 79 operates, State laws have no valid application and s 109 "for that reason simply has no operation": Rizeq at [92]. This conclusion makes the question of whether s 79(1) picks up s 40 of the Defamation Act, with at least most of the rest of that Act, a matter of statutory construction. For example, ss 21 and 22 mandating trial by jury are not picked up because of the contrary provisions for civil proceedings in this Court in s 40 of the FCA: Wing v Fairfax Media Publications Pty Ltd (2017) 255 FCR 61. There may be other provisions that are left behind as a result of some other inconsistency. That exercise of statutory construction involves answering two related questions: (1) whether there is a barrier in the manner of the enactment of the Defamation Act to s 40 being left behind; and (2) whether there is a barrier within Commonwealth legislation to s 40 being picked up. Section 79(1) does not operate to pick up some, but not all, of a State legislative scheme as surrogate Commonwealth law, if that would give an altered meaning to the legislation so severed: Commonwealth v Mewett (1997) 191 CLR 471 at 556; Solomons at [24]. Section 40 of the Defamation Act is part of an integrated scheme for defamation proceedings in New South Wales, forming part of a suite of provisions directed to encouraging resolution by settlement prior to trial. Part 3 is directed to the resolution of civil disputes without litigation, providing for an offer to make amends, provided this occurs within 28 days after the publisher was given a concerns notice: ss 13 and 14. While s 40 is in Part 4 of the Defamation Act, concerned with the litigation of disputes, s 40 itself links Part 4 to Part 3 by defining a settlement offer to include an offer to make amends whether made before or after a proceeding is commenced, and that in turn may carry indemnity costs consequences. If s 40 does not apply, then an important incentive to make an offer of amends is lost. Thus, the overall effect, and effectiveness, of Part 3 would be adversely altered if s 40 were left out of the equation. This is a barrier to s 40 being left behind, but perhaps not of itself an insurmountable barrier. It follows that the real barrier to the application of s 40 of the Defamation Act that must be considered is whether that provision, as against the terms of s 43 of the FCA, gives rise to any potential statutory inconsistency standing in the way of the operation of s 79 of the Judiciary Act. Section 43(2) of the FCA … limits the broad discretion to award costs by the words "[e]xcept as provided by any other Act". That provision has allowed, for example, s 570 of the Fair Work Act 2009 (Cth) to limit the circumstances in which a costs order may be made by this Court at all. This indicates that the role of s 43 is to facilitate costs orders being made, including upon an indemnity basis, not to prohibit or protect the making of those orders from being inhibited or limited, including by surrogate Commonwealth law that deals with a discrete subject matter not otherwise legislated for by the Commonwealth Parliament … [Section] 43(1) of the FCA provides a general jurisdiction to award costs … [Section] 43(2) makes it clear that this is discretionary, and s 43(3)(b) makes it clear that this may extend to indemnity costs. Thus s 43 is an enabling provision, including as to the award of costs being discretionary, even without resort to "[e]xcept as provided by any other Act". In those circumstances, I am unable to see why, when specialised legislation such as the Defamation Act is picked up, the costs part of that legislation does not also apply, even when a particular outcome is mandated in specific circumstances, with a wide residual discretion being retained in any event by the concept of the interests of justice embedded in s 40(2). No judge is required to make an indemnity costs order if it is not in the interests of justice to do so. Thus no relevant inconsistency arises … For completeness, I should note that the respondents support their argument as to how s 40 of the Defamation Act should operate by noting that the Court, in awarding costs, is required by s 37N(4) of the FCA to take into account any failure by a party or a party's lawyer to comply with the duty imposed by s 37N(1) or (2) respectively. That duty is to conduct civil litigation, including in settlement negotiations, in accordance with the overarching purpose in s 37M to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. I am satisfied that those considerations apply to the question of costs, but do not see this as adding anything to the question of whether s 40 applies. They are complementary to the operation of s 40, not inconsistent with it, notwithstanding that, absent s 40 applying, the discretionary power is not constrained by a mandate of the kind in s 40(2). I see no reason why this Court cannot take into account a party's or party's lawyer's failure to comply with the duty to conduct civil litigation in accordance with the overarching purpose in determining whether or not the party unreasonably failed to make or agree to a settlement offer, just as I see no reason why this Court could not have regard to the factors set out in s 40(1) [of the NSW Defamation Act] or the interests of justice whilst making that determination. There is a degree of divergence that is of a different category to the sort of inconsistency which would deny s 40 applying to the specialised nature of defamation proceedings, governing the manner of the exercise of that federal jurisdiction. It is not that there is a costs power that exists separately in relation to defamation proceedings, which is then fettered by s 40 being picked up. Rather, the Defamation Act is picked up largely as a whole (subject to the comments above), with a power to awards costs supplementing that which already exists under s 43, but with its own subject-matter-specific criteria. The present situation is quite unlike that considered by the Full Court in Wing at [27] in relation to trial by jury in civil proceedings in this Court, where the jury provisions in the FCA were fundamentally different and indeed opposite in effect to those in the Defamation Act, so as to be directly inconsistent and incapable of coexisting. It should be noted that parties in this Court in a similar matter, even where their positions were "widely divergent," have previously been able to proceed on the basis that it was common ground that s 40 of the Defamation Act would be picked up without issue: Hockey v Fairfax Media Publications Pty Ltd (No 2) (2015) 237 FCR 127 at [34]-[39]. I therefore reject the respondents' argument that s 40 does not apply to the determination of an application for indemnity costs for defamation proceedings brought under the Defamation Act as surrogate Commonwealth legislation. 35 In this case, it seems to me arguable that a barrier to the application of ss 10A(5) and (6) of the Defamation Act that may fall to be considered is whether those provisions, as against the terms of ss 37M (defining the overarching purpose of civil practice and procedure provisions), 37N (parties to act consistently with the overarching purpose) and 37P (power of the Court to give directions about practice and procedure in a civil proceeding) of the Federal Court Act, give rise to any potential statutory inconsistency standing in the way of the operation of s 79 of the Judiciary Act. 36 I have heard no submissions on the question. When I asked counsel for the fifth and sixth respondents how ss 10A(5) and (6) were picked up, he was, with respect, unable to assist me. 37 Sub-section 10A(5) requires a judge to determine whether the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person "as soon as practicable before a trial commences unless satisfied that there are special circumstances justifying the postponement of the determination to a later stage of the proceeding (including during the trial)". 38 The matters that a judge may take into account in deciding whether there are "special circumstances" are defined in s 10A(6) to include, but are not limited to, the cost implications for the parties; the resources available to the court at the time; and the extent to which establishing the serious harm element is linked to other issues for determination during the trial for the proceeding. As to the last of those considerations, the "other issues for determination" may include whether the alleged defamatory imputations were conveyed in the first place, because under s 10A "serious harm" is an additional element of the cause of action. See Rader v Haines [2022] NSWCA 198 at [17] (Brereton JA, with whom Macfarlan JA and Basten AJA agreed). 39 On one view, those non-exhaustive matters are not aptly described as "special" circumstances. They seem to me, on the contrary, to require the giving of attention to what are nowadays run-of-the-mill case management considerations, which are matters that a judge of this court may, and routinely does, take into account in giving directions about practice and procedure under s 37P of the Federal Court Act. Viewed that way, there would be no inconsistency between ss 10A(5) and (6) of the Defamation Act and s 37P of the Federal Court Act. On the contrary, to use Bromwich J's word, the former would be "complementary" to the latter, and not involve any inconsistency within the meaning of s 79 of the Judiciary Act. 40 On another view, it may be thought that the requirement of "special circumstances" is to be given content by the literal meaning of those words because the draftsperson presumably chose the words to be meaningful. As Lord Hoffmann put it in Chartbrook Ltd v Persimmon Home Ltd [2009] 1 AC 1101 at 1112-13 [17], "[t]he words used as labels are seldom arbitrary. They are usually chosen as a distillation of the meaning or purpose of a concept intended to be more precisely stated in the definition". If by the inclusion of the word "special", the legislature is taken to have intended that a separate pre-trial hearing on the question of serious harm must occur unless "exceptional" or the like circumstances are made out, such a provision might very well be said to fetter, and thus be inconsistent with, not only the broad and wide-ranging case management considerations provided for in s 37P of the Federal Court Act, but also the undoubted power under that section (and r 30.01 of the Federal Court Rules 2011 (Cth)) to order that a question arising in a proceeding be heard separately from any other questions. 41 The courts have long warned of the potential perils of hearing separate trials of issues. In Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 55 [168]-[170], for example, Kirby and Callinan JJ said: … The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap. The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests. Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question. 42 Whether and to what extent those considerations may or should be taken into account by a judge of this court in determining whether she or he is satisfied of the existence of "special circumstances" under s 10A(5) of the Defamation Act seems to me to be a further possible source of difficulty. 43 But in any event, it seems to me that the question whether the application of ss 10A(5) and (6) of the Defamation Act give rise to any potential statutory inconsistency standing in the way of the operation of s 79 of the Judiciary Act is sufficiently unclear that I should not attempt to resolve it now. 44 I considered asking the parties for additional submissions on that question. However, in the particular and unusual circumstances of this case, and having due regard to the potential pitfalls identified by Kirby and Callinan JJ in Tepko, in my view the appropriate and most efficient (including cost efficient) way to proceed in this matter is to treat the application made by the fifth and sixth respondents as having been brought under s 37P of the Federal Court Act and r 30.01 of the Federal Court Rules, and to order that the following questions be heard separately from any other questions: (1) whether the article conveyed one or more of the defamatory imputations alleged; (2) the extent of publication of the article; and (3) whether, in light of the answers to (1) and (2), publication of defamatory matter about the applicant caused, or is likely to cause, serious harm to her reputation. 45 In my view, those questions may justly and conveniently be heard separately, including where the evidence, as things currently stand, is that the article was published to no more than three persons, and that the applicant in the statement of agreed facts filed in the Downing Centre Local Court in substance arguably agreed that she had on many other occasions engaged in the same (dishonest) conduct the subject of the article. 46 In those circumstances, a decision about the separate questions may determine the outcome of the proceeding and save the parties the expense of a trial on all issues, so the advantages of the use of the power to order such questions "are plain". See TVW Enterprises Ltd v Duffy (No 3) (1985) 8 FCR 93 at 95 (Sweeney J). 47 The only order that I propose to make now is that a case management hearing be convened, with a view to making any relevant directions or orders, and to hear from the parties as to whether any more precise formulation of the separate questions identified above may be necessary. Costs will be reserved. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan. Associate: Dated: 9 May 2023 SCHEDULE OF PARTIES VID 429 of 2022 Respondents Fourth Respondent: GRIPEO LLC Fifth Respondent: MARTIN WYATT Sixth Respondent: REAL ESTATE ONLINE PTY LTD