New South Wales District Court CITATION: Novakovich v Waterhouse [2007] NSWDC 231 EX TEMPORE JUDGMENT DATE : 19 October 2007 JURISDICTION: Civil JUDGMENT OF: Gibson DCJ DECISION: (1) Grant leave to the plaintiff to file a Notice of Discontinuance in court; (2) The plaintiff pay the defendant's costs on a party/party basis, including the defendant's costs of today and in relation to this argument. CATCHWORDS: Tort - defamation - discontinuance - costs - application for indemnity costs LEGISLATION CITED: Defamation Act 2005 (NSW) Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 Fordyce v Fordham (2006) 67 NSWLR 497 CASES CITED: Habib v Nationwide News Pty Ltd (2006) 65 NSWLR 264 ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 Packer v Meagher [1984] 3 NSWLR 486 PARTIES: Plaintiff: Peter Novakovich Defendant: John Waterhouse FILE NUMBER(S): 1259 of 2007 COUNSEL: Plaintiff: M Rollinson Defendant: C A Evatt / R Rasmussen SOLICITORS: Plaintiff: Peter Novakovich Solicitors Defendant: Levitt Robinson Solicitors JUDGMENT 1. The plaintiff in these proceedings was granted leave to discontinue on 5 October 2007. The plaintiff had commenced these proceedings by way of statement of claim filed on 28 March 2007 asserting that on or about 10 October 2001 the defendant published to a Reverend Craig Fulton some words, which I will not set out in this judgment because of the damaging nature of their contents. 2. The matter came before me for directions on 27 April, 1 June and 27 June 2007. It was agreed that there would be trial before a judge alone (sitting without a jury), but it appears that the parties were operating under the misapprehension that the matter would be conducted under the Defamation Act 2005 (NSW) and were not aware of the Court of Appeal decision in Habib v Nationwide News Pty Ltd (2006) 65 NSWLR 264 which required a s 7A jury trial to be empanelled. This was drawn to their attention apparently by Mr Evatt. Mr Evatt appeared before me ex parte on 27 June and obtained a provisional date for a s 7A jury trial. There was objection by the plaintiff and when the attention of counsel for the plaintiff was drawn to Habib v Nationwide News Pty Ltd the matter was stood over to 17 August and then to 24 August for allocation of s 7A jury trial, with an estimate of two days plus. 3. The date of Monday 3 December was provisional and was not convenient. Attempts by me to give a provisional hearing on Wednesday 17 October were also unsuccessful. In the meantime, the plaintiff had been ordered to file statements. The defendant filed a s 7A defence denying publication and the plaintiff was then obliged to file statements by 31 August. The plaintiff did not do so. The plaintiff made an offer on 30 May 2007 seeking an apology and a small amount of costs. The defendant on 4 July offered to settle for agreed costs of $15,000.00. 4. In Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201, Hill J set out the basic principles relating to cost on discontinuance. His Honour noted these as follows: "(1) Where neither party desires to proceed with litigation the court should be ready to facilitate the conclusion of the proceedings by making a cost order: Stratford and the SEQEB case. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford supra. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them (SEQEB, supra). (4) In a particular case it might be appropriate for the court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation: cf Sunday Times Newspaper Co Ltd v McIntosh (1933) 33 SR(NSW) 371. (5) Where the proceedings terminate after interlocutory relief has been granted, the court may take into account the fact that that interlocutory relief has been granted: cf Re Asiatic Electric Co Pty Ltd (in liq) [1973] 1 NSWLR 603 at 606 , a case which, however, depended upon the specific wording of the statute under consideration." 5. Effectively there are two kinds of cases where there is discontinuance, as Burchett J said in ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 at 543. The first is where one of the parties, after litigating for a while, effectively surrenders to the other, and the second is one where it is not the case that one or the other side has won, it is simply that no issue remains between the parties except that of costs; examples of this are applications for interim injunctions and the like. 6. Neither side referred me to the ongoing debate in the Court of Appeal about whether or not there is a presumption that the discontinuing party pays the costs. This application solely relates to the issue of whether the circumstances of iniquity or injustice of the kind referred to by Hunt J in Packer v Meagher [1984] 3 NSWLR 486 have occurred. I therefore do not need to concern myself with the strong dissenting view of Santow JA in Fordyce v Fordham (2006) 67 NSWLR 497. The question is whether or not the conduct of the plaintiff warrants an order for indemnity costs. 7. I have read the correspondence that has been handed up to me. I have also had some explanation from the bar table about the circumstances in which the plaintiff commenced proceedings, it has to said, at the eleventh hour. I have an unfettered discretion as to costs and I have to take into account that when a case such as this started it is distressing for both parties. It is distressing for the plaintiff who may or may not believe he has been defamed and it is distressing also for the defendant to be faced with a statement of claim served many years afterwards. However, the circumstances in which an order for indemnity costs would be made in relation to proceedings commenced for defamation would really have to fall within the classes set out by Hunt J in Packer v Meagher. 8. It is my view that there is no disentitling factor of a kind, no delinquency of the kind referred to by Hunt J in Packer v Meagher in this case. This is a case where the plaintiff has commenced proceedings and has discontinued them and while there is not a presumption that costs should follow the event, that is the usual pattern and I see no reason why that should be varied here. 9. I do note that there is an offer to settle which is a Calderbank offer dated 4 July 2007, and that is a matter about which I have not been addressed. I have no way of knowing whether the estimate of costs at $15,000.00 is reasonable. It does seem to me that, for a matter that has been before the Court for mention only, for a total of seven times, including today, plus the time Mr Evatt mentioned it without the other side being present, this is somewhat erring on the side of indemnity costs rather than party/party costs. If there had been an offer to pay costs on a party/party basis I would have given serious consideration to the making of an order for indemnity costs on the basis that it was a Calderbank offer and the plaintiff had not effectively done better. 10. However, in the circumstances, it is my view that the appropriate order to make is that the plaintiff pay the defendant's costs on a party/party basis. These costs are to include the costs of today because in my view, the costs of today are an indistinguishable part of this litigation. While Mr Rollinson may have succeeded in persuading me that the costs of today should not be ordered on an indemnity basis, it is my view that the circumstances in which such an application was made are so inherently a part of the costs of this litigation that they should not be separated out. Accordingly it is my view that I should not make a separate order for the plaintiff who has successfully opposed this order to be entitled to the additional advantage of doing so at the defendant's expense. 11. Accordingly the orders that I make are as follows: (1) Grant leave to the plaintiff to file a Notice of Discontinuance in court. (2) The plaintiff pay the defendant's costs on a party/party basis, including the defendant's costs of today and in relation to this argument. ****** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.