New South Wales Supreme Court CITATION : Walter Vignoli v Sydney Harbour Casino Pty Ltd & Anor [1999] NSWSC 1227 CURRENT JURISDICTION : Common Law Division FILE NUMBER(S) : 20875/96 HEARING DATE(S) : 10 December 1999 JUDGMENT DATE : 15 December 1999 Walter Vignoli (Plaintiff) PARTIES : Sydney Harbour Casino Pty Ltd (First Defendant) John Grimshaw (Second Defendant) JUDGMENT OF : Bergin J COUNSEL : B.W. Collins QC/T.D.F. Hughes (Plaintiff) Ms L McCallum (Defendants) SOLICITORS : Nicholas G Pappas & Co (Plaintiff) Dunhill Madden Butler (Defendants) CATCHWORDS : Application for indemnity costs in circumstances where an award of aggravated damages had been made for unjustifiable defence - Aggravated damages and indemnity costs distinct awards. ACTS CITED : Part 52A Rule 33(4)(e) and (5) Supreme Court Rules 1970 (NSW). Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited & Ors (1988) 81 ALR 397; CASES CITED : Rouse v Shepherd (No2) (1994) 35 NSWLR 277; Cassell & Co Ltd v Broome [1972] AC 1027. DECISION : Indemnity costs awarded from date of filing defence in November 1996 to admission of liability on 25 October 1999. (pars. 31 and 32) THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION BERGIN J DATE 15 DECEMBER 1999 20875/96 - WALTER VIGNOLI v SYDNEY HARBOUR CASINO PTY LIMITED & JOHN GRIMSHAW JUDGMENT - COSTS 1 On 14 August 1996 the plaintiff filed a Statement of Claim in which he brought an action against the first and second defendants for defamation. After some amendment was allowed on the first day of the hearing to accommodate a second action for defamation against the same defendants the trial commenced before me and a jury of four on 1 November 1999 and concluded on 5 November 1999. The jury found that, in respect of the two matters complained of, the first was published by the defendants but did not carry the imputation pleaded and the second was not published by the defendants. I entered verdicts for the defendants. 2 In the same Statement of Claim the plaintiff brought an action against the first defendant for false imprisonment. The first defendant admitted liability in respect of this action by letter dated 25 October 1999 from its solicitors to the plaintiff's solicitors in the following terms: We are instructed to put you on notice that our client intends to not contest the issue of liability in relation to the false imprisonment component of your client's claim. It is our view that the proper course in such circumstances would be to have the different causes of action dealt with separately. Consequently, we seek your consent to have the matter of defamation dealt with at the hearing on 1 November 1999 and the issue of damages for false imprisonment determined at a date to follow shortly thereafter. 3 On 8 November 1999 when the false imprisonment matter was listed for hearing an order was made by consent dispensing with the jury. Mr McAlary QC made an application for an adjournment. That application was based on the unavailability of a "central witness", Mr Craig Dunn, who was claimed to have been in Mr Vignoli's presence during the whole of the period. 4 Mr Collins QC formally opposed the application but indicated that he accepted what Mr McAlary QC had said about the effect on his case of Mr Dunn's absence. He submitted that all counsel were available and the plaintiff wanted his case to go ahead and if any adjournment was to be granted he wanted to ensure that the plaintiff was protected as to costs. 5 Mr Dunn had apparently been involved in a motor vehicle accident on the previous weekend in Kangaroo Valley and although the details of his condition were unknown it was clear that he was not available that day. In the circumstances I granted an adjournment on the basis that the parties could restore that matter to the list after further information was available to assist in the assessment of when the matter could proceed to hearing. 6 The matter was restored to the list on Tuesday 9 November 1999 when, over the objection of the defendant, I listed it for hearing the following day. On 10 November 1999 a further application for an adjournment was made by Mr McAlary QC on the basis of a medical report from Dr Noel Newton of Picton dated 9 November 1999 which stated: This 40 year old patient was involved in a MVA on 5/11/99 and has concussion and whiplash. X-Rays being done today. They are not available as yet however I saw him this morning. He has concussion with headache and whiplash with severe right neck spasm. He is having physiotherapy and will be unfit to travel and give evidence this week. I would anticipate he would be fit next week. 7 I refused the adjournment and expressed the view that the proceedings were not impeded from commencing if, as it seemed to me was the case, Mr Dunn could be available for telephone communication to give any instructions that needed to be obtained in respect of matters that may not have been anticipated in the evidence of Mr Vignoli or his witnesses. 8 The hearing of the assessment of damages for false imprisonment proceeded to hearing on 10, 11 and 12 November 1999. The first defendant did not call any evidence. I delivered my judgment on 22 November 1999. 9 The costs argument was heard on 10 December 1999. Mr B W Collins QC, leading Mr T D F Hughes, of counsel, appeared for the plaintiff and Ms L McCallum of counsel appeared for the defendants. Defamation 10 Mr Collins QC submitted that the defendants made six applications during the trial which were unsuccessful. He submitted that although a costs order would be made in the defendants' favour as they were successful in the proceedings, such costs order should not include these six unsuccessful applications. 11 Those applications were two applications on 1 November 1990 prior to the empanelling of the jury challenging the capacity of the matters complained of to carry the imputations pleaded; two applications to discharge the jury; and two applications which Mr McAlary QC, who was leading counsel for the defendants at the trial, described as "verdict points". All of these applications were unsuccessful. 12 The first two applications took the better part of the first day, 1 November 1999. They are matters covered by s7A(1) of the Defamation Act 1974, as amended, and could have been made prior to the first day of the hearing pursuant to Part 31 of the Supreme Court Rules. 13 These were not the only matters that were the subject of argument on that day. The plaintiff had originally pleaded only one cause of action with the re-publication relied upon for damages. It took some little time for the plaintiff to adopt the final position of seeking leave to amend the Statement of Claim to plead the re-publication as a separate cause of action. That amendment was allowed and the capacity arguments then took place. In these circumstances although the defendants' applications were not successful I am not persuaded that I should exclude them from the costs order. 14 I am also not persuaded that the applications to discharge the jury and the two "verdict points" applications should be excluded from the costs order. 15 The two applications to discharge were very short. The second of the "verdict points" raised by Mr Alary QC was, as I said in my judgment of 3 November 1999, more complex than the first. I need not detail the nature of those applications but in my view they were appropriate applications to make in the course of the trial and although unsuccessful I am of the view they should not be dissected out of the costs order. 16 In all of the circumstances I am persuaded that the plaintiff should pay the defendants' costs of the defamation proceedings. False Imprisonment 17 The plaintiff makes an application for indemnity costs in respect of the action for false imprisonment. In support of this application Mr Collins QC relied upon Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited & Ors (1988) 81 ALR 397 and Rouse v Shepherd (No 2) (1994) 35 NSWLR 277. 18 In the former case Woodward J said at 401: I believe that it is appropriate to consider awarding "solicitor and client" or "indemnity" costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur the court will need to consider how it should exercise its unfettered discretion. 19 In the latter case Badgery-Parker J drew the distinction between the actions of a defendant in refining a case as it proceeds and the forcing of hopeless issues. In awarding indemnity costs His Honour said at 282: This behaviour put the plaintiff to the considerable expense of investigating an issue which the defendants were seemingly only pursing as a question of tactics between themselves. 20 In support of his application the plaintiff relied upon the following findings in my judgment of 22 November 1999: I have reached the conclusion that there was a lack of bona fides in the defendant's pleading and that it was not justified in maintaining it. (par 134) The question is whether these memoranda and the defendant's admission of liability on 25 October 1999 is evidence upon which I am able to reach the conclusion on the balance of probabilities that the defence lacked justification and the defendant was not acting in a bona fide manner in filing and maintaining such a defence. I am of the view that it is. (par 139) 21 Mr Collins QC submitted that the behaviour of the defendant had put the plaintiff to the considerable expense of investigating an issue for which there was not a scintilla of evidence to justify its maintenance. He submitted that in these circumstances an order for indemnity costs should be made. 22 Mr Collins QC also submitted that the costs should include costs for the 8th and 9th November 1999 when the matter did not proceed because of the unavailability of Mr Dunn who although described as a "central witness" was not called to give evidence. 23 Ms McCallum submitted that the costs to be awarded to the plaintiff are governed by Part 52A r 33(4)(e) and r 33(5) of the Supreme Court Rules. Part 52A r 33(4)(e) provides: (4) Subject to subrule (5) where, by or under the rules or any order of the Court, the plaintiff is entitled to his or her costs of any proceedings to which this rule applies, the amount of costs payable to him or her shall - (e) in respect of proceedings commenced after 30 June 1993, but on or before 1 October 1997, where he or she recovers a sum more than $75,000 but not more than $150,000, be only a half of the whole amount." 24 Part 52A r 33(5) provides: (5) In a case to which subrule (4) applies, if it appears to the Court that the plaintiff has sufficient reason for commencing or continuing proceedings in the Court, the Court may order that the amount of costs payable to the plaintiff be some greater part or the whole of the amount which would be payable to him or her apart from that subrule. 25 On 10 December 1999 after the parties agreed on the amount of interest I entered judgment for the plaintiff in the amount of $80,250. Ms McCallum submitted that in the circumstances having regard to Part 52A r 33(4)(e), far from awarding indemnity costs, I should make an order that the plaintiff only have half of the whole amount of his costs. 26 Mr Collins QC submitted that this was a case in which I would be satisfied that the plaintiff had "sufficient reason" for commencing and continuing the proceedings in the Supreme Court. He submitted that this was viewed by the plaintiff as a very serious false imprisonment by reason of which he suffered deep humiliation and disgrace. It had been a very public humiliation and slur for which he sought appropriate vindication. 27 I am of the view that the seriousness of this false imprisonment and the plaintiff's pursuit to be vindicated in a superior Court was sufficient reason for him to commence the proceedings and continue them in this Court. Accordingly I am of the view that although the plaintiff did not achieve a judgment of more than $150,000 I intend to exercise my discretion in his favour under Part 52A r 33(5) and allow him the whole of the amount of his costs. 28 That brings me to the final question as to whether I should award indemnity costs to the plaintiff. Ms McCallum submitted that the plaintiff has already recovered $10,000 in aggravated damages on the basis of an unjustifiable defence. She submitted that I should take this matter into account in exercising my discretion on this aspect of the matter. 29 The award of aggravated damages is to compensate the plaintiff for the heightened injury caused by the unjustifiable conduct of the defendant. Cassell & Co Ltd v Broome [1972] A.C. 1027 at 1124. An award of indemnity costs is to compensate a party for the incursion of costs in fighting or preparing to fight a case brought by a party who, properly advised, should have known had no chance of success. Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited & Ors (1988) 81 ALR 397 at 401. They are distinct awards. 30 I am satisfied that this defendant properly advised should have known its defence was unjustifiable. In the circumstances I am of the view the plaintiff should be awarded his costs on a solicitor/client or indemnity basis from November 1996 when the defence was filed to 25 October 1999 when liability was admitted. I am also of the view that he should be awarded his costs on an ordinary basis from 25 October 1999. Orders 31 The plaintiff is to pay the defendants' costs of the defamation proceedings. 32 The first defendant is to pay the plaintiff's costs of the false imprisonment proceedings on a solicitor/client or indemnity basis from 29 November 1996 when the defence was filed until 25 October 1999 when liability was admitted. The first defendant is to pay the plaintiff's costs from 25 October 1999 on an ordinary basis. This order is to include the plaintiff's costs thrown away by the adjournment of the matter on 8 November 1999. 33 Each party is to pay their own costs of the costs argument on 10 December 1999. *********** Last Modified: 12/16/1999 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.