New South Wales Supreme Court CITATION : Hodge v TCN Channel Nine & Anor No 2 - Interest and Costs [2006] NSWSC 1272 HEARING DATE(S) : 16 November 2006 JUDGMENT DATE : 28 November 2006 JUDGMENT OF : Smart AJ at 1 DECISION : See paras 80-81 CATCHWORDS : Rates of Interest for non-economic loss in defamation cases where vindication required and most of damage to hurt feelings etc occurred about time of publication - overall interest rates fixed rather than splitting up interest calculations - Costs - Requirements of offer of compromise and construction of offer - plaintiff succeeds on two out of three imputations - third imputation justified on particular basis - defendants succeeding on some issues - Overall costs order made rather than orders for a series of orders leading to expensive costs assessment - impermissible conditions attached to "Calderbank" offer and so disregarded. Federal Court of Australia Act 1976 LEGISLATION CITED : Supreme Court Rules Supreme Court Act 1970 UCP Act & Rules Assaf v Skalkoss unrep NSW 5/10/03 Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175 p67,645 Calderbank v Calderbank 1976 Fam 93 Carson v John Fairfax & Sons Ltd unrep NSWSC 6/5/94 Erskine v John Fairfax Group Pty Ltd unrep NSWSC 6/5/98 Hughes v Western Australia Cricket Association & Ors 1986 ATPR 40-748 CASES CITED : John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 McMullen v TCN Channel Nine Pty Ltd unrep NSWSC 938 MPB(SA) Limited v Gogic (1991) 171 CLR 657 Obeid v John Fairfax Publications unrep 2006 NSWSC 1059 Perkins v NSW Aboriginal Land Council unrep 15/8/97 Thompson v Australian Capital Television Pty Ltd & Ors unrep ATSC 4 1998 Vilo v John Fairfax & Sons Ltd unrep NSWSC 1206 15/12/00 PARTIES : Gregory Hodge v TCN Channel Nine Pty Limited & Nine Network Australia Pty Limited FILE NUMBER(S) : SC 20276/03 COUNSEL : (P) S Littlemore QC & Ms S Chrysanthou (D) B McClintock SC & Mr M Richardson SOLICITORS : (P) Blake Dawson Waldron (D) Gilbert & Tobin IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST SMART AJ Tuesday, 28 November 2006 20276/03: Gregory HODGE v TCN CHANNEL NINE PTY LIMITED and NINE NETWORK AUSTRALIA PTY LIMITED JUDGMENT – Interest and Costs 1. Further to my judgment of 18 September 2006 and the amendment of 20 September 2006 as to Special Damages, the parties have argued the questions of interest and cists. Interest Special Damages 2. In the amendment of 20 September 2006 to my judgment I assessed the special damages at $21,000, being part of the moneys paid by Mr Hodge to Wilkinson Media, in an endeavour by Mr Hodge to mitigate his damage. The parties were agreed that interest in this sum should be calculated at the rate of 9 per cent from the date of publication. As at 28 November 2006 such interest amounts to $5,913.37 . General Damages 3. The plaintiff submitted that he should receive interest on the general damages awarded at the rate of 4 per cent from the date of publication, and that the rate should not be halved because: (a) by reason of the nature of the publication most of the loss occurred at or immediately after the time of publication and that damages were not increased by reason of continuing injury (b) the prompt commencement of proceedings, being instituted within a week of publication of the matter. The plaintiff took immediate steps to stem the flow of damage. 4. Senior Counsel for Mr Hodge pointed to the graphic publication of the program on TCN 9 on 13 October 2003, republication of parts of the program subsequently, the widespread media coverage, the prominence given to the action of Australian Swimming in curtailing Mr Hodges's activities and the responses of other coaches. It was not suggested on behalf of Mr Hodge that there was no continuing damage or loss but rather that it was of a much lesser order than the initial damage. 5. Senior Counsel for the defendant submitted that in view of changed economic conditions the appropriate starting rate of interest was 2 per cent which should then be discounted by about half to cover the whole period from publication to the date of judgment. In the event of this submission being rejected, the defendant submitted that I should follow the practice of starting with an interest rate of 4 per cent and halving it to cover the whole period. 6. Both parties started with the judgment of the High Court in MPB(SA) Limited v Gogic (1991) 171 CLR 657. The effect of that decision is captured in the headnote: "… interest on damages for non-economic loss sustained before trial should not be calculated on current interest rates or the real rate of interest, which would have been available to the plaintiff in the relevant period, but on a rate which represents the difference between the prevailing rate for secure investments and the rate of inflation." 7. After referring to various economic factors the Court said at pp 663-664: "Damages for pre-trial non-economic loss, however, are assessed in accordance with the value of money as at the time of the award. In no way is any loss which a plaintiff incurs by reason of being deprived of his or her damages for pre-trial non-economic loss brought about by inflationary factors. In those circumstances, to award interest on damages for non-economic loss during the pre-trial period by reference to commercial rates is to compensate the plaintiff for a 'loss' which he or she has not sustained. No doubt whatever interest rate is used to compensate a plaintiff, it can be at best only a rough guide as to the value of the plaintiff's loss during the period when he or she was deprived of the use of his or her money." 8. After further reference to economic factors the Court explained the basis of the award of interest thus at 666: "A plaintiff is awarded interest because he or she has been deprived of the use of his or her money, not because he or she has forgone investment opportunities. It would be wrong, for example, to refuse to award a plaintiff interest simply because the real rate of interest during the relevant period was zero or a negative figure. Moreover, to award interest calculated by reference to the real rate of interest, when it has been a positive figure, ignores the important fact that the return to the real-life investor from his or her investment is diminished by income tax on both the inflationary and real profit components of that return. Thus, the use of the real rate of interest figure as the measure of a plaintiff's loss in being deprived of his or her damages for pre-trial pain and suffering does not seem inherently superior to the use of a fixed figure." 9. In Gogic the Court commented at 666 that the South Australian Supreme Court had selected a figure of 4 per cent, although somewhat arbitrary, as being fair and reasonable compensation for a plaintiff for being deprived of the use of his or her money and acted upon it for over seven years. The Court further commented that in the circumstances the use of the 4 per cent figure was more likely to achieve fair and reasonable compensation for plaintiffs than the use of the real rate of interest figure. 10. The defendant submitted that it was clear from the Court's discussion at 664 to 665 that the Court had in mind the prevailing economic conditions and, I would add, the variations which could occur. In my opinion it would be undesirable if a Court in each case had to review the economic conditions which had prevailed up to judgment. In Gogic the Court discussed some of the difficulties which could occur. On the other hand, having discussed the various matters to be considered, it does not necessarily follow that 4 per cent should be regarded as immutable for all time. 11. The defendant submitted that Schedule 5 to the UCPR indicated the changed economic conditions since Gogic was decided. Between 1 January 1981 and 31 August 1992 the Supreme Court commercial interest rates moved in a range of 13 to 21 per cent whereas since 1 September 1992 they have been 11.25 per cent or below and a flat 9 per cent since February 2002. The defendant submitted that this long term stable trend in interest rates (accompanied as a matter of common knowledge by much lower inflation) should now be recognised by this Court. While the exercise is somewhat arbitrary, the defendant submitted that the appropriate rate was now 2 per cent. 12. The defendant submitted that once the Court had fixed the rate it then has to be discounted to recognise that the plaintiff's loss is spread over the period from the defamation to judgment and that usually the interest rate has been halved. Reference was made to Assaf v Skalkoss unrep. Carruthers AJ NSWSC 5 October 2003; Carson v John Fairfax & Sons Ltd unrep. Levine J NSWSC 6 May 1994, Erskine v John Fairfax Group Pty Ltd unrep. Levine J NSWSC 6 May 1998, McMullen v TCN Channel Nine Pty Ltd unrep Dunford J NSWSC 938, 5 October 2000, Vilo v John Fairfax & Sons Ltd unrep. Simpson J NSWSC 1206 15 December 2000, Thompson v Australian Capital Television Pty Ltd & Ors unrep. Miles CJ ACTSC 4 unep. 1998 and Obeid v John Fairfax Publications unrep, 2006 NSWSC 1059 per Hoeben J, para 117. 13. In some of the cases, the rates of interest were not contested. The defendant contended that there had been a longstanding practice in defamation cases of using the 4 per cent rate for non-economic loss and halving it to allow for the hurt to feelings extending over the whole period from defamation to judgment. That has been the usual practice, but it may not always be apt. The cases of Gogic and Kelly have been applied. 14. Mr Hodge gave evidence that when he returned to Australia about December 2004, a former female swimmer he had coached about ten years previously shunned him at a local shopping centre. He found this hurtful. Mr Hodge concluded that the statements in the TV program had not been forgotten. 15. Both parties relied heavily on the judgment of McHugh JA in John Fairfax and Sons Ltd v Kelly (1987) 8 NSWLR 131. Kirby P agreed with McHugh JA. Interest is awarded for real and practical and not merely theoretical losses (p142). At p 143 McHugh JA said: "The correct approach in theory would seem to be that, since the plaintiff was entitled to damages immediately upon publication, the proper inquiry is first to determine to what extent the award was increased by reason of continuing injury. In strict theory the interest, in respect of this additional sum, would need to take account of the fact that the injury was spread over a period after publication. However, that amount has to be reduced for any sum additional to 'vindication damages' awarded in consequence of injury suffered between publication and verdict. This approach gives rise to obvious difficulties of assessment. But if, as I think is the case, the plaintiff is entitled to at least part of his damages from the date of publication, the choice is between awarding no interest at all or attempting to calculate interest on a basis which, although not mathematically perfect, achieves a measure or justice. Since it unfair to plaintiffs to deprive them of interest for the period in which they have been deprived of their money, interest ought to be awarded to the extent that is fair and proper." and "Speaking generally, the best approach is to treat the award as though the damages represent a loss spread over the period from the date of publication to trial. It is a process which does not achieve perfect justice for the plaintiff since he may have ceased to suffer actual injury well before the trial but it seems to be the most practical approach to a difficult problem." 16. McHugh JA stated the correct theoretical approach, recognised the difficulties in applying it and then formulated "the most practical approach". Australian Consolidated Press v Driscoll (1988) Aust Torts Reports, 80-175 p.67,645 was a defamation case dealing with the computation of interest. The leading judgment was delivered by Hope JA with whom Priestley JA agreed. At p 67,647-8 Hope JA said that in Kelly: "…This Court decided that interest is awarded to compensate the plaintiff for the loss which he suffers in being kept out of his money and as, except in exceptional circumstances, an award of damages in a defamation action has, or is to be treated as containing no award for loss after verdict, the plaintiff is prima facie entitled to such interest as is fair and proper on the whole of the award. Damages for vindication would ideally carry interest from the date of publication, but damages for injury to feelings and reputation may relate to the whole period from publication to trial. This gives rise to problems in calculating interest when the jury does not identify how its award is made up – a course which it was suggested should not be adopted. The practical solution adopted in these circumstances was to assume that the whole of the award represented a loss spread over the period from publication to trial." 17. Hope JA set out the two passages from Kelly quoted earlier. 18. At p 67,650 Hope JA expressed the view that "as to how interest should be calculated McHugh JA was not intending to describe general principles applicable to that calculation; he qualified what he described as the "best approach" with the words "speaking generally" and when he came to deal with the award of interest, he stated how he thought justice would be done in the particular case." Hope JA added, "The question in the present case is how the calculation should best be made in its particular circumstance." That is the question which I have to address. 19. In Driscoll Hope JA observed at 67,651 that the period between publication and trial including the period of the delay was one of continuous inflation (1978-1985). He was concerned that as the award was made in 1985 money values the plaintiff should not be awarded interest in respect of the period of delay due to his fault as the verdict which the plaintiff obtained included an added inflation factor of two and a half years change in money values. There was no delay in the present case to be taken into account, nor high inflation. 20. In Driscoll at p 67,651 Hope JA expressed this opinion: "Although damages for hurt were spread over the whole period, damages for vindication run from publication. These damages and the damages for initial hurt must have comprised a substantial part of the verdict although it is impossible to tell what part." 21. Hope JA held that the appropriate course to solve the difficult problem of doing justice to both parties lay in the fixing of the rate of interest. He further held that an appropriate rate of interest over the whole period was thirteen per cent and continued: "Because of the fact that a substantial part of the verdict represents damages on publication, it is not appropriate simply to divide the rate of interest in half. It is impossible logically to support any particular figure but taking all the circumstances into account I have concluded that a just result would be to calculate interest over the whole of the relevant period at the rate of nine per cent." 22. Mahoney JA agreed with the judgment of Hope JA and in general with his reasons. Mahoney JA in his reasons raised a number of problems as to the calculation of interest. He seemed to think that "the bases on which interest to judgment is to be calculated may vary in different kinds of cases." 23. In Vilo v John Fairfax & Sons Limited [2000] NSWSC [20] Simpson J pointed out that Driscoll pre-dated Gogic and at [20] stated: "The passage from Driscoll, in which Hope JA stated the view that a plaintiff should not be awarded interest in respect of a period delay due to his (or her) fault which leads to the amount of the award being made in an inflated money value must be read in the light of the decision in Gogic. Those views, it seems to me, were taken into account by the High Court in the reduction of the rate of interest applicable to awards of damages in respect of non economic loss. " 24. At [25] she said: "Although it may be reasonable to conclude that the greater damage was occasioned in the earlier part of the period, thus tilting the balance slightly in favour of the plaintiff for a larger interest rate, I think to do justice to both parties it is more appropriate to treat the injury as spread evenly over the period. This would justify a halving of the interest rate declared by the High Court. " 25. In substance Hoeben J in Obeid v John Fairfax Publications took a similar approach. However, Mr Hodge submitted that other judges have not taken the same approach. In Thompson v Australian Capital Television Pty Ltd & Ors [1998] ACTSC 46 Miles CJ agreed that the appropriate rate was 4 per cent and that damages should be weighed more heavily in the earlier part of the period since publication (at [10]). It was further held that any delay between publication and commencement of proceedings should reduce the award of interest for pre-trial damages. The interest rate was consequently reduced by half. Miles CJ took a somewhat different approach to delay from that taken by Simpson J and as to whether damages should be greater for the earlier part of the period. They both ended up with the same result of 2 per cent. 26. In Perkins v NSW Aboriginal Land Council (unrep 15/8/97) Badgery-Parker apportioned damages as relating partly to vindication and injury to feelings and reputation at around the time of publication and partly to injury to feelings suffered later and awarded interest at 4 per cent on the former and 2 per cent on the latter. Damages were not divided in the same manner in the present case. 27. The plaintiff stressed that TCN 9 on Nightline on 13 October 2003 at 11.26pm in its summary of the "Greg Hodge Story" repeated the essence of EF's complaints against Mr Hodge. The summary was repeated by TCN9 on Channel Nine Early News at 6.00am on 14 October 2003 and 6.31am that day. A substantially similar summary, but with slightly more elaboration was broadcast by TCN 9 on 14 October 2003 at 7.02am. A summary containing substantially the same complaints was broadcast at 8.01am. In the latter two broadcasts there was mention of Mr Hodge disputing EF's complaints,. There was a much truncated version of EF's allegations and Mr. Hodge's rejection of them broadcast at 8.11am on the To-day program. This appears to have been immediately prior to an interview with Mr and Mrs Hodge conducted by Tracey Grimshaw and Steve Liebmann on TCN9. As a prelude to that interview a substantial excerpt taken from various parts of the A Current Affair program was broadcast. Some of the parts broadcast contained incorrect factual statements in the complaints made and were damaging. TCN9 knew some of the statements made were factually incorrect. In the interview Mr Hodge was given ample opportunity to rebut the adverse allegations made against him. 28. There was a brief reference to the alleged stalking of EF and Mr Hodge's denial at 8.58am on the To-day program. 29. There was a further but different summary containing major allegations broadcast at 11.02am on the National Nine Morning News. The news item refers to an "AVO has been taken out by Fuller" and to Mr Hodge "accusing Channel Nine of conjuring up the story in a bid to get out of its contract to provide coverage of major swimming events." 30. On National Nine News at 6.02pm on 14 October 2003 there was a news item containing some of EF's allegations, Mr Hodge's replies and a statement that Australian Swimming had put Mr Hodge on restricted duties which required no contact with members of the Australian swimming squads. 31. On A Current Affair at 6.30pm on 14 October 2003 there was further coverage of the matter, a statement that Australian Swimming had decided to restrict Mr Hodge to operational duties pending an investigation into Ms Fuller's allegations. The item states that Mr and Mrs Hodge had publicly denied the allegations made by Ms E Fuller. 32. The item contains a reference to a complaint made by a male about the allegedly totally inappropriate treatment he was subjected to when in the Hodge home many years previously and an assertion by the reporter (Ms Patterson) that TCN9 had been contacted by a number of other former students prepared to back up Ms Fuller's claims. The item states that it was TCN9's understanding that Swimming Australia had advised Ms Fuller to apply for an interim Apprehended Violence Order against Mr Hodge. The item also states that as they showed last night Mr Hodge tells lies. 33. This item in part repeats some of the allegations made on the previous night, in part repeats the statements in denial made earlier by Mr and Mrs Hodge that day and in part adds some serious further allegations involving the male. 34. That item was followed at 6.35pm by an interview between Mr Ray Martin, Ms Fuller and her mother. Ms Fuller said she stood by her story of the previous night and would not change anything. Mr Martin commented that Ms Fuller's story was "everywhere to-day". 35. On 14 October 2003 at 11.27pm on Nightline TCN9 broadcast a further news item referring to some of Mr Fuller's allegations and the responses of Mr Hodge denying any of the alleged improprieties in his behaviour. 36. On 15 October 2003 at 7.14am on the To-day program TCN9 repeated portion of the item broadcast the previous evening on A Current Affair and then spoke with the Chief Executive of Australian Swimming who said that it was better for Mr Hodge not to have contact with athletes. He stated that Australian Swimming did not advise Ms Fuller to pursue seeking an AVO against Mr Hodge and that when Australian Swimming met with Ms Fuller they were told that she had sought such an order. Australian Swimming advised by email that they could not act without a written complaint. Australian Swimming also suggested that Ms Fuller should seek independent legal advice. The Chief Executive said that another woman had come forward the previous year but decided not to pursue her claims against Mr Hodge so the matter was not investigated. They were not similar sorts of allegations to those made by Ms Fuller. 37. On 15 October 2003 at 8.03am on the To-day program there was a brief mention that Australian Swimming was satisfied with how it deals with claims of inappropriate behaviour by a national swim coach., 38. On 15 October 2003 at 11.06am in National Nine News there was further reference to Ms Fuller's adherence to her allegations of inappropriate behaviour by Mr Hodge eight years ago when he was her coach, her assertion that he recently began stalking her and to Mr Hodge's denial. The item also referred to the decision of Australian Swimming standing Mr Hodge down until the matter was resolved. 39. On 15 October 6.10pm on National Nine News there was a brief News item that Mr Hodge denied claims of improper behaviour from a second woman and that Mr Hodge's troubles began earlier when Ms Fuller accused him of stalking her. 40. On 16 October 2003 at 6.35pm on A Current Affair TCN9 broadcast an interview between Mr Ray Martin and Mr Philip Fuller. After a reference to Mrs Hodge throwing Ms Fuller out of the Hodge family home and accusing Ms Fuller of being the other woman in Mr Hodges life there was a reference to Mr and Mrs Hodge raising questions about Ms Fuller's character. Mr P Fuller described this as a smokescreen and said that the issue was that Mr Hodge had been stalking Ms Fuller. Mr Fuller stated that both Mr and Mrs Hodge had told lies about their involvement with Ms Fuller. Mr Martin referred to the comment in a school report by Mr Hodge, as Ms Fuller's maths master, that Ms Fuller's conduct was excellent and contrasted this with Mrs Hodge saying that Ms Fuller was a troublemaker and manipulative. Mr Martin read the letter of 6 February 1997 from Mrs Hodge to the Fuller family (set out in the earlier judgment). 41. Mr Fuller reiterated his and his family's support of his daughter. Mr Fuller remarked that Mr Hodge had demonstrated that he had no moral code and was a loose cannon. 42. On Sunday 19 October 2003 at 9.11am TCN9 broadcast a further news report which repeated Ms Fuller's allegations of inappropriate behaviour by Mr Hodge when she was a child and that he has been stalking her. The report repeats Mr Hodge's denials that he had been stalking Ms Fuller and that he had behaved inappropriately towards Ms Fuller. The report repeated Mrs Hodge's criticisms of Ms Fuller and part of Mrs Hodge's letter of apology of 6 February 1997. 43. On 22 October 2003 on National Nine News at 6.07pm TCN9 broadcast that the hearing of Ms Fuller's application for an apprehended violence order against Mr Hodge had been adjourned to the following month and Mr Hodge's assertion that his name would be cleared in court. At 6.38pm on that day on A Current Affair TCN9 broadcast that the hearing of her application for an interim AVO would be heard next month. There was repetition of the allegations that Mr Hodge had acted inappropriately when she was a young member of Mr Hodge's squad and living at his home and that he had followed her. Mrs Sue Fuller is recorded as saying that the AVO was absolutely necessary. The TCN 9 Reporter observed that through all the commotion Ms Fuller had stuck to her story but Mr Hodge had changed his. Mr Hodge's denials of following Ms Fuller were also broadcast. 44. On 22 October 2003 at 11.15pm on Nightline TCN9 broadcast that the hearing of the AVO proceedings had been adjourned to the next month. This was substantially similar to the matter broadcast earlier at 6.07pm. 45. On 26 March 2004 on A Current Affair TCN9 broadcast that Ms Fuller's Court case had come to a surprisingly quick conclusion in that Mr Hodge today agreed to an Apprehended Violence Order sought by Ms Fuller without any admission. The terms of the Order agreed to were summarised by the reporter. She described what had happened thus "A surprising back flip worthy of an Olympic swimming gold medal" and "by accepting the conditions of the Apprehended Violence Order today Greg Hodge has ensured that he doesn't have to answer any of Emma Fuller's stalking allegations." 46. These comments can be made on the material broadcast after the program of 13 October 2003: (1) There was a great deal of coverage of the allegations of Ms Fuller on 14 and 15 October 2003. (2) While there was reference to Mr Hodge's alleged improper behaviour while Ms Fuller was in his squad and lived in the Hodge family home there was also reference to Ms Fuller's stalking allegations. I found that the allegations of following were probably substantially true but that the defendant had not proved that the following was with a view to a sexual relationship or because of a sexual obsession by Mr Hodge with Ms Fuller, or sexual attraction to her. In view of my findings in taking into account the hurt which Mr Hodge suffered I should exclude any hurt occasioned by the references to the stalking or following as such and absent a sexual connotation. (3) In the material broadcast there was reference to other complaints, but they are not matters which are the subject of these proceedings. (4) There was considerable reference to the conduct of Australian Swimming and some reference to its processes. (5) There was substantial reference to the Hodges vigorously repelling the attacks made and the attacks by the Hodges on Ms Fuller. 47. I am of the opinion that by far the greatest hurt to Mr Hodge's feelings would have occurred on 13, 14 and 15 October 2003 and in the weeks which followed. That hurt, although of a lesser order, would have continued up to judgment. It was apparent at the hearing Mr Hodge still felt keenly the sting of what had been said about his conduct towards Ms Fuller while she was in his swimming squad and living at his home. I bear in mind that damages for vindication run from publication. 48. As to the compensatory damages for non-economic loss I propose to start with an interest rate of 4 per cent. I am not persuaded that the current economic conditions with rising interest and inflation rates are such that I should start with less than 4 per cent. That has long been regarded as a correct starting point. 49. The question of the extent to which that rate should be discounted is one of considerable difficulty. It was not Mr Hodge's case that he did not continue to suffer hurt feelings up to the date of judgment, but rather that the hurt was most intense at the time of publication of the program and in the many broadcasts which followed. That intensity of hurt would have continued for some months after 16 October 2003. I have given some thought to differential rates of interest for the period from 13 October 2003 to 30 June 2004 and then for the period from 1 July 2004 onwards. I have noted that in about December 2004 Mr Hodge was shunned by a former swimmer. Apart from the question of delay, which does not arise in the present case I regard the approach taken by Hope JA in Driscoll's case as appropriate in the present case. Thus I note that damages for vindication run from publication, that most of the hurt to feelings occurred on and shortly after publication and that it is best to adjust the interest rate over the whole period to reflect these various factors. In all the circumstances I have reached the conclusion that the course which would do justice to both sides would be to discount the rate of 4 per cent and to set an interest rate of 2½ per cent on $280,000 from the date of publication to the date of judgment. 50. The plaintiff claimed interest at the rate of 4 per cent on aggravated damages of $40,000 from 13 October 2003 (the date of publication) to judgment, principally upon the ground that the matters found to justify an award of aggravated damages occurred prior to publication or within a short period of publication – see paras 909-925 of the judgment of 18 September 2006. Some of the aggravation occurred months after the date of the publication but Mr Hodge's submission that much of the conduct that gave rise to the award of aggravated damages occurred prior to or within a short period of publication is correct. However, the hurt experienced by Mr Hodge as a result of such conduct, while most intense on publication and within a relatively short period after publication, continued up to the date of judgment. 51. I propose to discount the rate of 4 per cent as it is better to deal with the whole period, as Hope JA did in Driscoll. I propose to award interest at the rate of 3 per cent on the sum of $40,000 from the date of publication to the date of judgment. 52. Thus I would award: (a) Interest at 9 per cent on the special damages of $21,000 from 13 October 2003 to 28 November 2006 $ 5,913.37 (b) Interest at 2½ per cent on $280,000 from 13 October November 2003 to 28 November 2006 $21,901.37 (c) Interest at 3 per cent on $40,000 from 13 October 2003 to 28 November 2006 $ 3,754.52 $ 31,569.-- When $31,569 is added to $341,000 there should be judgment for the plaintiff for $372,569. Costs 53. Mr Hodge seeks an order that the defendant pay the whole of his costs of the proceedings and on the basis of indemnity costs as from 29 October 2003. 54. The defendant submitted that these orders as to costs should be made: (a) each party to pay his and its own costs (b) alternatively to (a), that the plaintiff pay the defendant' costs of the following issues: (i) the plaintiff's motive and purpose in sending the July 1997 letter to Ms E Fuller; (ii) the plaintiff having followed Ms E Fuller in 2003 including (but not limited to) the costs of the witnesses Craig Yelavich, Marcus Unkuri, Nathan Birney and Matthew Barlow and the defendant' costs of the days those witnesses gave evidence; (iii) the truth of imputation (h) and contextual imputation (F) and that the defendant pay the plaintiff's costs on a party/party basis other than as specified; (c) alternatively to (a) and (b) that the defendant pay the plaintiff's costs on a party/party basis.. 55. The defendant advanced these reasons in support of its submissions: (a) the findings concerning the July 1997 letter and the 2003 "followings" followed from the rejection of the plaintiff's evidence and indicate that the plaintiff was, on the issues in question, lying on his oath. In such circumstances, an award of costs to a person who told conscious falsehoods in an attempt to obtain a verdict in his favour would be manifestly inappropriate. (b) the plaintiff failed on the discrete issues specified in sub-para (b) of the previous paragraph and should pay the costs of those issues; (c) the offer of compromise is inoperative because it does not comply with SCR Part 22, r 2. Offer of Compromise 56. Mr Hodge commenced proceedings on 17 October 2003. About 29 October 2003 Mr Hodge made an "offer of compromise" although there was a dispute whether it complied with Pt 22 of the Supreme Court Rules. Concurrently, the plaintiff made a Calderbank offer as an alternative to the offer of compromise. 57. The Calderbank offer can be disregarded as to indemnity costs as it sought in addition to payment of $30,000 and costs: (1) An apology to be read by Mr Ray Martin during an edition of A Current Affair. The apology required read: "On this program we broadcast that the Head Coach for Australian Swimming Mr Greg Hodge had behaved in an inappropriate manner towards a child and swimmer under his care and tuition. We now realise and recognise that our statements were wrong. A Current Affair takes this opportunity to apologise to Mr Hodge for the damage caused to his reputation and the hurt and embarrassment he has suffered." (2) You will undertake not to publish any further material from Ms Fuller or Mr Collins." 58. The Court could not make orders in terms of sub-paragraphs (1) and (2). The undertaking specified in sub-paragraph (2) goes beyond what could be reasonably entertained. Further, Mr Collins was not the subject of, nor involved in these proceedings. The program did not refer to him. 59. Mr Hodge served a document entitled Notice of Offer of Compromise. It provided: "1. The plaintiff is prepared to accept from the defendant the sum of $70,000 plus costs on the terms and conditions set out in paragraphs 2 and 3 below. 2. The offer is open for acceptance by the defendant for a period of 28 days. 3. If a notice of acceptance of the offer is received by the plaintiff's solicitors within 28 days the parties will file the following terms of settlement: "By consent and without admission of liability: (a) The defendant must pay the plaintiff party/party costs as agreed or assessed; (b) Interest will not accrue on the Settlement Sum until 28 days after judgment/the latest of (i) receipt by the plaintiff's lawyers of filed term of settlement; or (ii) receipt by the plaintiff's lawyers of a written document signed by the plaintiff authorising and directing the payment of the Settlement Sum; or (iii) receipt by the plaintiff's lawyers of a written notice that the defendant must lawfully pay any amount under the Legislation ( I have treated this sub-para as surplusage) (c) Interest will not accrue on costs until 28 days after the latest of: (i) the costs being agreed; or (ii) if costs cannot be agreed, receipt by the plaintiff's lawyers of a written notice of the assessment of costs;" (4) The plaintiff will in further consideration of the terms of settlement not exercise any right under Part 22, rule 5(1)(a) following the notice of acceptance This offer is made in accordance with the Supreme Court Rules, Part 22, Division 1". 60. Part 22, r 1A(1) provides that an offer of compromise is made to a party under Division 1 by serving a notice of the offer on the party. That was done, subject to the notice meeting the requirements of the Rules. Under r 1A(2)(b) the notice of offer shall be prepared in accordance with Pt 65, rules 1-4. It was not suggested that these rules had not been complied with. Under r 1A(2)(b) the notice of offer must bear a statement to the effect it is made in accordance with Division 1. The notice of offer bears such a statement. Rule 2 states: "In any proceedings the plaintiff or the defendant may make to the other an offer to compromise any claim in the proceedings on the terms specified in the Notice of Offer." 61. Rule 3 relevantly provides: "(3) An offer may be expressed to be limited as to the time it is open to be accepted but the time expressed should not be less than 28 days after it is made. … … (5) An offeree may accept the offer by serving a notice of acceptance in writing on the offeror before - (a) the expiration of the time specified in accordance with sub-rule (3) or, if no time is specified, the expiration of 28 days after the offer is made; … … (9) Where an offer is accepted under this rule any party to the compromise may enter judgment accordingly." 62. Rule (34)(3) was complied with. The offer was not accepted. The defendant attacked the notice of offer on a number of grounds. It was submitted that there was not an offer because the words used in para 1 of the Notice of Offer are "is prepared to accept". The document is entitled "Notice of Offer of Compromise" and para 2 states "The offer is open for acceptance by the defendant for a period of 28 days. Paragraph 3 refers to "notice of acceptance of the offer". At the end of the notice it is stated "This offer is made in accordance with Supreme Court Rules, Part 22, Division 1". This submission is unsound. 63. The defendant further submitted that the notice was defective because it did not state whether judgment was to be entered for $70,000 nor did it state in respect of which imputation or imputations the plaintiff made an offer to accept $70,000. Put another way, the defendant submitted that the offer was defective in that it did not specify what the plaintiff was offering to compromise including, particularly, whether all or part of his claim in the proceedings; paragraph 1 merely stated that the plaintiff was prepared to accept $70,000 plus costs. The defendant further contended that the notice did not state whether there was to be judgment for the plaintiff for $70,000 or whether judgment was to be entered for the defendant with a side deed whereby the defendant promised to pay the plaintiff $70,000. 64. This latter method is used in practice on occasions. In my opinion the offer made by the plaintiff meant and conveyed that the plaintiff was offering to settle the whole of the proceedings upon $70,000 being paid to him and judgment being entered in his favour for that sum and on the other terms stated in the Notice of Offer. 65. The time for payment is fixed by r 4 which provides: "1. An offer providing for the payment of a sum of money, or for the doing of any other act shall unless the notice otherwise provides, be taken to provide for the payment of that sum or the doing of that act within 28 days after acceptance of the offer." 66. There is no prescribed form of offer or acceptance. In my opinion the challenges to the efficacy of the Notice of Offer of Compromise fail. There has been substantial compliance with Pt 22 of the Supreme Court Rules. 67. Part 52A of Supreme Court Rules r 22 relevantly provides: (1) Upon the acceptance of an offer of compromise in accordance with Part 22 rule 3(5), the defendant shall, unless the Court otherwise orders, pay the costs in respect of the claim by the plaintiff against the defendant up to and including the day the offer was accepted. … … (4) Where an offer is made by a plaintiff and not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim to which the offer relates no less favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall, subject to rule 33, be entitled to an order against the defendant for the plaintiff's costs in respect of the claim from the day on which the offer was made, assessed on an indemnity basis in addition to his costs incurred before and on that day, assessed on a party and party basis." 68. The defendant directed attention to these words in sub-rule 4 "no less favourable to the plaintiff". It submitted that while the plaintiff was prepared to accept $70,000 plus costs and achieved judgment in the sum of $341,000, this was not the sole criterion. 69. The defendant contended that as one of the imputations had been justified and the imputation justified was that the plaintiff so misconducted himself in his sexual attentions towards Emma Fuller that he was unfit to hold his position in charge of Australian Olympic swimmers, the plaintiff had not achieved a result which was "no less favourable" than the terms of the offer. 70. The finding that this imputation had been justified was based on the letter sent by Mr Hodge to Ms Fuller about the end of July 1997. I held that it had not been established that the following at the end of April 2003 and on 15 August 2003 was by reason of Mr Hodge's sexual obsession with and/or sexual attraction to Ms Fuller. The following by Mr Hodge was wrong. That also made him unfit to hold his position with Australian Swimming but it was not established that the following which occurred amounted to sexual attentions towards Ms Fuller. The defendant submitted that the findings made against Mr Hodge meant that he should never have been employed by Australian Swimming and, practically, could not continue in his employment. Effectively, Mr Hodge had lost what he most wanted, that is to retain his senior position with Australian Swimming. The defendant contended that the plaintiff had achieved a phyric victory. 71. The defendant's submissions have some force but I do not think that they should prevail. Frequently, in defamation cases, a plaintiff does not succeed on all his imputations for a variety of reasons. When an overall view is taken of the proceedings and his claims the plaintiff achieved a result which was no less favourable than the terms of the offer. On many issues the defendant failed to make good its defence of justification and there was a substantial body of credible evidence contradicting the evidence led by the defendant. Reference is made to the findings in the judgment of 18 September 2006. Should Plaintiff Receive All his Costs and on what Basis? 72. Both parties accepted that costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. See SCR Pt 52A, r 11 and UCPR 42.1. 73. Section 76(1) of the Supreme Court Act 1970 and s 98 of the UCP Act provide that costs shall be in the discretion of the Court and that the Court may order that costs be awarded on the ordinary basis (party/party) or on an indemnity basis. 74. In Hughes v Western Australia Cricket Association & Ors 1986 ATPR 40-748 at p 48,136, after noting a similar statutory provision in s 43.3 of the Federal Court of Australia Act 1976 Toohey J said: "The discretion must of course be exercised judicially. There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be their effect. 1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey (1920) 2 KB 47. 2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar (1893) 1 QB 564. 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR. 4 at p 12. There is no difficulty in stating the principles; their application to the facts of a particular case is not always easy. Also it is necessary to keep in mind the caveat by Jacobs J in Cretazzo v Lombardi at p 16. His Honour sounded what he described as 'a note of cautious disapproval' of applications to apportion costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of a trial. His Honour commented: 'But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judge goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues." 75. This is also a case where the application of the principles is not easy. The credit of the witnesses was important and that involved a certain degree of overlappinhg so far as the various issues were concerned. It was a case where I examined the evidence on each of the many points in issue in some detail without losing sight of the overall picture. 76. The issue of the followings on 30 April 2003 and 15 August 2003 was difficult of resolution with substantial points being made on both sides. The evidence of Messrs Yelavich, Unkuri, Birney and Barlow took less than one day with three of them giving evidence on 16 November 2005 from 12.07 pm and one giving evidence from 10.01am to 10.51am on 17 November 2005. Mr Yelavich was cross-examined about other matters. Mr Davies gave evidence from 10.52am to about 11.30am on 17 November 2005. There was evidence in chief from Mr Hodge and Ms Fuller and both were cross-examined. There was the evidence of Mrs Hodge of what happened on 16 August 2003 and the evidence of Mr and Mrs Fuller. The credit of those three witnesses was in issue. 77. The evidence in chief of Mr Hodge as to the letter of late July 1997 and the Savage Garden CD extends from T77-T89 and in cross-examination from T195-T233. Ms Fuller and her parents gave evidence about this letter and its effect. I did not accept Mr Hodge's explanations about the letter and the Savage Garden CD. 78. This case was decided on the balance of probabilities with due regard being paid to the gravity of the allegations being made against Mr Hodge. I did not apply the standard of proof beyond reasonable doubt in reaching the conclusions adverse to Mr Hodge. As to imputation (h) and the letter and the difficulties of decision reference is made to para 445 of the judgment of 18 September 2006. 79. Considerable time was spent at the hearing on issues on which the plaintiff was not successful. On the other hand I do not regard the Notice of Offer of Compromise as inoperable. No issue was raised on which the plaintiff did not advance a case of substance. The issues raised in the case involved matters of public interest. It would be undesirable and unnecessary to make a series of orders dividing up the costs into indemnity costs, party and party costs and costs which should be borne by the plaintiff.. 80. In all the circumstances I think the order which will best do justice to both parties is that the defendant pay the costs of the proceedings of the plaintiff on the ordinary or party/party basis. 81. Interest is assessed at $31,569 and there will be judgment for the plaintiff for $372,569. 82. I order that the defendant pay the costs of the proceedings of the plaintiff on the ordinary (party/party) basis. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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