Supreme Court New South Wales Medium Neutral Citation: Gacic v John Fairfax Publications Pty Ltd (No 2) [2014] NSWSC 738 Hearing dates: 13 February 2014 and on written submissions Decision date: 06 June 2014 Jurisdiction: Common Law Before: Hall J Decision: (1) Judgment for the first plaintiff against the defendants in the amount of $207,842.19. (2) Judgment for the second plaintiff against the defendants in the amount of $207,842.19. (3) Judgment for the third plaintiff against the defendants in the amount of $207,842.19. (4) The defendants to pay the plaintiffs' costs of and incidental to the proceedings remitted by the Court of Appeal in respect of which judgment was delivered on 19 December 2013 on an indemnity basis. Catchwords: COSTS - defamation proceedings - award of pre-judgment interest at 3% per annum - defendant unreasonably failed to make a settlement offer - costs of and incidental to the proceedings to be assessed on an indemnity basis Legislation Cited: Civil Procedure Act 2005 (NSW) Defamation Act 1974 (NSW) Defamation Act 2005 (SA) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Cornes v The Ten Group Pty Ltd (No 2) [2012] SASCFC 106 Davis v Nation Wide News Pty Ltd [2008] NSWSC 946 Gacic v John Fairfax Publications Pty Ltd [2013] NSWSC 1920 Gacic v John Fairfax Publications Pty Ltd [2011] NSWCA 362 Gacic v John Fairfax Publications Pty Ltd [2009] NSWSC 1403 George Jamoo v Nation Wide News Pty Ltd [2004] NSWSC 126 Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877 Habib v Radio 2UE Sydney (No 4) [2012] NSWDC 12 Haertsch v Channel Nine Pty Ltd [2010] NSWSC 182 John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 McGaw v Channel Seven Sydney Pty Ltd [2006] NSWSC 1270 MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657 Nicholson v Nicholson (1994) 35 NSWLR 308 Nicol v Allyacht Spars Pty Ltd (No 2) (1988) 165 CLR 306 Texts Cited: Ritchie's Uniform Civil Procedure NSW Category: Consequential orders Parties: Aleksandra Gacic (First Plaintiff) Ljiljana Gacic (Second Plaintiff) Branislav Ciric (Third Plaintiff) John Fairfax Publications Pty Ltd (First Defendant) Matthew Evans (Second Defendant) Representation: Counsel: Mr C A Evatt; Mr R K Rasmussen (Plaintiffs) Mr T D Blackburn SC; Mr D R Sibtain (Defendants) Solicitors: McKenzie Leamey Solicitors & Barristers (Plaintiffs) Banki Haddock Fiori (Defendants) File Number(s): 2004/176936 Judgment INTRODUCTION 1The plaintiffs, Aleksandra Gacic, Ljiljana Gacic and Branislav Ciric, claimed damages from the defendant in respect of publication of a restaurant review on 30 September 2003. Following an appeal to the Court of Appeal (Gacic v John Fairfax Publications Pty Ltd [2011] NSWCA 362), orders were made remitting the proceedings for an assessment of damages. Following a hearing on damages, I delivered judgment on 19 December 2013: Gacic v John Fairfax Publications Pty Ltd [2013] NSWSC 1920. 2Judgment was entered in favour of each of the plaintiffs in the amount of $160,000. I reserved the question of costs. 3On 13 February 2014, counsel addressed on two issues, pre-judgment interest and costs. 4I have had the benefit of primary written submissions dated 12 February 2014 from Mr Evatt and Mr Rasmussen of counsel who appeared for the plaintiffs, and from Mr Blackburn SC with Mr Sibtain of counsel on behalf of the defendants together with the oral submissions on behalf of the parties. 5Further written submissions on behalf of the plaintiff dated 21 February 2014 were received as well as the further written submissions dated 25 February 2014 on behalf of the defendants. Plaintiffs' Submissions 1. Backdating of the Judgment 6Mr Evatt applied to have "... the date of Judgment backdated to the date that Harrison J gave judgment (18 December 2009)": Plaintiffs' Written Submissions at [4]. 7Mr Evatt sought to support the application by referring firstly to the amount of "provisional damages" of $80,000 which he submitted had been awarded by Harrison J and which he submitted the Court of Appeal had found to be inadequate. 8Mr Evatt submitted that the award of damages under the judgment I have delivered in effect replaced the award made by Harrison J. On that basis it was submitted: "... Therefore the Court is requested to backdate the judgment accordingly": Plaintiffs' Written Submissions at [4]. 9In that event it was submitted the lapse of time between 30 September 2003 and 18 December 2009 (the date of Harrison J's judgment) is six years, two months and three weeks (6.21 years). The total interest, it was therefore argued, is 18.63% of $160,000 being $29,808. As a matter of calculations it was said that each plaintiff is entitled to a total award including damages and pre-judgment interest of $189,808. If that approach was adopted, then the plaintiffs would be able to claim post-judgment interest on the latter amount from 18 December 2009 until the date or dates of payment. 10To support the application on behalf of the plaintiffs to "backdate" my judgment, so that it, in effect, replaces and operates from the date of the judgment of Harrison J, Mr Evatt relied upon the provisions of Uniform Civil Procedure Rule 36.4(3) that permits a judgment or order to take effect from an earlier date. 11Such orders are normally made, it was submitted, where there has been delay between adjudication of a claim and the formal pronouncement of the judgment, although it is not so confined. It was argued that this is such a case. To backdate the judgment to the date of the judgment of Harrison J, it was argued, does not alter substantive rights. 12In this case, it was submitted, the Court of Appeal "varied" the "order" by Harrison J by setting aside the orders of his Honour but, as the Court of Appeal was not able to determine the appropriate level of damages, it remitted the proceedings back to the Supreme Court in its Common Law Division. Had the Court of Appeal determined damages, it was argued that the plaintiffs would then have been entitled to seek the orders now sought at that time. 13It was accordingly submitted that pre-judgment interest should run from the date of publication (30 September 2003) to the date of Harrison J's judgment (18 December 2009) with post-judgment interest then to run until the date of payment of the damages. 2. The Pre-Judgment Interest Rate 14The plaintiff initially claimed interest at the rate of 3% per annum from the date of publication of the defamatory article (30 September 2003). That claim was subsequently revised and Mr Evatt stated that the plaintiffs' claim for pre-judgment interest was made at the rate of 4% per annum: Plaintiffs' Supplementary Written Submissions, 21 February 2014 at [3]. 15Mr Evatt in the course of his submissions referred to the decision of this Court (Nicholas J) in Haertsch v Channel Nine Pty Ltd [2010] NSWSC 182 in which his Honour awarded interest at the rate of 3% per annum: at [90]. 16Mr Evatt at least initially acknowledged that 3% per annum may be considered as a generally accepted rate in defamation cases. 17The period 30 September 2003 to 19 December 2013 is ten years two months and three weeks (10.21 years). 18An award of pre-judgment interest at that rate of 3% for the above period on an amount of $160,000 is $47,842.19. On that basis the total amount of judgment and interest would be $207,842.19 in respect of each plaintiff. 19Mr Evatt observed that 4% had been the rate originally sought on behalf of the plaintiff in Haertsch v Channel Nine Pty Ltd, supra. 20Mr Evatt produced a list or schedule of cases in which pre-judgment interest had been awarded. The cases were: * George Jamoo v Nation Wide News Pty Ltd [2004] NSWSC 126 (Nicholas J) - 3%. * McGaw v Channel Seven Sydney Pty Ltd [2006] NSWSC 1270 (Rothman J) - 3%. * Davis v Nation Wide News Pty Ltd [2008] NSWSC 946 (McClellan CJ at CL) - 3%. * Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877 (McClellan CJ at CL) - 3.5%. * Habib v Radio 2UE Sydney (No 4) [2012] NSWDC 12 (Levy DCJ) - 4%. 21Mr Evatt frankly conceded that he had increased the claim for pre-judgment interest to 4% per annum having regard to the submissions that had been made on behalf of the defendant: T 3:30-35, 13 February 2014. 22In the Plaintiffs' Further Submissions dated 21 February 2014, attention was drawn to Practice Note SC Gen 16. If any different rate of interest is to apply, then it was observed it should be the rate prescribed by the Practice Note with variations according to the Reserve Bank Published Cash Rate: Ritchie's Uniform Civil Procedure NSW, Note [36.7.5]. 3. Costs 23Application was made for the plaintiffs' costs to be awarded on an indemnity basis limited to the costs of the proceedings before me: T 9:46-50, 13 February 2014. 24Mr Evatt in his oral submissions referred to the offer that was made in respect of the proceedings as heard by Harrison J in the total amount of $240,000 inclusive of costs (that is, $80,000 inclusive of costs in respect of each plaintiff). 25Although a defence of truth had been pleaded, it was noted that the Court of Appeal determined liability in the proceedings in favour of the three plaintiffs and then remitted the issue of damages. 26Although from that point the defendants were then aware that damages remained the only issue for determination, Mr Evatt observed that the defendants made no offer at all. He emphasised that from the time the Court of Appeal delivered judgment, the defendants were on notice that they would have to pay damages. 27The Court of Appeal, Mr Evatt observed, had ordered costs of the proceedings before Harrison J to the plaintiffs which, he submitted, was contrary to the usual situation where the Court leaves costs for the judge on the retrial to determine. Mr Evatt submitted that the costs order that was made by the Court of Appeal in the present proceedings was accordingly a "strong order": T 10:30-35. 28Mr Evatt relied upon the provisions of s 48A of the Defamation Act 1974 in seeking an order for costs on an indemnity basis. He posed the question: "on an assessment of damages, is it not 'unreasonable' for the defendants to make no offer?" 29The offer made by the defendants before the judgment of Harrison J in the total amount of $240,000 inclusive of costs in respect of the three plaintiffs was characterised by Mr Evatt as "completely unreasonable": T 11:25-26. 30Mr Evatt observed not only did the defendants make no offer after the judgment of the Court of Appeal, they also left the defamatory article published on the internet. 31Mr Evatt submitted: (i) The provisions of s 48A(2)(a) are broadly expressed: "If the Court is satisfied that the defendant unreasonably failed to make a settlement offer ..." (ii) Those provisions are broader or less restrictive than the conditions required for a Calderbank offer which requires a party to recover damages in excess of the amount of the offer. 32Accordingly, in the present case, it was submitted for the plaintiffs that the preconditions set out in s 48A(2)(a) had been satisfied and that costs accordingly should be assessed on an indemnity basis. Defendants' Submissions 1. The Issue of "Backdating" - Post-Judgment Interest 33The defendants submitted that no reason had been identified or expressed on behalf of the plaintiffs for "backdating" the judgment to the date of Harrison J's judgment. 34Uniform Civil Procedure Rule 36.4 it was acknowledged, provides that a judgment or order is to take full effect "as of the date on which it is given or made" or "if the court orders that it not take effect until it is entered ..." However, Uniform Civil Procedure Rule 36.4(3) provides that: "The court may order that a judgment or order is to take effect as of a date earlier or later than the date fixed by those subrules." 35It was the defendants' submission that the only possible explanation for the making of such an order as the plaintiffs sought in this case was so that they could then avail themselves of the prescribed post-judgment interest rate from the date of judgment of Harrison J in 2009. It was noted that the judgment amount under the judgment which I delivered on 19 December 2013 had been paid on 16 January 2014, before the expiration of a period during which the judgment sum may be paid without post-judgment interest. The defendants argued that it would be manifestly unfair to expose them to an award of post-judgment interest in circumstances where there was no sum due to the plaintiffs prior to the making of orders in the proceedings now before the Court. 36I note that Mr Evatt observed in his submissions that, on the date judgment was delivered, he gave notice that the plaintiffs wished to be heard in relation to the question of pre-judgment interest and costs. 2. Pre-Judgment Interest 37The defendants took issue with the submission for the plaintiffs that they were "entitled to interest at the rate of 3% from the date of publication", that is, from 30 September 2003. 38An award of interest was a matter, it was emphasised, is within the discretion of the court. Reference was made to the observations of McHugh JA in John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 142. Interest, in the defendants' submissions, is not an "entitlement". 39I note that in John Fairfax & Sons Ltd v Kelly McHugh JA at 143 observed that in many cases an award of defamation damages will reflect an amount for continuing injury to feelings and reputation to the date of verdict. His Honour also observed: "Unless a claim is made for special damages or for the future, I think that it is best not to leave any questions to the jury in relation to the interest issue. 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 me to be the most practical approach to a difficult problem ..." 40It was submitted for the defendants that where the court concludes that much of the injury to feelings and reputation has occurred after the initial publication, a departure from that prima facie position is warranted: Defendants' Written Submissions at [5]. 41The defendants' submission was that hurt to feelings and injury to reputation were sustained at the time of publication and: "...that after the initial hurt to feelings and injury to reputation, most of the subsequent damage occurred well after the date of first publication in 2003, and closer to the date of the verdict ...." (Defendants' Written Submissions at [5]) 42It was further submitted, unlike in Haertsch v Channel Nine Pty Ltd, supra, the hurt did not persist to the date of judgment but that: "... it appears that the hurt caused to the plaintiffs has peaked in two widely separated periods: first, the time of publication; secondly, as a consequence of persons accessing the internet over the last few years and contacting one or more of the plaintiffs after such access ..." (at [7]) 43Much of the latter damage was said to have occurred in 2012 or 2013. 44On the issue of the appropriate interest rate to be applied, the defendants' submissions sought to employ the High Court's decision in MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657 to support a contention that any interest awarded should be at a lower rate than 3% per annum. 45Gogic was not a defamation case. It related to an action in the Supreme Court of South Australia by the plaintiff who recovered damages for personal injury against M.B.P. The trial judge had included an interest component on damages for pre-trial pain and suffering calculated at a commercial rate. 46The defendants' submission on this argument was set out at [8]-[13] of the defendants' written submissions dated 12 February 2014. I have, of course, considered the detail upon which this line of argument was developed in the written submissions without here reproducing the same. 47Based on the above argument, the defendants submitted that an interest rate of 3% per annum sought by the plaintiff was "too high". An appropriate figure, it was argued, might be around 2% per annum for the period up to 2008 and 1% per annum for the subsequent period. 48It was further submitted in this regard: "If that is correct, it is submitted that it would be inappropriate for the plaintiffs to receive an award of interest at the rate of 2% for the entire 10 year period." (at [13]) 3. Costs 49The defendants relied upon the following matters: (i) They had made a substantial offer prior to the commencement of the trial before Harrison J. It therefore cannot be said that they unreasonably failed to make a settlement offer. (ii) Following the refusal of the special leave application to the High Court, the only issue for determination in the proceedings involved an assessment of damages. (iii) Between the date of the Court of Appeal judgment and the conclusion of the present proceedings, no party made an offer of settlement. (iv) The defendants did not oppose the usual order for costs (the defendant to pay the plaintiffs' costs on a party/party basis) subject to any costs orders previously made. (v) There is no basis for departing from the usual rule. (vi) The mere fact that the plaintiffs were successful on appeal did not mean that the defendants acted unreasonably in failing to make an offer to compromise during the proceedings. (vii) The Court of Appeal made no assessment of the adequacy of the notional sum of damages said to have been awarded by Harrison J. The Court held that exemplary or aggravated damages "could" be a significant factor in the assessment. (viii) The defendants were successful in resisting an order for punitive damages. (ix) There is no occasion for the application of s 48A(2)(a) of the Defamation Act or a departure from the usual order as to costs. Consideration The Claim for Pre-Judgment Interest 50I am required to consider four issues affecting the awarding of interest on damages awarded to the plaintiffs. (i) The period over which pre-judgment interest should be awarded, that is, either: (a) the period from publication on 30 September 2003 to the date of judgment delivered on 19 December 2013; or (b) from the date of publication on 30 September 2003 to the date of the judgment delivered by Harrison J on 18 December 2009, with post-judgment interest to run until the date of payment of the damages. (ii) The rate of pre-judgment interest, that is whether interest should be awarded at 4% per annum as claimed by the plaintiffs, or on the basis of 1% per annum and 2% per annum as claimed in respect of different periods as contended for by the defendants or at some other rate. (iii) Whether my judgment should be "backdated". (iv) Whether costs awarded to the plaintiffs should be on an indemnity basis. 1. The "Backdating" Issue 51The Court has power, as noted above, under Uniform Civil Procedure Rule 36.4(3) to order that a judgment or order is to take effect as of a date earlier (or later) than the date fixed by the Rule. The issue in the present proceedings, however, is whether the discretion to make such an order should be exercised as sought by the plaintiffs. 52That question is to be considered in the circumstances of the lengthy history of this case, namely one involving the plaintiffs' claims for damages in respect of the defamation, the fact that there was a mistrial on liability and damages, a successful appeal by the plaintiffs to the Court of Appeal leading to an order of that Court setting aside the orders made in the first trial and the entry of judgment for the plaintiffs, and then a second trial on damages. 53The plaintiffs referred to cases where judgment on appeal has been awarded with interest under s 101 of the Civil Procedure Act 2005 from the date of the first instance judgment. Examples were said to be found in Nicol v Allyacht Spars Pty Ltd (No 2) (1988) 165 CLR 306 and Nicholson v Nicholson (1994) 35 NSWLR 308: Plaintiffs' Further Written Submissions, 21 February 2014 at [6]. 54However, the position in the present case is different in that there was no order made by the Court of Appeal varying an award of damages. The Court of Appeal, as noted above, resolved the issue of liability on a final basis by setting aside the orders made in favour of the defendants and entering a verdict in favour of each of the plaintiffs and then making an order for remittal of the issue of damages for assessment. There, accordingly, were no "variation" orders which had the effect of increasing an established right to damages previously determined under an earlier judgment at first instance. 55It is in that context that I am required to consider whether there exists any basis for a proper or principled exercise of the power to "backdate" the judgment as sought by the plaintiffs pursuant to Uniform Civil Procedure Rule 36.4(3). 56The application to make such an order under that subrule seeks to place the plaintiffs in the position of claiming interest on, what has said to be the conventional basis in defamation cases, that is at the rate of either 3% per annum (later increased in the plaintiffs' submissions to 4% per annum) on damages of $160,000 awarded to each plaintiff from 30 September 2003 to 18 December 2009. Thereafter they would be entitled to post-judgment interest. 57This case, however, is not analogous to one involving a variation of an earlier judgment awarding damages and increasing the damages previously awarded for the reasons I have stated. There was no actual award of damages made by Harrison J but merely a notional assessment made by his Honour having determined liability against the plaintiffs. 58The first time that the plaintiffs had an established right to damages was on 19 December 2013, the date upon which final judgment was delivered in their favour. It would, in my opinion, be a wrong exercise of the power under Uniform Civil Procedure Rule 36.4(3) to treat the judgment delivered on that date as having the effect of varying an established right under an order made by an earlier judicial determination in circumstances where no such determination or earlier order existed. 59It would not, in my opinion represent a proper exercise of the power under the Uniform Civil Procedure Rule to backdate the judgment simply so as to enable the plaintiffs to claim a post-judgment interest rate for a period in lieu of the "conventional" rate for defamation damages that would otherwise apply. 60I have accordingly concluded that the plaintiffs are entitled to pre-judgment interest from 30 September 2003 until 19 December 2013 at the rate to which I refer below and thereafter to post-judgment interest to the date of payment of the judgment amounts. 2. The Interest Rate 61As to the rate for pre-judgment interest awarded, the determination of the rate involves discretionary considerations. However, a proper exercise of the power to award interest requires account to be taken of the rate of interest awarded in previous defamation cases. In that respect, I have considered the observations of Nicholas j in Haertsch v Channel Nine Pty Ltd, supra, at [61] and the cases in which awards of pre-judgment interest varying between 3% per annum to 4% per annum as set out in [ REF _Ref389485854 \r \h 20] above. 62I am of the opinion, notwithstanding Mr Blackburn's submissions made on behalf of the defendants, that it is not appropriate to adopt and apply a rate of either 1% per annum or 2% per annum by reference, as a starting point, to the ten year bond rates up to 2008. 63I have concluded that an appropriate allowance for pre-judgment interest in each of the plaintiff's cases is 3% per annum. 64I do not accept the submissions for the defendants that an appropriate figure to apply in relation to pre-judgment interest should proceed upon the basis of the so-called "peaks" in the two "widely separated periods" referred to in the Defendants' Written Submissions dated 12 February 2014 at [7]. 65Whilst the plaintiffs suffered significant hurt to feelings and injury to reputation at and following the time of publication, it was not the case, in my assessment of the evidence given, including in particular the evidence of each of the plaintiffs, that "... most of the subsequent damage occurred well after the date of first publication in 2003 and closer to the date of the verdict ..." as submitted in the Defendants' Written Submissions at [5]. 66I accept, as Mr Evatt observed, that it is appropriate to have regard to the plaintiffs' evidence as to the hurt to feelings and injury to reputation and the extent thereof as given by each of them before Harrison J and in the proceedings before me on the hearing as to damages. 67The evidence establishes that the defamatory article has remained on the internet apart from one particular year: see [272] of the principal judgment. Such a continued publication over the years exacerbated the injury and hurt by the plaintiffs and had the effect of perpetuating or exacerbating the hurt to feelings and injury to reputation resulting from the defamatory publication. In my assessment of the evidence, after September 2003 the deleterious effects of the defamatory publication continued at significant and continuing levels upon each of the plaintiffs, a fact that was not assisted by the fact that there has been two hearings at first instance and two appeals. 68Accordingly, a proper approach, in my assessment, is to apply to the judgment sums an interest rate, on a uniform basis, at 3% Defendants' Written Submissions. 3. Costs 69The plaintiffs are each entitled to an order for their costs of the proceedings, which I have determined is to be paid by the defendants: Uniform Civil Procedure Rule 42.1 - "the general rule that costs follow the event". There was no issue in that respect. 70The dispute relates to the basis upon which such costs should be ordered. The plaintiffs' claim, as earlier noted, is that costs should be awarded on an indemnity basis. In that respect they rely upon the provisions of s 48A(2)(a) of the Defamation Act. 71The defendants submitted that costs should be awarded on the ordinary basis. 72This issue, as the submissions of both counsel accepted, involves, in part, the proper construction and application of s 48A(2). I note that that section was introduced into the Act in 2002. 73The underlying rationale for those provisions is readily identifiable. Given the potentially heavy burden of costs in defamation proceedings, the Court is given broad powers in awarding costs in proceedings to which the section applies, thereby encouraging parties to attempt by settlement offers to resolve defamation proceedings. 74In Cornes v The Ten Group Pty Ltd (No 2) [2012] SASCFC 106 the Full Court of the Supreme Court of South Australia (Kourakis CJ, Gray and Blue JJ) considered the provisions of s 38 of the Defamation Act 2005 (SA) which was moulded on s 48A of the New South Wales Act and is, in fact, in identical terms. 75The Court in that case observed: "Aside from the wording and structure of the section, its evident purpose is to encourage the early settlement of defamation proceedings (as opposed merely to settlement after judgment at first instance and prior to final determination on appeal) ..." (at [13]) 76The Court further observed: "Section 38 was enacted against the background of rules of court which provide for indemnity costs in favour of a plaintiff who betters a settlement offer. It is the evident purpose of section 38(2)(a) to broaden the situations in which indemnity costs are awarded to plaintiffs to encompass situations in which a plaintiffs falls short of bettering a plaintiff's offer as well as a situation in which a plaintiff achieves substantially more than a defendant's offer. This rationale does not apply to an appeal on liability, in which the appellant is either successful or not and no comparison arises between the quantum achieved by the plaintiff and the quantum of earlier offers." (at [14]) 77Section 48A authorises a court to take into account a broad range of matters in deciding whether to award costs and the basis upon which costs may be awarded. 78Section 48A(1) therefore provides that in awarding costs the court may "have regard to" the matters in sub-sections (a), (b) and (c). 79Section 48A(2)(a), without limiting sub-section (1), mandates that an award of costs 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 ..." 80Section 48A(3) provides: "Settlement offer means any genuine 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)." 81The issue between the parties concerns the application of the provisions of s 48A(2)(a) in the particular circumstances of these proceedings. 82As the Full Court noted in Cornes v The Ten Group Pty Ltd, supra, there are three preconditions which must be met before a provision such as s 48A(2)(a) is engaged: * Defamation proceedings must be successfully brought by the plaintiff; * The court must have determined that costs in the proceedings are to be awarded to the plaintiff; and * The court must be satisfied that the defendant unreasonably failed to make or agree to an offer to settle the proceedings before the proceedings are determined. 83As I have earlier noted, Mr Evatt in his submissions observed that after the proceedings were remitted by the Court of Appeal for the purposes of an assessment of damages, the defendants made no offer before the hearing. He submitted, accordingly, that this is a case in which in terms of s 48A(2)(a), the court would be satisfied that the defendants unreasonably failed to make a settlement offer. 84Mr Blackburn sought to meet this submission by referring to the fact that before the Court of Appeal hearing, and before the hearing before Harrison J, the defendants had made an offer and that accordingly, s 48A(2)(a) does not apply. With respect, I do not consider that this submission on behalf of the defendants is properly based. 85As the Full Court in Cornes v The Ten Group Pty Ltd observed at [12], the third precondition set out above uses the phrase "the proceedings" which is the same "proceedings" referred to in the first and second preconditions. The Court stated that the definition of "settlement offer", referring to an offer "before the proceedings are determined", suggests that the offer must be made before final judgment at first instance. 86The "proceedings" in the present case, in its protracted history, went through at least three stages, one before Harrison J, one before the Court of Appeal and the hearing on damages which I conducted. Up to the judgment of the Court of Appeal liability under the orders of Harrison J had been finally determined in favour of the defendants. By reason of the orders made by the Court of Appeal the issue of liability was finally determined in favour of the plaintiffs. The proceedings from that point onwards related only to the proceedings so far as assessment of damages was concerned. 87Accordingly, whilst the proceedings initially involved both liability and damages, it was only the latter, damages, that remained a determinable issue once remitted by the Court of Appeal. 88The defendants' offer made before the hearing by Harrison J was made in relation to proceedings when both liability and damages were undetermined and were in dispute. The basis upon which that offer was made no longer existed once the Court of Appeal set aside the orders of Harrison J and entered verdicts for the plaintiffs. 89The "proceedings" thereafter assumed a different and limited character. Liability no longer being an issue, damages only remained to be determined. It was the proceedings as to damages only that were remitted by the Court of Appeal. 90The rationale or legislative purpose behind s 48A, it has been observed, is "to encourage the early settlement of defamation proceedings": Cornes v The Ten Group Pty Ltd, supra, at [13]. Giving effect to that legislative purpose would require the making of a settlement offer. That is of particular importance in a case such as the present where there had been a first trial that miscarried, followed by appeal proceedings in the Court of Appeal, an unsuccessful application for special leave to the High Court by the defendants and then a final hearing on damages. 91The evident purpose of s 48A(2) could only be served if a "genuine offer" (s 48A(3)) was made by the defendants in an attempt to avoid a second first instance hearing. 92No settlement offer was however made by the defendants once liability had been determined by the Court of Appeal in favour of the plaintiffs. In relation to the proceedings it cannot, in my opinion, be said that the defendants made a "genuine offer" of settlement. 93I am satisfied that the defendants unreasonably failed to make a settlement offer within the terms of s 48A(2)(a) in the circumstances of the proceedings, in particular, as they stood in the period between the date of the orders made by the Court of Appeal including entry of verdicts in the plaintiffs' favour and the date of final determination by the judgment I delivered on 19 December 2013. 94Accordingly, I make an order pursuant to s 48A(2)(a) that the costs of and incidental to the proceedings, which I hereby formally award to the plaintiffs against the defendants, be assessed on an indemnity basis. Judgment and Orders Aleksandra Gacic (1) Verdict for the plaintiff, Aleksandra Gacic, against the defendants in the amount of $160,000. (2) Order pre-judgment interest on the amount of $160,000 referred to in (1) at a rate of 3% per annum calculated from 30 September 2003 to 19 December 2013 as set out in the Schedule hereto in the amount of $47,842.19. (3) Judgment for the plaintiff, Aleksandra Gacic, against the defendants in relation to the amounts referred to in (1) and (2), namely $207,842.19. (4) The defendants to pay the Aleksandra Gacic's costs of and incidental to the proceedings remitted by the Court of Appeal in respect of which judgment was delivered on 19 December 2013 on an indemnity basis. Ljiljana Gacic (1) Verdict for the plaintiff, Ljiljana Gacic, against the defendants in the amount of $160,000. (2) Order pre-judgment interest on the amount of $160,000 referred to in (1) at a rate of 3% per annum calculated from 30 September 2003 to 19 December 2013 as set out in the Schedule hereto in the amount of $47,842.19. (3) Judgment for the plaintiff, Ljiljana Gacic, against the defendants in relation to the amounts referred to in (1) and (2), namely $207,842.19. (4) The defendants to pay the Ljiljana Gacic's costs of and incidental to the proceedings remitted by the Court of Appeal in respect of which judgment was delivered on 19 December 2013 on an indemnity basis. Branislav Ciric (1) Verdict for the plaintiff, Branislav Ciric, against the defendants in the amount of $160,000. (2) Order pre-judgment interest on the amount of $160,000 referred to in (1) at a rate of 3% per annum calculated from 30 September 2003 to 19 December 2013 as set out in the Schedule hereto in the amount of $47,842.19. (3) Judgment for the plaintiff, Branislav Ciric, against the defendants in relation to the amounts referred to in (1) and (2), namely $207,842.19. (4) The defendants to pay the Branislav Ciric's costs of and incidental to the proceedings remitted by the Court of Appeal in respect of which judgment was delivered on 19 December 2013 on an indemnity basis. SCHEDULE Date from Date to Base Days in Period Rate per annum Rate per day Interest accrued 30/09/2003 31/12/2003 $160,000.00 93 3.00% $13.15 $1,223.01 1/01/2004 31/12/2004 $160,000.00 366 3.00% $13.11 $4,800.00 1/01/2005 31/12/2005 $160,000.00 365 3.00% $13.15 $4,800.00 1/01/2006 31/12/2006 $160,000.00 365 3.00% $13.15 $4,800.00 1/01/2007 31/12/2007 $160,000.00 365 3.00% $13.15 $4,800.00 1/01/2008 31/12/2008 $160,000.00 366 3.00% $13.11 $4,800.00 1/01/2009 31/12/2009 $160,000.00 365 3.00% $13.15 $4,800.00 1/01/2010 31/12/2010 $160,000.00 365 3.00% $13.15 $4,800.00 1/01/2011 31/12/2011 $160,000.00 365 3.00% $13.15 $4,800.00 1/01/2012 31/12/2012 $160,000.00 366 3.00% $13.11 $4,800.00 1/01/2013 19/12/2013 $160,000.00 353 3.00% $13.15 $4,642.19 TOTAL: $47,842.19 ********** 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. Decision last updated: 06 June 2014