Supreme Court New South Wales Medium Neutral Citation: Haddad v Nationwide News Pty Limited (No 7) [2015] NSWSC 1814 Hearing dates: 30 November 2015 Date of orders: 30 November 2015 Decision date: 30 November 2015 Jurisdiction: Common Law Before: McCallum J Decision: First plaintiff ordered to pay one quarter of the defendant's costs as agreed or assessed on the ordinary basis up to and including the date on which he ceased to be active in the proceedings. Leave granted to the defendant to put on an affidavit as to the identification of that date. Catchwords: COSTS – general rule that costs follow the event – apparent abandonment of claim – where first plaintiff did not appear or file a notice of discontinuance – where defendant seeks order for indemnity costs Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Huntsman Chemical Co Australia Limited v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 Ianelli v Hancock t/a Hancock Solicitors [2012] NSWSC 417 Lahoud v Lahoud [2006] NSWSC 126 Texts Cited: Ritichie's Uniform Civil Procedure NSW (2015, LexisNexis Butterworths) Category: Costs Parties: Wisam Haddad (first plaintiff) Steve Dablis (second plaintiff) Jamal El-Haouli (third plaintiff) Mauhamed Sari (fourth plaintiff) Nationwide News Pty Limited (defendant Representation: Counsel: No appearance for the first plaintiff) T Molomby SC with R Rasmussen (second, third and fourth plaintiffs) T Blackburn SC with L Barnett (defendant) Solicitors: First plaintiff unrepresented Zali Burrows Lawyers (second, third and fourth plaintiffs) Ashurst Australia (defendant) File Number(s): 2013/279941 Publication restriction: None Judgment – Ex Tempore 1. HER HONOUR: This is an action for defamation commenced by Mr Wisam Haddad and three others against Nationwide News Pty Limited. The proceedings were listed for trial with a jury commencing today. After a jury was empanelled, the three others to whom I have referred resolved their claim against Nationwide News by agreement outside court and the jury was discharged. 2. Mr Haddad did not appear this morning. Nationwide News seeks an order that the proceedings brought by him be dismissed and that he pay the defendant's cost as agreed or assessed on an indemnity basis. This judgment determines that application. 3. The circumstances in which the application is made are as follows. The statement of claim was filed on 19 September 2013. At that time, each of the four plaintiffs was represented by the same solicitor and the same counsel. On 28 July 2015, the solicitor on the record for the plaintiffs filed a notice of intention to cease to act for Mr Haddad only. He continued to represent the other defendants. On 14 August 2015, a notice of ceasing to act was filed. On 27 August 2015, a notice of change of solicitor was filed, bringing a new solicitor onto the record for Mr Haddad. On 28 October 2015, that solicitor filed a notice of intention to cease to act for Mr Haddad and that solicitor ceased to act by notice filed 25 November 2015. 4. A few days before the final notice of ceasing to act was filed, Mr Haddad himself sent an email to the solicitor on the record for the defendant. The email addressed two issues. As to his continuation of the proceedings, it said that Mr Haddad had had numerous issues with legal representation and for that reason would be ceasing to proceed with his defamation case against the defendant. The email was tendered by Nationwide News but on the understanding that it does not accept the truth of that contention as the reason for not proceeding with the case. 5. On 23 November 2015, knowing that Mr Haddad had not appeared in the proceedings for some time, my associate wrote to the parties seeking confirmation that the matter was ready to proceed for hearing today, noting the requirement for the Court to summon a jury panel. Following an exchange in which the defendant replied and the reply was copied to Mr Haddad, he replied to my associate: "Sorry, I am a bit confused as to what I need to do to finalise my withdrawal? Again, I do not wish to proceed further in pursuing my defamation case against Nationwide News." 1. At my request, my associate responded by drawing Mr Haddad's attention to the Uniform Civil Procedure Rules 2005 (NSW) about discontinuance and indicating that the question of costs would "need to be resolved by agreement with the defendant or by the Court." It was suggested that Mr Haddad may wish to seek legal advice in relation to that issue. The email confirmed that the proceedings were listed for trial today and stated that I would be happy to deal with the matter before the trial commenced. 2. Before the trial began, Mr Haddad was called outside court and did not appear. 3. I accept that it follows from Mr Haddad's apparent abandonment of his claim and his failure to appear today that his action should be dismissed and that he should be ordered to pay his share of the defendant's costs. However, Mr Blackburn SC, who appears with Ms Barnett for the defendant, seeks an order that the costs be assessed on an indemnity basis. 4. In support of the application, Mr Blackburn drew my attention to the annotation in Richie's Uniform Civil Procedure NSW at para 42.5.7 which provides examples of cases in which orders for indemnity costs have been made. At (c) of the annotation, one of the examples given is the case where a party has abandoned claims. The authorities cited for that example are Ianelli v Hancock, trading as Hancock Solicitors [2012] NSWSC 417 and Lahoud v Lahoud [2006] NSWSC 126. The annotation continues, "However, such a situation has to be distinguished from a belated acceptance of the unlikelihood of success," citing Huntsman Chemical Co Australia Limited v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 at 247. 5. The annotation further notes that the abandonment of claims for the purpose of narrowing the real issues in dispute and reducing the cost and complexity of the proceedings will not justify an order for indemnity costs, citing Lahoud at [23] to [43]. 6. I indicated that my preliminary view that there was nothing in the circumstances of the present case to take it outside the principles that would ordinarily apply in the case of a discontinuance where, absent agreement, the discontinuing party would have to seek leave to discontinue, allowing the court to determine the question of the costs and any other appropriate order. 7. Mr Blackburn and I have a different understanding as to what is the ordinary rule in those circumstances. It is my understanding that, absent some conduct of the kind ordinarily warranting an order for indemnity costs taking the proceedings outside the usual circumstance, a discontinuance is ordinarily allowed on the basis that the discontinuing party pay the other party's costs; the territory for dispute usually being where the discontinuing party seeks some relief from that order, which is the default order under the UCPR. 8. Mr Blackburn contended that, in the circumstance where a party discontinues without agreement, the party against whom the proceedings are discontinued has an opportunity to seek indemnity costs and, I think, suggested that such costs might more readily be ordered in those circumstances. In any event, I stood the argument down so as to allow an opportunity for the authorities of Ianelli and Lahoud referred to in the annotations to Ritchie to be brought to court and considered. 9. My consideration of those authorities has not altered my preliminary view. Ianelli was a case in which the plaintiff sought an order against a solicitor that he deliver up to her the documents specified in the summons. The proceedings came before Bellew J for hearing but could not proceed on that day due to the defendant's late service of an affidavit. The hearing of the evidence was completed a week later and the matter was then adjourned again for submissions. Prior to the adjourned date, the Court was informed that the defendant had delivered the entirety of the documents identified in the summons to the plaintiff, in effect capitulating completely to the relief sought. 10. Justice Bellew noted in that context that the defendant had offered no explanation as to the reasons he had chosen to take the course he did. That was a circumstance in my view plainly warranting explanation, particularly where the defendant was a solicitor and an officer of the court. 11. In the context of his consideration of that issue, Bellew J referred to the decision in Lahoud. A consideration of that case reinforces my apprehension that the proper order in the present case would be for the costs to be assessed on the ordinary basis and not on an indemnity basis. In Lahoud Campbell J referring to Huntsman Chemical said at [38], "In my view, abandonment of a claim is not sufficient in itself to warrant an order for indemnity costs." His Honour noted the argument put to him in that case and expressed the conclusion that the abandonment of a claim under s 106 of the Industrial Relations Act 1996 (NSW) seemed to His Honour to have been "an exercise in responsible advocacy." I do not think either of those cases informs the determination of the present application. 12. Further, in my view, whilst I do understand the difference between a discontinuance and a dismissal of proceedings, having regard to Mr Haddad's circumstances and in particular the fact that he was not legally represented at the time he communicated his decision to the defendant, the proper approach in my view is to apply the principles that apply in the case of a discontinuance. It was tolerably clear at least to me from some time ago that Mr Haddad seemed to have made a decision not to pursue his action. He did not appear on a number of occasions and all the signs were that he would not be prosecuting the action brought on his cause of action. 13. Had he simply filed a notice of discontinuance or attempted to do so, I think the proper order would have been the default order under the UCPR; namely, an order that he pay the defendant's costs as agreed or assessed on the ordinary basis. Mr Blackburn has emphasised the fact that there has been no explanation for that decision and no justification offered, adding that the defendant had incurred "a massive amount of useless costs." With great respect to Mr Blackburn, nothing he has said has persuaded me that this is an occasion for the exercise of the Court's discretion to award costs on the higher basis. Accordingly, I would confine the order to the usual order of assessment on the ordinary basis. 14. Unless the defendant wishes to be heard on the issue, in order to simplify the assessment process, I would propose to order that Mr Haddad pay a quarter of the defendant's costs up to and including the date on which he ceased to be active in the proceedings, namely 28 July 2015. 15. [FOLLOWING FURTHER SUBMISSIONS] I grant leave to the defendant to put on an affidavit within seven days as to the date up to which costs should be ordered. I will decide that question on the papers. ***** 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: 01 December 2015