FEDERAL COURT OF AUSTRALIA

Triguboff v Fairfax Media Publications Pty Ltd (No 2) [2018] FCA 1513

ORDERS

THE COURT ORDERS THAT:

1.    The respondents pay the applicant’s costs of the indemnity costs application as assessed or agreed.

2.    Apart from the costs referred to in order 1, the applicant pay the respondents’ costs of and incidental to the entirety of the proceeding, including the interlocutory application, as assessed or agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

1    Following an order made for summary judgment with costs in Triguboff v Fairfax Media Publications Pty Ltd [2018] FCA 845, the successful respondents applied for those costs to be awarded on an indemnity basis under r 40.02 of the Federal Court Rules 2011 (Cth). The applicant, Mr Triguboff, opposed such an order being made. Competing written submissions were furnished in accordance with a timetable and the determination was ordered to be made on the papers. This is the determination of that application.

2    It is not necessary to recount the prior decision in any detail. In short form, the respondents succeeded upon the primary ground advanced for summary judgment. That ground was based on the outcome of a separate question to the effect that the matter complained of in the published article was not about Mr Triguboff, but, rather, was about the company of which he is the founder and managing director, Meriton Property Services Pty Limited. None of the respondents’ alternative grounds succeeded. The article in question was published in early August 2017. While more time was spent on the primary argument than any of the alternative arguments, both in writing and orally, the alterative arguments were not insubstantial.

3    The respondents rely upon correspondence that was in evidence at the interlocutory application hearing, including, in particular, very early correspondence from the Group General Counsel for Meriton that made reference to reputational damage to Meriton, rather than to Mr Triguboff. However, I do not consider that correspondence to be of assistance here. The response was of greater relevance. The respondents’ solicitors reply correspondence was in terms generally consistent with their primary argument, namely that the article was not about Mr Triguboff.

4    On 23 August 2017, Mr Triguboff commenced proceedings in this Court. On 15 September 2017, the respondents’ solicitors wrote again in terms that were largely consistent with the argument advanced at the hearing of the interlocutory application, but also went further (September offer). At the conclusion of the September offer letter, the respondents urged Mr Triguboff to discontinue the proceedings and advised that if he did so, they would agree to discontinuance on the basis that there would be no order as to costs. The September offer letter also foreshadowed the making of the interlocutory application if discontinuance did not occur. The respondents subsequently indicated that they would rely upon that correspondence and their genuine steps statement in support of any application for indemnity costs if it became necessary to proceed with an interlocutory application.

5    On 20 September 2017, Mr Triguboff's solicitors sent a letter in response that wholly rejected the objections that had been raised and called upon the respondents to either file a defence or move to strike out the claim. In substance, the offer to an agreed discontinuance on the basis of no order as to costs was rejected.

6    The respondents refer in their submissions on this application to well-known authority concerning indemnity costs, including the influence of a formal warning of intention to seek such an award. They rely upon Szencorp v Clean Energy Council Limited (No 2) [2009] FCA 196 at [15] in support of the proposition that the renunciation of the opportunity to recover costs incurred in defending a proceeding can constitute consideration for a compromise which is real because it is of substance. The respondents submit that the test is whether or not the offeree’s rejection of the settlement offer was unreasonable in the circumstances, citing Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298 at [23]-[29]. Hazeldene’s Chicken Farm was further relied upon for the statement at [25] of the factors that may be relevant to whether the rejection of the settlement offer was unreasonable, namely:

(1)    the stage of the proceeding at which the offer was received;

(2)    the time allowed for the offeree to consider the offer;

(3)    the extent of the compromise offered;

(4)    the offeree’s prospects of success, assessed as at the date of the offer;

(5)    the clarity with which the terms of the offer were expressed; and

(6)    whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it.

7    Applying those factors, the respondents contend that Mr Triguboff acted unreasonably in not accepting the September offer at an early point in the proceedings, with more than adequate time having been given for it to be considered. Reliance is made on the finding that Mr Triguboff failed to establish that the article was properly characterised as being reasonably capable of being about him, being a point that had been made by the respondents since 15 August 2017. Reliance is also placed on the observation in the judgment at [81] that Mr Triguboff’s claim represented a reasonably flagrant attempt to bypass the limitation in s 9 of the Defamation Act 2005 (NSW).

8    The respondents submit that most of the issues raised by them in the September offer were pressed at the hearing of the interlocutory application, as were a number of the authorities cited in that correspondence. The respondents submit that they enjoyed success largely for the reasons raised in the September offer. Mr Triguboff was on full notice from 15 September 2017 of the points that the respondents would argue, and that if he did not discontinue the proceedings, there would be an application for indemnity costs. He nonetheless refused to discontinue. Had that offer been accepted, the proceedings would have been resolved at a very early stage with only limited costs being incurred by that time. The respondents submit that the September offer represented a genuine compromise in their having been prepared to forego costs incurred up to that time, including the costs of considering the claim and of preparing correspondence to that point in time. The offer is characterised as having been reasonable and clearly articulated at the time it was made.

9    The respondents also urge the Court to take into account the matters in the respondents’ genuine steps statement dated 15 September 2017, pursuant to s 12 of the Civil Dispute Resolution Act 2011 (Cth). Those matters are relevantly that the initial correspondence passing between the lawyers for both sides was directed to reputational damage caused to Meriton, rather than to Mr Triguboff, and that Mr Triguboff failed to issue a concerns notice under Division 1 of Part 3 of the Defamation Act before commencing proceedings in circumstances in which he was not facing any limitation period problem and had ample time to issue a concerns notice. While issuing a concerns notice would not have changed the respondents’ position, it is nevertheless an important alternative dispute resolution tool in that it requires a party to focus on the merits of its case before commencing proceedings, thereby encouraging negotiated outcomes. The respondents contend that such a notice should therefore have been issued. I take these additional matters into account, but they are not of much weight.

10    Mr Triguboff takes an entirely different tack in opposing an award of indemnity costs. His key arguments are that the September offer was not a genuine offer of compromise and/or that he did not behave unreasonably in rejecting that offer.

11    It is common ground that the September offer was not an offer of compromise by reason of it not complying with r 25.01 of the Rules. Mr Triguboff instead contends that it was no more than a Calderbank offer (that is, an offer falling within the terms described in Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586; [1976] Fam Law 93 and followed in countless cases since). Mr Triguboff submits that in order to be effective, a Calderbank offer must offer something which is a real compromise, which connotes giving something away. The concession must therefore be real, rather than trivial or contemptuous, and cannot merely be a proposal for capitulation, citing numerous authorities to that effect, a point that is not in doubt.

12    In opposition to the respondents’ argument that a walk away offer is a genuine compromise, Mr Triguboff cites authority to the contrary. The authorities on this topic deal with offers being made both by moving and responding parties. Mr Triguboff points to authorities which countenance a walk away offer being a genuine compromise, but submits that these tend to be cases in which the proceedings have been on foot for an extended period of time and costs are high, again citing numerous authorities.

13    Mr Triguboff submits that the September offer was not a genuine compromise because it required immediate capitulation, with the only compromise offered being that the respondents would forego their costs. He submits that that was of no real value in circumstances where the offer was made only three weeks after the commencement of the proceedings and where the only step that had occurred after that time was an exchange of correspondence. The costs incurred by the respondents by the time of the offer could not have been substantial. Thus, Mr Triguboff submits that the respondents’ offer to forego an entitlement to costs of negligible value did not amount to genuine consideration for their demand that the applicant immediately forfeit his entire cause of action.

14    Alternatively, Mr Triguboff points out that the discretion to order costs on an indemnity basis is engaged when the rejection of a Calderbank offer is unreasonable, with the burden being on the offeror to prove that a rejection was of that character. Mr Triguboff submits that the rejection of the offer was not so unreasonable as to warrant an award of costs on an indemnity basis when regard is had to five of the six factors identified in Hazeldene’s Chicken Farm, summarised above at [6]. Mr Triguboff responds to the first five of six factors identified by the respondents in turn (it not being in doubt that a warning was given that indemnity costs were being sought) as follows:

(1)    the stage the proceedings had reached: the September offer was made three weeks after the proceedings were commenced;

(2)    the time allowed to consider the offer: the offer was made on a Friday and a response was required by close of business on the following Tuesday, allowing only four calendar days (only two of those being business days) to consider the offer;

(3)    the extent of the compromise: the only compromise was an offer to forego costs that would have been of relatively negligible value;

(4)    the prospects of success and the clarity of the offer: the September offer identified five objections to Mr Triguboff’s claim, namely there being a lack of particulars, the matter complained of not being “of and concerning” Mr Triguboff, the imputations complained of not being reasonably capable of being conveyed or not being defamatory, the proceedings being an abuse of process because it was a transparent attempt to subvert s 9 of the Defamation Act and that Mr Triguboff should have sued for related torts such as injurious falsehood rather than defamation. As to those five objections, Mr Triguboff points out that:

(a)    the respondents only obtained relief on the second of those points and, in substance, each other contention was rejected;

(b)    Mr Triguboff did give identity particulars of the readers who had identified him in the matter complained of a short time after the September offer, namely on 20 September 2017, and the Court indicated that it would not have granted relief on the basis that sufficient particulars had not been provided: see [91]-[93]; and

(c)    had the separate question been answered in Mr Triguboff’s favour, the Court would have rejected the respondents’ challenge to the capacity of the matter to convey the imputations asserted and would also have rejected the challenge to the defamatory capacity of those imputations: see the prior judgment at [103]-[105] and [107]-[109] respectively.

15    Mr Triguboff submits that the respondents’ contentions about meaning and defamatory capacity failed as discrete challenges to his claim. Moreover, the respondents ultimately did not press their abuse of process argument, which the Court found was without merit: see [116]. Mr Triguboff thus submits that the Court should not regard the rejection of the September offer as unreasonable in circumstances where the majority of the contentions made in support of that offer were unmeritorious and unsuccessful, and, accordingly, costs should be assessed on an ordinary basis.

16    The conclusions I have reached in weighing up the competing submissions are as follows:

(1)    the Court should not be too concerned with formal compliance with Part 25 of the Rules in relation to offers to settle in all circumstances before countenancing an award of indemnity costs. There are doubtless cases (perhaps most cases) in which that approach is necessary, but this is not one such case, at least in relation to the separate question issue;

(2)    it must be kept steadily in mind that indemnity costs can be appropriate in some cases even when there has been no prior offer of settlement. An award of indemnity costs is essentially a finding that a party should not be out of pocket for the costs of a proceeding, or part of a proceeding. The settlement rules and longstanding Calderbank principles are but a means of bringing a disciplined focus to bear on whether a particular case has, or is likely to have, that character and to make it easier to achieve that outcome, including by giving the opposing party notice of the risk that they are taking in persisting with a claim rather than resolving a dispute;

(3)    even when the relevant parts of the Rules pertaining to offers to settle are applied in whole or in part with some rigour, careful regard must be had to all the circumstances, including the nature of the case and the nature of the settlement offer in that context;

(4)    had the respondents’ settlement offer been confined to the separate question issue, being a relatively simple point for experienced defamation lawyers, or had it been renewed and later prosecuted on only that confined ground, the respondents would have been on strong ground in relation to their application for the award of indemnity costs – Mr Triguboff’s legal advisers could not have been in any doubt that the claim that the matters complained of were about him was, to say the least, adventurous, and highly vulnerable to summary dismissal, even if the device of a separate question to achieve that may not have been in ready contemplation;

(5)    had those more confined circumstances been in play, I would have had little hesitation in finding that enough had been done to convey a reasonable settlement offer and that rejection of it, if not by the deadline then by a reasonable time after that deadline, would have been unreasonable. The case brought by Mr Triguboff was wholly misconceived and, as such, there was a strong case for indemnity costs confined to the separate question issue;

(6)    moreover, the approach that Mr Triguboff took to the separate question continued this unreasonable stance, including opposing it being brought at all and seeking a second interlocutory hearing very late in the piece;

(7)    however, neither the respondents’ offer nor the interlocutory application that they brought was so confined, and the wider ambit of the respondents’ alternative interlocutory case wholly failed; and

(8)    as such, the balance between the respondents’ reasonably strong case for indemnity costs on the separate question and its failure to confine its interlocutory case to that question on points that ultimately failed, or would have failed, is fairly struck by permitting the respondents to have a costs order for the entirety of their interlocutory application and of the proceeding, but only upon the ordinary party/party basis.

17    As the respondents’ application for indemnity costs has failed, there is no reason why they should not pay Mr Triguboff’s costs of that application.

Associate:

Dated:    12 October 2018