FEDERAL COURT OF AUSTRALIA

Abbott v Random House Australia Pty Ltd [1999] FCA 1540

COSTS – appeal against refusal to award indemnity costs.

Re Wilcox;  Ex parte v Venture Industries Pty Ltd (1996) 141 ALR 727 referred to

THE HON ANTHONY JOHN ABBOTT AND MARGARET VERONICA ABBOTT AND THE HON PETER HOWARD COSTELLO AND TANYA PAMELA COSTELLO V RANDOM HOUSE AUSTRALIA PTY LTD

NO. A 51 OF 1999

JUDGES:       BEAUMONT, MILES & DRUMMOND JJ.

DATE:            10 NOVEMBER

PLACE:          SYDNEY (HEARD IN CANBERRA)

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

THE COURT ORDERS THAT:

1.         The appeal be dismissed, with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

REASONS FOR JUDGMENT

THE COURT:

INTRODUCTION

1                     The background to this appeal appears from our reasons for judgment, delivered concurrently with these reasons, in appeals by the present respondent, Random House Australia Pty Ltd (“Random House”), against a judgment and orders of Higgins J awarding damages to the present appellants in defamation actions brought against Random House.  In his reasons for that judgment and those orders, his Honour reserved the question of the costs of the actions for argument.  The plaintiffs then applied for costs on an indemnity basis.  However, his Honour refused that application, making instead an order for costs in the plaintiffs’ favour on the usual party/party basis.  The plaintiffs now appeal from his Honour’s refusal to award indemnity costs.

2                     The grounds of the present appeal are that the primary Judge erred in finding that the conduct of Random House in failing to admit liability did not warrant an indemnity costs order.  The appellants submit also that the conduct of Random House in (a) refusing the appellants’ offers of compromise;  (b) failing to disavow the matter complained of and to apologise to the appellants for publishing it;  (c) failing to take prompt or effective steps to withdraw the first edition of the book containing the matter complained of from further dissemination;  and (d) failing to make a reasonable or realistic settlement offer – was so unreasonable as to warrant an indemnity costs order, or alternatively, an order that Random House pay the costs of the appellants on a solicitor/client basis.  The appellants further contend that his Honour erred in treating the award of aggravated damages, which he had already made, as a factor militating against the making of an indemnity costs order.

3                     The appellants now seek an order that the order for costs made at first instance be set aside, and in lieu thereof, it be ordered as follows:

“[Random House] pay the appellants’ costs of and incidental to the proceedings generally, including the costs of and incidental to the application for indemnity costs, on an indemnity basis, that is that such costs are to include all costs except in so far as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, the appellants will be completely indemnified by the respondent for their costs.”

4                     Alternatively, the appellants now seek an order that Random House pay their costs of the trial on a solicitor/client basis.

CONCLUSIONS ON THE APPEAL

5                     In his reasons for refusing indemnity costs, Higgins J referred, correctly, to the following statement in Re Wilcox;  Ex parte v Venture Industries Pty Ltd (1996) 141 ALR 727 at 732 – 733 as the guiding principle:

“35.     The Full Court of the Federal Court expressed the underlying principle appropriately, in my respectful opinion, in Re Wilcox;  Ex parte v Venture Industries Pty Ltd (1996) 141 ALR 727 at 732–3:

‘In order to exercise the discretion [to award indemnity costs] judicially the following principles have been accepted by the court as applicable:

(a)               the court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the court in departing from the usual course;

(b)               the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the court in departing from the usual course;

(c)                while the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.’”

6                     His Honour carefully examined the circumstances of this case, concluding, as has been noted, that an unusual costs order was not warranted.

7                     Whether or not his Honour should have made such an exceptional order was, of course, a matter for the exercise of his judicial discretion.  We should be reluctant to interfere with that discretion, especially in the area of costs.  There can be no real suggestion that the discretion miscarried.  The correct legal principles to be applied were identified by his Honour.  Their application was essentially a matter for his Honour’s judgment, particularly in assessing whether an offer of settlement was, or was not, unreasonable.  No case for our interference here has been made out.

ORDERS

8                     The appeal should be dismissed, with costs.

Associate:

Dated:              10 November 1999