Federal Court of Australia

Nassif v Seven Network (Operations) Ltd (No 2) [2021] FCA 1390

ORDERS

THE COURT ORDERS THAT:

1.    There be a verdict for the first applicant in the amount of $109,397 (inclusive of pre-judgment interest).

2.    There be a verdict for the second applicant in the amount of $546 (inclusive of pre-judgment interest).

3.    The respondents pay eighty percent of the applicants’ costs to be agreed or assessed.

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

REASONS FOR JUDGMENT

ABRAHAM J:

1    These reasons address the issue of the consequential orders to be made as a result of the substantive judgment in this matter, delivered on 22 October 2021: Nassif v Seven Network (Operations) Ltd [2021] FCA 1286.

2    The parties are in agreement as to the appropriate orders, save for the issue of costs.

3    That is, the orders including interest are to be:

(1)    There be a verdict for the first applicant in the amount of $109,397 (inclusive of pre-judgment interest).

(2)    There be a verdict for the second applicant in the amount of $546 (inclusive of pre-judgment interest).

4    I note that as a result of the judgment the respondents have removed the offending publication.

Costs

Submissions

5    The respondents accept that they are liable for the costs of the first applicant on an ordinary basis, but dispute that they are liable for the costs (on an ordinary basis) of the second applicant, Wiping Tears. The respondents contend that an award of nominal damages points to a result that differs substantially from the usual result that costs follow the event. In an attempt to balance the entitlement of the two applicants, the respondents propose an overall order that the respondents pay half of the applicants’ costs on an ordinary basis.

6    In summary, the respondents contend that Wiping Tears should not have commenced proceedings and its claim has substantially failed. Wiping Tears failed to achieve its primary purpose of substantial damages. Whilst the respondents accept that Wiping Tears also sought vindication and injunctive relief, they submitted that does not detract from Wiping Tears’ failure to recover substantial damages. The respondents submitted that the first applicant was the proper applicant and it was unnecessary to bring proceedings in respect to Wiping Tears. It submitted the award “suggests that it might not have been the best idea for the Second Applicant to bring the proceedings at all, let alone in the Federal Court where the Rules explicitly warn about costs consequences for verdicts under $100,000”. They submitted that from the time the defence was filed, its inability to establish economic loss would be a point taken by the respondents. It submitted that although it did not succeed in having the claim dismissed, the award of nominal damages reflects the respondents’ substantial success. The evidence and submission concerning Wiping Tears’ financial performance and its means of fundraising did not comprise an insignificant part of the trial. The respondents submitted that ought to be recognised in any costs order.

7    Wiping Tears contended it was entitled to all its costs. The reasons for judgment reflect that the respondents were unsuccessful on every defence raised. It submitted that generally it would be entitled to indemnity costs for persisting with defences that had no merit, but are not claiming that. Nonetheless it is said that is a factor relevant to the discretion. It submitted that the orders sought were also in respect to removing the publication and republication. That the respondents have now removed the offending publication is only as a result of the judgment in these proceedings. Although the final orders will not reflect the additional relief sought, that is only because the applicants have already succeeded in having the Seven News Report removed and by eliciting a promise from the respondents not to republish the imputations.

8    The applicants submitted that the primary purpose of a defamation claim is to vindicate the reputations of the applicant and to compensate for any damage done to reputation and hurt to feelings. A favourable judgment alone is a form of vindication: Murphy v Nationwide News Pty Ltd (No 2) [2021] FCA 432 at [18]. In the present case, vindication was important to nail the falsity of the imputations. The applicants submitted that this proceeding, relating to a mass media publication was properly brought in the Federal Court. It could not by sensibly suggested that the claim in respect of the second applicant ought to have been brought in a different jurisdiction to the claim for the first applicant. At the time the proceedings were commenced in the Federal Court, the second applicant could not know how it would fare economically in the years following the broadcast of the matter complained of, including in respect of the funds raised by the Blossom Ball held in late 2019. An order that the applicants be entitled only to 50% of their costs is at odds with the applicants overwhelming success on each point in dispute and the respondents’ failure of every defence advanced. Further, the percentage proposed is not at all reflective of the time properly associated with matters only relating to the second applicant.

Consideration

9    Section 43 of the Federal Court of Australia Act 1976 (Cth) confers jurisdiction on the Court to award costs. Section 43 is a broad power, and the award of costs is discretionary: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at [25]; Gray v Richards (No 2) [2014] HCA 47; (2014) 89 ALJR 113 at [2]. That said, ordinarily, a successful party is entitled to an award of costs in its favour in the absence of special circumstances justifying some other order: see Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at [11]; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67], [134]; Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [6]–[7].

10    If the primary purpose of bringing proceedings is to recover substantial damages (as opposed to, for example, vindicating a legal right), an award of nominal damages will ordinarily not entitle an applicant to the costs of the proceedings: Motium Pty Ltd v Arrow Electronics Australia Pty Limited [2011] WASCA 65 at [10]; Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd; Carelli v FS Architects Pty Ltd [2008] NSWCA 39 at [100]; Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166 at [9].

11    The principles bearing on costs apportionments and the liability of partially successful applicants were summarised by White J in Hockey v Fairfax Media Publications Pty Limited (No 2) [2015] FCA 750 at [84]-[91]. I apply, inter alia, those principles without repeating that passage here.

12    Although a nominal award was granted in respect to Wiping Tears, the issues raised in its case significantly overlapped with those of the first applicant. In particular, the defences relied on by the respondents applied to both, and as is apparent from the reasons for judgment, each was rejected. In practical terms the only additional matter in Wiping Tears’ case was the issue of damages. It may be accepted that at the time the proceedings were filed in this Court, the financial position of Wiping Tears that was to occur thereafter was not yet known. That said, it was known before the hearing commenced. Accepting that persisting with the claim did add to the length and substance of the hearing, it did not substantially do so. I note also that other relief was sought and vindication was, as it was submitted in the hearing, an important aspect.

13    Given the issues at the hearing, including the necessity for the applicants to produce evidence in respect to Wiping Tears in both cases, given the nature the imputation alleged, the respondents’ submission that they should only pay fifty percent of the applicants’ costs cannot be accepted. That percentage is not reflective of the conduct or the time spent particular to Wiping Tears in these proceedings. Nor does it reflect, in that context, that the applicants succeeded in respect to the each of the defences, which formed the substantial portion of the proceedings.

Associate:

Dated:    10 November 2021