Federal Court of Australia

Bastiaan v Nine Entertainment Co Holdings Limited (No 2) [2022] FCA 187

ORDERS

THE COURT ORDERS THAT:

1.    The respondents pay the applicant 75% of his costs of the interlocutory application filed on 6 December 2021 as amended and the case management hearing of 16 November 2021, such costs to be agreed and, in default of agreement, taxed immediately and payable forthwith.

2.    The respondents’ interlocutory application dated 10 December 2021 be dismissed with no order as to costs.

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

REASONS FOR JUDGMENT

(Revised from the transcript)

RARES J:

1    Following my decision to grant interlocutory injunctions to restrain apprehended contempts on his application in Bastiaan v Nine Entertainment Co Holdings Limited [2022] FCA 60, Marcus Bastiaan now seeks an order for costs, including in respect of the case management hearing on 16 November 2021, in which he first raised his concerns about the conduct of the respondents the subject of that decision. I granted the injunctions after being addressed as to their form this morning. Mr Bastiaan also seeks costs in respect of his lengthy argument today as to 14 subpoenas that the respondents caused to be issued.

The costs of the interlocutory injunction application

2    Mr Bastiaan’s solicitors wrote to the respondents’ solicitors on 12 November 2021 seeking an undertaking to the Court that they would “refrain from making any further proactive contact whatsoever unless by their legal representatives” with any of 23 named potential witnesses until the hearing and determination of the proceeding. However, the letter proposed that in the case of two sitting members of parliament, the Hon Michael Sukkar MP and the Hon Kevin Andrews MP, the respondents’ undertaking be limited to them not contacting those members in relation to matters the subject of this proceeding. The respondents’ solicitors rejected that proposal.

3    At the case management hearing on 16 November 2021 before Besanko J, who is the docket judge, the respondents indicated that they were not minded to give any undertakings and suggested that, if Mr Bastiaan wanted relief, that issue needed to be ventilated on a proper application.

4    On 1 December 2021, the respondents’ solicitors formally responded to the 12 November 2021 letter and they stated that the undertaking Mr Bastiaan sought was:

plainly too wide. It would prevent, inter alia:

(a)    legitimate enquiries with persons who may have information in relation to allegations of public misconduct, even where such inquiries do not involve any improper conduct calculated to interfere with the evidence of potential witnesses, and even if those persons voluntarily participate in interviews or in providing information to the respondents for the purposes of publication; and

(b)    the respondents speaking to potential witnesses with a view to seeking their assistance in this proceeding. In this regard, the proposed carve out in the undertaking for lawyers is insufficient to protect the respondents’ legitimate interests. It is unrealistic to expect persons to respond favourably to unsolicited phone calls, emails or letters from lawyers.

5    That letter reaffirmed the respondents’ counsel’s indication at the case management hearing on 16 November 2021 that the respondents refused to give such an undertaking by reason of its breadth and they rejected any suggestion that the respondents had engaged in any improper conduct. They stated they had no intention of acting improperly in the future.

6    On 16 December 2021, Mr Bastiaan’s solicitors made an open offer to compromise the interlocutory application he had filed on 6 December 2021 that, as amended on 2 February 2022, was the subject of the hearing last week. The offer was left open until 20 December 2021. The offer said that Mr Bastiaan did not seek to cause embarrassment to the respondents or their solicitors but rather sought to protect his ability to prepare his case. The open offer sought orders in a marked up amended form as follows:

1.     Pursuant to section 23 of the Federal Court of Australia Act 1976 and rule 1.32 of the Federal Court Rules 2011, that until further order each of the respondents, their officers, employees or agents, be restrained from:

(a)     communicating directly with those persons identified in Annexure A [not reproduced], being persons not party to the proceedings but who have been identified as potential witnesses (Potential Witnesses), for the purpose of obtaining comment for publication in print or online media with respect to evidence which they may give about the matters for determination by this Court;

(b)     publishing or causing to be published statements about the Potential Witnesses in print or online media with respect to evidence which they may give about the matters for determination by this Court in these proceedings or otherwise engaging in any intentional conduct calculated to interfere with any of the Potential Witnesses, such as to:

(i)     deter them from giving evidence; or

(ii)     to influence them in their giving of evidence,

in the proceedings;

(c)     engaging in any intentional conduct calculated to intimidate or otherwise bring improper pressure to bear on the applicant in respect of the conduct of these proceedings.

2.     Nothing in paragraph 1 is to prevent:

(a)     the respondents from communicating directly with those Potential Witnesses who are Members of Parliament in relation to matters unrelated or incidental to the conduct of these proceedings;

(b)     the solicitors for the respondents from contacting the Potential Witnesses with respect to the conduct of these proceedings;

(c)     the respondents publishing or causing to be published in print or online media a fair report of these proceedings.

3.     The respondents pay the applicant’s costs of and incidental to the application and the case management hearing on 16 November 2021.

(strikethrough as in original)

7    On 21 December 2021, the respondents’ solicitors responded in a somewhat intemperate fashion, rejecting the offer, characterising it as “frankly, insulting” and asserting that it was wholly unreasonable. They also made other allegations which it is not necessary to deal with here, but the response characterised the unfortunate state of the relationship between the solicitors representing the parties.

Consideration

8    In RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd (No 2) [2021] FCA 1194, Halley J surveyed the authorities dealing with the appropriate approach to ordering costs where an applicant for an opposed interlocutory injunction had succeeded in securing interim relief. His Honour summarised one aspect of the authorities at [26]. There, he said that in the absence of any disentitling conduct by the unsuccessful party, he did not consider that costs simply followed the event where the successful party obtained an interlocutory injunction. Halley J said that the appropriate order in a case where the injuncted party opposed the interlocutory relief at a substantive hearing is that costs be the successful party’s costs in the cause (at [13]–[14]). His Honour’s review of the authorities demonstrates that, inevitably, a range of discretionary considerations attaches to any particular factual situation.

9    Recently, two judges of the Court have dealt with similar applications as that brought by Mr Bastiaan for prophylactic relief to prevent an apprehended contempt and made costs orders in favour of the successful party who obtained the interim relief: see Basetec Services Pty Ltd v Leighton Contractors Pty Ltd (No 2) (2015) 236 FCR 432 (White J); Registered Clubs Association of New South Wales v Stolz (No 2) [2021] FCA 1418 at [209] (Yates J) and Registered Clubs Association of New South Wales v Stolz (No 3) [2021] FCA 1557 at [15]. In Basetec 236 FCR 432, White J ordered the unsuccessful party to pay 70% of the party-party costs of the successful party. In Stolz (No 3) [2021] FCA 1557, Yates J affirmed his earlier inclination that it was appropriate to make an order that the unsuccessful respondent pay 60% of the costs of the hearing. In both cases, there were other matters argued which accounted for a discount in respect of the costs order.

10    The Court has the power to order costs under s 43 of the Federal Court of Australia Act 1976 (Cth), which, of course, are in the discretion of the Court. Relevantly, the power includes a power to order costs at any stage of a proceeding, including before, during or after the hearing of the trial. And, Part VB of the Act creates the overarching purpose of the civil practice and procedure provisions to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. Under s 37N, the parties and their lawyers must conduct proceedings, including negotiations for settlement, in a way consistent with the overarching purpose.

11    This proceeding involves a significant clash between the values asserted by the parties. Mr Bastiaan asserts the right to protect his reputation, while the respondents assert their right to report upon important matters of public interest involving the conduct of members of political parties, which is potentially, if the respondents’ allegations prove to be correct, inconsistent with what the public might regard as appropriate.

12    I have had regard to the fact that the formulation of the relief which I granted in the interlocutory injunctions made today is narrower than the articulation of relief to which Mr Bastiaan claimed to be entitled. I have taken into account areas in which he sought to overreach, and the context in which he was placed by the respondents’ solicitors’ letter of 21 December 2021. That letter suggested that Mr Bastiaan faced intractable opponents who were not prepared to offer a compromise and insisted on the righteousness of their conduct.

13    It may be that, as the respondents observed, if a final hearing had taken place of the issues on a charge of contempt, Mr Bastiaan may or may not have succeeded in proving his allegations. But that was not the issue on which the interlocutory application came to be fought.

14    In approaching the award of costs, I have borne in mind that the respondents are likely to act in accordance with the orders of the Court and respect them. Thus, there is now not likely to be any occasion on which it becomes necessary either for Mr Bastiaan to bring a proceeding for contempt based on a breach of those orders or to do anything further to protect his interest in seeking to ensure that there be no unlawful interference in the administration of justice by conduct of the kind which warranted his seeking the interim relief. Moreover, he is an individual engaged in an already substantial and complex defamation proceeding, in which there is now a statutory cap on the amount of damages that he can be awarded. It is almost certain that there will be a substantial difference between any recoverable party-party costs on a taxation and the out of pocket and solicitor-client costs for the conduct of the proceeding, if Mr Bastiaan were to succeed in the proceeding and obtain an order for costs.

15    There is also a likelihood of significant further interlocutory disputes, in addition to the disputes I had to resolve today regarding subpoenas which the respondents issued and two notices to produce that Mr Bastiaan served. Mr Bastiaan served the first notice to produce on 12 November 2021 (the 12 November notice), seeking production originally on 16 November 2021. Besanko J stood the 12 November notice over to 10 February 2022. The 12 November notice required production of all communications that the respondents had with the potential witnesses since 19 August 2021 in connection with the November 2021 publicity. Mr Bastiaan served the second notice to produce on 30 November 2021 (the 30 November notice). The 30 November notice was attached to the interlocutory application of 6 December 2021, when amended on 2 February 2022, and effectively called for documents referred to in the respondents’ defence. The amended interlocutory application also sought orders that, first, the respondents produce, pursuant to r 20.31 of the Federal Court Rules 2011, six emails sought in the 30 November notice, which were referred to specifically by date in paragraphs of the defence, and secondly, that the 14 subpoenas to various persons and bodies, that I had granted leave to the respondents to have issued, be set aside.

16    The notices to produce were not called and Mr Bastiaan did not press for production of the six emails. There was an issue in relation to the six emails. Mr Quill had given evidence, on information and belief from Mr McKenzie, that none of the emails could be produced, even in redacted form, without disclosing or tending to disclose the identity of a source and so were the subject of journalist’s privilege as provided in s 126K of the Evidence Act 1995 (Cth). It became apparent that this issue could be deferred until after discovery and subpoenas because of the likelihood that Mr Bastiaan would discover them, or that persons to whom the subpoenas were addressed would produce them. That is because the pleading alleged that Mr Bastiaan, himself, either had been the author or an addressee of those emails. Thus, on the second day of hearing, senior counsel for Mr Bastiaan did not press either of the notices to produce.

17    Most of today has been taken up with the parties debating the appropriateness of many paragraphs in the 14 subpoenas. I made rulings sequentially in respect of each subpoena as counsel and I went through them to resolve whether what was sought fell within the legitimate scope of a subpoena, having regard to the principles in defamation litigation applicable to what a respondent, who seeks to justify, can do in using the processes of the Court to obtain information in addition to material which he, she or it already had or knew at the time of publication, as explained in cases such as Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1955) 72 WN (NSW) 250 at 254 per Owen J, with whom Street CJ and Herron J agreed; McDonald’s Corp v Steel [1995] 3 All ER 615 at 621H–622B per Neill LJ, with whom Steyn and Peter Gibson LJJ agreed, and Yorkshire Provident Life Assurance Company v Gilbert & Rivington [1895] 2 QB 148 at 152 per Lindley LJ, at 154 per A L Smith LJ; and see too Lord Esher MR’s well known statement in Hennessy v Wright [No 2] (1888) 24 QBD 445n at 448; Rush v Nationwide News Pty Ltd (2018) 359 ALR 473 at 511–512 [172]–[175] per Wigney J. Lindley LJ said in Yorkshire Provident [1895] 2 QB at 152:

I think it would be a very bad precedent to suggest that a person can simply by libelling another obtain access to all his books and see whether he can justify what he has said or not. I think it would be very lamentable if we should say, when a person has libelled another and has justified and has given particulars, that he is entitled to more than discovery of that which relates to those particulars. I think in principle that is right.

18    In the end, the permitted scope of the subpoenas considerably narrowed.

Conclusion

19    In the end, Mr Bastiaan has succeeded substantially on the major issues that have been in play over the last three days, namely, the right to substantive interlocutory relief, albeit not as broad as he had sought, and substantial relief in respect of the framing of subpoenas to third parties (who have not yet had the opportunity to address as to whether they have any objections themselves to the subpoenas). But he failed in having all of the subpoenas set aside and caused expense relating to his abandoned calls on the notices to produce and for the production of the six emails. I have balanced all of those matters, and attempted to arrive at an order for costs that also takes into account the factors to which I have referred, having regard to the stage of the litigation and Mr Bastiaan’s position in it.

20    I am of opinion that, in all of the circumstances, the appropriate order for costs, so as to reflect the overall positions of success and failure of the parties in the three days of dispute and the case management hearing on 16 November 2021, is to order that the respondents pay 75% of Mr Bastiaan’s costs, and that those costs, if not agreed, be taxed and payable forthwith.

Associate:

Dated:    4 March 2022

SCHEDULE OF PARTIES