Federal Court of Australia

Murdoch v Private Media Pty Ltd (No 2) [2022] FCA 1607

ORDERS

THE COURT ORDERS THAT:

1.    Costs for the interlocutory applications filed respectively by the applicant on 22 September 2022 and by the respondents on 5 October 2022 be costs in the cause.

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

REASONS FOR JUDGMENT

WIGNEY J:

1    On 21 October 2022, I dismissed interlocutory applications filed on behalf of the applicant in this proceeding, Mr Lachlan Murdoch, and the respondents, Private Media Pty Ltd, Mr Bernard Keane and Mr Peter Fray, who I will refer to collectively as Crikey: see Murdoch v Private Media Pty Ltd [2022] FCA 1275. I reserved judgment on the question of costs, but noted that my provisional view was that the costs of both unsuccessful applications should be costs in the cause: see Murdoch at [141]. I invited the parties to file written submissions if they sought some other costs order. Crikey did so, and submitted that a costs order should be made in its favour in respect of Mr Murdoch’s application. Mr Murdoch opposed that order and submitted that the appropriate order was costs in the cause.

2    One could perhaps be forgiven for thinking, when reading the parties’ respective written submissions, that the parties are occupying parallel universes. Crikey submitted that it was wholly successful in respect of Mr Murdoch’s application and that costs should follow the event. It conceded that it should pay Mr Murdoch’s costs in respect of its own unsuccessful interlocutory application, but submitted that those costs would be infinitesimal given that most of the hearing was spent dealing with Mr Murdoch’s more substantive application. For his part, Mr Murdoch contended that Crikey’s interlocutory application was entirely unsuccessful, whereas he had complete success. That contention was based on an analysis of the factual background and the practical outcome of the application. He submitted that, in all the circumstances, the just costs order would be that both parties’ costs be costs in the cause.

3    As is so often the case, the correct characterisations of the applications and their outcomes lie somewhere between the polar extremes that were advanced by the parties. I do not propose to rehearse the nature of the respective applications or the overall outcome of the interlocutory skirmish. That is readily apparent from the judgment in respect of those applications. It suffices to note the following.

4    First, while Mr Murdoch’s application initially sought clarification, or a limitation in respect of, a fairly important aspect of Crikey’s defence, it ultimately morphed into a strike out application in respect of that part of Crikey’s defence.

5    Second, prior to the hearing of Mr Murdoch’s application, Crikey furnished a proposed amended defence in an endeavour, it appears, to meet some of Mr Murdoch’s objections to the initial pleading. In doing so, Crikey at least implicitly conceded that there was some merit in respect of Crikey’s complaints concerning the defence as filed. The strike out application in due course addressed the proposed amended defence.

6    Third, while Mr Murdoch’s strike out application was ultimately unsuccessful, my reasons for judgment identified some parts of Crikey’s proposed amended defence which remained somewhat unclear or unsatisfactory. Crikey ultimately filed an amended defence, with Mr Murdoch’s consent, which addressed or purported to address the issues raised in my reasons.

7    Fourth, given that Crikey proposed an amended defence in response to Mr Murdoch’s application, and ultimately filed an amended defence which addressed further issues raised by Mr Murdoch’s strike out application, it would not be entirely accurate to say that Mr Murdoch’s application was wholly unsuccessful.

8    Fifth, the submissions advanced on Mr Murdoch’s behalf in support of the strike out application in respect of Crikey’s defence undoubtedly occupied the lion’s share of the hearing. Crikey’s application to strike out a paragraph of Mr Murdoch’s reply occupied very little time at the hearing and in the written submissions. It is readily apparent from my reasons for judgment in respect of the strike out applications that Mr Murdoch’s application was the more substantive application and consumed more court time. One of the reasons that Mr Murdoch’s application consumed more court time was that it mostly concerned the relatively new public interest defence in s 29A of the Defamation Act 2005 (NSW). That defence has not been the subject of any detailed consideration in any Australian court before. While the defence in the Defamation Act appears to have been based on a similar defence in the United Kingdom legislation, there are important differences in the relevant statutory provisions.

9    Sixth, it is fair to say that Crikey’s application was wholly unsuccessful.

10    The Court has a broad and largely unfettered discretion in relation to costs pursuant to section 43(2) of the Federal Court of Australia Act 1976 (Cth). It is well accepted that the usual or default position is that costs follow the event. It is, however, equally well accepted that there may be a departure from that default position in certain circumstances having regard to the particular facts and circumstances of the case at hand.

11    The usual or default position is also not so easily applied in circumstances where each party has had some measure of success, or where some issues have been resolved in a party’s favour and other issues have been resolved against a party, or where a party’s success only arose as a result of a change in position or on a point that was not squarely raised by the party and only arose in the course of submissions at the hearing. The default position also does not necessarily apply to every interlocutory step in the principal or substantive proceeding: see O’Keeffe Nominees Pty Ltd v BP Australia (No 2) (1995) 55 FCR 591; [1995] FCA 109 at 598.

12    Costs do not always follow the event in respect of interlocutory applications largely because that is not always the just result. What is just in the circumstances may ultimately depend on the outcome of the principal proceeding. It is common in the case of interlocutory applications to order that the costs of the application be the costs in the cause, or the successful party’s costs in the cause. That means that the question of who pays the costs in the interlocutory hearing will depend on the outcome of the principal proceeding.

13    Ultimately, the question for the Court in a case involving multiple interlocutory applications, where each party has had a measure of success, is what is fair and just in all the circumstances. In this case, each party succeeded in defeating the other’s interlocutory application, though, as has been explained, the true situation is not quite as simple as that. The issue is further complicated by the fact that Mr Murdoch’s application dominated the proceeding.

14    I am not persuaded in all the circumstances that it would be appropriate to order Mr Murdoch to pay Crikey’s costs of his unsuccessful interlocutory application at this stage. That is particularly so given that Crikey furnished a proposed amended defence shortly prior to the hearing and eventually filed an amended defence so as to address some of the issues ventilated in the course of the hearing and in my reasons for judgment.

15    I also do not consider it appropriate to make a costs order which attempts to apportion costs on the basis of the parties’ partial success in respect of certain issues, or having regard to the time spent at the hearing dealing with the separate issues.

16    My view, consistent with the preliminary view I expressed in my reasons for judgment relating to the first interlocutory application, is that the costs of the parties’ interlocutory applications be costs in the cause. That order, in my view, is fair and does justice between the parties.

17    I should finally add that, if this matter proceeds to final hearing in the manner it has proceeded to date, the costs of the interlocutory applications currently under consideration are likely to be a proverbial drop in the ocean.

18    The order I will make in respect of the costs of the interlocutory applications dated 22 September 2022 and 5 October 2022 be costs in the cause.

Associate:    

Dated:        20 February 2023