Citation: Moses v State of New South Wales (No. 4) [2010] NSWDC 286
Court: District Court of New South Wales
Date: 17 December 2010
Judge(s): Gibson DCJ
Background
Two plaintiffs brought proceedings against the State of New South Wales arising from the conduct of police officers. Their claims spanned wrongful arrest, false imprisonment, assault, malicious prosecution, and defamation. The matter proceeded to a six-day trial with strongly contested liability across all issues.
In the substantive judgment, Gibson DCJ delivered a mixed result. Both plaintiffs succeeded on their false imprisonment claims, each receiving $60,000. The first plaintiff also succeeded on claims of assault ($10,000) and malicious prosecution ($50,000). However, both plaintiffs failed entirely on their defamation claims, and the second plaintiff also failed on her assault claim.
Following payment of the judgment sums inclusive of agreed interest, the parties returned to court to resolve costs. The plaintiffs sought full party-party costs for the whole proceedings, and additionally sought indemnity costs based on the defendant's conduct during the litigation.
Legal Issues
- Whether the defendant's success on the defamation claims (and, in one plaintiff's case, the assault claim) justified a reduction in the costs otherwise payable to the plaintiffs as the overall successful parties.
- How section 40 of the Defamation Act 2005 (NSW), which addresses costs in defamation proceedings, interacted with a "walk away" offer made by the defendant across the whole proceedings.
- Whether the plaintiffs were entitled to indemnity costs based on the defendant's conduct, including alleged failures in discovery and the running of a "coherence" defence that delayed judgment.
Decision
Gibson DCJ confirmed that the general rule that costs follow the event remains the starting point, but that courts retain an unfettered (though judicially exercised) discretion. Where proceedings contain severable causes of action and a party succeeds on some but not others, an apportioned costs order may be appropriate. The court drew on the principle that a successful party "can expect a costs penalty if he or she unnecessarily litigates or causes expense."
On the defamation claims, the court noted that successful defendants in defamation are not the moving party and are drawn into litigation against their will. The purpose of costs orders in this context is to discourage parties from bringing or defending defamation actions they were likely to lose. The court considered the defendant's "walk away" offer in the context of section 40 of the Defamation Act 2005, but found that the plaintiffs had received significant damages on the non-defamation claims, meaning the offer could not be treated as an unreasonable one to reject simply in the defamation context.
On the indemnity costs application, the court rejected the plaintiffs' arguments. The defendant's failure to discover a large volume of documentation was described as regrettable but ultimately made no difference to the outcome. The court also observed that there was a degree of discovery failure on both sides, and that penalising litigants for the kinds of errors common in complex litigation was undesirable. The running of the "coherence" defence, which delayed judgment, was criticised but carried little weight given the defendant's ultimate success on the defamation claims.
The court settled on an order that the defendant pay 80% of the plaintiffs' party-party costs. This reflected that the principal claims, false imprisonment and malicious prosecution, were won entirely by the plaintiffs, while the defamation claims (which added discrete issues and hearing time) were lost.
Orders Made
- The defendant to pay 80% of the plaintiffs' costs on a party-and-party basis (varying the earlier reserved costs order).
- The plaintiffs' application for indemnity costs refused.
- Each party to pay their own costs of the costs applications.
Key Takeaways
- Where proceedings involve severable causes of action with mixed outcomes, a court may reduce the successful party's costs award to reflect the issues on which that party failed, rather than awarding full costs across the board.
- Under section 40 of the Defamation Act 2005 (NSW), a "walk away" offer in mixed proceedings does not automatically trigger indemnity costs in favour of the defendant; the court examines whether the offer was genuinely reasonable in context, including the value of claims outside the defamation cause of action.
- A defendant's failure to discover substantial documentation will not ground an indemnity costs order where the failure made no difference to the result and where both parties bore some responsibility for discovery shortcomings.
- Criticism of litigation conduct, such as the running of a problematic defence that delayed judgment, carries reduced weight where the party in question was ultimately successful on the claim to which that conduct related.
- The District Court treated the false imprisonment and malicious prosecution claims as the "principal claims" in assessing the overall costs outcome, which drove the relatively high 80% recovery despite the plaintiffs' complete failure on defamation.
Legislation and Cases Referenced
Legislation:
- Civil Procedure Act 2005 (NSW), s 98
- Defamation Act 2005 (NSW), s 40
- Uniform Civil Procedure Rules 2005 (NSW), r 42.1
Cases:
- Baker v Towle [2008] NSWCA 73
- Cretazzo v Lombardi (1975) 13 SASR 1
- Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141
- Garrison v Eastwood (1918) 15 OWN 273
- Melchior v Sydney Adventist Hospital Ltd (No 2) [2009] NSWSC 65
- Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749
- Moses v State of New South Wales (No. 3) [2010] NSWDC 243
- Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346
- Preston v Harbour Pacific Management Underwriting Pty Ltd [2008] NSWCA 216
- Ritter v Godfrey [1920] 2 KB 47
- Roach v News Group Newspapers Limited, The Times, 23 November 1992, [1998] EMLR 161
- Short v Crawley (No 40) [2008] NSWSC 1302
- Sunday Times Newspaper Company Limited v McIntosh (1933) 33 SR (NSW) 371