SELLMAN & ORS v SLATER & ORS NO 5 – COSTS [2018] NZHC 58

SELLMAN & ORS v SLATER & ORS NO 5 – COSTS [2018] NZHC 58 [7 February 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2016-404-1312[2018] NZHC 58UNDER the Defamation Act 1992BETWEEN JOHN DOUGLAS SELLMANFirst PlaintiffBOYD ANTHONY SWINBURNSecond PlaintiffSHANE KAWENATA FREDERICKBRADBROOKThird PlaintiffAND CAMERON JOHN SLATERFirst Defendantcont'dHearing: On the papersAppearances: E D Nilsson and J P Cundy for PlaintiffsB P Henry and C S L Foster for First DefendantC T Patterson and E J Grove for Second and Third DefendantsW Akel and J W S Baigent for Fourth and Fifth DefendantsJudgment: 7 February 2018JUDGMENT NO 5 OF PALMER JThis judgment is delivered by me on 7 February 2018 1.00 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarCounsel/Solicitors:Lee Salmon Long, AucklandB P Henry, Barrister, Auckland C T Patterson & E J Grove, Barrister, AucklandAndrew Walter Graham & Co, Auckland Simpson Grierson, AucklandCont CARRICK DOUGLAS MONTROSEGRAHAMSecond DefendantFACILITATE COMMUNICATIONSLIMITEDThird DefendantKATHERINE RICHFourth DefendantNEW ZEALAND FOOD ANDGROCERY COUNCIL INCFifth DefendantThe substantive interlocutory judgment[1] My interlocutory judgment of 2 October 2017 dealt with various applicationsby the defendants and plaintiffs.1 The formal outcomes were:2(a) the defendants' applications to strike out the claims as being time-barred were all declined;(b) the defendants' applications to strike out the claims as an abuse ofprocess were all declined but a minimum threshold of harm toreputation was applied to the meanings pleaded;(c) 21 of the 159 pleaded defamatory meanings were struck out in wholeor part (12 of the 129 defamatory meanings pleaded against the firstdefendant and 21 of the 159 meanings pleaded against the second andthird defendants);3(d) the fourth and fifth defendants' application to strike out the claimagainst them because it was speculative or false or incapable offounding legal liability was declined;(e) the defendants' applications to strike out the ss 39 and 41 notices weredeclined; and(f) the plaintiffs' applications to strike out the first defendant's affirmativedefence and requiring him to give particulars were declined as was theplaintiffs' application to recall the latter of these decisions.4[2] At the end of the judgment, I stated:51 Sellman v Slater [2017] NZHC 2392.2 At [2]–[5], [120], [122].3 The judgment suggested (e.g. at [4]) there were 161 pleaded meanings which was an error.4 Minute No 8 of 10 October 2017.5 At [126].I am inclined to let costs lie where they fall, since each party has had a measureof success. If, despite that indication, any party wishes to apply for costs, theyhave leave to file submissions within 15 working days and any responses areto be filed within 10 working days of that.SubmissionsPlaintiffs[3] The plaintiffs submit they were substantively successful in opposing thedefendants' strike out applications and costs should follow the event. They submit:(a) The first defendant failed completely in three applications andsucceeded only in striking out 11 meanings in whole, and one in part,of 131 challenged meanings.6(b) The second and third defendants failed completely in three applicationsand succeeded only in striking out 18 meanings in whole, and three inpart, of 134 challenged meanings.(c) The fourth and fifth defendants had no success at all.(d) The plaintiffs' application against the first defendant was dismissed buthis only formal step was to file a notice of opposition, late and withoutleave, and the application had been deferred by agreement of theparties, so costs should lie where they fell.(e) The importance or novelty of the legal issues is not a reason to departfrom the rule costs should follow the event. The defendants werewholly unsuccessful in seeking to develop the law in relation to Jameelabuse of process, the single publication rule and accessory liability.The plaintiffs' subsequent voluntary elaboration of their pleading isimmaterial.6 By my count, the first defendant challenged all 129 meanings pleaded against him, but thedifference in numbers is immaterial for present purposes.(f) The plaintiffs are entitled to costs on each of the notices of oppositionthey prepared which were not the same. The need for the threememoranda after the hearing was occasioned by the defendants'applications.[4] The plaintiffs seek costs on a 2B basis, plus disbursements:(a) from each of the defendants in relation to all pre-hearing steps on eachof the defendants' applications;(b) from the fourth and fifth defendants in respect of each set ofsupplementary written submissions filed following the hearing;(c) from the defendants jointly and severally in respect of the one-and-a-half-day hearing on 9 and 10 February 2017.First defendant[5] The first defendant agrees with my indicated inclination in the judgment thatcosts should lie where they fell. He submits both plaintiffs and defendants hadsuccesses and the consequence of the judgment is the plaintiffs have had to repleadwith significant changes. He also submits he was acting in the public interest in hisapplication in respect of abuse of process, I would be justified in refusing costs to allparties in the overall justice of the case, and there was a very considerable element ofpolitical debate involved.Second and third defendants[6] The second and third defendants support the other defendants' submissions. Inaddition, they submit, if any costs are awarded to the plaintiffs, it would beinappropriate to award full scale costs in respect of the applications by each of thedefendants given the considerable overlap in the plaintiffs' notices of opposition andsubmissions in response.Fourth and fifth defendants[7] The fourth and fifth defendants support my initial indicated inclination in thejudgment because:(a) the defendants had a measure of success in striking out 21 meanings,and the plaintiffs have had to file a second amended statement of claim;(b) the applications raised important issues as to the substance andprocedure of defamation law, which go to costs:(i) in the course of the judgment clarifying observations aboutalleged responsibility for continued publication led toamendment of the statement of claim;(ii) in rejecting application of Jameel abuse of process the judgmentrecognised and applied a threshold of seriousness of damage, sothe application was not completely unsuccessful;(iii) although the judgment declined the fourth and fifth defendants'strike out application, it noted it was capable of being amended,and that is what subsequently occurred.[8] Should I decide against costs lying where they fell, or ordering reduced costsunder r 14.7, the fourth and fifth defendants submit:(a) a single global sum should be awarded in relation to pre-hearing stepsgiven the substantial duplication in responding to the applications;(b) there should be no order in respect of the three memoranda orsubmissions following the hearing.Decision[9] It is a fundamental principle of New Zealand civil law that costs follow theevent – a losing party pays a winning party a contribution towards their legal costs.7The question of who has won and who has lost is guided by the interests of justice andmust be viewed in terms of "who in reality has been the successful party".8[10] Deciding who won and who lost in relation to these applications is notaltogether straightforward. But, on further reflection and contrary to my initialinclination, I consider such an assessment is possible. Overall, I consider the plaintiffsdid enjoy substantive success. While they have had to replead, their defamation suitremains substantially intact. But the costs need to reflect the overlap in the defendants'applications and submissions.[11] I consider the relative and success and failure of the applications to strike outthe proceeding was as follows:(a) The time-bar strike-out applications by all five defendants involvedargument about, and determination of, a relatively untested aspect ofNew Zealand defamation law, based on policy considerations. But theapplications all failed. I award costs to the plaintiffs in respect of thisaspect of the applications on a 2B basis.(b) The abuse of process strike-out applications also failed. However, theirdetermination yielded application of a minimum threshold of harm,which was the basis on which six of the 129 challenged meaningspleaded against the first defendant (around five per cent) and seven of134 of the challenged meanings pleaded against the second and thirddefendants (around five per cent) to be struck out in whole or part.Strictly, each party should be awarded costs for the proportion in whichthey were successful. On a net basis, accordingly, I award costs to the7 Rule 14.2(a) of the High Court Rules and Manukau Golf Club Inc v Shoye Venture Ltd [2012]NZSC 109, [2013] 1 NZLR 305 at [8].8 Waihi Mines Ltd v AUAG Resources Ltd (1999) 13 PRNZ 372 (CA) at [5]. See also Packing inLtd (in liq) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 (CA) at [6] (callingfor "a realistic appraisal of the end result").plaintiffs of 90 per cent of this aspect of the application against the firstdefendant and against the second and third defendants.(c) The applications to strike out meanings on the basis they could not bearthe meaning pleaded were successful in respect of six of the 129pleaded meanings challenged by the first defendant (around five percent) and 14 of the 134 pleaded meanings challenged by the second andthird defendants (around 10 per cent). On a net basis, accordingly, Iaward costs to the plaintiffs, in respect of this aspect of the applications,of 90 per cent against the first defendant and 80 per cent against thesecond and third defendants.(d) The fourth and fifth defendants' strike out application failed.Repleading by the plaintiffs was required, but that possibility is astandard assumption of the law of strike out. Novel elements ofaccessory defamation law were canvassed. But the application stillfailed. I award the costs to the plaintiffs for the fourth and fifthdefendants' strike-out application on a 2B basis.[12] Assuming, as I do for this purpose, that each of the three aspects of the strike-out applications of the proceeding by the first, second and third defendants were ofequal weight, the result is that I award to costs to the plaintiffs of 93 per cent of thecosts for the first defendant's strike out application, and 90 per cent of costs for thesecond and third defendants' strike out application.[13] But I agree there is an element of duplication in the plaintiffs' response to theapplications by the first defendant and the second and third defendants. They did notrequire completely separate responses and, therefore, completely additional costs. Idiscount each award by a third. So the first defendant will pay 62 per cent, and thesecond and third defendants will pay 60 per cent, to the plaintiffs for their applicationson a 2B basis.[14] In relation to the other applications, the hearing and disbursements:(a) The first, and the second and third defendants' applications to strike outthe ss 39 and 41 notices simply failed. They will each pay two thirdsof the costs of that to the plaintiffs on a 2B basis.(b) The plaintiffs failed in their two applications regarding the firstdefendant but he had to replead anyway. The first defendant did notmake written or oral submissions about these applications and thenotice of opposition was late and without leave. The costs of theseapplications will lie where they fell.(c) The three memoranda containing submissions following the hearingwere required in order to update the Court on developments in case law.The case law and submissions assisted the Court. Costs will lie wherethey fell in relation to those memoranda.(d) All defendants will pay the costs of the one-and-a-half-day hearing andthe plaintiffs' disbursements jointly and severally.[15] Overall, I consider these somewhat complex calculations of costs reflect a fairmeasure of the success of the plaintiffs regarding the applications dealt with in thejudgment...................................................................Palmer J