Edward Cecil Thompson v Australian Capital Television Pty Limited and Publishing and Broadcasting Pty Ltd and Tcn Channel Nine Pty Limited [1998] ACTSC 227 (4 June 1998)

  
  
  
  

  
   Downlaod RTF

   IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

   MILES CJ

   DEFAMATION - interest
on damages - appropriate rate - analogy with M.B.P.
(SA) Pty. Ltd. v. Gogic - whether different considerations apply to damages
for
hurt feelings from damages for vindication of reputation.

   COSTS - interest on costs - whether interest runs from date of judgment
or
date of taxation or agreement - whether successful party gains windfall from
interest on costs when costs not paid.

   Supreme Court Act 1933, ss.69, 70

   Supreme Court Rules, O.42A

   Baffsky v. John Fairfax & Sons Ltd [1991] ACTSC 58;  (1991) 106 FLR 21

   Bateman v. Shepherd (unreported, 14 July 1995, Supreme Court of the ACT,
Master Hogan)

   John Fairfax &
Sons Ltd. v. Kelly (1987) 8 NSWLR 131

   Australian Consolidated Press v. Driscoll (1988) Aust Torts Reports 80-175

   M.B.P. (SA)
Pty Ltd v. Gogic [1991] HCA 3;  (1991) 171 CLR 657

   Hewitt v. Queensland Newspapers Pty Ltd (unreported, 27 May 1996, Supreme
Court of the ACT)

   Tarlington
v. Hall (1981) 38 ACTR 1

  

  

   CANBERRA, 20 August 1997 (hearing), 4 June 1998 (decision)

   #DATE 04:06:1998

   Appearances

  
TABLE
 Counsel for the plaintiff: B.J. Salmon QC with CP McKeown

   Solicitors for the plaintiff: Elrington Boardman Allport

  
   Counsel for the defendant: W.H. Nicholas QC with R.C. Refshauge

   Solicitors for the defendant: Deacons Graham & James

  
   Counsel for the third parties: B.R. McClintock SC

   Solicitors for the third parties: Phillips Fox

  

  

  

   Order:

   1. The plaintiff be at liberty to enter judgment against the defendant, as
at 20 August 1997, in the sum of $141,500.

   2.
Execution be permanently stayed on $40,000 of the judgment sum.

   3. The defendant to pay plaintiff's costs including costs of
the trial
before Gallop J, interest on such costs actually paid by the plaintiff as at
the date of judgment to run from that date
and on any other costs to run from
21 days after such costs have been agreed or taxed..

   4. The defendant be at liberty to enter
judgment against the third parties
in the sum of $50,750.

   5. The third parties indemnify the defendants as to two thirds of the
plaintiff's costs as may be taxed or agreed together with any interest on such
costs to which the plaintiff may be entitled.

  
6. The third parties pay the defendant's costs of the third party
proceedings.

  

  

   MILES CJ

   1. On 20 August 1997 I indicated
that I would make orders as follows:

   "In the action by the plaintiff:

   1. Judgment for the plaintiff against the defendant
in the sum of $120,000
(together with interest on $80,000 still to be calculated).

   2. Execution on the judgment permanently stayed
on $40,000 of the said sum.

   3. The defendant to pay the plaintiff's costs.

   In the third party proceedings:

   1. The defendant
to have judgment against the third parties for $40,000
(that is $80,000 less $40,000 already paid) (together with interest still
to
be calculated).

   2. The third parties to pay the defendant's costs of third party
proceedings."

   2. As the parties sought
further orders in respect of costs and interest, I
gave leave for written submissions to be lodged on behalf of the respective
parties
at intervals of 14 days. The final submission was received by
facsimile transmission on Christmas eve 1997. The decision has not
been given
the priority it would otherwise have had.

  "Plaintiff's claim for interest on damages"

   3. In the claim against the
defendant (Channel 7), the plaintiff's damages
were assessed at $120,000. However, $40,000 had already been paid to the
plaintiff
by the third party (Channel 9) pursuant to a deed of release dated
23 August 1985. The plaintiff claims interest on $80,000 from
date of
publication, or, for convenience, from 1 March 1984, ten days after
publication to 20 August 1997. I consider that latter
date to be the date on
which the plaintiff was at liberty to enter judgment, but for a sum still to
be assessed. Interest thereafter
should be regarded as payable as on a
judgment, pursuant to s.70 of the Supreme Court Act 1933 (the Act) and O.42A
of the Supreme Court Rules.

   4. Channel 7 does not dispute that interest is payable on damages awarded
for libel. That is the practice in this Territory:
e.g. Baffsky v. John
Fairfax & Sons Ltd [1991] ACTSC 58;  (1991) 106 FLR 21 , Bateman v. Shepherd (unreported, 14
July 1995 Supreme Court of the ACT, Master Hogan). The practice is
supported by decisions of the Court of Appeal of New South Wales in John
Fairfax & Sons Limited v. Kelly (1987) 8 NSWLR 131 and
Australian
Consolidated Press v. Driscoll (1988) Aust Torts Reports 80-175 at 67,648.
These decisions appear to have been followed
by trial judges in New South
Wales in unreported decisions.

   5. The real problem, a frequently recurring one, is what rate of
interest
to apply to which part of the damages. In Baffsky the rate applied by Higgins
J appears to have been 4 per cent, reflecting
a view that the loss, in money
terms, is incurred at the time of publication of the libel. In Bateman , the
rate applied by Master
Hogan appears to have been 2 per cent, reflecting a
view that the actual loss is suffered more or less evenly over the period
between
publication and judgment. The latter view appears also to be the view
of the Court of Appeal in New South Wales as expressed in Kelly
and in
Driscoll . In both cases in this Court, the analogy between damages for libel
and damages for pain and suffering consequent
upon personal injury appears to
have been accepted. In relation to damages for pain and suffering prior to
judgment the High Court
held in M.B.P.(SA) Pty Ltd v. Gogic [1991] HCA 3;  (1991) 171 CLR 657
that a rate of 4 per cent, as acted upon by the Supreme Court of South
Australia for some years, represented
a rough but adequate guide as to the
value of the plaintiff's loss during the period when he or she was deprived of
the use of the
money that was to be awarded by way of damages. The High Court
held further that to award interest at commercial rates for periods
of
pre-trial pain and suffering would be to compensate the plaintiff for a loss
which had not been sustained. In this respect I note
that in Kelly and in
Driscoll (both prior to Gogic ) the Court of Appeal appears to have awarded
interest based on commercial rates.

   6. In the present case, so it is submitted, part of the damages represents
damages for vindication of reputation and part for
hurt to feelings and that
for the purposes of interest only, the latter attracts interest on analogy
with Gogic , whilst commercial
rates of interest should be applied to the
damages awarded for vindication of reputation. Apparently some judges at first
instance
in New South Wales have taken that approach. It appears to me to be
contrary to the earlier views expressed in Kelly , but consistent
with the
majority view in Driscoll.

   7. There is no doubt that at the present time separate components for
vindication and hurt
to feelings may be the subject of distinct calculation
within the global award for which judgment is given. In recent years, at least
in New South Wales and in this Territory, hurt to feelings has assumed an
importance not recognized previously or elsewhere. Similarly,
where the law
regards a defendant's wrong-doing as resulting in a monetary loss before the
trial, there has been increasing recognition
of the plaintiff's right to
compensation for being kept out of the money representing such loss. Gogic is
an example of the trend
in the development of the law in this area. As Mahoney
JA pointed out in Driscoll at 67,653, the component of interest is now often
one of the largest components in the judgment sum and questions of interest
sometimes involve inquiry of greater dimensions than
those of the trial of the
principal issue. However, where, as in the present case, the plaintiff has
received from one of the joint
wrong-doers a sum which represents part of the
monetary value of pre-trial loss, then the plaintiff is not entitled to
interest on
the sum so paid after the date on which it is received, because,
to the extent of the sum received, the loss has ceased to continue.

   8. I do not accept the submission that damages for vindication to
reputation are to be treated like a payment for out-of-pocket
expenses, or
damages for loss of earning capacity, assessed by calculation of actual loss
of earnings during a fixed period in the
past. In my view, the analogy is
closer to damages for pain and suffering. Accordingly, I think that interest
on damages for vindication
should be approached in the same way and on the
same principles applied as in Gogic . Thus, the appropriate rate to apply is 4
per
cent.

   9. The next question is whether to apply the 4 per cent rate to the whole
of the damages for vindication, or to apply it
in the same way as applied to
an award for past pain and suffering. Usually, in the latter case, if the
evidence does not permit
a factual finding other than that the pain and
suffering was experienced more or less evenly over the period, the rate of 4
per cent
is applied to one half of the damages. Often if the greater share of
pain and suffering were in the earlier part of the period, the
resulting
figure might be adjusted accordingly, without any pretence at arithmetical
accuracy.

   10. This approach follows, in
my view, as a consequence of the judgment in
Gogic , which makes clear that, for the purposes of interest, damages for pain
and suffering
are not assessed as if they fell due on the day of injury and
were calculated retrospectively. Such damages are awarded for the actual
pain
and suffering experienced between injury and trial as revealed by the
evidence. Similarly, in my view, damages for vindication
are assessed in the
light of the relevant circumstances since the date of publication, such
circumstances including the actual damage
to the plaintiff's reputation and
the relevant conduct of the defendant. On the evidence in the present case, I
find that vindication
damages and damages for hurt to feelings should be
weighted more heavily in the earlier part of the 14 years that have
elapsed
since publication. On the other hand, as a countervailing factor, I
accept the submission on behalf of the defendant that the delay
of 21 months
between publication and the commencement of the proceedings should reduce the
award of interest for pre-trial damages.
Hence the latter two aspects cancel
each other out in their practical effect.

   11. Insofar as my opinion may differ from those
of the members of the New
South Wales Court of Appeal in Kelly and Driscol , I think that it is more in
accord with the view of the
High Court expressed in Gogic .

   12. Finally, I should emphasize that the calculation of a sum to compensate
the plaintiff for
being kept out of damages which the judgment of the court
establishes are due by a defendant, is a new and emerging skill to be acquired
by trial judges. Section 69 of the Act, which confers the power to award
interest in this respect allows the alternative of awarding,
in the exercise
of discretion, a lump sum in lieu of interest. That discretionary alternative
will usually have some regard to interest
rates and allied matters and may
well have been a more appropriate approach in the present case. However, it
was not urged upon me
by any of the parties.

   13. Applying the 4 per cent rate to the unpaid part of the judgment, namely
$80,000, and reducing the
result by half, results in a figure close enough to
$21,500. The total sum for which the plaintiff is to have judgment is $141,500
(with execution permanently stayed as to $40,000 thereof).

  "The plaintiff's claim for interest on costs"

   14. The claim for
interest on costs, according to the submission, follows
from the judgment of Higgins J in Hewitt v. Queensland Newspapers Pty
Ltd
(unreported, 27 May 1996, Supreme Court of the ACT) in which his Honour
applied the "usual" rule that interest is payable on
costs from the date of
judgment.

   15. The first thing to be said is that the plaintiff did not obtain
judgment on 20 December
1993 but on 20 August 1997. There is nothing put on
behalf of the plaintiff to counter that proposition.

   16. Next, I think, with
respect, that a reading of the whole of the
judgment of Higgins J indicates that the principles expounded were:

   "(i) `Absent
any special order, the costs order will bear interest from the
date upon which it takes effect' (para. 3).

   (ii) `Good reason
will usually exist to order that [an order for costs]
date from the date of the judgment in consequence of which it is made'
(para.9)."

   17. Some of the authorities cited relate to "pre-dating" an order for
judgment in times when interest was attracted only from
the date of judgment
and when there was no general rule to award interest before judgment. Those
authorities do not appear to me
to be relevant.

   18. I was not referred to any provision in the Rules or in any Act which
gives the Court power to "back date"
an order for costs for the purpose of
interest or for any other purpose. That is not to say that there is no power
to make orders
in respect of reserved costs and the like. In any event,
assuming that the costs, whether or not agreed or taxed, attract interest
from
the date of judgment in the absence of an order to the contrary, the defendant
submits that there are reasons in the present
case to decline to award
interest before any date upon which the plaintiff has actually paid costs to
his solicitors or has or incurred
liability by agreement to pay interest on
the costs which have not been paid to his solicitors. The evidence suggests
that the plaintiff
in the present case is waiting until he receives the
damages before he pays his solicitors. There is no evidence of any agreement
to pay interest to the solicitors on costs not paid.

   19. I think that the point taken by the defendant is valid. Costs are
awarded
by way of indemnity. That is not to say that an order for costs will
not be made until the successful party has actually paid costs.
Even if the
plaintiff has not paid his solicitors to date, he is entitled to be
indemnified by the defendant in respect of his liability
to the solicitors.
However, if he is awarded interest on costs which he has not paid, then he
will receive a windfall. If by reason
of the agreement between himself and his
solicitors, he has incurred liability for interest on the costs which he has
not paid, then
he will not receive a windfall and it is fair to award
interest. But there must be evidence of such an agreement, otherwise the award
of interest is penal in nature against the defendant and not compensatory in
favor of the plaintiff. In this respect the remark of
Kelly J in Tarlington v.
Hall (1981) 38 ACTR 1 at 4 that costs should not be "fructifying in the wrong
pocket" is inappropriate to
the circumstances of the present case.

  "Claim by defendant for contribution to plaintiff's damages"

   20. As explained, Channel
9 has already paid $40,000 or one third of the
plaintiff's damages of $120,000 and is therefore liable to indemnify Channel 7
in
respect of the remaining one third, namely $40,000, together with one half
of the interest awarded to the plaintiff, that is $10,750,
making a total of
$50,750.

  "Claim by defendant for contribution by third party to defendant's costs in
plaintiff's claim"

  
21. Channel 7 submits that since the ultimate effect of the order relating
to damages is that the defendants Channel 7 and Channel
9 should each pay one
half of the damages remaining unpaid, then Channel 9 should contribute one
half of Channel 7's own costs. I
do not think that the latter proposition
follows from the earlier and otherwise I see no reason to make any order of
this nature.

  "Claim by defendant for contributing to plaintiff's costs"

   22. Channel 9 should indemnify Channel 7 for the same proportion
of the
plaintiff's costs as it would have borne if it had not made the previous
payment to the plaintiff, that is two-thirds.

 
"Claim by defendant against third party for costs of third party claim"

   23. Channel 7 has been successful in its third party
claim for contribution
to the plaintiff's damages. Channel 9 resisted the claim unsuccessfully and
that is sufficient reason to order
that Channel 9 pay Channel 7's costs of
bringing the third party claim.

   24. The orders which, I hope, will finally dispose of
this litigation are
as follows:

   (i) The plaintiff is at liberty to enter judgment against the defendant, as
at 20 August 1997,
in the sum of $141,500.

   (ii) Execution permanently stayed on $40,000 of the judgment sum.

   (ii) The defendant to pay plaintiff's
costs, interest on such costs to run
from 21 days after such costs have been agreed or taxed.

   (iv) The defendant at liberty to
enter judgment against the third parties
in the sum of $50,750.

   (v) The third parties to indemnify the defendants as to two thirds
of the
plaintiff's costs as may be taxed or agreed together with any interest on such
costs to which the plaintiff may be entitled.

   (vi) The third parties to pay the defendant's costs of the third party
proceedings.

   25. The parties can have liberty to apply
in respect of the terms of the
orders.