Feldman v GNM Australia Pty Limited (No 2)

[2016] NSWSC 1188

Supreme Court

New South Wales

Medium Neutral Citation:	Feldman v GNM Australia Pty Limited (No 2) [2016] NSWSC 1188
Hearing dates:	19 August 2016
Date of orders:	19 August 2016
Decision date:	19 August 2016
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Application for indemnity costs dismissed. Plaintiff to pay the defendants' costs as assessed on the ordinary basis.
Catchwords:	COSTS – application for indemnity costs
Legislation Cited:	Defamation Act (2005) (NSW)
Cases Cited:	Feldman v GNM Australia Pty Limited [2016] NSWSC 920 Miwa Pty Limited v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Pavlovic v Universal Music Australia Pty Ltd (2015) NSWCA 313
Category:	Procedural and other rulings
Parties:	Yosef Yitzchak Feldman (Plaintiff) GNM Australia Pty Ltd (First Defendant) Melissa Davey (Second Defendant)
Representation:	Counsel: J Cohen (Plaintiff) R Potter (Defendants)   Solicitors: Cambridge Lawyers Baker & McKenzie (Defendants)
File Number(s):	2015/382022
Publication restriction:	None

Judgment

1. HER HONOUR: These are proceedings for defamation which I determined in an earlier judgment: Feldman v GNM Australia Pty Limited [2016] NSWSC 920. In that judgment I ordered that the proceedings be permanently stayed. The basis for the defendants' stay application was the contention that the parties had reached a binding settlement agreement prior to the commencement of the proceedings. The contest was as to whether the exchange giving rise to that contention did indeed result in an agreement regarded as binding at law.

2. Today the defendants have applied for an order that the plaintiff pay their costs on an indemnity basis as opposed to the usual rule that the costs be paid as assessed on the ordinary basis.

3. The basis for the application for a special costs order is the content of a letter dated 15 March 2016 in which at paragraph 4 the defendant offered to consent to the dismissal of the proceedings with no order as to costs. Evidence before the Court today, which I accept, establishes that the value of that offer might have been in the order of around $20,000 to the defendants.

4. The principles for determining the application were not in dispute. Mr Potter relied on the decision of the Court of Appeal in Miwa Pty Limited v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8] where Basten JA identified the two questions for the Court to answer as follows:

1. whether there was a genuine offer of compromise; and

2. whether it was unreasonable for the offeree not to accept it.

5. I accept that the offer was one of compromise and that it was genuine. In my assessment, however, it is difficult to conclude that it was unreasonable for the plaintiff at the time not to accept it. The primary judgment records my deliberations as to the proper evaluation of the contentions put on behalf of the plaintiff. In particular Mr Cohen submitted on the strength of the decision of the Court of Appeal in Pavlovic v Universal Music Australia Pty Ltd (2015) NSWCA 313 that there can never be a finding of ostensible authority of a solicitor in the absence of legal proceedings. In the present case the alleged compromise of a dispute was reached before the commencement of these proceedings.

6. In the principal judgment I noted at [38] that neither party had cited any authority in which the question of the ostensible authority of a solicitor to bind his or her client to a settlement agreement has arisen in the context of the resolution of a civil dispute notified by the service of a concerns notice under the Defamation Act 2005 (NSW). In that respect the defendants’ application travelled into new legal territory. I do not think I can conclude that it was unreasonable of the plaintiff not to capitulate in the face of the letter of March 2016 rather than have the issue determined by the Court.

7. The Court must be astute to ensure that the authority to award indemnity costs is not exercised in such a way as to derogate from the right of a party to have a matter in dispute properly brought forward determined by the Court which is, after all, the Court's primary function.

8. For those reasons the application for indemnity costs is dismissed. I order the plaintiff to pay the defendants' costs as assessed on the ordinary basis.

**********