RADIO NEW ZEALAND v JOHN JEFFERS HARRISON & KERRY RAYMOND SINGLE [1999] NZCA 13 (25 February 1999)

IN THE COURT OF APPEAL OF NEW ZEALANDC.A. 119/98

BETWEEN RADIO NEW ZEALAND LIMITED

Appellant

A N D JOHN JEFFERS HARRISONand

KERRY RAYMOND SINGLE

Respondents

Coram:Thomas J

Gallen J

Doogue J

Hearing:25 February 1999

Counsel:J.W. Tizard for appellant

G.R.J. Thornton for respondents

Judgment: 25 February 1999

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JUDGMENT OF THE COURT DELIVERED BY DOOGUE J

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The single issue for determination on this appeal is whether the trial Judge was wrong in principle in not awarding solicitor and client costs to the appellant.The appellant was the second of three defendants to a claim in defamation brought by the respondents.Judgment was given for it.Costs were awarded to it upon the basis of a fair and reasonable contribution towards its actual and reasonable costs.Section 43(2) Defamation Act 1992 ("the Act") provides that solicitor and client costs shall be awarded where a claimant obtains judgment for a sum less than the amount claimed and in the opinion of the Judge the damages claimed are grossly excessive.In accordance with the requirements of s. 43(1) of the Act the damages claimed by the respondents against the appellant and the third defendant, a newspaper, were not specified. Notwithstanding that, the appellant claims the damages claimed were so excessive the principle underlying s. 43(2) of the Act should have been applied.

Section 43 of the Act provides:-

(1) In any proceedings for defamation in which a news medium is the defendant, the plaintiff shall not specify in the plaintiff's statement of claim the amount of any damages claimed by the plaintiff in the proceedings.

(2) In any proceedings for defamation, where--

(a) Judgment is given in favour of the plaintiff; and

(b) The amount of damages awarded to the plaintiff is less than the amount claimed; and

(c) In the opinion of the Judge, the damages claimed are grossly excessive,--

the Court shall award the defendant by whom the damages are payable the solicitor and client costs of the defendant in the proceedings.

The respondents sought damages from the first defendant in the sum of $750,000 including $250,000 for aggravated damages in respect of alleged defamatory statements in April 1996.The appellant, in combination with the first defendant, made a Calderbank offer to the respondents in November 1997.The trial date was 1 December 1997.In response to that offer the respondents said they were prepared to settle with the appellant in the sum of $100,000 together with costs and an apology.The appellant at no time made any payment into court but responded with an independent Calderbank offer of $50,000 which was not accepted.In a trial before a Judge and jury the respondents were unsuccessful against all three defendants.Judgment was accordingly entered for the appellant and the other defendants, all of whom sought costs from the respondents.

McGechan J, the trial Judge, awarded costs to all three defendants in a decision dated 23 April 1998.He took the view that it was a case in which the Court had to assess a reasonable contribution towards actual costs so far as they were reasonably incurred in respect of the appellant and the other defendants.He noted that he was referred to s. 43(2) of the Act and that it was accepted that that provision was not directly applicable.He said:-

What is more important is the broader policy which underlies that section, and which is to discourage excessive claims, so far as that can be achieved within a costs context.

He noted that the pre-trial offers which were made were somewhat on the late side.He noted that there were factors telling against both the respondents and the appellant in respect of costs.As s. 43(2) did not apply, he applied the principles which he had drawn together in Holden v Architectural Finishes Ltd [1997] 3 NZLR 143.Of the $125,000 costs claimed by the second defendant he awarded $60,000.That award has to be seen in the context of an award of $70,000 in respect of costs claimed of $134,000 by the third defendant and an award of $40,000 in respect of what the Judge regarded as a claim of $103,000 in relation to the first defendant.

The appellant accepts that the costs were in the discretion of the trial Judge.The appellant accepts that s. 43(2) of the Act does not apply.What lies at the heart of the appellant's case is the submission that there is no reason in principle why a defendant should be entitled to recover solicitor and client costs only where there is a judgment in favour of the plaintiff and that it is the effect of a grossly excessive claim to which the section is directed.

It is submitted for the appellant that the claim against the appellant was grossly excessive.It is said a claim in respect of a first publication by the appellant was necessarily $500,000 because there was such a claim against the first defendant and it was alleged that the appellant was jointly liable for such publication.It is further said that there had to have been a claim for a further amount in respect of a second publication by the appellant.It is difficult to accept these submissions at face value as they are based upon what was alleged against the first defendant when the appellant's position was very substantially different.The claim against the appellant was not and could not be quantified.There is no tenable basis for suggesting it was grossly excessive.In fact, as already noted, the respondents were prepared to settle their claim against the appellant in respect of fairly serious allegations for $100,000 together with costs and an apology.The requisite foundation for the appellant's submission that solicitor and client costs should have been awarded does not exist.

The appellant in its submissions treats the Judge's decision for rejecting solicitor and client costs as if it occurred entirely independently of his discussion of s. 43(2) of the Act.It is true that those subject-matters were dealt with in different parts of his judgment, but it is quite apparent, when the decision is read as a whole, that he considered the provision and took it into account, concluding nevertheless that this was not a case for solicitor and client costs.

For the appellant to succeed it must show that the trial Judge has exercised his discretion on a wrong principle: Cates v Glass [1920] NZLR 37; Beadle v M & L A Moore Ltd [1998] 3 NZLR 271.

The appellant is quite unable to point to any wrong principle being adopted by the trial Judge in the present case.Section 43(2) of the Act did not apply. However, McGechan J's decision took into account the principles underlying it and applied them to the facts of the case.

The appeal is and must be dismissed.

The respondents are entitled to their costs in respect of the appeal in the sum of $3,000 together with any reasonable disbursements including counsel's costs of coming from a distance.

Solicitors:

Oakley Moran, Wellington, for appellant

Carlile Dowling, Napier, for respondents