Dutton v Bazzi (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 08 December 2021
• Neutral Citation: [2021] FCA 1560
• Date: 08 December 2021

Federal Court of Australia

Dutton v Bazzi (No 2) [2021] FCA 1560

File number:	NSD352 of 2021
Judgment of:	WHITE J
Date of judgment:	8 December 2021
Catchwords:	COSTS – application for costs on an indemnity basis by the successful Applicant in defamation proceedings – no special or unusual circumstances to justify costs on an indemnity basis – application rejected. ; COSTS – unsuccessful party’s claim for a reduction of the costs payable pursuant to r 40.08 of the Federal Court Rules 2011 (Cth) – whether the Applicant could have commenced proceedings in a more suitable court – claim for reduction of costs upheld.
Legislation:	Federal Court of Australia Act 1976 (Cth) s 43 Uniform Defamation Acts Federal Court Rules 2011 (Cth) rr 25, 40.08 Defamation Act 2005 (NSW) s 40
Cases cited:	AMP Services Ltd v Manning (No 3) [2007] FCA 510 Australasian Performing Right Association Limited v Metro on George Pty Ltd [2004] FCA 1371, (2004) 64 IPR 57 Colgate‑Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 Dutton v Bazzi [2021] FCA 1474 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 3) [2008] FCA 896 Hanson‑Young v Leyonhjelm (No 5) [2020] FCA 34 Hayson v Age Company Pty Ltd (No 3) [2020] FCA 1163; (2020) 280 FCR 139 Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750; (2015) 237 FCR 127 Murphy v Nationwide News Pty Ltd (No 2) [2021] FCA 432 Oliver v Nine Network Australia Pty Ltd [2019] FCA 583 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Queensland North Australia Pty Ltd v Takeovers Panel (No 2) [2015] FCAFC 128; (2015) 236 FCR 270 Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15; (2021) 387 ALR 123 Tenji v Henneberry & Associates Pty Ltd [1999] FCA 1259 Umoona Tjutagku Health Service Aboriginal Corporation v Walsh [2019] FCAFC 32; (2019) 268 FCR 401
Division:	General Division
Registry:	New South Wales
National Practice Area:	Other Federal Jurisdiction
Number of paragraphs:	52
Date of hearing:	8 December 2021
Counsel for the Applicant:	Mr H Clift
Solicitor for the Applicant:	Baker McKenzie
Counsel for the Respondent:	Mr R Potter SC with Mr B Dean
Solicitor for the Respondent:	O’Brien Criminal & Civil Solicitors

ORDERS

		NSD352 of 2021
BETWEEN:	PETER CRAIG DUTTON Applicant
AND:	SHANE BAZZI Respondent

order made by:	WHITE J
DATE OF ORDER:	8 December 2021

THE COURT ORDERS THAT:

1. Judgment is entered for Mr Dutton against Mr Bazzi in the sum of $35,825.

2. Mr Bazzi pay Mr Dutton’s costs, but on the scale appropriate to an action brought in the Queensland Magistrates Court for a defamation resulting in a judgment of $35,825.

3. With respect to disbursements, Mr Bazzi pay only those disbursements which Mr Dutton would have had to pay, had the proceedings been brought and pursued in the Queensland Magistrates Court.

4. Mr Dutton pay 50% of Mr Bazzi’s costs of, and incidental to, today’s hearing.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

EX TEMPORE REASONS FOR JUDGMENT

WHITE J:

1. On 24 November 2021, I delivered judgment in Mr Dutton’s defamation action against Mr Bazzi: Dutton v Bazzi [2021] FCA 1474 (the Principal Judgment). I found that Mr Dutton was entitled to judgment against Mr Bazzi for $35,000. I dismissed his claim for injunctions.

2. I said that, before entering judgment, I would hear from the parties on the issues of interest and costs. It is those matters which are the subject of this judgment. These reasons should be read in conjunction with the Principal Judgment.

Interest

3. On the topic of interest, the parties agreed that interest should be allowed in the sum of $825. Accordingly, I will enter judgment for Mr Dutton in the sum of $35,825.

Costs

4. On the issue of costs, Mr Dutton seeks an order that Mr Bazzi pay his costs on an indemnity basis.

5. Mr Bazzi’s approach to costs can be summarised by three propositions:

1. Mr Dutton should not be awarded indemnity costs;

2. because Mr Dutton had only partial success in the proceedings, he should receive only a portion of his costs; and

3. the Court should, in any event, invoke r 40.08 of the Federal Court Rules 2011 (Cth) (the FCR) and reduce the costs to which Mr Dutton is entitled.

6. Both parties accepted that it is the discretion invested in the Court by s 43 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) which is to be exercised presently. While adverting to Hayson v Age Company Pty Ltd (No 3) [2020] FCA 1163, (2020) 280 FCR 139; to Stead v Fairfax Media Publications Pty Ltd [2021] FCA 15, (2021) 387 ALR 123 at [316]; and to Murphy v Nationwide News Pty Ltd (No 2) [2021] FCA 432 at [6], neither party suggested that the exercise of the discretion is governed by s 40 of the Defamation Act 2005 (NSW) and its counterparts in the Uniform Defamation Acts of the States and Territories (the UDA). I will proceed on the basis on which the parties agreed.

7. Section 43 of the FCA Act provides that, except as may be provided in another Act, the award of costs is in the discretion of the Court. The discretion is to be exercised judicially. That means that, generally speaking, an unsuccessful party will be required to pay the costs of the successful party: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [66]. Costs are awarded in order to compensate the successful party for the costs it has incurred in the proceeding and not as a penalty. Usually, the Court awards costs on a “party and party” basis: Colgate‑Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 232.

8. However, there are circumstances in which it is appropriate for the Court to award costs on some other basis, including on a solicitor‑client basis or an indemnity basis: Colgate‑Palmolive at [233]. Before the Court makes such an order, it should be satisfied that there is some “special or unusual feature of the case justifying the departure from the ordinary practice”: Colgate‑Palmolive at [233]. Unreasonableness in the conduct of litigation by a party has been recognised as one such special circumstance.

Mr Dutton’s claim for indemnity costs

9. In seeking an order for indemnity costs, Mr Dutton referred to a number of matters. First, he submitted that, while the Court is not bound by s 40 of the UDA, it is in the public interest that outcomes on costs in defamation cases be consistent across Australian jurisdictions and that, for that reason, the Court should regard the cost provisions in the UDA as an important consideration in exercising its own costs discretion. Mr Dutton submitted that the Court should be satisfied that Mr Bazzi failed unreasonably to make a settlement offer or to agree to a settlement offer proposed by him and, in accordance with s 40(2)(a) of the UDA, require him to pay indemnity costs on that basis.

10. Secondly, Mr Dutton contended that Mr Bazzi’s denial from the outset that any of the pleaded imputations arose was plainly unreasonable.

11. Thirdly, Mr Dutton submitted that, while...