Earlier this month I wrote extensively about two recent Australian defamation cases, both involving Twitter.
One of those was the controversial Federal Court case of Joseph Hockey v Fairfax Media Publications Pty Limited and Others  FCA 652, a case brought by the Australian Treasurer against Fairfax Media over the publication of certain articles in print and online, and the promotion of those articles using a poster and Twitter.
I predicted in my original piece analysing the case that the issue of legal costs would be become a significant point of contention between the parties:
… some reporting of the judgment seem to indicate a huge victory for Mr Hockey. On a closer examination of the decision, I would argue against that conclusion on the basis the court only upheld a relatively small proportion of Mr Hockey’s claims, specifically only those which related to a poster and a tweet.
The parties will now make submissions on relief by way of injunctions, interest and costs.
As for costs, that’s where things will get really interesting. The $200,000 judgment for Mr Hockey may not be the ‘windfall’ most people saw when the judgment was handed down. This is because although in litigation costs will usually follow the event, meaning that the successful party has a ‘reasonable expectation’ of being awarded costs against the unsuccessful party, the court has relatively wide discretion when it comes to awarding costs.
For example, the court can make so-called ‘differential costs orders‘ in circumstances where the ‘winning’ party failed on one or more issues at trial. The court has the discretion to disallow the ‘winning’ party from recovering costs that relate to such issues and, in some circumstances, may also award costs to the ‘losing’ side in respect of them.
Mr Hockey had failed in his defamation case on a number of issues, as none of the newspaper and online publications of the three articles in question were found to be defamatory.
If one accepts that a sizeable portion of the legal costs incurred by both sides would have been incurred in relation to the three articles, there is a possibility of a differential costs order being made by the court. This would mean that Mr Hockey would not be able to recover a substantial portion of his costs. Further, he could find himself liable for Fairfax’s costs in respect of those issues. That could be quite catastrophic in financial terms.
Such are the vagaries of high-stakes litigation. So watch this space …
On Tuesday, lawyers appearing for Fairfax at the Federal Court of Australia described Joe Hockey’s case as an ‘unmitigated disaster’, arguing that Fairfax should not be ordered to pay the bulk of Mr Hockey’s legal costs.
As anticipated, Fairfax’s barrister Sandy Dawson argued before Justice White that Fairfax was the ‘overwhelming winner’ of the defamation case with Mr Hockey failing ‘in respect of 12 out of 15 [causes] sued on’, and noted that the Twitter issue was added to the case relatively late in the proceedings. He submitted that Mr Hockey should pay 60% of Fairfax’s costs in respect of The Sydney Morning Herald and The Age publications and asked for the costs in respect of The Canberra Times on a party/party basis.
Conversely, Mr Hockey’s side argued that he should be given costs on an indemnity basis and conceded costs only in relation to the article published in The Canberra Times, and submitted each party should bear their own costs in that respect.
At the hearing Mr Hockey also sought a permanent injunction against The Sydney Morning Herald and The Age, which would prevent them from republishing the defamatory imputations that were found to be conveyed on Twitter ad by the poster, including that he was ‘corrupt in that he was prepared to accept payments to influence his decisions as Treasurer.’ His counsel, Bruce McClintock argued that an injunction was ‘both necessary and desirable.’
Mr Dawson, appearing for Fairfax, argued such an injunction would be an ‘incredible restriction … on freedom of the press’ and would ‘strike at the heart of freedom of the press.’
Justice White also expressed a reluctance noting that such an order could restrict the freedom of the press in the future and hypothesised that such an injunction would mean Fairfax could not report on any potential allegations of corruption against Hockey:
There is not even a hint that Mr Hockey would engage in corrupt conduct but it is not unknown for respectful, reliable, responsible persons to fall from grace.
I’m not suggesting Mr Hockey is likely to, but the injunction you seek would preclude the respondents from publishing that if it was to occur.
Justice White reserved his decision.
*’The Twitter bird’ feature image sourced from Andreas Eldh under Creative Commons Attribution 2.0