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Joe Hockey falters against Fairfax on costs and injunctions

Joe HockeyJustice White of the Federal Court published his judgment on the subjects of costs and injunctions yesterday afternoon in the fascinating defamation saga of our Treasurer, Joe Hockey, and Fairfax.

In light of the practical outcome to date, the case will likely serve as a cautionary tale for politically flavoured defamation cases in Australia.

The injunctions

As far as the injunctions are concerned Justice White concluded none were justified and dismissed all of Joe Hockey’s applications.

This didn’t come as a huge surprise given Justice White’s comments in the course of the arguments on the subject on 14 July.

In respect of the two mandatory injunctions, Justice White noted they would serve no practical purpose as the two tweets in question have been already deleted by The Age. Further, an undertaking has been given to delete the remaining two relevant tweets, even though Joe Hockey’s claims did not cover them.

In denying the application in respect of the five permanent injunctions, Justice White stated that in Australia:

… permanent injunctions restraining a repetition of publication of matters found to be defamatory are not usually issued as a matter of course in this country. The authorities show that injunctions are issued only when some additional factor is evident, usually, an apprehension that the respondent may, by reason of irrationality, defiance, disrespect of the Court’s judgment or otherwise, publish allegations similar to those found to be defamatory unless restrained from doing so …

Justice White found The Age, rather than exhibiting an attitude of defiance, indicated respect for the court’s orders and a willingness to act responsibly.

The judgment highlighted the only publication of The Sydney Morning Herald (SMH) found to be defamatory was the poster promoting the articles published in the SMH. Since the very nature of such posters is to be a topical and transient form of advertising, it was deemed ‘highly improbable’ that the SMH would publish another poster with the same content.

Justice White stated ‘any future publication of the kind postulated by Mr Hockey is likely to be regarded as so separated in time and circumstance from the publication of the SMH poster and the two tweets as not to be regarded as a publication of “the same or like matter”.’

Justice White considered four further relevant matters:

  1. the injunctions sought by Mr Hockey were not anchored to past events or conduct but would have extended to publications concerning his future conduct;
  2. Mr Hockey continues to be a member of Federal Parliament and the holder of an important public office, meaning there is likely to be continuing public interest in his conduct relating to the discharge of his public duties;
  3. the public interest in free speech and receiving information on government and political matters; and
  4. the undesirability of courts making themselves a form of gateway to be negotiated before the publication of material.

Costs

On the costs front Joe Hockey didn’t fare much better either. In fact he fared much worse than I anticipated in one of my earlier reports on the matter, where I based my hypothetical calculations on the presumption he could recover 40% of his legal costs from Fairfax.

The judgment stipulates he may only recover 15% of his overall costs across the three proceedings involved, This is in addition to a relatively meagre judgment of $120,000 in damages and $4,200 in interest over the SMH poster, and $80,000 in damages and $2,800 in interest in respect of the tweets.

In respect of The Canberra Times proceedings Justice White declined to make any costs order.

Justice White noted he was not satisfied that Fairfax failed unreasonably to agree to a settlement offer proposed by Mr Hockey and neither had he established that the failure by Fairfax to make any offer of settlement was unreasonable.

In the course of considering the cost issues, Justice White acknowledged Joe Hockey’s partial success, evidenced by the award of damages, justified a partial costs order in his favour. However, he qualified this by noting the three publications upon which he succeeded were essentially the same, so that in substance he succeeded on only one matter, and his failure altogether on the claims against The Canberra Times.

Justice White went on to explain ‘the appropriate comparison would be between the relatively terse statements in the SMH poster and the two tweets of The Age, on the one hand, and the substantial articles, on the other. That difference by itself suggests that the greater focus at trial would have been on the articles rather than on those publications on which Joe Hockey succeeded.’

You would be justified in thinking Joe Hockey’s case for costs would have been strengthened by Justice White’s finding that Mr Goodsir, the Editor in Chief of the SMH, was motivated by malice towards Joe Hockey. However, you would be wrong. This was due to a significant tactical error in the conduct of the matter, pleading malice on the part of two further Fairfax employees right up to the opening of the case, but then pursuing it only in respect of Mr Goodsir.

Justice White concluded on this subject:

… I consider that Mr Hockey’s case of malice actually counts against him on the question of costs or, at the very least, neutralises the significance of the finding in his favour. That is because Mr Hockey did not confine his case on malice to Mr Goodsir. His pleading in each proceeding was to the effect that each of Mr Goodsir, Mr Holden and Mr Kenny had been actuated by malice. By the time of trial, Mr Hockey had had the affidavits containing the evidence in chief of the respondents’ witnesses for some three months. Despite their foreshadowed evidence, counsel for Mr Hockey did not retreat from the allegation of malice when opening the case at trial …

Despite the pleading and despite the opening, ultimately Mr Hockey pursued (subject to one qualification) the plea of malice only in respect of Mr Goodsir. It was not pursued at all in relation to Mr Kenny or Mr Cubby, or for that matter Mr Nicholls.

The significance of these matters on the question of costs is that, having made the serious allegations which he did about the improper purpose of these employees of the respondents … and not succeeded, Mr Hockey should not have the costs of the vindication to which they were entitled.

Justice White then set out detailed reasons why Joe Hockey should only recover 15% of his overall costs, across all three proceedings:

The starting point is that Mr Hockey should not be entitled to his costs in suing The Canberra Times. Those costs may not have been one-third of his overall costs but are likely to have been much more than the nominal amount he suggested. A reduction of approximately 20% seems appropriate. The intermediate figure of about 80% should then be reduced to take account of Mr Hockey’s failure on the matters which were at the core of his claims against the SMH and The Age, including his failure on the identified factual and legal issues. Some further reduction again is appropriate if Mr Hockey is spared from an order that he pay the costs of The Canberra Times.
On that basis, I consider that an appropriate order is that Mr Hockey recover 15% of his costs in the three proceedings. He should be able to recover those costs against the publishers of the SMH and The Age only. An order should be made staying further enforcement of those orders once Mr Hockey has recovered 15% of his overall costs.

The only saving grace for Joe Hockey in the circumstances is that he was not ordered to pay any of Fairfax’s costs, estimated to be over $1 million.

It is believed Joe Hockey himself incurred around $1 million in legal costs. If so, Justice White’s orders leave him over $600 million out of pocket.

Given the outcome is arguably a disaster for Joe Hockey both financially and substantially, an appeal in the matter is not entirely unlikely. 21 days and counting …

Previously on The Vue Post:


*’The Twitter bird’ feature image sourced from Andreas Eldh under Creative Commons Attribution 2.0

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