Introduction
In Murphy v Nationwide News Pty Ltd (No 2),1 the Federal Court recently ordered the respondents to pay the whole of an applicant’s costs of a defamation court proceeding despite the applicant failing to do better than the respondents’ pre-trial Calderbank offer.
Had the respondents framed their pre-trial offer differently to rely on the presumptive cost entitlements under the Court rules, the decision on costs would likely have been different.
The costs decision
The underlying proceeding by Mr Murphy2 concerned five defamatory imputations alleged to have been conveyed by an article authored and published by the respondents.
Prior to trial, the respondents made Mr Murphy an offer to settle the proceeding for $120,000 plus costs. The offer was conveyed by a letter marked 'without prejudice except as to costs’ and gave notice the respondents would rely on the letter to seek ‘costs on an indemnity basis from the date of the letter in accordance with the principles of Calderbank v Calderbank (1975) 3 All ER 333 and/or pursuant to section 40(2)(b) of the Defamation Act 2005 (NSW)'.
At trial, the Federal Court found one of the five alleged imputations was conveyed by the article. The Court awarded Mr Murphy $110,000 for general damages plus interest. The parties then agreed judgment should be entered for $111,726.
Although the judgment of $111,726 was less than the respondents’ pre-trial offer of $120,000, the Federal Court ordered that the respondents pay Mr Murphy’s costs of the entire proceeding. The Court did not order that the respondents were entitled to recover their costs from the date of the offer.
1 [2021] FCA 432 (costs judgment) .
2 Murphy v Nationwide News Pty Ltd [2021] FCA 381 (primary judgment) .
