The case began with a report in the Sunday Age in November 1994. It said, “”The director of the Australian War Memorial, Mr Brendon Kelson, has retired suddenly during an inquiry into dozens of allegations of harassment in the workplace.” It was a poor piece of journalism. Kelson had announced his retirement plan before the inquiry had begun. The so-called inquiry was a
scatter-gun witch-hunt by the Merit Protection Review Agency that had been found defective by the Federal Court. A phone call to Kelson would have put the record straight.
The Age was on toast. It apologised a fortnight later. It offered damages. There were counter offers. There was no agreement. A writ was served and then the matter was in the hands of the lawyers and the legal system.
The costs, time, effort and delay got hopelessly out of proportion to the matter at stake.
This was an article on Page 4 of the Sunday Age. Sure, it caused some embarrassment, but few in Canberra would taken much notice and those who knew Kelson would have their own view of him irrespective of the article. Indeed, the case highlights one of the great farces of defamation cases, where witnesses put their hands on their hearts and in effect say, “”I have known the plaintiff for many years. He is a saint without a blemish on his character. And having had this firm and considered view of the plaintiff, I read an article on Page 4 of a newspaper and was shocked and I immediately thought lesser of him and that he was a ratbag and a scallywag.” In any event, the case went to trial. There are two elements to that. Either the newspaper did not offer enough in the way of apology and damages or the plaintiff, as advised by his lawyers, was demanding too much.
(I have to declare some interests here. I gave evidence in the case to the effect that I thought the apology a reasonable one in the circumstances. I also gave evidence, though, that I thought the journalism was negligent. I also wrote articles broadly sympathetic to Kelson when he was under siege by the MPRA. Kelson’s lawyers are also The Canberra Times’s lawyers. But I am also sympathetic to newspapers when they are being sued.) Ultimately, Kelson’s lawyers would not take anything less than $75,000 in damages and $150,000 in costs. Faced with a $225,000 bill for one article on Page 4, the Age felt it would have to defend.
Kelson won the case and got $82,500 in damages “”plus costs”. You would think that that was a good verdict for Kelson and that his lawyers had done him proud. Not so, if you read last week’s judgment. Kelson won’t see a cracker of that $82,500, if I’ve done my sums right. His lawyers will get the lot, unless they discount their bills as a result of the case.
Before the trial, the Age offered $65,000 plus costs. The judge quoted Kelson’s barrister as saying that that offer would have left Kelson “”almost out of pocket”. This is because the official costs allowed by a court officer would be less than the actual costs charged by the lawyers.
So when a court orders “”plus costs” it means those necessary and reasonable to conduct the case according <>to the scale allowed in the Supreme Court rules.
If the difference between court-allowed costs and actual costs was almost $65,000 before the five-day trial had even begun, imagine how much greater the difference would be after the trial. A lot more than $82,500.
Well, Kelson’s lawyers took the matter back to the judge, arguing that they should be allowed actual costs, not court-allowed scale costs. The judge said no to that last week.
I estimate the total costs could have run as high as $290,000. After all, Kelson’s lawyers wanted $150,000 in costs before the trial, so after the trial their costs must have been much higher than that, perhaps $200,000. The Age runs a fairly efficient shop. It did not brief a QC, so it had one barrister and one solicitor in court. Kelson, however, had a QC and junior barrister, two solicitors and a clerk. Most of them were in court most of the time and presumably they all had a hand in preparation. The Age’s costs were probably $90,000.
The Age will have to pay about $100,000 of Kelson’s court-allowed costs, leaving Kelson with a shortfall of $100,000 on his actual bills and only $82,500 in verdict to pay for it. Even if I am 20 per cent out, there is still virtually nothing left of Kelson’s damages verdict. It gets swallowed by lawyers.
Worse for Kelson … the Age will probably appeal. He will probably cross-appeal and appeal the costs award.
The true verdict is that defamation is a complete mug’s game for everyone but the lawyers. And this is not an exceptional case. Costs invariably exceed the verdict.
The problem is that the law and procedure are too complex and the rules of evidence too restrictive. It is quite mad that one small article in a newspaper should cost so much to argue about. The average punter (or senior public servant) cannot risk such costs, so defamation law as a way of getting redress for bad journalism is out of reach.