In the recent decision of the Supreme Court of NSW, Balzola v Passas (No 2) [2020] NSWSC 1200, a plaintiff sued two defendants in defamation.

The plaintiff succeeded against the first defendant and failed against the second.

The damages were very modest, the sum of around $11,000.00.

The Court found that, in relation to the second defendant, that costs should “follow the event” meaning the plaintiff had to pay the second defendant’s legal fees. The second defendant tried to elevate that costs order to cost on the more generous “indemnity” basis, but failed. This meant that that the plaintiff had to pay on the less generous “ordinary” basis.

Having been successful against the first defendant, the plaintiff sought his costs against her on the indemnity basis.

The plaintiff failed. The Court found that an offer the plaintiff made, which the first defendant did not accept, required a wide-ranging apology and did not provide for a “clean exit” from the litigation. As such, it was not unreasonable for the first defendant not to accept it.

Further, the Court found the first defendant should only pay a proportion of the successful plaintiff’s costs because: (i) the very modest $11K claim raised an issue about whether the legal costs were proportionate, (ii) the P was only partially successful, having lost on more of the claim than he won, and (iii) the first defendant should not have to pay legal costs relating to the plaintiff’s unsuccessful pursuit of the second defendant.

The Court ordered that the first defendant only had to pay two-thirds of the plaintiff’s legal costs.

In closing, the Court queried whether the proceedings were worth the “powder and shot”; whether the legal costs incurred – and the argument about those costs – was worth the modest amount of damages claimed. 


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