Russell v Australian Broadcasting Corporation (No 3) [2023] FCA 1223

At a glance

• On Tuesday 24 October 2023, the Federal Court handed down a costs judgment granting Heston Russell costs on an indemnity basis following the ex-commando’s victory against the Australian Broadcasting Corporation (ABC) in a protracted defamation lawsuit.
• This article continues on from our earlier article here and unpacks Justice Michael Lee’s judgement.

On Tuesday this week, the Federal Court handed down a decision granting Heston Russell costs on an indemnity basis following the ex-commando’s victory against the Australian Broadcasting Corporation (ABC) in a protracted defamation lawsuit – see our earlier article here. In his judgment, Justice Michael Lee revealed that, had the ABC not freely consented, Mr Russell may not have been awarded the indemnity costs order.

In the judgment as to costs dated 24 October 2023, Justice Lee ordered the following:

• A judgment in favour of Mr Russell against the ABC in the amount of $412,315.48, including interest.
• The ABC is to pay Mr Russell’s costs for the proceedings on an ordinary basis for costs incurred before mid-September and, thereafter, on an indemnity basis.
• Both parties are granted leave to appeal His Honour’s findings on the meaning of the defamatory statements.

Justice Lee ruled that injunctive relief was unnecessary as the ABC have removed the impugned publications from their website. His Honour stated that there is no significant risk that the defamatory material will be republished, thus extinguishing the need for a court order.

Mr Russell sought an order for costs on an indemnity basis, relying on an offer of compromise made by his solicitor to ABC Legal Service in mid-September 2021. The essential terms of the offer of compromise, which the ABC rejected, included judgment for Mr Russell in the sum of $99,000 and ABC to remove the articles from their website. His Honour clarified that unless justice demands otherwise, when one party successfully brings defamation proceedings and is awarded costs, those costs will be granted on an indemnity basis if the court determines that the opposing party unreasonably declined to accept or negotiate a proposed settlement offer.

In forming this view, His Honour concurred with the principles outlined in Callan v Chawk (Costs) [2023], a case concerning the award of indemnity costs following an offer of compromise. Justice Lee considered Rule 25.14(3) of the Federal Court Rules 2011, which enables applicants to pursue indemnity costs when the opposing party rejected their earlier offer, and a more favourable judgment was later achieved. His Honour pointed out that while the court has the discretion to issue orders inconsistent with the Rules, this discretion should be exercised while keeping in mind the overarching purpose, which is “the just resolution of disputes according to the law as quickly, inexpensively, and efficiently as possible.”

Notably, the ABC consented to pay Mr Russell’s costs on an ordinary basis until mid-September 2021 and on an indemnity basis after that. Consequent upon the mutual consent of the parties, the court agreed to proceed with the proposed orders despite His Honour’s inclination to issue an alternative order. Justice Lee highlighted that Mr Russell had given deliberately false evidence during his cross-examination. If it weren’t for the ABC’s consent to the proposed order, his Honour would have considered an order reducing Mr. Russell’s costs related to the false evidence issue. Nevertheless, upon careful consideration, the court formed the view that proceeding with such a reduction would represent an inappropriate exercise of the court’s discretion, given the ABC’s explicit consent to the order proposed by Mr Russell.