MR ANTONIO TRASENTE v MS KIRSTY MCCREIGHT [2025] SADC 16

First Applicant: MR ANTONIO TRASENTE Counsel: MR P. BULLOCK - Solicitor: HWL EBSWORTH LAWYERS Second Applicant: D.J. DEVELOPMENTS PTY LIMITED Counsel: MR P. BULLOCK - Solicitor: HWL EBSWORTH LAWYERS First Respondent: MS KIRSTY MCCREIGHT Counsel: MR T. GUTHRIE - Solicitor: FBR LAW Hearing Date/s: 28/01/2025 File No/s: CIV-24-000062 B DISTRICT COURT OF SOUTH AUSTRALIA (Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. ANTONIO TRASENTE, D.J. DEVELOPMENTS PTY LIMITED v KIRSTY MCCREIGHT (No 2) [2025] SADC 16 Judgment of his Honour Judge Burnett 25 February 2025 PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS - NATURE OF COSTS: INDEMNITY DOCTRINE PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT - COSTS WHERE APPLICATION NOT GRANTED The applicants seek various costs orders in relation to an application brought by the respondent for summary determination and summary judgment. The application was dismissed. The applicants seek indemnity costs or solicitor and client costs against the respondent and an order that the costs be paid forthwith. The respondent opposed the costs order sought by the applicants and contended that costs should be in the cause or reserved to the trial judge. The respondent further contended that any adverse costs should be reduced in that she was successful on a discrete issue, namely whether the application for summary judgment should be deferred to trial (as the applicants contended) instead of being heard in the normal way prior to trial (as the respondent contended). Held: (1) The applicants are entitled to 85% of their costs on the standard costs basis. (2) Where an application for summary judgment fails because the responding party has established a reasonable basis for instituting or defending the claim, the usual order for costs will be either costs in the cause or deferring the question of costs to trial: Holmes v Jefferis (No 2) [2022] SASCA 74, Whitehall Holdings Pty Ltd v Custom Credit Corporation Ltd -- 1 of 9 -- [1992] WASC 356 applied. However, the rationale for such an order does not apply when the application for summary judgment fails for some other reason. In this case, the application failed because the matter was not suitable for summary determination. Therefore, there was no reason to defer the question of costs to trial or order costs be in the cause (3) Although the Court is generally reluctant to award costs on a particular issue: Holmes v Jefferis (No 2) [2022] SASCA 74, Cretazzo v Lombardi (1975) 13 SASR 4 applied, in this case an order providing for some deduction in costs was appropriate given that there was a preliminary hearing of the application by the applicants (which was unsuccessful) to have the summary judgment application deferred to trial. (4) The application for indemnity costs or solicitor and client costs is refused: DKL v LYK (No 2) [2019] SASC 160, Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 applied. The application for summary judgment raised complex questions of law dealing with a concerns notice under the Defamation Act 2005 (SA) in respect of which there was no binding authority. The factual dispute was discrete. It was not the case that the respondent should have known, if properly advised, that they had no prospects of success on its application for summary judgment. The mere existence of a warning by the applicants solicitors that they regarded the application of having no prospects of success is not sufficient, by itself, to justify an award of costs on an indemnity basis: Poniatowska v Channel Seven Sydney Pty ltd (No 5) [2021] SASCFC 41 applied. (5) It was not appropriate to order that costs be paid forthwith. The normal rule is that costs will be payable at the final determination of proceedings: Rosegum Corporation Pty Ltd v Young (No 2) [2017] FCA 36 applied. Defamation Act 2005 (SA) 41, referred to. Trasente, D.J. Developments Pty Limited v McCreight 2024] SADC 149; Holmes v Jefferis (No 2) [2022] SASCA 74; Whitehall Holdings v Custom Credit Corporation Ltd [1992] WASC 356; DKL v LYK (No 2) [2019] SASC 160; Colgate-Palmolive Company v Cussons (1993) 46 FCR 225; Khan v Hassan [2023] VCC 852; Poniatowska v Channel Seven Sydney Pty Ltd (No 5) [2021] SASCFC 41, [12]; Rosegum Corporation Pty Ltd v Young (No 2) [2017] FCA 36, applied. -- 2 of 9 -- ANTONIO TRASENTE, D.J. DEVELOPMENTS PTY LIMITED v KIRSTY MCCREIGHT (No 2) [2025] SADC 16 Introduction 1 The respondent brought a revised interlocutory application dated 12 September 2024 (FDN 32) in which she sought orders that the applicants’ claim in defamation be struck out or, alternatively, summarily dismissed or, in the further alternative, summary judgment be given against the applicants in respect of the defamation claim. 2 The respondent had brought an earlier interlocutory application dated 12 April 2024 (FDN 5) in which she sought orders that the applicants’ claim in defamation be struck out as invalid or because it did not disclose a cause of action, being statute barred, or alternatively that summary judgment be entered against the applicants on the cause of action for defamation as there was no basis for prosecuting the cause of action as it was statute barred. Subsequent to the filing of that application, the applicants filed a revised statement of claim (though not agreeing that they were required to do so), seeking an extension of time to bring the claim in defamation. The respondent ultimately did not proceed with the initial interlocutory application but instead proceeded with the revised application. 3 On 12 November 2024, the Court delivered judgment in which it dismissed the revised interlocutory application.1 The Court found that the application raised issues that were not suitable for summary determination.2 4 The applicants now seek three costs orders. First, they seek an order that the respondent pay the applicants’ costs of and incidental to FDN 5 on an indemnity basis. Secondly, they seek an order that the respondent pay the applicants’ costs of and incidental to FDN 32 on a solicitor client basis. Thirdly, they seek an order that the respondent pay any costs order forthwith. 5 The applicants submitted that they were entitled to the costs order because: (1) They were successful in both applications; (2) The respondent had no real prospect of succeeding on either application and had in fact effectively abandoned the first application dated 12 April 2024 (FDN 5); (3) Related to (2), the applicants had warned the respondent, prior to the issue of the application and later, that the application was doomed to fail; 1 Trasente, D.J. Developments Pty Limited v McCreight [2024] SADC 149. 2 Ibid, [46]. -- 3 of 9 -- [2025] SADC 16 2 (4) The respondent had not properly engaged with UCR 102 prior to issuing, and continuing with the applications; (5) The issues raised in the applications were discrete and it would be some time before the proceedings went to trial, such that it was appropriate to make an order that the costs be paid forthwith. 6 The respondent opposed the orders sought and submitted that costs should be in the cause or reserved to the trial judge. The respondent further submitted that there should be a reduction in any costs order made in favour of the applicants (if the Court made such an order) because the applicants had initially argued that the application should be deferred to trial. Procedural and factual background 7 The applicants instituted proceedings on 4 January 2024, in which they brought claims against the respondent in defamation and injurious falsehood. Both claims relate to publications alleged to have been made on 15 November 2022. The time limit for the institution of the defamation proceedings expired on 15 November 2022 unless a valid concerns notice had been given. The application of the respondent for summary judgment raised issues of whether a concerns notice had been given in the manner required under the Defamation Act 2005 (SA), whether s 41 of the Act provides a code as to means by which a concerns notice may be given and whether the concerns notice was required to be, and in fact was, brought to the attention of the respondent. 8 The issues that were required to be determined were matters of law or mixed matters of law and fact. The factual matters were of limited scope, namely whether the concerns notices, which had been purportedly sent on 13 November 2023 and 30 November 2023, had come to the attention of the respondent. There were some complex questions of law, which have not been the subject of authoritative, or in some cases, any determination. There were also some discretionary considerations, including that the application, even if successful would not dispose of the whole of the proceedings in that the claim for injurious falsehood would remain in any event and that there would be fragmentation of the proceedings. 9 The Court rejected the application of the applicants to defer the application for summary judgment to trial, finding that the respondent was entitled to have the application determined prior to trial. 10 As I have already said, the Court dismissed the application of the respondent. The Court did so because it determined that the matter was not suitable for summary judgment or summary determination. Determination of the costs applications 11 The first issue to be determined is whether the Court should proceed to determine costs of the interlocutory application at this stage. The respondent has -- 4 of 9 -- [2025] SADC 16 3 contended that the Court should reserve the costs to trial where the trial judge will be in a better position to determine the merits of the positions that were advanced. 12 In the circumstances of this case, I do not consider that to be an appropriate approach or order. I have formed this view because the resolution of the application did not require the determination of the legal or factual issues that arise from the application and whether there was a reasonable basis to bring the claim. The Court did not consider the merits of the positions that were advanced. Instead, the Court found that the case in defamation was not suitable for summary judgment or summary determination. I therefore decline to reserve the question of costs to trial. 13 The second issue that arises is whether the applicants are entitled to their costs (as they contend) or whether, as the respondent contends, costs should be in the cause or reduced because of the success of the respondent on the issue of the Court refusing to defer the summary judgment application to trial. UCR 194.4(5) provides for a presumptive costs rule that the costs of interlocutory applications are costs in the cause. 14 The starting point for the applicants’ contention that costs should be awarded now is that the applicants were successful in that the application for summary judgment and summary dismissal was dismissed. In Holmes v Jefferis (No 2),3 the Court of Appeal discussed the approach taken to costs in a failed application for summary judgment. The Court held:4 In Whitehall Holdings [Whitehall Holding Pty Ltd v Custom Credit Corporation Ltd [1992] WASC 356], Ipp J said that the “usual order where an application for summary judgment is dismissed is that the costs of the application be in the cause so that the party successful at the trial recoveries them”. His Honour explained that the basis upon which the usual order is not made is where the respondent should have known that it would “inevitably fail” to obtain summary judgment. In that case, the appellant’s principal defence was a counterclaim which exceeded the claim for which summary judgment was sought. It is unclear from the report whether the then Western Australian rules and the current South Australian rules are comparable. For example, in that case the Full Court set aside the summary judgment and made an order that the appellants have “leave to defend”. That order raises the possibility that the rules are not comparable. It is not necessary to rule on whether the usual rule referred to in Whitehall Holdings explains the current terms of r 194.4(5). That rule is itself rendered subject to an order to the contrary made by this Court. In many cases, the current rule will be explained by the fact that when an application for summary judgment fails, it fails because a reasonable basis for defending the claim (for example) has been established. That basis may or may not ultimately succeed at trial. In those circumstances it may be appropriate to defer the question of costs until the fate of the defence has been determined at trial. That is consistent with the summary way in which the merits of the defence are addressed on an interlocutory basis ahead of the trial. 3 [2022] SASCA 74. 4 Ibid, [10]-[12]. -- 5 of 9 -- [2025] SADC 16 4 15 However, when the application for summary judgment fails for some other reason (as in the present case),5 then the rationale for the usual order referred to by Ipp J in Whitehall Holdings v Custom Credit Corporation Ltd6 disappears. That is the case in the present case. The application for summary judgment or summary determination was not dismissed because the Court analysed the strength of the applicants’ claim and formed the view that there was a reasonable basis for bringing the claim (which might at trial be shown to be wrong). Rather, the Court examined the nature of the application and other matters pertaining to the exercise of the discretion and found that it was not a suitable case for summary judgment. That decision will not be revisited or called into question at trial. In these circumstances, there is no reason to deny the applicants their costs of successfully defending the application. The respondent’s contention that costs should be in the cause is therefore rejected. 16 Although the courts are generally reluctant to make costs orders on particular issues or to penalise a successful party for not winning every argument,7 in some cases an issue may be sufficiently discrete so as to justify some reduction in the costs that would otherwise be awarded to the successful party. In the present case, I consider that some deduction is justified. The question of referring the application to trial was a discrete aspect of the application. It was heard separately from the rest of the application and prior to the argument as to whether the matter was suitable for summary judgment. There was some time spent on the argument that the matter should be deferred to trial. The parties each provided written submissions on this issue and there was oral argument. The respondent was successful on that argument. In these circumstances, I consider that a deduction of 15% in the amount of costs that the applicants to which it would otherwise be entitled is justified. 17 The third issue that arises for determination is whether the applicants are entitled to indemnity costs or solicitor and client costs in relation to the two applications. Although ultimately costs orders will have to be made separately in relation to each application, it is appropriate to consider the applications together when determining whether it is appropriate to make an indemnity costs order or a solicitor and client costs order. The difference between the two orders is that in the case of an indemnity costs order the party in favour of whom the order is made is entitled to payment of costs except to the extent the costs are shown by the liable party to have been unreasonably incurred.8 In the case of solicitor and client costs, the successful party is entitled to payment of costs to have been reasonably incurred.9 5 Ibid, [17]. 6 [1992] WASC 356. 7 Holmes v Jefferis (No 2) [2022] SASCA 74, [25]; Cretazzo v Lombardi (1975) 13 SASR 4. 8 UCR 191.1 9 Ibid. -- 6 of 9 -- [2025] SADC 16 5 18 The Court has a discretion to award indemnity costs rather than costs on the standard costs basis.10 The principles relating to the circumstances in which indemnity costs might be ordered were discussed by Doyle J in DKL v LYK (No 2)11 where Doyle J held:12 In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd, (1988) 81 ALR 397, 401, Woodward J said: I believe that it is appropriate to consider awarding “solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion. 19 In Colgate-Palmolive Company v Cussons Pty Ltd,13 Sheppard J held that the question must always be whether the particular circumstances of the case warrant the making of an order for payments of costs other than on a party and party basis. In the circumstances of this case, I do not consider that the respondent should have known, if properly advised, that there were no chance of success in her application for summary judgment. Success on the application required the Court to find in the second respondent’s favour on a number of points of law. These included: (1) Can a claim in defamation be maintained if a concerns notice has not been given to the respondent prior to the institution of proceedings. Existing authority favoured the position advocated by the respondent that a claim cannot be maintained in such circumstances; (2) Did s 41 of the Defamation Act provide a code as to means by which a concerns notice may be given. There is no binding authority on this point; (3) Was the concerns notice sent to an email address that complied with s 41 of the Defamation Act. That involved the characterisation of the email address to which the concerns notice had been sent. It raised a question of law. There was no relevant law which had addressed this issue; (4) Did the respondent have actual knowledge of the concerns notice that had been sent and was that a relevant matter. That is partly a question of fact and partly a question of law as to whether actual knowledge will prevent a respondent from saying that a concerns notice had not been given. There was some authority, from the Victorian County Court in 10 UCR 194.3(1)(a). 11 [2019] SASC 160. 12 Ibid, [26]. 13 (1993) 46 FCR 225, 233-234. -- 7 of 9 -- [2025] SADC 16 6 Khan v Hassan14 to the effect that s 41 of the Defamation Act was not concerned with actual knowledge, but whether the notice had been served in accordance with the requirements of s 41. 20 The fact that there were complex questions of law does not mean that an application for summary judgment is doomed to fail and can be said to have no chance of success. In some instances, a court, on a summary judgment application, is prepared to consider applications despite them raising difficult or even novel questions of law. Similarly, a court may be prepared to hear an application and allow limited cross-examination, notwithstanding that it will have to make a finding on a factual issue. That is more likely if the evidence is discrete and does not involve a contest between witnesses. The cross-examination in this case would have been on a discrete issue upon which only the respondent would likely have given evidence. It cannot be said that there was no prospect that the Court would have entertained an application to permit limited cross-examination and rule on a limited factual question. Courts might take a different view of the discretionary matters as to the appropriateness of determining a summary judgment application. 21 For all of these reasons, I do not find that the respondent should have known, if properly advised, that she had no prospect of success in issuing and perusing the application. 22 I accept that the applicants’ solicitors warned the respondent’s solicitors prior to the issue of application and during the course of the application, that the respondent did not have any chance of success. The applicants foreshadowed that if the application was pursued that they would be seeking an order for indemnity costs. The applicants in their correspondence set out the basis for their contention that the application had no prospects of success. The points that were made in support of that contention raised some of the matters upon which the Court ultimately dismissed the application. 23 I do not consider that the applicants’ warning changes the order that should be made and justifies an indemnity or solicitor and client costs order in favour of the applicants. It was not unreasonable for the respondent to pursue the application even though she was ultimately unsuccessful. The parties are entitled to take a different view of the merits of an application. The fact that the successful party may have communicated their view as to why they will be successful is not sufficient, by itself, to justify costs to be awarded in their favour on an indemnity basis or solicitor/client basis. The Full Court made this point in Poniatowska v Channel Seven Sydney Pty Ltd (No 5)15 when they held: In assessing this question, it is relevant to take into account any warning by the opposite party that it considers that this criterion is satisfied and particularly if the opposite party identifies why that is so. However, the mere fact of the existence of such a warning, or of reasons advanced by the opposite party for it, is not sufficient in itself to justify an award 14 [2023] VCC 852 15 [2021] SASCFC 41, [12]. -- 8 of 9 -- [2025] SADC 16 7 of indemnity costs: it is necessary for the Court to be satisfied on an objective assessment that, properly advised, the unsuccessful party should have realised that it had no chance of success. 24 The applicants also submitted that a further reason that indemnity costs should be ordered in their favour was that the respondent had not complied with UCR 102 and sought to resolve the issues rather than proceeding to issue the application. The evidence does not make out that submission. The respondent gave notice of the application, and the parties engaged in some correspondence about its merits. Ultimately, the parties took a different view regarding the merits of the application for summary judgment. 25 The fourth issue concerns whether an order should be made that costs be ordered to be paid forthwith. The Court has a discretion to order costs to be paid forthwith. UCR 194.4(8) creates a presumptive costs rule that costs will not be taxed and become payable until the final determination of the proceedings. The matters raised by the applicants in relation to the issue of indemnity costs are also relevant to the application for costs to be paid forthwith. The applicants submit that they were put to unnecessary expense and that the application has delayed the timely progress of the matter. There clearly has been delay, although not all of that delay can be attributed to the conduct of the respondent (e.g. the applicants sought to have the application deferred to trial). However, for the reasons which I have already expressed, I do not consider that the conduct of the respondent was unreasonable. As McKerracher J in Rosegum Corporation Pty Ltd v Young (No 2)16 pointed out, in the normal case costs are paid at the conclusion of the proceedings. The rationale for this rule is to avoid a multiplicity of assessments of costs and the possibility that respective liabilities for costs will be set off against each other. 26 Although I accept in this case that the application has caused delay, there has not been unreasonable conduct on the part of the respondent (for example, such as multiple attempts to plead a cause of action). In all the circumstances, I decline to make an order that the costs orders that I have made in favour of the applicants be paid forthwith by the respondent. Conclusion 27 I therefore order that the respondents pay 85% of the applicants’ costs of and incidental to FDN 5 and FDN 32 on the standard costs basis. 16 [2017] FCA 36. -- 9 of 9 --