By Stuart Eustice, Partner and Lidia Martinez Chavez, Lawyer

Background

Heather Wellington (Respondent) commenced proceedings against Kirsty Metcalf (Applicant) seeking damages for defamatory statements published on Facebook. On 21 November 2022, following a trial, the Respondent was awarded $100,000 in damages. A month later, on 15 December 2022, the Respondent was granted an indemnity costs order.

The Respondent’s solicitors issued a bill totalling $664,674.60, with an estimated taxation amount of $547,280. The Applicant contested the bill, filed objections and sought an adjournment of the taxation process. The adjournment was refused by the Costs Court on 9 May 2024.

Application for Stay

On 14 May 2024 the Applicant sought a stay of the taxation of costs, along with an application for leave to appeal and an extension of time for filing the appeal. The grounds for the stay included:

1. Special Circumstances: The Applicant argued that without a stay, the appeal could be rendered nugatory if successful, and there was no apparent prejudice to the Respondent, who had already received the damages and whose solicitors had acted on a no win/no fee basis.
2. Financial Recovery Risk: The Applicant expressed concern that if the costs were paid to the Respondent and the appeal succeeded, recovery of those costs might be difficult.
3. Merits of the Appeal: The Applicant contended that the appeal had reasonable prospects of success, primarily based on alleged litigation misconduct by the Respondent leading to an incomplete discovery process.

Judgment

The general principle is that a successful party is entitled to the “fruits” of their victory, including costs. Although the Applicant argued that the taxation process could be wasted if she succeeded in the appeal, the Court noted that the costs of taxation would be dependent on the outcome of any potential retrial.

The Court acknowledged the risk that the taxation costs might be wasted if the appeal succeeded. However, it found that this risk did not alone warrant a stay, particularly given Respondent’s entitlement to enforce the costs order. The Applicant’s concern regarding the Respondent’s ability to repay the costs was addressed by the Respondent’s undertaking to hold any sums received in an interest-bearing controlled money account until the appeal was resolved. This undertaking mitigated concerns about potential non-recovery of costs and as such the Applicant had not demonstrated special or exceptional circumstances justifying a stay.

Conclusion

The Court of Appeal ruled that Applicant had not met the threshold for a stay (of the taxation of costs). The undertaking provided by the Respondent’s solicitors to hold funds in a controlled account until the resolution of the appeal addressed the primary concern of financial recovery. Consequently, the application was refused.