Steve Cannane, HarperCollins ask for indemnity costs in deep sleep therapy case

A former ‘deep sleep therapy’ doctor could face even more legal costs after failing to clear his name over an old psychiatric scandal.

Journalist Steve Cannane and book publisher HarperCollins are seeking a larger costs payment after comprehensively winning a defamation case brought by two doctors who performed a discredited therapy on psychiatric patients in the 1960s and ‘70s.

John Gill and John Herron sued Mr Cannane over his 2016 book about Scientology in Australia, Fair Game, which covered the controversial religion’s role in uncovering the psychiatric scandal at the now notorious Chelmsford Hospital.

The doctors contended deep sleep therapy was accepted medical practice at the time and they were hung out to dry at a royal commission in 1990 after a Scientologist campaign.

But that version of events was soundly rejected last year by Federal Court Justice Jayne Jagot, who blasted the attempt to “rewrite history” when it came to the “dangerous, experimental” treatment. Her judgment is being appealed.

Justice Jagot ordered Dr Gill, who funded the proceedings, and Mr Herron, who has since died, leaving behind an insolvent estate, to pay the successful parties’ costs in the ordinary way.

But the journalist and publisher are now seeking indemnity costs to cover a significantly larger proportion of their total expenses, which Mr Cannane has said amount to “millions”.

John Gill (pictured) funded the lawsuit for himself and John Herron, who has since died. Picture: Nikki Short

The Federal Court heard on Thursday a solicitor in the case “just didn’t think” of applying for indemnity costs prior to the judgment.

Mr Cannane and HarperCollins’ barrister, Anais D’Arville, argued this inadvertent error meant Justice Jagot could now make a different costs order under the “slip rule”.

Sue Chrysanthou SC, acting for Dr Gill, said the failure to ask for indemnity costs signalled a “change of mind”, not an error, and Justice Jagot could do no such thing.

Justice Jagot said it seemed more like “opportunism than inadvertence” to her.

“It’s not that he changed his mind. Your mind’s just a blank. It’s not in your mind,” the judge said.

“Then you see the judgment and think, ‘Ooh, I’ve done really well there. I’m going to apply for indemnity costs.’”

She asked if that was, really, a situation that warranted revoking the existing order.

Yes, Mr D’Arville said, because the doctors should have known their case was doomed.

He argued indemnity costs should be granted as there “was not a skerrick” of medical evidence to support deep sleep therapy as practised at Chelmsford.

The treatment involved patients being sedated with heavy doses of barbiturates, to the point where they were incontinent and fed through a tube, and given electroconvulsive therapy.

He also argued the treatment at Chelmsford had already been the subject of a detailed investigation: the 1990 royal commission, which made scathing findings about the doctors.

Ms Chrysanthou said the case did not attract indemnity costs, pointing out Justice Jagot herself ruled in 2018 it was not an abuse of process.

“Just because they lost, someone has to lose litigation, that doesn’t mean the penalty of indemnity costs has to come up,” she said.

The barrister argued Mr Cannane and HarperCollins had proceeded with “hopeless” defences – claiming the book chapter was a fair report or summary of the royal commission – that chewed up time and money.

“We’ll never get back the hours of our lives of having to read the entire Royal Commission report to consider those defences,” Ms Chrysanthou said.

“If they were so confident in their truth defence, why didn’t they just stick to that?”

Justice Jagot will hand down her decision at a later date.

HarperCollins is a subsidiary of News Corp, the publisher of NCA NewsWire.

Originally published as Steve Cannane, HarperCollins ask for indemnity costs in deep sleep therapy case