Roberts-Smith agrees to pay costs of failed defamation, visits bankruptcy lawyer

Disgraced war veteran Ben Roberts-Smith was filmed leaving the offices of a bankruptcy lawyer in Perth on Thursday morning, less than an hour after a Sydney court learnt he had agreed to pay the costs of his failed defamation action.

Roberts-Smith, a Victoria Cross and Medal of Gallantry recipient, sued The Age, The Sydney Morning Herald and The Canberra Times over six stories published in 2018 that alleged he had unlawfully killed prisoners, engaged in a campaign of bullying against a fellow soldier and committed an act of domestic violence.

Ben Roberts-Smith leaves the offices of a bankruptcy lawyer on Thursday morning.Credit: Nine

He was bankrolled by billionaire media mogul Kerry Stokes, who has signalled that he would fight an application by the newspapers for his private company and the Seven Network to foot their share of an estimated $25 million in combined legal fees that were racked up.

Roberts-Smith was employed by Seven as an executive in the Queensland office. He resigned from the network the day after he lost the case.

A Nine camera crew captured Roberts-Smith leaving the offices of the Bankruptcy Advisory Centre in Subiaco shortly after 11am (AEST) on Thursday, after he earlier asked a member of the public for directions to the building. His public relations consultant told this masthead that Roberts-Smith was considering an appeal and had no intention of filing for bankruptcy.

At a case management hearing earlier in the day, the Federal Court heard Roberts-Smith accepted he should pay the costs of the proceedings and that they should be paid on an indemnity basis from March 17, 2020, when he rejected a settlement offer from Nine, which owns The Age and The Sydney Morning Herald.

Kerry Stokes and the Seven Network will fight an application for them to pay the costs of the defamation suit they bankrolled for Roberts-Smith.Credit: Trevor Collens

Indemnity costs cover a higher proportion of the successful party’s legal costs than a standard costs order, and are awarded in exceptional circumstances, for example when a losing party does not accept an offer of settlement or shows an unwillingness to compromise.

Roberts-Smith is denying that the costs incurred between the start of the case in 2018 and the settlement offer in 2020 should be paid on an indemnity basis. His barrister, Arthur Moses, SC, asked for the evidence on that issue to be delayed until after the deadline for an appeal expires on July 12.

Stokes, whose family is the controlling shareholder in Seven West Media, was Roberts-Smith’s most ardent supporter and funded the case through the public company in its early days, before transferring the liability to a loan from his private company Australian Capital Equity (ACE).

Stokes also indirectly covered $250,000 in legal costs for three witnesses who agreed to give evidence on behalf of Roberts-Smith, both in relation to the defamation case and an inquiry by the Inspector-General of the Defence Force – an arrangement that Justice Anthony Besanko noted was “unusual” – through Seven and later ACE.

The court heard ACE and Seven Network Operations Ltd disputed the claim that they should be liable for any of Nine’s legal costs.

The newspapers have asked the Seven Network to pay costs up to June 23, 2020, when its loan agreement was in place, and then ACE to pay the costs from June 24, 2020, when it took over the liability.

They have subpoenaed Seven for records of attendance by lawyers for the Seven Network and ACE at the defamation hearing and correspondence between those entities and their lawyers. Seven, ACE and their law firms have applied to have those subpoenas set aside.

Justin Williams, SC, appearing for the Seven Network, ACE and their lawyers, said those records could not rationalise the making of a third-party costs order.

Roberts-Smith’s lawyer Arthur Moses, SC, arrives at the Federal Court of Australia on Thursday morning.Credit: Anna Kucera

“There is nothing surprising or inappropriate in parties such as Seven Network or ACE in attending and observing proceedings,” Williams said.

“There was obviously close interest in them. The applicant was a very senior executive at the organisation, everyone knows there were the loan agreements in place in respect of his legal costs and the Seven Network is obviously a news organisation and ... these were very high-profile proceedings.”

None of this suggested Seven or ACE were the real parties in the proceedings or that they controlled the conduct of Roberts-Smith, he said. Hypothetically, Seven or Stokes might have sought advice from their lawyers about the prospects of an appeal, and there might be very good reasons for that, he said.

“It’s possible the applicant may request financial assistance in respect of the costs of any appeal,” he said.

But Nicholas Owens, SC, appearing for the newspapers, said the frequency that lawyers for ACE and Seven attended court would show the extent to which they were overseeing and managing the defamation case.

The case, which ran over 110 days and involved 41 witnesses, will be among the most expensive defamation cases in Australian history.

Besanko found on June 1 that the newspapers had proved three murders that were the subject of the stories and another one besides, as well as the act of bullying. He also found that the decorated war veteran may have perverted the course of justice by intimidating a witness at the trial.

The allegation of domestic violence was not proven, but the sting of that allegation was neutered by the finding that Roberts-Smith was a war criminal and murderer.

Roberts-Smith resigned from his role as general manager at Seven Queensland the following day.

The landmark judgment puts pressure on the federal war crimes investigator to bring charges against Roberts-Smith and other veterans.

The court heard that the special investigator had applied to the court for access to sensitive information and documents on the court file that were not made public during the trial.

The media companies consent to the investigator gaining access to the file, but Roberts-Smith has raised concerns.

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