Landmark Verdict: de Hek Triumphs with $27,500 Indemnity Costs – Unraveling the McCullah vs. de Hek

Stephen McCullah receives a scolding judgement from the judge demanding to pay $27,500 for Danny de Hek a.k.a The Crypto Ponzi Scheme Avenger legal cost.Show more

Download PDF at https://www.dehek.com/wp-content/uploads/2023/08/McCullah-v-De-Hek-costs-.pdf

TIME STAMPS / CHAPTERS

Introduction 00:00:00
Summary of document 00:15:00
Joshua Pietras 00:19:45
Defamation Lawyers Ali and Peter 00:20:30
Ben Hood (Senior Lawyer) 00:21:00
[1] Plaintiff: US CEO in finance. 00:22:52
[2] 1st Def: Drops shipping, exposes scams, videos about plaintiff. 00:23:16
[3] Claims: Damages, injunctions, defamation. 00:23:42
[4] Defences: Truth, opinion, privilege, no harm, public interest. 00:
[5] Application: Security, plaintiff discontinues. 00:
[6] Costs: 1st Def seeks costs. 00:
[7] Legal Aid: No costs unless exceptional. 00:
[8] Costs Claim: Indemnity, uplift, or scale costs. 00:
[9] Plaintiff's Stand: Opposes costs, suggests scale costs. 00:
[10] Rule 15.23: Discontinuance costs to defendant. 00:
[11] Cost Principles: Discretion, must be principled. 00:
[12] Costs on Discontinuance: Presumption, exceptions. 00:
[13] Indemnity Costs: Rare, vexatious proceeding. 00:
[14] "Gagging Writ": Suppression claim, Defamation Act. 00:
[15] Defamation Act: Excessive claims, vexatious proceeding. 00:
[16] Indemnity Costs Claim: Vexatious proceeding. 00:
[17] Section 45: Deems vexatious if no trial intent. 00:
[18] Section 43: Claims for damages, excessive claims. 00:
[19] Michaels Case: Ulterior motive claim. 00:
[20] Indemnity Costs Application: Rules and Act. 00:
[21] Michaels Case Precedent: Indemnity costs. 00:
[22] Intent to Proceed: Inference from quick discontinuance. 00:
[23] Quick Discontinuance: No trial intent. 00:
[24] Strong Security Application: Context for discontinuance. 00:
[25] Suppressing Publications: Intent, not vindication. 00:
[26] No Trial Intent: Offers, actions show. 00:
[27] No Intent: Offers to settle, pause, discontinue. 00:
[28] Changing Circumstances: Rejected due to evidence. 00:
[29] Excessive Claims: Reflect intimidation. 00:
[30] Amount Claimed: Not moot, reflects intent. 00:
[31] Smear Campaign: Plaintiff's alleged ulterior motive. 00:
[32] No Evidence: Plaintiff's counterarguments dismissed.
[33] Smear Campaign: Supported by evidence.
[34] Conclusion: Ulterior motive, indemnity costs.
[35] Plaintiff Owes: First defendant indemnity costs.
[36] Indemnity Costs Reasonable: Still need to be fair.
[37] Quantum Not Challenged: Plaintiff doesn't dispute.
[38] Excessive Time Charged: Concerns about hours.
[39] Difference from Scale Costs: Factor in reasonableness.
[40] Scale Costs Assessment: Suggests lower amount.
[41] Claim Exceeds Reasonableness: Indemnity costs.
[42] Reasonable Indemnity Costs: $27,500.
Joshua Pietras (LLB (HONS), BSC, LLM 01:26:30
Stephen Mccullah Story 01:27:40
Conclusion 01:32:35

In the court judgment delivered by Associate Judge Paulsen on August 17, 2023, in the New Zealand High Court, Stephen Andrew James McCullah, the plaintiff, had brought a defamation claim against Danny James de Hek (first defendant) and DANNY : DE HEK LIMITED (second defendant). McCullah, an entrepreneurial CEO in the finance and investment sector residing in the United States, alleged that de Hek, who was involved in dropshipping electronics and providing web-hosting services, had posted defamatory YouTube videos about him.

The plaintiff sought damages, injunctive relief, and exemplary damages against the defendants. There were seven causes of action for defamation in the statement of claim, with varying amounts of compensatory damages and injunctive relief. (3.8 Million) The defendants filed defenses including truth, honest opinion, qualified privilege, and responsible public interest communication. The first defendant also applied for security for costs.

However, shortly before the security for costs hearing, the plaintiff discontinued the proceeding against both defendants. The first defendant sought indemnity costs, arguing that the plaintiff had no intention of proceeding to trial and that the proceeding was brought for an ulterior motive. The plaintiff contended that no costs should be awarded, but if they were, they should be scale costs.

Associate Judge Paulsen reviewed relevant rules and legislation, including sections of the Defamation Act 1992, and determined that the plaintiff had indeed brought the proceeding with an ulterior motive and never intended to take it to trial. Therefore, the first defendant was entitled to indemnity costs.

Considering the actual costs claimed and the scale costs applicable, the judge concluded that an award of $27,500 in indemnity costs was reasonable under the circumstances.

In summary, the court judgment delivered by Associate Judge Paulsen on August 17, 2023, awarded the first defendant indemnity costs of $27,500 due to the plaintiff’s ulterior motive in bringing the defamation proceeding and his lack of intention to take it to trial.