Hudson v Lee

[1994] HCATrans 264

~

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IN THE HIGH COURT OF AUSTRALIA

SITTING AS THE COURT OF

DISPUTED RETURNS

Office of the Registry

Sydney No 560 of 1993

B e t w e e n -

ROBERT JAMES NEILSON

HUDSON (JNR) I..

Petitioner

and

MICHAEL JOHN LEE, MP

First Respondent

and

AUSTRALIAN ELECTORAL COMMISSION

Second Respondent

Argument as to Appropriate Cost

Rules

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON.MONDAY, 28 MARCH 1994, AT 10.19 A

(Continued from 1/10/93)

Copyright in the High Court of Australia

Hudson 61 28/3/94

MR G. GRIFFITH, OC, Solicitor-General for the Commonwealth:

Your Honour, this is a Commonwealth motion. I

appear for the Commonwealth. (instructed by the

Australian Government Solicitor)

MR J.A. McCARTHY, OC: If it please Your Honour, I appear

for the first respondent. (instructed by

McClellands)

MR R.J.N. HUDSON:  I am here, Your Honour, basically as an

observer and to represent myself. (in person)

HER HONOUR:  Do I need to hear from you, Mr Solicitor?

MR GRIFFITH:  I hope not, Your Honour. Our point,

Your Honour, is that the order Your Honour made for

costs was for costs and we understand that there is

a suggestion that it was other than costs and we

would seek to address Your Honour on that if that

is a suggestion to be pursued.

HER HONOUR:  Yes, thank you. Yes, Mr McCarthy, I think you have the difficult task in this case, do you not?

MR McCARTHY: .In respect of - - -?

HER HONOUR:  You contend that it is indemnity costs, do you;

that the order was made for indemnity costs?

MR McCARTHY:  Your Honour, I would submit that certainly it

was not meant to be in terms of the principles that

go to costs inter partes. In fact, Your Honour, I

have reduced our submissions to writing in relation

to that and I would seek leave to hand some

submissions to you.

HER HONOUR:  Yes, thank you.

MR McCARTHY:  Your Honour, there is a copy of an order

there.

HER HONOUR:  Yes. Do you wish to elaborate your

submissions?

MR McCARTHY:  Only this way, Your Honour, that the wording

that is sought by the applicant on this motion

takes one back into the very principles that relate the appropriate approach, just as the principles on
to costs inter partes and it was that which the

which costs are awarded would not be those that

govern costs inter partes; similarly, in relation

to the nature of costs orders. In other words,

Your Honour, we would be looking at - in our

submission, there is some further and different

Hudson 62 28/3/94

principle on which the costs order under

section 360(4) ought to be expressed.

Your Honour, it is, in relation to that, of some significance to look at the history of that provision.

HER HONOUR:  I wonder if you could help me before you go to

that. It is some little time since I have been

involved with costs. In a practical sense, what do

you understand to be the main difference between

the order you seek and party-and-party costs?

MR McCARTHY:	Your Honour, party-and-party costs, in practical terms, is that level of costs that is
normally ordered in a matter and which are given on
a taxation.  The reality, as made clear,
Your Honour, in the most recent decision on these
points in New South Wales, which is Milosevic v GIO
OF NSW, is that under a taxation, Your Honour,
under party/party costs, a party does not recover
all or substantially his costs. But the figure is
really in the range of approximately two-thirds or thereabouts.
HER HONOUR:	But what is the principle which sustains that

difference as between party-and-party costs and

indemnity costs and at what point in between, if

that be the case, enters the notion that you have
set out in your draft notice of motion other than

those that were "unreasonably incurred"?

MR McCARTHY:  Or "unreasonable an amount".

HER HONOUR:  Or "unreasonable amount". May I amend your

order? I think there is an "un" missing. May I

have another read?

MR McCARTHY:  Yes, certainly, Your Honour.

HER HONOUR:	Yes, I think there is an "un" missing.
MR McCARTHY:	Thank you for drawing that to my attention,

Your Honour.

HER HONOUR:	Not that anything turns on it.
MR McCARTHY:	The most recent number of the New South Wales

Reports has a fairly detailed discussion of these

matters and it may be of some value just to hand

the judgment up to Your Honour.	It is called
Milosevic v GIO.	I only received it during the

course of this week but it went to the nature of

indemnity costs and party-and-party costs as to

whether the power to award such costs existed in

the District Court Act of New South Wales and,

Hudson 63 28/3/94

therefore, for the District Court to award those

costs.

It was found there, Your Honour, that such a

power, since costs were defined as being costs

payable between party and party, meant that there

was an overriding controlling clause in the

District Court Act and, as a consequence, rules which sought to give a definition to costs that
was wider than that were ultra vires the Act. That

is the major point in its overall sense.

But what I wish to draw Your Honour's

attention to concerning the judgments is at

page 333D, Your Honour will find in the judgment of

Mr Justice Kirby the meaning of party-and-party

costs. He quotes there from the well-known

textbook, Saddington's Taxation of Costs between

Parties, and says this:

"As to costs which a successful litigant is

entitled to recover from his opponent

represents the damage which he has suffered

through being forced to take or defend legal

proceedings, in consequence of some wrongful

act or·,neglect on the .part of his opponent, it

becomes necessary to define what that damage

is. It is the expense which has been

reasonably and properly incurred and not the

expense which has been actually incurred. A

man may incur unnecessary expense, as by

paying extravagant fees to counsel or to

witnesses, or may be over-cautious and so take

precautions which are not really necessary,

and to allow him such unnecessary expense

would enable him to put the burden of his own

timidity or extravagance upon his opponent.

Such expense is regarded as damage not

necessarily caused by the unsuccessful

litigant, who is consequently not called upon

to pay it. It may be compared with the damage

which, in actions for negligence, is

considered too remote."

HER HONOUR:	Now, what is the difference between that and what you propose?
MR McCARTHY:	Your Honour asks me where does the order that

we put forward place itself in terms of the scale?

Your Honour, traditionally, the highest scale was

solicitor and own client scale where, basically,

the fees that were involved in that - and that is

also set out in this definition - were on a

taxation against a client; the solicitor was

entitled to such costs other than those that had

not been authorized either implicitly or explicitly

by the client. Your Honour, the indemnity costs

Hudson 64 28/3/94

principle in terms of a taxation would leave the

costs in such a position that a taxing officer can,

in actual fact, review not only whether they were
authorized but whether they were reasonably

incurred and of a reasonable amount. So, it is not

the end scale that is involved there.

Your Honour, the purpose of an order over and

above party and party is to attempt to put a party
in a matter in such a position that they, through

the order of the court and through the exercise of
the discretion in the taxation officers, have an

order for costs that will return them an amount

that is closer to the amount that they have

actually incurred. In other words, it recognizes

that not only are there costs over and above those
that are involved in party-and-party taxation and
the obvious matter, say, involving that would be
counsels' fees and, in relation to a solicitor, the

attendances and type of attendances that were

involved.

The party-and-party scale, Your Honour, is

usually regarded as being that which is necessarily

involved and is a restrictive scale. There is a

whole learning, Your Honour, which is reflected in

that approach by taxation officers. So that is how

we would define the difference and when Your Honour

made the. order for costs and used the words "the

costs incurred", it was going towards that that it

was assumed, in terms of these submissions, that

that order went. Whatever an order of

party-and-party costs will do, Your Honour, it will

not be an order in relation to costs incurred.

Now, what has been the traditional approach,

Your Honour, in terms of the Court of Disputed

Returns: the provisions that Your Honour is

operating under in terms of the power to award

costs came out of the Court of Disputed Returns

provisions in the English statutes. In England

that was at a time when there was scarcely a

difference between the scales as those matters had

been investigated.

The only other discussion in terms of a Court

of Disputed Returns of costs in Australia and in

the High Court, Your Honour, has been in the very

first case of Chanter v Blackwood. A similar

position has been taken by the Commonwealth

concerning fees in that matter. Your Honour, I

hand up to you a copy of Chanter v Blackwood

(No 3), 1 CLR 456, and I draw Your Honour's

attention to this, as to what were regarded as

appropriate costs. I would take Your Honour to

page 458 where there is an amount that had been

allowed for counsel's fees in the case, Your Honour

Hudson 65 28/3/94

will see at the top of the page there, and there is

an attempt to have the counsel's fees reduced both

in terms of attendances and time, and the

Chief Justice just said:

I am against you as to this. I think it is a

reasonable amount, and that the taxing officer
was not bound by the order of the Court as to

costs to reduce it.

Now, what the order had been, Your Honour will see

at page 457, at about point 3:

"that the respondent do pay to the petitioner

his costs of and occasioned by the said

petition so far as the same relate to the

claim of the said petitioner that he received

a majority of votes and ought to have been

returned at the said election, up to and
inclusive of Monday the eleventh day of April,
such costs to be taxed by the Deputy Registrar

of the High Court."

And then there is set out then the bill. I only

draw that to Your Honour's attention as there is no

.other ~efer.ence .specifically to costs in the High

Court in terms of an elaboration on costs in that

way.

Your Honour, the only other matter I draw

Your Honour's attention to as to the approach that was adopted at page 459 point 6, in terms of

attendance of the petitioner at the Court, there

was a question about whether his attendance "was

reasonably necessary" and a broad definition,

again, was given of that matter.

The Commonwealth has had a Court of Disputed Returns as a part of our, in effect, parliamentary

and election structure since the earliest days and	the High Court has filled that role now for
90 years. The section that we are concerned with,
section 360(4), has only been a part of the
legislation since 1983. Prior to that, the powers
of this Court under section 360 did not include a
power to order costs against the Commonwealth or,
indeed, the Crown in any capacity in Court of
Disputed Returns matters.

HER HONOUR:  Whatever might be the position with petitioner

and respondent, what factors would indicate that

the Commonwealth should be obliged to do more than

pay what was reasonably incurred in the sense of

party-and-party costs - necessarily incurred? For

example, you see, in indemnity costs, they are

awarded on some occasions as an indication of the

Hudson 66 28/3/94

disapproval of the conduct of litigation or

something of that nature.

MR McCARTHY:	Yes, Your Honour.
HER HONOUR:	But there is no such factor that would operate against the Commonwealth, is there?
MR McCARTHY:	Your Honour, only in this sense: what the

Commonwealth represents is that part of the

community that has the status of the statute and

the Parliament behind it. It is the very nature of the law itself that has brought about the fact that

Mr Lee was required to be involved in these

processes before Your Honour. I do not wish to

canvass again or try Your Honour's patience by

putting to you again the reasons why Mr Lee should

receive an order in this matter. But, Your Honour,

if one reduces to the statute one can ask, "What is

the purpose of this legislation and what are we

attempting to do with an order for costs?" Well,

Your Honour, the analogous situation in regard to

New South Wales is section 172 and it was to bring

the Commonwealth, in effect, into line with the

State of New South Wales and, indeed, to make it a

firmer approach that the present section 360(4), in

our submissions, was adopted.

Your Honour, New South Wales had, until 1928,

in its Legislative Assembly a qualifications and

membership committee which heard election

petitions. It was in 1928 that New South Wales

went over to a Court of Disputed Returns.	It had
been the practice, Your Honour, of the

qualifications committee in relation to the parties

before it to recommend that the Crown pay the costs

of the parties to an election petition and it was

that very purpose, Your Honour, that was adopted

through amendment through members when the Court of

Disputed Returns was established in New South

Wales.

Your Honour, I hand up to Your Honour - and I

hand to my friend - a reference specifically to the

debate when this matter was going through the New

South Wales Parliament, just to draw Your Honour's

attention to what the procedure was and what the

origin of this particular section was in the New

South Wales Act.	Your Honour, if I could hand that
up to you:	it is in the second column under a

heading called "Court of Disputed Returns" and it

has there a reference to a Mr Jaques who has a

reference within that that is picked up elsewhere -

and I will not take Your Honour to the other

references - that in actual fact the practice in

New South Wales was for the qualifications

committee to make an order for the costs of the

Hudson 67 28/3/94

parties, in other words, that the parties were not

to be out of pocket over their procedures in being

involved in election petitions, and that was the intention in bringing about the amendment in New

South Wales.

Now, what the purpose of such legislation may

be and how it is to be approached, Your Honour, was

considered by Mr Justice Maxwell in Re Darlinghurst

Petition, (1951) 51 SR(NSW) 204. I hand a copy of

that to Your Honour and I give a copy to my friend.

This was, in fact, something that was very similar,
Your Honour, to the aspects of the election
petition that is being dealt with in Deahm v

Webster in that there were matters that, in effect,

were a challenge to the state of the roll itself

and the matter had, in effect, to be abandoned.

The part that I wish to take Your Honour to is

in relation to the discussion concerning costs. If

I could take Your Honour to page 209, to the top of

the page, and if I might read from there:

This petition having been dismissed, two

applications for costs are made, both of which

are opposed by the person against whom in

effect the application is directed. Mr Shand,

on behalf of Mr Finnan, the successful

candidate, asks that the petitioner should pay

the costs. May I say at once that the one

clear thing about this is that Mr Shand's
client should not be out of pocket - somebody
should pay his costs. In effect, Mr Ashburner

concedes that. Mr Smyth, on behalf of the

Electoral Commissioner, also asks that the

petitioner should pay his costs.

Now, this is the part, Your Honour, I would rely

on:

Mr Ashburner opposes both orders, but the

opposition takes a somewhat different form in
relation to Mr Shand's application from that

which it takes in relation to Mr Smyth's

application. I think Mr Smyth's application

could be dealt with more speedily because more

easily than the other one. It is true that,

here again, I think the Electoral

Commissioner's office should not be out of pocket by reason of what I think was a proper

step taken by him and on his behalf. I do not

think that it is a case in which the

petitioner should be required to pay the

Electoral Commissioner's costs. I do think it

is a clear case in which the court should

exercise the only discretion which is open to

it, and that is, under s 172, to recommend

Hudson 68 28/3/94

that the Electoral Commissioner's costs be

paid by the Crown. I want to make it clear

that it is obvious that he stands in a

different position from the position in which

Mr Finnan stands. I am aware of nothing which

directly was suggested as affecting the

Electoral Commissioner; on the other hand, I

do not imagine that it could be suggested that

in any sense he has rushed into the arena so

that he should therefore be obliged to pay the

costs of that excursion. I think it is a

proper case in which I should, and therefore

to the fullest extent and in the only form in

which I can make the order, I do recommend

that his costs be paid by the Crown. That may

be merely a matter of book-keeping, but,

however that may be, I think that is the

proper order with regard to that.

In other words, Your Honour, a party that has been brought to the Court of Disputed Returns in

the circumstances that Mr Lee has, in terms of the

object of the section as we would see it, given its history and background, that, plus what was said in

Nile v Wood concerning indemnifying - that is the last matter, Your Honour. That is the background

in Darlinghurst. The present legislation is said

to have the purpose of the order. As Your Honour

quoted in the judgment last year, "to indemnify a

party for the costs that have been incurred."

Now, Your Honour, obviously there should be a

way in which that can be directed to the returning
officer but, in our respectful submission, the

order that is put forward is one that would be

contrary to what was stated in Nile v Wood

concerning inter partes costs and a more

appropriate direction, particularly, Your Honour,

in the light of the fact that the costs position in

New South Wales is changing, for instance, and in

the profession generally, to have a principle that

was more in line with that which is is in our

order.

HER HONOUR:  Thank you. I still do not understand, however,

the difference between your order, "reasonably

incurred and reasonable in amount", as a matter of

principle, between that and party-and-party costs?

MR McCARTHY:  Your Honour, it is certainly regarded as a

different scale and it is certainly regarded,

Your Honour, as being something that is, in terms

of taxation officers, a more generous approach and

is a level of costs that reflects what the client

has in actual fact incurred as a result of being

brought into proceedings as a result of his public

position.

Hudson	69	28/3/94
HER HONOUR:	Yes.	Are you seeking full indemnity costs?

MR McCARTHY:  No, Your Honour.

HER HONOUR: Solicitor/client costs?

MR McCARTHY:  No, we are seeking an order, Your Honour, in

terms of a taxation, that those costs would be met
that the taxation officer did not regard as

unreasonable in this. That is something larger, in

terms of principle, Your Honour, than a party/party

scale.	I do not think it would be disputed,
Your Honour.	On a party\party scale it certainly

would not be the case that the costs that he has incurred would be the costs that would be met by

the Commonwealth. ·

Now, the other concept that is involved there,

Your Honour, looking back to Nile v Wood and the

language that is used there, is what is to be the

nature of the indemnity, and the indemnity that is

described and was applied by Your Honour was that

which went to the costs that had been incurred.

Now, our submission is, Your Honour, that most

appropriately the words that would be added would

be, in terms of Your Honour's order, "reasonably

incurred" but that to make clear that it was not

assenting to inter partes costs principles, the

form of the order, Your Honour, is, in our

respectful submission, better expressed in the

order that we have tendered, rather than to have

this matter go on, as indeed it is going to be, a
major precedent on costs in Courts of Disputed

Returns, to be something that is tied up with costs

inter partes. Thank you, Your Honour.

HER HONOUR:  Thank you. Mr Hudson, do you have anything to

say?

MR HUDSON:	No, thank you.
HER HONOUR:	Thank you. Yes, Mr Solicitor?
MR GRIFFITH:	Your Honour, to some extent we feel this is a

problem of what might be called the "Phillip Street

stray counsel" syndrome and that is, Your Honour,

if you are nice to counsel once, they come back and

ask for more. As we understand, Your Honour, the

point at issue in Hudson v Lee (No 2) was whether

there should be an order for costs against the

Commonwealth which was not a party to the petition

at all and, Your Honour, on rereading the

transcript, we see nothing in the argument to

indicate there was any suggestion at all that the issue was other than: should the Commonwealth be

ordered to pay costs? We say, Your Honour, that

Hudson 70 28/3/94

carries with it the ordinary position "costs" means

"costs".

Now, Your Honour's order, of course, was

something which fits, we would submit, comfortably

with the course of Your Honour's decision and the
corroboration from the argument but, as Your Honour

will see from the exhibited correspondence to the

affidavit in support of the motion, there is a

difference between the parties, and perhaps I could

indicate the aspects where we see there would be a

material difference here.

HER HONOUR: Are you talking about a principle difference or

a money difference?

MR GRIFFITH:  Your Honour, I illustrate the principle by

just reference to three items, if I could,

Your Honour.

HER HONOUR:	Yes, thank you.
MR GRIFFITH:	The first, Your Honour, is the convention -

and I hope he is not embarrassed because he is in

Court but we refer to the authority of Registrar

Jones' .decision in the Gulland taxation, if I can

hand Your Honour a copy of the Legal Reporter

decision in that. That merely, Your Honour,

repeats very succinctly and adequately expresses,

if I may say so, Your Honour, the ordinary

principle that on a taxation what is recoverable is

counsel fee, including within it, fee for

preparation and fees for one or two conferences.

Now, Your Honour will see in this matter - I

will not take Your Honour to the detail - that, in

effect, what there is is a charge by reference to

"hourly attendances" and "extended conferences"
producing, Your Honour, a total of fees which,

perhaps, we could measure just by reference to the

issue in respect of costs. After Your Honour's

judgment in the substantive issue, the matter was

brought on and argued in something like 40 minutes

on costs after written submissions and, yet,

counsels' fees on that, when charged for

separately, add up to some $5050.	Now, we would
say, Your Honour, that the -

MR McCARTHY:  Your Honour, I am going to ask for an

adjournment if my friend continues this. If it is

going to be a matter of a discussion about fees, I

do not think that is appropriate to be a case in

which this is going to be put forward.	I will have
someone else come.	I did not think the

Solicitor-General was going to put - Your Honour

had specifically asked him if "this is a matter of

principle?", and certainly, if it was a matter of

Hudson 71 28/3/94

principle, I am instructed to deal with it but if

he is going to get down to a discussion about

taxation et cetera, over this, Your Honour, I find

this entirely distasteful.

HER HONOUR:  Yes. I do not think we need to get too excited

about it.

MR GRIFFITH:  I am not going to, Your Honour, I am just

illustrating - - -

MR McCARTHY:  No, even as an illustration I find that

distasteful to do something like that.

MR GRIFFITH:  Your Honour, the second matter I desire to

refer to is the fact that there is claims for

junior counsel's attendance being involved in the

matter. Your Honour will see that from the

exhibit. In fact, under the terms of the Act,

Your Honour, only one counsel may appear with

leave.

HER HONOUR:  I think junior counsel appeared separately,

Mr Solicitor. There were occasions when junior

counsel - - -

MR GRIFFITH:  No, Your Honour, but concurrently I am

referring to.

HER HONOUR:  I see, yes.

MR GRIFFITH: Indeed, there was a gentleman sitting behind

who is now not sitting behind, Your Honour, who

seemed to be still doing - - -

HER HONOUR:  Yes.

Your Honour, the basic principles on costs, if

I may hand Your Honour a summary by way of

submission dealing with that - - -

HER HONOUR:  Thank you. Do you have a copy for Mr McCarthy?

MR GRIFFITH:	I have handed him a copy, yes, Your Honour.
HER HONOUR:	He has one, thank you.
MR GRIFFITH:	I do not intend to take Your Honour through

this in any detail, other than it does speak for

itself. But the decision of Sir Robert Megarry, in

EMI Records, is conveniently regarded as the contemporary starting point. Indeed, the Court of

Appeal judgment that my learned friend handed to

Your Honour referred to that judgment, and mentions

the varies bases of costs.

Hudson 72 28/3/94

I should indicate that there is some confusion

within the authorities within Australia between

costs on solicitor and client basis, and solicitor

and own client basis and, indeed, Justice Megarry

in his discussion, refers really entirely to the

concept of solicitor and own client when discussing

the difference between that and indemnity basis.

Because, of course, in solicitor and own client if

the client has specifically agreed to the fee then

ordinarily the fee is recoverable, but that has no

consequence when it is solicitor and client, not

solicitor and own client, because there is still

the issue of reasonableness if the other party is

paying. Your Honour, in truth it seems that the

trustee basis referred to as item 3 in the

categories of Vice-Chancellor Megarry coincides

more closely with the solicitor and client basis,

as distinct from solicitor and own client basis.

Your Honour, we admit, of course, that the

discretion given to Your Honour under the

Commonwealth Electoral Act is a general and open

discretion. None the less, we refer to in

paragraph 4 of our submission here that

Your Honour's judgment in Knight v F.P. Special

Assets Ltd, 174 CLR 178, concurring with that of

Their Honours the Chief Justice and Justice Deane,

indicated that where a court has a general

discretion towards costs, that means the

discretion:

must be exercised judicially and in accordance

with general legal principles pertaining to

the law of costs.

Your Honour, we have extracted at page 3 of

our submission a summary by Justice Sheppard in the

Colgate Palmolive case dealing with the ordinary

basis of party and party, the accepted historical basis of it whereby, of course, it is accepted as

of course that when there is an order for costs

there will not be a full recovery, and His Honour

expresses a view which, we submit, is entirely

consistent with authority, that in the ordinary

case an order for party-and-party costs, as a rule,

and a departure is to be justified by reference to

some relevant principle.

We refer, Your Honour, to the Ragata decision of Justice Davies which is an unreported decision,

referred to by Justice Sheppard, and perhaps if I

could hand Your Honour a copy of that judgment.

Unless Your Honour desires me, I will not take

Your Honour to the specific passages because we

feel they sufficiently referred to in this summary.

We admit in paragraph 7, Your Honour, that the

categories in which costs may be ordered, other

Hudson 73 28/3/94

than the basis of party and party, are not closed,

that must be the case. In paragraph 8 we summarize

the situations where there has been acceptance of

departure from the ordinary party-and-party basis.

I will turn in a minute to the question of

what is the relevant principle under the Act

because we accept entirely Your Honour's judgment

that there is a new reference point under the Act

and one must determine the issue of discretion by

reference to principles under that Act, and not

confined, Your Honour, to the ordinary position of

the position between party and party and litigation

inter partes.

Your Honour, having summarized that position that the departure is from the ordinary order is to

be for a particular reason, in paragraph 9 and

following we make the point that where costs are

awarded on the indemnity basis, unreasonable costs

are not included. If I could refer to my learned

friend's proposed order, Your Honour. Our reading

of the order is to regard that proposal in

paragraph 1 as reflecting what is the ordinary

point of inquiry for a taxing officer in connection

with an order for taxation on an indemnity basis.

That is something which is discussed in some detail

by Sir Robert Megarry in the EMI Records' case, and
I think Your Honour will find that it is confirmed both by more recent references, which we have

given, and also by the terms of relevant rules of

court. So, for example, in the case of the New

South Wales Supreme Court Rules, Part 52

rule 33 (1) to (3), one seems to have an expression

of basis for costs which is consistent with that

form of expression as adumbrated by

Sir Robert Megarry. So, under "Solicitor and

Client Basis" costs it is stated in 52.33 of the

New South Wales Rules:

(1) All costs shall be allowed except as

mentioned in the following subrules.

(2) Costs shall not be allowed in so far as

they are of an unreasonable amount, unless the

amount has been approved by the client.

(3) Costs shall not be allowed in so far as

they are unreasonably incurred, unless
incurred with the approval of the client.

One can see there that is a reference to solicitor and own client basis of cost, rather than, as we

have referred to Your Honour, the different
distinction where it is solicitor and client, which

would seem to be covered by the common fund and

trustee basis dealt with by the earlier rules.

Hudson 28/3/94

Your Honour, the particular rule of the New

South Wales court dealing with indemnity basis is

rule 28A which says:

On a taxation on the indemnity basis, all

costs shall be allowed except in so far as

they are of an unreasonable amount or have

been unreasonably incurred and any doubts

which the taxing officer may have as to
whether the costs were reasonably incurred or

were reasonable in amount shall be resolved in

favour of the receiving party.

So that, in essence, Your Honour, the difference is

that there is a presumption on allowing, unless the

costs are regarded as unreasonable an amount or

unreasonably incurred, and there seems to be a

reverse onus. So, Your Honour, there is a

significant difference between that and the

ordinary order for costs. We summarize,

Your Honour, that position in paragraph 9 and

following up to 13 of our summary, which we have

handed to Your Honour.

Having identified the different bases of cost

by.reference to general principle, it remains our

submission that party-and-party basis is the rule

and any departure from that rule must be justified.

We have already made the observation that there was no suggestion in the argument before Your Honour on the previous occasion on costs that there should be

any departure from this rule. We make the further

observation, Your Honour, that there is no reported

authority - and we know one - where, in connection

with the exercise of the jurisdiction under the

Court of Disputed Returns provisions of the Act,

there has been any order made, either against a

party or against the Commonwealth or against the

Electoral Commission, Your Honour, other than on

the normal basis for costs.

Indeed, Your Honour in the Nile v Wood

decision relied upon by my learned friend, that is

exactly the order which was made. The Court,

Your Honour, on an application for costs by

Mrs Nile herself, refused that order.

Notwithstanding, Your Honour, the particular

circumstances that her petition was taken against a

candidate who, in fact, was disqualified, and was

so ordered by the Court as being disqualified, but

none the less, Your Honour, in the particular

circumstances, made an order for Mrs Nile to be

indemnified against the costs ordered to be paid

against the respondents in her petition, who

obtained a cost order against her. The order

obtained by those respondents, Your Honour, was an

order merely for costs, on an ordinary

Hudson 75 28/3/94

party-for-party basis, and that was as is clear

from the report in Nile v Wood, Your Honour, in a

case of a petition somewhat analogous to the one in this case, where the petition itself was hopelessly

misconceived and defective in form, and in

allegation.

Now, in the case of Nile v Wood there was a

difference, Your Honour, in that the applicant -

the petitioner there - had the advantage of legal
representation. In this case, Your Honour, the

applicant has not had that advantage but, we would

submit, Your Honour, having regard to the

underlying position an petitioner who has not had
the advantage of legal advice should be no more

harshly judged in respect of defects of form than

one who has. Indeed, Your Honour, that was the

approach adopted by Your Honour in your decision on

the costs order.

It is our submission that any order for cost

which may be made, as in this case, against the

Commonwealth is, in essence, a vicarious order so

far as the position of successful respondents to a

petition are concerned. In this matter, the matter

does. not concern the application being made by a

petitioner who is unsuccessful for the petitioner's

costs, it is an application being made by a

respondent to a petition for its costs, in

circumstances whereby it was accepted as common

ground for the application that an ordinary order

for costs against an unsuccessful petitioner would

be an empty order.

May I take Your Honour briefly to the

provisions of the Act dealing with costs, the Court
of Disputed Returns provisions. Firstly,

section 356, as Your Honour remembers, provides for

security for costs. This is in the context of

accepting Your Honour's view that the Act on its

even without legal representation. Indeed, in the	face is intended to enable open access to be made,
next matter, Your Honour, notwithstanding that an order is sought to join the Commonwealth as a party for the purpose of securing an order for costs, it
would be necessary, if Your Honour makes such an
order, for me to apply for leave to appear for the
Commonwealth. Who else would appear for the
Commonwealth I cannot imagine, Your Honour, but I
will ask Your Honour's leave in due course. The
cost provisions then are followed by section 371
which says:

The Court may award costs against an

unsuccessful party to the petition.

Hudson 76 28/3/94

That is the normal order of the Court. If such an

order is made or if the deposit is applied, and

then there is also provision in costs under

section 373.

So that, Your Honour, one has a clear

contemplation within the Act, quite apart from

section 360, that the issue of costs is to be

involved both from the point of view of enabling a

successful petitioner to have his or her costs and,

secondly to enable there to be the usual penalties

as to costs - perhaps I should not say usual

penalties - ordered within the discretion of the

Court. Of course this is confirmed by

section 360(l)(ix) which specifically enables the

Court to award costs, and that is normally what the

Court does.

Your Honour that, in our submission, is the

primary provision as to costs under the Act. so,

for example, in this case if there had been not the
agreed feature peculiar to the petitioner,

Mr Hudson, that it was accepted that an award of costs against Mr Hudson would be empty, it would have been an issue for Your Honour to determine

.whether a cost .should be awarded against Mr Hudson, and then possibly whether or not a Nile v Wood-type

order should be made as against the Commonwealth.

Now, of course, Your Honour, one might have

expected that, in that event, a Nile v Wood order

might have been made consistently with

Your Honour's order - which, in effect, cut out the

middle person. It went direct and, with respect,

quite appropriately to the essential issue to say,

"Well, why have a Nile v Wood situation when, it is

clear from the documents, that such an order of

costs against the petitioner would be empty, it may

as well be a direct order", and that seems a very

sensible course to have adopted, particularly as

the petitioner was not legally represented, and it

makes the whole issue of working out costs a lot

simpler.

It is within that context that 360(4) provides

this Court with this unusual power of the sort

which was discussed, firstly by Justice Brennan

and, secondly, by Their Honours Justices Deane and

Toohey in the Nile v Wood situation and, as

Your Honour said in your previous decision in this

matter, Their Honours Justices Deane and Toohey
made the point that the Court:

"is not constricted by reference to the

principles controlling the making of an order

for costs inter partes", and should be

exercised "when considerations of what is fair

and just support, on balance, an order

Hudson 77 28/3/94

indemnifying a party against costs which the

party may have incurred in connexion with an
electoral petition".

Justice Brennan, of course, adopting a somewhat different view limiting the entitlement to more of

cases of demonstrated - one will not say, "wrong

doing", but not proper practice by a Commonwealth

officer or cases of public interests, His Honour's

other exception.
Your Honour, we are quite comfortable with the expressions of each of the judgments in that

judgment; I suppose, indeed, we must. One problem,

of course, about learning in this area is that

there is no right of appeal, so that Nile v

wood -

HER HONOUR:  It is not the only problem with the Act.

MR GRIFFIN: Agreed, Your Honour, but we would agree, if

perhaps, the only thing I agree with what my

learned friend said to day, Your Honour, that there

is a tendency for one decision in these matters to

become a precedent for the next. Without waxing

~loquent on.obvious.issues, we would submit that
the essence of my learned friend's submissions are,

that in cases where there is a petition taken,

including one such as this where it is misconceived

and liable to be struck out on the initial hearing,

the appropriate order to be made should be that all
parties - at least all parties other than the

petitioner - should be fully indemnified for all

their costs in connection with the proceeding.

If one is dealing with public interest, or public benefit, we would submit, that obviously

there is no element of public benefit to know that

it is open season for all parties in electoral

petition matters after an election. But,

Your Honour, we do refer back to Your Honour's

judgment and that of others of Their Honours

referred to in the Knight case of indicating that

it is necessary, without confining in any way or

limiting the exercise of an open discretion under

subsection (4) - and we agree that it is an open

discretion - that there should be principles for

its exercise, not necessarily constricted by
reference to those controlling the making of orders

for cost inter partes but, we say, this subsection

was not intended to operate in a vacuum divorced

from general principles of the law.

In that regard, we say the starting point here

is that the normal position, in our submission, is

that where there is an unsuccessful electoral

petition the respondent's costs should be ordered

Hudson 78 28/3/94

to be paid by the unsuccessful petitioner. As it

happened in Nile v Wood in a case where,

admittedly, the successful respondent was

ultimately shown to be, and held by the High Court

rather than the court sitting as a Court of

Disputed Returns on reference from Parliament, to

be disqualified from holding office. As Nile v

Wood indicates, on that starting point, the

ordinary order is, costs means costs, and as we

have already pointed from Mr Justice Sheppard's

decision in the Colgate Palmolive case,

118 ALR 250:

It is a matter of notoriety that the indemnity
for costs which one party recovers from
another pursuant to the common order that one
pay the costs of the other does not very often
provide the party entitled to the benefit of

the order with anything approaching a full

indemnity for the costs which have - - -

HER HONOUR:	Now, but why is that? What has gone wrong in this.area? There must be something gone wrong.
MR GRIFFITH:	Your Honour, it has not gone wrong, it has

.always .been the case that it.has been wrong, that

is the position.

HER HONOUR: But, what is it? Is it to do with the costs

actually charged being out of kilter with the fixed

scales?

MR GRIFFITH:  Your Honour, one basis of difference is that

which I first referred Your Honour to, up to the

point of my learned friend's objection, the basic

of approach -

HER HONOUR: But, that goes to - I mean, they are taxing

matters - - -

MR GRIFFITH: Precisely.
HER HONOUR:	- - - rather than principled matters, but why

is it? Is it that the fixed scales do not reflect

what the fees, in fact, are?

MR GRIFFITH: Well, Your Honour, that is a fact, it seems,

that basically one finds that -

HER HONOUR:  Is that not a factor that it should be taken

into account in this area?

MR GRIFFITH: Only by reference to principle, in our

submission, Your Honour.

HER HONOUR: Well, exactly, but principle is not necessarily

long-established practice. If things have got out

Hudson 79 28/3/94

of kilter then they may - in what is essentially a

new area, as it were - and why does not one have

regard to the fact that something has been - well

it has been recognized now in a number of cases, to

be nothing like a proper indemnity.

MR GRIFFITH: It it is always recognized, Your Honour, it is

the sine qua non, and that is what happens when you

litigate an order for costs, it does not give you

full indemnity costs, that is the principle for

order of costs. It is better than American,

Your Honour, where there is no costs ordered, but,

that is the case. Now, if Your Honour says, "This

should be reviewed here," in our submission, what

Your Honour in fact is saying is, "It that it

should be reviewed for all purposes of litigation

inter partes," which is - - -

HER HONOUR: Well, I mean, one of the principles is open

justice, affordable justice. Access, particularly

in this area, it is clear from the Act, access to

all, but there is hardly access if something, which

nobody will precisely identify, means that there is

not anything like indemnity.

MR .GRIFFITH: With respect, Your Honour, it might make

justice less affordable, because if a party knew

that it would be entitled to full indemnity on the

reverse onus provision that we have referred to,

Your Honour, then one is likely to have an

excessive incurring of costs and - - -

HER HONOUR:	That may be something that is wrong with the order, the form of the order and the approach taken
and there might be something wrong with the approach propounded by Mr McCarthy. But there seems to me also to be something wrong with the
approach taken which says it is always the case that you do not get anything like your costs,
notwithstanding that they were reasonably incurred
and in a reasonable amount, in terms of what is
available in Phillip Street or Queens Street, if
you like.
MR GRIFFITH:	Your Honour, I am not quite sure whether we

are talking about general principle or in orders

under the Act on petition?

HER HONOUR:  Or general practice.

MR GRIFFITH:  Yes. Your Honour, if one is dealing with

general practice as to costs, that is one thing; if

one is saying whatever happens in general practice

there is a particular open meaning here, that is

another.

Hudson 80 28/3/94

HER HONOUR:  I go back to the question I asked before: what

is the difference in principle? I mean, in general

terms, party-and-party costs are supposed to

compensate you for the costs necessarily and

reasonable incurred.

MR GRIFFITH: 

Your Honour, we would submit that is not the

case historically; party-and-party costs represent
the form in which an order for costs, which are
ordered by the court to be paid, are to be

calculated and the relevant principles concerning

that and, Your Honour, it has never been the case
that such an order has been regarded as an
indemnity; in fact it has always been the - - -

HER HONOUR: 

It is an indemnity of a kind; it is supposed to

indemnify you for costs necessarily and reasonably

incurred.

MR GRIFFITH: Yes. Your Honour, entitlement for costs in

the ordinary case is recoupment of a part of your

costs. The extent to which you recoup them depends

upon well-known principles of assessment and

taxation of costs, such as the decision of

Registrar Jones to which I referred Your Honour,

which .is .entirely.consistent with authorities, not

only of this Court, but of all courts.

HER HONOUR:	Is it then that the courts take the view, through their taxing officers, that what is
necessary and reasonable is not the same as what the market is?

MR GRIFFITH:  Not at all, Your Honour. Your Honour, the

court that orders the costs takes a view that an

entitlement to costs should be limited by reference

to these long-standing principles; that costs as

ordered by a court, Your Honour, save in what we
refer to as the exceptional cases, Your Honour, are

ordered on the basis that they will be or expected

to be, Your Honour, less than the actual costs

incurred. And one can see, Your Honour, that there

are reasons for that: one is that it certainly

acts as a discouragement to extravagant expenditure

of costs on the basis that that expenditure may not

be recovered. If one has no such limitation,

Your Honour, then means a party that regards itself

as having a reasonable prospect of success, either
as claimant or as respondent, then may incur
whatever costs it chooses so long as they are not

regarded as unreasonable or unnecessary.

Examples are given by Justice Megarry and

other of the Justices that we refer to Your Honour in the cases that then rather than having just two
counsel and one expert, you might decide to have

four counsel with three experts and have endless

Hudson 81 28/3/94

conferences with them. It is a matter of natural

inhibition, Your Honour, upon the capacity of

either party to incur costs at the other party's

ultimate expense. But Your Honour is raising a

fundamental question which is an interesting one

for juris-potential debate, with respect,

Your Honour, but our submission is that the provisions of the Act, including subsection (4), are within the context of the accepted general
principle, and we have referred Your Honour to the

authorities reiterating what is established, that

the ordinary order for court costs is merely costs

as between party and party to be taxed by accepted

bases. Our submission to Your Honour is that the

discretion which Your Honour has under

subsection (4) is one issue within the framework of

such cost position.

If, indeed, that is the case, is perhaps confirmed by the fact that one has no examples of

costs in electoral petition matters being ordered

on any other basis.

HER HONOUR:  No, I am not concerned about the basis, I am

concerned with why it is that it can now be said,

and seemingly accepted, in many cases the result

will be that the amount recovered by the successful

party will fall short of, in many cases well short

of, a complete indemnity.

MR GRIFFITH: Yes.

HER HONOUR:  I know it goes on to say, "This has been

settled practice for centuries." Now if it is

because people go around incurring costs which are
unreasonable in amount or unnecessary to the

conduct of the litigation, that I can understand,

but if it is some other matter, then it seems to me

that there really is a problem that ought to be

addressed.

MR GRIFFITH:  Your Honour, there are probably various

issues. One is the question of how counsel is

briefed. Your Honour, there was a time when

counsel was merely briefed on the basis of

Registrar Jones' decision, Your Honour, and then,

clearly enough, it has become a practice to have

daily fees which, although it is a practice - that daily fees were not recoverable on a taxation,

and then the practice that counsel keeps time

sheets not unanalogous to those of solicitors. In

the Gulland case they were kept to .1 of an hour.

In other cases there might be by reference more to

an hour than six minutes, but it might be a case of

practice, Your Honour, not coinciding with the

Hudson 82 28/3/94

accepted basis of the Court calculation of what is

appropriate.

Your Honour, the basic difference between

party and party and indemnity is that in party and
party, costs are excluded unless they are held to

be reasonable. In indemnity, they are included
unless they are held to be unreasonable with

reverse onus.

HER HONOUR:  I can understand that as a practical

difference; I do not know that it is a principal

difference.

MR GRIFFITH: But it produces a lot of principal, if one

calls principal, capital, Your Honour, the result

between those approaches - well perhaps one can

look at the Gulland taxation as just an example of

real figures, Your Honour, to keep away from those

in this case my friend objects to, that one can

see the different calculations. If one counsel

says, "I was on a plane for 10 hours corning to

Court; I am going to charge for that, because

otherwise I would be working", and one says, "That

is unreasonable", that is one thing, Your Honour,

but one might take the view that is reasonable, if

a man or woman has only got five working days, if

they lose one in a week, well then they have lost

20 per cent of their week, but the Court does not

allow it and, clearly, on party and party they will

not, Your Honour; on indemnity, it could be the

other way around. That is where the difference in

approach could be significant.

Similarly, Your Honour, if it is suggested

that only one counsel can appear but you need two

minds to work together in preparing it, one could

have a different approach there. That is to

illustrate one possible point of difference in this

case.	Your Honour, searching questions are
welcome, but it is in the context of the whole

history of costs, Your Honour, that we submit in

this case the principles are to be found here, and

we do rely upon the fact, Your Honour, that the

points which are made here for a wider order than

costs seem to be ones more from second wind, having

got the first and what was intended as a final leg

in, rather than ones which form the basis of the

original application.

Your Honour, I was not intending to be so polemic on referring to Justice Sheppard's

reference, the matter of notoriety, but

Your Honour, we say it is clear from the Act it is

not intended that the subsection for jurisdiction

should mean, as a matter of course, the

Commonwealth should pay costs on an indemnity basis

Hudson 83 28/3/94

to every successful respondent to an electoral

petition. We say, Your Honour, clearly also it is

not implicit that the Commonwealth should pay the

difference in costs which can be recovered against

an unsuccessful petitioner under ordinary

principles of party and party and costs actually

incurred.

Your Honour, if it were intended that the

jurisdiction under subsection (4) should enable

costs to be recovered on an indemnity basis then,

we would submit, the Act would have said so. What

it does is introduce a new factor which can be used

as Your Honour did quite appropriately - I would

say now "in my submission", Your Honour, we would

not have submitted that last time, but now we do -
having regard to the circumstances that otherwise

the innocent respondent would be out of pocket

because, just as much as is appropriate in Nile v

Wood, in this case it is appropriate to ensure that

the successful respondent recover costs.

In Nile v Wood it was held inappropriate that

the petitioner had ultimate responsibility for

them; in this case, where it was common ground that

the.unsuccessful petitioner could not pay them. Of

course, Nile v Wood was a stronger case for there

to be orders for costs against the Commonwealth

because of the ultimate strength of the underlying

complaint of Nile v Wood, even if it was presented

to the Court in an improper form.

So, Your Honour, we would accept what

Justice Brennan said in Nile v Wood, that some

warrant for imposing a liability on the funds of

Commonwealth must appear before it is appropriate

to make an order and we say, Your Honour, this is

in the context that the costs of the respondent to

an unsuccessful petition should ordinarily be paid

by the petitioner, and we refer, apart from the sections I have already referred to Your Honour, to	Re Darlinghurst Petition, (1951) 51 SR(NSW) 204, at
pages 209 to 210.

Your Honour, although I hesitate to agitate

this again, we do submit that the mere fact that a

successful respondent may otherwise be forced to

bear some of the costs burden of defending the
petition, we submit is not in itself sufficient

reason to justify the making of an order under

section 360(4).	We submit there has to be an
additional factor.	So, Your Honour, if it is not

appropriate to make an order for an unsuccessful

petitioner to pay indemnity costs, we would submit,

on the fact of things, it is not appropriate to

order the Commonwealth to pay.

Hudson 84 28/3/94

HER HONOUR: There may be cases.

MR GRIFFITH: There could be, Your Honour; we close off

nothing.

HER HONOUR:  A public interest case may well be such a case.

MR GRIFFITH: Could well be; yes, Your Honour, that is

agreed. We say not all cases, Your Honour, which in essence is the submission we say is being made

to Your Honour here. No, we close off nothing on

the discretion, Your Honour; we are just looking for a principle to articulate.

We submit that the reasons from Your Honour's

judgment in Hudson v Lee as to why a direct order

should be made against the Commonwealth was not for

any perceived public benefit resulting from this

petition. There was none at all. A lot of money

has been expended to get nowhere on a petition
which, on its face, was bad in form and wrong in

law. But with all that effort, anyway,

Your Honour, it was appropriate, in our submission,

because the petitioner is agreed a person of

limited means. We submit that is it, Your Honour.

This does not even get to Nile v Wood standard, in

our submission, so in those circumstances it was

held by Your Honour fair and just the Commonwealth

pay the costs.

So, in effect, we were substituted with the

petitioner - nothing to do with merit or issues; it had to do with the fact that the petitioner did not

have any money.	So we make the point, this is
weaker than Nile v Wood.	Of course in Nile v Wood

the costs of those successful respondents were

ordered to be paid on a party-and-party basis by

Mrs Nile and then ordered to be indemnified by the

Commonwealth on that basis. We submit that that is

not only how Your Honour's order reads, but it is

what Your Honour intended so it was not a surprise

that Your Honour asked my learned friend to go

first this morning.

We say that there is no reason of principle or justice why a respondent to a petition brought by a

person of limited means should be in a more

favourable position in respect of costs than a

petition brought by a person of more substantial

means. Perhaps we will agitate the contrast in the

next matter of Webster. But we say the principle

for orders of respondents' costs should be the same

and we submit there has to be more circumstances

than merely the fact that the petition is of

limited means to go beyond the ordinary order for

costs.

Hudson 85 28/3/94

One of the things put, Your Honour, as we

understand it, is that there was some public

benefit from these proceedings. We say there is

none here and that Your Honour certainly did not

refer to any issue of public benefit in the

judgment with the issue of want and means that

formed the basis for Your Honour's order. We would

say that there is no inherent public benefit in

merely having parties' complaints after an election

ventilated irrespective of merit. One thing, of course, the electoral Acts are very clear on are the requirement that there be points taken with

grounds and particulars.

Although one does not require legal

representation, one indeed requires leave to have

it. At the same time, Your Honour, one is required

to have a good point to run it either in person or
in any other way in a Court of Disputed Returns,

which is natural enough because one does not want to have continued uncertainty. I mean, what if a

matter such as, say, Webster was one which

determined the balance of power? There is an
obvious interest in matters only being pursued in a

Court of Disputed Returns when there are real

issues to be pursued.

So we submit that this is not a case on any grounds where indemnity costs might justifiably be

awarded against the petitioner. Even if it were

the case one would say, "Well, the petitioner here

should be awarded", and we would not submit it for

a moment. Indeed, Your Honour, we would say that

there must be a very much lower threshold for

reasonableness for a petitioner acting in person

than a petitioner acting with legal advice. None

the less, we would submit that the Commonwealth

should not be liable beyond anything

beyond party-and-party, even if for reasons

personal to a petitioner, a petitioner should. But

we do not need to engage in that because that does

not seem to be the situation here.

To go to Your Honour's order, I suppose in

form this is an application under Order 30 rule 11

of the High Court Rules for elucidation. We are

not quite sure actually, Your Honour, because we do not want any elucidation because to us the order is quite clear, but it seems there is a dispute

between the parties and the form of our motion

expresses clarifying expression which, we would

submit, clarifies and expresses that which is

ordered. My learned friend's proposal, we would

agree, expresses an appropriate order of costs for

indemnity, which we submit is exactly what

Your Honour did not order.

Hudson 86 28/3/94

We accept that whatever is the clarification

arising from any further orders Your Honour makes

in this matter - and I suppose it could be resolved

with reasons with no order as long as it is clear,

because we do not really think that the order has

to be altered; it just has to be put beyond

argument - that there could still be disputes by

reference to the touchstone for taxation, and the points that my learned friend rose to his feet on

obviously are ones which would be ventilated by

reference to the appropriate test. I was not

intending to ventilate them here and ask

Your Honour for a ruling but merely indicate that

these are the differences that will come up in
either event, and to indicate that we submit that

there has been no basis put to Your Honour to say

that there should be, as it were, reverse onus on

any issue as to this on the question of

unreasonableness or whether or not they are

unnecessary.

My learned friend referred in passing to the

history so quickly that we really did not have any
history. But we do submit that there is nothing to
indicate that there has been any historical

practice and certainly none in this. Court and the

Court of Disputed Returns after 1983 and after the

amendment to give any support for a view that the costs should be other than costs. If Your Honour pleases.

MR HUDSON:	Excuse me, Your Honour.
HER HONOUR:	Yes, Mr Hudson?
MR HUDSON:	Through the documentation that was served on me, I do believe that I do not have a copy of what the
learned gentlemen on my right was reading from and
that he submitted to Your Honour. Also, I would
like to ask through Your Honour of him: what does
you look around there is a nice young lady and two he deem to be reasonable grounds and costs? When
other counsels of some description, I believe,
serving him today and I would just like to know, in
layman's terms, what does he deem to be reasonable
costs, Your Honour?
HER HONOUR:	I do not think that is appropriate, Mr Hudson.

Mr Solicitor, I do not think you need answer it,

but if you have got a copy of your submissions,

please give them to Mr Hudson.

MR GRIFFITH:  I am sorry, Your Honour, I should have handed

it. We were not expecting an appearance from

Mr Hudson on the basis that he was not directly

involved in this issue.

Hudson 87 28/3/94

HER HONOUR:  Yes, thank you. Yes, Mr McCarthy, anything in

reply?

MR McCARTHY: Three matters principally, Your Honour. First

of all, the long excursus that the Solicitor has

given Your Honour into principles concerning awards

of costs, and the written submissions that he has

handed forward on that basis in relation to that

basis in direct sense, cannot have a bearing on

what comes forward for proper decision by

Your Honour in this matter. There are two proper bases, in our submission, on which any order should be considered. One is the statute and the other is

authority.

The Solicitor said he is comfortable with Nile

v Wood and it is consoling to know that he is,

particularly as he has informed Your Honour in no

uncertain terms that any order that he proposes

will not have the effect, if the Court follows it,

of seeing that Mr Lee has anything like, or

anything near, the reasonable costs that he has

incurred in these proceedings, and that that is the

very nature of the order that he seeks. What he

did not relate that to was what the specific

authority of this Court, sitting as a Court of

Disputed Returns, has held regarding what section

364 means, and that is this: at page 143 in Nile v

Wood the majority says this, that there should be,

in an appropriate circumstance -

an order indemnifying a party against costs

which the party may have incurred in connexion

with an electoral petition.

Mr Solicitor today proposes, in no uncertain terms,

that that is exactly the order that should not be

made. He has come here today with all authority

armed to put that to Your Honour and is quite open

about it; that if Your Honour accedes to his

application or anything along those lines, not only

is that object of the Act and the very wording of

authority turned, but we go into an area where this

Court, sitting as a Court of Disputed Returns, has

said that we were not to go, which was into

principles concerning costs inter partes.

The answer, if I may say so, to the first

series of my friend's submissions, is this: they

are irrelevant, there was no way he made them

relevant, and they are contrary to the very

purposes of this statute as has been laid down by

authority and they will achieve exactly the result

that is the reverse of what was intended here.

This was an ameliorating section, and while my

friend says I was brief on the history, I had it long enough to state a decision concerning these

Hudson 88 28/3/94

principles in another jurisdiction that made clear

what the purpose is. It was to see that people are

not disadvantaged in terms of costs involved in

public administration.

That comes to the second matter that one would

put in reply to what the Solicitor has said, and

that is this: the Commonwealth never proposed, or

would never accede that costs ought to have been

paid in this matter at all, and that was
recanvassed again today in views that there was no

public benefit in relation to an order for costs or

in these proceedings.

What Your Honour's judgment, in our respectful

submission, took into account was this: that the

respondent had warned the petitioner about the

futility of these proceedings from the very

beginning; that he had been told that there was no
possibility that he could succeed, and that was
said not only orally, but in writing.

Nevertheless, the petitioner persisted in these proceedings, and the only reason, as Your Honour

made quite clear, as to why this was going on is

because that was the wording and nature of this

legislation. Mr Hudson was permitted - in fact,

Your Honour used the words "It was left open,

encouraged" to bring these proceedings and to

continue with them. He needed very little in terms

of money to do it. That is the nature of the

proceedings that we are faced with here.

HER HONOUR: This is a double-edged sword though, is it not?

One might as well say, "Well, if the proceedings

were so evidently hopeless, why bother with legal

representation at all?"

MR McCARTHY:  Your Honour, that has been put and canvassed,

and the answer to that was the answer that was

given by the Chief Justice of Australia in the very

first case in the Court of Disputed Returns,

Chanter v Blackwood, 1 CLR 39. At page 132

His Honour said:

I think a claim to set aside a parliamentary

election is a matter of as great importance as

any that can be raised in any Court. I regard

this, therefore, as a matter of importance.

It is also a matter of considerable

difficulty.

That was in the first case as a Court of Disputed

Returns the reason why counsel would be retained in

the matter.

Your Honour, what the Solicitor is saying on

this point is that there was no public interest

Hudson 89 28/3/94

really in the award that was made over and above

the fact that Mr Hudson was impecunious. The

public interest point was this: that the Act is

structured in such a way by our community through

its parliament that these proceedings can be

brought. It cannot be imagined with an order such

as 360(4) that a person who is involved in those
proceedings as a respondent would not be entitled

to an order that would substantially cover all his

reasonable costs.

That comes to the last point that my learned friend made, which was that in terms of principle

there should be some principle put forward, and that there was none in these terms as to why an

order has been made. In our respectful submission,

Your Honour, the distinction that he has made

between this case and other what one could call

"public interest" litigation, has not been

maintained at all and, in fact, it is unclear why

his public office, that is, his membership of the	in cases where, as here, it is only as a result of subject of these proceedings and can be made the
subject of these proceedings, that there is an even
stronger ground in those cases as to why when a
party such as he is successful the order should be
in terms of costs, not only against a petitioner if
that be appropriate, or against the Commonwealth, is that the order be that he reflect all his
reasonable costs.

Lastly, I would just draw to Your Honour's

attention to reinforce the point that the Solicitor

has made the judgment I handed to Your Honour in

Milosevic, and to mention a number of points there again just for Your Honour's information, that at

page 3470 in the judgment of Mr Justice Cripps,

Your Honour will find the difference

between - there is a reference there to "Costs (on

an indemnity basis)" as to how they differ from

solicitor/client and from party/party - it is the

reference to "District Court Practice" by O'Grady:

"Costs (on an indemnity basis) differ from

solicitor-and-client costs principally in that

costs are not justifiable on the indemnity
basis solely by establishing that they were

incurred on the client's instructions.

Your Honour was asking what is the difference

between the costs and various rulings as to

costs - I bring that to Your Honour's attention.

The other matter was this: in the judgment of

Mr Justice Cripps over the page at page 348, I draw

Your Honour's attention to the last paragraph

there, and in particular the words where there is a

Hudson 90 28/3/94

reference to Mr Justice Rogers and his judgment in

Qantas v Dillingham. Justice Cripps says:

Rogers J pointed out that over the last twenty years "party and party" costs orders have

failed properly to compensate or indemnity

successful litigants. He referred to the rule

of thumb over many years that a successful

litigant recovered between one half to two

thirds of actual costs. In Degma.m v Wright

Holland J made it clear that an indemnity

order did not mean that a loser would have to

pay "for absurd extravagances of the winner".

Like Kirby P, I can see no reason in

principle, why the power of the District Court
to make costs orders should not be widened,

with perhaps only one caveat. Ordinarily, an

appellate court will not intervene to set

aside costs orders -

and he goes on. Your Honour, there is no doubt,

and it comes from the Solicitor's submissions, both

orally today and in writing, if Your Honour accedes

to that order it is in the certain knowledge that

not only will actual costs not be paid or anything
near .. actual. costs paid, but that is the

understanding of the profession and of taxing

officers as to what that order is. It is also, in

our submission, Your Honour, exactly contrary to

what public interest litigation in this time

demands, and indeed, what the language of the

section and what the authority of this Court has

established. If Your Honour pleases.

HER HONOUR:  Thank you, Mr McCarthy. I will reserve in this

matter.

AT 11.46 AM THE MATTER WAS ADJOURNED SINE DIE

Hudson 91 28/3/94