Marsh v Baxter
[2015] WASCA 179
•3 SEPTEMBER 2015
MARSH -v- BAXTER [2015] WASCA 179
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASCA 179 | |
| THE COURT OF APPEAL (WA) | 03/09/2015 | ||
| Case No: | CACV:127/2014 | 25 MARCH 2015 | |
| Coram: | McLURE P NEWNES JA MURPHY JA | 25/03/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal granted Appeal allowed | ||
| B | |||
| PDF Version |
| Parties: | STEPHEN WILLIAM MARSH SUSAN GENEVIEVE MARSH MICHAEL OWEN BAXTER |
Catchwords: | Costs Indemnity principle Successful party's liability to pay own costs Funding arrangement |
Legislation: | Nil |
Case References: | Marsh v Baxter [2014] WASC 187 Marsh v Baxter [2014] WASC 187 (S) Noye v Robbins [2010] WASCA 83 Noye v Robbins [No 6] [2008] WASC 266 Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 Windus v Director of the Fair Work Building Industry Inspectorate [2013] FCA 1053; (2013) 216 FCR 207 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MARSH -v- BAXTER [2015] WASCA 179 CORAM : McLURE P
- NEWNES JA
MURPHY JA
- First Appellant
SUSAN GENEVIEVE MARSH
Second Appellant
AND
MICHAEL OWEN BAXTER
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : KENNETH MARTIN J
Citation : MARSH -v- BAXTER [2014] WASC 187 (S)
File No : CIV 1561 of 2012
Catchwords:
Costs - Indemnity principle - Successful party's liability to pay own costs - Funding arrangement
Legislation:
Nil
Result:
Leave to appeal granted
Appeal allowed
Category: B
Representation:
Counsel:
First Appellant : Mr C G Colvin SC
Second Appellant : Mr C G Colvin SC
Respondent : Ms F Vernon
Solicitors:
First Appellant : Slater & Gordon Lawyers
Second Appellant : Slater & Gordon Lawyers
Respondent : Bradley Bayly Legal
Case(s) referred to in judgment(s):
Marsh v Baxter [2014] WASC 187
Marsh v Baxter [2014] WASC 187 (S)
Noye v Robbins [2010] WASCA 83
Noye v Robbins [No 6] [2008] WASC 266
Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474
Windus v Director of the Fair Work Building Industry Inspectorate [2013] FCA 1053; (2013) 216 FCR 207
1 McLURE P: On 25 March 2015 the court ordered that:
(1) There be leave to the appellants to appeal the orders of K Martin J made on 19 September 2014.
(2) The appeal be allowed.
(3) Within 14 days the respondent do file and serve an affidavit:
(1) deposing to information regarding the respondent's liability for the costs claimed by him in the action relating to any arrangements between the respondent and the Pastoralists and Graziers Association or Monsanto or either of them;
(2) annexing a copy of any documents regarding the respondent's liability for the costs claimed by him in the action relating to any arrangements between the respondent and the Pastoralists and Graziers Association or Monsanto or either of them.
(4) The orders made by the trial judge relating to costs and special costs be stayed until further order.
(5) There be liberty to apply.
2 These are my reasons for joining in those orders.
3 On 28 May 2014 Kenneth Martin J dismissed the appellants' action against the respondent: Marsh v Baxter [2014] WASC 187. Issues relating to the costs of the action, including injunction proceedings, were reserved.
4 On 19 September 2014 the trial judge ordered the appellants to pay the respondent's costs of the action and made special costs orders: Marsh v Baxter [2014] WASC 187 (S).
5 The trial judge refused the appellants' application for orders that (1) the respondent file an affidavit regarding his liability to pay the costs claimed by him, including information and documents relating to any funding arrangements between the respondent and, inter alia, the Pastoralists and Graziers Association of WA (PGA) and Monsanto Australia Ltd (Monsanto); and (2) the respondent's application for costs and special costs orders be stayed pending the determination of the respondent's liability for those costs.
6 The appellants' application was supported by two affidavits of the appellants' solicitor, Mark Walter, sworn on 10 and 11 July 2014. Mr Walter's evidence is to the following effect. By letters dated 7 and 8 July 2014 to the respondent's solicitors, the appellants' solicitors requested the information and documentation the subject of the application. The respondent's solicitors refused the request.
7 Annexed to Mr Walter's first affidavit are PGA publications dated February and July 2011 stating that the PGA had set up a legal defence fund for the respondent and secured donations for that purpose. Also annexed is a newspaper report of evidence given at trial by Mr Digby Stretch, the Chair of the PGA Livestock Committee. A copy of the transcript was relied on in the appeal. The relevant evidence is as follows:
[I]s it the fact that the PGA has set up a defence fund to, in part, fund Mr Baxter's costs for the running of his defence in this case?---That's true, that the PGA set up that fund for that reason. And nowhere, to my knowledge, has the PGA put any of its own money into this.
All right. But the PGA is conducting that fund on behalf of Mr Baxter?---They are (ts 908).
8 Also annexed to Mr Walter's first affidavit are media reports of statements, one attributed to the respondent, stating that Monsanto was backing the respondent with legal and financial support.
9 Annexed to Mr Walter's second affidavit are copies of the financial statements of the farming business conducted by entities associated with the respondent for the financial years ending 30 June 2012 and 2013. There is no reference in the financial statements to having incurred any legal expenses.
10 The trial judge refused the appellants' application on the basis that the evidence in support did not show 'any reasonable basis or reasonable grounds sufficient to query whether Mr Baxter has been relieved from his usual liability to personally pay his solicitors for the costs incurred in respect of his defence of the plaintiffs' action' [54]. He characterised the annexures to Mr Walter's first affidavit as self-serving correspondence and unsourced hearsay statements that did not provide any reliable evidentiary basis to suspect that the respondent was not personally liable to pay the legal costs of his defence of the action [55].
11 The trial judge erred in his assessment of the reliability and sufficiency of the evidence in support of the appellants' application. Statements made by the PGA in its own publications are inherently reliable. Further, the media report of Mr Stretch's evidence to the same effect could have been confirmed by checking the transcript of his evidence. The fact that the PGA was soliciting donations to a fund for the respondent's defence of the action is itself a sufficient basis for the orders sought by the appellants.
12 Moreover, the reliability of the media reports relating to Monsanto's financial and other involvement in the respondent's defence of the action was underpinned by what was glaringly obvious from the trial, being Monsanto's separate and independent interests, legal and financial, in the outcome of the action.
13 There was a sufficient evidentiary foundation for the appellants' application, which should have been granted.
NEWNES & MURPHY JJA:
14 This appeal concerned a challenge to a decision by the learned primary judge in connection with costs sought by the respondent against the appellants following the dismissal of the appellants' claims in the substantive proceedings.1
15 The appellants had applied to the primary judge for certain materials to be disclosed in connection with the respondent's application for costs orders against them in the primary proceedings on the basis, in effect, that there was an issue as to whether the respondent satisfied the 'indemnity principle' with respect to costs. Generally speaking, the 'indemnity principle' requires there to be a legal liability on the part of the party seeking the costs order to pay costs to the party's lawyer.2 The appellants submitted (and it was not contentious in this appeal) that in an appropriate case, the trial judge has power to consider whether the requirements of the indemnity principle have been satisfied, and to make orders and conduct a hearing for that purpose.3
16 The primary judge denied the appellants' application, effectively on the grounds of insufficiency of evidence. He concluded that the appellants' evidence did not disclose any reasonable basis or reasonable grounds sufficient to query whether the respondent had been relieved from his usual liability personally to pay his solicitors.4
17 The appellants' ground of appeal was in the following terms:
The learned trial judge erred in law in failing to consider whether the evidence filed in support of the interlocutory application for disclosure was sufficient to support the grant of the order, alternatively in finding that the evidence did not disclose a reasonable basis to suspect that the indemnity principle was not applicable in the present case [57]. The trial judge should have found that the evidence in support of the application did disclose a reasonable basis to suspect that the indemnity principle may not be applicable in the present case and, on that basis, should have granted the orders sought.
18 In our respectful view, the primary judge erred in his assessment of the evidence.
19 The application was an interlocutory one and hearsay evidence was admissible. The evidence led by the appellants was to the effect that:
(a) the respondent had informed the press, prior to the commencement of the proceedings at first instance, that he would fight the case by the appellants and 'Monsanto would back him';5
(b) the respondent had called evidence at the trial from Mr Stretch of the Pastoralists and Graziers Association of WA (PGA), who said that PGA had set up a 'defence' fund, to fund in part the respondent's costs of the defence of the proceedings6 and PGA had made similar statements in newsletters to its members;7
(c) the respondent's financial statements with respect to his farming business for 2012 and 2013 made no reference to any legal expenses incurred,8 however, the respondent claimed costs in an amount over $700,000.9
20 Whilst the last mentioned matter, on its own, might be consistent with the possibility that the respondent was covered by an insurance policy,10 and that his insurers had paid for the defence of the proceedings, that explanation was not advanced by way of evidence from the respondent, and was not the only available inference on the evidentiary materials considered as a whole.
21 In our view, the evidence was admissible and sufficiently cogent to support the appellants' application. For these reasons we joined in making the orders on 25 March 2015 referred to by McLure P in her reasons.
1 The judge's reasons dismissing the appellants' claims in the substantive proceedings is Marsh v Baxter [2014] WASC 187. The interlocutory decision under appeal is Marsh v Baxter [2014] WASC 187 (S).
2Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 [45], [126]; Noye v Robbins [2010] WASCA 83 [295] - [308], [381], [382].
3Wentworth v Rogers [177] - [178]; Noye v Robbins [No 6] [2008] WASC 266 [3]; Windus v Director of the Fair Work Building Industry Inspectorate [2013] FCA 1053; (2013) 216 FCR 207 [17] - [21], [31].
4Marsh v Baxter [2014] WASC 187 (S) [54] - [55], [60].
5 GB 22.
6 GB 27; see also trial ts 908.
7 GB 23 - 24.
8 GB 34 - 125.
9Marsh v Baxter [2014] WASC 187 (S) [6].
10 cf Wentworth [104].
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