Marsh v Baxter - [2014] WASC 187 (S)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: MARSH -v- BAXTER [2014] WASC 187 (S)

CORAM: KENNETH MARTIN J

HEARD: ON THE PAPERS

DELIVERED : 19 SEPTEMBER 2014

FILE NO/S: CIV 1561 of 2012

BETWEEN: STEPHEN WILLIAM MARSH
First Plaintiff
SUSAN GENEVIEVE MARSH
Second Plaintiff
AND
MICHAEL OWEN BAXTER
Defendant

Catchwords:

Costs - Special costs orders - Indemnification principle - Stay sought - Information as to successful parties' obligation to bear his legal costs - Costs principles

Legislation:

Legal Profession Act 2008 (WA), s 280(2)

Result:

Costs orders issued in defendant's favour

Category: B

Representation:

Counsel:

First Plaintiff                :     No appearance
Second Plaintiff            :     No appearance
Defendant:     No appearance

Solicitors:

First Plaintiff                :     Slater & Gordon
Second Plaintiff            :     Slater & Gordon
Defendant:     Bradley Bayly Legal

Case(s) referred to in judgment(s):

Atwell v Roberts [2013] WASCA 37 (S)
Bolton v Stange [2001] WASCA 34
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S)
Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S)
EDWF Holdings No 1 Pty Ltd v EDWF Holdings No 2 Pty Ltd [2008] WASC 275 (S)
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Hodgkinson v Doepel & Associates Architects Pty Ltd [2006] WASC 237 (S)
Noye v Robbins [2010] WASCA 83
Noye v Robbins [No 6] [2008] WASC 266
Pourzand v Telstra Corp Ltd [2012] WASC 210 (S2)
SDS Corporation Ltd v Pasdonnay Pty Ltd [2004] WASC 26 (S2)
Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 14 (S)
Windus v Director of Fair Work Building Industry Inspectorate [2013] FCA 1053; (2013) 216 FCR 207

KENNETH MARTIN J: Having successfully defended all aspects of the plaintiffs' case at the trial, the defendant, Mr Baxter, by his minute of proposed orders of 20 June 2014, seeks orders that the plaintiffs pay his taxed costs of the action, including reserved costs.
Mr Baxter also moves for some special costs orders applicable to the taxation of his costs. He seeks by his minute (par 2) that his trial costs be allowed and taxed without regard to any of the limits as set under applicable costs scale determinations. Alternatively, he seeks (by par 3) that a taxation of costs proceed without regard to the limits imposed by the relevant costs determinations in respect of six aspects of the costs scale, namely:
(a)the giving of discovery of documents (scale item 7);
(b)defence (scale item 3(b));
(c) proceedings in chambers (scale item 10(a));
(d)preparation of case (scale item 17);
(e)fee on brief for senior counsel and for senior counsel fee for subsequent days of trial (scale items 20(b) and 20(d)); and
(f)counsel fee on brief and for counsel fee for subsequent days of trial (scale items 20(a) and 20(c)).
By par 4 of his minute Mr Baxter also seeks that the taxing officer be directed to make reasonable allowances for:
(a)The preparation and attendance at the mediation conference by both Senior Counsel and Counsel in addition to the allowances for the Instructing Legal Practitioner;
(b)The preparation for and attendance at trial including travel, accommodation and other expenses of the expert witnesses;
(c)Further preparation carried out by Senior Counsel, Counsel and Instructing Legal Practitioner after the commencement of [the] trial.
As foreshadowed in my primary reasons, this outstanding trial costs issue has been dealt with entirely on the papers.
Mr Baxter's application seeking orders for his taxed costs and special costs is supported by the affidavit of Kimberley Theresa Bavin, sworn 17 June 2014. Ms Bavin is a solicitor employed by Mr Baxter's instructing solicitors. Her short affidavit essentially attaches Mr Baxter's draft party/party bill of costs for taxation against the plaintiffs. At par 5 of her affidavit Ms Bavin deposes:
The amounts claimed within the Defendant's Draft Party/Party Bill of Costs for Taxation correctly reflect the work done on a Party/Party basis in relation to the various items in this matter.
I append as attachment A to these reasons Mr Baxter's draft party/party bill of costs as proposed for a taxation. Essentially, the draft shows a potential claim for taxed costs sought as against the plaintiffs and showing 64 different aspects of claimed costs in the amount of $707,615.42 and coupled with claimed disbursements (seen across items 65 - 93 of the draft bill) in the further amount of $96,373.71. That constitutes in aggregate a claim for taxed costs and disbursements sought by Mr Baxter against the plaintiffs, in the amount of '$803,989.10'. I note that figure, now given in the draft bill of costs, in fact appears to be three cents short of the actual aggregate sum, but intentional or not, that discrepancy is of little moment.
Mr Baxter's taxed costs orders are supported by written submissions from his counsel (Mr Forbes) of 18 June 2014, setting out the underlying statutory framework for claiming legal costs (s 280 of the Legal Profession Act 2008 (WA)) and in particular s 280(2) and which, as regards costs orders, empowers a court to do all or any of the following; namely to:
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or taxed.
There are two principal aspects to a successful invocation of s 280(2) so as to obtain a special costs order. First is a requirement that the court be moved to the level of holding the opinion that the amount of costs allowable in respect of a matter under a legal costs determination would be 'inadequate', without intervention. The second aspect is that it must then be established by the claimant to the court's satisfaction that the demonstrated inadequacy in taxed costs under the scales arises because of one or more of the 'unusual difficulty, complexity or importance of the matter': see Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11] addressing a predecessor statutory provision as to costs, which was in terms substantially equivalent to s 280(2) of the Legal Profession Act 2008 (WA) (namely, s 215 of the Legal Practice Act 2003 (WA)); see also Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S) [3] and Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 14 (S) [7] - [9].
The requirement in respect of the court reaching an assessment that the costs allowable in respect of a matter under a legal costs determination is inadequate can be surmounted where a claimant party shows that there is a fairly arguable case that a party's proposed bill of costs to be presented to a taxing officer may tax out at amounts greater than the limits which would otherwise have been imposed under the applicable costs determination scale. But this is not an arithmetic exercise. The court brings to account in making that assessment its overall impressions about the case, as well as its broad experiences of the workings of the litigation process.
As regards the second component of s 280(2) via the phrase 'unusual difficulty, complexity or importance of the matter' it is well-established that the adjective 'unusual' only qualifies the word 'difficulty' within that phrase. Hence, the word 'unusual' does not qualify the other ensuing criteria, namely 'complexity' or 'importance': see Hodgkinson v Doepel & Associates Architects Pty Ltd [2006] WASC 237 (S) [33] and SDS Corporation Ltd v Pasdonnay Pty Ltd [2004] WASC 26 (S2) [102] - [106]; Cape Lambert Resources Ltd [3] - [5]; and Atwell v Roberts [2013] WASCA 37 (S) [15] - [17].
Both questions to be addressed under s 280 of the Legal Profession Act will be addressed by the court as matters of overall impression, rather than becoming a subject of detailed evaluation: see EDWF Holdings No 1 Pty Ltd v EDWF Holdings No 2 Pty Ltd [2008] WASC 275 (S) [7].
In rendering its s 280 evaluation a court will necessarily draw upon its own experience and act upon broad impressions which are gained during the running of the relevant litigation, particularly taking account of the nature and magnitude of issues which have been raised and determined: see Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [43].
But the effect of a special costs order, once made, does not ultimately inhibit the discretion of a taxing officer in the taxation process itself. If a special costs order is made, that event merely allows a taxing officer to consider the potential for an end costs allowance outcome upon the taxation which may ultimately exceed the quantum of any particular scale limit. It always remains entirely within the taxing officer's discretion whether or not to allow an amount claimed as a reasonable allowance for the work carried out.
The effect of a special costs order raising or removing a scale limit is simply to free a taxing officer of a quantitative constraint that would otherwise be delivered by the scale limits: see Heartlink [26] and SDS Corporation Ltd v Pasdonnay [162].
None of the aforementioned principles concerning costs orders presented here as being at all controversial on my review of the exchanged written submissions between these parties concerning costs orders.

The plaintiffs' submissions

The responsive position of the unsuccessful plaintiffs at trial, concerning costs, is discernible from their rival minute of proposed costs orders of 11 July 2014. This is explained in the plaintiffs' written submissions as to costs of the same date by the plaintiffs' costs counsel (Ms M L Coulson). The submissions observe at [24] that the plaintiffs do not take issue with any of the legal principles cited in the defendant's submissions. In particular, the applicability as regards s 280(2) of the two-limb test from Heartlink at [16] is reiterated.
Essentially then, the stance of the plaintiffs, as reflected under their minute and submissions, is to accept the defendant now holds an entitlement to seek an order for the taxed costs of the action (subject to raising a plenary point culminating in a submission put primarily, but in the alternative, that the defendant's application for costs and special costs orders ought be stayed pending a determination as to that plenary issue). The plaintiffs' submissions do not oppose a taxing officer making reasonable allowances for four of the six items as claimed by Mr Baxter without regard to limits imposed by the relevant legal costs determinations (other than as to allowing increased hourly rates): see par 3.2 of the plaintiffs' minute of proposed costs orders.
Essentially then, there presents only minimal controversy as regards Mr Baxter's advocated costs orders seeking the removal of scale limits in respect of:
•giving discovery of documents (item 7)
•preparation of case (item 17)
•fee on brief for senior counsel and senior counsel fee for subsequent days of trial (items 20(b) and 20(d))
•fee on brief for counsel and counsel fee for subsequent days of trial (items 20(a) and 20(c))
By reference then to par 3 of the defendant's minute of proposed orders, only the claims seeking a removal of scale limits in respect of item (b), the defence (scale item 3(b)) and item (c), proceedings in chambers (scale item 10(a)), now raise any substantive controversy. However, remaining in dispute at all levels is the allied request by Mr Baxter that his taxation of costs against the plaintiffs proceed without reference to the limits of the hourly rates, which are also set under the relevant costs determinations.
As regards the first Heartlink hurdle (that is, inadequacy) underlying Mr Baxter's application seeking special costs orders pursuant to s 280(2), the plaintiffs have contended via their written submissions:
•(par 29) it is only those scale items the defendant has identified at par 3 of the defendant's minute that are relevant and no other scale limits or items should be altered. In other words, the plaintiffs reject any blanket approach seeking the lifting of all scale limits. They contend this would result in a lack of clarity and certainty, as well as a substantive failure to satisfy the first limb;
•(par 30) the plaintiffs do accept, however, that 'there are sufficient grounds justifying the making of special costs orders in favour of the Defendant, in relation to Scale items identified at number 3 of the Defendant's Minute, other than numbers 3(b) and 3(c), and other than in relation to hourly rates'. The plaintiffs observe, as is fully accepted, that a mere lifting or removal of a scale limit does not bind or impinge upon the ultimate decision of the taxing officer. They repeat that the effect of such an order is simply to free the taxing officer of a constraint that would have otherwise impacted upon a taxation by reason of a scale limit: see again Heartlink [25] - [26].
As to a meeting of the second Heartlink limb, concerning the criteria required to enliven the s 280(2) threshold for a special costs order, namely either unusual difficulty, complexity or importance, once again the plaintiffs' written submissions sensibly display what is a realistic concession at par 42, in these terms:
Notwithstanding the Defendant's very brief submissions regarding the Second Limb … the Plaintiffs do not take issue with the satisfaction of the Second Limb.

Summary of position

Subject to my ensuing resolution of the plenary (alternative) issue raised by the plaintiffs concerning the requested stay of Mr Baxter's taxed costs application, it may now be appreciated that otherwise, the range of the disputation concerning a making of taxed trial costs orders favouring Mr Baxter against the plaintiffs is narrowed.
Subject then, to my later determination of the plenary submission of the plaintiffs concerning a stay, I can say that beyond the parties' submissions, I have been independently satisfied as a matter of overall impression for this trial as to a likely inadequacy of a taxation outcome for Mr Baxter under the applicable costs scales of the relevant legal costs determinations. That is a view based upon my assessment of the wide dimensions of the trial, now determined. That impression is rendered bearing in mind I have also been the case manager of the action in the CMC list of this court since its commencement in 2012 and, of course, was the trial judge.
I am also independently satisfied the second limb of s 280(2) is met. There is here a demonstrable satisfaction of all aspects of that provision, namely, unusual difficulty, complexity and not to mention an undeniable importance of the matter to participating parties and more generally. In that respect, the wide dimensions of the parties' trial submissions and the responding scale of my reasons for decision - compel what are essentially self-evident conclusions to that end.
I will also say, however, at this point that I do accept two sub-aspects of the plaintiffs' submissions as regards a taxation of costs for Mr Baxter and the making of special orders. First, on my assessment, a plenary order allowing a taxation to proceed without regard to any of the limits of the applicable costs determinations (alternatively sought under par 2 of the defendant's minute), is not appropriate. In that respect, see observations of Edelman J in Pourzand v Telstra Corp Ltd [2012] WASC 210 (S2) [24]. His Honour observed that a plenary order lifting all scale limits was not appropriate. I endorse that approach as a matter of principle. In my view, it is preferable in principle to proceed as the defendant's minute does in the alternative, by identifying particular scale items requiring adjustment or removal: see par 3 of the defendant's minute, cf the plaintiffs' minute at 3.2.
Second, on the evidence provided for this application, I am not persuaded that a removal of the scale limits concerning hourly rates for legal practitioners under the scale, is or has been justified. An increase in rates would appear to be implicit via some of the claims for taxed costs, as seen under the draft bill. I would not make any orders as regards increasing hourly scale rates. To that end, I note recent observations by Edelman J in Crawley Investments Pty Ltd v Elman [2014] WASC 233 (S) [22] referring in turn to Pullin J's observations in Flotilla [22]. In present circumstances, no basis to alter the rates has been shown.
As regards the plaintiffs' objections in respect of Mr Baxter's claimed removal of scale limits in respect of items (b) and (c) (namely, defence - scale item 3(b) and proceedings in chambers, scale item 10(a)), then notwithstanding the plaintiffs' submissions under pars 35 - 37, my decision is that the limits imposed by the costs determination scale should be removed. An ultimate decision as to the level of a reasonable allowance should be left for the assessment of the taxing officer - without the impediment of any quantum scale limit intruding into that evaluation.
As to the defence, the plaintiffs' submissions correctly point out that the claim in respect of the amended defence is properly identified under item 15 of the draft bill, showing a claimed amount of $17,003.80. Next, it is said at par 37 of the plaintiffs' submissions:
There is no costs order in favour of the Defendant in relation to the Amended Defence and the Defendant's Submissions do not address the issue other than assuming an entitlement to these costs.
However, on this issue, I must disagree. The defendant succeeded at the trial upon his pleaded defence and, in my view, should have an opportunity to recover at a taxation the reasonable costs of the pleading of Mr Baxter's revised defence at the trial under this amendment to his defence pleading.
Likewise, as regards the claim in respect of proceedings in chambers and scale item 10(a), I would conclude it is also appropriate to remove that scale limit, to allow a taxation to proceed without the intrusion of any such constraint. The foreshadowed chambers claim is in respect of item 8 of the draft bill and concerns the parties' strategic conference in chambers before me on 3 August 2012, in the ultimate amount of $2,288.
The plaintiffs also oppose proposed orders seen under par 4 of the defendant's minute (pars 40 and 41 of their written submissions). In that respect, the core submission is such orders are unnecessary. It is put:
The taxing officer has a discretion to determine reasonable allowances, if any, for these costs, and accordingly, directions from the Court are unnecessary.
Upon this issue, I accept the defendant's submissions under their pars 43 to 52. Again, the orders sought in such terms do not fetter a taxing officer's ultimate discretion. I accept that the directions as are sought may, in these areas, reduce potential for uncertainty, or for disputation on the taxation of the defendant's costs.
Accordingly, but subject to my ensuing resolution of the plaintiffs' plenary submission which is advanced in the alternative for a stay, appropriate orders concerning Mr Baxter's taxed costs should issue in the following terms:
1.The plaintiffs do pay the defendant's costs of the action, including reserved costs, to be taxed if not agreed.
2.The taxing officer, in taxing the bill of costs of the defendant, is to make reasonable allowances for the following items and without regard to the scale limits imposed under the relevant legal costs determinations, in relation to:
(a)giving discovery of documents (scale item 7);
(b)defence (scale item 3(b));
(c)proceedings in chambers (scale item 10(a));
(d)preparation of case (scale item 17);
(e)fee on brief for senior counsel and for senior counsel fee for subsequent days of trial (scale items 20(b) and 20(d));
(f)counsel fee on brief and for counsel fee for subsequent days of trial (scale items 20(a) and 20(c)).
3.The removal of the scale limits under the relevant legal costs determinations under order 2 above does not extend to increase the hourly rates as allowed under the scales.
4.The taxing officer is also directed to make reasonable allowances for:
(a)the preparation and attendance at the mediation by both senior counsel and counsel in addition to the allowances for the instructing legal practitioner;
(b)the preparation for and attendance at the trial, including travel, accommodation and other expenses of the expert witnesses;
(c)further preparation carried out by senior counsel, counsel and instructing legal practitioner after the commencement of the trial.

Those costs orders are appropriate subject to a resolution of the plenary deferment issue raised by the plaintiffs, which I have deferred till now, concerning the proposed stay pending the provision of requested costs identification information as sought by the plaintiffs from Mr Baxter but declined.

Plenary issue

The plaintiffs' costs minute by pars 1 and 2, seeks these orders:
1.In relation to Part A of the Plaintiffs' Responsive Submissions dated 11 July 2014 ('the Responsive Submissions'), within 14 days, the Defendant file and serve an affidavit deposing to the following matters:
1.1Information regarding the Defendant's liability for the costs claim by him in the Action above including, but not limited to, any arrangements between the Defendant and the Pastoralists and Graziers Association of WA ('the PGA'), the Defendant's crop insurance company and Monsanto.
1.2Annexing any documents that address the extent of the liability between the Defendant and his solicitors, including the documents that outline the arrangements, if any, between the Defendant and/or the PGA, the Defendant's crop insurance company and/or Monsanto.
2.Further, that the defendant's application for costs and for special costs orders be stayed pending the determination of the defendant's liability for those costs (as claimed by him in the action).
Application to this court to compel Mr Baxter's provision of this costs information was supported by the plaintiffs' written submissions of 11 July 2014: see pt A - headed 'No entitlement to costs' (pars 13 - 22).
In part, these submissions of the plaintiffs contend:
14.The Plaintiffs submit that they have reasonable grounds to query whether or not the Defendant has any liability for the costs that the Defendant is seeking from the Plaintiffs. See Mr Walter's Affidavit and Mr Walter's Supplementary Affidavit.
Part A of the plaintiffs' costs submissions then concludes:
21.If the successful litigant is under no liability to his or her own lawyers for costs, there is no basis upon which the Indemnity Principle is to operate; and in such circumstances if the unsuccessful party were to pay costs to the successful party, the result would be to enrich the successful party by the amount of any such payment, which is inconsistent with the Indemnity Principle: Adams v London Improved Motor Coach Builders Ltd [1920] All ER Rep 340 at page 342.
22. Accordingly, the Plaintiffs submit that the Defendant is not entitled to the costs that he now seeks until a Liability Issue is determined; and the Plaintiffs seek the orders outlined at numbers 1 and 2 in the Plaintiffs' Minute.
The application to compel provision of this information and for the stay is supported by two affidavits filed by the plaintiffs' solicitor, Mr Mark Jonathan Walter of Slater & Gordon Lawyers.
Mr Walter's first affidavit, sworn 10 July 2014, appends a number of documents. First, as annexures MJW1, MJW2 and MJW3, there is a stream of correspondence passing between Coulson Legal, the engaged costs consultant solicitors acting on behalf of the plaintiffs, and the defendant's solicitors, Bradley Bayly Legal. In short, the correspondence of 7 and 8 July 2014 from Coulson Legal had requested information from the defendant's solicitors concerning possible legal cost related arrangements as between Mr Baxter and the PGA, or Mr Baxter's crop insurance company. This was requested, so it was put, 'to ensure that your client has incurred liability for the costs'.
The following letter of 8 July 2014 requested information concerning arrangements, if any, between Mr Baxter and Monsanto as regards his legal costs.
These communications were responded to by Mr Baxter's solicitors on 8 July 2014, advising:
My client is under no obligation to provide discovery of documents relating only to costs to your client.
The request in your letter is based on mere speculation and is inconsistent with case law (Bolton v Strange [2001] WASCA 73 at [7] - [8]).
Annexure MJW4 to Mr Walter's affidavit then attached a variety of media sourced clippings from diverse sources. This material extended to include the Western Grain Growers News issue 1 of 15 February 2011 and 2 July 2011, a printout from the internet of two pages (pages 13 and 14 of the affidavit) under a heading, Dow Jones, an extract from The Countryman apparently of 27 February 2014 and a further internet printout of two pages (pages 16 and 17), once again under the heading Dow Jones. A last media gathered extract appears to be a printout from an ABC News website of 19 June 2014.
Mr Walter then concludes his first affidavit, in terms:
10.Based on the Media Reports, I verily believe that I have reasonable grounds to query whether or not the Defendant has any liability for the costs that the defendant is seeking from the Plaintiffs.
Mr Walter swore a supplementary affidavit of 11 July 2014, this time attaching as the bundle of documentation marked MJW5
true copies of the financial statements for M O Baxter & Co and Seven Oaks Farm Trust for the financial years ending 30 June 2012 and 30 June 2013 relating to the Defendant's farming business ('the Financial Statements').
Mr Walter observed:
6.The Financial Statements make no reference to the Defendant incurring any legal expenses, which are ordinarily a deductible business expense for taxation purposes.
7.Based on the Financial Statements, I verily believe that I have reasonable grounds to query whether or not the Defendant has paid, or has any liability to pay, the costs that the Defendant is seeking from the Plaintiffs.
It is apparent from the plaintiffs' written costs submissions (under pt A) that from a precedent perspective, considerable reliance is put for the costs information being sought by production of documents by Mr Baxter, upon Noye v Robbins [No 6] [2008] WASC 266 [3]. It was submitted:
18.The Court has previously ordered the production of documents where it was apparent that some arrangement had been made for payment of the successful party's costs of the action by a third party.
Noye v Robbins [No 6] was later taken (with other issues in the surrounding litigation) on appeal to the Court of Appeal: see Noye v Robbins [2010] WASCA 83. Immediately it can be seen that the underlying circumstances were different to this case. It had been demonstrated in Noye v Robbins [No 6] that the State had already met and fully discharged the costs liability of that successful respondent, Inspector Robbins, to his solicitors.
Noye v Robbins [No 6] was not a case of a party holding suspicions over another party to civil litigation receiving some degree of funding support for their costs exposure to its own lawyers. Noye v Robbins [No 6] was a situation of the respondent's trial costs to his lawyers having been completely paid and that obligation fully discharged by the State. The proposed recovery of taxed party/party cost against the unsuccessful party to that litigation, Mr Noye, would only have been, in the end, for the ultimate subrogated benefit of the State - under the terms of costs indemnification repayment arrangements in place between the State and Inspector Robbins. To that end, I note observations of the trial judge in Noye v Robbins [No 6] at [3], as to the information disclosure orders made:
However, counsel for the plaintiff submitted that there had been a funding agreement, the details of which were not then fully known to the plaintiff, under which the first defendant had all of his legal costs of this litigation paid from another source and that he was not personally liable to repay any of that funding. On this basis, it was submitted for the plaintiff that, not being under any liability to pay his costs of the proceedings, or to repay the source from which those costs had been funded, the first defendant was not entitled to an order for costs against the plaintiff because there was no payment or liability for which he needed an indemnity. (my emphasis in bold)
That was the different context in which in Noye v Robbins [No 6] the disclosure by affidavit orders as regards providing documents comprising the underlying agreements relating to funding assistance were made by the trial judge.
In the present case, the plaintiffs' plenary submission as regards a required disclosure by Mr Baxter of documents on affidavit and a stay was responded to by the defendant's further written submissions of 16 July 2014.
Those submissions draw attention to the comprehensive reasons of Owen JA on the appeal for that Noye litigation, concerning costs. Particularly relevant is his Honour's discussion of the (costs) indemnification principle, at [295] - [338] of those reasons and an ultimate upholding of the costs orders below, which favoured Inspector Robbins.
The reasons addressing costs by Owen JA were agreed with by Pullin JA and by Buss JA (see Pullin JA at [381] and Buss JA at [382]). At [313] Owen JA said:
I prefer the view that, even if the liability has been discharged prior to the award of costs, a successful party can still recover costs under the principle in Adams. There are three reasons which lead me to this conclusion. First, the authorities do not, as a matter of principle, appear to differentiate between situations in which the liability exists and has not been discharged and those in which the liability existed but has now been discharged. Secondly, in several cases a successful party has been permitted to recover costs under the Adams principle even though their liability had already been discharged by a third party. The third reason is that the indemnity principle is a flexible principle designed to allow for a just and fair result. In my view, in this instance fairness dictates that Robbins should be allowed to recover his costs.
Working from those principles, upon my evaluation of the materials assembled under Mr Walter's two affidavits, there has not here been shown by such evidence 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.
Self-serving correspondence passing as between the engaged solicitors in that respect, does not assist. Nor does a hotch-potch collation of unsourced hearsay statements assembled from a trawl of diverse media sources provide to me any reliable evidentiary basis to suspect that Mr Baxter did not ultimately bear the primary personal costs exposure to his trial solicitors - to meet his party and party defence costs, in respect of his defence of the present action. Even the unsourced hearsay statements in the collected media articles speak only of Mr Baxter receiving some 'support' (as regards meeting his overall costs liability). But 'support', by receiving contributions towards legal costs falls conceptually a very long way short of properly showing a basis to think Mr Baxter is, or has been, relieved of all personal responsibility to his engaged solicitors for their costs incurred in defending the plaintiffs' ultimately unsuccessful action against him.
Likewise, Mr Walter's assembly of two financial years' financial statements for M O Baxter & Co is wholly equivocal and unhelpful. I assess that material as of no assistance towards showing that Mr Baxter does not bear any legal exposure to his solicitors for his solicitor/client costs incurred in the defence of the plaintiffs' action against him.
Mr Walter's conclusions, therefore, expressed in two affidavits, to the effect that he thinks he holds a reasonable basis to suspect that the indemnity principle as regards costs is not applicable to the present case is, on a proper analysis, wholly misplaced.
Accordingly, the plenary objection raised against making an immediate order for taxed costs in Mr Baxter's favour, with special costs orders, fails. To allow the plaintiffs' application for disclosure by Mr Baxter in respect of any agreements from the PGA, Monsanto or Mr Baxter's crop insurer would, on my assessment, very much amount to the sanctioning of an impermissible fishing expedition: see Windus v Director of Fair Work Building Industry Inspectorate [2013] FCA 1053; (2013) 216 FCR 207 [19].
In the present case, where Mr Baxter has been and continues to be represented by legal practitioners, the Court should assume that the relationship of solicitor and client exists between them and thereby carries a consequential obligation in the client, Mr Baxter, to be responsible for his legal costs as they fall due: see Bolton v Stange [2001] WASCA 34 [7]. As I assess matters, nothing has seriously emerged from the materials presented to undermine or detract from that position.
Consequently, reasonable grounds have not been established to raise any question or doubts over whether Mr Baxter is or was under an exposure to meet his trial costs to his engaged solicitors. An information gathering quest as proposed by the Marshes' solicitors is not appropriate.
Accordingly, there should be orders in the terms I have identified at [33] above.
ATTACHMENT A