Costs - Appellant's claim against respondent dismissed at trial - Order that appellant pay respondent's costs - Respondent indemnified for costs by third party - Whether respondent entitled to order for costs - Indemnity principle - Whether stay of costs order should be lifted
JUDGMENT OF THE COURT: On 28 May 2014, the primary judge dismissed an action by the appellants against the respondent for damages. The respondent sought an order for costs. On the issue of costs, the appellants applied for orders that (1) the respondent file an affidavit regarding any funding arrangements he had entered into with third parties to meet the costs of solicitors who acted for him in the action, and (2) the respondent's application for the costs of the action be stayed pending the determination of whether the respondent had any personal liability to pay his own solicitors' costs. The application was dismissed.
On 25 March 2015, this court allowed an appeal against the dismissal of the appellants' application. The respondent was ordered to file an affidavit deposing to…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Marsh v Baxter [No 2] [2016] WASCA 51
Case
[2016] WASCA 51
Decision Date
CaseChat Overview and Summary
In Marsh v Baxter [No 2], the parties involved were Marsh, the appellant, and Baxter, the respondent. Marsh initiated proceedings against Baxter for damages due to negligence and nuisance caused by genetically modified canola seeds intruding onto Marsh's property from Baxter's. The Western Australian Supreme Court presided over the case, which culminated in the dismissal of Marsh's claims on 28 May 2014. Baxter subsequently sought an order for costs, which Marsh opposed on the basis that Baxter had been indemnified by third parties for the costs of his legal representation.
The central legal issue before the court was whether Baxter was entitled to an order for costs from Marsh given that Baxter's costs were covered by a third party. Specifically, the court needed to determine if the principle of indemnity precluded Baxter from claiming costs against Marsh. Additionally, the court had to decide whether the stay of the costs order imposed by the appeal court should be lifted. The appeal court had previously ordered Baxter to provide an affidavit detailing any funding arrangements with third parties, such as the Pastoralists and Graziers Association of WA and Monsanto Australia Ltd, and had stayed the primary judge's costs orders pending this information.
The court held that Baxter was not entitled to an order for costs because his costs had been fully indemnified by third parties, and he had no personal liability to pay his own legal expenses. The court reasoned that the indemnity principle applied, preventing Baxter from claiming costs against Marsh. The court also found that the stay of the costs order should remain in place until the issue of indemnity was fully resolved. Consequently, the respondent's application to lift the stay of the costs order was dismissed.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
JUDGMENT OF THE COURT: On 28 May 2014, the primary judge dismissed an action by the appellants against the respondent for damages. The respondent sought an order for costs. On the issue of costs, the appellants applied for orders that (1) the respondent file an affidavit regarding any funding arrangements he had entered into with third parties to meet the costs of solicitors who acted for him in the action, and (2) the respondent's application for the costs of the action be stayed pending the determination of whether the respondent had any personal liability to pay his own solicitors' costs. The application was dismissed. On 25 March 2015, this court allowed an appeal against the dismissal of the appellants' application. The respondent was ordered to file an affidavit deposing to information relating to any arrangements between the respondent and certain third parties as to his liability for the costs of the action and the costs orders made by the primary judge were stayed until further order. The respondent filed affidavits in respect of the costs arrangements and now seeks to have the stay of the costs orders of the primary judge lifted. On 3 April 2012, the first appellant brought proceedings against the respondent claiming damages for negligence, alternatively nuisance, following the intrusion onto the appellants' property of some genetically modified canola seeds from the respondent's property. The second appellant was added as a plaintiff to the action on 4 February 2014. The action went to trial shortly afterwards in February 2014, occupying 11 days. On 28 May 2014, the primary judge dismissed the appellants' action: Marsh v Baxter [2014] WASC 187. Issues relating to the costs of the action were reserved. The appellants subsequently applied 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. The evident purpose of the application was to determine whether the respondent's costs of defending the action had been met by the PGA or Monsanto in circumstances where the respondent had not incurred any personal liability for those costs, with the result that he was not entitled to an order for costs. On 19 September 2014, the primary judge dismissed the appellants' application and ordered the appellants to pay the respondent's costs of the action in accordance with costs orders his Honour had previously made: Marsh v Baxter [2014] WASC 187 (S). On 25 March 2015, this court allowed an appeal against the dismissal of the appellants' application. It made the following order: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; and(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.