Griffith v Australian Broadcasting Corporation & Ors [2013] NSWSC 750 | Case summary

Background 3On 24 April 1995, the ABC's Four Corners program broadcast a documentary produced by Dr Millikan concerning, inter alia, Mr Griffith. Mr Griffith and another person, Mr Timothy Macartney-Snape, commenced proceedings in the Supreme Court against the ABC and Dr Millikan alleging they were defamed. Mr Macartney-Snape was successful against the ABC and Dr Millikan, but Mr Griffith was not (see Griffith & Macartney-Snape v Australian Broadcasting Corporation [2008] NSWSC 764). 4Mr Griffith brought proceedings in the Court of Appeal but his appeal was dismissed (see Griffith v Australian Broadcasting Corporation [2010] NSWCA 257). He subsequently sought leave to appeal to the High Court, but that application was refused (see Griffith v Australian Broadcasting Corporation [2011] HCATrans 98). 5It seems that Dr Millikan had the benefit of indemnity for defamation proceedings with the ABC. For a substantial period of time while the proceedings were on foot, lawyers employed by the ABC were acting as the solicitors on the record both for the ABC and Dr Millikan. 6On 21 November 2011, the ABC and Dr Millikan filed an application for assessment of party/party costs pursuant to s 350 of the Act, seeking a total amount of $606,221.65. Pursuant to s 357 of the Act, the manager of costs assessment referred the application to Mr Bartos. 7Subsequent to the filing of the application for the assessment, external solicitors commenced acting on behalf of both Dr Millikan and the ABC in the assessment process. 8A number of voluminous documents were supplied by the parties to Mr Bartos, which are unnecessary to describe. What is relevant is that in the correspondence the solicitors acting for Mr Griffith raised a number of points which they alleged affected the capacity of either or both the ABC and Dr Millikan to recover costs. For the purposes of this notice of motion it is only necessary to note two of them, which are related. 9The first concerns the conditions attached to the practising certificates of the solicitors employed by the ABC. It was asserted in the correspondence that, because they only have practising certificates entitling them to act "in house", they were not entitled to act on behalf of Dr Millikan and that, in doing so, they breached either or both the Legal Profession Act 1987 or the Act. It was further submitted that as a consequence no costs could be recovered for their acting for Dr Millikan. 10The second point is that it was asserted that, by having its employed solicitors act on behalf of the third party, namely Dr Millikan, the ABC itself engaged in legal practice without being an Australian legal practitioner and thereby breached either the Legal Profession Act 1987 or the Act. It was submitted the consequence of that is that all of the costs incurred by the ABC were irrecoverable. 11Needless to say, the ABC disputes every aspect of those contentions. Nothing in this judgment is to be taken as either an acceptance or rejection of them. They remain uncontested allegations which appear to involve a number of propositions of fact and law. 12In the end result, the making of these assertions and the response to them by the solicitors acting for the ABC and Dr Millikan led to Mr Bartos writing to the parties in the following terms on 15 March 2013: "I refer to your letter of 13 March 2013. Your letter raises a number of complex issues concerning the relationship between Dr Millikan and the Australian Broadcasting Corporation ("ABC") and its in house lawyers and their consequences on costs. I do not believe that I have the power or the appropriate procedural tools to determine all of those issues, which appear to be vigorously contested. For example, I do not believe that I can make a finding that ABC and/or its in house lawyers breached either or both of the Legal Profession Act 1987 and Legal Profession Act 2004 and the consequences flowing from that. Assuming that you are correct and that Dr Millikan would be not liable for costs to ABC (the indemnity aside) and any of the exceptions to the indemnity rule do not apply in the present circumstances, it seems to me that the Baker & McKenzie's alternate submission is probably correct. That is, that in those circumstances ABC would be entitled to recover its costs in the situation where the attendances were in the ABC's sole interest or the combined interest of both ABC and Dr Millikan (subject to your comments in paragraph 31). However in those circumstances Dr Millikan could not recover the costs of ABC acting for him solely in his own interest. I note your comments that there are some parts of the statement of claim that contain claims only against Dr Millikan. Of course some attendances on Dr Millikan could also be regarded as being in the combined interest of both ABC and Dr Millikan. The situation appears to be less complex during the period when Baker & McKenzie were on the record as acting for Dr Milikan [sic] and ABC. In my view even if the costs relating to any attendances on Dr Millikan to [sic] were paid by ABC, as was apparently the case, ABC would be in the position of an insurer. I presently do not see any bar to recovering such costs as may be assessed. I do however have some difficulty in seeing how during that period ABC could also claim costs of its own legal staff. It seems to me that there are two ways of dealing with the situation. Firstly, the parties agree for the issues concerning the situation of Dr Millikan and any other issues they think are appropriate to be determined by the Court, or you institute such proceedings unilaterally and seek the stay of the assessment in the meantime. Once the court makes its determination I would proceed with the assessment. Secondly, I proceed with the assessment, separating any costs that are unique to Dr Millikan and the parties then can make an application to the Court to deal with such issues. In that situation I would require Baker & McKenzie to identify in the bill of costs, the costs relating to attendances solely in Dr Milikan's [sic] interest. I appreciate the complexity of the situation, on the other hand the application has been filed in November 2011 and I am keen to ensure that it proceeds. Unless the parties agree to commencing the proceedings prior to my assessment or unless you commence such proceedings within 28 days I would be minded to proceed with the assessment as indicated in the second alternative. I would appreciate the parties letting me know their views and intentions by 28 March 2013." (emphasis added) 13The reference to "your comments in paragraph 31" in the above extract is a reference to part of the correspondence from Mr Griffith's solicitors which raised the second point that I have described above (at [10]). It is clear that in this letter the assessor was expressing concern as to his ability to address and resolve the issues that had been raised, and was suggesting various means by which the parties could resolve them. 14In subsequent correspondence the ABC and Dr Millikan's solicitors made it clear that, in their view, the assessment process should continue and the parties could, at the end of that process, exercise their statutory rights, a matter to which I will return. For his part, of course, Mr Griffith instituted these proceedings. 15One matter that should be noted is that the second option suggested by Mr Bartos involved his assessing so much of the costs claimed as were solely referable to the ABC's employed solicitors acting on behalf of Dr Millikan. As counsel for the ABC, Mr Walker SC, pointed out, it may be that the outcome of that process is that no or only a minimal amount of the costs incurred were solely referable to Dr Millikan, in which case the first point that I have described above (at [9]) may become moot.

The Motion to Dismiss 26As I have stated, Mr Griffith seeks declaratory relief in the following form: "1 A declaration that under the orders of the Court of 4 July 2007 and 4 September 2008 (the "Costs Orders") made in Supreme Court of New South Wales Proceedings No. 20300 of 2001 ("the Underlying Proceedings"), the second defendant ("Dr Millikan") is not entitled to recover any costs from the plaintiff in respect of legal services provided by the first defendant ("the ABC") and/or its officers, servants and agents to or on behalf of Dr Millikan. 2 A declaration that under the Costs Orders, the ABC is not entitled to recover any costs from the plaintiff in respect of legal services provided by the ABC and/or its officers, servants and agents to or on behalf of the ABC. 3 Alternatively to declaration 2, a declaration that in respect o costs incurred in the combined interest of the defendants (the "common costs"), the ABC is entitled to recover only a portion of the common costs from the plaintiff under the Costs Orders, that portion not to exceed 50%." 27In accordance with UCPR 59.4(c), the summons specifies the grounds upon which these declarations are sought. In summary, the claim in prayer 1 corresponds with the first point I have referred to earlier and prayer 2 corresponds with the second point. The grounds also confirm that prayer 3 is consequential upon an acceptance of either one or both of those points. 28Mr Walker SC submitted that the proceedings should be dismissed for three related reasons. First, he contends the proceedings do not identify any decision of the costs assessor, much less identify any error, jurisdictional or otherwise. This much can be accepted. It is clear Mr Griffith is not seeking to invoke the supervisory jurisdiction of this Court confirmed by s 69 of the Supreme Court Act. Instead he is seeking to invoke its declaratory jurisdiction confirmed by s 75 and in particular what Professor Aronson et al describe as the Court's "concurrent original jurisdiction" (see Aronson, Dyer & Groves, Judicial Review of Administrative Action 3rd ed (2004) Lawbook at 753). 29Second, Mr Walker SC submitted that in circumstances where Mr Griffith could avail himself of his statutory rights of review and then appeal then, as a matter of discretion, this Court should decline to interfere with the process of costs assessment. 30Third, he suggests that the relief sought is entirely "academic" or premature in that until the costs assessor completes his function one will not know whether there is any utility in the declarations sought. 31Mr Smark SC submitted that there was nothing unusual in his client seeking declaratory relief in a matter such as this. As an example of this jurisdiction being invoked in this context he cited the decision of Davies AJ in Commonwealth Bank of Australia v Hattersley [2001] NSWSC 60; 51 NSWLR 333. In Hattersley, Davies AJ held that solicitors employed by corporations are entitled to have their costs assessed on the same basis as that of independent solicitors exercising comparable skills in the performance of comparable work. 32In the course of that judgment his Honour rejected a submission that to grant declaratory relief would involve an unwarranted interference with the statutory scheme for costs assessment. His Honour found (at [30] to [31]): "I agree with Mr Quickenden that, in general, it is thoroughly undesirable to engage in judicial review of proceedings which are at an interlocutory stage. In many fields, courts have made it plain how undesirable this is: see Sankey v Whitlam (1978) 142 CLR 1 at 25-26 and Director-General of Social Services v Chaney (1980) 47 FLR 80. In Overton Investments Pty Ltd v Carnegie [2000] NSWSC 581, I discussed some of the problems involved in reviewing proceedings which have not been heard and determined. The powers conferred on the Court by its inherent jurisdiction and s23 and s75 of the Supreme Court Act should not be exercised lightly so as to overcome the restrictions which exist on the ambit of the prerogative writs. However, I am satisfied that, in the present case, the request or direction given by the Assessor would, if complied with, have led to an assessment of the costs on a wrong basis and that fulfilment of the request or direction would have involved the CBA in a very great deal of unnecessary work and expense. In the circumstances, I think it is appropriate to make an order: see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582 and Attorney General for New South Wales v Smits (1998) 45 NSWLR 521." 33Mr Smark SC submitted that, as a matter of discretion, the Court should allow the proceedings to continue because they may result in an outcome that could obviate the need for the costs assessment to continue and thus avoid undue expense and delay. Although Mr Smark SC accepted that the determination of the declarations was likely to involve some factual questions, he submitted that the hearing time raised by the summons would only occupy one or two days of court time, which he anticipated would compare favourably to the time involved in the costs assessment. 34Before returning to these considerations, it is appropriate to address an issue that arose concerning the respective powers of costs assessors and this Court. As I have stated, Mr Bartos expressed some reluctance to resolve the factual and legal issues that arose out of the contentions put on behalf of Mr Griffith. Depending on how the matter unfolds, it may be that, unless he does resolve them, the statutory appeal mechanisms that I have referred to, including those concerning questions of law, cannot be engaged. The preliminary observation that I made above (at [18]) suggests that it is the costs assessor's duty and function to resolve those matters. However, this has been considered at a higher level. 35In Wentworth v Rogers [2006] NSWCA 145; 66 NSWLR 474 an issue arose as to whether a cost assessor was entitled or obliged to determine a question concerning the terms and validity of a cost agreement between a party and their legal representatives when determining an assessment of the amount payable to that party by an opposing party which had incurred a costs order. 36At [38] Santow JA noted that dicta from two earlier Court of Appeal decisions, namely Graham v Aluma-Lite Pty Ltd (Court of Appeal 25 March 1997, unreported) and Wentworth v Rogers [1999] NSWCA 403, supported the proposition that the cost assessor had such a power and authority. His Honour found at [40]: "The Court of Appeal [in those cases] implicitly accepted that with these powers, though falling short of curial, the costs assessor was not only empowered in the first instance to determine the terms of the retainer of counsel and solicitor but should do so. That approach recognises the expeditious administrative process for assessing costs under the Act. For most cases determination by the costs assessor should suffice without necessity for curial review. It would be unusual that the content of the costs agreement was not self-evident from its written record, or its interpretation so problematic that a costs assessor could not, in practice, reach a sufficiently reliable result. But the discretion to order curial review remains as a safeguard for the exceptional cases that warrant it." 37In so finding, Santow JA noted the constraints upon the manner in which costs assessors were able to engage in fact finding. His Honour considered that the complexity of an issue that might arise for determination by a cost assessor, coupled with the limitations on their means of resolving such issues, were factors that might warrant a grant of leave to appeal on the merits under the equivalent of s 385 (former s 208M of the 1987 Act) (at [57] to [64]). However, his Honour added at [65]: "One final matter. Although I conclude in the exceptional circumstances of this case that appeal under s 208M of the Act should have been allowed, I do not consider that such review should be readily granted, or allowed to become automatic. If it did, the costs assessment process will cease to provide a straightforward, efficient mode of resolving costs disputes, but be trammelled by unnecessary litigation. This review should be carried out so that it deals only with the matters identified, and in an expeditious manner. It must be remembered that considerable delay and cost has already attended the costs orders originally made. Furthermore, any appeal must be pursued by the appellants with all reasonable expedition." 38Basten JA appears to have taken a different view. His Honour noted the limits on the powers available to the cost assessor to resolve questions of fact, and in particular the absence of any power to receive oral evidence or permit cross examination (at [184]). His Honour stated: "[191] If the costs assessor did not have power to make findings in relation to such contractual matters, and purported to do so, his or her decision might be set aside as demonstrating legal error. In that case, it would be futile to remit the matter to the assessor; the dispute must be resolved elsewhere. On the other hand, it may be asked whether, if the costs assessor correctly refused to determine the contractual questions, leave could be granted under s 208M and those issues could be raised in the relevant court or tribunal. [192] The appropriate resolution of these uncertainties may be found in the principle that administrative officers and bodies, which have no power to make binding determinations of law, are nevertheless required, for the purpose of exercising their powers, to consider matters of law. Thus, in considering the power of a tax agents' board, under the Income Tax Assessment Act 1936 (Cth), Brennan J (sitting as President of the Administrative Appeals Tribunal) held in Re Adams and the Tax Agents' Board (1976) 12 ALR 239 at 242: An administrative body with limited authority is bound, of course, to observe those limits. Although it cannot judicially pronounce upon the limits, its duty not to exceed the authority conferred by law upon it implies a competence to consider the legal limits of that authority, in order that it may appropriately mould its conduct. In discharging its duty, the administrative body will, as part of its function, form an opinion as to the limits of its own authority. The function of forming such an opinion for the purpose of moulding its conduct is not denied to it merely because the opinion produces no legal effect. [193] It would undoubtedly be desirable if a costs assessor had power to refer a question of law to the Supreme Court for determination, being the kind of power sometimes conferred on tribunals. On the other hand, it may have been thought sufficient that the costs assessor would have an implied power not to continue with the assessment of the application, so as to allow the parties to have the contractual issue determined in the court in which the proceedings arose. At least where that court is a court with appropriate jurisdiction, that approach would have much to commend it. In any event, it is not necessary to resolve the precise extent of the assessor's powers for present purposes. The existence of a dispute of this kind, combined with the lack of relevant procedural mechanisms for allowing a hearing and determination in an appropriate manner, would, absent other considerations, generally mandate a grant of leave pursuant to s 208M of the 1987 Act." (emphasis added) 39The final part of [193] in the judgment of Basten JA reveals agreement between his Honour and Santow JA as to the approach to be adopted where leave is sought under the equivalent of s 385 in cases involving some factual or legal complexity. The balance of [193] appears to express a different opinion to that expressed by Santow J at [40]. For the sake of completeness, I note that Hislop J, who was the third judge, did not indicate a preference for the views of either Santow or Basten JJA on this question (at [216]). 40Mr Smark SC advised the Court that his client's summons had been "inspired" by [193] in the judgment of Basten JA in Wentworth v Rogers. By that, I understand him to submit that that paragraph provides support for the proposition that the costs assessor in this case, Mr Bartos, either should have or was entitled to avoid addressing the points raised by his client, and the appropriate forum to pursue them was by way of the proceedings in this Court invoking the jurisdiction confirmed by s 75 of the Supreme Court Act. 41Both Santow and Basten JJA's statements extracted above were clearly obiter. Moreover, Basten JA did not indicate any final view to the effect contended for in [193]. The passage cited by his Honour in [192] suggests that his Honour accepted that an alternative view was reasonably open. 42With respect to his Honour, I have a number of difficulties with [193] of his Honour's judgment to the extent that it denies that cost assessors have the power to determine, albeit not finally, complex issues of fact or law or that it suggests that they were entitled not to do so and thereby not perform the function vested in them by s 367. 43I have already referred to s 367 and the absence of any express limit on that function to be found in the Act. The only contrary indications raised in Basten JA's judgment in Wentworth v Rogers concern the limited powers conferred on cost assessors, in that they are only enabled to obtain documents and are not empowered to receive oral testimony or permit cross examination. 44However, with respect to his Honour, I do not think that those limitations indicate that a cost assessor does not have the power or authority to determine issues of the kind raised either in Wentworth v Rogers or in this case (cf Wentworth v Rogers at [179]). Instead, a conferral of those limited powers only means that Parliament has chosen a more informal, perhaps cheaper but definitely different, means of having factual questions resolved compared with the usual curial process. The final result if the parties are not satisfied with the outcome utilising the means conferred by the statute is that they can then apply to the relevant Court for leave to re-agitate the assessment and by that means utilise the usual curial processes. 45Further, in this second part of [191] Basten JA contemplates a cost assessor correctly refusing to decide some "contractual questions" and then leave being granted to re-agitate the cost assessment under former s 208M. However, if a cost assessor refuses to decide certain "contractual questions" that are necessary to make a determination, then there would never be any possibility of leave being granted under former s 208M, because there never would be a "determination of the application made by a cost assessor". To the contrary, the cost assessor would simply sit there, inert, unable to complete the function expressly vested in them by the statute. 46The consequence is that I prefer and will act upon the approach stated by Santow JA in Wentworth v Rogers at [40]. Thus, I will approach the balance of the application on the basis that it is the cost assessor's duty and function to determine as best he or she can such issues of fact and law as arise on the cost assessment in order to discharge their function under s 367 of the Act. If a cost assessor were to refuse to do so, then relief in the nature of mandamus would be available to require them to do so. 47It further follows from this that I accept that these proceedings involve the invocation of the declaratory jurisdiction of this Court in circumstances where there is a full scheme of merits and judicial review available to Mr Griffith that will enable him to obtain a determination of all the issues and fact and law he wants to raise. However, that conclusion does not of itself necessarily lead to a conclusion that the proceedings should be dismissed. 48As I have stated, Mr Walker SC also submitted that these proceedings are either premature or may ultimately be of no utility. In relation to the first point noted above (at [9]), I accept that this is so because the outcome of the cost assessor's investigation may be that no or minimal costs were incurred that were separately referable to Dr Millikan, in which case declaratory relief concerning their recovery would appear to be either hypothetical or, at least, a significant waste of time. 49This reasoning does not necessarily apply to the second point noted above (at [10]). However, on the material available it does appear that this issue involves a number of factual as well as legal questions. In that circumstance, if the proceedings were to continue and the Court were to grant the declaration then, in so far as that involves some question of law, it would no doubt bind the costs assessor. However, in circumstances where the resolution of prayer 2 would involve factual findings, there is some doubt as to whether they would bind the assessor given that, prima facie, the function of fact finding is vested in him, at least at first instance. 50It is not necessary for me to resolve this aspect except to note that the greater potential for the issue raised by the summons to involve factual matters, the greater the undermining of the statutory scheme created by the Parliament. As I have said, that scheme contemplates fact finding by cost assessors, fact finding by review panels and then, by the relevant court under s 385, if leave were granted. 51I referred earlier to the decision of Davies AJ in Commonwealth Bank of Australia v Hattersley. Those proceedings involved a classic example of the utilisation of the declaratory procedure. The facts do not appear to have been in dispute and none of the parties to the litigation appear to have opposed the Court determining the important question of law that was raised. It was only an amicus curiae who made a submission that relief should be refused as a matter of discretion, a submission that his Honour rejected in the extract I have set out above (at [32]). 52By way of contrast, in Currabubula Holdings Pty Ltd v State Bank of New South Wales Ltd [2000] NSWSC 232 at [65], Einstein J refused declaratory relief so as to avoid circumventing the appeal mechanism created by the Legal Profession Act 1987 for cost assessments. 53I have referred earlier to Mr Smark SC's submission as to the relative time and costs that might be involved in the pursuit of these proceedings, as opposed to pursuing the cost assessment process. Whether or not these proceedings, if allowed to continue, would prove to be quicker and cheaper than a cost assessment is difficult to gauge. However, the starting position is that it is Parliament's assessment that the appropriate forum to decide these issues is via the statutory mechanisms it created, and which I have described. In the end result the ABC and Dr Millikan have satisfied me that that process should not be interfered with by the continuation of these proceedings. All the points that Mr Griffith wishes to raise can be determined via that statutory scheme. 54It follows that I will order that the proceedings be dismissed. [The parties addressed on costs.] 55I have heard the parties briefly as to the question of costs. On 7 May 2013, the solicitors for the ABC and Dr Millikan wrote to the solicitors for Mr Griffith offering to have their summons dismissed with no order as to costs and leaving their offer open for three days. In that letter a number of points were put in support of the proposition that the proceedings commenced by Mr Griffith were inappropriate. In broad terms the points made in the letter have been upheld by me. Nevertheless, as I have indicated, at the very least some support for the utility of these proceedings was to be derived from a passage from the judgment of a single judge in the Court of Appeal. One aspect of my reasoning for dismissing the summons is that I have respectfully disagreed with that view. 56In those circumstances, I do not think it can either be said that the summons was hopeless or that there was something otherwise inappropriate in Mr Griffith pursuing a course which, on one view, conformed with what was stated by Basten JA in Wentworth v Rogers at [193]. 57Accordingly, I do not consider that there is any warrant for a special costs order. Instead the costs order that I will make will be on a party/party basis. 58Accordingly, I order that the summons be dismissed and that the plaintiff pay the first and second defendants' costs of the proceedings.

Griffith v Australian Broadcasting Corporation & Ors

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