Jorgensen v Wilson

He submitted that if I declined to recuse myself then he insisted that another judge rule on that decision. The email concludes: I agree with all my colleagues who declare that Mossop J is a dishonest judge. I look forward to hearing from you as to Justice Mossop’s Recusal.

It was not made clear who Mr Jorgensen’s “colleagues” were.

The additional written submissions provided on 4 May 2023 made similar allegations. The test

In Charisteas v Charisteas [2021] HCA 29; 273 CLR 289 [11]-[12], the High Court articulated the general principles as follows: Where, as here, a question arises as to the independence or impartiality of a judge, the applicable principles are well established, and they were not in dispute. The apprehension of bias principle is that "a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide". The principle gives effect to the requirement that justice should both be done and be seen to be done, reflecting a requirement fundamental to the common law system of adversarial trial – that it is conducted by an independent and impartial tribunal. Its application requires two steps: first, "it requires the identification of what it is said might lead a judge ... to decide a case other than on its legal and factual merits"; and, second, there must be articulated a "logical connection" between that matter and the feared departure from the judge deciding the case on its merits. Once those two steps are taken, the reasonableness of the asserted apprehension of bias can then ultimately be assessed. As five judges of this Court said in Johnson v Johnson, while the fair-minded lay observer "is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice". (Footnotes omitted.)

Kirby J observed in Johnson v Johnson [2000] HCA 48; 201 CLR 488 at [53] that “a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.”

The ‘two mights’ test encapsulated in the formulation in Charisteas (“might reasonably apprehend that the judge might not bring an impartial mind”) is to be interpreted in the context of the ordinary judicial practice. That does not require a judicial officer to remain on the bench in sphinx-like silence nor does it preclude a judicial officer from exercising control over the proceedings in a manner consistent with s 5A of the Court Procedures Act 2004 (ACT): Johnson v Johnson [2000] HCA 48; 201 CLR 488 at [13]; Manny v Nissen (No 2) [2023] ACTCA 20.

Mr Gaffney deposes that he considers that “the costs claimed by the defendants in the Costs Application are reasonable and in direct connection with this Proceeding”.

Although the costs order was made on a solicitor and client basis, Mr Gaffney deposes to the opinion that “party and party costs are usually between approximately 66% and 75% of solicitor and client costs.” Adopting the lowest end of his range (66 percent), he estimates that party and party costs would be in the order of $115,392.

Mr Gaffney estimates the costs of the present application for a gross sum costs order as being approximately $18,000 inclusive of GST and disbursements on a solicitor and client basis if it was determined on the papers. Having regard to the fact that it was not solely determined in the papers, the costs would be somewhat higher than that. The affidavit indicates that the defendants do not seek to recover the costs incurred in the preparation of the costs application if they are successful in obtaining a gross sum costs order.

Had the order been for party and party costs it would have been significant that the affidavit does not disclose the extent of Mr Gaffney’s experience with taxation of costs in this or any other jurisdiction. The affidavit, which identifies the deponent as a Senior Associate employed by Ashurst, simply states “In my experience as a litigation solicitor in superior courts in Australia, party and party costs are usually between 66% and 75% of solicitor and client costs.” That statement does not disclose what experience he has and in which courts. It is a statement at such a level of generality that it provides no secure foundation for any estimate. In these days of specialisation and contracting out of costs assessment it cannot be assumed that all litigation solicitors will have significant experience with assessment of costs in a particular court. Further, the statement does not provide a secure foundation for the estimate of recoverable amounts where a larger legal practice has a team of solicitors working (and billing) on a matter as distinct from a smaller practice where there is likely to be less room for contesting the reasonableness of the incurring of fees.

The other significant deficiency in the affidavit is the failure to articulate, in any detail, the relationship between the individual defendants, their former employer ASIC, and the insurer Comcover. It is clear that Comcover has been paying the invoices. It is not clear whether Comcover is an insurer (as described in the affidavit) or the administrative entity managing a Commonwealth government self-insurance scheme. The terms of the policy or coverage which led to the involvement of Comcover is not disclosed. It is not made clear whether that policy or coverage directly covered the defendants or whether it only covered ASIC and ASIC has agreed or is otherwise legally obliged to indemnify the individual defendants. As will come to be of significance, the affidavit does not specifically address whether or not individual defendants could in any circumstance become liable for the costs of the solicitors engaged or whether there is an agreement that under no circumstances would that be the case. Submissions

The defendants’ submissions were, in summary, as follows: (a) The plaintiff has caused the defendants to incur significant costs in responding to the originating application which has been permanently stayed as an abuse of process. (b) The plaintiff’s conduct in bringing vexatious proceedings against ASIC or the defendants necessitated the defendants seeking the order that he be declared a vexatious litigant. (c) The plaintiff has not made payment or otherwise discharged his costs liabilities in previous proceedings in the Supreme Court of New South Wales, the Supreme Court of Tasmania or the ACT Supreme Court. (d) In seeking a gross sum costs order of $80,000, the defendants have significantly compromised their entitlement to costs by seeking only 46 percent of the actual costs incurred in the proceedings up until the delivery of judgment on 10 March 2023. (e) The defendants are not seeking any costs of the current cost application. (f) As a result, the court can be confident that it would be doing justice between the parties and avoiding the further unnecessary costs of a costs assessment by exercising its discretion to make a gross sum costs order of $80,000 for the defendants’ costs in the proceedings.

At the forefront of Mr Jorgensen’s submissions was the proposition that no orders should be made because the defendants themselves had not incurred any liability: “[A]s conceded in Mr Gaffney’s submissions, the 4 Defendants costs were absolutely zero, so how can they possibly seek costs?” Instead, he submitted that liability was incurred by ASIC. Having regard to the evidence in Mr Gaffney’s affidavit, that submission must be understood as being that the costs were incurred by ASIC or Comcover and not by the defendants themselves.

On this issue the defendants’ submissions state that they have been indemnified by Comcover. The submissions are then as follows: In regard to the Court’s authority to award costs to a successful, indemnified party, the defendants remain liable as principal for the costs in the Proceeding. That is to say, costs are not awarded to Comcover, as such, even though they have the benefit of the award due to their relationship with the defendants: Dal Ponte [sic] Law of Costs, 4th edition, 2018 at [7.16]. The fact that the defendants in the Proceeding are indemnified by Comcover, who is not a party to the Proceeding, does not disentitle the defendants to an order for costs: Johnson v Santa Teresa Housing Association (1992) 83 NTR 14 at [20]. In Coshott v Woollahra Municipal Council [2008] NSWCA 176 this position was explained further by AJA Handley [sic] at [11]: “A litigant, liable to his own solicitor for the costs of proceedings, who is indemnified in whole or in part for those costs, is entitled to recover his taxed or assessed costs for the benefit, in whole or in part, of the party providing that indemnity: Dyktynski v BHP Titanium Minerals Pty Ltd [2004] NSWCA 154; (2004) 60 NSWLR 203 CA. The principle extends to all indemnity arrangements whether or not they are in the nature of insurance." (Emphasis in original.) Determination

The authorities cited by Dal Pont in the passage relied upon by the defendants support the proposition that so long as there is some chance that the party may be liable to the solicitors on the record for the party then that is sufficient to permit recovery of costs pursuant to a costs order. The cited authorities are as follows.

In New Pinnacle Group Silver Mining Co v Luhrig Coal and Ore Dressing Appliances Co (1902) 2 SR (NSW) 50 proceedings had been brought by the respondent to set aside an arbitration. Those proceedings were successful. It emerged at taxation that the respondent was indemnified against costs by a Mr Lempriere who had an interest in having the arbitrated award set aside. The contention was that because the respondent had no liability for the costs incurred by Mr Lempriere and had been indemnified against those costs, the compensatory principle expressed in Harold v Smith (1860) 5 H & N 381; 157 ER 1229 precluded an award of costs in its favour. In support of an award of costs, reference was made to the position of an assignee bringing proceedings in the name of an assignor after having given an indemnity in relation to costs to the assignor. It was said that if costs were recoverable in that case, then they should also be recoverable in the circumstances of the case at hand. Cohen J said (at 54): “Yet no case has been cited with the plaintiff on the record, being a nominal plaintiff, with a complete indemnity against any liability for costs, given by the real plaintiff, has been refused the costs of the action, or even where his right to them has been questioned.”

Walker J confined the principle in Harold v Smith to one arising in the particular facts of that case. He described the contention of the appellant in this case as: [T]hat on an order that one party to the record shall pay the other party’s costs, only those costs can be allowed for which such other party is personally liable to the attorney who represents him on the record.

Of that contention Walker J said (at 56-57): I know of no authority for this proposition, and it is opposed to what I should have thought was daily practice. In the case of an assignor of a chose in action suing for the benefit, and on the indemnity, of the assignee, to whom alone the plaintiff’s attorney on the record looks for his costs, could it be contended that the defendant, on judgment going against him, could escape paying the plaintiff’s costs of the action on the ground that the plaintiff on the record was not liable for them to the attorney? That case is very analogous to the present, in which, as I understand the facts, Lempriere for his own purposes used the name of the Luhrig Co., and Messrs. Stephen, Jaques & Stephen, who appeared nominally as solicitors for the company, looked for their costs, not to the company, but to Messrs. Blake & Riggall, with an ultimate liability in Lempriere. The doctrine of costs being an indemnity was never intended, in my opinion, to be pressed to the length to which the Pinnacle Co. are seeking to press it. Only by torture could it be made to apply to the present case.

In McCullum v Ifield [1969] 2 NSWR 329 at 330 the Government Insurance Office (GIO) undertook the defence of a motor vehicle claim. That defence was successful and a party and party costs order was obtained by the defendant. The plaintiff submitted, amongst other things, there was no right to recover costs against the plaintiff because the defendant had not incurred any liability. Instead, the defence had been conducted by a solicitor employed by the GIO. Taylor J found that the defendant was entitled to recover party and party costs. His Honour said (at 330): It is established that if a party to an action has an agreement with his solicitor that he will not have to pay any costs then he cannot recover party and party costs against the adversary. (Gundry v Sainsbury [1910] 1 KB 645). Equally it is clear that the fact that a party to civil proceedings is indemnified by insurance or other agreement against his liability to pay the costs does not prevent him recovering his party and party costs. (See New Pinnacle Group Silver Lead Mining v Luhrig Coal & Ore Dressing Appliances Co. (1902) 2 SR (NSW) 50; Adams v London Improved Motor Coach Builders [1921] 1 KB 495; [1920] All ER Rep 340.)

The court referred to the operation of s 18 of the Motor Vehicles (Third Party Insurance) Act 1942 (NSW), which allowed an authorised insurer to conduct proceedings in the name and on behalf of an insured person, and concluded that the GIO was not the defendant but rather the solicitor employed by the GIO who appeared for the defendant. The court rejected the argument which relied upon the fact that the defendant never became liable to pay the costs of the solicitor because that solicitor would look only to the GIO. However, the solicitor had not made any agreement with the defendant that he would act for him for nothing. The court considered that this argument was concluded against the plaintiff by R v Archbishop of Canterbury [1903] 1 KB 289 and Adams. Particular reference was made to the example given by Romer LJ in Archbishop of Canterbury at 295 which referred to a defendant represented by an insurer.

R v Miller [1983] 3 All ER 186 was a case in which costs of the defence of a criminal charge were ordered to be paid out of a central fund. The successful defendant’s employers had undertaken to pay the costs of the defence but the defendant was aware that if they did not do so he would have to pay the cost himself. The taxing authority refused to certify any part of the bill of costs because it was almost certain that the defendant’s employers would pay those costs and it was never realistically anticipated that the defendant would bear any of the costs. A taxing master upheld that ruling and also held that the facts established that there was an agreement between the solicitors and the employers that the employers would be primarily liable for the costs of the defence.

On appeal Lloyd J held that costs had been “incurred by” the accused within the meaning of the relevant statute, as he was responsible or liable to his solicitors for the costs of the defence even if a third party had in fact undertaken or was liable to pay those costs. The fact that the accused was the client of the solicitors representing him raised a presumption that the accused was personally liable for the costs of his defence and it was only where there was an express or implied agreement which was binding on the accused solicitors to the effect that in no circumstances would they seek to recover the costs from the accused that the costs ceased to be “incurred by him” for the purposes of the relevant statute. The realistic expectation that the employers would pay the defence costs was a factor to be taken into account in determining whether there was an implied agreement that the accused would not be liable for the costs in any event. However, the defendant was aware that he would be liable for the costs if his employers failed to pay them and as a result such an agreement could not be implied. This meant that the costs could be recovered from the central fund.

Lloyd J referred to the decision in Adams. The critical point from that case being that there was a possibility of the client being liable notwithstanding that the union also undertook to pay the costs. Davies v Taylor (No 2) [1974] AC 225 was also referred to. That was a case in which it was contended, for the purposes of a statutory scheme which allowed payment of “costs incurred by” another party, no costs had been so incurred because the successful defendant was insured and the insurance company was bound to pay his costs. Once again, the decision turned upon “the absence of proof of an agreement between him and them or between them and the insurance company that he would not pay their costs”: at 230. Lloyd J also referred to Lewis v Averay (No 2) [1973] 1 WLR 510 in which the Automobile Association undertook a defendant’s appeal to the Court of Appeal after having made it clear that he was indemnified in all respects so that no part of the costs of the appeal would have fallen on him. Notwithstanding this, the successful defendant’s costs were held to be within the expression “costs incurred by him”. Lord Denning reasoned that Mr Averay was, in law, the party to the appeal and if the appeal had failed he would be the person ordered to pay the costs. Without further reasoning he said (at 513): “The truth is that the costs were incurred by Mr Averay, but the Automobile Association indemnify him against the costs … That is sufficient to satisfy the requirements that the costs were ‘incurred by him’”.

Following these cases Lloyd J said that he rejected the proposition that “costs incurred by” means “costs paid by”. He summarised the principle (at 190) as follows: I would hold, following Adams v London Improved Motor Coach Builders Ltd and the other cases I have mentioned, that costs are incurred by a party if he is responsible or liable for those costs, even though they are in fact paid by a third party, whether an employer, insurance company, motoring organisation or trade union, and even though the third party is liable for those costs. It is only if it has been agreed that the client shall in no circumstances be liable for the costs that they cease to be costs incurred by him, as happened in Gundry v Sainsbury [1910] 1 KB 645.

He referred to the discussion in a number of cases of whether or not the agreement to relieve a client of costs must be made with the client or whether it is sufficient that it be made with the third party. He expressed no concluded view on that issue.

Significantly, the case involved a discussion of the burden of proof, Lloyd J saying (at 190-191): There was also some discussion as to the burden of proof. The initial burden of proving that Richards Butler & Co were acting for Mr Glennie lay on Mr Glennie. But that burden could be discharged, as it was in the present case, by showing that Mr Glennie was the party to the proceedings, and Richards Butler & Co the solicitors on the record. Once it was shown, as is now conceded, that Mr Glennie was indeed the client, then a presumption arose that he was to be personally liable for the costs. That presumption could, however, be rebutted if it were established that there was an express or implied agreement, binding on the solicitors, that Mr Glennie would not have to pay those costs in any circumstances.

The judgment then refers to the fact that in a taxation the whole of the solicitor’s file will be before the taxing officer and that if there was a doubt about the issue further evidence could be called for.

Lloyd J said that the issue was not who would be primarily liable for the costs but whether or not it was agreed that the client should not be liable for those costs under any circumstances.

Johnson v Santa Teresa Housing Association (1992) 83 NTR 14 involved a motor accident case where there were two defendants. The second defendant was entitled to be indemnified by the first defendant, the second defendant’s employer, for any amount payable to the plaintiff. The first defendant argued that because there was a statutory obligation on the Territory Insurance Office to indemnify the second defendant against all costs, the second defendant was not entitled to any further order for costs against the first defendant. In other words, because the second defendant was indemnified by an insurer there were no costs which it could recover from the first defendant. Mildren J rejected this contention (at 18): Be that as it may, the fact that the second defendant is entitled to indemnity for his costs by an entity which is not a party to the suit ought not to preclude the second defendant from seeking an order for his costs against another party to the suit. It is true that there are authorities to the effect that, if a party is not liable to pay any costs to his own solicitor, no costs can be recovered from the other side: see e.g. Irving v Gagliardi; Ex parte Gagliardi (No 2) (1895) 6 QLJ 200 per Griffith CJ. However, more recent authorities show that that principle cannot be taken too far. One well-established exception is where a party is represented by a solicitor employed by the Crown, and the party really represented the Crown’s interests: see, for example, Lenthall v Hillson [1933] SASR 31. In that case the Full Court (Napier and Angas Parsons JJ) said (at 36): “We think that the principle that costs are given as an indemnity can be carried too far. It comes from the unwritten law, and depends upon considerations of public policy and convenience, and it follows that it must be reasonably understood and applied.” Later (at 37) their Honours concluded: “It is apparent that in the circumstances the rule that costs are an indemnity must have been understood, as it was understood in Irving v Gagliardi i.e. as applying to the liability of the real and not of the nominal plaintiff.” There is no reason why any distinction should be made between plaintiff’s and defendants. In the instant case, the “real” defendants were the Territory insurance office and the first defendant’s indemnity insurer, as they ultimately will bear the losses.

Reference was made to the decision in Backhouse v Judd [1925] SASR 395 which followed the reasoning in Adams. Also referred to was Blackall v Trotter (No 1) [1969] VR 939 where the Full Court of the Supreme Court of Victoria found that a defendant who was represented by a solicitor employed by the Crown was entitled to costs. It referred to the reasons of Walker J in New Pinnacle.

Mildren J concluded (at 19-20): There is no evidence that the second defendant has an agreement with his solicitors that, come what may, only the Territory Insurance Office will be liable to meet his costs. … The authorities to which I have referred show that the mere fact that a party to litigation is entitled to indemnity from a person not a party to the proceedings does not disentitle that person to an order for costs. It could not therefore be argued that the second defendant is not entitled to his costs against the first defendant on the indemnity notice, and indeed the first defendant does not argue to the contrary. But if that is so, there is no reason in principle why the second defendant ought not to be able to obtain an indemnity for costs ordered to be paid by him to the plaintiff, merely because the second defendant is entitled to be indemnified by the office.

Wilson v Richmond River Shire Council [2000] NSWSC 71 was a decision (like Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72) arising out of the “Iron Gates” development at Evans Head in New South Wales. The plaintiff had commenced proceedings against Iron Gates Pty Ltd and the Richmond River Shire Council. He retained a solicitor. A representative of the New South Wales Aboriginal Land Council indicated that if the solicitor accepted instructions from the plaintiff, then the Land Council would meet his costs on a specified basis. The fees were in fact paid by the Land Council. The costs assessor declined to find any amount payable, relying on the fact that the solicitor could not recover any costs from the plaintiff because the plaintiff was under no liability to pay them. On appeal from this decision, Adams, McCullum, Angor Pty Ltd v Ilich Motor Co Pty Ltd (1992) 37 FCR 65 and Johnson were all relied upon. Having reviewed the decisions in these cases, Harrison M concluded (at [15]): It is my view that there was no agreement between the plaintiff and his solicitor that in no circumstances was he (the plaintiff) liable to pay the costs. In the absence of evidence of a bargain to that effect, the plaintiff became liable to his solicitor for costs and this liability is not excluded because the New South Wales Aboriginal Land Council undertook to pay his fees. [The plaintiff] was the person giving instructions to the solicitor. The solicitor was acting with the plaintiff’s knowledge and assent. Thus the plaintiff was liable to pay his solicitor’s costs and the fact that the New South Wales Aboriginal Land Council indemnified the plaintiff does not prevent him from recovering his costs.

For that reason, the decision of the costs assessor was set aside and the matter remitted for redetermination.

Howard v Mechtler [2000] NSWSC 455 was a case relating to control of a soccer club. A resolution changing the directors of the club was challenged by a number of individual plaintiffs. That challenge was successful. The solicitors who acted for the plaintiffs had been retained by the club. On appeal from a costs assessment, the contention of the defendants was that in the absence of retainers from the individual plaintiffs, the individual plaintiffs were not liable to pay the solicitors and hence there was nothing against which the defendants were liable to indemnify them. So far as the evidence was concerned Malpass M said (at [9]): There was material which revealed a relationship with the Club as to payment of the firm’s costs. The material also established that the individual plaintiffs had a liability to the firm to pay its costs. It did not prove that the plaintiffs had no liability whatsoever to pay the firm its costs.

The court was referred to Angor and Adams and said (at [11]): It suffices to make general reference to some of the principles which emerge from the cases. Under an order for costs, the paying party is only obliged to pay such costs as the receiving party was primarily and potentially legally obliged to pay to his solicitor. There is an indemnity only in respect of the costs covered by the order. A receiving party cannot recover a sum in excess of the liability to his own solicitor. There can be co-existing obligations. The liability of the client is not excluded merely because there may be a third person to indemnify the client. It is necessary to prove that under no circumstances does the client have any liability to pay costs to his solicitors.

The Master found that the finding that the individual plaintiffs had not retained the firm was simply not open on the material before him and also that the assessor’s application of the indemnity principle was erroneous. The determination was set aside.

North Australian Aboriginal Legal Aid Service Inc v Bradley (No 2) [2002] FCA 564 was a costs decision following the first instance proceedings which were ultimately appealed to the High Court in North Australian Aboriginal Legal Aid Service Inc v Bradley [2004] HCA 31; 218 CLR 146. The applicant had unsuccessfully challenged the appointment of the respondent as Chief Magistrate of the Northern Territory. In relation to costs, one of the points raised was that the respondent was not entitled to any order for costs because he had been completely indemnified by the Northern Territory. This was dealt with by Weinberg J in emphatic terms (at [101]-[104]): The contention that Mr Bradley is not entitled to costs because he was fully indemnified from the outset by the Northern Territory is equally without merit … The effect of this submission, if accepted, would be remarkable. Ministers of the Crown are frequently sued in this and other courts. When proceedings fail, they receive costs. There is no suggestion that they are personally liable for costs incurred in defending those proceedings. They are, by convention, fully indemnified by their governments. … Whatever arrangements there may in any given case be for the payment of fees, whether by government or by some benevolent third party, that is a matter between the parties to those arrangements. It is of no relevance when determining whether or not, as successful litigants, they are entitled to costs.

Coshott v Woollahra Municipal Council [2008] NSWCA 176 involved an appeal from a costs assessment process. The assessed costs of the Council were approximately $81,000. An amount of approximately $34,000 had been paid to the Council’s solicitors under a mutual indemnity scheme maintained by a group of councils. The appellant, who was liable to pay the Council’s costs submitted that the indemnity principle meant that the Council could not recover more than it had paid or was liable to pay to its solicitors and, having regard to the payment made by the mutual indemnity scheme, the amount payable pursuant to the costs order should be reduced. Handley JA (with whom Tobias and McColl JJA agreed) said (at [11]): A litigant, liable to its own solicitor for the costs of proceedings, who is indemnified in whole or in part for those costs, is entitled to recover his taxed or assessed costs for the benefit, in whole or in part, of the party providing that indemnity … The principle extends to all indemnity arrangements whether or not they are in the nature of insurance.

The general principle that emerges from this line of cases is that unless it is specifically established that as a result of an agreement the party with the benefit of the costs order would never be liable for the solicitor’s costs, then the fact that another party has paid those costs or indemnified the party in relation to costs is not a barrier to recovery of those costs pursuant to a costs order. A broader principle which might be seen to arise from Averay is not supported by any clear reasoning and cannot be accepted. It is notable that the decision of Weinberg J in Bradley is inconsistent with the principle as I have articulated it but, as will become apparent, is supported by a different line of authority. Although Coshott was specifically referred to in the defendant submissions, that case is not supportive of those submissions because in that case there was no doubt that the Council was liable to its own solicitors. The only issue related to the consequences of payment of part of those solicitors’ costs by a third party. However, in the present case there is, at the very least, doubt about the liability of the defendants to the solicitors acting on their behalf.

Because of the lack of detail in the evidence about the relationship between the defendants, Comcover, and ASIC, had it been necessary to determine the application on the basis of the principles set out in the cases relied upon by the defendants and to which I have referred, there would be difficult questions as to: (a) what inferences could be drawn from the very limited circumstances disclosed in the affidavit of Mr Gaffney; and (b) who bore the onus of proving that there were no circumstances in which the individual defendants could be liable for the costs incurred.

It is not necessary to determine those questions because, in my view, the issue is resolved by a different line of authority. That is the line of authority which indicates that a successful party represented by the Crown Solicitor in litigation in which the relevant government has an interest is not disentitled to costs from an unsuccessful party merely because the successful party is not under a personal liability to the Crown Solicitor for costs. It is this line of authority which would explain the statements made by Weinberg J, without reference to authority, in Bradley.

So far as the Territory is concerned, that line of authority is best represented by the decision in Inglis v Moore (No 2) (1979) 25 ALR 453. That was one of many decisions arising from litigation brought by Mrs Inglis who was dissatisfied with decisions made about her employment at the Australian Parliamentary Library. The principal proceedings were in the ACT Supreme Court: see the history of the proceedings in Inglis v Moore (Unreported, Supreme Court of the Australian Capital Territory, Connor J, 12 December 1977) and the subsequent decisions in Inglis v Moore (1979) 24 ALR 411 and Inglis v Moore (1981) 51 FLR 293. There were concurrent proceedings in the High Court which were stayed by Mason J because they sought to agitate the same issues as the proceedings on foot in the Supreme Court: Moore v Inglis (1976) 50 ALJR 589; appeal dismissed in Moore v Inglis (1976) 51 ALJR 207.

In Inglis v Moore (No 2) the underlying proceedings were in the Supreme Court and involved Ms Inglis suing a number of public servants who worked at the Parliamentary Library, from the Parliamentary Librarian down to a clerical assistant. The allegations in the 50-page statement of claim are described in the decision at 461-462.

The decision of a Full Court of the Federal Court in Inglis v Moore (No 2) was on an appeal from a decision of a judge of the ACT Supreme Court who was reviewing the registrar’s decision on a taxation of the costs awarded in favour of the defendants. One of the issues raised in the case was whether or not the defendants, who had successfully struck out Mrs Inglis’s statement of claim, were entitled to recover costs in circumstances where they were represented by the Crown Solicitor and not personally liable for the costs of the Crown Solicitor. This aspect of the decision in the case is accurately captured in the headnote which provides: “A successful party who is represented by the Crown Solicitor in litigation in which the Crown has an interest is not disentitled to costs from an unsuccessful party merely because he is not under a personal liability to the Crown Solicitor for costs.” This principle was defined or illustrated by the cases to which the court referred, namely, R v Archbishop of Canterbury [1903] 1 KB 289, Irving v Gagliardi (1895) 6 QLJR 200, MacLaurin v Hall (1913) 13 SR (NSW) 114, Lenthall v Hillson [1933] SASR 31, Ex parte W A Grubb Pty Ltd; Re Johnston (1949) 66 WN (NSW) 224, Nolan v George [1959] Qd R 315, Blackall v Trotter (No 1) [1969] VR 939. St John and Brennan JJ adopted what was said in Blackall at 941: In our opinion, neither in that case nor in Lenthall v Hilson did the court base its decision on the ground that there was any liability of the party represented to the Crown-employed solicitor for costs. Both cases, in our opinion, decided that in the circumstances the Crown by virtue of its interest in the subject matter of the litigation, was entitled to make its solicitor available to act for the party on the record, and that as the Crown incurred the expense of his employment the party he represented was entitled to recover the costs awarded to him. Since expense was incurred, albeit not by the party on the record, in the employment of the solicitor, the decisions are distinguishable from cases such as Gundry v Sainsbury [1910] 1 KB 645 … where no expense at all was incurred in the employment of the solicitor.

The separate reasons of Davies J (at 465-466) relied upon the same authorities, also quoted from Blackall and reach the same result.

The court also dealt with a challenge to the capacity of the Crown Solicitor to act for the defendants in that case, an issue which was not raised in the present proceedings. It is notable, however, as a result of the similarity with the factual circumstances of the present case that, in addressing whether or not the Crown Solicitor was entitled, without statutory authority, to act for the defendants, the judgment of St John and Brennan JJ said (at 456-457): The Commonwealth has an interest in protecting its employees against claims brought against them in respect of acts done within the scope of their employment. The Commonwealth has an interest in litigation of that kind, not only to protect the Commonwealth from claims made against it on the footing of its vicarious liability for the acts or torts of its employees … But also to protect employees in performing the functions of their employment from the risk of a personal liability for costs, if they should be sued in respect of what they have done, or are alleged to have done, in performing those functions.

Inglis v Moore (No 2) was followed in R v Barbaro (1992) 108 ACTR 1 at 7 and Ditton v Gallagher (1992) 110 ACTR 12 at 15 where the principle was applied in relation to legal services provided by the Australian Government Solicitor. It was also followed in Dahler v Australian Capital Territory [2016] FCA 257 where it was applied in relation to legal services provided by the ACT Government Solicitor.

The principle articulated in Inglis v Moore (No 2) is applicable in the circumstances of the present case. Even though, as indicated earlier, the relevant evidence is unsatisfactorily limited, it is clear that the defendants are sued for their conduct as employees of ASIC, an emanation of the Commonwealth. The Commonwealth, through Comcover, has retained solicitors so as to protect its former employees from a personal liability for costs. In those circumstances, the fact that the defendants themselves may not have any personal liability for costs is not a basis for refusing to allow the recovery of costs incurred on their behalf.

Although the principle articulated in Inglis v Moore (No 2) was expressed in the context of a Crown Solicitor acting for the Commonwealth employee, in my view, the same principle applies in circumstances where private sector lawyers are engaged by the Commonwealth to act on behalf of current or former Commonwealth employees who are sued upon allegations arising out of their conduct as such employees. The principle operates as an exception to the general requirements of the indemnity principle described above and there is no proper basis for distinguishing between legal services provided by a Crown Solicitor and legal services provided by private practitioners engaged to act for the Crown. That is because the exception to the general requirement of the indemnity principle is one designed to recognise and protect the legitimate interests of the government in defending its conduct even when only its employees or former employees are joined in the proceedings. The recognition and protection of that legitimate interest is not affected by a change in the identity of the solicitors engaged to act for the government.

Because the principle applies in the present case, costs may be recoverable even if the individual defendants have not been shown to be exposed to a risk of personal liability for the costs incurred by the solicitors on the record for them.