Mann v Carnell [2001] ACTSC 18

3. The application was successful despite the claim of privilege and on 4 January 1998 it was ordered that the Chief Minister produce the documents to Dr Mann. The further order was made that "the costs of the application abide any order made in proceedings subsequent hereto on any cause of action alleged to have arisen out of the publication of the documents or any part of them by the respondent to Michael Moore on or about 15 December 1997."

4. Proceedings in the Federal Court of Australia challenging the order for preliminary discovery in this Court followed. On 4 December 1998 a Full Court of the Federal Court allowed the appeal, set aside the order for preliminary discovery and further ordered Dr Mann to pay the Chief Minister's costs of the appeal, with leave to the parties to apply to this Court in respect of the application: Carnell v Mann (1998) 159 ALR 647.

5. Dr Mann was granted special leave to appeal to the High Court. On 21 December 1999 the appeal was dismissed with costs: Mann v Carnell [1999] HCA 66; (1999) 168 ALR 86.

6. The Chief Minister now applies for her costs in this Court against Dr Mann. It may be observed that the condition of the costs order made on 4 January 1998 have not been met in that no proceedings on any cause of action arising out of the publication have been commenced. Nevertheless, it is appropriate, in the light of the orders made by the Federal Court on 4 December 1998, that this Court now decide the issue.

7. Costs are in the discretion of the Court: Supreme Court Act 1933, s 23 (the Supreme Court Act). However, there is a well entrenched judge-made rule of practice that, in the absence of circumstances justifying an order to the contrary, costs "follow the event", that is to say, the "loser" pays the costs of the "winner". It seems that unless the legislature specifies some other outcome, such as parties paying their own costs, e.g. Family Law Act 1976 (Cth), s 117, the winner-take-all rule confines the width of the discretion conferred by the statute.

8. The practice is so entrenched that it is often approached as if it were part of the common law. It was not part of the common law of England. That appears to be the reason why it does not apply in the United States, unless authorised by statute. Whether it is part of the common law of Australia does not need to be decided. A judge who proceeded as if there were an open discretion on costs unhindered by the practice would almost certainly be regarded as erring in law.

9. So what are the circumstances which justify Dr Mann resisting an order for the costs of the application which he finally lost by majority in the High Court? He raises the following matters.

The behaviour of some of the defendants in Mann v Board of Health & Ors (SC 641 of 1990, 717 of 1990, 458 of 1991).

10. As some of those defendants are persons for whom the Board of Health (and now, as a matter of law, the Territory) was responsible, Dr Mann accused them then, and still accuses them, of deceitful behaviour. The payment into court without admission of liability, he says, was an offer which, in the hard world of financial reality, he could not afford to refuse. Yet his acceptance of it deprived him of the opportunity of vindicating his position. Further, he says, without that behaviour the circumstances which led to the need to make the application for preliminary discovery would not have occurred.

11. Whilst there may be substance in Dr Mann's allegation as to the behaviour of the persons concerned, I do not think that such behaviour should be the subject of inquiry for the purpose of allocating responsibility for the costs of the application for preliminary discovery against the Chief Minister. That behaviour was too long ago and too far removed from the publication by the Chief Minister to Mr Moore of legal advice relating to the litigation to which it led. Besides, it was Dr Mann's decision to accept the money paid into court, and, whilst that decision may be understandable, Dr Mann would have been aware that acceptance of the sum put an end to the litigation and the potential determination of the issues raised by it. I was not informed of the outcome with regard to costs. In the ordinary course of events Dr Mann would be entitled to his costs on a party and party basis to the time of the payment (but not for solicitor and client costs) and responsible for all his costs from the time of the payment onwards.

Legal professional privilege: common law or Evidence Act 1995?

12. The question whether the common law or the Evidence Act 1995 (Cth) (the Evidence Act) applies to legal professional privilege for the purpose of preliminary discovery (and discovery in general) is a question of public importance which was not settled until the High Court decision in Mann v Carnell. However, Dr Mann says, and I accept, that it was a question in which he became enmeshed willy-nilly and the success or otherwise of his application did not depend on it. He submitted that the public stood to gain, and did in fact gain, by the authoritative decision of the High Court, whereas he never stood to gain and therefore should not be held to have lost on this issue. There is merit in the submission.

13. The question whether, applying common law considerations, legal professional privilege applies as between members of the executive and members of the legislature in a Westminster style of government is also of general importance to the law in Australia. Dr Mann conceded that he took this question head on, but submitted that public interest in its determination, and the division of opinion in the High Court, is a strong indication that he alone should not have to bear the costs. Again, there is merit in the submission.

14. Mann v Carnell and Mann v Board of Health & Ors are not the only pieces of litigation in which Dr Mann has had to bear legal costs of proceedings concerning the government of the Territory. O'Neill v Mann [1997] HCA 28; (1997) 191 CLR 204 was another case. A Magistrate sued Dr Mann for defamation arising from a report made by Dr Mann to the then Attorney-General concerning the Magistrate's conduct in other proceedings_._ After the High Court ruled that Dr Mann's report was not protected by absolute privilege, the Magistrate eventually applied for leave to discontinue the defamation action. The action having been cross-vested to the Federal Court, Finn J granted leave to discontinue and made an order which in effect meant that each party pay his own costs: [2000] FCA 1680. Dr Mann drew attention to the fact that the winner-takes-all approach was not applied in that case and asks, whether rhetorically or otherwise, why a similar outcome should not be reached in the present application, where he discontinued the case by accepting the sum paid into court.

15. Dr Mann submits that his actions in Mann v Board of Health should be regarded as those of a "whistleblower" who sought genuinely to expose misconduct on the part of official persons and that these days such actions are protected, if not encouraged, by legislation. I take it that he had in mind that the Public Interest Disclosure Act 1994 applied. It is not necessary to make a decision on that point. I am not sure whether he was confining the point to his original action against the Board of Health or whether it extended to his recent application to expose the correspondence between the Chief Minister and Mr Moore. In any event, I do not think that I am in a position to properly inquire into these matters. The first of them is similar to the matter discussed at [10] and [11] above.

16. In accordance with the above, Dr Mann submits that he personally should not have to shoulder the costs of the government in what is classically a case of the individual against the State on a matter of public interest and in which, viewed globally, he has never completely succeeded nor completely failed. He points out, no doubt correctly, that the Chief Minister will not have to pay costs personally and will be indemnified by the Territory, as were the relevant defendants in Mann v Board of Health. In Mann v Carnell, the High Court at [16], 91 noted that the Territory, whose legal professional privilege was in question, did not seek to be made party to the application for preliminary discovery. Dr Mann submitted that "common sense and justice" should not result in him having to pay "more than 12 peppercorns" with regard to the Chief Minister's costs. There is substance in this submission in the light of the factors discussed above.

17. The winner-takes-all rule is not always followed in public interest litigation. Sometimes indeed the winner can be required to pay the costs of other parties: see Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, Edgley v Federal Capital Press of Australia Pty Ltd [1999] ACTSC 124.

18. There was a strong element of public interest in Dr Mann's application, not necessarily intended at the beginning, but that is how it has turned out. Apart from the question of legal professional privilege, the application was not bound to fail. The majority of the High Court pointed out at [14], 90 that there had been no finding of fact at first instance about the content of the publication. I did not at the stage when the documents had been produced to the court for the purpose of the ruling consider that it was appropriate to make such a finding. I do so now on the question of allocation of responsibility for costs. I put it no higher than to say that the contents of the documents, which I have read, were such that it was arguable that they were defamatory of Dr Mann.

19. In all the circumstances, I think that in the proper exercise of discretion, the appropriate order is that each party pay his and her own costs of the application commenced by originating notice of motion dated 24 February 1998.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Miles.

Solicitor for the respondent: ACT Government Solicitor