FEDERAL COURT OF AUSTRALIA

Oil Basins Limited v Watson [2017] FCAFC 103

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

NORTH ACJ AND RARES J:

INTRODUCTION

1    The appellant, Oil Basins Limited (Oil Basins), appeals against orders made by a judge of this Court on 9 December 2015. The primary judge dismissed an application for review of the taxation of a bill of costs. The review arose in the following circumstances.

2    On 24 February 2014, Gilmour J made orders in favour of the respondents, the applicant in a claimant application for a determination of native title under the Native Title Act 1993 (Cth) (the Act). His Honour ordered that Oil Basins pay the respondents’ costs “of the interlocutory application dated 6 May 2013 including, for the period since 19 March 2013, any costs thrown away by reason of OBL changing its position on the issue of connection”. Those costs were to be paid on an indemnity basis forthwith. On 17 November 2014, the costs orders were confirmed on appeal: Oil Basins Limited v Watson [2014] FCAFC 154.

3    On 22 May 2015, Registrar Trott taxed the respondents’ bill of costs and signed a certificate of taxation on the sum of $161,248.23.

4    On 17 June 2015, Oil Basins filed the application for review of the taxation under r 40.34(2) of the Federal Court Rules 2011. On 2 October 2015, Oil Basins filed an amended application for review of the taxation.

THE JUDGMENT OF THE PRIMARY JUDGE

5    The primary judge said at [10]:

The primary argument made by Oil Basins is that, because the claimants had no liability to pay their lawyer for costs incurred in the conduct of the proceeding, and in fact paid no costs at all, there was nothing to indemnify and all the items in the bill of costs should have been disallowed by the registrar.

6    His Honour found at [15] that Ms Jacki Cole, the then principal legal officer of the Kimberley Land Council (KLC), was properly named as the respondents’ solicitor on the record. The KLC was the representative body acting on behalf of the respondents, but was not the solicitor on the record.

7    His Honour then referred to the argument advanced by Oil Basins as follows:

17    Turning more precisely to the issue at hand, Oil Basins notes that at the taxation before the registrar on 7 April 2015 the current solicitor on the record for the claimants, Mr Kevin Murphy, the principal legal officer of the KLC, conceded that the claimants had no legal liability to pay any costs to Ms Cole.

18    Oil Basins contends that, there being no liability in the claimants to pay Ms Cole, and in circumstances where no costs were in fact paid, there is nothing to indemnify and accordingly all the items in the bill of costs should be disallowed.

8    His Honour continued:

20    Oil Basins further submits that, in any event, whether or not the KLC was able to charge for legal services was not the relevant issue before the registrar at the taxation. It says there was no evidence before the registrar that the KLC or Ms Cole were engaged by the claimants or the terms of any engagement. Rather the evidence was that there was no costs agreement between the KLC and the claimants.

21    Oil Basins says that at the taxation on 7 April 2015, the solicitor now on the record, Mr Murphy, conceded that the claimants had no legal liability to pay any costs to Ms Cole. Oil Basins submits, that being the evidence, the only finding that could be made is that under no circumstances did the claimants have any legal liability to pay costs to Ms Cole.

9    His Honour referred to several arguments put by Oil Basins that the KLC and/or Ms Cole were not entitled to charge legal fees. For instance, it was argued that, contrary to the view adopted by the Registrar, the KLC was not a community legal centre and hence not entitled to charge the respondents legal fees by virtue of that status. These arguments need not be referred to further because they did not figure in the appeal.

10    The primary judge then referred to the relevant argument advanced by the respondents as follows:

27    The claimants do not dispute the key facts, to the effect that they have no liability to pay the costs of Ms Cole, the then solicitor on the record, and have not paid any costs.

28    The claimants say, however, three facts in addition to those set out in Oil Basins’ submissions are relevant:

(1)    the KLC is recognised as a Native Title Representative Body (NTRB) under the NTA;

(2)    the KLC receives funding from the Commonwealth for the services that it conducts to fulfil its functions under the NTA; and

(3)    the KLC is a community legal centre for the purposes of the Legal Profession Act.

…

30    In that regard, the claimants say there is only one issue between the parties and that is whether the Court can apply Mansfield J’s decision in Far West Coast Native Title Claim so as to dismiss the review application.

31    So far as the application of the Far West Coast Native Title Claim decision in the present circumstances is concerned, the claimants concede:

•    there was no costs agreement between the KLC and the claimants; and

•    the claimants have no liability to pay the KLC’s costs.

32    However, the claimants contest the proposition put by Oil Basins that there was no retainer between the KLC or Ms Cole and the claimants, saying that plainly there was. It contends this can be inferred from the fact that Ms Cole was the solicitor on the record and from the many published decisions of the Court recording the fact that the KLC and Ms Cole acted for the claimants. Thus the claimants contend that it follows that while the claimants may not have expected to be liable to pay costs, underlying the relationship was an understanding that such a liability may exist; citing Far West Coast Native Title Claim at [22] to this end.

11    His Honour then said:

35    In the circumstances, I agree with the submission made on behalf of the claimants that the key issue between the parties is whether the Court can follow Far West Coast Native Title Claim so as to dismiss the review.

12    His Honour then referred in detail to the judgment of Mansfield J in Far West Coast Native Title Claim v State of South Australia (No 8) [2014] FCA 635 (Far West). In that case the applicant for a native title determination sought costs of certain interlocutory applications against a Mr Robert Victor Miller. Mr Miller contended that the applicant could not obtain an order for costs because the applicant owed no liability for costs to South Australian Native Title Services Limited (SANTS). SANTS was a native title representative body which provided legal services to the applicant. It would not charge the applicant for its services. It would be funded by the Commonwealth for the functions it provides under the Act including conducting the proceeding for the applicant.

13    Mansfield J made an order under s 85A of the Act that Mr Miller pay the applicants’ costs on a party and party basis save for the disbursements reasonably incurred by the applicant which were to be assessed on an indemnity basis. His Honour explained that the native title representative body was entitled to charge for providing legal services as a consequence of its statutory functions, that the applicant, although not expecting to pay those costs, may have such a liability as a result of the relationship between the applicant and the representative body. In a passage referred to by the primary judge Mansfield J said:

21.    The established jurisprudence is that a party who is represented by the Crown Solicitor or Australian Government Solicitor notionally incurs cost to his solicitor although he will not have to pay any money to the solicitor: see Ditton v Gallagher (1992) 110 ACTR 12 at 15 per Gallop J.

22.    I recognise that the present relationship is a little different in that it is between a Native Title Representative Body and a claim group. However, in my view there is a close analogy to the cases referred to above. Firstly, where a Native Title Representative Body has provided legal assistance in relation to the conduct of a native title determination application, costs will have been incurred by its legal officers on behalf of the applicant for the claim group and even though the applicant for the claim group may not expect to be liable to pay for them, the relationship is such that underlying it is the understanding that such a liability may exist. The Representative Body is providing legal services, and fulfilling its statutory mandate, as contemplated by the NT Act on behalf of that applicant. In addition, the Representative Body in turn is funded to provide those services in a way which expressly provides for the application of those funds in that way. It may be added that the reverse to the present position may also occur. A costs order under s 43 of the FCA Act, having regard to s 87A of the NT Act, may be made in appropriate circumstances against an applicant, and those costs would then in the normal course be paid through the Representative Body provided the applicant was represented through it.

[Emphasis added.]

14    The reasoning in Far West was central to the reasoning of the primary judge. His Honour then applied Far West to reach the conclusion that the respondents were entitled to be indemnified.

THE SUBMISSIONS OF OIL BASINS

15    The argument advanced by Oil Basins on the appeal was within a narrow compass. Mr Cobby, who appeared as counsel for Oil Basins, contended that the primary judge made a finding that Mr Kevin Murphy, the solicitor for the respondents, conceded before the Registrar that the respondents had no liability to pay legal costs to Ms Cole. Mr Cobby further contended that further concessions were made before the primary judge, namely, that there was no costs agreement between the respondents and the KLC, and that the respondents have no liability to pay the KLC’s costs. It followed that the respondents could not obtain an indemnity for costs from Oil Basins because the respondents were not liable for costs. It was argued that, having found that Mr Murphy had made the concession, the primary judge erred by failing to distinguish Far West on its facts, and by holding that Oil Basins was bound to pay the respondents’ costs. Mr Cobby put it as follows:

We don’t come here today to say that native title representative bodies can’t, in appropriate circumstances, obtain an order for costs. What we say is in the particular circumstances of this case, where that liability is negatived by the concession, the right to indemnity doesn’t arise.

…

What we say is that the situation that has arisen in this case has arisen because of particular circumstances between the respondents and the native title representative body, the Kimberley Land Council, where they reached – well, where it’s conceded that there was no liability at all.

16    In support of this argument, Mr Cobby referred to [27] and [31] in the primary judgment, extracted above at [10], in which the alleged concessions were recorded. The first was made before the Registrar, and the second was made in the course of the review.

CONSIDERATION

17    A representative body, such as the KLC, has the statutory facilitation and assistance functions, under s 203BB(1)(b) of the Act, of assisting persons who may hold native title “including by representing them or facilitating their representation … in … proceedings relating to … (i) native title applications”. However, s 203BB(2) requires a representative body not to perform those functions “unless it is requested to do so”.

18    In performing those functions in relation to an application under s 61 of the Act, such as one for a determination of native title, a representative body has to “act in a way that promotes an orderly, efficient and cost-effective process for making such applications”, pursuant to s 203BC(3).

19    The Secretary of the Department administering the Act, on behalf of the Commonwealth, can provide funds to a representative body (s 203C(2)) and the body has to do all things necessary to ensure that payments out of the money were correctly made (s 203DB).

20    Thus, the Act contemplates that a representative body, such as the KLC, would receive funds from the Commonwealth enabling the body to assist an applicant for a determination of native title under s 61 to be legally represented in those proceedings by a solicitor or lawyer on the record, such as Ms Cole or Mr Murphy and by counsel briefed by such a solicitor or lawyer. That is, the Act contemplates that, in the ordinary course, a representative body, in the KLC’s position, would receive a grant of funds from the Commonwealth to enable it to engage a solicitor or lawyer to act, on the Court record, for an applicant and to retain counsel. It followed that there was a chance that the solicitor or lawyer so acting would make a direct claim against the representative body or applicant for which the s 61 application was made, if the Commonwealth did not continue to provide funding, but in the ordinary course no-one needed to be concerned with such a scenario. Moreover, that situation is closely analogous to that when a Minister is represented in his or her official capacity by a solicitor or lawyer acting for the Crown (including when that person retains counsel to appear) in legal proceedings.

21    The practical reality is that Ms Cole was the solicitor on the record, even if employed or retained by the KLC, and the KLC incurred costs (that it paid from money granted to it), through her acting and retaining counsel in the proceedings in which Oil Basins was ordered to pay costs.

22    Oil Basins’ argument on this appeal relied on the alleged finding by the primary judge that Mr Murphy conceded that the respondents had no liability to pay legal costs. However, in addition to [27] and [31] relied upon by Mr Cobby, the primary judge also recorded at [32], extracted above at [10], that the respondents contested the suggestion that Mr Murphy had made an unqualified concession.

23    The primary judge did not make an explicit finding of fact on the question of whether the concession was made by Mr Murphy. However, it was implicit in the course taken by the primary judge that he accepted the respondents’ contention that no such concession had been made. If the primary judge had accepted the position advocated by Oil Basins that the respondents had made the concession, there would have been no occasion to apply Far West.

24    In the course of oral argument it became clear that there was no evidence before the primary judge concerning the making of the alleged concession. His Honour acted on the allegations made in written submissions in the terms recorded by his Honour.

25    The onus of proving that the concession was made lay on Oil Basins. In the absence of that evidence, the appeal was bound to fail given the limited basis upon which Oil Basins alleged that the primary judge had erred.

26    In order to avoid this result, Oil Basins applied to adduce further evidence on appeal to establish that the alleged concession had been made. The Court determined that it was in the interests of justice to allow further evidence to be adduced on appeal. The evidence concerned would be confined and able to be obtained without delay. Thus, orders were made for a short timetable for the filing of affidavits by each party.

27    Oil Basins relied on an affidavit of Timothy Joseph Kavenagh and an affidavit of Stewart Vivyan Forbes both sworn on 5 August 2016. Mr Forbes appeared as counsel for Oil Basins together with Mr Kavenagh instructing before the Registrar on 7 April 2015. Mr Kavenagh and Mr Forbes both took notes at the hearing and copies of those notes were annexed to their respective affidavits.

28    The respondents relied on an affidavit affirmed by Mr Murphy on 6 August 2016. He appeared by phone from the KLC offices in Broome together with Ms Jemma Arman. She was the lawyer in day-to-day charge of the native title claim. Ms Arman no longer works for the KLC and was travelling overseas and unavailable at the time to provide evidence of what occurred before the Registrar. She took file notes at the hearing before the Registrar. Those notes were annexed to Mr Murphy’s affidavit.

29    None of the deponents were required for cross-examination.

30    The relevant parts of Mr Kavenagh’s notes read as follows:

Forbes -    applicant was never going to bill

Murphy -    is hypothetical.

if body funding knew of behaviour was going to go on they would have required the applicants to be charged.

Far West on point. Court knew of circumstances when it made indemnity costs order. – wide discretion of Federal Ct in ordering costs. – costs orders ensure litigation not taken up lightly – ensure parties are ethical + make claims

Forbes -    Murphy

-    can't say they were never going to be charged. May have been the case if we had of known of circumstances that now exist.

[Emphasis added.]

31    Mr Kavenagh deposed that a letter from him to Mr Murphy dated 12 February 2015 was tendered before the Registrar. The letter included the following paragraph:

It appears that under no circumstances would the applicants in the proceedings be liable to Ms Cole for any costs in relation to the abovementioned proceedings. Kindly either confirm that this is the case or provide us with evidence to the contrary.

32    Mr Kavenagh deposed that Mr Forbes then asked Mr Murphy to confirm that the respondents have no liability to pay Ms Cole’s costs. Mr Kavenagh recalled that Mr Murphy replied “I don’t quibble with that at all”. Mr Kavenagh’s notes record that exchange in the same terms as Mr Kavenagh recalled in his affidavit.

33    Mr Forbes’ affidavit was substantially to the same effect. He deposed that:

5.    I then made the submission that “it appears that the applicants are not under any legal liability to pay costs to Jacki Cole”, Ms Cole having been the solicitor on the record for the applicants in the proceedings.

6.    Mr Murphy then said “I don’t cavil with that at all”. Mr Murphy may have said “quabble”(sic) instead of “cavil”.

His file note, although brief, supported that evidence.

34    Mr Murphy deposed that he did not recall the actual words of his discussion with Mr Forbes on this point. Ms Arman’s filenote recorded Mr Forbes’ submission in the following terms:

Forbes        [Ms Cole] not incurring any expenses

no personal liability

Ms Arman’s filenote did not record Mr Murphy’s response to that submission.

35    Whilst there is no difference in substance between the three file notes, it is convenient to focus on Mr Kavenagh’s file note because it is the most comprehensive of them.

36    Near to the beginning of the hearing before the Registrar Mr Forbes put Oil Basins’ primary position, namely, that the respondents were never going to receive a bill for legal costs. Mr Kavenagh’s notes record that Mr Murphy responded that he could not say that the respondents were never going to be charged. There was elaboration around that response. For instance, Mr Murphy said that Far West was on point.

37    That exchange does not demonstrate a concession that the respondents were not to be charged for legal services. The contention that the respondents were never to be charged was rejected directly by Mr Murphy. Further, the reference to Far West signalled that the respondents contended that they were entitled to an indemnity because that was the only basis on which the discussion in Far West could be relevant to the taxation of the bill of costs in this case.

38    Later in the hearing Mr Forbes asked Mr Murphy to confirm the suggestion in the letter of 12 February 2015 that under no circumstances would the respondents be liable for costs to Ms Cole. Mr Murphy did not quibble with that statement. Read in the context of the shortly preceding discussion, that response concerned a liability to Ms Cole, but not a liability to the KLC.

39    A party who challenges the existence of a retainer bears the onus of establishing its absence. Ordinarily, a party who challenges the authority of a solicitor to act for another party should do so by an interlocutory application in the proceedings rather than raising that challenge as a defence to the claim: Australian Workers Union v Bowen (1946) 72 CLR 575 at 590 per Dixon J, 592 per Williams J applying Banco de Bilbao v Sancha [1938] 2 KB 176 at 192 per Greer, MacKinnon and Clauson LJJ.

40    A strong presumption arises that a solicitor has a contract of retainer with the person who is the party for whom the solicitor appears on the record of proceedings: Halliday v Sacs Group Pty Ltd (HCA unreported 23 December 1992) at pp 6-7 per Dawson J with whose views Mason CJ agreed in refusing an application for an extension of time within which to file a notice of appeal in Halliday v High Performance Personnel Pty Ltd (In Liq) (formerly Sacs Group Pty Ltd) (1993) 113 ALR 637 at 639, see too Hudgson v Endrust (Australia) Pty Ltd (1986) 11 FCR 152 at 154-155 per Pincus J.

41    A solicitor who acts on instructions for a party on the record is presumed to be entitled to look to that party for costs, even if the solicitor’s instructions originated from a third person, unless it is proved that there is a contract that negates that presumption: Marsh v Baxter (No 2) [2016] WASCA 51 at [37]-[38] per McLure P, Newnes and Murphy JJA; Lawrie v Lawler (2016) 168 NTR 1 at 96-97 [476]-[478] per Heenan AJ with whom Doyle and Duggan AJJ agreed on this issue at 42 [256].

42    The importance of the qualification to this principle, namely that there be a contract negating the presumption that is legally enforceable underscores both the onus that lay on Oil Basins to prove such a legal relationship, and the imprecision of its attempt to do so. The uncommunicated subjective reservations or intention of one party to a state of affairs is not relevant to the objective ascertainment of a contractual relationship if it exists: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105-106 [24]-[25] per Gaudron, McHugh, Hayne and Callinan JJ.

43    In the result, Oil Basins has not discharged the onus of establishing that the respondents made a concession that they would not be liable to pay legal costs incurred by the KLC in representing them in the interlocutory applications the subject of the order of Gilmour J. That was the only basis on which the appeal was argued. In contrast to the position taken before the primary judge, Oil Basins did not contest that there was a retainer by the respondents with Ms Cole and the KLC. Nor did Oil Basins challenge the correctness of the judgment in Far West. Consequently, no occasion arises for those matters to be canvassed. The appeal fails on the narrow evidentiary basis on which it was argued.

44    Here, Oil Basins did not assert that the respondents had not retained Ms Cole to act as their solicitor. Rather, Oil Basins contended that it was a contractual term of that retainer that she could never recover, in any circumstances, including, for example the insolvency of the KLC, any amount from the respondents in respect of their legal representation in the substantive proceedings.

45    The Native Title Act recognises that Aboriginal and Torres Strait Islander peoples often will need, and should have, entitlements to financial and other assistance in bringing claims under the Act, including for determinations of native title, compensation and Indigenous land use agreements. One thing is clear in the Act and that is that does not presume that Indigenous peoples are necessarily indigent or without the financial capacity to retain lawyers, for valuable consideration payable by them to those lawyers, to make claims under the Act.

46    Rather the Act, in s 85A(1), provides a presumption that each party to proceedings under the Act “must bear his or her own costs”. If Oil Basins’ argument were correct, namely that in circumstances where a representative body such as the KLC, undertook the function, under s 203BB(1)(b), of representation of persons in proceedings relating to native title applications, the presumption in s 85A(1) would be misconceived. That is because one party, namely the person or persons who held, or claimed to hold, native title, would never bear his, her or their own costs, as they would never be liable for such costs in the first place.

47    It follows that the appeal is dismissed.

Associate:

Dated:    6 July 2017

REASONS FOR JUDGMENT

DOWSETT J:

Introduction

48    The persons named as respondents in this appeal comprise the successful applicant for a determination as to the existence of native title pursuant to the Native Title Act 1993 (Cth) (the “Native Title Act”). I shall refer to such proceedings as “the Native Title Application”, and to those respondents collectively as the “Native Title Applicant”. I shall use the same terms (uncapitalized) to address, in a general way, all such proceedings and applicants.

49    At a relatively late stage in the Native Title Application, the appellant (“Oil Basins”) elected to be joined as a respondent. As a result of the way in which Oil Basins conducted itself in those proceedings, the trial Judge (Gilmour J) made an order for costs against it, and in favour of the Native Title Applicant, as contemplated by s 85A of the Native Title Act. That order was upheld on appeal.

50    On 22 May 2015 the matter proceeded to taxation. A Deputy District Registrar (the “taxing officer”) signed a certificate of taxation in the amount of $161,248.23 in favour of the Native Title Applicant (the “taxed bill”). Oil Basins sought review of the taxed bill, submitting that:

    the Native Title Applicant was under no liability to pay any costs incurred in connection with the Native Title Application and therefore could not recover any amount on taxation; and/or

    certain travel and accommodation expenses should have been disallowed by the taxing officer.

51    The primary Judge (Barker J) dismissed the application with costs. Oil Basins appeals from that decision.

Grounds of Appeal

52    The grounds of appeal are as follows:

1.    The learned Judge erred in holding that the [Native Title Applicant] was entitled to be indemnified for the costs as per the certificate of taxation dated 22 May 2015, despite [such applicant] having no legal liability to pay any costs to its solicitor, Ms Cole.

2.    The learned Judge erred in holding [at [54]] that Parliament plainly intended and expected that a native title representative body would be the body that usually and often acts for claimants under the Native Title Act 1993 (Cth), by failing to take into account that in the relevant case Ms Cole acted for and represented the [Native Title Applicant] and at law only a lawyer can represent a party in proceedings before the Federal Court of Australia.

3.    The learned Judge erred in his reasoning by taking [i]nto account [at [55]] that it would be odd if not perverse that a cost order against a respondent could not be the subject of recovery by a native title representative body, the relevant circumstances being that no costs order had been made in favour of any native title representative body.

4.    The learned Judge erred in ordering [Oil Basins] to pay the [Native Title Applicant’s] cost of the review despite there being no evidence of, or finding made, that [Oil Basins] had by any unreasonable act or omission, caused the [Native Title Applicant] to incur costs in connection with the review.

53    Oil Basins did not pursue ground 4. Nor did it appeal against his Honour’s conclusions concerning the travel and accommodation expenses. Grounds 1, 2 and 3, collectively question the entitlement of the Native Title Applicant to recover any costs pursuant to the costs order, given the circumstance alleged by Oil Basins, namely that it did not incur liability to pay any amount by way of costs or outlays, to Ms Cole or otherwise. I should say that the case has been conducted upon the basis that there is no relevant distinction between costs and outlays.

representative bodies

54    In the conduct of the Native Title Application, the Native Title Applicant was assisted by the Kimberley Land Council (the “KLC”), a representative body as defined in s 253 of the Native Title Act. Legal assistance was provided by Ms Jacki Cole, then KLC’s principal legal officer. A representative body must be an eligible body as defined in s 201B of the Native Title Act, and recognized pursuant to s 203AD of that Act. Section 201B identifies four categories of corporation as being “eligible”. Although two of those categories are comprised of corporations incorporated for purposes associated with indigenous matters, companies incorporated under the Corporations Act 2001 (Cth) are also included. The fourth category (identified in s 201B(1)(b)) appears to include corporations which are already representative bodies. There is no suggestion that a representative body must be, or is to be an agent or emanation of the Commonwealth or any of its agencies.

55    The functions and powers of representative bodies are set out in Pt 11 Div 3 of the Native Title Act. Sections 203B-203BJ deal with functions. Section 203B identifies seven functions, the presently relevant function being “facilitation and assistance”. Section 203BB(1) provides:

...

(1)    The facilitation and assistance functions of a representative body are:

(a)    to research and prepare native title applications, and to facilitate research into, preparation of and making of native title applications; and

(b)    to assist registered native title bodies corporate, native title holders and persons who may hold native title (including by representing them or facilitating their representation) in consultations, mediations, negotiations and proceedings relating to the following:

(i)    native title applications;

(ii)    future acts;

(iii)    indigenous land use agreements or other agreements in relation to native title;

(iv)    rights of access conferred under this Act or otherwise;

(v)    any other matters relating to native title or to the operation of this Act.

56    Section 203BB(1)(b) refers to assistance by representing, or facilitating representation in proceedings relating to native title applications. As I understand it, the case has been conducted upon the basis that a representative body may not, itself, represent a party to litigation in the way that a legal practitioner does. However that function may be performed by a legal practitioner who is entitled so to act.

57    Section 203BA may be marginally relevant for present purposes. It provides:

...

(1)    A representative body must use its best efforts to perform its functions in a timely manner, particularly in respect of matters affected by:

(a)    the time limits under this Act; or

(b)    time limits, under another law of the Commonwealth or a law of a State or Territory, that are relevant to the performance of its functions.

...

(2)    A representative body must perform its functions in a manner that:

(a)    maintains organisational structures and administrative processes that promote the satisfactory representation by the body of native title holders and persons who may hold native title in the area for which it is the representative body; and

(b)    maintains organisational structures and administrative processes that promote effective consultation with Aboriginal peoples and Torres Strait Islanders living in the area for which it is the representative body; and

(c)    ensures that the structures and processes operate in a fair manner, having particular regard to:

(i)    the opportunities for the Aboriginal peoples or Torres Strait Islanders for whom it might act to participate in its processes; and

(ii)    the extent to which its processes involve consultation with those Aboriginal peoples or Torres Strait Islanders; and

(iii)    its procedures for making decisions and for reviewing its decisions; and

(iv)    its rules or requirements relating to the conduct of its executive officers; and

(v)    the nature of its management structures and management processes; and

(vi)    its procedures for reporting back to persons who hold or may hold native title in the area, and to the Aboriginal peoples or Torres Strait Islanders living in the area.

58    This section requires a representative body to perform its functions in particular ways. It applies to the facilitation and assistance function generally, including the provision of legal representation in native title applications. Parliament has chosen to impose certain duties upon representative bodies which might otherwise be express or implied terms of a solicitor’s retainer. Section 203BC seems to serve a similar purpose. It provides:

203BC How facilitation and assistance functions are to be performed

General

(1)    In performing its facilitation and assistance functions in relation to any matter, a representative body must:

(a)    consult with, and have regard to the interests of, any registered native title bodies corporate, native title holders or persons who may hold native title who are affected by the matter; and

(b)    if the matter involves the representative body representing such bodies corporate, native title holders or persons – be satisfied they understand and consent to any general course of action that the representative body takes on their behalf in relation to the matter.

Consent of native title holders etc.

(2)    For the purposes of paragraph (1)(b), a native title holder or a person who may hold native title is taken to have consented to action if:

(a)    where there is a process of decision-making that, under the traditional laws and customs of the group to which he or she belongs, must be complied with in relation to giving consent of that kind – the consent was given in accordance with that process; or

(b)    where there is no such process of decision-making – the consent was given in accordance with a process of decision-making agreed to and adopted by the members of the group to which he or she belongs in relation to giving the consent or giving consent of that kind.

Streamlining of applications process

(3)    In performing its facilitation and assistance functions in relation to an application under section 61 in relation to land or waters wholly or partly within the area for which the body is the representative body, the representative body must:

(a)    act in a way that promotes an orderly, efficient and cost-effective process for making such applications; and

(b)    if the land or waters covered by the application are wholly or partly covered by one or more applications (including proposed applications) of which the representative body is aware – make all reasonable efforts to minimise the number of applications covering the land or waters.

59    A representative body’s powers are set out in s 203BK. Relevantly, ss 203BK(1) and (2) provide:

(1)    A representative body has power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

(2)    Without limiting subsection (1), a representative body has power to enter into arrangements and contracts to obtain services to assist in the performance by the representative body of its functions.

60    Divisions 4 and 5 deal with finance and financial accountability, including audit arrangements. Section 203C contemplates that each representative body will be funded by the Commonwealth. Although the possible availability of other sources of income is not expressly excluded, there is no suggestion that a representative body has any obligation to obtain funds from other sources.

the right to practise in this court

61    At first instance and, to a lesser extent, on appeal the parties addressed the nature and extent of Ms Cole’s right to practise in this Court. Much was said concerning the entitlement to practice as a legal practitioner under Western Australian law. In my view that debate was largely misconceived. Entitlement to practise in federal courts is regulated by Pt VIIIA of the Judiciary Act 1903 (Cth) (the “Judiciary Act”). Section 55A contemplates admission to practise pursuant to rules promulgated by the High Court. No such rules have been promulgated. Sections 55B and 55C effectively provide that a barrister or solicitor who is entitled to practise in the Supreme Court of a State or Territory is entitled to practise in federal courts, provided that his or her name is on the Register of Practitioners, referred to in s 55C(1). Any consideration of Ms Cole’s entitlement to practise should have started with those sections. Western Australian law may have been relevant to Ms Cole’s entitlement to have her name entered in the Register, and to the extent of her entitlement to practise. See APLA Ltd v Legal Services Commissioner of New South Wales (2005) 224 CLR 322 at [22].

62    In its written submissions Oil Basins seems to assume that entitlement to practise in this Court is to be derived from r 4.01 of the Federal Court Rules 2011 (the “Rules”). See Oil Basins’ submissions at para 9, footnote 8. In s 4 of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”), the term “lawyer” is defined to mean, “a person enrolled as a legal practitioner of a federal court or the Supreme Court of a State or Territory”. There is no requirement that the practitioner’s name be on the Register. However the Federal Court Act does not purport to regulate entitlement to practise. The definition seems to have been included for the purposes of Part VB, concerning case management, including the obligations of practitioners in that area. Hence use of the term, as defined, for the purposes of the Federal Court Act does not raise any inconsistency between that Act and the provisions of the Judiciary Act relating to entitlement to practise. However the definition has been included in the dictionary contained in the Rules and therefore applies to r 4.01, which rule appears to entitle a party to be represented by a lawyer as so defined. That provision seems to be inconsistent with the requirements of the Judiciary Act in that it does not require, as a condition of the entitlement to practise in federal courts, that the practitioner's name be on the Register. I am inclined to the view that r 4.01 should be read as authorizing only representation by a practitioner whose name is on the Register. Alternatively, the rule may be at least partially invalid.

63    Section 85 of the Native Title Act provides:

A party may appear in person or may be represented by a barrister, a solicitor or, with the leave of the Federal Court, another person.

64    It is probable that this section assumes that any such barrister or solicitor will be entitled to practise in the Federal Court pursuant to s 55B of the Judiciary Act. It seems unlikely that s 85 was intended to modify the effect of s 55B. The effect of any such modification would be that any person who could accurately claim to be a barrister or solicitor, anywhere in the world, would be entitled to appear in Native Title proceedings in this Court. The only effective way of limiting the meaning of s 85 is by reference to the Judiciary Act.

65    Where there is no entitlement to practise, the practitioner will generally not be able to recover professional costs or outlays. See Guss v Veenhuizen (No 2) (1976) 136 CLR 47 at 52 and 59-60. See also University of Western Australia v Gray (No 25) (2009) 180 FCR 483. However these matters seem to be of little moment for present purposes. On appeal, there has been no suggestion that Ms Cole was not entitled to practise in this Court.

the award of costs

66    The question in dispute in this appeal is whether the amounts allowed in the taxed bill were properly allowed. The amounts were, as far as I can see, outgoings by way of counsels’ fees and travel and accommodation expenses.

67    The Court’s power to award costs is statutory. Section 43(1) of the Federal Court Act provides:

(1)    The Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which this or any other Act provides that costs must not be awarded. This is subject to:

(a)    subsection (1A); and

(b)    section 570 of the Fair Work Act 2009; and

(c)    section 18 of the Public Interest Disclosure Act 2013.

68    Section 43(2) provides:

Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.

69    Section 85A of the Native Title Act provides:

(1)    Unless the Federal Court orders otherwise, each party to a proceeding must bear his or her own costs.

...

(2)    Without limiting the Court’s power to make orders under subsection (1), if the Federal Court is satisfied that a party to a proceeding has, by any unreasonable act or omission, caused another party to incur costs in connection with the institution or conduct of the proceeding, the Court may order the first‑mentioned party to pay some or all of those costs.

70    That section may be seen either as a limitation upon the operation of s 43 of the Federal Court Act, or as a separate grant of power. The distinction does not matter for present purposes.

71    It has long been accepted that an award of costs pursuant to a statutory power authorizes an order that one party to the litigation in question pay to the other party, outgoings properly incurred in the conduct of the litigation. In that sense the party in whose favour the order is made is to be indemnified for amounts so expended, or liabilities incurred. Costs are not punitive. See Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750 at [37] and Hawker v Weston (No 2) [2015] FCA 521 at [9]. The order is made in favour of the party, not the solicitor. Hence amounts recoverable by a party may include amounts paid or payable to his or her legal practitioner. In the present case, Oil Basins asserts that the Native Title Applicant has, at no time, been obliged to pay any amount to either KLC or Ms Cole, so that there is no amount in respect of which it may be indemnified. In effect, the question is whether the Native Title Applicant had any obligation to pay the amount as identified in the taxed bill, or whether there is some other basis upon which it may recover such amounts.

72    Usually, a legal practitioner’s entitlement to recover the amounts of professional costs and outlays from the client is pursuant to a contract of retainer. Not infrequently, the existence of a contract of retainer is inferred from the fact that the legal practitioner apparently acted in the interests of the relevant party, with his or her knowledge. Where a retainer is inferred, it may be relatively clear that there was at least an implied undertaking to pay the practitioner’s costs and outgoings. However, in this case, Oil Basins asserts that KLC provided legal services to the respondents pursuant to Pt 11 Div 3 of the Native Title Act. Whether there was also a retainer, and whether it included an undertaking to pay costs and outgoings may depend upon the proper construction of the Native Title Act and the dealings between the Native Title Applicant on the one hand, and KLC and/or Ms Cole on the other.

73    The following passage from the decision of Dawson J in Halliday v SACS Group Pty Ltd (High Court; 23/12/1992) at pp 6-7 provides a succinct description of the proper approach to the present question:

This argument is clearly based on the principle stated by Bankes L.J. in Adams v London Motor Builders:

“The principle upon which costs as between party and party are allowed is that the costs are awarded to the person claiming them as an indemnity. That being the principle, it follows that any one who is not in a position to claim to be indemnified is not entitled to an order for party and party costs.”

For this reason it has been held that costs cannot be claimed by a party in an action if the solicitors in the action were not engaged by that party, that is, if there was no contract of retainer between the solicitors and that party. However, contrary to his submissions, it is the applicant who bears the onus of establishing the absence of this contract of retainer.

The mere fact that a person appears on the record as the solicitor for a party does not necessarily justify the conclusion that there is a contract of retainer between the solicitor and that party. But, at least where the party is aware of this and takes no steps to rectify it, then a presumption must arise that there is a contract of retainer between them. And, both in so far as the Court is concerned and as between the parties to an action, the presumption that the solicitor on the record represents the party for whom he is recorded as being solicitor must surely be a strong one.

[Footnotes omitted.]

74    Mason CJ, in hearing an application for an extension of time within which to appeal against his Honour’s decision, effectively adopted this reasoning. See Halliday v High Performances Personnel Pty Ltd (in liq) (1993) 113 ALR 637. However, even a strong presumption may be displaced. Further, a retainer does not necessarily include an express or implied undertaking to pay the practitioner’s costs and outgoings.

75    In the present case, Oil Basins submits that the Native Title Applicant had no obligation to pay any amount to Ms Cole or KLC, their services having been provided pursuant to the Native Title Act. The conduct of the case, at first instance and on appeal, must be seen in light of the fact, known to all parties that such services were so supplied. Implicit in Oil Basins’ case is the proposition that there was, therefore, a basis for concluding that KLC and Ms Cole had provided legal services other than pursuant to a retainer containing an express or implied undertaking to pay anything to either of them. Further, Oil Basins relies upon the fact that when Mr Murphy, KLC’s Principal Legal Officer, was asked to say whether there were circumstances in which the Native Title Applicant could have been asked to pay any amount, he effectively said only that such a possibility could not be excluded.

76    I should say that there appears to be a pervading inconsistency in the Native Title Applicant’s position concerning the question of its liability to pay costs to Ms Cole or KLC. On the one hand, it accepts that there was no such liability. On the other hand, it relies upon the decision of Mansfield J in Far West Coast Native Title Claim v South Australia (No 8) [2014] FCA 635, which decision depends upon the existence of some such “underlying” liability to pay costs. Hence I must consider the case on both bases. My attempts to deal with such inconsistency may cause these reasons to be, in places, a little opaque.

the native title applicant, klc and ms cole

77    A representative body’s functions include the supply of legal services to native title applicants within a specified geographical area (ss 203A, 203B and 203BB). Such supply is to be funded by the Commonwealth (s 203C). These matters would be known to all representative bodies and to native title applicants and claim groups who seek such assistance. There are limitations upon a representative body’s capacity to provide and fund legal proceedings. First, it must be asked to do so. Second, it can only do so to the extent that its resources and prioritization decisions permit. The Native Title Applicant submits that provisions of the Native Title Act may be construed so as to authorize the charging of native title applicants for the provision of services. I am unable to see any substance in that submission. Further, such a construction would be most unfavourable to the indigenous people whom the legislation was designed to benefit.

78    The preamble to the Native Title Act includes the following statement:

A special procedure needs to be available for the just and proper ascertainment of native title rights and interests which will ensure that, if possible, this is done by conciliation and, if not, in a manner that has due regard to their unique character.

Governments should, where appropriate, facilitate negotiation on a regional basis between the parties concerned in relation to:

(a)    claims to land, or aspirations in relation to land, by Aboriginal peoples and Torres Strait Islanders; and

(b)    proposals for the use of such land for economic purposes.

It is important that appropriate bodies be recognised and funded to represent Aboriginal peoples and Torres Strait Islanders and to assist them to pursue their claims to native title or compensation.

It is also important to recognise that many Aboriginal peoples and Torres Strait Islanders, because they have been dispossessed of their traditional lands, will be unable to assert native title rights and interests and that a special fund needs to be established to assist them to acquire land.

The Parliament of Australia intends that the following law will take effect according to its terms and be a special law for the descendants of the original inhabitants of Australia.

The law, together with initiatives announced at the time of its introduction and others agreed on by the Parliament from time to time, is intended, for the purposes of paragraph 4 of Article 1 of the International Convention on the Elimination of All forms of Racial Discrimination and the Racial Discrimination Act 1975, to be a special measure for the advancement and protection of Aboriginal peoples and Torres Strait Islanders, and is intended to further advance the process of reconciliation among all Australians.

79    It is difficult to reconcile with those aims, an intention that in some circumstances, a native title applicant will be liable to pay a representative body for costs and outlays incurred by it in performing its statutory functions, which outgoings have been met using funds provided by the Commonwealth. Section 85A demonstrates that Parliament intended that those who became involved in proceedings under the Native Title Act should not generally have to pay the costs of other parties. Although the section permits the Court to depart from that general rule, it does not purport to change the nature of a costs order as an indemnity against a liability incurred by the party in whose favour such order is made.

80    It is universally acknowledged that indigenous people and communities have long suffered, and continue to suffer serious financial disadvantage. It is inconceivable that Parliament intended that in any circumstances, native title applicants or claim groups should incur an obligation to pay for the services provided by a representative body under the Native Title Act and at the expense of the Commonwealth.

The decision at first instance

81    At first instance and on appeal, the Native Title Applicant has relied heavily upon the decision of Mansfield J in Far West Coast. It was largely the basis of the primary Judge’s reasoning. However, one decision at first instance, based upon one set of facts, cannot sensibly be advanced as establishing the law to be applied to another set of facts. Much of the reasoning in Far West Coast, and in argument at first instance, focussed upon State provisions concerning the entitlement to practise in South Australia and Western Australia respectively, matters which I consider to be largely irrelevant for present purposes. I shall return to the reasoning in Far West Coast. However I should first examine the primary Judge’s reasons.

82    First, the primary Judge concluded that Ms Cole, and not KLC was, at relevant times, the solicitor on the record. By the time of the hearing at first instance, Mr K Murphy had assumed Ms Cole’s position in KLC. Oil Basins took a number of points concerning entitlements to practise in Western Australia. I do not propose to discuss those matters. It also submitted that:

    KLC could not be the solicitor on the record for the Native Title Applicant;

    there was no evidence before the taxing officer that KLC or Ms Cole had been engaged by the Native Title Applicant, or as to the terms of any such engagement;

    there was evidence that there was no costs agreement between KLC and the Native Title Applicant;

    at the taxation, Mr Murphy conceded that the Native Title Applicant had no legal liability to pay any costs to Ms Cole;

    in those circumstances, it followed that in no circumstances could the Native Title Applicant be under any legal liability to pay costs to Ms Cole;

    to the extent that the decision in Far West Coast might be relevant, the decision should be distinguished upon the basis that the South Australian provisions concerning legal practitioners, including provisions as to the recovery of costs by legal aid providers, differed from the Western Australian provisions; and

    in those circumstances, the amount of the taxed bill should be reduced to zero, and/or the certificate of taxation should be set aside and the assessment of costs, permanently stayed.

83    The primary Judge summarized the Native Title Applicant’s submissions as follows:

    the issue between the parties is as to whether the decision in Far West Coast applies so as to lead to the dismissal of Oil Basins’ application;

    there was no costs agreement between KLC and the Native Title Applicant;

    the Native Title Applicant had no obligation to pay KLC’s costs; and

    the Native Title Applicant had no liability to pay Ms Cole’s costs.

84    I should say that his Honour used the word “claimants” rather than the words, “Native Title Applicant”. However I understand his Honour to have been referring to the entity which received the benefit of the order for costs.

85    At [32] the primary Judge said:

However, the claimants contest the proposition put by Oil Basins that there was no retainer between the KLC or Ms Cole and the claimants, saying that plainly there was. It contends this can be inferred from the fact that Ms Cole was the solicitor on the record and from the many published decisions of the Court recording the fact that the KLC and Ms Cole acted for the claimants. Thus the claimants contend that it follows that while the claimants may not have expected to be liable to pay costs, underlying the relationship was an understanding that such a liability may exist; citing Far West Coast Native Title Claim at [22] to this end.

86    This submission contains a number of curiosities. First, it is inconsistent with the concession that the Native Title Applicant had no liability to pay anything to KLC or to Ms Cole. It seems to assert a retainer between the Native Title Applicant and both KLC and Ms Cole. As KLC is not a legal practitioner, it cannot have been retained as such. Secondly, the Native Title Applicant asserted that it can be inferred that KLC and Ms Cole acted for it. Again, it cannot be the case that KLC acted as a legal practitioner. In summary, the Native Title Applicant submitted that although it may not have expected to be liable to pay costs, “underlying the relationship was an undertaking that such a liability may exist.” The passage is borrowed from the judgment in Far West Coast. I shall examine its correctness at a later stage. For the moment, I simply point out that the relevant question is whether the Native Title Applicant was liable to pay anything, not whether the Native Title Applicant expected to discharge any such liability. The submission assumes the existence of a liability without establishing any basis for such assumption, and in the face of the concession that there was no such liability.

87    The nature of the “understanding” is not clear. In particular, there is no attempt to identify those who may have shared that “understanding”. To be relevant for present purposes, it would surely have had to be a shared understanding between the Native Title Applicant on the one hand, and Ms Cole and/or KLC on the other. Further, the “understanding” would, for present purposes, have to give rise to a liability to pay. I have difficulty in accepting that the Native Title Applicant shared any such understanding, given the circumstances in which KLC provided Ms Cole’s services. In any event, even if there were some such understanding, it would surely be superseded, at least for present purposes, by the concession that no amount was payable to either Ms Cole (at [27]) or KLC (at [31]) by way of costs. It is impossible to reconcile the concessions at [27] and [31] with the submission identified at [32].

88    The primary Judge then concluded that the question between the parties was, “whether the Court can follow [Far West Coast] so as to dismiss the review”, and proceeded to analyse that case, observing that Mansfield J:

    did not “analyse” the question as to whether a representative body could be, “in a strict sense”, a legal representative; and

    said that although the Native Title Applicant did not personally incur legal costs in engaging the representative body, that body incurred legal costs in defending the relevant proceedings.

89    The primary Judge inferred that Mansfield J did not treat the representative body as the solicitor on the record, but as a representative body which incurred legal obligations in performing its statutory function under the Native Title Act in “acting for” relevant native title applicants. I again point out that the performance of such statutory function was financed by the Commonwealth.

90    The primary Judge then observed that Mansfield J had concluded that the statutory situation was analogous to that in which a Crown solicitor represents a party in litigation, where the Crown has an interest in such litigation. In that situation, the represented party, if successful may recover the costs of the Crown solicitor’s appearance, notwithstanding the fact that he or she may be under no obligation to pay. Although accepting that the analogy was not precise, Mansfield J concluded that when a representative body provided legal assistance to a native title applicant, “costs will have been incurred by its legal officers on behalf of [such applicant] and, even though [such applicant] may not expect to be liable to pay for them, the relationship is such that underlying it is the understanding that such a liability may exist.”

91    The purpose of this analogy seems to have been to identify an obligation to pay which was not dependent upon the existence of a retainer or any other agreement between the parties. There are at least two difficulties with this analogy. First, the Crown may only intervene in this way if it has an interest in the litigation. The relevant court may determine whether there is such an interest. See Inglis v Moore (No 2) (1979) 46 FLR 470 at 472. The Court’s power to decide the matter suggests that the Crown’s interest must be more than a purely political interest. Secondly, both Mansfield J and the primary Judge seem to have concluded that the decision in Inglis v Moore established that the party represented by the Crown solicitor incurred an “underlying” obligation to pay its costs, thus justifying the assertion that in both Far West Coast and the present case, such a liability had arisen. However Inglis v Moore proceeded on the basis that no liability arose, and that the represented party’s entitlement to costs depended on the fact of the Crown’s interest in the matter, not the existence of any implied or underlying liability. I shall return to this matter when I consider the decision in Far West Coast.

92    The primary Judge then noted that Mansfield J had also drawn an analogy between representative bodies and legal aid providers, and that his Honour had rejected the suggestion that such analogy was false, given that the legal aid legislation generally established a “costs regime”. Mansfield J addressed this aspect at [23]-[25]. The primary Judge seems to have adopted the reasoning in those paragraphs. On that basis, his Honour rejected Oil Basins’ submissions concerning the taxed bill.

far west coast

93    In Far West Coast Mansfield J considered an application for an order as to costs in connection with an interlocutory application made by a respondent to a native title application. After referring to s 43 of the Federal Court Act and s 85A of the Native Title Act, Mansfield J noted that the Native Title Applicant was seeking costs against the relevant party (“Miller”), and that Miller submitted that :

… there is no liability owed by [the Native Title Applicant) to their legal representative [the representative body]. That is because [the representative body] will not charge [such applicant] for the legal services it has provided, and in turn [the representative body] receives funding from the Commonwealth for the services which it conducts to fulfil its function under the [Native Title Act] including the conduct of this proceeding for the [Native Title Applicant].

94    His Honour observed that similar orders had been previously made in similar circumstances.

95    Counsel for Miller submitted that although representative bodies were analogous to legal aid bodies, established under State or Territory legislation, such legislation generally permitted those bodies to seek orders for costs. Miller submitted that, in the absence of any such statutory authority, a representative body under the (Native Title Act) could not charge for legal services, and so the assisted party, having the benefit of an order for costs, could not recover an amount which it had no liability to pay. Mansfield J observed that the relevant native title applicant had not personally incurred legal costs by “engaging” the representative body, but that the representative body had incurred costs in resisting Miller’s application.

96    His Honour said, at [18]-[21]:

18.    In my view, this situation is analogous to the relationship between the Crown and its legal officers. In Inglis v Moore … , St John and Brennan JJ found at 472:

[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.

...

[T]he 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.

19.    The position is well-established. In The Begarin … , Nicholls CJ found that the Crown does not have its cases conducted free of cost, but instead pays salaries which must be taken to be merely the mode in which it remunerates its legal officers who conduct its cases for it. This is not dissimilar to salaries paid to salaried lawyers from legal aid institutions and public bodies and authorities.

20.    Going back further, Lord Stormonth Darling observed in Lord Advocate v Stewart … at 945:

So long as fees proposed to be charged are reasonable in amount...there is no reason why he should escape part of the consequences of his unrighteous litigation merely because of this arrangement between the Crown and its officers. In one sense, no doubt, he does not cause any additional expense to the Crown; because the salaries would have to be paid whether he litigated or not. But it is to be presumed that the salaries have been calculated on the footing of there being an average amount of litigation, and each salary therefore may be said to contain the equivalent of each separate fee; if so, there is no injustice in the Crown being recouped to that extent by the losing party.

21.    The established jurisprudence is that a party who is represented by the Crown Solicitor or Australian Government Solicitor notionally incurs cost to his solicitor although he will not have to pay any money to the solicitor: see Ditton v Gallagher … per Gallop J.

97    There appears to be an inconsistency between the reference in the first subparagraph of [18] to the successful party’s not being under a personal liability to the Crown solicitor for costs, and the reference at [21] to such person “notionally” incurring such a liability. Much may depend upon the meaning of the word “notionally”.

98    His Honour considered that there was a “close analogy” between that situation and the relationship between a representative body and a native title applicant. His Honour then observed that although such an applicant may not expect to be liable to pay for costs incurred by a representative body’s legal officer, “the relationship is such that underlying it is the understanding that such a liability may exist”. There is no explanation as to how or why such liability “underlies” the relationship. As I have said, the decision in Inglis v Moore does not depend upon the existence of any such liability.

99    Inglis v Moore recognizes that the Crown may make its legal officers available to act for a party to litigation if it has an interest in that litigation. As I have observed the Court may determine whether the Crown has such an interest. See Inglis v Moore at p 472, and Brownsea Haven Properties Ltd v Poole Corporation [1958] 1 Ch 574 at 592 and 607. As I have also observed, the decision in Inglis v Moore is not dependent upon any liability as between the represented party and the Crown legal officer. At page 472, St John and Brennan JJ said:

It has long been the rule that 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: cases which define or illustrate the rule include Irving v Gagliardi; MacLaurin v Hall; Lenthall v Hillson; Ex parte W.A. Grubb Pty Ltd; Re Johnston; and Blackall v Trotter (No 1). In the case last mentioned the Full Court of the Supreme Court of Victoria said: “In our opinion, neither in that case nor in Lenthall v Hillson, 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 Gundrey v Sainsbury where no expense at all was incurred in the employment of the solicitor.

[Footnotes omitted.]

100    The extract from Blackall v Trotter (No 1) is self-explanatory but the matter was taken further in Lenthall v Hillson [1933] SASR 31 at 36-39. In that case the Court concluded that the rationale of the cases was that where proceedings were brought in the name of one party (the “nominal party”) but, in fact, they were being conducted by another party (the “real party”) for the purposes of taxation, costs were given by way of indemnity to the real party in whose interest the costs were incurred, although the order was made in favour of the nominal party. Napier J (for the Court) observed that the general rule was that, “the Courts of law would not notice any rights or liabilities other than those appearing on the record, and the party on the record was the only person for, or against, whom the judgment could be given.” His Honour then referred to cases in which a beneficiary was allowed to sue in the trustee’s name without obtaining his or her consent. At 37 Napier J continued:

The typical case was the assignment of a debt and the practice is stated in Lush, at p 226: - “If a person assigns a debt to another he impliedly gives that person authority to sue in his name (citing Pickford v Errington, (1835) 4 D.P.C. 453) … but in all cases the person whose name is on the record as the plaintiff is entitled to an indemnity to cover his liability for costs, and no action should be commenced till his consent has been sought for, and a sufficient indemnity tendered and refused. The question then arises in one of two ways, either upon an application by him to set aside the proceedings, or if he gives a release, etc.”

It is apparent that in these 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.

101    At 38, his Honour continued:

The question in the present case arises upon the construction of the Statute. It is the same question as in Attorney-General v Shillibeer (supra), i.e. the meaning of the word “costs,” and we think that the meaning of the word, as it was formerly used in the Ordinance 6 of 1850, must be determined by reference to the practice current at that time. In our view of the authorities it is manifest that, in the Courts of common law, “costs” were understood as an indemnity to the party bringing the action, without regard to the liability of the nominal party, whose name must necessarily appear upon the record. We think that this view was accepted in R v Archbishop of Canterbury, [1903] 1 K.B. 289, where the Court of Appeal refused to disallow the taxed costs of the solicitor to the Treasury, who defended on behalf of the Archbishop. See per Romer L.J., at p. 295.

102    In the later decision of Blackall v Trotter (No 1) [1969] VR 939, the Victorian Full Court indicated that it would not limit the “principle” to the situation in which a Crown-employed solicitor acted for a party, referring to the decision of the New South Wales Full Court in New Pinnacle Group Silver Mining Co v Luhrig Coal and Ore Dressing Appliances Co (1902) 2 SR (NSW) 50. In that case proceedings had been taken in the name of a person who had been indemnified for his costs by the “real” party. Clearly the “real” party had taken the action in the name of the “nominal” party, presumably because the former had an interest in the proceedings.

103    It has not been suggested that KLC had any interest of the relevant kind in the Native Title Application. In a broad sense, KLC had, by virtue of its statutory duties, some interest in the conduct of native title proceedings in the area for which it was responsible, but in my view, it cannot be said that it had any particular interest in the outcome of the Native Title Application. It was, in no sense, the “real” party, just as the Native Title Applicant was, in no sense, merely a nominal party.

104    In Inglis v Moore, St John and Brennan JJ identified the Crown interest (at 473) as “an interest in protecting its employees against claims brought against them in respect of acts done within the scope of their employment … not only to protect the Commonwealth from claims made against it on the footing of its vicarious liability … but also to protect employees in performing the functions of their employment from the risk of a personal liability for costs, …”.

105    The decision in R v The Archbishop of Canterbury ex parte Cobham [1903] 1 KB 289 is one of the seminal cases in this area. Cobham sought mandamus against the Archbishop. The Crown offered to conduct the case on behalf of the Archbishop. The offer was accepted. In these secular times, it may seem that the government had no real interest in those proceedings. However the Archbishop was the head of the established Church, and therefore closely linked to government. In other circumstances mandamus would not have been available. Further, as the headnote reveals, the circumstances in which relief was sought was a matter in which the Crown had an interest. The report of the decision at first instance (reported at [1902] 2 KB 503) indicates that the matter concerned the validity of the appointment of a bishop, whose appointment required the King’s assent. Hence there was a substantial legal, perhaps even constitutional interest in the matter.

106    Properly understood, the present case cannot be treated as being analogous to that in Inglis v Moore. There is no question of any “real” or “nominal” party. Further, the decision offers no basis for inferring, in the present case, that the Native Title Applicant undertook any “underlying” liability to pay costs and outlays to KLC. Indeed the decision in that case was clearly based upon the proposition that the rule or practice relating to Crown representation was not based upon any express or implied liability, on the part of the represented party, for the costs and outlays incurred by the Crown.

107    The last four sentences of [22] in Far West Coast are said to demonstrate the appropriateness of the analogy. With all respect, I am unable to accept that proposition. The practice concerning Crown solicitors is not dependent upon fulfilling any statutory duty. It rather involves an exercise of the Crown’s administrative function, lacking any specific statutory basis. The practice does not depend upon there being specific funding for the provision of Crown representation. The practice is based solely upon the interest of the Crown in the matter. The proposition that in some circumstances, the representative body might meet an order for costs made against a native title applicant, is irrelevant. Further there is no specific provision establishing any liability to do so, unless it can be seen to be incidental to the facilitation and assistance function.

108    The judgment in Far West Coast at [23] is difficult to understand. Whilst representative bodies and legal aid bodies may both provide legal assistance, using government money, that characteristic, in itself, says nothing about the relationship between an entity of either kind and a recipient of such legal assistance, or the capacity of such an entity to recover costs and outlays from such a recipient.

109    The absence of any “specific costs regime” in the Native Title Act cannot possibly assist in drawing an inference as to the Native Title Applicant’s liability to pay. The assertion that there is no difference “in principle” between representative bodies and legal aid bodies has little meaning in the absence of any identification of the principle in question. Further, the issue is not whether a representative body can seek costs in that capacity. The question is whether a Native Title Applicant may recover, pursuant to an order for costs, cost and outlays which it is not liable to pay. Further, in each case, the nature of the entity must be determined by reference to the relevant statute. There is no warrant for assuming that all bodies providing legal assistance (including representative bodies) under Commonwealth, State and Territory legislation have similar purposes and are intended to operate in similar ways.

110    It is then said that s 85 of the Native Title Act confers a wide jurisdiction to make costs orders. Undoubtedly, Mansfield J meant to refer to s 85A. Opinions may differ as to the width of that power, given that the starting point is that there should be no costs orders. However it is true that orders may be justified in many different circumstances. This case is not about the power to order costs. As was pointed out in Lenthall, it is rather about the meaning of the word “costs” in the context in which it is used, including the provisions of the Native Title Act. The point is that in the context of legal proceedings, the word “costs” inevitably carries with it, the notion of indemnity. It cannot seriously be argued that Parliament intended, in enacting s 85A, to empower this Court to make costs orders which go beyond the indemnification of the relevant party against his or her liability to pay such costs.

111    It is said that if a representative body retains independent lawyers, “[i]t would be difficult to suggest that the independent lawyer … should not be able to seek costs from another party in appropriate circumstances”. There is, with all respect, a certain awkwardness of language in that assertion. A lawyer cannot generally seek an order for costs against a party. Any order will be in favour of the lawyer’s client. The client’s capacity to recover under such an order depends upon his or her having incurred liability to pay. If the client is liable to pay the lawyer, the former, not the latter, will recover the amount from the other side. The question is whether there is any such liability.

112    Finally, it is said that, “[T]o preclude [representative] bodies from seeking costs orders through [a native title] applicant, including disbursements such as those to counsel, when appropriate could work obvious injustice in a real and practical sense where [the representative body] is either funding the legal services for [a native title applicant] or is providing its own legal resources to [a native title applicant]”.

113    With all respect, I do not accept that the present problem can be resolved by reference to generalized notions of justice. The problem arises out of the way in which KLC and, perhaps, other representative bodies conduct business. If such a body wishes to ensure that a native title applicant can recover under any order for costs, it need only enter into an appropriate agreement with it, either at the commencement of the proceedings or prior to the incurrence of a particular cost or outlay. No doubt there will be difficulties. The relevant native title applicant may not wish to do so. The Commonwealth might disapprove. Alternatively, the representative bodies could seek appropriate amendments to the Native Title Act.

114    I do not accept that the decision in Far West Coast offers any assistance for present purposes.

the burden of proof

115    It is for Oil Basins to show that the primary Judge erred in dismissing its application. In my view, to the extent that his Honour’s decision depended upon the reasoning in Far West Coast, such error has been demonstrated. However, I understand the Native Title Applicant to have advanced below, and to advance on appeal, an argument that does not rely upon that decision. That alternative argument is that s 85A, properly construed, permits the Court to award costs to an applicant which is assisted by a representative body, irrespective of whether the applicant is liable to pay that body’s costs. At least part of that argument seems to be based upon the proposition that Oil Basins does not challenge the correctness of the reasons in Far West Coast, but rather argues that the decision should be distinguished. That proposition does not accurately reflect Oil Basins’ position. Oil Basins submits that the decision in Far West Coast can only be justified on the basis that Miller had not established that the relevant native title applicant had no liability for costs. Oil Basins submits, in the present case, that it has established that the Native Title Applicant had no such liability.

116    To some extent I have already dealt with the submission that as a matter of construction, s 85A, in some way, contemplates recovery of costs, notwithstanding the fact that there is no liability to pay such costs. However, in view of the way in which the Native Title Applicant puts this aspect of its case, I should say a little more. It submits that it is absurd to construe s 85A as not permitting the Court to award costs to a native title applicant who is assisted by a representative body because:

    Parliament plainly intended that such a body would “usually and often” act for native title applicants pursuant to the Native Title Act; and

    by reason of the relevant role and function of a representative body under that Act, it is entitled to act, by employed lawyers or by “engaged” lawyers in proceedings under that Act.

117    Whilst those propositions are no doubt true, I do not see the suggested absurdity. I accept that pursuant to s 85A, an order for costs may be made in favour of a native title applicant. However as I have previously observed, the question is the meaning of the word “costs”. In this case, the word is used in the context of litigation. It empowers a court to order one party to litigation to pay some or all of the costs incurred by another party. In that context, the word “costs” has long been understood to describe costs which the latter party has paid, or is liable to pay. In my view, it is most unlikely that Parliament intended to depart from that well-established proposition, absent any express provision to that effect. I see no basis for drawing any such inference from s 85A, having regard to the Native Title Act. I see no difficulty in the administration of that Act, arising out of this view. The effect of s 85A is that the making of an order for costs is to be the exception rather than the rule. Hence it is unlikely that, if my approach be correct, the funding of representative bodies will be seriously undermined. As I have said, if there be a problem, it can be resolved by the representative body entering into an appropriate agreement with the relevant native title applicant. Further, if the representative bodies feel it necessary, they can seek appropriate amendments to the Native Title Act.

118    At paras 21-26 of its submissions, the Native Title Applicant accurately sets out aspects of the Native Title Act as it applies to representative bodies and their functions. At paras 25 and 26, it concludes:

25.    The service delivery model contemplated by these provisions is one where persons who claim to hold native title apply to a NTRB for assistance and the NTRB, having regard to its determined priorities and allocation of resources, makes a decision on the application. When a NTRB makes a decision to assist such persons there will ordinarily be no issue about payment for those services. This is because it is contemplated that NTRBs will use funding grants to provide the assistance. This means that when a NTRB decides to assist persons who claim to hold native title there is no need to enter into an arrangement for payment for that assistance, including any costs agreement for legal services. This model is entirely consistent with the preamble and objects of the NTA.

26.    When construing s 85A it is necessary to have regard to the scheme in the NTA relating to NTRBs, including those provisions that specify how NTRBs are to perform their functions. The breadth of those provisions ought not to be restricted by the application of the indemnity principle as urged by the appellant when the NTA contemplates that ordinarily, persons who claim to hold native title, will not pay for assistance, including for legal services, in relation to claimant applications.

119    Paragraph 25 seems to concede the absence of any obligation on a native title applicant to pay a representative body for costs and outgoings. At para 26, the Native Title Applicant seems to submit that s 85A should be characterized as being a provision of wide application. This submission is curious, given that s 85A is primarily designed to limit the availability of costs orders. However the problem is not one of inconsistency between the so-called “indemnity principle” and some unstated construction of s 85A. The question is as to the meaning of the word “costs” when it is used in s 43 of the Federal Court Act and in s 85A. As appears from the cases, in the litigation context it means those amounts which the relevant party has paid, or is liable to pay. Nothing in s 85A suggests an intention to change that meaning. I accept that s 85A does not contemplate native title applicants paying for assistance provided by representative bodies.

did mr murphy make a relevant concession?

120    Given the views which I have already expressed, it is not strictly necessary that I consider this aspect of the case. However, as Oil Basins placed some emphasis upon it, I should do so. In my view, there can be no challenge to the validity of the order made by Gilmour J. The only question is whether it entitled the Native Title Applicant to recover amounts which it was never liable to pay.

121    Obviously, Mr Murphy’s alleged concessions should not be understood as going to any question of statutory construction. Rather, such concessions go to the question of whether in the circumstances, the Native Title Applicant had incurred any costs to which the costs order might attach.

122    Underlying the Native Title Applicant’s case are the propositions that:

    Ms Cole acted on its behalf; and

    it may be inferred that she was retained so to act.

123    As I have said, there is authority for the proposition that when a legal practitioner has apparently acted for a party, there is a strong perception that he or she was retained to do so, at least where the party knew that the practitioner was so acting, and took no steps to rectify the position. In the ordinary course of legal practice, that proposition is no doubt true, but it says little or nothing about the situation in which, pursuant to the Native Title Act, a representative body provides legal services using an employed lawyer or otherwise, and using funds supplied by the Commonwealth. The relationship between the Native Title Applicant on the one hand, and KLC and/or Ms Cole on the other, arises out of the functions conferred upon KLC by the Native Title Act, rather than upon the common understanding of the solicitor-client relationship, including the concept of retainer. The only relationship contemplated by Pt 11 of the Native Title Act is that of supplier and recipient of services, including legal services, such supply being at the expense of the Commonwealth, and at the request of a native title applicant. Whilst some features of such a relationship may resemble features of the more common relationship between solicitor and client, it does not follow that all such features will be replicated in any relationship associated with the performance by KLC of its statutory functions. It is possible that such relationship may be supplemented by relationships independently entered into between KLC and/or Ms Cole and the Native Title Applicant. There is, in this case, no suggestion of any such independent (of the Native Title Act) relationship.

124    Even if it be assumed that there was something like a retainer between the Native Title Applicant and KLC or Ms Cole, it is difficult to see why it should have been an implied term of that retainer that the Native Title Applicant pay anything for services provided at Commonwealth expense. Contrary to the Native Title Applicant’s submissions, when those considerations are taken in conjunction with Mr Murphy’s evidence, it is clear that the Native Title Applicant incurred no liability for any costs or outgoings incurred by KLC or Ms Cole.

125    At the taxation, Oil Basins was represented by Mr Forbes, instructed by Mr Kavenagh. Both kept notes of the proceedings. According to those notes, Mr Kavenagh and Mr Forbes made a number of assertions to the effect that the Native Title Applicant had incurred no liability for any costs or outgoings in connection with the relevant proceedings. According to their notes, at no stage did Mr Murphy assert that the Native Title Applicant had undertaken to pay any amount in connection with the supply of legal services by KLC. However he said words to the effect that had KLC known that Oil Basins was going to behave as it did, it would have required the Native Title Applicant to be charged. This statement clearly implies that because KLC had not foreseen such conduct, the Native Title Applicant had incurred no such obligation. That KLC may have considered that it could have imposed such a requirement is quite irrelevant, given that it did not purport to do so.

126    In the course of the taxation, Mr Murphy also said that he could not say that the Native Title Applicant would never have been required to pay, and that it may have been required to do so, had KLC known of, “the circumstances that now exist.” That statement also implies that there was no such liability, as far as Mr Murphy knew. Mr Forbes invited Mr Murphy to confirm that Ms Cole had no liability for any outgoings incurred. Mr Murphy said that he did not cavil or quibble with that proposition.

127    Mr Murphy’s version of events relied upon notes taken by another employee of KLC, Ms Arman. She is no longer employed by KLC. Her version is not much different from those given by Mr Forbes and Mr Kavenagh. At page 8 of the notes, Ms Arman summarized Mr Forbes’ submissions as being that:

    Ms Cole was the solicitor for the Native Title Applicant;

    KLC was not a legal practitioner and not a “legal party”;

    the Native Title Applicant had no obligation to pay KLC;

    there was no costs agreement; and

    the Native Title Applicant was never going to be billed for disbursements.

128    Ms Arman summarized Mr Murphy’s submissions as follows:

    (apparently referring to Oil Basins’ submissions), they were “hypothetical, all on hypothetical basis”;

    the decision in Far West Coast was directly in point– wide discretion;

    the order (as to costs) was made in contemplation of KLC (presumably having the benefit of it);

    Court made order on that basis; and

    the costs basis was to (monitor?) behaviour of parties.

129    There is then the following passage:

Forbes

1.    Would [the Native Title Applicant] have been required to pay?

KM [Mr Murphy]

1.    Couldn’t say. Couldn’t predict this scenario. Anyway, not applicable in the scenario under Native Title Act, “class actions in NT [world?]”, subject to Native Title Act.

2.    Bill going out? That’s not the end of the matter.

130    To some extent I have edited the above account in the hope that it will assist the reader. However I have retained some problematic aspects of it. I have also inserted the question marks. It seems that Mr Murphy considered that under the Native Title Act regime, any enquiry as to whether the Native Title Applicant would have been required to pay was irrelevant. He also seems to have suggested some analogy to class actions.

131    According to Ms Arman, Mr Forbes later referred to a letter from Oil Basins’ solicitors to Mr Murphy in which the solicitors noted that certain documents had not been produced and asserted that:

It appears that under no circumstances would [the Native Title Applicant] be liable to Ms Cole for any costs in relation to the abovementioned proceedings. Kindly either confirm that this is the case or provide us with evidence to the contrary.

132    There was no response to this letter. Mr Forbes also said that Ms Cole, “did not incur those costs, the Kimberley Land Council did”, a matter which is not now in dispute. A discussion of the case followed, focussing primarily on the decision in Far West Coast. At one stage the taxing officer asked if the parties wanted the matter to be referred to a Judge. There was also a discussion as to whether KLC was a community legal centre. In the end the taxing officer proceeded on the basis that KLC was such a body. The matter was not referred to a Judge.

133    It is true that Mr Murphy did not, in terms, concede that the Native Title Applicant would never have been asked to pay some amount to KLC in connection with the involvement of Oil Basins in the litigation. However, although he spoke of billing them, he offered no basis for any entitlement to do so. Nor did he suggest that any such request had been made. Indeed, he seems to have accepted that the question had not been considered at any relevant time. One might have expected that he, as KLC’s principal legal officer, having the conduct of the present proceedings, would have been able to inform the taxing officer as to whether KLC claimed that the Native Title Applicant was liable to it for the relevant outgoings and, if so, the basis for such liability, whether it be pursuant to the Native Title Act, any agreement between KLC and the Native Title Applicant, some general practice or otherwise. However Mr Murphy did not, at any time, claim that there was any such obligation.

134    It is no answer to say that he was not employed by KLC at the time of the relevant events. If there were any relevant agreement or practice, he or somebody else in KLC surely would know. If not, he could have contacted Ms Cole. That he did not do so suggests that he did not expect that such inquiry would disclose anything beyond his own knowledge and understanding.

135    Assuming that Oil Basins bore some onus of proof that the Native Title Applicant had no obligation to pay KLC or Ms Cole, it did not seek to discharge that onus only by reference to Mr Murphy’s evidence. Oil Basins also pointed to the fact that KLC provided legal services to the Native Title Applicant pursuant to the Native Title Act, using funds provided by the Commonwealth. As the Native Title Applicant asserts, nothing in the Act suggests that a native title applicant may have to pay for such services. Clearly, in the usual course of providing legal services, KLC understood that it would not be recompensed by native title applicants. Mr Murphy’s understanding seems to have been, at its highest, that in some circumstances, KLC may have required some reimbursement. There was no suggestion that it had made any such requirement in this case, or that it had an identifiable right to do so. In those circumstances, I infer that there was no such liability. It follows that there is no amount for which the Native Title Applicant can be indemnified pursuant to the order of Gilmour J.

other matters

136    I should add two further comments. I have had regard to the decision of the Court of Appeal of Western Australia in Marsh v Baxter (No 2) [2016] WASCA 51. It is a case of the kind previously discussed in these reasons in which there were “nominal” and “real” parties. I have expressed my reasons for holding that this case is not of that nature.

137    Finally, I accept that the outcome which I favour in this case is unsatisfactory, having regard to the circumstances in which Gilmour J made the relevant order. However the position adopted by the Native Title Applicant poses its own unsatisfactory consequences. To the extent that it submits that an order for costs, pursuant to a statutory power, may permit the recovery by the relevant party of an amount which it has not paid, and is not liable to pay, it departs from a long-established understanding as to the meaning of the term “costs”, in the absence of any express statutory language to that effect. Further, to find that in certain circumstances, a native title applicant may be liable to pay for legal services provided by a representative body under the Native Title Act would expose each native title applicant to the risk that its representative body would assert, and seek to enforce such liability.

orders

138    I would allow the appeal, set aside the orders below and the certificate of taxation. The taxation should otherwise be forever stayed.

Associate:

Dated:    6 July 2017

SCHEDULE OF PARTIES