Peter Dutton’s lawyers query whether ‘error’ in Shane Bazzi’s costs could hypothetically reveal billing ‘sham’

·4 min read
<span>Photograph: Jono Searle/AAP</span>
Photograph: Jono Searle/AAP

Lawyers for Peter Dutton have “hypothetically” questioned whether Shane Bazzi’s lawyers presented a “sham” bill for $233,000 of costs, after they were forced to revise down the “real bill” for the defamation case to $155,510.

Bazzi’s counsel said that an “error” was discovered in an earlier statement to the court and the fresh statement corrected the record, but said the error was “not significant enough” to justify delaying the costs hearing.

After Bazzi’s win in the full federal court in the defamation case, the pair have been locked in a battle over costs which Dutton’s lawyers say could reveal the refugee advocate “was never liable for anything” as his lawyers may have agreed to be paid only whatever he raised through crowdfunding.

On Friday, the full federal court granted Dutton’s application to adjourn the costs matter, setting up a November show-down in which the Liberal leader’s lawyers will seek to cross-examine Bazzi and his lawyers about the fee arrangement.

Related: Awarding $248,000 in legal costs would be a ‘windfall’ for Shane Bazzi, Peter Dutton warns

Dutton’s barrister, Guy Reynolds, said despite Bazzi’s solicitor earlier claiming a December bill proved costs of $233,000, an affidavit on Thursday revealed that the “real bill” dated 14 October “is for $155,510, or the exact amount of the crowdfunding for the trial”.

At a hearing on Friday, Bazzi’s counsel explained that the earlier bill, issued less than a week after the defamation trial over Bazzi’s “Dutton is a rape apologist” tweet, contained a $50,000 discount.

Reynolds told the court he may need to cross-examine Bazzi and his solicitor.

“It may well be the case that the bills that have been provided on assessment are sham bills … with the possibility also that the fee agreements between Mr Bazzi and his solicitors are shams,” he said.

“So that the true position may well be, that under the arrangement … Mr Bazzi was never liable for anything, and rather the arrangement was that whatever came in by way of crowdfunding was what the solicitors would … receive.”

Reynolds said he was “only talking hypothetically” but if there were “no liability” between Bazzi and his solicitors, then the application for costs would be “an abuse of process” and “potentially … something far more serious”.

Reynolds said the “error” discovered by Bazzi’s counsel in its earlier costs statement to the court was “said to be something to do with a billing system”, Reynolds said.

Bazzi’s counsel resisted the application for adjournment, arguing that the correction issued about the bill was “not significant enough” to justify it and there was “not any relevant prejudice” to the interests of justice.

Justice Michael Wigney said he was “puzzled” as to what the mistake was and how it occurred. He said the “burning question” was how the discount came about.

Justice Steven Rares said the new statement was “very spare” on details about what had happened.

“There is just no explanation about how the earlier bill was sent for exactly the amount deposited in the trust account,” Rares said.

“I think Mr Reynolds is entitled to have some explanation about that and seek some information – it goes directly to what the billing arrangement was.”

Related: Peter Dutton asks high court for permission to appeal against defamation case loss to Shane Bazzi

Bazzi’s barrister countered that money raised through crowdfunding was held in trust to pay his legal bills, and whether his agreement with his lawyers was capped at the amount raised it was “still a liability and still one that gives rise to costs”.

He rejected Dutton’s argument that paying Bazzi’s costs would amount to a “windfall”, arguing it is a “reimbursement” for funds expended for the case.

“You may be right, but we need to know the facts,” Wigney said.

The court granted Dutton an adjournment, with subpoenas for documents likely to follow before a November hearing.

The court agreed to an application from Bazzi’s lawyers to release $50,000 paid by Bazzi as security for costs, because he had won the appeal.

Dutton has sought to appeal to the high court in a bid to overturn the loss in the defamation case, although the court has not decided yet whether to take the case.