APL Co Pte Ltd v Thomas
[2014] FCCA 1312
•26 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| APL CO PTE LTD v THOMAS | [2014] FCCA 1312 |
| Catchwords: BANKRUPTCY – Costs – self-represented party – whether order for costs appropriate – whether costs should follow the event – what costs are recoverable. |
| Legislation: Family Law Act 1975, s.117 Federal Circuit Court of Australia Act 1999, s.79 Federal Court of Australia Act 1976, s.43 Federal Court Rules2011, rr.40.01, 40.18, 40.29, Schedule 3 Federal Magistrates Act 1999, s.79 |
| Cachia v Hanes (1994) 179 CLR 403 George v Fletcher (Trustee) (No.2) [2010] FCAFC 71 Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 Mbuzi v Favell (No.3) [2012] FCA 1078 Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 Von Reisner v Commonwealth of Australia (No.2) (2009) 262 ALR 430 |
| Applicant: | APL CO PTE LTD TRADING AS APL LINES (AUSTRALIA) (ARBN 081 191 282) |
| Respondent: | MATTHEW EDWARD THOMAS |
| File Number: | SYG 881 of 2013 |
| Judgment of: | Judge Jarrett |
| Hearing date: | By written submission |
| Date of Last Submission: | 11 June 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 26 June 2014 |
REPRESENTATION
| The Applicant appeared in person |
| Solicitors for the Respondent: | Terri Bell & Co. |
ORDERS
The applicant pay the respondent’s costs of and incidental to the proceedings, including the application for costs, in accordance with Part 13 of the Federal Circuit Court (Bankruptcy) Rules2006.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
SYG 881 of 2013
| APL CO PTE LTD TRADING AS APL LINES (AUSTRALIA) (ARBN 081 191 282) |
Applicant
And
| MATTHEW EDWARD THOMAS |
Respondent
REASONS FOR JUDGMENT
By an application filed on 29 April, 2013 the applicant petitioned the Court for a sequestration order against the estate of the respondent. When the matter came on for hearing, the petition was dismissed because it had lapsed.
The respondent, who represented himself in these proceedings, now seeks an order that the respondent pay his costs of and incidental to the application in a fixed sum. The applicant opposes such an order. I made directions for the filing and service of written submissions by each party in relation to the question of costs. Each party filed submissions. These reasons relate to the respondent’s costs application.
The General Rule
The first issue is whether there ought to be an order for costs at all in favour of the respondent against the applicant. The applicant argues that there is a discretionary reason to refuse the respondents relief.
The Court has a broad discretion in relation to cost orders pursuant to s.79 of the Federal Circuit Court of Australia Act1999. Ordinarily the respondent would be entitled to an order for costs against the applicant because he was the successful party in the litigation. Generally speaking, costs follow the event in the absence of special circumstances warranting a different order: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136; George v Fletcher (Trustee) (No.2) [2010] FCAFC 71 at [12].
The applicant argues that the circumstances make it unjust to award the respondent costs because he has, by his conduct, brought the proceedings upon himself. In that regard, the applicant argues that the creditor’s petition was brought about as a result of the respondent’s failure to pay debt owed by the respondent to the applicant of $35,755.01. There seems to be no dispute between the parties that the amount remains outstanding.
The creditor’s petition, however, was dismissed because it lapsed before it was heard. Despite the petition being before a Registrar of this Court on at least five occasions and before a judge on at least two occasions, no application to extend the petition was ever advanced by the applicant. At no point did the applicant suggest that an order extending the life of the petition was necessary. The application failed through oversight on the applicant’s part.
Those circumstances do not amount to special circumstances that warrant a different order from the usual order as to costs. The respondent should have an order for his costs of and incidental to the proceedings against the applicant.
An order for costs in favour of a litigant in person
In this particular case, the costs to which either party might be entitled are subject to the Federal Circuit Court (Bankruptcy) Rules 2006. By r.13.01 of those Rules, a person who is entitled to costs in a proceeding to which the Bankruptcy Act applies, is entitled to costs in accordance with Part 40 of the Federal Court Rules 2011 unless the Court otherwise orders. The Court has power to fix a sum for costs rather than require the parties to attend to taxing of those costs.
However, the respondent has represented himself throughout these proceedings and the applicant argues that successful self-represented litigants are not entitled to an order for costs of proceedings. The applicant argues that successful self-represented litigants are only entitled to be reimbursed their out-of-pocket expenses.
The issue, then, is to identify the costs and outlays, if any, to which the applicant is entitled in these proceedings and what costs order might therefore be appropriate.
As the submissions for the applicant point out, in Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 Peter Gibson LJ observed at 525:
A litigant in person in ordinary parlance is a party to litigation who represents himself by appearing in court himself.
Litigants who represent themselves are not uncommon. Many have taken some legal advice, not just about the law that applies to the particular application that sees them before the Court, but also about the practice and procedure to be expected when they represent themselves. Contrary to the submissions made by the applicant in this case, the fact that a party to litigation might be described as a “self-represented litigant” does not carry with it the conclusion that the party has had no recourse at all to legal advice.
To the extent that the applicant’s submissions suggest that the respondent has always held himself out as “self-represented”, that is clearly the case, for indeed, he has always been self-represented in the sense that there has never been a legal practitioner acting for him, or on record, in these proceedings. To suggest, as the applicant’s submissions impliedly do however, that the respondent has never availed himself of legal advice, paid or otherwise, is simply not open. The fact, as the applicant suggests in its written outline that: “Until the Outline of Argument pertaining to costs was served by the Respondent, the Applicant has never been aware that the Respondent has sought advice from solicitors in these proceedings or at all” is simply irrelevant. The respondent self-represented or otherwise, was never obliged to disclose to the applicant that he had, or had not, received legal advice.
The applicant relies upon Cachia v Hanes (1994) 179 CLR 403 to advance an argument that no costs order is appropriate in this case. In that case, the appellant was successful at first instance and secured an order for costs against the unsuccessful party. The appellant, an engineer by profession, at all times represented himself in the trial court. On taxation of his bill of costs against the unsuccessful party, his claims for compensation for the loss of his time spent in the preparation and conduct of his case and travelling expenses, associated with the preparation and conduct of his case were disallowed. The grant of special leave was confined to the disallowance of the appellant’s claim for compensation for the loss of his time spent in preparation and conduct of his case and out-of-pocket expenses, being travelling expenses, associated with the preparation and conduct of his case.
A number of observations about, Cachia v Hanes might be useful. First, the Court reiterated the basis upon which costs are ordinarily awarded, namely, as an indemnity for legal costs actually incurred. At 410 the Plurality said:
It has not been doubted since 1278, when the Statute of Gloucester introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation.
And again at p.414
… the accepted basis for an award of costs is that they are by way of indemnity. They are intended to reimburse a litigant for costs actually incurred; they are not intended to compensate for some other disadvantage or inconvenience suffered by the litigant.
…
Whilst the restricted basis upon which party and party costs are awarded may be debated as a matter of policy, it is to be borne in mind that party and party costs have never been regarded as a total indemnity to a successful litigant for costs incurred, let alone total recompense for work done and time lost.”
Secondly, there was no suggestion in that case that an order for costs in favour of an unrepresented party was always inappropriate. The case proceeded on the basis that the order for costs that had been made in favour of the unrepresented appellant at first instance was appropriate. The issue before the High Court was the content of that cost order.
Thirdly, the content of the costs order, and the case, turned upon the provisions of the Supreme Court Act1970 (NSW) and the Supreme Court Rules1970 (NSW) that related to costs. Mason CJ, Brennan, Deane, Dawson and McHugh JJ held (at 409) that the costs provided for in the New South Wales Supreme Court Rules:
… do not include time spent by a litigant who is not a lawyer in preparing and conducting his case. They are confined to money paid or liabilities incurred for professional legal services. It is only in that sense that the Rules speak of ‘costs’.
See also the observations of Toohey and Gaudron JJ at p. 424.
Fourthly, speaking in respect of the Supreme Court Rules, the Plurality said (at 410):
To use the Rules to compensate a litigant in person for time lost would cut across their clear intent. Costs, within the meaning of the Rules, are reimbursement for work done or expenses incurred by a practitioner or practitioner’s employee. Compensation for the loss of time of a litigant in person cannot be said to constitute costs within the meaning of the Rules.
Finally, in respect of the claim for travelling expenses the Plurality determined (at 417) that they were not out-of-pocket expenses which would have been recoverable by the appellant, or his solicitor, had he been legally represented. At best, the appellant might have been entitled to the fees payable to witnesses if he had given evidence in his own cause.
Thus, in my view, Cachia v Hanes does not go so far as the applicant submits so as to prevent an order for costs being made in the respondent’s favour in this case. Cachia v Hanes makes it clear that for the purposes of the Supreme Court Rules 1970 (NSW), the respondent would not be entitled to recompense for time spent in preparing and conducting his case. Any claim for “costs” would be confined to money paid or liabilities incurred for professional legal services. Similarly, for the purposes of the Supreme Court Rules 1970 (NSW), the respondent would not be entitled to claim travelling expenses.
However, there is no reason to think that the interpretation given to the word “costs” by the High Court in Cachia v Hanes is not apposite to that word where it appears in s.79 of the FCCA Act or the Federal Circuit Court (Bankruptcy) Rules 2006. Indeed, the Federal Court of Australia has held that the interpretation and reasoning in Cachia v Hanes applies to similar questions arising under the Federal Court of Australia Act1976 and the Rules of court promulgated under that Act: Von Reisner v Commonwealth of Australia (No.2) (2009) 262 ALR 430.
Similarly, in relation to the Family Law Act1975 were there is no definition of “costs” in that Act, in Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 at p 129, Hayne J said:
On its face, then, the reference in s 117 to “costs” is a reference to “costs” as that word is ordinarily understood in the law: the amount which the person to whom the order is directed must pay to some party to the litigation as partial indemnity for the professional legal fees and expenses incurred by that party in the course of the litigation.
If one has regard to Part 21 of the Federal Circuit Court Rules, the scale of costs set out in Schedule 1 to those Rules and the provisions of Part 13 of the Federal Circuit Court (Bankruptcy) Rules, there is no reason to think that the reasoning of the High Court of Australia in Cachia v Hanes (above) does not apply with equal force to the Rules of this Court.
Thus, notwithstanding that the respondent is a litigant in person, he is nonetheless entitled to an order for costs. He may not recover for his time spent in preparing and conducting his case, but he may recover money paid or liabilities incurred for professional legal services together with any other out-of-pocket expenses incurred by him.
In Mbuzi v Favell (No.3) [2012] FCA 1078 the Federal Court considered a claim by a self-represented litigant who had been successful on appeal. The Court considered that the successful appellant was entitled to an order for costs against the unsuccessful respondent. The appellant had sought legal advice and claimed the cost of those legal advice sessions as part of the costs to which he was entitled in the proceedings. The Court made an order that the successful appellant present to the Registrar a bill of costs and disbursements in taxable form in accordance with the Federal Court Rules2011 and that the successful appellant should be entitled to recover such costs and disbursements in respect of the proceedings as the Registrar allows as being properly and reasonably incurred.
The applicant argues that the respondent can only recover money which was actually spent. That is, however, simply not the case. I have already extracted relevant parts of the judgment from Cachia v Hanes above. It is clear that a self-represented litigant is entitled to recover for liabilities incurred, not simply for money paid by him or her. That the respondent may have incurred liabilities for legal advice that he has not yet discharged does not mean that he may not recover the amount of those liabilities pursuant to a costs order in his favour if they are otherwise liabilities which have been reasonably incurred.
The form of order
The respondent seeks an order for fixed costs. The applicant points out that there is little proof of many of the matters claimed by way of costs and outlays by the respondent. I agree. On the material presently before the Court it is impossible to reach any conclusions about whether the amounts claimed by the respondent are reasonable in all the circumstances. I do not intend to make an order for fixed costs as the respondent seeks.
In the absence of an order for fixed costs, and given that I am of the view that the respondent is entitled to an order for costs, the respondent is entitled to costs in accordance with Part 40 of the Federal Court Rules (r.13.01(1) of the Federal Circuit Court (Bankruptcy) Rules).
An order for costs to be paid by one party to the other without any further description is an order that the costs are to be costs as between party and party: r.40.01 of the Federal Court Rules. The phrase costs as between party and party is defined in the dictionary to the Federal Court Rules as meaning only the costs that have been fairly and reasonably incurred by the party in the conduct of the litigation.
A bill of costs filed pursuant to Part 40 of the Federal Court Rules must include particulars of any disbursements claimed (r.40.18) and the costs to be allowed on taxation must be in accordance with Schedule 3 of the Federal Court Rules: r.40.29. All court fees and other fees and payments may be allowed in the amounts actually incurred: item 18, Schedule 3 of the Federal Court Rules.
Given the difficulty with assessing the respondent’s costs on the material before the Court, and given the process otherwise laid out in the Rules for the assessment of costs, it is appropriate to make an order for the respondent’s costs to be taxed. It will be a matter for the taxing officer to determine which of the costs and disbursements claimed by the respondent are properly claimable by him.
Conclusion
Having regard to the above matters, it seems to me that:
a)the general rule that costs ought to follow the event has not been displaced in this case;
b)the respondent is entitled to an order for his costs of the proceedings against the applicant;
c)there is insufficient evidence upon which the Court might act so as to fix the costs pursuant to r.13.01(2) of the Federal Circuit Court (Bankruptcy) Rules;
d)the respondent’s costs ought to be taxed in accordance with the Federal Circuit Court (Bankruptcy) Rules;
e)upon taxation, the respondent will not be entitled to compensation for time spent by him preparing and conducting his case, although he will be entitled to allowances for work done by others to which the items in Schedule 3 of the Federal Court Rules2011 apply;
f)that he has not paid some of those costs is irrelevant, because he has incurred a liability to pay them; and
g)he is entitled to his other out-of-pocket expenses.
Accordingly, I make the orders set out at the commencement of these reasons.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 26 June 2014
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