Express Cargo Services Pty Ltd v Mysko (No 2)

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SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

EXPRESS CARGO SERVICES PTY LTD v MYSKO (No 2)

[2023] SASC 133

Judgment of the Honourable Justice Stein  

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - UNREASONABLE CONDUCT OR DELINQUENCY RELATING TO PROCEEDINGS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - HOPELESS CASES

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS - INFORMAL OFFERS AND CALDERBANK LETTERS - UNREASONABLE REFUSAL OF OFFER

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - PARTICULAR CASES - OTHER PARTICULAR CASES

At trial, the applicant was largely successful.  It sought its costs of and incidental to the proceedings on an indemnity basis on three grounds:

1.The respondent’s conduct, including in sending excessive and unnecessary email correspondence, was unreasonable.

2.Aspects of the respondent’s case were hopeless.

3.The respondent imprudently refused an offer of settlement and ultimately achieved a worse result at trial.

The applicant had sought costs thrown away on an indemnity basis as a consequence of the late adjournment of the trial in December 2021.

Held, allowing the application for indemnity costs in part:

1.The respondent is to pay the applicant’s costs thrown away in consequence of the adjournment of the trial on 21 December 2021 on an indemnity basis.

2.The respondent is to pay the applicant’s costs of perusing and responding to the respondent’s correspondence from 11 October 2021 on an indemnity basis.

3.The respondent is to pay the remainder of the applicant’s costs of and incidental to the proceedings on a standard costs basis.

Corporations Act 2001 (Cth) s 1317AA; Supreme Court Act 1935 (SA) s 40(1); Uniform Civil Rules 2020 (SA) rr 3.1, 194.1, 194.5, 194.6, referred to.
Hamod v New South Wales (2002) 188 ALR 659; Bhagat v Global Custodians Ltd [2002] FCA 223; du Boulay v Worrell [2009] QCA 63; Chattaway v Minister for Health (No 2) [2021] SASC 89; TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 3) [2016] FCA 828; Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159; Spalla v St George Motor Finance Ltd (No 8) [2006] FCA 1537; Salfinger v Niugini Mining (Australia) Pty Ltd (No 4) [2007] FCA 1594; Woodley v Woodley (No 2) [2017] WASC 94; Aistrope v South Australian Housing Trust [2019] SASC 214; Raptis v City of Melbourne [2017] VSC 488; Macedon Ranges Shire Council v Thompson (2009) 170 LGERA 41; Quach v Health Care Complaints Commission (No 2) [2015] NSWCA 311; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Calderbank v Calderbank [1976] Fam 93; Giller v Procopets (2009) 24 VR 1; BMD Major Projects Pty Ltd v Victorian Urban Development Authority [2007] VSC 441; Secretary to…

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Details
Case
[2023] SASC 133
Decision Date

CaseChat Overview and Summary

In the matter of Express Cargo Services Pty Ltd v Mysko (No 2), Express Cargo Services Pty Ltd (ECS) sought indemnity costs against the respondent, Mysko, following the conclusion of litigation. The dispute centred around allegations of improper conduct and communications made by Mysko, who was self-represented throughout the proceedings. ECS argued that Mysko's litigation conduct was unreasonable, her case was hopeless, and she unreasonably refused a compromise offer. The primary legal issues before the court were whether Mysko's conduct during the litigation warranted indemnity costs and whether her refusal of a compromise offer justified such an award.

The court found that Mysko's conduct in the litigation was unreasonable, as evidenced by the numerous lengthy, repetitive, and largely irrelevant emails she sent to ECS's legal representatives. These communications, many of which contained allegations of harassment and threats to report ECS's legal representatives, demonstrated a motive of anger and revenge rather than a legitimate attempt to defend her position. The court held that Mysko's conduct was in breach of the overarching obligations under the Uniform Civil Rules 2020 (SA). Furthermore, the court concluded that Mysko should have been aware that her case had no reasonable prospects of success, given the strength of ECS's allegations and the evidence presented. Additionally, Mysko's refusal to accept ECS's offer of compromise, which would have resulted in the dismissal of the application without costs, was deemed unreasonable. Consequently, the court granted ECS indemnity costs for certain costs thrown away and for responding to Mysko's email communications, while ordering the remainder of the costs on a standard costs basis.

The court ordered that Mysko pay ECS's costs incurred due to the adjournment of the trial on 21 December 2021 and the costs of responding to Mysko's email communications from 11 October 2021 on an indemnity basis. Additionally, Mysko was ordered to pay the remaining costs of the proceedings on a standard costs basis. The court emphasised that while Mysko's self-representation did not excuse her from the obligations of civil litigation, it did mitigate the harshness of the costs order.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

STEIN J
In January 2022, the respondent sought by FDN 95 and FDN 100, among other things, the immediate dismissal of the action against her. I refused the applications in the circumstances set out in Schedule A to my reasons for judgment. ECS sought indemnity costs in relation to FDN 95 on the basis there was no proper evidence in support of it, the application had no prospects of success and ECS had made an offer on 11 January 2022 that if the respondent consented to the application being dismissed, ECS would not seek its costs. I reserved costs on the basis that the respondent ought to be given an opportunity to put forward any materials and submissions in opposition to the application. It does not appear that the application for indemnity costs was thereafter addressed by the respondent. I did not seek submissions from the respondent on the application for indemnity costs of FDN 95 because I have determined to refuse it. I do not consider the respondent as a self-represented litigant should be expected to have understood the extremely poor prospects of success of her interlocutory application which to some extent was based on her “whistleblower” assertions. In addition, the offer was made to her on 11 January and only open for acceptance until 12 January 2022. While I dismissed the applications brought by the respondent, there were aspects of the hearing of the interlocutory applications that assisted the Court in understanding the defence the respondent was to present at trial. Conclusion ECS is entitled to indemnity costs in relation to costs thrown away by reason of the adjournment on 21 December and to indemnity costs in relation to dealing with the respondent’s email communications. It is otherwise entitled to costs on a standard costs basis.Orders I make the following orders:1.The respondent is to pay the applicant’s costs thrown away in consequence of the adjournment of the trial on 21 December 2021 on an indemnity basis. 2.The respondent is to pay the applicant’s costs of perusing and responding to the respondent’s correspondence from 11 October 2021 on an indemnity basis.3.The respondent is to pay the remainder of the applicant’s costs of and incidental to the proceedings on a standard costs basis.

Ratio Decidendi

Legal Principle Established

Established by: STEIN J

The respondent represented herself from October 2021. The respondent conducted her defence strenuously. The respondent, at times, asserted that her contract with ECS was not binding. She also persisted with arguments that she was contractually obliged to send the impugned communications. With particular vigour, the respondent asserted that she was a whistleblower within the meaning of s 1317AA(1) or (2) of the Corporations Act 2001 (Cth) (“Corporations Act”) and was therefore immune from liability in sending the impugned communications. The respondent engaged in prolific correspondence during the course of the proceedings.Applicant’s submissions ECS submitted that it was successful in making out the majority of its allegations and obtaining the preponderance of the relief it sought. Counsel for ECS relied on three bases to advance its application for indemnity costs: ·The respondent’s conduct in the litigation was unreasonable.·The respondent should have been aware that she had no chance of success. ·The respondent failed to accept an offer of compromise made by ECS to resolve the proceedings and ECS subsequently obtained an outcome better than the compromise contained in the offer. Counsel for ECS submitted that if any of the above grounds individually did not rise to the level required to justify an order for indemnity costs, the Court could consider the bases in combination to be satisfied that the threshold was met. In submitting that the respondent conducted the litigation in an unreasonable manner, counsel for ECS referred to the respondent sending hundreds of emails, many of which were extremely long, repetitive, unfortunate in tone and lacking apparent relevance, as a feature of the respondent’s conduct that warranted an order for indemnity costs. Counsel for ECS submitted that its representatives were required to peruse the emails to determine whether their content was actually relevant, resulting in considerable time and cost incurred by ECS as a direct consequence of the respondent’s conduct. Counsel for ECS referred to one trial exhibit,[1] 658 pages in length. It contained a selection of 455 emails sent by the respondent to the solicitors of ECS between September 2021 and April 2022, many copied to the Court, together with replies. Many of the emails contained allegations of harassment and intimidation levelled by the respondent at ECS’ legal representatives and intimations that she would report them to the Legal Profession Conduct Commissioner,[2] often repeated across multiple lengthy emails.[3] Counsel for ECS submitted that the quantity, content and tone of the emails combined to demonstrate that the respondent was motivated by anger and a desire for revenge rather than legitimately attempting to ventilate her legal rights. Counsel for ECS submitted that it was unreasonable for the respondent to subject ECS to the extraordinary expenditure involved in reading hundreds of pages of communications in circumstances where the communications were largely repetitive, irrelevant and demonstrated the respondent’s primary motive was not legitimate and did not comply with the overarching obligations in r 3.1 of the Uniform Civil Rules 2020 (SA) (“UCR”).[1] Exhibit A17.[2] For example, Exhibit A17 at 195-199, 255-256, 360-361, 437, 444-445.[3] See the examples provided in the footnote above.