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Hillig v Darkinjung Pty Ltd (No 2)

Hillig v Darkinjung Pty Ltd (No 2)

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NEW SOUTH WALES COURT OF APPEAL

CITATION:
Hillig v Darkinjung Pty Ltd & Ors (No 2) [2008] NSWCA 147

FILE NUMBER(S):
40489 of 2006; 40386 of 2006

HEARING DATE(S):
On written submissions

JUDGMENT DATE:
23 June 2008

PARTIES:
Peter Hillig in his capacity as Administrator of Darkinjung Local Aboriginal Land Council - Appellant
Darkinjung Pty Ltd - First Respondent
Jeffrey John Bradford - Second Respondent
David Pross - Third Respondent
Greg Flanders - Fourth Respondent
George Alexander Watts - Fifth Respondent
Michael Stuart Jones - Sixth Respondent
Ian Cunliffe - Seventh Respondent

JUDGMENT OF:
Beazley JA Giles JA McColl JA

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
SC 2842 of 2006

LOWER COURT JUDICIAL OFFICER:
Austin J

LOWER COURT DATE OF DECISION:
15 June 2006

LOWER COURT MEDIUM NEUTRAL CITATION:
[2006] NSWSC 594

COUNSEL:
Mr D H Murr SC with Mr D A Smallbone - Appellant
Mr S D Epstein SC - Second to Seventh Respondents

SOLICITORS:
Patrick Woods & Co - Appellant
Tony Simpson & Co - First Respondent - submitting appearance
Norton White Melbourne - Second to Seventh Respondents - submitting appearances

CATCHWORDS:
PROCEDURE – costs – effect of decision of Court of Appeal that solicitor was retained without authority – whether solicitor should be ordered to pay costs of proceedings – basis on which such an order might be made – held – whether costs should be ordered matter for discretion – solicitor entitled to proceed on basis that issue whether he was properly retained was a matter for judicial determination – s 98(1) and (2) Civil Procedure Act 2005 – Uniform Civil Procedure Rules 2005 42.3.
PROCEDURE – submitting appearance – whether submitter exceeded proper role of submitting party – held – no.
PROCEDURE – whether appellate court can interfere with primary judge’s orders where all respondents file submitting appearances without determining whether orders affected by error – held – no.
LEGAL PRACTITIONERS – compliance with court directions.

LEGISLATION CITED:
Civil Procedure Act 2005
Supreme Court Act 1970
Supreme Court Rules 1970
Uniform Civil Procedure Rules 2005

CATEGORY:
Consequential orders

CASES CITED:
Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
AW & LM Forrest Pty Ltd v Beamish (1998) 146 FLR 450
Bonan v Hadgkiss [2007] FCAFC 113; (2007) 160 FCR 29
Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 82 ALJR 173
Harrington v Rich [2008] FCAFC 61
Harry S Bagg's Liquidation Warehouse Pty Ltd v Whittaker (1982) 44 NSWLR 421
Hawksford v Hawksford [2005] NSWSC 463
Hillig v Darkinjung Pty Ltd [2008] NSWCA 75
Hillig v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1371
Hillig v Darkinjung Pty Ltd [2006] NSWSC 594; (2006) 201 FLR 148
Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178
Massey v Wales [2003] NSWCA 212; (2003) 57 NSWLR 718
Orellana-Fuentes v Standard Knitting Mills Pty Ltd [2003] NSWCA 146; (2003) 57 NSWLR 282
Oshlack v Richmond…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] NSWCA 147
Decision Date: 23 June 2008

CaseChat Overview and Summary

This case concerned an appeal regarding costs orders made in proceedings before Austin J. The appellant sought to recover costs from the seventh respondent, Mr Cunliffe, who had filed a submitting appearance. The dispute centred on whether Mr Cunliffe, as a non-party to the original proceedings, could be ordered to pay costs, and conversely, whether he was entitled to recover his own costs. The Court of Appeal was required to determine the scope of the court's discretion under section 98(1) of the *Civil Procedure Act 2005* and Uniform Civil Procedure Rules 2005 (UCPR) 42.3, particularly concerning orders against non-parties and the definition of a "party" for costs purposes.

The court considered whether Mr Cunliffe could be treated as a "party" to the proceedings for the purpose of costs orders, despite not being formally joined to the record until a later date. It examined the distinction between a party on the record and a "real party" who plays an active role and has an interest in the litigation, referencing *Knight v FP Special Assets Ltd*. The court also assessed whether Mr Cunliffe's conduct after filing his submitting appearance exceeded the proper role of a submitting party, and whether the appellant had complied with court directions regarding the notification of mediation outcomes.

Ultimately, the Court of Appeal held that it would not be a just exercise of discretion to order Mr Cunliffe to pay the appellant's or the first respondent's costs of the appeal. The court found that Mr Cunliffe had not exceeded the role of a submitting party and that the appellant had failed in his costs application against him. Consequently, the appellant was ordered to pay Mr Cunliffe's costs of filing his submitting appearance and any subsequent costs incurred in that role, as well as the costs of the costs application. The first respondent was ordered to bear its own costs of the costs application. Save for these orders, no further costs were awarded between the appellant, the first respondent, and the seventh respondent.

Orders

Orders of the court

1. As between the claimant/appellant and the first to sixth respondents there be no liability of each to the other as to the costs of the proceedings; 2. Any existing costs orders be vacated between those parties; 3. Appellant to pay the seventh respondent's costs of filing his submitting appearance on 13 March 2007 and the costs he incurred thereafter in that role; 4. Appellant to pay the seventh respondent's costs of the costs application; 5. First respondent to bear its own costs of the costs application; 6. Save as aforesaid, no order as to the costs of the appeal or the proceedings below as between the appellant, the first respondent and the seventh respondent.

Background

Background to the litigation

The reply submissions advanced a number of propositions concerning Commissioner for Railways (NSW) v Cavanough [1935] HCA 45; (1935) 53 CLR 220 which it is unnecessary to record. Suffice it to say that the appellant submitted that Cavanough was distinguishable insofar as the seventh respondent was concerned, but accepted that what, if any “benefit” Mr Cunliffe was entitled to during the period the primary judge’s declarations subsisted may depend on other contentions which, presumably, may also be raised in the Court below. Finally, the appellant responded to the seventh respondent’s submission that there was no conduct which warranted a personal costs order against him by contending that this submission overlooked the basis of the application against him, that he was a party to the Interlocutory Process below and to the proceedings in this Court and also to the primary judge’s orders so that he was subject to the same costs consequences as any other unsuccessful party. I shall return to this issue.Background Before turning to matters of principle, it is necessary to delve in some greater detail into some aspects of the procedural history than was outlined in Hillig No 1 (at [15] – [21]). As is apparent from those passages, Austin J dealt with three applications, all of which related to what his Honour described as the “single main issue”, in short, the efficacy of the Resolutions: primary judgment (at [4]). The Originating Process was filed by the appellant on 17 May 2006 and named the first to sixth respondents as defendants. However all the matters with which Austin J dealt were made in various documents described as “Interlocutory Process”. In chronological order those matters were an application made by the appellant to challenge Mr Cunliffe’s retainer by a document entitled “Interlocutory Process” filed on 24 May 2006 (the “retainer application”). The document sought an order that the Notice of Appearance filed by Mr Cunliffe on behalf of Darkinjung be struck out and an order that he pay the costs of the application. It is that application which led to what can be described as Mr Cunliffe’s substantive involvement in the proceedings, distinguishing his involvement in that sense from his involvement as solicitor on the record for the then first to sixth defendants. However even the reference to his “substantive involvement” should be qualified. The Interlocutory Process was entitled as between the appellant as plaintiff and the “defendants listed in the Schedule” thereto. Mr Cunliffe was not named in the Schedule, although Part B of the document indicated that notice of the application was to be given both to Darkinjung and to him. The second application before the primary judge was an application filed by the defendants on 29 May 2006 in substance seeking an order that the Resolutions were ineffective. The third application was filed by the appellant on 1 June 2006 and in substance seeking an order that the Resolutions were effective and declarations that he, rather than the second to sixth defendants, was the director of Darkinjung: Hillig v Darkinjung Pty Ltd [2006] NSWSC 594; (2006) 201 FLR 148 (the “primary judgment”) (at [2]–[3]). I shall refer to the second and third applications as the “principal proceedings”. The seventh respondent was not named as a party to either of these applications.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In my view it would not be a just exercise of the costs discretion to order Mr Cunliffe to pay either the appellant’s or the first respondent’s costs of the appeal.66 Turning to Mr Cunliffe’s application for costs, in my view, the usual rule which, as I have noted (at [5]) the appellant concedes would ordinarily be applicable, should apply, in the first instance, to Mr Cunliffe’s costs of filing his submitting appearance. Next, it is necessary to consider whether any conduct in which Mr Cunliffe engaged after the filing of that document exceeded the role of a submitting party. In my view, it did not. Rather, counsel for the second to seventh respondents appeared on the appeal in response to peremptory correspondence from the appellant’s solicitors demanding their attendance so that any issue as to costs might be resolved on that day. Inevitably, having regard to the second to seventh respondents’ submitting appearances, the Court inquired of Mr Epstein about the purpose of his attendance. While he said, somewhat Delphically, that those who he represented “would contend to the extent necessary that the appeal should be held to be not competent and leave should not be granted”, he did not move on the competency application and, apart from responding to inquiries from the Court, did not make submissions either on the competency motion or the substantive appeal. Accordingly, in my view, the appellant should pay Mr Cunliffe’s costs of 9 May 2007 as well. The combined effect of this paragraph is that the appellant should pay Mr Cunliffe’s costs of filing his submitting appearance and the costs he incurred thereafter in that role.Conclusion It remains only to observe that it was incumbent upon the appellant to inform the Court immediately the matter was mediated successfully on 9 May 2008. The appellant was then under an obligation to file and serve submissions in reply by 14 May 2008. No explanation was given in the reply submissions as to why the appellant was in default of that order, or why he waited until 29 May 2008 to draw to the Court’s attention the outcome of the 9 May 2008 mediation. As I have indicated, I was already substantially advanced in preparing a judgment on the basis of the submissions which had been filed and on the assumption that the appellant did not intend to file any submissions in reply. I would also observe that, contrary to the assumption in the reply submissions, it is not appropriate for counsel to arrogate the Court’s role as to whether other parties should file submissions. After this judgment had been completed further submissions were received from counsel for the seventh respondent. The Court had not directed such submissions be filed. The submissions contended for the order I had already decided to make. They largely rehearsed arguments addressed in the second to seventh respondents’ 7 May 2008 submissions, with a heightened tone of indignation arising from the outcome of the mediation. While Mr Cunliffe’s concern to make submissions more specifically addressed to his own position than those prepared when the appellant’s target was a larger group is understandable, it was inappropriate for submissions to be delivered without the Court’s leave.69 The appellant has failed in his costs application and should pay Mr Cunliffe’s costs. The first respondent should bear its own costs.Orders

Ratio Decidendi

Legal Principle Established

Mr Epstein also said he wished that day to resist the order for costs the appellant sought against the second to seventh respondents. He did so apparently because the appellant’s solicitors had written to Mr Cunliffe on 20 March 2007 advising that the appellant would be making submissions on costs at the hearing of the appeal and would not consent to a second hearing day for that issue to be canvassed. In response Mr Cunliffe advised that his “clients” would be represented at the hearing to resist any adverse costs order: see Affidavit of Ian George Cunliffe, 7 May 2007. As events transpired the Court determined that the issue of costs should be determined once the substantive appeal was resolved: Hillig No 1 (at [31]).Consideration In my view Mr Smallbone’s submission that Mr Cunliffe pay the appellant and first respondent’s costs should be rejected. Subject to the rules of court, costs are in the discretion of the court which has full power to determine by whom, to whom and to what extent costs are to be paid: s 98(1), Civil Procedure Act 2005. The power conferred by s 98(1) is subject, inter alia, to UCPR 42.3 which relevantly provides:“(1) Subject to rule 42.27, the court may not, in the exercise of its powers and discretions under section 98 of the Civil Procedure Act 2005, make any order for costs against a person who is not a party.(2) This rule does not limit the power of the court:…(d) to make an order for costs against a person who purports, without authority, to conduct proceedings in the name of another person.” Mr Smallbone’s submissions proceed on the premise that Mr Cunliffe was a “party” to the Interlocutory Process of 24 May 2006, the orders made by the primary judge and the appeal and, implicitly to the primary proceedings. In my view that submission is incorrect insofar as the primary proceedings are concerned. There is no definition of “party” in the UCPR, although I note “active party” is defined in the Dictionary to the Rules, relevantly as meaning “a party who has an address for service in the proceedings”. That definition reflects the ordinary understanding that a “party” is a “party to the record” (R v Murray; Ex parte Commonwealth [1916] HCA 58; (1916) 22 CLR 437 (at 469)), an understanding which is also reflected in UCPR Pt 6 Div 5 dealing with “Joinder of causes of action and joinder of parties”. Mr Cunliffe was not a party in that sense to the primary proceedings. As I have said, he was not named as a defendant in the Originating Process, nor in either the second or third applications considered in the primary judgment. He was first formally joined as a party on the record on 19 May 2008. Accordingly, prima facie, Mr Cunliffe is entitled to the benefit of UCPR 42.3(1). However the concept of a “party” may not be confined to a person who is on the record. In Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 it was held that the Queensland Supreme Court had jurisdiction to make a costs order against a person who, while “not a party according to the record … was considered to be the ‘real party’ ”: see (at 189 – 190) per Mason CJ and Deane J (Gaudron J agreeing). Such a person was someone who “… played an active part in the conduct of the litigation and …[who had] an interest in the subject of the litigation”: Knight (at 193).