Hines, Mark Edward Hines, Tanya Maree v Tasmanian Water and Sewerage Corporation Pty Ltd

[2022] TASSC 38

[2022] TASSC 38

COURT:                  SUPREME COURT OF TASMANIA

CITATION:             Hines v Tasmanian Water and Sewerage Corporation Pty Ltd  
[2022] TASSC 38

PARTIES:  HINES, Mark Edward
  HINES, Tanya Maree
  v
  TASMANIAN WATER AND SEWERAGE
  CORPORATION PTY LTD

FILE NO:  2359/2020
DELIVERED ON:  14 June 2022
DELIVERED AT:  Hobart
HEARING DATE:  31 January 2022
JUDGMENT OF:  Brett J

CATCHWORDS:

Procedure – Civil proceedings in state and territory courts – Costs – Indemnity costs – Unreasonable conduct or delinquency relating to proceedings – Appeal from a decision of a Magistrate granting default judgment – Unnecessary expense caused by appellants’ refusal to pursue available remedy of an application to set aside default judgment in the lower court – Appeal devoid of merit – Conduct of appeal made difficult by appellant filing numerous lengthy and irrelevant materials – Order that appellants pay respondent’s costs on an indemnity basis.

Bob Brown Foundation v Sustainable Timber Tasmania [2022] TASFC 3 – followed.
Magistrates Court (Civil Division) Rules 1998, rule 113.
Aust. Digest – Procedure [1576]

REPRESENTATION:

Counsel:
           First Appellant:  In person
           Second Respondent  In person
           Respondent:  Olivia Jenkins
Solicitors:
           First Appellant:  In person
           Second Respondent  In person
           Respondent:  Rae & Partners

Judgment Number:  [2022] TASSC 38
Number of paragraphs:  8

Serial No 38/2022

File No 2359/2020

MARK EDWARD HINES and TANIA MAREE HINES v TASWATER

REASONS FOR DECISION  BRETT J

14 June 2022

1. On 16 February 2022, I dismissed the appeal brought by the appellants against the decision of a magistrate to grant judgment to the respondent in respect of a claim brought in the Magistrates Court.  The judgment had been entered by the magistrate when the appellants failed to attend a directions hearing.

2. After delivering my decision on the substantive appeal, the respondent applied for an order for costs, to be assessed on an indemnity basis.  I then directed that each party lodge written submissions in respect of that application within a specified time. I indicated that when I received the written submissions, I would make a decision on the costs application, reduce it to writing and forward it to each party. I also indicated that if either party wanted a further hearing in which to make oral submissions on the costs issue, that party should make that request in the written submissions.

3. Both parties have now filed written submissions. Neither has requested an oral hearing. Accordingly, I will now proceed to determine the issue of costs.

4. In Bob Brown Foundation v Sustainable Timber Tasmania [2022] TASFC 3, Pearce J set out a helpful summary of judicial pronouncements concerning the correct approach to the exercise of the Court's discretion where an award of indemnity costs is under consideration:

   "An order for indemnity costs can properly be made where 'there is some special or unusual feature in the case to justify the court exercising its discretion in that way': Preston v Preston [1982] 1 All ER 41 at 58. In Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 152, Black CJ stated the principles applicable to a claim for indemnity costs in these terms:

   '... it is well established that the starting point for any consideration of an application for indemnity costs is that in the ordinary case costs will follow the event and the Court will order the unsuccessful party to pay the costs of the successful party, on a party and party basis, a basis which will fall short of complete indemnity. Nevertheless, the Court has an absolute and unfettered jurisdiction in awarding costs, although the discretion must be exercised judicially. So indemnity costs may properly be awarded where there is some special or unusual feature in the case justifying the Court in exercising the discretion in that way.'

   In Hamod v State of New South Wales [2002] FCAFC 97, 188 ALR 659, Gray J, with whom Carr and Goldberg JJ agreed, stated at [20]:

   'Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.'

   In Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy (No 2) [2020] FCAFC 112, in the context of a failure by a party to make discovery, the Court stated at [31]:

   'The point which we wish to emphasise is that to justify a special costs order, there must be conduct deserving of criticism and resulting in greater expense to the innocent party.'"

5. Applying those principles, it is clear that there are circumstances in this case which justify an award of indemnity costs in favour of the respondent. Those circumstances are:

   ·    As I demonstrated in the reasons for the decision made by me on 16 February, the appeal was utterly devoid of merit. In particular, a critical aspect of the appellant's complaint was the factual assertion that they had not been given notice of and were not aware of the directions hearing.  The appellants expressly confirmed in the hearing before me that they had not received the notice. However, the existence of the notice as an annexure to a document prepared and filed by the appellants prior to the directions hearing made it clear that this assertion was false. The respondent's submissions on the costs question assert that this amounts to fraud, but I will not go as far as to make that determination. It is sufficient to note that the existence of that document, which was contained within the documents provided by the Magistrates Court and not referred to at any stage by the appellants, completely removed any legitimate basis of merit in respect of the appeal.

   · While I accept that an appeal to this Court can be based on considerations such as the entry of judgment without notice having been given to the appellants, it was always patently clear that the simple and cost effective remedy in respect of the entry of judgment in default of appearance was an application to the Magistrates Court to set aside the judgment under r 113 of the Magistrates Court (Civil Division) Rules 1998. Such an application could have been dealt with in a simple and cost effective way, and this would have avoided the need for the respondent to expend considerable resources in dealing with an appeal to this Court. Further, the appellants were provided with advice, both by Holt AsJ and in writing by the solicitors for the respondent, about this procedure. They refused to heed such advice and deliberately decided to press on with the appeal. This conduct, in my view, demonstrated a degree of unreasonable recalcitrance, which directly resulted in the respondent having to incur unnecessary costs in order to meet the appeal.

   ·    The appellants made the conduct of the appeal difficult, and increased expense to the respondent, by filing a number of lengthy documents which contained substantial amounts of what can best be described as irrelevant and unhelpful material. Notwithstanding this description, it was of course necessary for the legal representatives of the respondent to read, analyse and consider that material in order to determine whether any, and if so what, response was necessary. The irrelevant material included attacks on the integrity of the respondent, the magistrate and staff of the Magistrates Court. None of these attacks were justified or had any basis in fact.

6. The appellant's submission against an award of costs amounts to an argument that the original claim by the respondent in the Magistrates Court lacked merit, and that they should not have to bear the costs incurred by the respondent in employing lawyers in respect of the claim. This argument lacks merit. The appellants commenced and persisted with an unmeritorious appeal. The respondent was perfectly entitled to resist the appeal, and to be legally represented in doing so.

7. The outcome of the appeal warrants an order for costs. The special features referred to above justify an order that the respondent's costs be assessed on an indemnity basis. I intend to so order. In making this decision, I have taken into account that the appellants were unrepresented throughout the course of these proceedings. I agree with the respondent's submission that this is a relevant factor, but there comes a point where even unrepresented parties must bear the consequences of unreasonable and unjustified conduct, which results in unnecessary costs to the other party. That factor does not dissuade me from making an order for indemnity costs.

8. I order that the appellants pay the respondent's costs of the appeal to be taxed and assessed on an indemnity basis.