Hoe v Lennox
[2020] VSC 262
•13 May 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2018 03013
| ALEX HOE | Appellant |
| v | |
| LESLEY LENNOX | Respondent |
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JUDGE: | Forbes J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 March 2020 |
DATE OF JUDGMENT: | 13 May 2020 |
CASE MAY BE CITED AS: | Hoe v Lennox |
MEDIUM NEUTRAL CITATION: | [2020] VSC 262 |
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JUDICIAL REVIEW – Appeal from orders of the Magistrates’ Court – s 109 Magistrates Court Act 1989 – Claim struck out pursuant to order 23.02 of Magistrates’ Court General Civil Procedure Rules2010 – Unilateral communication to the court to obtain a dismissal of proceeding rather than a strike out as previously ordered – Denial of procedural fairness - Orders quashed – Order striking out proceeding remains.
COSTS – Self-represented litigant – No entitlement to recover cost of time spent by non-legal practitioner in preparation and presentation of case – Cachia v Hanes (1994) 179 CLR 403 – Disbursements recoverable – Section 24 Supreme Court Act 1986; Order 63 Supreme Court (General Civil Procedure) Rules 2015.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | In person | |
| For the Respondent | Mr F. Hill, LFS Legal |
HER HONOUR:
This ruling deals principally with the costs of a successful appeal by Mr Hoe from orders made by the Magistrates’ Court. He had filed a civil complaint claiming loss and damage as a result of being called a scammer. This arose out of a contractual dispute where Mr Hoe said he held instructions from a number of the owners to take over management of the owners corporation of premises at 26A Audsley Street, Clayton South. The respondent, an employee of the existing owners’ corporation management, emailed all owners a concern that Mr Hoe’s approach to them might be that of a scammer.
Mr Hoe was self-represented in his Magistrates’ Court hearing. He faced a strike out application under Order 23.02 of Magistrates’ Court General Civil Procedure Rules 2010 (‘the Rules’) on the basis that his pleadings disclosed no cause of action. The strike out application was successful and orders were made striking out the appellant’s claim and ordering costs of the application in a fixed sum. Mr Hoe was provided with a copy of these orders (‘Order A’).[1]
[1]Order of Judicial Registrar R. Andrew in Alex Hoe v Lesley Lennox (Magistrates’ Court, H11245616), 20 November 2017, during the appeal this order was referred to as ‘Order A’.
After this the solicitors for the respondent approached the Magistrates’ Court for an amendment to the orders. That amendment related to an error as to the amount of the fixed sum costs in the order. The sum had failed to allow for a 25% uplift on the scale fees. This uplift had been asked for on the basis of an offer of compromise that had been made. The uplift was granted by the Magistrate at the hearing. A second order was then issued dated 19 December 2017 (‘Order B’), altering the amount of the costs payable by increasing the figure to allow for a 25% uplift.[2] Mr Hoe was not informed of this approach to the Court. Nor was he sent a copy of the amended Court order. A letter was sent dated 27 December 2017 demanding payment in the amount set out in Order B. Mr Hoe requested a breakdown of the costs as requested at the hearing.
[2]Order of Judicial Registrar R. Andrew in Alex Hoe v Lesley Lennox (Magistrates’ Court, H11245616), 19 December 2017, during the appeal this order was referred to as ‘Order B’.
After this, on 8 January 2018 the respondent’s solicitors again approached the court requesting further amendment of the Order B. This time the amendment sought to enlarge the liability for costs from a fixed sum to ‘costs on scale with a 25% uplift to be assessed by the Supreme Court Cost Court in default of agreement’.[3] The court made this change.[4] Again neither the solicitors for the respondent nor the court informed Mr Hoe of these matters.
[3]Affidavit of Alex Hoe, 27 December 2018 (Mr Hoe’s Affidavit), Exhibit AH-16.
[4]Order of Judicial Registrar R. Andrew in Alex Hoe v Lesley Lennox (Magistrates’ Court, H11245616), 15 January 2018 (‘Order C’), during the appeal this order was referred to as ‘Order C’.
Mr Hoe sent a cheque for payment of costs in the amount of $1324.80 originally ordered based upon Order A provided to him by the Court. This was confirmed on 15 February 2018 and accompanied by a copy of Order A. Mr Hoe made clear he was paying the amount that he was ordered to pay. The cheque was banked. The solicitors for the respondent then sent Mr Hoe a receipt for his cheque as ‘part payment of costs order’. Mr Hoe also emailed on this day having become aware of the three orders, the latter two being made without notice to him.
Agreement as to costs payable was not reached and so the matter proceeded to hearing in the Supreme Court Costs Court before Judicial Registrar Gourlay in April 2018. The Registrar questioned how there could be an order to pay costs in a fixed sum and an order for costs in the proceeding. She also made clear that a dismissal of a proceeding was needed to obtain the costs of the proceeding and the order only struck out the statement of claim. She was also concerned that Mr Hoe had not been informed and observed that unilateral communication to a court by a party is unacceptable. The costs hearing was adjourned. The respondent then requested the matter be relisted before the Magistrates’ Court Registrar who had heard the strike out application.
The request for the re-listing (a copy of which was sent to Mr Hoe) requested a hearing for orders that the matter be struck out, explaining that the Supreme Court Costs Court (‘Costs Court’) had been unable to confirm that the matter had been struck out.[5] This misunderstands the matters raised by the Judicial Registrar who was clear that the pleading had been struck out but could not confirm that the proceeding was dismissed.[6] From the transcript, the Registrar appreciated the difference. A hearing was listed for 28 November 2018. The practitioner[7] appearing for the respondent at the hearing made clear that what was being sought was a clarification of the order previously made and not a new application.[8] Mr Hoe was given notice by the court of the re-hearing.
[5]Mr Hoe’s Affidavit (n 3) part of Exhibit ‘AH – 23’, The letter from Mr Free, LFS Legal dated 24 September 2018 to the Registrar at Heidelberg Magistrates’ Court requested a hearing for the purpose of seeking “orders wherein this matter be struck out… That costing proceeding has been adjourned with the Judicial Registrar being unable to confirm that the orders made by.…[were] that the matter has been struck out.”
[6]Transcript of Proceedings, Lesley Lennox v Alex Hoe (Supreme Court of Victoria Costs Court, S CI 2018 01039, Judicial Registrar Gourlay, 24 April 2018) 6 [13] – [31].
[7]Who was not the legal practitioner who appeared at the first hearing on 17 November 2017.
[8]Transcript of Proceeding, Alex Hoe v Lesley Lennox (Magistrates’ Court, H11245616, Registrar R. Andrews, 28 November 2018).
At the hearing, and without any prior notice to Mr Hoe, the respondent’s solicitor produced a draft order dismissing the proceeding and seeking an order that the respondent’s costs of the proceeding be paid by the appellant. The draft minute of order which was produced had not been provided to Mr Hoe at any time prior to the commencement of the hearing. Mr Hoe produced the transcript of the original application and submitted that what had been ordered was a strike out of his claim.[9] He provided the transcript of the Costs Court hearing to the Registrar. He submitted that he had notice of the hearing and understood it to be for clarifying the orders made. He said that he had no notice that a dismissal of the proceeding would be sought.[10] He asked for clarification of what the change meant but this was not explained to him. He requested an adjournment to seek advice as to the meaning and effect but this was refused.[11] Despite the transcript of the initial hearing, and indeed the three earlier orders referring only to a strike out application, the Registrar acceded to the submission that dismissing the proceeding was a clarification of the earlier order made under 23.02 of the Rules. The proceeding stood dismissed by order dated 28 November 2018 (‘Order D’)[12].
[9]Ibid 5 [00:07:10].
[10]Ibid 8 [00:00:00].
[11]Ibid 8, 11, 12, 13 [00.1.38].
[12]Order of Judicial Registrar R. Andrew in Alex Hoe v Lesley Lennox (Magistrates’ Court, H11245616), 28 November 2018, during the appeal this order was referred to as ‘Order D’.
It is from these orders, that Mr Hoe appeals to this court pursuant to s 109 of the Magistrates’ Court Act 1989 (‘the Act’). An appeal lies only on a question of law. Mr Hoe’s grounds of appeal variously canvassed error of law on the face of the record, bias, abuse of process and a denial of procedural fairness.
An order under rule 23.02 striking out a claim, removes the pleading but does not conclude the proceeding. A party is free to re-plead in proper form a claim that they wish to bring but which is not disclosed by the statement of claim as it was filed. The Magistrates’ Court complaint was not in evidence before me but it is perhaps unsurprising that a self-represented litigant may not present a claim pleaded in a proper form.
The transcript from the original Magistrates’ Court hearing which was in evidence before me recorded the appellant as describing his action as a ‘civil wrong that was done to me based on a wrongful conduct’[13]. The respondent’s legal representative describing the appellant’s claim this way:
The complaint made by the Plaintiff is seeking damages and loss because he claims that a registered Australian company he’s a Director and a Shareholder of… suffered a loss because the defendant stated of the plaintiff in an email to her own clients that her company held the reasonable view that he “may be a scammer”.[14]
[13]Transcript of Proceeding, Lesley Lennox v Alex Hoe (Magistrates’ Court, H11245616, Judicial Registrar R. Andrew, 17 November 2017), Affidavit of Mr Hoe, Exhibit AH-9 [00:12:26].
[14]Ibid [00:01:31].
The respondent did not make an application to summarily dismiss the proceeding as she might have chosen to do. Whether or not the circumstances can properly disclose a cause of action remains for Mr Hoe to demonstrate.
Mr Hill who appeared for the respondent[15] on the appeal quite properly accepted that an order striking out a claim left a party free to re-plead whereas a dismissal brought finality to the proceeding. It followed that Order D was not properly characterised as a ’clarification’ of the original order made. Nor could it be characterised as something for amendment pursuant to the slip rule. Order 36.08 of the Rules (‘the slip rule’) is used for non-contentious matters where all parties are in agreement.
[15]And who did not appear or have any involvement in the events outlined before this appeal was commenced.
Even if the slip rule were an appropriate basis for the original adjustment of the fixed amount of costs of the application, it was inappropriate for the respondent’s solicitors to attempt to do so by contacting the court on an ex parte basis. Mr Hill quite properly accepted that contacting the court, and obtaining the orders of 19 December 2017, Order B and 15 January 2018, Order C without informing Mr Hoe, amounted to a denial of procedural fairness to him. In those circumstances he did not oppose the orders that I proposed and made at the conclusion of the hearing. It was therefore not necessary to deal with claims of apprehended bias or error on the face of the record. I quashed the orders of 19 December 2017, 15 January and 28 November 2018.
The effect of my orders leaves the Magistrates’ Court proceeding H11245616 with the claim struck out but with Mr Hoe able to file a further statement of claim in accordance with the Rules should he wish to do so. The costs order remains and has already been satisfied by Mr Hoe.
The Notice of Appeal also sought a hearing on exemplary damages. I indicated that an appeal under s 109 of the Act is not a mechanism for making claims for damages, exemplary or otherwise and that I would not entertain submissions on this question.
Mr Hoe sought an order for costs which was resisted by the respondent. I gave leave to Mr Hoe to file short submissions as to the basis upon which he seeks payment of legal costs as a self-represented litigant and the quantum of any costs or disbursements.
Section 24 of the Supreme Court Act 1986 provides that:
(1)Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all the matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.
….
This principle is further outlined by Order 63.02 of the Rules which provides the general power to exercise the discretion consistent with s 24.
As a general matter of practice, the costs follow the event. Mr Hoe having succeeded in his appeal seeks his costs.
Mr Hoe’s submissions filed 8 April 2020 seek costs on an indemnity basis with a 45% uplift. The calculation of those costs make clear that what is sought includes the costs of the Magistrates’ Court complaint itself (incurred thus far), the costs associated with a complaint to the Legal Services Commissioner[16] and the costs of the Costs Court application incurred thus far, as well as the costs of this proceeding.
[16]The affidavit material included a foreshadowed complaint to the Legal Services Commission but no evidence as to whether such a complaint was made.
It is not appropriate to consider costs in relation to proceedings, as yet undetermined, before other courts or judicial officers. I will not entertain an application for costs of the Magistrates’ Court proceeding or the Costs Court proceeding. In the absence of any evidence regarding a complaint to the Legal Services Commissioner or any submissions as to why any such costs should be considered by this court I do not make any order for those costs.
As to the costs associated with this proceeding Mr Hoe seeks the sum of $13,365.44 (before any uplift). A substantial part of that total represents the time spent by Mr Hoe and his assistant in preparation for and attending court and expenses associated with travel to and from the court to file documents or attend hearings and mediation. Mr Hoe submits that as a self-represented litigant he is disadvantaged as he is not compensated for his time.
The uplift of 45% is sought based upon a submission that there needs to be a contingency to reflect the absence of protection from an adverse costs order if the appeal was unsuccessful and on the basis that it act as a deterrent to persons bringing ‘unsubstantiated proceedings’.
A litigant in person is entitled to represent themselves in court. They may be at a disadvantage compared to a litigant who is legally represented. The purpose of an award of costs is not to address this disadvantage. Nor are uplifts, which may be permitted where fees are charged by solicitors are contingent upon outcome, for the purpose of protection against an adverse cost order. Contingency fees are directed at the basis upon which a solicitor is engaged by a client. There is no basis to apply a contingency fee where a litigant is self-represented and so no basis for seeking any uplift.
It is clear that a self-represented litigant is not entitled to recover as legal costs their own time spent in preparation and presentation of their case. Nor can they recover the time of other persons who are not legal practitioners who have assisted this preparation or presentation. In Cachia v Hanes[17] the High Court majority said:
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.[18]
…
This is hardly surprising. 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. They were never intended to be comprehensive compensation for any loss suffered by a litigant.[19]
[17](1994) 179 CLR 403.
[18]Ibid, 410.
[19](1994) 179 CLR 403 [410 – 411].
A self-represented litigant as with a represented litigant, cannot claim as a component of legal costs, their own time spent in preparation or attendance at court for their litigation. An order for costs is not intended to compensate for some disadvantage or inconvenience suffered by litigants. This applies equally to legally represented parties as well as self-represented litigants.
However, it is also clear that a self-represented litigant, is entitled to claim expenses actually incurred in the proceeding which, had he been represented could have been recoverable by him or his legal representative. Disbursements include court fees, searches of court files and transcript.
Transcript was also obtained of the Costs Court hearing on 24 April 2018 and 23 October 2018 and the two Magistrates’ Court hearings on 17 November 2017 and 28 November 2018. It was necessary to search the Magistrates’ Court file to obtain the correspondence and subsequent orders for the purpose of preparing the affidavit in support of the appeal. These disbursements as provided by Mr Hoe amount to $1,434.21.
Costs are a matter of the court’s discretion. Generally the person who succeeds is entitled to be indemnified for the legal expense incurred in bringing or defending the action. The quantum of those costs, whether on a standard or an indemnity basis is also a matter of discretion, save for particular outcomes governed by Rule 26.[20] Again the usual practice is for costs on a standard basis. The distinction between standard and indemnity is generally directed at the quantum of costs charged by legal practitioners for the work of solicitors or barristers that can be recoverable or for variable disbursements such as expert reports or witness fees which may exceed scale allowances. Those matters are not applicable here with one exception which I will outline below. Filing and court fees are fixed amounts and remain the same. It is not therefore necessary to address the submissions as to whether it is appropriate, having regard to the matters highlighted in submissions, to order indemnity costs. The court related disbursements relevant to this proceeding, by Mr Hoe’s summary amount to $ 2,172.30 (filing, setting down and hearing fee). Therefore disbursements in total amount to $3606.51.
[20]Supreme Court (General Civil Procedure) Rules 2015.
Mr Hoe did obtain some legal advice. His submissions referred to legal costs incurred in the sum of $5,500. He provided the tax invoice and the costs disclosure letter associated with that expense. As this claim is for work done by a legal practitioner it would be prima facie recoverable by a self-represented litigant. The costs disclosure is signed on 4 October 2018 and the invoice dated 27 November 2017. As these pre-date the Magistrates’ Court order dismissing the proceeding, it is not clear to me whether this legal advice related to a potential Supreme Court appeal or to the re-listing before the Magistrates’ Court arising from the Costs Court matter. If Mr Hoe can demonstrate a relevance to this appeal he would be entitled to recover the relevant amount as part of a costs order.
The further complication in relation to the solicitors fees is raised by submissions of the respondent. Those submissions accept that expenses of a self-represented litigant may extend to payment of a solicitor’s invoice. However they question whether the work relates to this proceeding. They also question whether the provision of legal advice was from a person holding a current practicing certificate at the time.
The associated question is then whether this disbursement, if allowed, should be paid on an indemnity or a standard basis. In my view it should be on a standard basis. Any criticism of the conduct of the respondent (or more accurately the practitioners) made by Mr Hoe is mostly directed at their conduct in litigation in the Magistrates’ Court. To the extent that he makes any criticism of the way this appeal has been conducted I reject his submission. In my view there is no basis to award indemnity costs in relation to this appeal. In the absence of agreement as to the appropriate amount on a standard basis, it would be a matter for the Costs Court.
Given that the appeal has been successful it is not appropriate in my view that there be no order as to costs leaving Mr Hoe out of pocket for the expenses paid by him in lodging the appeal. The Respondent submitted that as between the appellant and respondent there should be no order as to costs leaving each to bear their own costs. She submits that the Magistrates’ Court’s actions has also adversely impacted upon her. I accept the submission from her solicitor that the steps taken in corresponding with the Magistrates’ Court were not her steps. A solicitor/client bill of costs of the Respondent was annexed to the submissions. This solicitor and client arrangement is not relevant to the question of costs between parties and not a matter upon which I should make any comment.
The Respondent’s primary submission was that the costs of both parties should be paid by the Magistrates Court ‘with appropriate certificates provided’. The foundation for that submission was that the Magistrates’ Court failed to make the correct order on 17 November 2017 when it made Order A. The original order, made pursuant to Rule 23.02 as requested by the respondent was not made in error (save perhaps to overlooking an uplift amount on the scale fixed sum for the application). I have set out my reasons for that conclusion above. If what was originally sought was a dismissal of the proceeding, then the error lay with the practitioners filing the application and appearing at the first instance. The costly exercise for both parties that has ensued has in part resulted from a continuation of this misunderstanding and a failure by the respondent’s solicitors to ensure that any correspondence they sent to the court included the other party. I do not accept the submission that the failure to notify the Appellant of the court communication was in any way ameliorated by the grounds for clarification.
Although the Notice of Appeal as drawn seemed to take issue with Order A, it was clear from the argument advanced, as well as the actions of Mr Hoe in paying the initial costs order, that his challenge was principally directed at the subsequent orders made.
The Magistrates’ Court was served with the proceeding and has notified the court that, as is usual it will abide by the outcome in accordance with the principles in R v Australian Broadcasting Tribunal; Ex parte Hardiman.[21] It is not a party to the proceeding. I accept that the Respondent made appropriate concessions at trial. However, I do not see any of the circumstances set out in the submissions as giving rise to a basis for ordering that both parties’ costs be paid by the Magistrates’ Court. Accordingly I do not propose to call on that court to be heard.
[21](1980) 144 CLR 13 as per letter 1 February 2018 (sic) stamped received by the Supreme Court Prothonotary on 5 February 2019.
I will order that the Respondent pay the costs incurred by Mr Hoe limited to payment of disbursements by way of court fees and transcript costs in the sum of $3,606.51 calculated as set out above and any costs payable to a legal practitioner in relation to advice associated with this appeal, on a standard basis, that amount being agreed between the parties and referred to the costs court in default of agreement.
I will grant liberty to the respondent to make an application pursuant to the Appeal Costs Act 1998 (Vic).
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