Howlin v Clarence City Council and Sheriff for the State of Tasmania (No 2)
[2014] TASSC 39
•30 July 2014
[2014] TASSC 39
COURT: SUPREME COURT OF TASMANIA
CITATION: Howlin v Clarence City Council and Sheriff for the State of Tasmania (No 2) [2014] TASSC 39
PARTIES: HOWLIN, Darryl Robert
v
CLARENCE CITY COUNCIL
SHERIFF FOR THE STATE OF TASMANIA
FILE NOS: 523/2005, 279/2009, 548/2010, 586/2012
DELIVERED ON: 30 July 2014
DELIVERED AT: Launceston
HEARING DATES: 6 and 11 June 2014
JUDGMENT OF: Tennent J
CATCHWORDS:
Procedure – Costs – General rule – Costs follow the event – Departing from the general rule – Order for costs on an indemnity basis – Conduct of parties – Conduct tending to litigation.
Supreme Court Civil Procedure Act 1932 (Tas), s12.
Burnie Port Corporation Pty Ltd v Bank of Western Australia Limited & Anor (No 3) (2003) 12 Tas R 325, referred to.
Aust Dig Procedure [575]
Procedure – Courts and judges generally – Power to control proceedings – Miscellaneous powers.
Supreme Court Rules 2000 (Tas), r508(1)(b).
Shaw v Harris (No 1) (1992) 3 Tas R 153, referred to.
Aust Dig Procedure [16]
REPRESENTATION:
Counsel:
Applicant: In person
Clarence City Council: C Gunson
Sheriff for the State of Tasmania: P Turner (11 June 2014)
Solicitors:
Applicant: N/A
Clarence City Council: Shaun McElwaine + Associates
Sheriff for the State of Tasmania: Director of Public Prosecutions
Judgment Number: [2014] TASSC 39
Number of paragraphs: 22
Serial No 39/2014
File Nos 523/05, 279/09, 548/10, 586/12
DARRYL ROBERT HOWLIN v CLARENCE CITY COUNCIL, SHERIFF FOR THE STATE OF TASMANIA (No 2)
REASONS FOR JUDGMENT TENNENT J
30 July 2014
On 31 March 2014, Darryl Howlin ("the applicant") commenced proceedings by which he sought to bring a halt to enforcement action being taken by the Sheriff of the Court ("the Sheriff") at the behest of the Clarence City Council ("the respondent") in respect of a number of costs orders. The proceedings were commenced because the Sheriff was about to auction the applicant's home. The auction was to be held on 10 April 2014. The hearing of the application was brought on at short notice and occurred on 8 April. The hearing involved counsel for both the respondent and the Sheriff. At the conclusion of the hearing, the application was refused. I indicated that written reasons would be published. The respondent sought an order for costs. That application was adjourned to a date to be fixed to allow for the written reasons to be published, and for each party to consider them. The written reasons were distributed to the parties on 11 April 2014: Howlin v Clarence City Council and Sheriff for the State of Tasmania [2014] TASSC 20.
The respondent seeks an order that the applicant pay its costs of and incidental to his failed application. It also seeks an order that any costs ordered be taxed on an indemnity basis, and a certificate for counsel. Counsel for the Sheriff did not seek any order as to costs. The application for costs came on for hearing on 6 June 2014. At that hearing, counsel for the respondent also sought an order pursuant to the Supreme Court Rules 2000 ('the Rules"), r508(1)(b). That provides that a judge may order that any affidavit containing scandalous material be removed from the Court file. Counsel for the respondent had indicated at the hearing of the substantive application that he would seek such an order.
The costs application
The Supreme Court Civil Procedure Act 1932 ("the Act"), s12, invests the Court with jurisdiction to award costs, and provides that such costs shall be in the discretion of the Court. Neither the Act nor the Rules specifically provide that costs may be awarded on an indemnity basis. The closest the Act comes to the issue is that s12(3) provides that costs may be awarded on a solicitor and client basis.
The first issue therefore to be determined is whether the Court should exercise its discretion in favour of the respondent by making a costs order against the applicant at all. If the Court determines such an order is appropriate, the second issue is the basis upon which any costs ordered to be paid should be taxed. The alternatives available to the Court are that any costs be taxed on a party and party basis, a solicitor and client basis or an indemnity basis. It is the last which the respondent seeks.
Should there be a costs order?
The discretion of the Court to award costs is to be exercised judicially by reference to the circumstances of the case. The general rule is that costs are to follow the event although that principle may be departed from where there are circumstances which might warrant it. In the present case, it was not suggested that there was any circumstance which might justify an order otherwise than in accordance with the general rule.
The applicant was wholly unsuccessful in his application. The application lacked merit and was clearly brought in an attempt to delay an inevitable step being taken by the Sheriff. There is no reason why costs should not follow the event. There should be an order that the applicant pay the respondent's costs.
Does the Court have power to order that any costs ordered to be paid be taxed on an indemnity basis?
Although no issue was raised by the applicant by way of a challenge to the power of the Court to order costs on an indemnity basis, I am satisfied the Court has such a power. Underwood J (as he then was) dealt with the issue of indemnity costs in Burnie Port Corporation Pty Ltd v Bank of Western Australia Limited & Anor (No 3) (2003) 12 Tas R 325. His Honour said at [14] – [21] :
"14 … The distinction between costs taxed on a solicitor/client basis and costs taxed on an indemnity basis is a little difficult to detect. The Supreme Court Civil Procedure Act 1932, s12, confers jurisdiction on a judge to award costs with 'full power and authority to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid'. Section 12(3) provides:
'(3) The Court or any judge thereof may award costs as between solicitor and client in any case in which such costs may be awarded by the Court or a judge thereof at the commencement of this Act.'
15 The Supreme Court Rules 2000 do not prescribe the basis upon which either solicitor/client costs or indemnity costs should be taxed, although r837(9) acknowledges that nothing in the Division of the Supreme Court Rules that is headed 'Costs' derogates from the power of the Court or a judge to make such orders as to costs as are just in the circumstances of the case.
16 In the absence of any rule or statutory provision governing the matter, it appears to me that the use of the expression 'taxed on a solicitor/client basis', or 'taxed upon an indemnity basis' in an order, requires the taxing officer to interpret the meaning of the order, cf Giles v Randall [1915] 1 KB 290. Mr McElwaine submitted that taxation of costs on an indemnity basis means that all costs shall be allowed except insofar as they are of an unreasonable amount or may have been unreasonably incurred. To support that proposition, he referred to the Rules of Court (Vic), r63.30, but, unlike the Tasmanian Rules, the Victorian and other State Rules define the different bases upon which costs are to be taxed. It seems to me that, having regard to the provisions of the Supreme Court Civil Procedure Act, s12(3), the appropriate source for the meaning of an order that costs shall be allowed on a solicitor/client basis is the practice prior to the introduction of the Supreme Court Civil Procedure Act. For a useful discussion on the matter, I refer to National Mutual Life Association of Australasia Ltd v Chris Poulson Insurance Agencies Pty Ltd (No 6) 113/1998.
17 Indemnity costs are a fairly new invention, and absent a rule defining the meaning of the expression 'taxed upon an indemnity basis', the taxing officer is dependent upon the terms of the order to define the extent of the indemnity. See, eg, Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd and Others [1988] FCA 202; (1988) 81 ALR 397; Re Bond Corporation Holdings Ltd (1990) 1 ACSR 350. It may be noted that the power of this Court to order that costs be allowed on an indemnity basis was upheld in National Mutual Life Association of Australasia Ltd (supra). …
18 …
19 Although the judicial discretion to make a costs order is not fettered by statute, it must be exercised judicially in accordance with established principle. In Hughes v Western Australian Cricket Association (Inc) and Others [1986] FCA 382; (1986) ATPR 40-748, Toohey J said, at 48,136:
'The discretion must of course be exercised judicially. There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be their effect.
1 Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey (1920) 2 KB 47.
2 Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar (1893) 1 QB 564.
3 A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR 4 at 12.'
20 In addition, it is well settled that costs may be ordered to be taxed on a solicitor/client or indemnity basis. In Fountain Selected Meats (Sales) Pty Ltd (supra), Woodward J said at 400 - 401:
'Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases 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). It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the court's discretion - for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties: see Andrews v Barnes (1888) 39 Ch D 6 LR Ch App 133; Forester v Read (1870) 6 LR Ch App 40; Christie v Christie (1873) 8 LR Ch App 499; Degmam Pty Ltd (in Liq) v Wright (No 2) (1983) 2 NSWLR 354.
"Another case cited in argument was Australian Guarantee Corporation Ltd v De Jager [1984] VicRp 40; (1984) VR 483 where (at 502) Tadgell J allowed solicitor and client costs because he found the pursuit of the action to have been 'a high-handed presumption'."
No doubt the expression "high-handed presumption" was appropriate in the case Tadgell J had to decide, and he needed to go no further; but in order to establish a convenient principle in such cases it is necessary to be a little more prosaic. I believe that it is appropriate to consider awarding "solicitor and client" or "indemnity" costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.'
21 Of course, the foregoing is not to be read as limiting the circumstances in which solicitor/client or indemnity costs will be ordered, but it indicates that there needs to be some very special circumstance before such an order will be made. A detailed insight into the principles applicable to making a solicitor/client costs order with an historical introduction is provided by Shephard J in Colgate-Palmolive Company & Anor v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225. Many cases are referred to and discussed by his Honour. The judgment concludes with a succinct expression of six principles, the last three of which are apposite and I respectfully adopt (233 - 234):
'In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 Ch D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client "as and when the justice of the case might so require." Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ((1982) 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at 6) similar views in Ragata.
Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525, Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal), Crisp v Keng (Supreme Court of New South Wales, 27 September 1993, unreported, Court of Appeal) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.'"
Should there be an order for indemnity costs in this case?
Counsel for the respondent accepted that it is unusual for a court to order costs to be taxed on an indemnity basis. He also accepted that, to justify such an order, the respondent would need to establish some special circumstances. Counsel submitted that it was the conduct of the applicant in relation to his application which amounted to a special circumstance such as to justify the order sought. He raised a number of issues relating to that conduct.
The application, it was submitted, was, on its face, devoid of merit and there was no basis for the orders sought. With respect, I agree. The situation faced by the applicant was that there had been a number of costs orders made against him in favour of the respondent. The respondent's costs pursuant to those orders had been taxed, and certificates of taxation issued. The costs as taxed were due and payable by the applicant. The respondent had thereafter taken steps authorized by law to enforce payment of the costs owed which had ultimately resulted in arrangements being made by the Sheriff to sell the applicant's home by public auction.
The application mounted by the applicant was an attempt to stop that auction. The applicant demonstrated no error in the processes undertaken by either the respondent or the Sheriff which might have the effect of vitiating the authority of the Sheriff to sell the applicant's property. Instead, the applicant attempted to re-litigate the issues which he had previously litigated before this Court and in respect of which he had been unsuccessful.
The applicant filed a lengthy affidavit in support of his application. It contained 50 paragraphs and 87 pages of annexures. Those annexures were largely copies of exhibits at trials in which the applicant and the respondent had been involved, and extracts from transcripts of those trials. The affidavit also contained a number of paragraphs in which personal attacks were made on various judges, legal practitioners and officers of the respondent. The bulk of the affidavit was struck out on the basis the material was irrelevant to the application before the Court or scandalous or both.
The argument required to deal with this largely irrelevant material increased the length of the hearing unnecessarily.
The Court clearly has to be mindful of the fact that the applicant is unrepresented. Courts are generally forgiving to a degree of failures by unrepresented litigants to address issues correctly. However, courts also need to be mindful of potential prejudice which may flow to the opposing party if too much generosity is extended. The applicant is not an inexperienced litigant. In fact, in a separate application he seemed quite proud to tell the Court that he had the greatest history of litigation by a litigant in person in the Supreme Court of any state in Australia. The applicant has represented himself on numerous occasions before judges at first instance and on appeals. He has argued complicated issues. He has argued costs issues. He has demonstrated an ability to research issues and, in particular, legislation. He has been told before by judges, including me, about the need to ensure that affidavits are confined to relevant material and that oral arguments he mounts are to be confined to matters relevant to the proceedings before the Court. The applicant continues to ignore such advice and did so in this matter.
Orders for costs generally are to be compensatory and not punitive. Costs awarded on an indemnity basis are not intended to be punitive. An order for such costs is intended to ensure that the beneficiary of the order suffers no loss as a result of, in this case, the conduct of a litigant which has resulted in unmeritorious proceedings and argument and an unnecessarily lengthy hearing.
In the circumstances I am satisfied that the respondent has demonstrated that there are special circumstances in this case which justify an order that the applicant pay the respondent's costs of and incidental to the application filed 31 March 2014 to be taxed on an indemnity basis
Counsel for the respondent also sought that there be a certificate for counsel. That is, in my view, appropriate. The matter dealt with by the application involved a consideration of legislation and procedures not often considered by the Court, and complex arguments.
Application pursuant to r508(1)(b)
I accept that the applicant's affidavit sworn in support of his application contained scandalous material. I have already made some findings in that regard. The applicant made personal attacks on legal practitioners, members of Supreme Court staff and members of the respondent's staff. He also made comments impugning the integrity of judges of the Court. The material was entirely unnecessary and irrelevant to the application before the Court. The material contained his personal views drawn from a combination of facts which, at times, were inaccurate, and were often entirely unconnected.
The issue is whether an order should be made under r508. What counsel for the respondent actually sought was an order that the affidavit containing the material should be removed from the Court file and placed in a sealed envelope with a notation to the effect it not be opened save as a consequence of an order of a judge. He also sought orders that the applicant be required to produce to the Court all copies of the affidavit in his possession and that he be restrained from publishing the contents of the affidavit to any other person. The orders were sought to ensure that the content of the affidavit was not available to any member of the public who might search the file.
The practice of ordering an affidavit to be removed from a Court file and placed in a sealed envelope is one rarely used. Counsel referred to a decision of Wright J in Shaw v Harris (No 1) (1992) 3 Tas R 153. His Honour took the view that it was appropriate to order an affidavit be placed in a sealed envelope and left on the Court file with a notation it not be opened without an order of a judge, having made the following findings about an affidavit:
"Indeed, much of the affidavit was more than just extravagant, it was outrageous, the more so as the male defendant himself is a practitioner of this Court. It contains explicit and generalised allegations of criminal misconduct against the plaintiffs and their legal representatives and it uses inflammatory and undisciplined language in the course of doing so. This is improper and in breach of RSC, O 41, r 13. It is inappropriate for me to illustrate my views by reference to the contents of the affidavit and to thus perpetuate this regrettable state of affairs. However, I identify paras 6, 7, 9, 20 and the penultimate sentence in para.21 as falling into this category. A portion of para 18 which also contained objectionable material of this kind, was ruled inadmissible at the hearing with the agreement of counsel for the defendants. I need hardly add that none of the accusations has been substantiated in any way whatsoever."
His Honour did not go further than the order he made, and no submissions were made to me to justify the orders sought beyond the type made by Wright J. I note that the affidavit has been on the Court file, absent any order of the type now sought, since 31 March 2014 and, despite the fact that I reserved my decision following the hearing of this application, no attempt was made to have me deal with the issue with any urgency. I had no evidence about whether there had been any access to the file by any member of the public in the meantime, or about any attempt by the applicant to publish the contents of the affidavit to any person outside those directly involved in these proceedings.
In the circumstances, I am of the view that, while an order of the type made by Wright J is appropriate, there is little basis for the further orders sought.
Outcome
The orders of the Court will therefore be as follows:
1.That, in relation to the proceedings commenced by the applicant on 31 March 2014, there be a certificate for counsel.
2.That the applicant pay the respondent's costs of and incidental to the application filed on 31 March 2014, such costs to be taxed on an indemnity basis.
3.That the affidavit of the applicant sworn 31 March 2014 be placed in a sealed envelope, which envelope is to remain on the Court file with a notation that it not be opened without an order of a judge.
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