Huang v Frankston City Council (Costs Ruling)
[2023] VSC 41
•14 February 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2021 02605
| KAI YUAN HUANG | Plaintiff |
| v | |
| FRANKSTON CITY COUNCIL | Defendant |
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JUDGE: | Tsalamandris J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 14 February 2023 |
CASE MAY BE CITED AS: | Huang v Frankston City Council (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2023] VSC 41 |
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PRACTICE AND PROCEDURE – Costs – Costs orders – Whether costs should follow the event - Where defendant successful – No special circumstances to justify departure from general rule – Plaintiff to pay defendant’s costs on a standard basis – Supreme Court Act 1986, s 24 – Supreme Court (General Civil Procedure) Rules 2015, Order 63 – Civil Procedure Act 2010, Part 4.5 – Oshlack v Richmond River Council (1998) 193 CLR 72 – Northern Territory v Sangare (2019) 265 CLR 164 – Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd (Orders and Costs) [2020] VSC 267.
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APPEARANCES: | Counsel | Solicitors |
| Determined on the papers |
HER HONOUR:
Preliminary
On 30 November 2022, via email, I delivered reasons for judgment in this matter.[1] The proceedings involved an application by the appellant, Mr Huang, for leave to appeal a decision of the Victorian Civil and Administrative Tribunal in respect of whether certain documents held by the respondent, Frankston City Council (the Council), ought be provided to him under freedom of information legislation. I did not grant Mr Huang leave to appeal and dismissed his application.
[1][2022] VSC 733.
The parties were not able to reach agreement as to final orders to be made in this proceeding. Accordingly, on 2 December 2022, I made timetabling orders requiring the parties to submit proposed orders and submissions in support thereof.
On 7 December 2022, the Council proposed the following orders to give effect to my judgment:
(a) The application for leave to appeal from the order of the Victorian Civil Administrative Tribunal made on 15 June 2021 in Huang v Frankston City Council [2021] VCAT 634 be dismissed;
(b) The proceeding be dismissed; and
(c) The appellant pay the respondent’s costs on the standard basis, to be taxed in default of agreement.
The Council made submissions in support of its proposed orders, and also provided an affidavit affirmed by its solicitor, Maryam Popal, on 7 December 2022. In her affidavit, Ms Popal stated that on 16 May 2022, the Council made a formal offer of compromise to Mr Huang pursuant to Order 26 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) that Mr Huang pay the Council a sum of $10,000 (inclusive of costs) and the proceedings be discontinued. The Council submitted that it was unreasonable for Mr Huang not to accept this offer because his grounds of appeal had no real prospects of success, and the offer was a significant compromise on the Council’s legal costs, which it would, and did, incur in successfully opposing the application for leave to appeal. The Council stated that, despite this, it had elected not to pursue its potential entitlement to indemnity costs, and instead was content for its costs to be paid by Mr Huang on the standard basis.
On 13 December 2022, via email, Mr Huang sought a one month extension in respect of the order[2] requiring him to provide proposed orders to give effect to the Court’s decision and as to costs, together with submissions in support by 14 December 2022. He stated that the extension was required due to his caring responsibilities and his intention to appeal the decision.
[2]Dated 2 December 2022.
On 15 December 2022, I made the following orders:
1. The application for leave to appeal from the order of the Victorian Civil and Administrative Tribunal made on 15 June 2021 in Huang v Frankston City Council [2021] VCAT 634 be dismissed.
2. The respondent’s costs of the proceedings be reserved, until 6 February 2023.
3. By 6 February 2023, the applicant is to file and serve submissions (of no more than 5 pages) in respect of costs of the application.
On 6 February 2023, via email, Mr Huang made the following submissions:
1. I put "No order as to cost" under my amended Notice of Appeal. I requested each party pay for their own cost at the beginning of my case.
2. I do not have any details of information about the Respondent's cost claimed. The Respondent only provided with a figure of A$10,000.00, I don't have any idea how the figure was calculated and I don't have any comment either.
3. I am a pensioner and pension is my only income.
For the reasons that follow, I will order that Mr Huang pay the Council’s costs on the standard basis, to be taxed in default of agreement.
Who should pay the costs incurred and on what basis should costs be awarded?
Mr Huang submitted that there be no order as to costs, that is, that each party bear its own legal costs. The Council sought an order that Mr Huang pay its costs on a standard basis, to be taxed in default of agreement.
Section 24 of the Supreme Court Act 1986 and Part 4.5 of the Civil Procedure Act 2010 confer a broad discretion on the court to award costs. This discretion must be exercised judicially and in accordance with Order 63 of the Rules.[3]
[3]Rule 63.02.
It is well established at common law that, as a general rule, costs follow the event.[4] This means that a successful party is generally entitled to an award of costs absent special circumstances.[5]
[4]See for example Oshlack v Richmond River Council (1998) 193 CLR 72 (Oshlack).
[5]Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd (2010) 31 VR 46, 50 [15].
The justification for this general rule was explained by McHugh J in the High Court decision of Oshlack v Richmond River Council:[6]
The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.[7]
[6]Oshlack (n 4).
[7]Ibid, 97 [67].
As to whether special circumstances exist to justify a departure from this general rule, Riordan J in Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd (Orders and Costs)[8] said as follows:
[8][2020] VSC 267.
The touchstone for departing from the general rule is what is required to do justice between the parties. Circumstances which may justify a departure from the usual rule include where the successful party:
(i) contested many issues on which they failed;
(ii)required the losing party to contest issues abandoned during trial;
(iii) took unnecessarily technical points;
(iv) inappropriately prolonged the litigation;
(v) pressed a substantially exaggerated claim;
(vi)caused the real issues to be obscured or unnecessary evidence to be led; or
(vii)facilitated the loss of the opportunity to expeditiously dispose of the case.[9]
[9]Ibid, [10].
Mr Huang’s email correspondence did not refer to any such circumstances, instead Mr Huang referred to two matters which I infer he considered relevant to who should be ordered to pay costs in this matter.
First, Mr Huang referred to a sum of $10,000 that the Council had indicated it would accept in May 2022 to resolve the appeal, and complained that he did not know how this figure was calculated.[10] In circumstances where the Council was successful in this Court but does not seek to rely upon the service of its offer of compromise, the sum is irrelevant to my consideration of whether there should be a departure from the general rule that costs follow the event. Further, in making a costs order, it is not necessary for the quantum of costs to be known. Therefore, Mr Huang’s uncertainty as to the basis for the sum of $10,000, is irrelevant to the exercise of my discretion in respect of who should pay the costs incurred in the appeal.
[10]See above [7(2)].
Second, Mr Huang referred to being a pensioner.[11] For the reasons that follow, this is also an irrelevant consideration.
[11]See above [7(3)].
The High Court in Northern Territory v Sangare[12] held that the impecuniosity of an unsuccessful party, without more, is not a sufficient reason to deny a successful party its costs. In doing so, it referred to the judgment of Chernov JA in Board of Examiners v XY,[13] where his Honour identified the practical difficulties which would arise if a party’s level of impecuniosity was to be a relevant consideration.[14] The High Court then reiterated that:
In point of principle, it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party. That consideration of basic justice does not lose its compelling force simply because the successful party happens to be wealthy: the successful party, whether rich or poor, did not ask to be subjected to the expense of unmeritorious litigation. The statutory power to order costs affords the successful party necessary protection against unmeritorious litigation; and unmeritorious litigation is no less unmeritorious because it is pursued by a person who is poor or who is a litigant in person.[15]
[12](2019) 265 CLR 164 (Sangare).
[13](2006) 25 VAR 193, 207-8 [33]-[34].
[14]Sangare (n 12), 174 [27].
[15]Ibid.
In addition, it was noted that ‘[t]he circumstance that the appellant is a public authority is likewise irrelevant’.[16]
[16]Sangare (n 12), 174 [28].
Accordingly, as there is nothing on the facts of this case to justify departure from the general rule, I will order that Mr Huang pay the Council’s costs.
As to the basis upon which the Council’s costs should be paid, r 63.28 provides for taxation of costs on the following bases:
Subject to this Part, costs in a proceeding which are to be taxed shall be taxed on—
(a) the standard basis;
(b) the indemnity basis; or
(c) such other basis as the Court may direct.
‘Standard basis’ and ‘indemnity basis’ are described under r 63.30 and r 63.30.1 as follows:
63.30 Standard basis
On a taxation on the standard basis, all costs reasonably incurred and of reasonable amount shall be allowed.
63.30.1 Indemnity basis
(1)Subject to paragraph (2), on a taxation on the indemnity basis all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred.
(2)Any doubt which the Costs Court may have as to whether the costs were unreasonably incurred or were unreasonable in amount shall be resolved in favour of the party to whom the costs are payable.
As to the usual basis of taxation of costs in a proceeding, r 63.31 states:
Except as provided by these Rules or any order of the Court, including the Costs Court, costs shall be taxed on the standard basis.
It therefore follows that unless provided for by the Rules or an order of this Court, costs are to be taxed on a standard basis.[17]
[17]Amaca Pty Ltd v CSR Ltd (Costs Ruling) [2018] VSC 67, [19].
I note that the Council did not seek an award of costs on an indemnity basis but rather that costs be awarded on a standard basis, to be taxed in default of agreement. Mr Huang made no submissions in respect of the basis upon which costs should be awarded.
For my reasons set out above, the circumstances of this case do not warrant departure from the general rule. It therefore follows that Mr Huang should pay the Council’s costs of the proceeding on a standard basis, to be taxed by the Costs Court in default of agreement. I will order accordingly.
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