Mako'ochieng v Kirk (No 2)
[2017] VSC 747
•12 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 03852
| BERNARD OTIENO MAKO'OCHIENG | Applicant |
| v | |
| SUSAN ELIZABETH KIRK | Respondent |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 12 December 2017 |
CASE MAY BE CITED AS: | Mako'ochieng v Kirk (No 2) |
MEDIUM NEUTRAL CITATION: | [2017] VSC 747 |
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COSTS — Whether special circumstances exist justifying an order for indemnity costs — Costs order made in favour of the Respondent in related proceedings to be set off against costs to be paid by the Applicant.
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HIS HONOUR:
On 14 August 2017 the Court dismissed the Applicant’s application pursuant to s 109 of the Magistrates’ Court Act 1989 for leave to appeal from an order of the Magistrates’ Court of Victoria. This judgment deals with a question of costs. The finalisation of costs arising out of the proceedings heard on 25 and 26 July 2017 has been delayed by a related application brought by the Respondent against Thexton Lawyers (‘Thexton’), who were the Applicant’s solicitors during the period 14 October 2016 to 4 July 2017. Thexton ceased to act for the Applicant on 4 July 2017, shortly prior to the hearing of the application for leave to appeal on 25 and 26 July 2017.
On 4 September 2017 the Respondent filed a summons seeking the following orders:
1. Thexton Lawyers (Law Practice) pay such of the Respondent’s costs of the appeal, including reserved costs, that were incurred by the Respondent while the Law Practice were solicitors on the record (14 October 2016 – 4 July 2017) and were wasted by reason of the Law Practice’s conduct in the proceeding, in the amount of $78,552.19, or such amount as the Court determines.
2. The Law Practice pays the Respondent’s costs of this application including all costs relating to preparation of the Respondent’s submissions relating to the wasted costs.
The Respondent’s application for costs orders against Thexton was made pursuant to rule 63.23 of the Supreme Court (General Civil Procedure) Rules 2015 and s 29 of the Civil Procedure Act 2010. On 14 November 2017 the Court was informed that the Respondent’s claim against Thexton had been settled and a deed of settlement signed by both parties. Under the terms of settlement, Thexton will pay the Respondent $50,000 in respect of the claim for $78,552 in wasted costs. On 15 November 2017 the Court made orders by consent dismissing the Respondent’s summons of 4 September 2017 with no order as to costs.
On 14 November 2017 the Respondent’s solicitor, Mr Morrow, informed the Court that the Respondent accepts that any costs order made against the Applicant should take account of the $50,000 which will be recovered by the Respondent from Thexton.
The application for leave to appeal has been dismissed. The Respondent, subject to making due allowance for the costs recovered from Thexton, is entitled to recover the costs which she incurred in resisting the application.
The Respondent seeks an order that the Applicant pay her costs on an indemnity basis. I have determined that it is appropriate that the Applicant pay the Respondent’s costs of the hearing on 25 and 26 July 2017 on an indemnity basis, but otherwise the Respondent’s costs should be paid by the Applicant on a standard basis, to be taxed in default of agreement.
Special circumstances must exist before a court will award costs on an indemnity basis.[1] In Legal Services Commissioner v Bone[2] Morrison JA (with whom Fraser and Gotterson JJA agreed) cited with approval the following passage from the judgment of Goldberg J in White Industries (Qld) Pty Ltd v Flower & Hart (a firm):
The authorities do not support the proposition that simply instituting or maintaining a proceeding on behalf of a client which has no or substantially no prospect of success will invoke the jurisdiction. There must be something more namely, carrying on that conduct unreasonably.[3]
[1]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 [7].
[2][2014] QCA 179.
[3]Ibid [10] citing [1998] 156 ALR 169, 236.
I am satisfied that special circumstances do exist in the present case which warrant an order for indemnity costs in respect of the two days of hearing of the application for leave to appeal on 25 July and 26 July 2017.
In the Court’s judgment delivered 14 August 2017 I have recorded a finding that the Applicant made allegations of fraudulent conduct which were entirely without merit. He did so notwithstanding the fact that his own lawyers were not willing to advance such submissions, their refusal to do so being part of the basis upon which they ceased to act for the Applicant on 4 July 2017. The Applicant maintained the allegations of fraudulent conduct on the part of the Respondent’s Senior Counsel in circumstances where the Court had directed him to give very careful consideration to whether there was a proper basis for making the allegations.[4] The Applicant was warned of the very serious consequences which might flow if he maintained the allegations of fraudulent conduct.[5]
[4][2017] VSC 459 [22].
[5]Transcript of Proceedings, Mako’ochieng v Kirk (Supreme Court of Victoria, SCI 2016 03852, McDonald J, 25 July 2017) 77-78 line 11-8.
Even after making due allowance for the fact that the Applicant is a self-represented litigant, his conduct in advancing and maintaining baseless allegations of fraudulent conduct on the part of the Respondent’s Senior Counsel was most unreasonable. It is conduct that was the making of an indemnity costs order for the two days of the hearing of the application for leave to appeal.
The orders of the Court will be as follows:
1. The application for leave to appeal is dismissed.
2.The Applicant pay the Respondent’s costs of the hearing on 25 and 26 July 2017 on an indemnity basis.
3.Subject to order 4, the Applicant is otherwise to pay the Respondent’s costs of the application for leave to appeal, including reserved costs, on a standard basis, to be taxed in default of agreement.
4.The quantum of costs payable under order 3 is to be reduced by $50,000 being the sum recovered by the Respondent from Thexton Lawyers in respect of paragraph 1 of the Respondent’s summons dated 4 September 2017.
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