Marmanidis v Germein (No 2)

[2017] SASC 114

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Civil)

MARMANIDIS v GERMEIN & ANOR (NO 2)

[2017] SASC 114

Judgment of The Honourable Justice Hinton

28 July 2017

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - GENERALLY

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES

The plaintiff’s application for judicial review was allowed and orders in the nature of certiorari were consequently made quashing the default judgment made against her.  The plaintiff, who was at all times a litigant in person, made an oral application for her costs at the time judgment was delivered.  The first defendant made no application for costs, other than to seek indemnification against the second defendant and intervener in the event that the plaintiff may be awarded costs.

Held: Plaintiff’s costs application granted in part and the first defendant’s application refused.

1.       It is settled that a litigant in person may only recover the disbursements paid in bringing or defending proceedings.  To the extent that the plaintiff seeks costs and damages outside these bounds, her application is incompetent.

2.       There is good reason to depart from the general rule given the way in which the plaintiff chose to engage, or not, in the process in the court below.  In this light it is reasonable that she bear much of the expense of the action in this Court.

3.       In the absence of any reason being provided to depart from the ordinary approach, where the ordinary approach is that costs be determined between the parties joined in an issue, the first defendant’s application is refused.

Supreme Court Act 1935 (SA) s 40; Supreme Court Civil Rules 2006 (SA) rr 263, 266, referred to.
Kelly v Noumenon Pty Ltd (1988) 47 SASR 182; Cachia v Hanes (1994) 179 CLR 403, applied.
Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2013] SASCFC 105; Willing v Hollobone (1972) 3 SASR 532; Cornwall v Rowan (No 2) [2005] SASC 122, considered.

MARMANIDIS v GERMEIN & ANOR (NO 2)
[2017] SASC 114

Civil:

HINTON J.

Introduction

1. On Friday, 7 July 2017, I delivered my reasons for allowing the plaintiff’s application for judicial review and made orders in the nature of certiorari quashing the default judgment made against her in Magistrates Court Action No AMCCI‑13-3288.  At the hearing, the plaintiff made an oral application for her costs against the first defendant. Counsel for the first defendant foreshadowed that his client might also wish to apply for costs, subject to obtaining instructions. Consequently, I granted the first defendant seven days (from that date) in which to file and serve any application and submissions as to costs notwithstanding that his client was unsuccessful in the judicial review action.  I also granted the plaintiff 14 days (from that date) to file and serve any submissions in reply to any such application of the first defendant, or in support of her own costs application.  The first defendant made no application for costs other than to seek indemnification against the second defendant and the intervener in the event that I awarded the plaintiff costs.

2. I grant the plaintiff’s application in part. I refuse the first defendant’s application. My reasons, which follow, should be read against the background of my judgment on the judicial review application.[1]

   [1] [2017] SASC 103.

   Applicable principles

3. Section 40(1) of the Supreme Court Act 1935 (SA) (SCA) provides the Court with a broad power to award costs. It says:

   40-Power of court with regard to costs

   (1)    Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.

4. Nothing express in the SCA cuts down the breadth of that discretionary power as it applies to these proceedings. While rules of court have been made, in particular 6SCR 263, they have been held not to fetter the discretion conferred by s 40(1) SCA.[2] In Lyons v Legalese Pty Ltd & Others [No 2] I said:[3]

   In the light of this the starting position is that s 40 SCA grants this Court a discretion confined only by subject matter, scope and purpose. Its antecedents can be traced to the Supreme Court of Judicature Act 1890 (UK) with the closing words of the section having been inserted “to ensure that the court has, so far as possible, freedom of action”. - The breadth of such power was commented upon in Norbis v Norbis by Mason and Deane JJ. Their Honours said:

   The point of preserving the width of the discretion which Parliament has created is that it maximizes the possibility of doing justice in every case. But the need for consistency in judicial adjudication, which is the antithesis of arbitrary and capricious decision-making, provides an important countervailing consideration supporting the giving of guidance by appellate courts, whether in the form of principles or guidelines.

   It is settled that costs are compensatory in nature and are awarded “to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings” and not by way of punishment of the unsuccessful party. Three points should be made here; first, the party in whose favour an award of costs is made is compensated for work done or expenses incurred by their lawyers or persons working for their lawyers and not for their loss more generally. Second, whilst it is true that a costs order is not intended to punish, costs may be awarded on a ‘solicitor and client’ or ‘indemnity basis’ if the unsuccessful party engages in some “relevant delinquency”. Costs awarded on a ‘solicitor and client’ or ‘indemnity basis’ result in the successful party being “more fully or adequately compensated”. Third, the power contained in s 40 SCA is not confined to making an award of costs against a party. The power may be exercised adverse to a non-party.

   Once it is accepted that an order for costs is compensatory in nature two things follow. First, the outcome of the proceedings becomes the primary consideration in the exercise of the discretion as it identifies who is to be compensated. Second, the general rule subject of r 263(1) necessarily becomes “a relevant consideration in any exercise of the discretion in relation to costs”.

   Fairness and policy dictate that it is the successful party who ordinarily should be compensated. An order in terms of the general rule is ordinarily fair because if the proceedings had not been brought the successful party would not have incurred costs. …

   (footnotes omitted.)

   [2]    Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2013] SASCFC 105 at [58] (Stanley J, Gray and Sulan JJ agreeing).

   [3] [2017] SASC 2 at [5]-[8].

5. I remain of this view.

6. In this case the plaintiff was not legally represented at any stage. It is settled that a self-represented litigant may only recover out-of-pocket expenses including disbursements paid in bringing or defending proceedings.[4] In Kelly v Noumenon Pty Ltd King CJ stated:[5]

   The expenses which a successful litigant recovers pursuant to an order for costs do not include compensation for his own time spent in instructing his solicitor or otherwise in connection with the case: Ogier v Norton (1904) 29 VLR 536. He receives compensation for his attendance at trial only by way of a witness fee: United Hand-In-Hand and Band of Hope Company v National Bank of Australasia (1878) 4 VLR E 271; Harbin v Gordon [1914] 2 KB 577 esp at 586; Russo v Russo [1953] VLR 57 at 67. I think that there would be dangers in any relaxation of that rule. Costs can be a crushing burden upon an unsuccessful litigant and the fear of an order for costs may operate to deprive a person of ordinary means, for practical reasons, of access to justice for the purpose of redressing a wrong or defending himself against an unjust claim. In these days of ever increasing complexity in litigation employees of large organisations engaged in litigation may spend much time in tasks associated with the litigation. If the costs of the time so spent is to be added to the costs recoverable from the unsuccessful party, the burden upon that party will become even more crushing and even more of a deterrent against resorting to courts of justice. Costs are intended to be an indemnity to the successful party but, as was pointed out in Lenthall v Hillson (supra) at 36, “the principle that costs are given as an indemnity can be carried too far”. The court was not there referring to the scope or quantum of costs, but the point is valid in those connections also. The law has always been conservative in its approach to the quantum of costs to be borne by an unsuccessful party. 

   …

   The rule that a party is not compensated for time spent in connection with the litigation applies even where the party conducts his own case, Oliver, The Law of Costs, p 66 and cases there cited, especially London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 at 875. It would seem, however, that some modest relaxation of the application of the rule to a litigant conducting his own case in now called for. In Willing v Hollobone (1972) 3 SASR 532 the right to an allowance for time actually occupied in appearing before the court when it is sitting, where the litigant is not a witness, was said to be not “altogether free from doubt” and “not completely clear”: per Bray CJ at 534 and 535. It seems to me that a fee analogous to a witness fee ought to be allowed to a litigant in person for the time occupied while the court is sitting, at least where it is shown that he has thereby lost income.

   [4]    Willing v Hollobone (1972) 3 SASR 532.

   [5] (1988) 47 SASR 182 at 184-185.

7. Whilst Bray CJ considered it not “altogether free from doubt” that a litigant in person could not recover the equivalent of a witness fee to compensate them for time spent at court, at least where loss of income was substantiated, that doubt has since been resolved by the High Court in Cachia v Hanes (Cachia).[6] In Cachia it was fundamental to the appellant’s argument that “costs” within the meaning of Part 52 of the Supreme Court Rules 1970 (NSW) included costs for time lost in preparing and conducting his case. The majority held:[7]

   To use the Rules to compensate a litigant in person for time lost would cut across their clear intent. 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.

   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. As Coke observed of the Statute of Gloucester, the costs which might be awarded to a litigant extended to the legal costs of the suit, "but not to the costs and expences of his travell and losse of time".

   (footnotes omitted.)

   [6] (1994) 179 CLR 403.

   [7]    Cachia v Hanes (1994) 179 CLR 403 at 410-411 (Mason CJ, Brennan, Deane, Dawson and McHugh J).

8. I do not consider the law in this State to be any different. It shares a common origin with that of New South Wales and I am aware of no statute or rule that has modified the position. Accordingly, the plaintiff is limited on her application to recovering her out-of-pocket expenses including disbursements.

   Consideration

9. The plaintiff provided written submissions in support of her oral application for costs within the 14 days allowed by my order of 7 July 2017. Consistent with the general rule contained in 6SCR 263, the plaintiff seeks to be awarded costs on the basis that costs follow the event.[8] She particularises the costs she seeks as follows:[9]

   [8] Submissions on costs of the plaintiff, 21 July 2017 at [35].

   [9] Submissions on costs of the plaintiff, 21 July 2017 at [36].

   36. The Appellant submits that the Court award the Appellant the costs documents in the Orders sought by the Appellant at 4.5 of the Appellant’s Affidavit of 18 November 2017 as shown in 8 above, that is the cost of:

   (i) The Warrant of sale be removed from the Appellants’ Certificate of Title.

   (ii) The Appellant be awarded her costs of the action.

   (iii) The Appellant be reimbursed with interest the monies paid to the Sheriff.

   (iv) The Appellant be recompensed for damage to the Appellant’s home, personal, family and other property.

   (v) The Appellant be recompensed for damage to the Appellant’s specialist medical practice.

   (vi) The Appellant be recompensed for damage to the Appellant’s reputation and the Appellant’s family’s reputation.

   (vii) The Appellant be recompensed for the Appellant’s financial losses as a result of the action.

   (viii)The Appellant’s Certificate of Title be restored to the Certificate of Title that authentically reflects the property the Appellant owns freehold, the Appellant having purchased the property with a mortgage which was discharged prior to the Warrant of Sale being registered on the Appellant’s Certificate of Title.

   (x) The Appellant be recompensed for damages and costs incurred as a result of changes made or attempted to be made to the Appellant’s Freehold Certificate of Title.

   (xi) The Appellant be recompensed as a result of not being able to be legally represented in these proceedings.

   (xii) The Appellant be recompensed for damages and costs incurred as a result of being subjected to unconstitutional prejudicial orders being made when the issues were first referred to him by the Appellant’s State Member of Parliament over a number of years which the Attorney General for the State of South Australia finally advised on 20 January 2011 he would not address.

   (xiii) The Appellant be awarded costs occasioned by the Intervention of the Attorney General.

10. The plaintiff also claims, amongst other things, reimbursement for the cost of filing her application, the cost incurred in obtaining copies of transcript and the Court record, and photocopying costs.[10] Further, she seeks the cost of obtaining legal advice and installing a security system in her home. Lastly, she seeks damages for defamation in connection with these proceedings.[11]

    [10] Submissions on costs of the plaintiff, 21 July 2017 at [38].

    [11] Submissions on costs of the plaintiff, 21 July 2017 at [39].

11. As indicated, the plaintiff, as a litigant in person, may only be compensated for her out-of-pocket expenses and disbursements. Consequently, to the extent that her application seeks costs and damages falling outside these bounds it is incompetent.

12. The plaintiff paid a filing fee of $2,419.00, transcript costs of $1,684.90, a file search and inspection fee of $92.90 and photocopying fees.

13. In my view good reason arises in this case to depart, in part, from the general rule. I refer to my finding as to the way in which the plaintiff chose to engage, or not, in the process in the court below. In my view, the plaintiff has been the author of her own misfortune in no small part. In the circumstances, it is reasonable that she bear much of the expense of her action in this Court.

14. I also bear in mind that much of the documentation presented to me by the plaintiff was irrelevant or already before the Court in one form or another. Further, inspection of the Court file and the copying of documents was motivated by her mistrust of court processes and misunderstanding of the concept of the Court record and the content of the Court file. Lastly, I do not think it was necessary for the plaintiff to have the benefit of the transcript to the extent that she did.

15. I also take into account the fact that the proceeding as initially instituted was incompetent. I do not think the first defendant should be burdened with paying any expenses or disbursements associated with regularising the matter.

16. In the circumstances I award the plaintiff $2,419.00, being the fee charged upon filing her application and a global figure of $500.00 for all other disbursements and out-of-pocket expenses.

    The first defendant’s application

17. In Cornwall v Rowan [No 2] the Full Court said:[12]

    By reason of s 40 of the Supreme Court Act 1935 (“SCA”) the costs of and incidental to all proceedings in the Court are in the discretion of the Court or Judge and the Court or Judge shall have full power to determine by whom and to what extent such costs are paid. The rule of court which deals extensively with the powers of the Court in relation to costs is r 101 of the Supreme Court Rules 1987. Rule 101.02 provides that subject to the Rules, the costs of and incidental to a proceeding shall follow the event unless the Court otherwise orders. This rule does not fetter the general discretion on costs given by s 40 of the SCA (Copping & Anor v ANZ McCaughan Ltd (No 1) (1995) 63 SASR 523).

    In this case, three matters relating to costs are of particular relevance. The first is that a party may be successful in an action but unsuccessful in relation to one or more issues in the action and that the lack of success in relation to issues may be reflected in the order for costs either by depriving the party successful in the action of his costs on the issue, or by doing this and requiring the successful party to pay the costs of the issue to the other party. The power to make an order in these terms will be exercised with caution (Cretazzo v Lombardi (1975) 13 SASR 4 per Jacobs J at 16).

    Secondly, in certain circumstances the court will order an unsuccessful defendant to pay not only the plaintiff’s costs but also the plaintiff’s liability for costs to a successful defendant (Bullock v London General Omnibus Co [1907] 1 KB 264: Bullock order), or to pay directly to a successful defendant his costs (Sanderson v Blyth Theatre Co [1903] 2 KB 533: Sanderson order).

    [12] [2005] SASC 122 at [43]-[45].

18. The Bullock and Sanderson orders to which the Full Court refers were each made in cases where the defendant in whose favour the order was made had succeeded and the defendant against whom the order was made failed. That is not this case. Still the discretion contained in s 40(1) SCA is broad enough to allow for the order the first defendant seeks and 6SCR 266(2) does not condition the power to order that one party indemnify another for costs. The difficulty, however, is that the first defendant advances no argument in support of its application. The second defendant filed a submitting appearance. The intervener did not make submissions in support of either party but confined its submissions to matters of legal principle and procedure. In my view the Attorney-General’s intervention did not add, at least materially, to the time taken to hear the matter. In the absence of any reason being provided to depart from the ordinary approach, where the ordinary approach is that costs be determined between the parties joined in an issue, I refuse the first defendant’s application.

    Conclusion

19. For the above reasons, I order that the first defendant pay the plaintiff the sum of $2,919.00 in respect of her out-of-pocket expenses and disbursements incurred in prosecuting the judicial review application in this Court.[13]

    [13]   The judicial review proceeding being SCCIV-16-1297.

1. As is apparent from the above, the question of costs in the proceedings in the Magistrates Court form no part of my order. In my view, those costs are a matter for the Magistrates Court to determine as and when the question arises in the proceedings in that Court.