McFarlane v Outback Communities Authority (No 2)

[2024] SASC 74

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Judicial Review)

MCFARLANE v OUTBACK COMMUNITIES AUTHORITY (NO 2)

[2024] SASC 74

Judgment of the Honourable Justice Hughes  

ADMINISTRATIVE LAW - JUDICIAL REVIEW

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS

On 16 April 2024, the Court granted an application by the respondent for summary dismissal of judicial proceedings brought by the applicant. The application was granted on the basis that the proceedings lacked merit and had no prospect of success.

The respondent applied for costs. The applicant sought to be heard in opposition.

The applicant submitted that costs should not be awarded against him on compassionate grounds and because the issues he sought to raise concerned issues of importance.  

Held:

1.    The fact that the appellant is incarcerated and impecunious did not, of themselves, provide a basis for a denial of costs.

2.    The appeal was a challenge to interlocutory orders and did not amount to public interest litigation.

3.    The appellant did not displace the general position that a successful party will be granted costs in respect of the dismissal of an unmeritorious action.

Uniform Civil Rules 2020 (SA) rr 144.2, 256.5, referred to.

Marshal v Parole Board of South Australia [2024] SASC 9, discussed.

Latoudis v Casey [1990] HCA 59, considered.

MCFARLANE v OUTBACK COMMUNITIES AUTHORITY (NO 2)
[2024] SASC 74

Civil: Judicial Review

1. HUGHES J: On 16 April 2024, the Court granted an application by the Outback Communities Authority (respondent) for summary dismissal of judicial review proceedings brought by the applicant.  The proceedings lacked merit and had no prospect of success.

2. The applicant is incarcerated and unrepresented.

3. Upon delivery of the Court’s decision, the respondent applied for costs.  The applicant opposed such an order but was unprepared for argument on the topic.  Given the applicant’s circumstances, I gave the applicant an opportunity to make his response to the application for costs in writing, and a right of reply to the respondent.  Those submissions were received on 30 April 2024 and 7 May 2024 respectively.

4. The respondent submits that as the successful party, it should be awarded its costs and that no basis for departure from that starting point has been identified.  Counsel for the respondent submitted that there was no evidence of impecuniosity on the part of the applicant and that his incarceration alone was not a basis for declining to order costs.  The respondent also submitted that this is not “public interest” litigation but rather a dispute as to an alleged debt of a landowner to pay an amount owed to a governing authority.

5. The applicant submitted that the Court should refuse the respondent’s costs application on compassionate grounds due to the applicant’s incarceration.

6. He further referred to the “imperative issue that questions the fundamental democratic right of out of council district communities in South Australia”.  He went on to say that,

   “The applicant acts in good conscience pursuing a remedy to implement a democratic mechanism compatible with human rights along with local government act in the interest of all out of council district communities in SA and for the OCA to observe the remedied democratic mechanism for CARM agreements.”

7. The above submission, as I understand it, is that the underlying dispute which was the basis for the proceedings in the Magistrates Court that are now on review in the District Court, are important to a broad section of the community.

   Consideration

8. Rule 194 relates to the general discretion of the Court to make an order for costs.[1] Relevantly, it provides:

   [1]    Uniform Civil Rules 2020 (SA).

   194.1— Costs may be ordered at any stage

   (1) The Court may make an order for costs in favour of a party or non-party and against a party or non-party at any stage of a proceeding up to and after the final determination of the proceeding.

   ...

   194.5—General costs principles

   (1) Each of the following principles are subject to—

   (a)     the presumptive costs rules in  rule 194.4  (to the extent that the Court does not otherwise order);

   (b)     other applicable rules;

   (c)     other applicable principles; and

   (d) the overriding discretion of the Court as to costs.

   (2)Costs follow the event.

   (3)–(11)...

9. Rule 194.6 provides that in exercising its discretion as to costs, “the Court may have regard to any factors it considers relevant”.

10. Essentially, the Uniform Civil Rules reflect the common law on costs, which is that an award of costs is discretionary but generally costs reflect the outcome of the proceedings.  A successful party will usually have a reasonable expectation of an award of costs and where that is not the case, the reason should usually be connected to the proceedings.[2]

    [2]    Latoudis v Casey [1990] HCA 59 per McHugh J.

11. The effect of a litigant’s incarceration on costs was recently considered by this Court in Marshal v Parole Board of South Australia.[3]  In that case, Mr Marshal opposed an order for costs in relation to judicial review proceedings that he brought against the State in respect of decisions concerning is eligibility for parole.  Mr Marshal discontinued the proceedings before they were finalised and the State was successful in obtaining an award of costs despite the Court accepting that Mr Marshal was impecunious and incarcerated.   McDonald J said,

    In Northern Territory v Sangare,[4] the High Court gave consideration to the effect of impecuniosity on an order for costs. The Court made the following general observations about an award of costs in circumstances in which there is a significant disparity in the resources of the parties:

    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.[5]

    [3] [2024] SASC 9.

    [4] [2019] HCA 25.

    [5] Ibid, [27].

12. It was determined that the fact that one of the parties is a public authority was also an irrelevant consideration.

13. The High Court further rejected a submission that as a matter of practicality courts should not award costs in circumstances in which the impecuniosity of the losing party was unlikely to ever be enforced. The Court said:

    In any event, as a matter of authority, the courts have consistently rejected the suggestion that a costs order should not be made against an impecunious party because it would be futile to do so. The circumstance that a person may not presently, or even foreseeably, be able to meet an order for costs has not been regarded as a reason to regard the creation of the debt as an exercise in futility. The very existence of the debt created by the order is a benefit to a creditor. The successful party is better off with the benefit of the order than without it. It simply cannot be assumed that the respondent will never have the means to pay the debt in whole or in part or that it might not otherwise be turned to valuable account by the appellant.[6]

    [6] Ibid, [35].

14. I do not accept the applicant’s submission that an award of costs should not be made against him because of his circumstances.

15. The respondent conceded that where litigation is brought or defended in the public interest, a court may exercise its discretion not to make an award of costs against the unsuccessful party.  However, the difficulty for the applicant is that the judicial review proceedings could not be said to be “public interest litigation”. They were a challenge to interlocutory orders made in response to various strategic applications made by the applicant in the prosecution of his minor civil review.

16. In respect of the underlying issues to which the applicant refers in his costs submission, his opportunity to air these issues (in relation to which it should not be assumed that it is accepted that they constitute “public interest” litigation) has not been lost. 

17. The judicial review proceedings did not touch upon the issues that the applicant seeks to rely upon in his argument about costs.  The applicant brought the judicial review proceedings when he could have proceeded to have those substantive issues aired in the District Court review. 

18. The respondent’s application for costs is granted.  The respondent shall have its costs to be agreed or taxed.  This decision will be communicated to the parties electronically to avoid further cost and inconvenience to them.