Murch v Annesley [No 2]

[2021] VSCA 126

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0005

ROBERT GEORGE MURCH and ORS (according to the Schedule attached)	Appellants
v
PAUL DAVID ANNESLEY and ORS (according to the Schedule attached)	Respondents

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JUDGES:	BEACH, EMERTON and KENNEDY JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	11 May 2021
DATE OF JUDGMENT:	11 May 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 126
JUDGMENT APPEALED FROM:	Murch v Annesley (Unreported, Supreme Court of Victoria, 11 December 2020, Forbes J)

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PRACTICE AND PROCEDURE – Costs – Vexatious proceedings – Primary judge not ordering costs against parties against whom extended litigation restraint orders made – Primary judge ordered no order as to costs – House v The King (1936) 55 CLR 499 applied – Unjust and unreasonable for costs not to follow the event – Appeal allowed – Costs order set aside – Respondents ordered to pay costs of proceedings against them.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr D C Harrison	Wilkinson Lawyers
For the Respondents	The first respondent in person and on behalf of the second and third respondents

BEACH JA
EMERTON JA
KENNEDY JA:

1. On 11 December 2020, at the suit of the appellants, a judge sitting in the Trial Division made extended litigation restraint orders (ELROs) under the Vexatious Proceedings Act 2014 (‘the Act’) against the first three respondents (‘the respondents’).  Upon the making of those orders, the appellants applied for costs.  That application was refused, and the judge made an order that there be ‘no order as to costs’.[1]

   [1]Murch v Annesley (Unreported, Supreme Court of Victoria, 11 December 2020, Forbes J) (‘Costs Reasons’).

1. On 31 March 2021, this Court granted the appellants leave to appeal against the judge’s order that there be no order as to costs.[2]  The underlying facts and background of this appeal are set out in those reasons.

   [2]Murch v Annesley [2021] VSCA 83 (‘Leave Reasons’).

1. The judge made an ELRO against each of the respondents because she was satisfied that each of them had frequently commenced or conducted vexatious proceedings against the appellants.  In her reasons for refusing to make an order for costs against the respondents, the judge said:

In relation to the question of costs, … it strikes me that it is an unusual application, and it’s not an inter partes dispute that is being ruled upon by the court, but rather a request that the court exercise its discretion, as will be clear from my reasons for a protective purposes, not just to protect litigants or individuals, but also to protect the resources of the court.

It also strikes me that in the various pieces of inter partes litigation that are relied on to establish a right under the Vexatious Proceedings Act, there have been provisions for costs orders in those proceedings, and this application is really about the vexatiousness of proceedings that have been and might in future be brought, more than it is about vexatious conduct.  Although I appreciate that conduct — the way that proceedings are conducted is relevant on the question of vexatiousness.  And for those reasons, where such an application is brought by individuals rather than by the Attorney-General, in my view the appropriate order is simply that there be no order as to costs.

1. The ground upon which the appellants have been given leave to appeal is as follows:

1.        The judge erred in the exercise of her discretion as to costs in that she:

(a)       misconceived the nature of the proceeding;

(b)       took into account irrelevant considerations;  and

(c)failed to exercise the discretion of the court properly and according to law.

1. In support of their ground of appeal, the appellants made the following interrelated submissions:

(1)The judge was wrong to characterise the proceeding before her as not inter partes;  alternatively, even if this characterisation was correct, the judge was wrong to rely upon it so as to deprive the appellants of their costs.

(2)The judge erred in taking into account the fact that costs orders had been made in earlier proceedings;  and in determining that the present proceeding was ‘really about the vexatiousness of proceedings that have been and might in future be brought, more than it is about vexatious conduct’;  and also erred in relying on the fact that the proceeding was brought by individuals rather than by the Attorney-General.

(3)The judge’s discretion as to costs miscarried.  There was no reason why costs should not have followed the event, and been awarded in the appellants’ favour.

1. In his written case filed in this Court, the first respondent observed that the appellants had asked the judge to exercise her discretion to award costs.  The tenor of the first respondent’s contention appeared to be that, the judge having exercised her discretion (the exercise of which, the first respondent said he ‘respect[s]’), the appellants should not be permitted to ask for the discretion to be re-exercised, simply because they are dissatisfied with the result.

1. In submissions this morning, the first respondent, who spoke on behalf of himself and the second and third respondents, said that no order as to costs should be made in the proceeding before Forbes J because the proceedings relied upon by her Honour in support of the orders she made were based on ‘police matters’ which had not yet been resolved, and it would be a miscarriage of justice in all the circumstances to make any order for the costs of the proceeding in the Trial Division.

1. We reject this submission.  It is appropriate that the question of costs of the proceeding below should now be finally determined.

1. It is trite that the judge’s decision to make no order as to costs was a discretionary decision, reviewable only on the bases set out in House v The King.[3]  Using the language employed by the plurality[4] in House, her Honour’s decision can only be set aside if she acted upon a wrong principle;  if she allowed extraneous or irrelevant matters to guide or affect her;  if she mistook the facts;  if she did not take into account some material consideration;  or if the decision is unreasonable or plainly unjust.

   [3](1936) 55 CLR 499, 505 (‘House’).

   [4]Dixon, Evatt and McTiernan JJ.

1. In the present case, we doubt that the fact the appellants’ proceeding involved not just the protection of litigants or individuals, but also the resources of the Court, was a relevant matter to be taken into account in not ordering costs in favour of the appellants.  Similarly, it is difficult to see how the fact that the appellants might have obtained orders for costs in their favour in other proceedings, could be a matter that might disentitle them to an order for costs in the present proceeding.

1. More fundamentally, to the extent that her Honour concluded that because the proceeding was brought by individuals, rather than by the Attorney-General, it was not appropriate to order costs in favour of the appellants, her Honour’s conclusion was, with respect, not sound.

1. Prior to the appellants making their applications under the Act, the respondents had frequently commenced or conducted vexatious proceedings against them. The only lawful remedy for the appellants was to commence the proceeding they commenced, seeking an ELRO against each of the respondents. The proceeding was contested. The appellants incurred costs over and above any which were awarded in the various vexatious proceedings to which they had already been subjected. In our view, there is no reason why the costs of their applications should not have followed the event. Indeed, having regard to the history of the litigation between the parties, the order that there be no order as to costs was, with respect, unreasonable or unjust. The appellants should have been awarded the costs of obtaining the ELROs against the respondents.

1. Accordingly, we will make orders allowing the appeal, setting aside the judge’s order that there be no order as to costs, and ordering in lieu that the respondents pay the appellants’ costs of the proceeding at first instance.  Such costs will be limited to the costs of obtaining the ELROs made against the three respondents to this appeal.  For the avoidance of doubt, the appellants are not entitled to any order for costs in relation to their unsuccessful applications against the fourth, fifth and sixth defendants,[5] who were not respondents to this appeal.

   [5]See Leave Reasons [2].

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SCHEDULE OF PARTIES – S EAPCI 2021 0005

ROBERT GEORGE MURCH	First applicant
ROBIN KISSEL	Second applicant
R G MURCH NOMINEES PTY LTD (ACN 005 424 742)	Third applicant
and
PAUL DAVID ANNESLEY	First respondent
SHARLENE PHYLLIS ANNESLEY	Second respondent
SUSAN ANNESLEY	Third respondent