Oswal v ANZ Banking Group Ltd

[2016] VSC 408

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2011 4653

BETWEEN:

RADHIKA PAKAJ OSWAL	Plaintiff
v
ANZ BANKING GROUP LTD (ACN 005 357 522) & ORS	Defendants

S CI 2012 1995

PANKAJ OSWAL	Plaintiff
v
IAN MENZIES CARSON & OTHERS	Defendants

S CI 2015 00804

YARA PILBARA FERTILISERS PTY LTD (ACN 095 441 151)	Plaintiff
v
PANKAJ OSWAL & ORS (ACCORDING TO THE SCHEDULE)	Defendants

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JUDGE:	DODDS-STREETON JA
WHERE HELD:	Melbourne
DATE OF HEARING:	Application on the papers
DATE OF JUDGMENT:	26 July 2016
CASE MAY BE CITED AS:	Oswal v ANZ Banking Group Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 408

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PRACTICE AND PROCEDURE – Application to reduce by half daily setting down and hearing fees pursuant to regs 8 and 8A of the Supreme Court (Fees) Regulations 2012 to plaintiffs in two proceedings ordered (with a third proceeding) to be managed and heard together – Whether Court empowered by reg 8, 8A, or inherent jurisdiction of the Court – Whether any such power to reduce the daily setting down and hearing fees should be exercised in the circumstances – Application refused.

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Counsel	Solicitors
For the Applicant	A J I Bannon SC P H Wallis	Watson Mangioni Lawyers Pty Ltd
For the Defendant	---	---

HER HONOUR:

The Application

1. Pankaj Oswal and Radhika Oswal (‘the applicants’), who are the plaintiffs in proceeding S CI 2012 1995 and S CI 2011 4653 respectively, applied by a letter of their solicitors dated 27 May 2016, pursuant to regs 8[1] and 8A[2] of the Supreme Court (Fees) Regulations 2012 (‘Fees Regulations’) or the Court’s inherent jurisdiction, for a 50 per cent reduction in their setting down and daily hearing fees.

   [1]Regulation 8 pertains to hearing fees.

   [2]Regulation 8A pertains to setting down fees.

1. The Commercial Court Registry by letters dated 17 May 2016 required each plaintiff to pay, pursuant to reg 8 of the Fees Regulations, a setting down fee incorporating a first day hearing fee and thereafter the prescribed daily fees, the amount of which varies according to the length of the trial.

The Applicants’ Submissions

1. The applicants submitted that the Court should reduce the fees so that, in effect, they are liable for only one setting down and daily hearing fee between them.

1. The application was supported by written submissions dated 1 June 2016.  Counsel for the applicants declined the invitation to amplify the submissions in relation to the Court’s power to reduce setting down and daily hearing fees and whether, in this case, the imposition of the prescribed fees occasioned any material injustice.

1. The applicants submitted that the Court is empowered to reduce the setting down and hearing fees and should do so in this case because:

a)Three proceedings, including the plaintiffs’ proceedings and a third related proceeding, S CI 2015 804 (in which the plaintiff, Yara Pilbara Fertilisers Pty Ltd, does not apply for any reduction of the setting down and daily fee imposed on it), by the order of Sifris J made on 18 March 2015, were and are managed and being heard together, with evidence in one proceeding to be evidence in the others.

b)Although the three proceedings are not consolidated, there is no practical distinction between consolidation and the effect of the order that they be, inter alia, managed and heard together.

c)Although there are overlapping issues in each proceeding, there is also a large number of issues that relate solely to each proceeding.  The time for the hearing of each proceeding will thus be substantially greater than if each had been heard separately.  On the basis of the estimate of 62 days for the trial (given in May 2016), each of the applicants would pay setting down and daily hearing fees of $108 371.60, totalling $216 743.20 when combined.[3]

d)The sums charged were considerable and, consistently with the policy of ‘user pays’ said to underpin the imposition of hearing fees, the actual cost of providing the services should be taken into account.

e)The imposition of a full daily hearing fee in all three proceedings would distort the policy objectives of equity, appropriateness and access to justice because the Court was providing only a single service to all the plaintiffs in each proceeding at the same time.

f)The circumstances of the present case are analogous to those in Bechara v Legal Services Commissioner,[4] because the Court was in effect charging twice for the one service.[5]

g)Imposing hearing fees in all three proceedings would be inconsistent with the objectives of the Civil Procedure Act 2010. Section 7 of that Act provides that the overarching purpose of the Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute. The order providing for the proceedings to be heard together would not be cost effective if all plaintiffs must pay a hearing fee for the entire duration of the trial.

[3]The estimate of the trial’s length was subsequently significantly increased.

[4](2010) 79 NSWLR 763.

[5]In Bechara v Legal Services Commissioner (2010) 79 NSWLR 763, a solicitor conducted three personal injury actions for three family members against the same defendant, which were heard together with the same barrister, and evidence in one being evidence in the other. The New South Wales Court of Appeal held that although the proceedings were not formally consolidated, the solicitor had contravened s 208Q of the Legal Profession Practice Act 1987 (NSW) by charging each client in accordance with his standard costs agreement on a time-costed basis, as if each client’s case had been conducted separately.  The Court of Appeal noted that the applicable method of charging was by time costing and the solicitor should have apportioned the hearing costs between the clients, rather than charging each client the full amount.

Relevant Legislation and Regulations

1. The Fees Regulations are made by the Governor in Council pursuant to s 129 of the Supreme Court Act 1986 (‘the Act’), which relevantly provides:

(1)The Governor in Council may make regulations for or with respect to—

(a)the fees payable in respect of any matter in the Court;

…

(2)A power conferred by subsection (1) to make regulations providing for the imposition of fees may be exercised by providing for all or any of the following matters—

(a)specific fees;

(b)maximum fees;

(c)minimum fees;

(d)fees that vary according to value or time or class of matter;

(da)different fees for different classes of proceedings or different classes of party;

(e)the manner of payment of fees;

(f)the time or times at which fees are to be paid—

and it is not necessary for the amount of any fee to be related to the cost of providing the service.

(2A)The regulations may—

(c)provide in a specified case or class of case for the exemption of any proceeding, person or thing or a class of proceeding, person or thing from any of the provisions of the regulations, whether—

(i)unconditionally or on specified conditions; and

(ii)either wholly or to such an extent as is specified; and

(d)provide for the payment in advance of any fee fixed under subsection (1)(a); and

(e)provide for proportionate consequences of failure to pay any fee fixed under subsection (1)(a); and

(f)provide for the reduction, waiver, postponement, remission or refund, in whole or in part, of any fee fixed under subsection (1)(a); and

…

(3)Subject to the regulations or any power to reduce, waive, postpone, remit or refund any fee fixed under subsection (1)(a), the prothonotary or a deputy prothonotary at or for the place where a proceeding is to be heard may, having regard to the income, day to day living expenses, liabilities and assets of the person liable to pay a fee prescribed under subsection (1)(a), waive payment of that fee if, in his or her opinion, the payment of that fee by that person would cause him or her financial hardship and, in that case, that prescribed fee is not payable.

1. The Fees Regulations made under s 129 of the Act relevantly state:

1        Objective

The objective of these Regulations is to prescribe the fees payable in respect of matters in the Supreme Court.

5        Definitions

…

hearing fee means the fee payable for a hearing under item 1.15, 1.16A, 1A.11, 1A.12 or 1A.13 of the Schedule;

…

8        Payment of hearing fees

(1)Subject to any order of the Court and subregulation (2), a hearing fee in relation to any proceeding is payable by the plaintiff or other party seeking the hearing.

(2)A hearing fee is not payable if the sole purpose of the hearing is the delivery of a reserved judgment.

(3)A hearing fee must be paid by the date specified in the written notice of hearing issued by the Court.

8APayment of setting down and entry to list fees

(1)Subject to any order of the Court, a setting down fee or an entry to list fee in relation to any proceeding is payable by the plaintiff or other party seeking the hearing or the entry of a matter to a list.

(2)A setting down fee must be paid—

(a)on the filing of the notice of trial; or

(b)if no notice of trial is required, within 28 days of the order setting the matter down for trial.

(3)An entry to list fee must be paid at the time the matter is entered into the relevant list.

9Fees

The fees payable in respect of matters in the Supreme Court are the fees set out in the Schedule.

The Schedule relevantly provides:

1.15     For hearing a trial by Judge or by Judge with jury—

(a)for days 2 to 4—per day or part of a day;      46.0 fee units

(b)for days 5 to 9—per day or part of a day;      76.8 fee units

(c)for day 10 and subsequent days—per day

or part of a day  128.3 fee units

Discussion

1. Regulations 8 and 8A are made pursuant to the power conferred by s 129(1)(a) of the Act. The fees imposed on the applicants in this case are fees fixed under sub-s 1(a) of the Act.

1. Although s 129(2A)(f) of the Act empowers the making of regulations that provide for the reduction, waiver, postponement, remission or refund, in whole or in part, of any fee fixed ‘under subsection 1(a)’, no regulation is expressed in those terms.

1. Section 129(3) of the Act provides that the prothonotary or a deputy prothonotary (subject to the regulations or any power to waive, postpone, remit or refund any fee fixed under subsection 1(a)) may waive payment of a fee fixed under subsection (1)(a) if, in his or her opinion (having regard to income, day to day living expenses, liabilities and assets of the person liable to pay), payment would cause the person financial hardship.

1. It is and was open to the applicants in the present case to apply, under s 129(3) of the Act, to the prothonotary for waiver of the daily hearing fee on the basis of demonstrated financial hardship. Section 129(3) does not, however, provide for a reduction (as distinct from the waiver) of fees and the prothonotary’s power is limited to circumstances of financial hardship. Accordingly, the applicants must rely on regs 8 and 8A to support their submission that each should be required to pay only 50 per cent of the prescribed setting down and daily hearing fee in the circumstances of this case.

1. As there is no regulation providing for reduction, waiver, postponement or refund of any fee in whole or in part, as contemplated by s 129(2A)(f) of the Act, and regs 8 and 8A do not refer to a reduction, any power of the Court to reduce setting down and hearing fees under regs 8 and 8A must derive from their introductory words: ‘Subject to any order of the Court…’.

1. The introductory words of regs 8 and 8A suggest that the Court could, contrary to the words that prescribe a setting down and hearing fee, order that the relevant fee is not payable. The extent, however, of any implicit power in regs 8 and 8A is unclear. Whether it would incorporate a power to reduce or apportion fees in the absence of an express provision to that effect, as contemplated by s 129(2A)(f) of the Act, is doubtful.

1. Further, assuming, without deciding, that regs 8 and 8A confer a power to reduce setting down and daily hearing fee, respectively, the Fees Regulations offer no guidance on the factors relevant to the exercise of any such discretion or power.

1. The potentially relevant authority identified[6] is sparse and inconclusive on whether there is power to reduce fees on the basis of the Fees Regulations or the inherent jurisdiction of the Court. In the present case, it is unnecessary to decide whether a power exists, as no circumstance which could support its exercise in the applicants’ favour was established. In my opinion, any discretion to reduce setting down and hearing fees, whether implicitly conferred by reg 8, 8A or the inherent jurisdiction of the Court, would be exercised only in order to avoid a materially unjust outcome or significant prejudice. (It would be unnecessary to rely on reg 8, 8A or inherent jurisdiction to avoid stifling a claim due to the financial hardship on a plaintiff, as that is expressly covered by s 129(3) of the Act.)

   [6]In Re: Vasiliou [2009] VSC 286 (9 July 2009), Byrne J dismissed an application in the Practice Court to appeal from the Deputy Prothonotary’s refusal to waive a court fee. His Honour stated that ‘it was not at all clear’ whether he had the power to review, remit or hear an appeal from the decision to the Deputy Prothonotary.

1. I am not satisfied that in this case any material injustice or significant prejudice was established.

1. The applicants submitted, without reference to a specific supporting provision or authority, that a policy of ‘user pays’ applies and that the fees should not exceed the cost of providing the services. The Act, however, expressly provides that the Fees Regulations need not fix fees based on the cost of providing the service. Accordingly, the fees may represent an amount less or greater than the cost of providing the service. The fact that the fees exceeded the cost of providing the service would not, without more, constitute a basis for a reduction.

1. The applicants, in any event, adduced no evidence of the costs of providing the Court resources and services necessary for the trial of the proceedings.  In particular, the applicants did not establish that such costs are less than their combined setting down and daily hearing fees.

1. There is no basis on which to assume that the fees charged bear any relationship to the actual costs of providing the service, or indeed that the combined fees exceed the costs of provision.[7]

   [7]See, for example, Steven Rares, ‘Is access to justice a right or a service?’ (2015) 89 Australian Law Journal 777; Attorney-General’s Department, Parliament of Australia, A Strategic Framework for Access to Justice in the Federal Civil Justice System (2009) 44–59; Australian Government Productivity Commission, Access to Justice Arrangements, Inquiry Report No 72 (2014) 533–571; Supreme Court of Victoria, Submission No DR324 to Productivity Commission, Access to Justice Arrangements, 6 June 2014; Judicial Conference of Australia, Submission No DR195 to Productivity Commission, Access to Justice Arrangements, 21 May 2014:

1. In the present case, the parties, including the applicants, are clearly sufficiently well-resourced to support exceptionally large-scale, costly litigation of unusual magnitude.  As the applicants submitted, only one setting down and daily hearing fee would have been payable if the three proceedings had been consolidated.  Further, the hearing time for each of the applicants’ proceedings may, as the applicants submitted, be greater because the proceedings are heard together than if each had been heard separately.  However, the issues common to all proceedings need be heard only once.

1. The applicants did not contend that they will suffer any financial hardship or that their claims will be stultified if they are required to pay the full prescribed setting down and daily hearing fees.  The litigation has absorbed, and will continue, probably for a lengthy period, to absorb, very considerable Court resources, including the court room, associated facilities, large numbers of judicial and support staff and related services.

1. Accordingly, in all the circumstances, I am not persuaded that any power or discretion which may be conferred by reg 8 or 8A of the Fees Regulations or the inherent jurisdiction of the Court should be exercised to reduce the setting down and daily hearing fees imposed on the applicants.

In Westpac Banking Corporation v Hiskey [1999] SASC 419 (14 September 1999) Lander J found it unnecessary to decide whether the Supreme Court of South Australia (which did not, at that time, have the power to remit or reduce a fee on account of poverty) had inherent jurisdiction to waive fees. His Honour stated at [7]–[8]:

[The plaintiff] has claimed … that she is impecunious and not in a position to pay the fee necessary for the lodgement of the appeal …  The Supreme Court Act 1935, unlike the District Court Act, does not expressly provide power in the court to waive fees.  Fees under the Supreme Court Act are fixed by the Governor in Council, pursuant to s 130(1) of the Supreme Court Act.  There is no power in that section to dispense with the fees, nor does there appear to be any power in the regulations to dispense with or waive fees.
There are decisions of this Court and other courts which suggest that there is inherent jurisdiction in the court to waive fees when a party is able to satisfy the court that the party is impecunious and unless the fees are waived the party will be denied justice: Pearce v Ryan (SASC, Debelle J, 4 February 1997, unreported); King v South Australian Psychological Board (SASC, Bleby J, 9 April 1998, unreported); R v Lord Chancellor ex parte Witham [1997] 2 All ER 779.

Ultimately, however, his Honour found it unnecessary to determine whether he had the power to waive the fee.
In Lyberopoulos v Svilans (2001) SASC 254 (2 August 2001), Lander J distinguished a number of authorities said to support an inherent power to waive court fees. His Honour held that the court did not have the power to review the Master’s decision not to waive the court fee: ibid [15].
Following Lyberopoulos v Svilans, the Supreme Court Act 1935 (SA) was amended to provide the court with power to waive fees fixed by regulation: see Garrett v Macks & Duncan [2007] SADC 68 (14 June 2007) [25].
In Global Investment House Pty Ltd v Murdock [2012] SASC 13, Judge Lunn observed that there was no inherent jurisdiction of the Court to refund a fee already paid by the applicant, although the hearing occurred after the amendments to the Supreme Court Act 1935 (SA) permitting the waiver or omission of fees.

“While overall rates of cost recovery are highly variable between courts, they are substantially less than 100 per cent in all courts.  Cost recovery in most courts is between 20 to 35 per cent, but varies from about 3 per cent in the Family Court of Australia to just over 50 per cent in the Magistrates’ Court of Victoria (figure 16.1).
…
Further, these figures represent the average rate of cost recovery, and thus the share of costs recovered may be significantly lower or higher in individual cases.  For example, while the average rate of cost recovery in the Supreme Court of Western Australia is currently 19 per cent, the share of the court’s costs recovered in the Bell case was less than 5 per cent (see box 16.2).

…
Even when fees waived or reduced for disadvantaged parties are counted as recovered costs, the level of cost recovery in Australian courts is still low, meaning that court usage by non-disadvantaged parties is still extensively subsidised by taxpayers (table 16.2).