Reynolds v City of Darwin (Costs) - [2022] NTCA 4

CITATION:Reynolds v City of Darwin (Costs) [2022] NTCA 4
PARTIES:REYNOLDS, Carolyn Jane
v

CITY OF DARWIN

TITLE OF COURT:  COURT OF APPEAL OF THE NORTHERN TERRITORY
JURISDICTION:  CIVIL APPEAL from the SUPREME COURT exercising Territory Jurisdiction
FILE NO:AP 13 of 2020 (22035126)
DELIVERED:  27 June 2022
HEARING DATE:  On the papers
JUDGMENT OF:  Grant CJ, Blokland J and Riley AJ
CATCHWORDS:

COSTS – Party/Party – General rule that costs follow the event – Application of the rule and discretion
Appeal from decision of Supreme Court dismissed – Respondent seeks costs in accordance with general rule that costs follow the event – Impecuniosity of unsuccessful party cannot without more justify a decision to deny successful party its costs – Respondent’s character as a public authority irrelevant to the application of the basic principle – Appellant to pay respondent’s costs of proceedings – Costs of Local Court proceedings payable on standard basis – Costs of appeal proceedings payable on an indemnity basis – Costs payable as agreed or taxed in default of agreement – Applications for the stay of warrant of possession in Supreme Court and Court of Appeal certified fit for counsel.
Local Court (Civil Procedure) Act 1989 (NT) s 19
Local Court (Civil Jurisdiction) Rules 1998 (NT) r 38.02, r 38.04, r 38.11
Supreme Court Act 1979 (NT) s 55
Supreme Court Rules 1987 (NT) r 63.07, r 63.26, r 63.27, r 63.28, r 63.72,
Acer Forester Pty Ltd v Complete Crane Hire (NT) Pty Ltd [2013] NTSC 62, Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1998) 81 ALR 397, Hadid v Lenfest Communications Inc [2000] FCA 628, Harrison & Anor v Schipp (2002) 54 NSWLR 738, Monck v Commonwealth of Australia (No 2) [2020] NTCA 1, MS Stock Contracting v AUX Venture (No 2) [2011] NTSC 76, Northern Territory v Sangare (2019) 265 CLR 164, Oshlack v Richmond River Council (1998) 193 CLR 72, applied.
REPRESENTATION:
Counsel:
Appellant:Self-represented
Respondent:  JW Roper SC
Solicitors:
Appellant:Self-represented
Respondent:  Minter Ellison
Judgment category classification:    C
Number of pages:  18

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Reynolds v City of Darwin (Costs) [2022] NTCA 4
No.AP 13 of 2020 (22035126)

BETWEEN:

CAROLYN JANE REYNOLDS
Appellant

AND:

CITY OF DARWIN
Respondent

CORAM: GRANT CJ, BLOKLAND J AND RILEY AJ
REASONS FOR JUDGMENT
(Delivered 27 June 2022)
THE COURT:

On 6 September 2021, this Court dismissed an appeal from a decision delivered by the Supreme Court on 30 October 2020. The respondent has sought an order that the appellant pay its costs of and incidental to the proceedings at first instance before the Local Court and of the appeal proceedings to the Supreme Court and this Court.
Procedural history
The procedural history of this appeal is set out in this Court’s decision in Reynolds v City of Darwin [2021] NTCA 3. By way of summary, the appellant’s prosecution of the appeal was characterised by a series of applications for adjournment made variously on medical grounds and to allow the appellant to procure legal representation. Those applications were unsupported by any satisfactory medical evidence, and the appellant had not procured legal representation in the six months which had been allowed for that purpose in the appeal proceedings before this Court. The appeal was dismissed on the basis that the appellant’s claim depended entirely upon the service of written notice exercising an option to renew the lease over the subject land, and it was plain on the evidence and the findings at both first instance and intermediate level that no written notice had been served.
At the time the appeal was dismissed, the parties were ordered to file and serve any written submissions they wished to make in relation to the issue of the costs of this appeal, the proceedings below and the proceedings at first instance by close of business on 15 October 2021.
Submissions and orders sought
On 15 October 2021, the solicitors for the respondent filed submissions which sought orders that:
(a) the appellant pay the respondent’s fixed costs of and incidental to the appeal to this Court, the appeal to the Supreme Court and the proceedings at first instance in one or other of two amounts dependent upon whether those costs were ordered to be paid on an indemnity or standard basis; and
(b) the monies paid into court as security for costs pursuant to orders made on 20 November 2020 be released to the respondent in part payment of those costs.
In the alternative, the respondent sought orders that:
(a) the appellant pay the respondent’s costs of and incidental to the appeal to this Court, the appeal to the Supreme Court and the proceedings at first instance on either an indemnity or standard basis, as agreed or taxed in default of agreement; and
(b) that appearances on interlocutory applications before this Court and the Supreme Court at intermediate level be certified fit for counsel pursuant to r 63.72(9)(a) of the Supreme Court Rules 1987 (NT).
As the respondent properly concedes, under the alternative orders sought the monies paid into court would continue to be held by the Court pending agreement or taxation, after which time a further application would be required.
Also on 15 October 2021, the appellant filed a letter containing representations which were addressed in part to costs issues. Those submissions may be summarised as follows:
(a)the business which the appellant conducted on the subject land was beneficial to the public interest;
(b)the respondent, its legal representatives and the courts ‘knowingly and improperly permitted a case to proceed against a self-represented litigant with a declared frontal lobe brain injury in a declared position of financial hardship to progress without even attempting to provide an equitable solution or opportunity for mediation’;
(c)the appellant was continuing to pursue a mediated resolution to the dispute;
(d)on 4 October 2021, the appellant had initiated proceedings in the High Court (presumably by way of application for special leave to appeal from the decision of this Court); and
(e)on 13 October 2021, the appellant was witness to a riot in the community of Peppimenarti.
On 20 October 2021, the appellant’s daughter, ostensibly on behalf of the appellant, sent an email to the Supreme Court Registry advising that as a result of the disturbance in the community of Peppimenarti the appellant ‘has not been able to attach the authorities and High Court submissions as expected’.
By return email on 21 October 2021, the Court acknowledged receipt of the appellant’s email, advised that the question of costs was the only matter outstanding before the Court of Appeal, and enquired whether the appellant wished to file submissions in response to the respondent’s submissions in relation to the question of costs. The appellant did not subsequently file submissions or anything further to the letter which had been filed on 15 October 2021.
For the reasons described in Northern Territory v Sangare (2019) 265 CLR 164, and subsequently applied by this Court in Monck v Commonwealth of Australia (No 2) [2020] NTCA 1, the appellant’s claimed impecuniosity, the potential futility of making an order for costs (leaving aside recovery of the amount paid by way of security), and the respondent’s character as a public authority will not in these circumstances justify a decision to deny the successful party its costs in accordance with ordinary principles. It is also the case that on proper characterisation, the proceedings in the Local Court were in the form of a routine application by the respondent for the possession of business premises following the expiry of a lease. Those proceedings were followed by appeals commenced by the appellant at intermediate level and before this Court in the attempted vindication of a private property interest, even accepting that the business which she conducted on the subject land was beneficial to the public interest.
Accordingly, the three questions which present for consideration are whether costs should be ordered to be paid on the standard or the indemnity basis; whether the order should be for the appellant to pay the respondent’s costs in a fixed sum or as agreed or taxed in default of agreement; and, if the order is for costs as agreed or taxed, whether the appearances on applications to stay the warrant of possession before this Court and the Supreme Court at intermediate level should be certified fit for counsel.
Standard or indemnity basis
Rule 63.26 of the Supreme Court Rules provides that on a taxation of costs on the standard basis, there shall be allowed a reasonable amount in respect of all costs reasonably incurred, with any doubt to be resolved in favour of the paying party. Conversely, r 63.27 provides that on a taxation of costs on the indemnity basis, all costs shall be allowed except to the extent that they are unreasonable, with any doubt to be resolved in favour of the receiving party. Rule 63.28 provides that costs are to be taxed on the standard basis except as provided by the Rules or an order of the Court.
The principles which govern whether an order for costs should be made on a standard or indemnity basis are uncontroversial. The ordinary rule is that costs should be awarded on a standard basis unless there is some special or unusual feature of the matter warranting indemnity. An order for costs on an indemnity basis is not punitive in nature, but is made to more adequately compensate the successful party having regard to the particular facts and circumstances of the matter: see MS Stock Contracting v AUX Venture (No 2) [2011] NTSC 76, [15]. Although the categories are not closed, the circumstances which will ground an order for costs on an indemnity basis will include: the making of false or irrelevant allegations of fraud, or the making of allegations which for some other reason should not have been made; the undue prolongation of the case by groundless contentions (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233-234); some relevant delinquency or misconduct on the part of the unsuccessful party (Oshlack v Richmond River Council (1998) 193 CLR 72, [44]); and the commencement or continuation of proceedings for some ulterior motive or without any prospect of success, or in wilful disregard of known facts or clearly established law (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1998) 81 ALR 397, [15]-[25]).
It would appear that no costs orders were made by the Local Court at first instance or by the Supreme Court in the appeal from the decision of the Local Court. In an appeal to this Court, the Court of Appeal shall give such judgment as it thinks fit, and may affirm, reverse or vary the judgment appealed from, in whole or in part: Supreme Court Act 1979 (NT), s 55 (1)(b), (2)(a). Similarly, in an appeal to the Supreme Court from the Local Court, the Supreme Court may make such orders as it thinks fit: Local Court (Civil Procedure) Act 1989 (NT), s 19(6). Those two provisions in combination permit this Court to make orders in relation to the costs of proceedings before the Local Court, the Supreme Court and in the present appeal, assuming this Court is in a position to make the necessary assessments in relation to the conduct of proceedings in courts below. Although the question of the costs of the proceedings before the Local Court could be remitted to that court for determination, the circumstances are sufficiently clear for this Court to determine the matter and the efficient administration of justice militates in favour of that course. Neither party suggests otherwise.
The question of costs in the Local Court proceedings is governed by Part 38 of the Local Court (Civil Jurisdiction) Rules 1998 (NT). Subject to any countervailing provisions in the principal Act, those Rules and any relevant practice directions, Order 63 of the Supreme Court Rules applies with the necessary changes to Part 38 and costs are allowable in accordance with the relevant costs set out in the Appendix to Order 63: see Local Court (Civil Jurisdiction) Rules, rr 38.02, 38.04. It follows that in the Local Court too, costs may be awarded on either the standard or indemnity basis in the application of the same principles as are discussed above. Unless the Court orders otherwise, costs are taxed by a taxing officer appointed by the Chief Judge or a judicial registrar: see Local Court (Civil Jurisdiction) Rules, r 38.11.
The Local Court made the following findings in relation to the appellant’s substantive claim in City of Darwin v Carolyn Reynolds [2020] NTLC 5 at [34]-[35]:
I reject the account of the Respondent. She went beyond exaggeration and was self- serving and untruthful. She was unable to make basic concessions. The totality of the reliable evidence suggests she had overlooked the need to provide notice during the notice period. I do accept that she contemplated renegotiating the Lease with the Applicant as to the number of tanks, potential improvements, to negotiate CPI indexing or otherwise a lesser rent and potentially assigning the lease to Gemma or having it otherwise in her name. I reject as untruthful reconstruction the evidence of the Defendant relating to her conduct in and about the notice period.
It is uncontroversial that the Respondent did not serve written notice during the notice period. I have found that The Lease required such notice must be in writing. I have also found that the requirement to give notice was overlooked by the Respondent and accordingly that she did not give oral notice of an acceptance the offer to renew the lease as set out in clause 10. In the event I am wrong about the need for written notice I am satisfied no oral notice was given during the notice period.
The conduct of the appellant during the course of the Local Court proceedings was described in those reasons as ‘erratic’, such that consideration was given to the appointment of a litigation guardian. The Local Court made the following findings in that respect at [45]-[46]:
I accept the Respondent has seriously high blood pressure and was unwell at periods during these proceedings, and various adjournments were granted to accommodate her. Ultimately the hearing had to be attended to, it is a matter of short duration and the applicant was entitled to have it heard.
It was apparent, quite apart from being unwell, the Respondent was endeavouring to delay the proceedings and muddy the waters. This included exaggeration, untruths and red herrings of various types. On the evidence before me, I do not accept her assertion that she has a brain injury, was struck by lightning or has Post Traumatic Stress Disorder (PTSD) as she claims.
Those findings and the ultimate result notwithstanding, we are unable to conclude that the respondent should be awarded its costs of the proceedings before the Local Court on an indemnity basis. As described above, those proceedings took the form of an application by the respondent for a warrant of possession in relation to the subject land. The appellant did not have the benefit of legal representation during the course of those proceedings. Although the Local Court ultimately rejected the appellant’s evidence and found that the appellant had no defence to the application, that result was based in large part on factual findings which could only be made following a hearing of the evidence. However misguided the appellant’s subjective beliefs may have been, it cannot be concluded to the relevant standard that at that stage of the proceedings she persisted with a defence which she knew, or ought to have known if she had received competent legal advice, to be hopeless. The fact that a case may be doomed to fail does not inevitably mean that the unsuccessful party should have known there was no chance of success: see Acer Forester Pty Ltd v Complete Crane Hire (NT) Pty Ltd [2013] NTSC 62, [41]-[42]. That is particularly so in circumstances where the result was also contingent in part on the determination of a substantive legal issue concerning whether written notice was necessary for the exercise of the option.
Nor do the terms of the lease relied upon by the respondent properly ground an order for costs on an indemnity basis. Clause 4 of the lease of the premises obliged the tenant ‘to pay any legal costs and expenses as between solicitor and client incurred by the Lessor as the result of any breach by the Lessee of any terms hereof or in relation to any request act or negotiation by the Lessee his solicitors agents or servants of or incidental to any matter appertaining to this lease’. First, the costs were incurred in relation to the Lessor’s application for a warrant of possession rather than incurred as a result of any breach by the Lessee, and on proper characterisation the respondent’s application for a warrant of possession was not in relation to ‘any request, act or negotiation’ by the appellant. Second, the fact that there might be a contractual entitlement to costs on a solicitor and client basis does not mean that the Court will necessarily make an order that the costs of proceedings relating to the contractual arrangement be paid on an indemnity basis. That decision will turn on the conduct of the parties in the proceedings and the application of the principles described above. The position may be different in relation to a contractual arrangement which obliges one party to pay the other party’s costs on an indemnity basis of any action taken in connection with the enforcement of the agreement, but that was not the case here.
For these reasons, the appellant should properly pay the respondent’s costs of the proceedings in the Local Court on a standard basis. Different considerations apply to the appeal to the Supreme Court and the subsequent appeal to this Court. The appeal to the Supreme Court was restricted to questions of law, and by that time the appellant was well aware of the relevant findings of fact which had been made by the Local Court and its determination in relation to the requirement of written notice. In Reynolds v City of Darwin [2019] NTSC 69 at [13]-[14], the Supreme Court described the appellant’s grounds of appeal in the following terms:
The questions of law asserted by the appellant include allegations of “judicial misfeasance and mis-conduct” in November 2019 (four months before the hearing in March 2020), the allegation being that [the Local Court judge] caused the appellant to have a “medical collapse”, whereupon he erred in law in that he “failed to provide appropriate medical consideration”. A similar ground is that his Honour erred in law when he failed to accept a medical certificate for the appellant’s non-appearance on 13 December 2019 (three months before the hearing). Another ground is that his Honour erred in law and failed to provide an unbiased decision, the allegation being that the judge was “compromised by his previously declared dislike of Mrs Reynolds and her ownership of the Rock Centre Darwin”. A similar theme is pursued in another ground which asserts that his Honour “erred in law throughout this trial clearly demonstrating his serious contempt and dislike of Mrs Reynolds especially after her daughters and she had reported his behaviour to the Chief Judge [of the Local Court]”. Another alleged error of law was that his Honour “failed to accept any of the evidence and particulars presented by Mrs Reynolds”, and that he “repudiated any of the facts presented by Mrs Reynolds’ witnesses”. A similar ground asserts that His Honour erred in law “when he excluded all the factual evidence given by Mrs Reynolds, while under oath, as both truthful and accurate”. The factual evidence said to have been excluded included Telstra records, diary entries, and visitation records. It is asserted as another error of law that his Honour refused to allow many of Mrs Reynolds witnesses to appear. In that context, his Honour is said to have failed to explain the court process so as not to “unjustly disadvantage a self-represented litigant with a declared medical condition”.
It is not necessary to dwell further on the grounds of appeal at this stage. However, I set out below ground 9 because it gives a flavour of the way in which the appeal hearing proceeded, with the applicant constantly making unsupported and illogical allegations against the trial judge, as well as irrelevant submissions which were very often not referable to the evidence before the Local Court:
Ground 9
[The Local Court judge] erred in law and relied on Hearsay evidence and he “wrongfully informed him” [himself] about Mrs Reynolds medical condition. His skuldugerous behaviour, assertions regarding the operation of Mrs Reynolds business clearly demonstrate that [the Local Court judge] was informing himself and has no considerations as a business minded person planning and preparing the future of their business. Mrs Reynolds clearly understands that a 25 year lease is likely to continue beyond her operational effectiveness hence Mrs Reynolds in discussion with the City of Darwin had discussed and developed a comprehensive succession plan involving her daughter and other climbing Instructors taking over the new renewed lease.

So far as the central issue was concerned, the Supreme Court found at [40] of the Reasons for Decision:
Ultimately, the questions as to whether or not the appellant served notice, and whether she did so in writing or otherwise, were questions of fact which were decided against her in the Local Court. I refer to the extract from the reasons of [the Local Court judge] in [35] above. Having regard to the principles explained in [11], and in particular sub-paragraph (1), there is no basis for this Court to intervene on appeal.
The Supreme Court dealt with the balance of the grounds of appeal in a general sense in the following terms at [41] of the Reasons for Decision:
I turn to deal with the plethora of allegations made against [the Local Court judge] in the appellant’s notice of appeal, many but not all of which are mentioned by me in [13] and [14] above. Those allegations could be dismissed on the basis that they are misconceived and/or raise irrelevant matters, or do not assert errors of law, or that they raise contentions which are unsupported by the evidence. However, some of them at least require consideration and analysis.
The outcome of that further consideration and analysis, which extended to 30 pages in the Reasons for Decision, was that the allegations made by the appellant were entirely without foundation or merit. What is apparent from the Reasons for Decision in the Supreme Court is that the appellant made false or irrelevant allegations in the conduct of the appeal which should not have been made; the appellant’s conduct of the appeal caused the undue prolongation of the case by groundless contentions; and by that stage of the proceedings the appellant knew, or ought to have known if she had received competent legal advice, that her case generally and the appeal particularly was hopeless. The same observations may be made in relation to the subsequent appeal to this Court having regard to the grounds of appeal asserted and the matters set out in this Court’s decision in Reynolds v City of Darwin [2021] NTCA 3.
For those reasons, it is appropriate that the order for costs in favour of the respondent in the proceedings before the Supreme Court and this Court be on the indemnity basis. It should be noted in this respect that on the delivery of the Reasons for Decision by the Supreme Court on 30 October 2020, the Supreme Court reserved the question of costs and ordered the respondent to file and serve submissions on that matter within 21 days and the appellant to file and serve any written submissions in response within a further 21 days. On 21 November 2020, the respondent filed written submissions seeking costs in compliance with those orders. The appellant did not file any submissions in response to the respondent’s submissions and the Supreme Court did not go on to make any orders in relation to the costs of the appeal before it, presumably because that question was subsumed by the subsequent appeal to this Court.
Costs in fixed sum or as agreed or taxed
The next question for consideration is whether the orders should be for the appellant to pay the respondent’s costs in a fixed sum or as agreed or taxed in default of agreement. Order 63.07(c) of the Supreme Court Rules provides that where the Court orders that costs be paid to a party, it may also order that the receiving party is entitled to a gross amount specified in the order instead of taxed costs. The Court has a broad and unfettered judicial discretion to make a costs order in a fixed sum, and the rule is directed to the avoidance of lengthy, expensive and time-consuming taxation processes in appropriate cases: see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 120; Harrison & Anor v Schipp (2002) 54 NSWLR 738, [20]-[22].
In the present case, the respondent has filed affidavit material deposing to what are said to be ‘realistic estimates of the amount of recoverable costs that the Respondent would be entitled to if this Court was to make a costs order in its favour’. That affidavit goes on to describe the methodology used to reach the costs estimates and annexes the deponent’s calculations and invoices for disbursements. The respondent submits that this case is a proper one for the award of costs in a fixed sum rather than taxation because the taxation process is likely to be blighted by the protracted delays which characterised the substantive proceedings, and because the respondent is unlikely to recover its costs of the taxation process given the appellant’s apparent financial situation.
There is some force in the respondent’s submissions, but this is not an appropriate matter for the Court of Appeal to attempt some assessment of the costs properly recoverable at all three stages of this proceeding. That is so even allowing for the fact that the rule contemplates the application of ‘a much broader brush and will be applied on taxation’: see Hadid v Lenfest Communications Inc [2000] FCA 628, [35]. There are a number of reasons for that.
First, although the circumstances are sufficiently clear to allow this Court to make a determination whether costs should be awarded on the standard or indemnity basis, the question of the quantum of those costs in the application of the relevant test requires a closer level of scrutiny. Second, it will not generally be appropriate as a matter of practice for the Court of Appeal to be drawn into a costs assessment process at first instance. Third, it would be inappropriate for this Court to fix the amount of costs payable by the appellant in circumstances where she has effectively disengaged from the appeal process and has not been heard on the matter. Although it may well prove to be the case that the appellant will remain disengaged during the course of any taxation process, she will in those circumstances at least have notice of the respondent’s claim in the form of a bill of costs in taxable form for each stage of the proceedings.
Accordingly, the appropriate orders are for the appellant to pay the respondent’s costs of the proceedings before the Local Court, the Supreme Court and this Court either as agreed or as taxed in default of agreement. In the event that the matter proceeds to taxation, the respondent’s costs of the proceedings before the Local Court in File No 21934192 are properly taxed by the Local Court taxing officer.
Certification for counsel
The final question for consideration is whether the appearances on applications to stay the warrant of possession before this Court and the Supreme Court at intermediate level should be certified fit for counsel. A certification for the allowance of a fee for counsel attending on those applications is appropriate having regard to the relatively complex nature of the arguments and the significance of the applications for the respondent’s interests and operations.
Disposition
The orders are:
1.The appellant is to pay the respondent’s costs of the proceedings before the Local Court in File No 21934192 on the standard basis, with those costs to be agreed or taxed by the Local Court taxing officer in default of agreement.
2.The appellant is to pay the respondent’s costs of the appeal to the Supreme Court in File No 2020-02980-SC on the indemnity basis, with those costs to be agreed or taxed by the Supreme Court taxing officer in default of agreement.
3.The appellant is to pay the respondent’s costs of this appeal on the indemnity basis, with those costs to be agreed or taxed by the Supreme Court taxing officer in default of agreement.
4.The appearances on applications to stay the warrant of possession before this Court and the Supreme Court at intermediate level are certified fit for counsel.

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