FEDERAL COURT OF AUSTRALIA
Shaw v MAB Corporation Pty Ltd (No 2) [2014] FCA 227
Citation: Shaw v MAB Corporation Pty Ltd (No 2) [2014] FCA 227 Appeal from: Shaw v MAB Corporation Pty Ltd [2013] FCA 1231 Parties: JOHN SHAW v MAB CORPORATION PTY LTD, MAB DOCKLANDS PTY LTD, YARRANOVA PTY LTD, NEWQUAY STAGE 2 PTY LTD, ARNOLD BLOCH LEIBLER, ABC FIDUCIARY CORP PTY LTD, ABL & CO CUSTODIANS PTY LTD, MR ANTHONY CALVI, MR IAN MICHAEL SMITH and MR ALEXANDER WILLIAM KING File number: VID 15 of 2014 Judge: MORTIMER J Date of judgment: 14 March 2014 Catchwords: PRACTICE AND PROCEDURE – Costs – application for leave to appeal unsuccessful – applicant self-represented – respondents seek costs assessed on an indemnity basis – whether appropriate to award indemnity costs on particular facts of case – costs ordered on party-party basis. Legislation: Federal Court of Australia Act 1976 (Cth) s 43
Federal Court Rules 2011 (Cth) r 40.02
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Fountain Selected Meats (Sales Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Gaffney v RSM Bird Cameron Partners (a Firm) (No 2) [2013] FCA 945
Hamod v New South Wales (2002) 188 ALR 659; [2002] FCA 424
Karam v Palmone Shoes Pty Ltd [2012] VSCA 97
Shaw v MAB Corporation Pty Ltd [2014] FCA 62
Shaw v MAB Corporation Pty Ltd (No 2) [2014] FCA 88
Winn v Blueprint Instant Printing Pty Ltd (No 3) [2011] FCA 742
Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792Date of hearing: Heard on the papers Date of last submissions: 25 February 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 17 Solicitor for the Applicant: The applicant appeared in person Solicitor for the Respondents: Arnold Bloch Leibler
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 15 of 2014
BETWEEN: JOHN SHAW
ApplicantAND: MAB CORPORATION PTY LTD
First RespondentMAB DOCKLANDS PTY LTD
Second RespondentYARRANOVA PTY LTD
Third RespondentNEWQUAY STAGE 2 PTY LTD
Fourth RespondentARNOLD BLOCH LEIBLER
Fifth RespondentABC FIDUCIARY CORP PTY LTD
Sixth RespondentABL & CO CUSTODIANS PTY LTD
Seventh RespondentMR ANTHONY CALVI
Eighth RespondentMR IAN MICHAEL SMITH
Ninth RespondentMR ALEXANDER WILLIAM KING
Tenth Respondent
JUDGE:
MORTIMER J
DATE OF ORDER:
14 MARCH 2014
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The applicant is to pay the respondents’ costs of and incidental to the application for an extension of time in which to seek leave to appeal, and the application for leave to appeal.
2. The costs referred to in paragraph 1 of these orders, if not otherwise agreed, are to be assessed on a party-party basis.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 15 of 2014
BETWEEN: JOHN SHAW
ApplicantAND: MAB CORPORATION PTY LTD
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- Case
- [2014] FCA 227
- Decision Date
CaseChat Overview and Summary
The court held that indemnity costs are compensatory rather than punitive, serving to fully compensate a party for costs incurred when it was unreasonable for the unsuccessful party to have subjected the other party to such expenditure. The court emphasised that while indemnity costs are typically awarded when a party pursues a claim without reasonable justification or in an unreasonable manner, the norms of behaviour expected from legally advised and represented parties might differ from those expected from self-represented litigants. The court noted that while self-represented litigants are not immune from indemnity costs, the exercise of the costs discretion may differ when a litigant is not legally represented. The court considered it appropriate to order indemnity costs in this case due to the unreasonable nature of Mr. Shaw's appeal application.
The court concluded that Mr. Shaw should pay the respondents' costs of and incidental to the application for an extension of time to seek leave to appeal and the application for leave to appeal. If not otherwise agreed, these costs were to be assessed on a party-party basis. The court’s order highlighted the importance of the particular facts and circumstances in exercising the broad discretion to award costs, including the view of what can reasonably be attributed to the unsuccessful party in terms of disregard for litigation norms.
Orders
Orders of the court
1. The applicant is to pay the respondents’ costs of and incidental to the application for an extension of time in which to seek leave to appeal, and the application for leave to appeal.
2. The costs referred to in paragraph 1 of these orders, if not otherwise agreed, are to be assessed on a party-party basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Despite the emphasis in many cases on conduct of the unsuccessful party which is open to criticism, indemnity costs are not punitive, but are compensatory. In Hamod v New South Wales (2002) 188 ALR 659; [2002] FCA 424, Gray J (with whom Carr and Goldberg JJ agreed) observed (at [20]):Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by some uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure for costs.CONSIDERATION Both the pursuit of a claim without any reasonable justification, and the pursuit of a claim in a manner that cannot reasonably be justified, are common themes in the authorities. The confidence with which Courts may reach these conclusions is likely to be affected by consideration of what can be expected from the legal representatives of an unsuccessful party. The matters to which the authorities refer contain norms of behaviour in litigation which can be expected from parties who are legally advised and represented. They may also proceed on unstated assumptions about norms which operate in terms of advice passing between lawyers and clients concerning the prospects of success of particular litigation, or the manner in which litigation should be conducted. This may, in part, explain the general reluctance of courts to make orders for indemnity costs against litigants in person, although, in an appropriate case, they will make such an order: see the observations of Kenny J in Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [45]. Winn v Blueprint Instant Printing Pty Ltd (No 3) [2011] FCA 742 and Karam v Palmone Shoes Pty Ltd [2012] VSCA 97 are offered by the respondents as examples of where indemnity costs were ordered against self-represented litigants in circumstances where their conduct may be characterised as an abuse of process. Those cases illustrate the qualification identified by Kenny J in Wu: it cannot be said self-represented litigants enjoy any immunity from indemnity costs orders. However, it should be recognised that the considerations affecting the exercise of the costs discretion may be different, or differently weighted, where a litigant is self-represented. As with any broad discretion, ultimately the costs discretion is exercised by reference to particular facts, and where necessary particular characterisations of those facts. This may include the Court’s view of what can reasonably be attributed to the unsuccessful party in terms of consciousness or knowledge that the norms expected of parties in litigation have been disregarded. There may be circumstances in which it is appropriate to make an order for indemnity costs consequent upon summary judgment: see for example Gaffney v RSM Bird Cameron Partners (a Firm) (No 2) [2013] FCA 945 per Gilmour J. There are some similarities between the approach taken by Gilmour J in Gaffney, and the approach taken by the primary judge in Mr Shaw’s case.