Wang v Farkas

[2014] NSWCA 29

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Wang v Farkas [2014] NSWCA 29

Hearing dates:

16 December 2013

Decision date:

26 February 2014

Before:

Bathurst CJ at [1];
Beazley P at [2];
Basten JA at [3]

Decision:

(1) Set aside the judgment and orders made in the District Court on 20 May 2011 in so far as they dismissed the appeal from the order made by the magistrate in the Local Court with respect to the costs of the proceedings before him.

(2) In place thereof direct that the District Court set aside the order made by the magistrate with respect to costs and substitute a judgment in favour of Mr Farkas in an amount of $22,315, such judgment to take effect from the date of the order for costs made in the Local Court.

(3) Set aside the judgment and orders of the District Court made on 21 October 2011 with respect to the costs of the appeal.

(4) In place thereof, direct that the applicants pay the expenses and disbursements of the defendant (Mr Farkas) incurred in relation to the challenge to the apprehended personal violence orders and that Mr Farkas pay so much of the applicants' costs as are attributable to the orders made in the Local Court with respect to costs, subject to an allowance for any disbursements incurred by Mr Farkas in seeking to enforce the orders of the District Court prior to the commencement of the proceedings in this Court.

(5) Make no order as to the costs of the parties in this Court.

(6) Give liberty to the parties to file written submissions, not to exceed 7 pages, within 10 days of delivery of this judgment, with a further 7 days to respond by submissions not exceeding 3 pages.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

ADMINISTRATIVE LAW - judicial review - jurisdictional error - power of magistrate to award costs for time spent by litigant in person in prosecuting proceedings for apprehended violence order - power to award costs against defendants jointly and severally

COSTS - criminal - power to award - whether power to order costs for time of litigant in person - definition of "professional costs" in Criminal Procedure Act 1986 (NSW) - legal practitioner appearing for himself - application of Chorley - relevance of Chorley in applying Criminal Procedure Act 1986 (NSW)

PROCEDURE - criminal - costs - whether power to make defendants jointly and severally liable for costs of proceedings

WORDS AND PHRASES - "professional costs" - Criminal Procedure Act 1986 (NSW), s 211

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 3, 98
Crimes (Domestic and Personal Violence) Act 2007 (NSW), ss 84. 91, 93, 99; Pt 14
Crimes (Appeal and Review) Act 2001 (NSW), ss 28, 70
Criminal Appeal Act 1912 (NSW), s 5B
Criminal Procedure Act 1986 (NSW), ss 3, 211, 212, 213, 214, 215; Pt 2, Ch 4
District Court Act 1973 (NSW), ss 28, 148A, 176; Pt 3, Divs 9, 9A
Evidence Act 1995 (NSW), s 17
Judiciary Act 1903 (Cth), s 26
Local Court's (Civil Claims) Act 1970 (NSW), ss 33, 34
Supreme Court Act 1970 (NSW), ss 19, 69, 76
Uniform Civil Procedure Rules 2005 (NSW), r 59.10

Cases Cited:

Atlas Corporation Pty Ltd v Kalyk [2001] NSWCA 10
Cachia v Hanes [1994] HCA 14; 179 CLR 403
Craig v South Australia [1995] HCA 58; 184 CLR 163
Dobree v Hoffman (1996) WAR 36
Downey v Acting District Court Judge Boulton (No 5) [2010] NSWCA 240; 78 NSWLR 499
Farkas v Ping [2013] NSWCA 440
Garde v Dowd [2011] NSWCA 115; 80 NSWLR 620
Guss v Veenhuizen (No 2) [1976] HCA 57; 136 CLR 47
Hartford (Holdings) Pty Ltd v CP (Adelaide) Pty Ltd [2004] SASC 161; 234 LSJS 66
Khera v Jones [2006] NSWCA 85
Khera v Jones [2005] NSWSC 122
Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531
Latoudis v Casey [1990] HCA 59; 170 CLR 534
Lawrence v Nikolaidis [2003] NSWCA 129; 57 NSWLR 355
London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872
McIlraith v Ilkin [2008] NSWCA 11
McIlraith v Ilkin (Costs) [2007] NSWSC 1052
Murphy v Arnoldous-Lewis [2009] NSWCA 142
Preston v Commissioner for Fair Trading [2011] NSWCA 40
Ryde City Council v Pedras [2009] NSWCCA 248
Spanos v Lazaris [2008] NSWCA 74

Texts Cited:

Lord Cocke's Commentary, 2 Inst 288
Statute of Gloucester, 6th Edw 1, c1

Category:

Principal judgment

Parties:

James Wang (First applicant)
Y Ping Gu (Second applicant)
George Farkas (First respondent)
NSW Bar Association (Amicus curiae)

Representation:

Counsel:

Applicants (Self-represented)
First Respondent (Self-represented)
Ms J S Gleeson SC/Ms J Walker (Amicus curiae)
Solicitors:

Applicants (Self-represented)
First Respondent (Self-represented)

File Number(s):

CA 2013/22988

 Decision under appeal 

Jurisdiction:

9101

Date of Decision:

2011-05-20 00:00:00

Before:

North DCJ

File Number(s):

DC 2006/16064; DC 2006/16035

Judgment

1. BATHURST CJ: I agree with Basten JA.

1. BEAZLEY P: I agree with the reasons of Basten JA, save for his Honour's reasons, at [44]-[45], relating to the joint and several liability of the applicants for the costs of the respondent Mr Farkas. In my view, there was no basis for a joint and several order as there was no liability that could be described as joint. The joint and several order made by the magistrate in respect of costs effectively rendered each applicant responsible for his or her own conduct as well as the conduct of the other that gave rise to the Apprehended Violence Order. Legally, that was not so. Each was liable for his/her own conduct and was the respondent to a separate proceeding. In those circumstances, I cannot see a basis in the legislation that would permit the magistrate to make a joint and several order. Subject, therefore, to how the costs should be borne by the applicants, I otherwise support the orders proposed by Basten JA.

1. BASTEN JA: For several years the applicants and the respondent were neighbours on Dunara Garden, Point Piper, in the eastern suburbs of Sydney. A dispute arose as to a development proposed by the applicants with respect to their property. The dispute led to applications by the respondent for apprehended personal violence orders against each of the applicants. Such orders were made in the Local Court on 11 June 2010, by Magistrate Bartley. On 17 August 2010 the magistrate ordered that the applicants pay the respondent's costs of the proceedings, for which each was to be jointly and severally liable, and which were assessed on an indemnity basis. The magistrate fixed the amount of costs at $278,993.

1. The respondent appeared for himself in the Local Court. The main component of the costs was an amount for the time spent by the respondent in representing himself. The principal question in this Court was whether the magistrate had power to order the recovery of such costs from the applicants. A separate issue concerned the power of the Court to make a single order against the applicants (who were husband and wife), for which they were to be jointly and severally liable.

Nature of proceedings

1. The application brought by Mr Farkas in the Local Court invoked that Court's jurisdiction to make an apprehended personal violence order pursuant to the Crimes (Domestic and Personal Violence) Act 2007 (NSW) ("the Apprehended Violence Act"). The application was made on 7 March 2006, with interim orders being made in April 2006. The proceedings were contested by the applicant, Mr James Wang, who appeared for himself and for his wife, Ms Y Ping Gu. There were numerous interlocutory steps, before the hearing by Magistrate Bartley, which commenced on 15 August 2007 and ran for 24 hearing days spread over three years. This Court was told that the written submissions before the magistrate ran to 530 pages.

1. The applicants exercised their rights of appeal to the District Court, pursuant to s 84(2) of the Apprehended Violence Act. The appeal was heard by North DCJ over six days. The applicants were legally represented for the course of the appeal, but Mr Farkas represented himself. On 20 May 2011 North DCJ delivered judgment dismissing the appeal and upholding the orders, including the costs order, made in the Local Court. Belatedly, the applicants requested North DCJ to state a case to the Court of Criminal Appeal, pursuant to s 5B of the Criminal Appeal Act 1912 (NSW), in relation to the costs order. The application was rejected. There was no right of appeal from the judgments in the District Court.

1. In January 2013, the applicants commenced proceedings in this Court, pursuant to s 69 of the Supreme Court Act 1970 (NSW), the primary relief sought being an order in the nature of certiorari to quash so much of the order made by the District Court on 20 May 2011 as dismissed the appeal from the costs order made in the Local Court on 17 August 2010, and then only in so far as that order included a "component representing professional costs and disbursements".

1. Mr Farkas submitted, correctly, that, the judgment of the District Court being protected by a "no certiorari" clause, the jurisdiction of this Court was limited to intervening on the basis of jurisdictional error: District Court Act 1973 (NSW), s 176; Spanos v Lazaris [2008] NSWCA 74 at [15] (Beazley and Bell JJA agreeing with me); Downey v Acting District Court Judge Boulton (No 5) [2010] NSWCA 240; 78 NSWLR 499 at [133]-[134]; Garde v Dowd [2011] NSWCA 115; 80 NSWLR 620 at [10], dealing specifically with a challenge to a costs order made under the Apprehended Violence Act. He further submitted that there was no dispute that the magistrate had power to make a costs order against the applicants and that any error made by the magistrate must therefore be an error within jurisdiction. The proceeding should be dismissed, he submitted, for that reason and, if that were not correct, because the magistrate made no relevant error.

1. Both the applicants and respondent appeared for themselves in this Court. The primary focus of the written submissions was upon the scope of the general law principles developed by the courts in England (and applied in Australia) in relation to the scope of orders for costs in favour of successful litigants who were legal practitioners appearing for themselves. Although the written submissions were expertly drawn on both sides (the applicants had the assistance of their daughter who is a law graduate) the Court invited the professional associations to seek leave to appear as amicus curiae. The Bar Association of New South Wales sought leave to be represented by counsel, which leave was granted. The Court thus had the benefit of assistance from independent counsel.

Legal principles

1. At the heart of the submissions was the application of a decision of the English Court of Appeal, London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 ("Chorley"). That case involved a civil action against a firm of solicitors who successfully defended themselves. They sought to recover the costs of their defence. The principle for which the case stands was stated by Brett MR at 875-876:

"When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit. When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. ... The true rule seems to be that when a solicitor brings or defends an action in person, he is entitled to the same costs as an ordinary litigant appearing in person, subject to this restriction, that no costs which are really unnecessary can be recovered."

1. The underlying principle, as expressed by Bowen LJ, was that "[p]rofessional skill and labour are recognised and can be measured by the law; private expenditure of labour and trouble by a layman cannot be measured": at 877.

1. The respondent submitted that this principle had been accepted in Australia and upheld in judgments of the High Court, particularly Guss v Veenhuizen (No 2) [1976] HCA 57; 136 CLR 47 and Cachia v Hanes [1994] HCA 14; 179 CLR 403. Further, he noted that the principle had been accepted and applied by this Court, referring to Atlas Corporation Pty Ltd v Kalyk [2001] NSWCA 10; Khera v Jones [2006] NSWCA 85 and McIlraith v Ilkin [2008] NSWCA 11. On the other hand, as the submissions for the Bar Association recognised, the principle has not been wholeheartedly endorsed in Australia and has, in at least two cases, not been extended to cover the costs of a practitioner appearing as an advocate: Hartford (Holdings) Pty Ltd v CP (Adelaide) Pty Ltd [2004] SASC 161; 234 LSJS 66 (Doyle CJ, Gray and Besanko JJ) and Dobree v Hoffman (1996) WAR 36 (Parker J, Rowland and Steytler JJ agreeing), in the latter case the Full Court in Western Australia declined to apply Chorley.

1. Before addressing the question of authority, it is necessary to identify how the question arises in the present case. As stated by Bowen LJ in Chorley (at 876), "[c]osts are the creation of statute". As he explained, the English practice derived from a passage in Lord Coke's Commentary, 2 Inst 288, stating that the provision in the Statute of Gloucester, 6 Edw 1, c1, giving "the costs of the writ purchased", extended beyond the costs of the writ to the "legal cost of the suit, but not to the costs and expenses of his travel and loss of time": Chorley at 876-877. When costs are awarded pursuant to local legislation, the question must be whether the legislature intended to incorporate this principle into the legislative provision.

1. The present case was not concerned with proceedings in the civil jurisdiction of the Court, but with an application for an order available under a specific statute, which in turn provided that costs were to be determined in accordance with the process in the criminal jurisdiction.

1. The jurisdiction to make orders and determine applications under the Apprehended Violence Act was conferred on the Local Court by s 91(1)(a) of that Act. The appellate jurisdiction, conferred on the District Court by s 84(2), is to be exercised as part of its criminal jurisdiction: s 93. The power to award costs arose under Pt 14 of the Apprehended Violence Act and, in particular, under s 99 which, so far as relevant, provided:

99 Costs

(1) A court may, in apprehended violence order proceedings, award costs to the applicant for the order or decision concerned or the defendant in accordance with this section.

(2) Costs are to be determined in accordance with Division 4 of Part 2 of Chapter 4 of the Criminal Procedure Act 1986.

1. That Division of the Criminal Procedure Act 1986 (NSW) provides that "[a] court may award costs in criminal proceedings only in accordance with this Act": s 212(1). The Division then makes separate provision for the award of professional costs to an accused person (s 213), with specific restrictions being imposed where the prosecutor acted in a public capacity (s 214). The relevant provision in the present case is s 215 which, so far as material, states:

215 When professional costs may be awarded to prosecutor

(1) A court may at the end of summary proceedings order that the accused person pay the following costs to the registrar of the court, for payment to the prosecutor, if the accused person is convicted or an order is made against the accused person:

(a) such professional costs as the court considers just and reasonable,

...

(3) The order must specify the amount of costs payable."

1. The Criminal Procedure Act provides that the term "accused person" is to include, in relation to summary offences, a "defendant": s 3(1). To operate coherently with the Apprehended Violence Act, in its application to costs under that Act, that term must include a defendant to an application for an apprehended violence order. (So much was not in dispute.) Importantly, the Criminal Procedure Act also defines, in the same Division as the operative provision, the term "professional costs":

211 Definition

In this Part:

professional costs means costs (other than court costs) relating to professional expenses and disbursements (including witnesses' expenses) in respect of proceedings before a court.

1. There are three features of this statutory scheme which are of present significance. First, although the underlying principles relevant to costs orders are similar in criminal and civil proceedings - see Latoudis v Casey [1990] HCA 59; 170 CLR 534 - the circumstances in which costs orders are made vary. Thus costs orders are not made in relation to trials for indictable offences and, as the Criminal Procedure Act itself provides, restrictions may be imposed with respect to summary offences: as in s 214.

1. Secondly, the Criminal Procedure Act provides an exclusive statement of the circumstances in which costs can be ordered: s 212(1). While it may be necessary to identify what is meant by the term "costs", to the extent that the statute defines the term, its limitations must be respected and the term should not be given a broader meaning which may be available in another context.

1. Thirdly, the costs which are recoverable are not identified as "costs" in a general sense, but are limited to certain specific costs: s 215(1)(a). They are described as "professional costs", which is a defined term: s 211.

1. The defined term "professional costs" must exclude costs which would be incurred by a non-professional person, such as a litigant acting for himself or herself. Nor can there be doubt that the phrase in the definition, "professional expenses and disbursements", includes amounts paid by a litigant to a qualified legal practitioner in respect of court proceedings. However, it is not at all clear that "expenses" and "disbursements" include amounts calculated as the value of time devoted by a professional person to court proceedings, acting on his or her own behalf. The ordinary meaning of "disbursement" is money paid out or expended. One does not, in ordinary parlance, disburse one's time. The primary meaning of "expenses" also relates to the spending of money. No doubt one can expend other resources, including one's labour or time; however, the plural "expenses" is not used in ordinary parlance to refer to matters other than money. Accordingly, properly construed, the term "professional costs" as it appears in the Criminal Procedure Act, Pt 2 of Ch 4, does not extend to a valuation of time devoted by a litigant, even if a legal practitioner, to his or her own proceedings.

1. This conclusion is fortified by the consideration that the Local Court magistrate must consider the amount of costs which are "just and reasonable" and must specify that amount in the order: s 215(1)(a) and (3). Although Mr Farkas prepared a "Memorandum of fees" which he described as a "tax invoice", that exercise was artificial: he did not owe himself any money. No doubt he presented such a document to the Court as a practical means of demonstrating the amount he considered just and reasonable in the circumstances. That course affirmed, rather than denied, the artificiality of the exercise. Accordingly, unless authority commands a different conclusion, the language of the Criminal Procedure Act forecloses an order for costs which includes a component calculated by reference to the time expended by the successful litigant on his or her own case.

Scope of authorities

1. Guss v Veenhuizen concerned a claim by a solicitor acting for himself to recover a sum for his own time in relation to an appeal to the High Court. The joint reasons of Gibbs ACJ, Jacobs and Aickin JJ, referred to Chorley (and a later English case) and stated at 51:

"Those authorities establish that the litigant in person does not recover such costs in such circumstances in the capacity of a solicitor, but because, he happening to be a solicitor, his costs are able to be quantified by the Court and its officers."

1. As recognised in the later case of Cachia v Hanes (at 412), the Chorley principle was not in issue; Guss v Veenhuizen turned on whether the exception applied in favour of a practitioner who was not on the High Court Register of Practitioners.

1. Cachia v Hanes itself was not concerned with a legal practitioner, but with a litigant in person who had failed to recover "compensation for the loss of his time spent in the preparation and conduct of his case and for out of pocket expenses, being travelling expenses, associated with the preparation and conduct of his case": at 408. The relevant statutory provision, then contained in s 76(1) of the Supreme Court Act (now found in the Civil Procedure Act 2005 (NSW), s 98) provided for the power of the court to award "costs", a term defined in s 19 as including "fees, charges, disbursements, expenses and remuneration": s 19(1). The term "costs" was not separately defined in the rules governing taxation. The joint reasons in Cachia v Hanes stated at 409:

"It is fundamental to the appellant's argument that the time he lost in preparing and conducting his case constitutes 'costs' within the meaning of this rule. He is, however, unable to sustain that proposition. The 'costs' provided for in the Rules do not include time spent by a litigant who is not a lawyer in preparing and conducting his case. They are confined to money paid or liabilities incurred for professional legal services. It is only in that sense that the Rules speak of 'costs'."

1. The joint reasons further referred (at 411) to a "somewhat anomalous exception" introduced by Chorley, suggesting that the reasoning ignored "the questionable nature of a situation in which a successful litigant not only receives the amount of the verdict but actually profits from the conduct of the litigation": at 412. After referring to the passage from Guss v Veenhuizen set out above, the majority stated, at 412-413:

"If the explanations for allowing the costs of a solicitor acting for himself are unconvincing, the logical answer may be to abandon the exception in favour of the general principle rather than the other way round. However, it is not necessary to go so far for the purposes of the present case. It suffices to say that the existence of a limited and questionable exception provides no proper basis for overturning a general principle which has, as we have said, never been doubted and which has been affirmed in recent times."

1. The Civil Procedure Act now contains the following definition:

3 Definitions

(1) In this Act:

...

costs, in relation to proceedings, means costs payable in or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration. [Emphasis added.]

1. The introduction of the emphasised word "payable" may at some stage require reconsideration of the application of Chorley in civil proceedings in this State. It is not necessary for present purposes to resolve that question.

1. If Guss v Veenhuizen were determinative of the present case, this Court would be bound to follow it: while Cachia v Hanes casts doubt upon the validity of the principle that the legal practitioner could recover for his time expended in his proceedings, that principle was expressly not abandoned, nor overturned. The change in statutory language may mean that the issue will never arise. It is also not necessary for this Court to consider whether the approach adopted in Dobree v Hoffman by the Western Australian Full Court, which declined to apply Chorley, should be followed. Again, arguably the issue did not arise, because the decision ultimately turned on the legislative provisions in Western Australia. Guss turned on (but did not discuss) the power to award costs in the High Court, which was conferred by reference to the term "costs", undefined in any relevant respect: Judiciary Act 1903 (Cth), s 26. Accepting that Guss v Veenhuizen is binding as to the correct construction of that language in any statute, in principle it would not bind this Court (or another court) in respect of a materially different statutory provision.

1. It remains to consider whether there is binding authority in this Court which requires a different conclusion.

1. In Atlas Corporation, this Court upheld a claim by a solicitor acting on behalf of himself and other members of his firm to recover the costs of proceedings in which the firm had sought to recover from the appellant the professional fees charged by it whilst acting as solicitors for the appellant. The Court held that the exception to the general principle, which allowed the lawyers to recover, had been accepted in Guss v Veenhuizen and should be applied. There was no consideration of the relevant statutory scheme; if the original proceedings were in the Supreme Court, it may be assumed that the legislative scheme was that considered in Cachia v Hanes. However, if Guss v Veenhuizen does not bind this Court with respect to the statutory language now under consideration, Atlas Corporation takes the matter no further.

1. In Khera v Jones leave was refused by the Court (Mason P and Ipp JA) in relation to an attempt to challenge the Chorley exception in its application to litigation between two solicitors, each of whom appeared for himself. The original proceedings were in the District Court, but there was no reference to any aspect of the legislative scheme operating in that Court. Leave was refused because of the "major impediment" created by the decision of the Court in Atlas Corporation. It appears from the reference to the case under appeal - Khera v Jones [2005] NSWSC 122 - that the original proceedings were conducted in the District Court, probably in 2002. The power to award costs was then dealt with in Pt 3, Div 9A of the District Court Act. At that time, in Div 9A "a reference to costs [was] a reference to the costs payable by a party in or in relation to proceedings, including disbursements": s 148A. It would have been arguable that the inclusion of the phrase "payable by a party" might have allowed for a different approach to that adopted in Chorley. However, the statutory language was not addressed in the judgment: it therefore adds nothing to the conclusion based on Atlas Corporation.

1. The Court was also referred to the judgment in McIlraith v Ilkin, but again the discussion is uninformative. The Court (comprising Bell JA and me) was unable to identify a relevant order: at [16]. In the event that an order had been made requiring the plaintiff to pay the defendant's costs of acting for himself (he being a solicitor), the decision followed Atlas Corporation (as did the trial judge, Brereton J, in McIlraith v Ilkin(Costs) [2007] NSWSC 1052). In neither court, it appears, was any reliance placed on the precise terms of the statutory provision under which costs had been awarded, although it may be that the provisions of the Civil Procedure Act were in force when the costs were incurred. In their terms, neither judgment did more than apply Atlas Corporation.

1. Finally, reference was made to an order in the criminal jurisdiction of the Local Court: Ryde City Council v Pedras [2009] NSWCCA 248 (Giles JA, Buddin J agreeing; Harrison J writing separately to similar effect). The case involved a prosecution under the Companion Animals Act 1998 (NSW). The defendant was convicted, but successfully appealed to the District Court. In upholding the appeal, the District Court awarded the defendant costs including an amount for his "personal time". The matter came before the Court of Criminal Appeal on a stated case under s 5B of the Criminal Appeal Act. The amount awarded for personal time was identified as "the defendant's lost earnings as a taxi driver": at [26]. The Court applied Cachia, holding that the lost earnings were not recoverable. Whilst noting that neither party referred to the statutory provision empowering the judge to award costs, Giles JA expressly did. He noted that the relevant power was to be found in s 28(3) of the Crimes (Appeal and Review) Act 2001 (NSW), which stated that the District Court "may make such order as to the costs to be paid by either party ... as it thinks just". There were restrictions applicable in some cases, under s 70, but they did not affect the extent of the power. The term "costs" was not defined. Applying Cachia v Hanes, the Court of Criminal Appeal held that the District Court had erred in awarding an amount by way of costs for the time of a litigant, who was not a legal practitioner, in the conduct of the litigation.

1. Lawrence v Nikolaidis [2003] NSWCA 129; 57 NSWLR 355 involved a dispute as to the scope of the costs which could be recovered by a solicitor acting in person. Thus, the question was not directed to the availability of a claim in accordance with Chorley, but as to the scope of the amounts properly claimable. The original proceedings involved a civil dispute in the Local Court, to which the Local Courts (Civil Claims) Act 1970 (NSW), s 34(1) applied, placing in the discretion of the Court "costs in or in relation to an action". Section 33 stated that "a reference to costs is a reference to the costs payable by a party in or in relation to proceedings, including disbursements", but no reference was made to this provision in the reasoning of the Court (Hodgson JA, Beazley JA agreeing, Meagher JA contra, though not on the point of principle in issue).

1. In Murphy v Arnoldus-Lewis [2009] NSWCA 142 leave was refused to appeal against a judgment of McCallum J holding that Mr Murphy, the successful plaintiff in Local Court proceedings, could not recover travelling expenses as part of the Court's power to award "costs". Like Pedras, the decision was a straightforward application of Cachia v Hanes to a non-legal practitioner litigant. A further application of the principle is to be found in Preston v Commissioner for Fair Trading [2011] NSWCA 40 at [183]-[185] (Campbell JA).

1. This review of the cases relied upon by the respondent demonstrates that there is no authority requiring the Court to apply the Chorley exception in construing the relevant provisions of the Criminal Procedure Act. For the reasons given above, that step should not be taken: the order for costs made in the Local Court was therefore erroneous in point of law. It remains to consider whether the error was jurisdictional, so as to permit relief despite the privative clause in s 176 of the District Court Act and, if so, the appropriate form of the relief.

Whether error jurisdictional

1. The respondent's submissions may be summarised in the following propositions:

(a) the order as to costs was made by a magistrate sitting as the Local Court;

(b) the jurisdiction of a court encompasses authority to decide questions of law, as well as questions of fact, and

(c) a wrong decision by a court on a question of law will not ordinarily involve jurisdictional error.

1. The joint reasons in Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531 identified jurisdictional error by an inferior court as arising "if it mistakenly asserts or denies the existence of jurisdiction or if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist": Kirk at [72], quoting, with added emphasis, from the judgment in Craig v South Australia [1995] HCA 58; 184 CLR 163 at 177.

1. The distinction between a law which limits the functions or powers of the tribunal and a law which does not is, as both Craig and Kirk accepted, sometimes "difficult to discern". At the risk of creating a false taxonomy, it may be helpful in some cases to consider at what level a particular legal principle operates, namely whether it is a law which:

(a) creates enforceable rights and obligations in individuals;

(b) confers jurisdiction on a particular court or tribunal to resolve disputes between individuals in relation to their rights and obligations, or

(c) imposes express constraints on the power of the court or tribunal in the exercise its jurisdiction.

1. Disregarding an express constraint is likely to be the clearest example of jurisdictional error. For example, Kirk held that the Industrial Court had disregarded the prohibition in the Evidence Act 1995 (NSW) upon a defendant giving evidence as a witness for the prosecution - the prohibition worked through a provision making the defendant incompetent: s 17(2). Further, where the law imposes obligations of procedural fairness, a failure to comply with those obligations will constitute jurisdictional error, although the precise boundaries of the obligation in a particular case may appear to fall within the discretion of the court or tribunal in determining its own procedures.

1. In the present case, as the respondent emphasised, there was no dispute that the magistrate had power to award costs in his favour, which the magistrate did. Whether the costs were assessed on a correct basis or not was, the respondent submitted, a matter to be determined by the magistrate and, on appeal, by the District Court judge. An error on their parts as to the amount of the costs did not constitute jurisdictional error, even if it involved a legal error. If every error of law constituted jurisdictional error, particularly in the case of a court such as the District Court, judicial review would transmogrify into an appeal for error of law, without regard to the requirement that certiorari is available only for error of law on the face of the record, and, in the case of a privative clause, only where an error is properly characterised as jurisdictional. The present case may have involved a mistaken exercise of jurisdiction but the mistake, he submitted, was not jurisdictional.

1. Accepting that difficulties will arise in drawing a line between jurisdictional and non-jurisdictional errors of law, the respondent's submissions cannot be accepted. Although the power conferred on the Local Court is to award such costs as it thinks to be "just and reasonable", what is just and reasonable is not to be judged at large. Rather, the exercise is constrained by the defined term, "professional costs". If, properly understood, that phrase does not include the value of time spent by a legal practitioner in conducting his or her own litigation, then the inclusion of an amount on that account in the award would be an error of law on the part of the Court. But it is more than that: it involves the award of an amount of money to compensate for that for which the law says compensation is unavailable. In functional terms, it involves the exercise of a power which does not exist. That constitutes jurisdictional error. Accordingly, this Court has power to intervene.

Joint and several order

1. A different conclusion follows with respect to the other basis upon which the order of the magistrate was challenged, namely making the liability for costs a joint and several liability of the applicants. While it may be true that separate applications were made for apprehended personal violence orders against Mr Wang on the one hand and Ms Gu on the other, the proceedings were heard together, evidence in one was treated as evidence in the other, the two defendants had common representation and there was no attempt to show that particular stages of the proceedings were quarantined by reference to one defendant only. (Thus, if Ms Gu had at some stage sought to have the hearing separated, that did not happen and there is no challenge now available to the manner in which the applications were conducted.)

1. Even where these characteristics exist, there may well be cases where it is appropriate to impose separate costs obligations on each defendant. It is by no means clear that this was such a case, but in any event the power to make the order in fact made was available to the magistrate and any error in the exercise of that discretionary power (and none was identified in those terms) would undoubtedly be an error within jurisdiction. The only claim made by the applicants was that no such power existed, a claim which must be rejected.

Relief

1. The respondent resisted relief, should it otherwise be available, on discretionary grounds. He relied upon the history of the proceedings for the proposition that the applicants were continuing to abuse the process of the Court, as they had in the past and on the basis that the matter now raised was not agitated before the Local Court or the District Court. Finally, he noted that there had been a delay of more than a year between the date when North DCJ declined to state a case to the Court of Criminal Appeal (20 October 2011) and the commencement of proceedings in this Court in January 2013. It appears to be accepted that the applicants did not know of the refusal of their application for a stated case until shortly before the present proceedings were commenced: how that came about need not be determined. It is clear that the applicants were not diligent in pursuing the present application and that the steps taken in January 2013 came in response to an attempt by the Sheriff to enforce a writ of execution.

1. The first ground for refusing relief should be rejected. The fact, accepted by the magistrate and in the District Court, that the applicants had misconducted themselves in the course of the litigation, should not deprive them of appropriate relief if they are able to establish that the Court exceeded its powers.

1. The second point is similar to that which arose in Kirk, namely that the basis for the ultimate success of the applicants was not raised at earlier stages of the proceedings. Care must be taken in depriving applicants of proper relief on this basis in circumstances where they have been unrepresented. On the other hand, the applicants were represented in the District Court and, to the extent the matter was not raised there, the respondent may have incurred additional costs as a result of the failure to take the point at an earlier stage. However, the application of the Chorley exception was dealt with at some length by North DCJ and it cannot be said that challenge to the basis on which costs were ordered was not raised in the District Court.

1. There remains the question of delay. At the time proceedings were instituted, there was no time limit on applications under s 69 of the Supreme Court Act. (There is now a requirement to commence proceedings within three months of the date of the decision, subject to the power of the court to extend that time: Uniform Civil Procedure Rules 2005 (NSW), r 59.10.) Had the application extended to some aspect of the apprehended personal violence order, which had been in force on a continuing basis, the question of delay would have carried significant weight. In the present case, there has, in effect, been a delay in the respondent obtaining an amount of money to which, on the reasoning set out above, he is not entitled. There is prejudice, but largely limited to the costs incurred by him in putting in motion action to enforce the court order. To the extent that disbursements have been made to that end, he should be entitled to recover them, as a condition of any grant of relief to the applicants.

1. For these reasons, the Court should not decline to grant relief in the exercise of its discretion. The question is then what form the relief should take. The amended summons sought an order setting aside the dismissal by the District Court of the appeal from the decision in the Local Court, by reference to the component of the costs order representing professional costs and disbursements. An order in those terms should be made. The result is that the appeal should be allowed in part and a different order substituted for that made by the magistrate with respect to costs. If it were possible for orders to be made in this Court, other than a remittal of the matter to the District Court, there would be much to be said for that course.

1. It appears that the amount awarded by way of costs by the magistrate, $278,993, was constituted by two components. The bulk of the amount, $256,678 comprised "professional costs"; a lesser amount, $22,315 constituted "disbursements". The former amount should be disallowed. The latter amount is outside the challenge to the scope of "professional costs", as defined in the Criminal Procedure Act and is therefore recoverable.

1. The proceedings in the District Court were by no means limited to a challenge to the costs order. To the extent that they involved a challenge to the substantive orders made by the magistrate, the dismissal of the appeal stands. The orders of the District Court judge included an order that the applicants pay the respondent's costs in that Court. No doubt there would need to be some apportionment of costs, although it is unclear that, on the principle stated above, Mr Farkas would be entitled to recover very much by way of costs in resisting the appeal, successfully in part and unsuccessfully in respect of another part. On the other hand, the applicants were represented by senior counsel in the District Court and, to the extent that they should have been successful, may be entitled to an order for costs in respect of that part of the proceedings against Mr Farkas.

1. A further consequence of the matters raised above is that the arrangements for security will either lapse or need to be undone. It is therefore possible that consequential orders will be required in any event. Granting liberty to apply to resolve these issues is necessary, but should not be treated on either side as an invitation to reagitate any issue which has been disposed of in this judgment.

1. In order to focus the minds of the parties, the Court should propose tentative orders along the following lines and give the parties leave to file brief written submissions within 14 days if they seek to have a proposed order varied. The reason for a reasonably tight timetable is that the security provisions now in place effectively expire at the end of March 2014, with liberty to the parties to apply in the event that this Court does not resolve the proceedings by the end of February: Farkas v Ping [2013] NSWCA 440 at [23]-[28] (Leeming JA). It is highly desirable that no further costs be incurred, if that can be avoided.

1. The proposed orders are as follows:

(1) Set aside the judgment and orders made in the District Court on 20 May 2011 in so far as they dismissed the appeal from the order made by the magistrate in the Local Court with respect to the costs of the proceedings before him.

(2) In place thereof direct that the District Court set aside the order made by the magistrate with respect to costs and substitute a judgment in favour of Mr Farkas in an amount of $22,315, such judgment to take effect from the date of the order for costs made in the Local Court.

(3) Set aside the judgment and orders of the District Court made on 21 October 2011 with respect to the costs of the appeal.

(4) In place thereof, direct that the applicants pay the expenses and disbursements of the defendant (Mr Farkas) incurred in relation to the challenge to the apprehended personal violence orders and that Mr Farkas pay so much of the applicants' costs as are attributable to the orders made in the Local Court with respect to costs, subject to an allowance for any disbursements incurred by Mr Farkas in seeking to enforce the orders of the District Court prior to the commencement of the proceedings in this Court.

(5) Make no order as to the costs of the parties in this Court.

(6) Give liberty to the parties to file written submissions, not to exceed 7 pages, within 10 days of delivery of this judgment, with a further 7 days to respond by submissions not exceeding 3 pages.

**********

Amendments

14 July 2014 - Correcting respondent's name in [2]; correcting typographical errors in quote in [10]; correcting typographical errors in citation and quote in [13]; correcting error in quote in [25] and amending Div 9 to Div 9A in [32].

Amended paragraphs: [2], [10], [13], [25], [32]

Decision last updated: 14 July 2014