Waybecca Pty Ltd v Vella

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COSTS COURT

S CI 2017 02472

WAYBECCA PTY LTD	Applicant
v
JOSEPH VELLA	First Respondent
RICHARD GIZA	Second Respondent

---

JUDGE:	Wood AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	16 August 2018
DATE OF JUDGMENT:	10 September 2018
CASE MAY BE CITED AS:	Waybecca Pty Ltd v Vella & Anor
MEDIUM NEUTRAL CITATION:	[2018] VSC 492

---

APPEARANCES:	Counsel	Solicitors
No appearance for the Applicant	Falcone & Adams
No appearance for the First Respondent
The Second respondent appeared in person with ‘McKenzie friend’ (Stanislawa Bahonko)

HIS HONOUR:

I heard two matters in this proceeding on 16 August 2018 and reserved my decision. I now publish my decision and reasons. Disputes between these parties have a long and unfortunate history. It is necessary to describe some of that history before dealing with the two matters before me. What started out as a minor dispute in the Magistrates’ Court has culminated in a succession of unsuccessful applications by the respondents before an Associate Judge, a Judge, the Court of Appeal and finally the High Court.
The current proceeding in the Costs Court was initiated by the applicant to quantify its entitlement to costs arising from orders made by an Associate Judge, Judge and the Court of Appeal. The appeal from the Judge to the Court of Appeal was dismissed on a self-executing order as a result of a failure of the respondents to comply with a security for costs order for $25,000.
The following passage from the Court of Appeal[1] is worth citing.
17.This proceeding concerns property of relatively modest value. The costs that have been incurred from the commencement of proceedings in the Magistrates’ Court to date, however, could only be described as wholly out of proportion with the value of the subject matter of the dispute. Moreover, as the judgments that have already been written in the Trial Division and in this Court in these proceedings disclose, Mr Giza’s compliance with the overarching obligations set out in the Civil Procedure Act 2010 could not be described as wholehearted.
…
19.Mr Giza is impecunious. That impecuniosity has not been brought about by any conduct of Waybecca. In the event that Mr Giza fails in his application for leave to appeal, there is little (if any) prospect that Waybecca will recover its costs from Mr Giza.
[1]Giza v Waybecca Pty Ltd (2014) VSCA 184.
The initiating Summons for Taxation in the Costs Court was issued on 29 June 2017 with an endorsement notifying the respondents that a Notice of Objection should be filed seven days prior to the hearing date endorsed on the Summons. A case management/mediation was endorsed on the Summons with the scheduled date of 31 July 2017. A Notice of Objection on behalf of the respondents was filed on 17 July2017. It did not comply with Rule 63.47(2) Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) and merely made submissions about the applicant’s lack of standing in the Magistrates’ Court, what occurred in that Court, financial losses suffered by the respondents, the applicant’s ability to pay its own costs, the applicant’s financial gain from the proceedings and the respondents’ impecuniosity.
After the mediation on 31 July 2017 the matter was listed for telephone mentions on 7, 11, 18 and 24 August 2017. On the last of these occasions an order was made by Costs Registrar Conidi for the respondents to file and serve a Notice that complied with Rule 63.47(2), namely an ‘itemised Notice of Objection identifying each item in the bill of costs to which an objection will be made and state specifically and concisely the grounds of objection to each item’. The time for compliance was set as 12 September 2017 and the taxation listed for 19 September 2017.
No further Notice of Objection was filed by the respondents. Rule 63.49 provides that ‘Where no objection to a bill is made in accordance with Rule 63.47, the Costs Court may allow or disallow the amount of the costs in the bill in whole or in part.’
The respondents filed a document dated 12 September 2017 entitled ‘Affidavit in Response to the Orders of Registrar Conidi of 24/08/2017’. The affidavit was sworn by the second respondent and described the requirement to address each item as ‘oppressive in the circumstances of the case where I provided a detailed Objection outlining grounds that Applicant’s is (sic) not entitled to any costs at all from me or Joseph Vella and that his claims for costs are illegitimate’. The affidavit then goes on to make the assertion that the costs claimed are matters between the applicant and its lawyers and that the matter should be referred to the DPP. Reference is also made to confidential matters alleged to have been said at the mediation. Such matters cannot be the subject of evidence.[2]
[2]Section 24A Supreme Court Act 1986.
A further affidavit was filed on 18 September 2017 which merely dealt with the underlying facts in the Magistrates’ Court proceedings and an alleged counterclaim for money said to be payable by the applicant. A subsequent affidavit was filed on 19 September 2017 which again complains about alleged conduct relevant to the Magistrates’ Court proceedings and the alleged counterclaim. A complaint is also made about the security for costs application dealt with by the Court of Appeal and the second respondent’s impecuniosity.
The taxation of costs proceeded before Costs Registrar Walton on 19 September 2017. The second respondent appeared on that day with a ‘McKenzie friend’ (Stanislawa Bahonko, who has previously been declared by a Judge of the Supreme Court to be a vexatious litigant). Some time after the commencement of the taxation hearing the second respondent and McKenzie friend withdrew from the hearing, denying themselves the opportunity to examine documents, participate in the taxation and make submissions.
The taxation then continued in their absence and the bill was examined, documents were produced from the applicant’s file in support of items claimed, and rulings were made by the Costs Registrar. There were two bills of costs. The first arose from orders of the Trial Division (‘first bill’). The first bill was reduced by the Costs Registrar on taxation by $6,652.29 and the costs of the taxation were then added on in the sum of $2,135.55. The second bill arose from the order of the Court of Appeal (‘second bill’) and was also reduced by the Costs Registrar on taxation by $7,085.55 with $517.50 being taxed on.
On 6 October 2017 the respondents filed a Notice of Review of the taxation result, although it is only the second respondent who is actively participating in all these proceedings. An Amended Notice was filed on 20 October 2017. Neither Notice complied with Rule 63.56.2(4) as they failed to state by a list the items objected to with specific and concise grounds of objection. On 24 October 2017 a Judicial Registrar made an order which provided the respondents with a copy of the two bills marked with the allowances and reductions made by the Costs Registrar at the taxation. An order was also made requiring the respondents to file a Notice of Review which complied with Rule 63.56(2). The applicant elected not to appear on 24 October 2017 when those orders were made.
A further Amended Notice of Review was filed on behalf of the respondents on 15 November 2017 which did make specific objections to some specific items as well as taking objection to all items on broad grounds. The review of the Costs Registrar was listed for a call-over before the Judicial Registrar on 6 December 2017. The respondents filed a Notice to Produce, addressed to the applicant, to produce their file. The Judicial Registrar has a discretion on review to receive further evidence in respect of any objection.[3] The review of the Costs Registrar’s taxation was listed for hearing on 7 February 2018.
[3]Rule 63.56.2(7).
The applicant elected not to appear at the call-over and at the hearing on 7 February 2018 but relied on a written submission dated 6 February 2018. In broad terms, issue was taken with the respondents’ failure to comply with the Rules in relation to the Notice of Review, the frivolous, vexatious and embarrassing nature of allegations and a submission was made that it was unjust and unreasonable for the applicant to incur further costs in participating further. That review was heard by the Judicial Registrar on 7 February 2018 and it was subsequently dismissed on 14 March 2018 with comprehensive reasons published.
The reasons of the Judicial Registrar make reference to the Notice to Produce.[4] It is apparent from the reasons that the respondents had the onus of demonstrating that the Costs Registrar had made errors. The respondents already had access to common Court documents, the various Court files, and their own copies of all the correspondence between the parties. The only documents they did not have were the file notes of the applicant’s legal representatives and communication with their own client. The Judicial Registrar obviously declined to exercise the discretion to permit fresh evidence in the review of the Costs Registrar taxation. In any event, the applicant’s file could not be classified as fresh evidence as it was produced at the original taxation before the Costs Registrar. Further, there were no grounds specified in the Review that would have necessitated the examination of any document on the applicant’s file.
[4]Paragraph 12(m) of the reasons.
This concludes the relevant history that precedes the two matters to be considered now. The first matter is the Notice of Review (‘Review’) of the Judicial Registrar’s dismissal of the review of the Costs Registrar pursuant to Rule 63.56.4 of the Supreme Court(General Civil Procedure)Rules 2015. The Review was filed on 28 March 2018 in the names of both respondents but in reality the second respondent is the only one to participate. The second matter for determination is a Summons filed on 6 February 2018 (‘Summons’) seeking that the entire proceedings in the Costs Court (ie, the Summons for Taxation) be dismissed because of the alleged breach of overarching obligations contained in the Civil Procedure Act 2010. The respondents rely on affidavits of the second respondent sworn 11 January 2018 (‘first affidavit’) and 5 February 2018 (‘second affidavit’) in relation to the Summons and an affidavit of 15 August 2018 (‘third affidavit’) in relation to both the Review and the Summons. There are also written submissions dated 13 August 2018 (‘Submissions’) relied upon in relation to both the Review and the Summons.
Turning to the relief sought in the Review[5] the respondents outline the following orders they seek:
1.The orders No 1 made in the Costs Court by Judicial Registrar Gourlay on 14 March 2018 and the reasons for judgments be set aside.
2.Notice of Review is reinstated AND/OR
3.Taxation of costs sought by Waybecca Pty Ltd by the summons for Taxation of costs of 29/06/2017 is set aside AND/OR
4.The original case is referred back to the COA for a determination of an appeal as to the costs orders given in the proceeding AND/OR
5.Respondents’ substantive appeal in the COA to be reinstated AND/OR
6.The respondents are granted under the Australian Constitution for the question of a miscarriage of justice and abuse of process by the applicant instituting original vexatious actions without a due cause at the Magistrates Court of Vic. at Dandenong to be heard and determined in the proper court of law before the Applicant’s Summons for taxation of costs is allowed to be filed.
[5]Review dated 15 November 2017 - page 11.
The Submissions[6] seek different orders as follows :
1.That Richard Giza is given leave to appoint his disability advocate Stanislawa Bahonko to speak for him, the right given to him in the International Convention on Rights of People with Disabilities.
2.That costs claimed by Waybecca and his lawyers against Richard Giza and Joseph Vella are disallowed for the failure of the applicant’s and his lawyers to comply with the overarching obligations under the Civil Procedure Act 2010 Vic. as per established authority.
3.That Waybecca Pty Ltd pays Richard Giza who is since 13 April 2016 the sole owner of the Unit 34 for usage of his property for parking for 6 years the sum of $30,000.
[6]Submissions dated 13 August 2018 – page 2.
The jurisdiction of the Costs Court is contained in the Supreme Court Act 1986. Section 17D prescribes the parameters. In brief the jurisdiction is the quantification of recoverable costs of parties pursuant to orders made in legal proceedings and the review of costs chargeable by lawyers as provided for by the Legal Profession Act 2004 and Legal Profession Uniform Law (Victoria). There is no jurisdiction to entertain any proceeding or counterclaim in relation to money sought against the applicant (see paragraph 3 in the Submissions) that does not arise from costs orders made in legal proceedings by Courts or VCAT.
The Supreme Court Act 1986 also provides that the jurisdiction is to be exercised with as little formality or technicality and with as much expedition as that Act or Rules allow. Although Ms Bahonko was technically a ‘McKenzie friend’ she describes herself as a ‘disability advocate’. I was prepared to allow her to address the Costs Court on this occasion in the interests of expedition given the fact that she had prepared all the second respondent’s documentation. The Review states that the second respondent suffers from various disabilities and the ’McKenzie friend’ has acted since June 2014 in all previous proceedings before the Magistrates’ Court, Supreme Court and Court of Appeal and ‘prepared all the paperwork for the respondents in this matter’.[7] The second respondent confirmed at the hearing on 16 August 2018 that he adopted and consented to the written material filed on his behalf and that he was content for Ms Bahonko to prepare documents and speak on his behalf in spite of a reference in his third affidavit to her having a possible ‘cerebral aneurysm’.[8]
[7]Paragraph 5 on page 2 of the Review.
[8]Paragraph 7 of the third affidavit sworn 15 August 2018.
The Rules provide that the Review must state each item in the bill sought to be reviewed and the concise ground of objection.[9] On review the Costs Judge can confirm, set aside or vary the order or make such further order as may be necessary. The onus is on the objecting party to demonstrate errors in rulings made in relation to items in the bills.
[9]Rule 63.56.4(4).
Here, the Review consists of an eleven-page document making a range of accusations and submissions, most of which are irrelevant, have no merit or seek orders I have no power to make. These will be dealt with below. All items in both bills are objected to based on these broad objections. These will also be dealt with below.
There are some grounds that are capable of consideration that can be distilled down as relating to some specific items in the second bill (Court of Appeal) and there is objection to the taxation proceeding in relation to the Court of Appeal order on the basis that it was interlocutory. These will be dealt with first.
The specific items objected to in relation to the second bill are a block of 55 items in total and relate to all dealings between the applicant’s lawyers and Court of Appeal personnel. Their conduct is said to be corrupt as they provided undue assistance to the applicant’s lawyers and this is said to form the basis of a complaint to IBAC.[10] The remaining objections in relation to these items are not relevant to the work performed.[11]
[10]Page 2 of the Review at paragraphs 6 to 8 and paragraph 20 on page 4.
[11]Page 3 of the Review at paragraphs 9 to 12.
The second group of 50 specific items objected to in the second bill relate to ‘perusal of orders and documents.’ The global objection is that perusal is part of wages[12] and the charges are excessive for ‘reading 2 minutes of a standard order’.[13] However, the perusal of documents is a specific item in the Supreme Court Scale[14] and the allowance is to be calculated on the basis of the length of documents. There is specific objection to item 225 claimed at $57.20. This was in fact reduced on taxation to $19.20 as a receiving and filing item. Items 231 and 228 are for perusal of an amended order and to a letter from the first respondent to the Court of Appeal. The amendment to the order was made by that Court. Both these allowances are reasonable.
[12]Paragraphs 13 to 18 on page 3 of the Review.
[13]Paragraphs 16 and 17 on page 3 of the Review.
[14]Item 8 in the Scale.
The Court of Appeal order was not an interlocutory one. The order was a self- executing one which provided for the dismissal of the proceeding in that Court in the event of security not being provided. That is in fact what occurred. The submission is made that the order was invalid ‘as it contravenes the Australian Constitution and relevant law’.[15] That submission is disingenuous as an application for special leave to appeal that decision has already been refused by the High Court in Giza v Waybecca Pty Ltd.[16]
[15]Paragraph 37 on page 5 of the Review.
[16](2016) HCASL 314.
Turning now to the submissions contained in the Review document referred to in paragraph 21 above, every item in the second bill is objected to on the basis of conduct of all the cases in the Magistrates’ Court, Supreme Court and Court of Appeal by the applicant’s lawyers. A breach of a duty to make disclosure in relation to the underlying facts surrounding a deed and contract of sale is alleged.[17] The Costs Court is not able to consider the factual matrix underpinning the initial cause of action. That is considered by those Courts in the successive unsuccessful appeals. The Costs Court merely quantifies the work performed in the litigation as against the relevant scale and determines if the work and times claimed are reasonable. Orders for the liability for those costs have already been made and it is not open to the Costs Court in this proceeding to revisit the merits of the making of the orders or any counterclaim as outlined in paragraph 18 above.
[17]Paragraphs 1 and 2 of the Review on pages 1 and 2.
The third affidavit consists of nine paragraphs. Paragraphs numbered 1 to 4 seek to revisit the underlying controversy that was the subject matter of the Magistrates’ Court proceedings, the continued utilisation of his car park and disappearance of his vehicle. The remaining paragraphs numbered 5 to 9 deal with perceived issues surrounding dealings with the registry, statements made by a judge in the Court of Appeal and injuries sustained by Ms Bahonko arising from a bus accident on the way to the registry. None of these issues are relevant to the decisions to be made in relation to the Review and the Summons.
Every item in the second bill is objected to on the basis that the costs in the bill exceed the security for costs figure set by the Court of Appeal.[18] Figures set in the security for costs application are estimates projected forward with a discount component. The actual costs after the event are invariably greater. There is no reason to disallow all items on the basis that the total exceeded the security amount identified by the Court of Appeal.
[18]Paragraphs 3 and 4 on page 2 of the Review.
The respondents also claim costs for the work performed by the ‘McKenzie friend’ in all proceedings including the Magistrates’ Court.[19] That individual is described by the respondents as a ‘retired voluntary nurse.’[20] There is no power to do so or basis for an entitlement in any event.[21]
[19]Paragraph 5 on page 2 of the Review.
[20]Paragraph 51 on page 6 of the Review.
[21]Cachia v Hanes (1994) 17 CLR 403 at 409-410.

Every item in the first bill is objected to on the basis of the general assertion they were excessive having regard to the nature of each of the proceedings before the Associate Judge, Judge and Court of Appeal.[22] The claims for costs are described as ‘fraudulent’, intended to ‘intimidate’ and the Summons for Taxation should be dismissed a result of ‘demonstrated criminal conduct’ by the applicant.[23] The Costs Registrar has also been singled out and named as demonstrating ‘plain corrupt conduct’.[24] There is no basis for these scurrilous accusations.
[22]Paragraphs 19, and 21 to 24 of the Review.
[23]Paragraph 25 of the Review.
[24]Paragraph 19 on page 4 of the Review.
Broad general objections previously made are maintained which are repetitive and have no basis. Namely, that all items be disallowed as they relate to the applicant and issues between the applicant’s lawyers and the applicant’s director.[25] The underlying themes of illegality, miscarriage of justice, the constitution, deception, extortion, failure to provide a duty lawyer, failure to refer to a psychologist’s report, demonstrated bias, bad faith, abuse of power, procedural fairness, and natural justice are maintained and repeated.[26] I do not propose to deal with each and every paragraph raised. What follows are comments on the significant general categories.
[25]Paragraph 27 on page 5 of the Review.
[26]Paragraphs 31, 32, 33, 37, 39 and 40 on page 5, paragraphs 55 to 62 on pages 6 & 7, paragraphs 63 to 70 on pages 7 & 8, and paragraphs 9 on page 11 of the Review.
There are allegations the respondents are entitled to damages,[27] that the applicant has derived a financial benefit from the land being the subject of the original litigation,[28] and that the applicant acted vexatiously by commencing and then defending all the appeals in the knowledge the respondents had no assets.[29] All these are baseless and irrelevant.
[27]Paragraphs 71 & 72 on pages 8 and 9 of the Review.
[28]Paragraphs 75 & 76 on pages 9 and 10 of the Review.
[29]Paragraphs 73 & 74 on page 9 of the Review.
The Submissions referred to in paragraph 15 and 17 above again seek to impugn what occurred, and the decision, in the Magistrates’ Court proceeding and the conduct of the applicant’s lawyers both in that court and in the deceptive conduct that led to the security for costs order in the Court of Appeal. Reference is also made to the bus accident and the alleged bias of the Judicial Registrar.
The demonstrated actual bias allegedly perpetrated by the Judicial Registrar is said to be represented by her finding that the Court of Appeal order was final,[30] that the role of the ‘McKenzie friend’ was necessarily restricted, and that her status as a vexatious litigant, having been made in a corrupt declaration by a Judge of ‘Irish origin,’ was taken for granted because of ‘her own background’ and demonstrated ‘racial prejudice’.[31] Again these are baseless. In particular the Judicial Registrar dealt with the role of a ‘McKenzie friend’ in her reasons.[32] There was no unjustified restriction of the individual exercising that role.
[30]Paragraphs 1, 5 & 6 on page 10 of the Review.
[31]Paragraph 2 on page 10 of the Review.
[32]Paragraphs 3, 4, & 15 to 20 of the reasons published 14 March 2018.
The applicant elected not to participate in the review hearing before the Judicial Registrar (other than a written submission) or before me. This is not surprising. The applicant was successful in the Magistrates’ Court and has been required to defend numerous costly unsuccessful applications made by the respondents before Lansdowne AsJ, Hargrave J (as he then was) and the Court of Appeal. In oral submissions at the hearing on 16 August 2018 it was put on behalf of the respondents that the applicant’s non-participation in the Review and Summons amounted to a breach of the Civil Procedure Act by failing to prosecute the matter up until completion. The non-appearance by the applicant to the applications by the respondents does not amount to a concession as to merit. The respondents bear the onus to establish the merits of these two matters.
In oral submissions it was also put that the second respondent should not have been deprived of his property given his disability and that he was disadvantaged at all stages due to that disability, and that he should not have been penalised by costs orders. Again, it is not open for this court to revisit the merits of costs orders made.
Issue was also taken in oral submissions with the refusal by the Judicial Registrar at the call over of the Review on 6 December 2017 to order the applicant to produce documents in contrast to the manner other matters were dealt with. Orders for production of documents are made at call overs as a matter of course in reviews initiated by clients of law practices under the Legal Profession Act 2004 and Legal Profession Uniform Law 2015. Orders for production of documents are not made in matters where a party and party matter has been taxed before a Costs Registrar when those documents were present and capable of inspection and the review of that taxation is initiated.
In oral submissions before me significant emphasis was placed upon alleged breaches of the Civil Procedure Act 2010 arising from what occurred in the Magistrates’ Court proceeding. These include a failure to negotiate, absence of a mediation, failure of the applicant’s legal team to cease to act when there was no legal foundation for the proceeding, and refusal of an application for a rehearing.
The respondents clearly have no intention and/or ability to pay any of the costs orders. The Court of Appeal proceeding was dismissed because of a failure to provide security for costs as ordered. This is confirmed in the current Review document filed 28 March 2018. The following statement appears:[33]
Respondents either solely or jointly have no capacity to make payments to the Applicant & will not have such capacity in the forcible (sic) future, making Enforcement of costs without legal validity and unenforceable, thus Taxation of Costs losing its purpose and any legal meaning.
(a)Joseph Vella is aged pensioner with ill health without assets and about ½ million dollars of private debts.
(b)Richard Giza is a disability Pensioner aged 62 without assets and with private debts estimated at about ½ million dollars.
(c)Both pensions are below poverty level and no dollars can be taken out of them.
(d)Futility of making costs enforcing orders of the Costs Court.
(e)Applicant substantially contributed to the destruction of respondents’ public company with losses amounting to millions of dollars’.
[33]Page 10 of the Review.
It is of note that the Court of Appeal found that the allegation in paragraph (e) of this statement is unfounded.[34]
[34]See paragraph 19 in Giza v Waybecca Pty Ltd (2016) VSCA 184 quoted at paragraph 3 above.
It is clear from the reasons of the Judicial Registrar that the ‘McKenzie friend’ has been unhelpful to the respondents’ cause and has failed to understand the processes involved.[35] The extent to which the Review, affidavits and Submissions contain matters that cannot be considered in this jurisdiction confirms that conclusion of the Judicial Registrar. Throughout the course of this matter helpful information and directions contained in orders referencing the Rules and proper format of any notice of objection and review have been ignored with significant focus being maintained on irrelevant matters and global objection to any and all costs claimed. It is fortunate in the context of this matter that the Costs Registrar in the first instance undertook the taxation task diligently by scrutinising the applicant’s claims and reducing the bills to the benefit of the respondents in the manner outlined in paragraph 10 above.
[35]Paragraphs 20 & 21 - Judicial Registrar’s reasons (14 March 2018).
In summary, in addition to raising general objections which raised irrelevant matters, the respondents have failed to demonstrate that there were any errors made in the rulings and allowances made by the Costs Registrar in relation to items in the bills. The Judicial Registrar considered the items in the bill where specific objection had been taken to those items as part of the review. The Judicial Registrar’s analysis of the specific items in the first bill is contained in paragraphs 26 (i) to (xiv) of her reasons. The analysis of the specific items in the second bill are contained in paragraph 30(a) to (h) in her reasons.
No reviewable error arises from the published reasons of the Judicial Registrar and it should be dismissed on that basis. Having considered them I cannot find fault with the analysis and reasoning.
Turning now to the Summons (filed on 6 February 2018) to have this entire Costs Court proceeding dismissed due to alleged breaches of the Civil Procedure Act 2010 (‘the Act’) by the applicant and/or its legal representatives.
The first two affidavits in support sworn by the second respondent are relied upon. The first, sworn 11 January 2018, relies on the failure to comply with the Notice to Produce in this proceeding[36] and the applicant’s conduct in commencing the Magistrates’ Court proceeding.[37] The second affidavit relies on statements allegedly made in the mediation in this proceeding which cannot be the subject of evidence,[38] the applicant’s conduct by claiming costs in the Court of Appeal matter when no appeal has occurred, and finally the applicant’s failure to participate in the review process initiated by the respondents.
[36]Paragraph 4 of the affidavit.
[37]Paragraph 5 of the affidavit.
[38]Section 24A Supreme Court Act 1986.
The Act defines ‘Court’ to be the Supreme Court, County Court and Magistrates’ Court.
The Act imposes numerous obligations on parties and their legal representatives. Part 2.4 of the Act contains sanctions for breaches of overarching obligations. Section 28 enables a Court to take them into account in exercising any power in relation to a civil proceeding.
Section 29 outlines a number of possible orders in relation to costs, expenses or compensation as options for sanctions. There are also options to order that steps be made to rectify breaches, that a party not be permitted to take a step in the proceeding and ‘any other order that the court considers to be in the interests of any person prejudicially affected by the contravention’. Section 29(3) states that ‘This section does not limit any other power of a court to make any order, including any order as to costs’.
Section 30 prescribes the process for the initiation of any application for an order under section 29. Section 30(1)(a) states that it is to be made ‘in the court in which the civil proceeding was, or is being, heard’.
The application must be made before finalisation of the proceeding[39] although there is the option of an extension of time application if the contravention was not known until after the finalisation of the proceeding.[40]
[39]Section 30(2).
[40]Section 31(1) and (2).
The second respondent’s second affidavit in support makes allegations that relate to conduct that occurred in the Magistrates’ Court proceeding, in the trial division proceeding in the Supreme Court and also the Court of Appeal proceeding. None of these allegations can be dealt with by the Costs Court in this taxation proceeding given the provisions of the Act outlined in paragraphs 49 and 50 above.
In relation to breaches alleged to have occurred in this proceeding the allegation is that the applicant’s lawyers failed to produce their file pursuant to a Notice to Produce. The file however was produced at the taxation hearing, and the second respondent elected to leave the hearing thus denying himself the opportunity to inspect it, and participate in the taxation where the file was scrutinised by the Costs Registrar and rulings made in relation to items claimed in the bill of costs. As outlined in paragraph 14 above, for the Notice to have any effect, leave had to be given by the Judicial Registrar for the respondents to adduce fresh evidence and no such leave was given. The applicant’s file did not constitute fresh evidence in any event. The other alleged breach is the failure of the applicant to participate in the Review before the Judicial Registrar. The applicant did participate in the Review before the Judicial Registrar by filing the submissions dated 6 February 2018. There was no obligation on them to appear as the respondents initiated the Review and they had the burden of proof.
There are no grounds to find breaches in the conduct of the Costs Court proceeding that would justify dismissing the proceeding. The Cost Court’s function is to quantify costs orders already made in these other proceedings. Any application to extend time to make application for sanctions for breaches that are alleged to have occurred in the conduct of those other proceedings (but were unknown at the time of finalisation) are made in those proceedings.

The Review filed 28 March 2018 and the Summons filed 6 February 2018 are dismissed.

[2018] VSC 492

10 September 2018