Appellant v Respondent

Supreme Court of Victoria|2014-06-25|Before: Croucher J

PRACTICE AND PROCEDURE - Costs - Successful appeal from order of Associate Judge refusing application for leave to appeal from decision of Victorian Civil and Administrative Tribunal - Successful appeal (separately heard) from Tribunal's decision - No appeal against Associate Judge's costs order against appellant - Whether that costs order must be appealed separately before appellant's costs of hearing before Associate Judge may be allowed - Whether appellant's costs of application before Associate Judge and of appeal against her Honour's order refusing leave to appeal should be apportioned on account of abandonment of several grounds, recasting of appellant's case and loss of hearing time necessitating unnecessary expense for respondent - Whether costs of senior counsel and two junior counsel should be allowed - Whether respondent entitled to indemnity certificate under s 4 of the Appeal Costs Act 1998 (Vic).

1 On 10 December 2013, I allowed an appeal by Jade Applebee against a decision of the Victorian Civil and Administrative Tribunal ("the Tribunal") confirming a declaration by the respondent that Ms Applebee's dog Kerser was a "restricted breed dog". I set aside the Tribunal's decision and remitted the matter to the Tribunal, differently constituted, to be heard and decided afresh.[1]

2 On 18 December 2013, I heard submissions from counsel on the question of costs. The answer to that question was not as simple as it might seem at first blush. In the end, the proceeding involved three separate but related hearings in this Court - one before an Associate Judge and two before me - out of which five issues have arisen on the question of costs. Before addressing those issues, I shall set out a brief chronology of, and some of the detail surrounding, the hearings in this Court.

Application for leave to appeal before Associate Judge

3 On 3 April 2013, the Tribunal affirmed the respondent's declaration that Kerser was a "restricted breed dog" and published reasons for that decision.[2]

4 On 16 May 2013, the Associate Judge heard the appellant's application for leave to appeal against the Tribunal's decision. On 29 May 2013, her Honour refused leave to appeal and published reasons for her decision.[3]

5 On 13 June 2013, her Honour published reasons for rejecting the appellant's submission that there should be no order for costs and accepting the respondent's submission that the appellant should pay its costs.

6 On 14 June 2013, the orders refusing leave to appeal and directing the appellant to pay the respondent's costs of the application were authenticated.

7 In the draft notice of appeal and in written submissions filed and served ahead of the hearing before the Associate Judge, counsel for the appellant agitated four grounds of appeal. Counsel for the respondent filed and served detailed submissions in response ahead of the hearing. A fifth ground of appeal was not added until the hearing, although it is fair to say that the substance of that complaint was mentioned in the appellant's written submissions under cover of another ground. All grounds were rejected. A variant of the fifth ground was one of the bases on which leave to appeal was subsequently granted and on which the appeal ultimately succeeded.[4]

8 On 6 and 7 August 2013, I heard the appellant's appeal against the Associate Judge's decision to refuse leave to appeal. On 6 September 2013, I allowed that appeal, set aside the Associate Judge's order, granted leave to appeal against the Tribunal's order upon some grounds but not others and published reasons for my decision.[5]

9 In the notice of appeal and in the written submissions filed ahead of the hearing of the appeal, counsel for the appellant identified nine grounds of appeal. During the hearing, the argument on behalf of the appellant developed somewhat. The grounds of appeal were reduced to five in number. Some of the points the respondent had addressed in written submissions were no longer pursued. Again, counsel for the respondent had filed and served detailed submissions in response to all nine grounds ahead of the hearing.

10 Aspects of the revised grounds had not been taken before the Associate Judge and were not contained in the original notice of appeal from her Honour's decision, although these revised grounds included points that succeeded on the appeal against the Associate Judge's order and on the ultimate appeal.[6] Counsel for the appellant were directed to file and serve an amended notice of appeal against the order of the Associate Judge and an amended draft notice of appeal against the order of the Tribunal to reflect the grounds and questions of law raised in oral argument. The matter was stood down so that this might be done. Time was lost. The matter had been listed for a day but ended up taking two days. Counsel for the respondent drafted additional notes in response to the revised grounds which he handed up and spoke to on the second day of the hearing.

11 As indicated earlier, on 10 December 2013, I allowed the appellant's appeal against the Tribunal's order and published reasons for my decision.[7]

12 During the hearing of the earlier appeal against the Associate Judge's order, I raised the question whether the argument on that hearing could be treated as if it were also the argument on the hearing of any appeal against the Tribunal's order, so that a separate hearing would be avoided in the event that I came to the view that the appeal against the Associate Judge's order should be allowed and that leave should be granted to appeal the Tribunal's order. The parties filed written submissions on the point. The appellant submitted I should take the suggested course. The respondent disagreed and submitted there should be a separate hearing.

13 Ultimately, I acceded to the respondent's submission. Among the reasons for taking that course was that one of the grounds on which leave to appeal was granted was raised for the first time during the hearing of the appeal against the order of the Associate Judge, so that the respondent did not have a great deal of time to respond to it. Another reason was that the respondent indicated it would seek to put transcript of the hearing at the Tribunal before the Court on an appeal and that such transcript may be material to the determination of any such appeal. As it happened, no such transcript was placed before me on the subsequent appeal.

14 Originally, the appeal against the Tribunal's order was listed for oral hearing on 18 October 2013. But, by agreement between the parties, the matter ultimately was heard on the papers, with the parties filing additional submissions on the grounds and questions of law that had been the subject of a grant of leave to appeal.

15 The first issue concerning costs is whether it is open to order that the respondent pay the appellant's costs of her initially unsuccessful application before the Associate Judge in circumstances where the appellant did not separately appeal the order that she pay the respondent's costs of that application.

16 Mr Connor, who appeared for the respondent, submitted that the combined effect of s 17A(2) of the Supreme Court Act 1986 (Vic) and rules 77.06.2(3) and (6) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) is that, "if a prospective appellant wishes to appeal a costs order made by an Associate Judge, an application for leave is required within 14 days of the order being made". Mr Connor also pointed out, however, that the Court may extend time under rule 77.06.2(3) at any time; and that it would be open to do so, grant leave to appeal and reverse the costs order in this case.

17 Mr Klotz, who appeared for the appellant, submitted that leave to appeal is not necessary. Rather, he submitted, given that the costs order made by the Associate Judge was a consequential order made to benefit the successful party, such an order could no longer survive when the substantive decision on which the costs order was based had been overturned and the appellant is now the successful party. He submitted that s 17A(2) requires leave to appeal a costs order only where that party seeks to appeal a costs order alone[8] or where that party's appeal brought on the merits as of right fails.[9] He also submitted that, if leave were required to appeal a costs order despite a successful appeal against the substantive order upon which the costs order was based, anomalous cases may arise in which the costs order might not be the subject of grant of leave because there was thought to be no error in the exercise of the discretion as to costs.

18 In my view, Mr Klotz's submissions should be preferred. He is correct in submitting that, because the costs order was consequential upon a decision that has now been reversed, that order can no longer stand. Accordingly, I do not consider leave is required to appeal the costs order made by the Associate Judge. In my view, that order should be set aside and in its stead, subject to a qualification to be discussed shortly, I shall order that the respondent pay the appellant's costs of and incidental to the hearing before the Associate Judge.

19 I also make clear that, lest I be wrong in that view, I would have extended time in accordance with rule 77.06.2(6), granted leave to appeal the costs order on the ground that the substantive order on which it was based has now been reversed and otherwise made the same order as to costs in favour of the appellant.

Apportionment of costs of the application before the Associate Judge

20 The second issue is whether the appellant's costs of the application before the Associate Judge should be apportioned or reduced in circumstances where the proposed grounds of appeal raised in submissions before the hearing failed and were ultimately not pursued on the subsequent appeal against the refusal of leave, but the respondent had been put to significant unnecessary expense in coming to meet those grounds at the application.

21 Mr Connor submitted that, in the circumstances just described, there should be such a reduction. He pointed out that s 24 of the Supreme Court Act confers a broad discretion on the Court as to by whom, and to what extent, the costs of litigation are to be paid. He referred inter alia to a passage from Ruddock & Ors v Vadarlis & Ors (No 2) (2001) FCR 229 at 234-235[11], where Black CJ and French J said this:

Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:

Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.
A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.

22 Mr Klotz submitted that there should be no reduction in this case. He submitted that a reduction might occur only if an action had failed in part or hopeless points had been taken and/or unreasonable protraction of a hearing had been occasioned by the successful party, none of which occurred here. He also submitted that parties should not be discouraged from pursuing litigation by the risk of not receiving their costs when successful.

23 I do not say that the four points agitated by the appellant were hopeless or should not have been taken, but the fact is they were not pursued ultimately; and yet the fact that they were pressed necessitated what turned out to be a significant amount of unnecessary work on behalf of the respondent ahead of the hearing. On the other hand, the hearing was of course necessary and a variant of the fifth ground, albeit raised at the eleventh hour, did succeed at a later stage.

24 Balancing all matters as best I can, I have determined that the respondent should be ordered to pay only 90 percent of the appellant's costs of and incidental to the application before the Associate Judge.

Apportionment of costs of the appeal against the order of the Associate Judge

25 The third issue raises the similar question whether the costs of the appeal against the Associate Judge's order refusing leave to appeal should be apportioned or reduced in circumstances where several of the grounds raised initially were not pursued but the respondent still had been put to expense in meeting those grounds; and, Mr Connor submitted, where the recasting of the appellant's case caused the appeal to run into a second day.

26 As to the first point, Mr Klotz made submissions similar to those he made in respect of the costs of the hearing before the Associate Judge. As to the second point, he submitted I should not be satisfied that the time lost did cause the matter to run into a second day. Rather, he submitted that it is apparent from the oral argument ultimately advanced by both parties and the issues raised that the matter was always going to spill into a second day of hearing.

27 I accept Mr Connor's submission that there should be some reduction in the appellant's costs on account of what turned out to be unnecessary work the respondent was required to do in attempting to meet points that were ultimately not pursued.

28 I do not accept, however, that the recasting of the appellant's case caused the matter to run into a second day. Having re-examined the transcript of the hearing on 6 and 7 August 2013 and the documents that were filed, I accept Mr Klotz's submission that the matter was always going to spill into a second day.

29 Balancing all matters as best I can, subject to the next point to be made, I have determined that the respondent should be ordered to pay only 90 percent of the appellant's costs of and incidental to the appeal against the order of the Associate Judge.

30 The fourth issue raises the question whether, in respect of the appeal against the Associate Judge's order and the subsequent appeal against the Tribunal's order, the appellant should be entitled to the costs of three counsel - namely, senior counsel and two junior counsel.

31 The appellant accepted, as I do, that this was not the type of case in which the respondent should have to pay for two juniors in addition to senior counsel. To be sure, the case raised matters of importance justifying the briefing of senior counsel. But only one junior was necessary, not two.

32 The fifth issue raised the question whether the respondent can and should be granted an indemnity certificate in respect of costs.

33 In my view, s 4 of the Appeal Costs Act 1998 (Vic) allows for the granting of, and it is appropriate to grant, an indemnity certificate in respect of the appellant's costs the respondent is ordered to pay, and the respondent's own costs, at each stage of the proceeding in this Court.

The costs order announced by the Associate Judge on 13 June 2013 and authenticated on 14 June 2013 is set aside.

The respondent is ordered to pay the following proportions of the appellant's costs of the following stages of the proceeding, including any reserved costs, such costs to be taxed on the standard basis in the absence of agreement:

a) ninety percent of the appellant's costs of and incidental to the application before the Associate Judge for leave to appeal against the order of the Tribunal;

b) ninety percent of the appellant's costs of and incidental to the appeal against the order of the Associate Judge refusing leave to appeal, save that the appellant shall be allowed counsel's fees only in relation to senior counsel and one junior counsel; and

c) one hundred percent of the appellant's costs of and incidental to the appeal against the order of the Tribunal, save that the appellant shall be allowed counsel's fees only in relation to senior counsel and one junior counsel.

Pursuant to s 4 of the Appeal Costs Act 1998 (Vic), the respondent is granted an indemnity certificate in respect of costs at each stage of the proceeding in this Court, including the appellant's costs the respondent is ordered to pay and the respondent's own costs.

[1] Applebee v Monash City Council (No 2) [2013] VSC 680.

[2] Applebee v Monash CC (Review and Regulation) [2013] VCAT 394.

[3] Appleby v Monash City Council [2013] VSC 282. The appellant was incorrectly described in the proceedings before the Associate Judge as "Jane Appleby".

[4] See Appleby v Monash City Council [2013] VSC 282 at [44]- [49]; Applebee v Monash City Council [2013] VSC 481 at [21]- [50]; Applebee v Monash City Council (No 2) [2013] VSC 680 at [28]- [46].

[5] Applebee v Monash City Council [2013] VSC 481.

[6] See Applebee v Monash City Council [2013] VSC 481 at [51]- [79]; Applebee v Monash City Council (No 2) [2013] VSC 680 at [47]- [78].

[7] Applebee v Monash City Council (No 2) [2013] VSC 680.

[8] Giurina v Owners Corporation [2013] VSC 39 at [28] per McMillan J.

[9] Sunland Waterfront (BVI) Ltd & Anor v Prudentia Investments Pty Ltd & Ors [2013] VSCA 237 at [530]- [533] per Warren CJ, Osborn JA & Macaulay AJA.

Court (General Civil Procedure) Rules 2005

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