This is an application for a certificate pursuant to s 6 of the Suitors' Fund Act 1951 (NSW) (the Act) with regard to the costs of an appeal from the Local Court in its civil jurisdiction. The appeal was heard before me on 17 March 2016, and my judgment upholding the appeal was delivered on 22 April 2016.
The relevant provision is as follows:
6 Costs of certain appeals
(1) If an appeal against the decision of a court:
(a) to the Supreme Court on a question of law or fact, or
(b) to the High Court from a decision of the Supreme Court on a question of law,
succeeds, the Supreme Court may, on application, grant to the respondent to the appeal or to any one or more of several respondents to the appeal an indemnity certificate in respect of the appeal.
The application is brought by Sur Holdings Pty Ltd (Sur), which was the plaintiff in the Local Court, the successful respondent to a motion in the Local Court, and the unsuccessful respondent in the appeal before me. For ease of comprehension of the reader, I shall refer to the moving party before me as Sur.
B & B Enterprise (Aust) Pty Ltd (B&B) was the defendant in the Local Court, the unsuccessful applicant on the motion in the Local Court, and the successful appellant before me. Again, for ease of comprehension, I shall refer to that party simply as B&B.
Counsel for B&B was present at the hearing of the application for the certificate, but only as an interested observer.
Background
I shall not recount the background of this matter in any detail; recourse should be had to my judgment in B & B Enterprise (Aust) Pty Ltd v Sur Holdings Pty Ltd [2016] NSWSC 490.
Suffice to say that Sur sued B&B in the Local Court of New South Wales by way of a statement of claim with regard to council rates that Sur claimed that it had paid but that should have been paid by B&B. In due course, Sur obtained a default judgment against B&B. B&B became aware of the default judgment, and thereafter filed a notice of motion in the Local Court seeking to have that default judgment set aside.
At the hearing of the motion in the Local Court at Tenterfield on 26 August 2015, each party was represented. Recourse to the transcript of that hearing (which was placed before me in evidence on the appeal) demonstrates that the lawyer then appearing for Sur made submissions in resistance to the motion to set aside the default judgment (see particularly at T 2.25-50).
At the end of the hearing, the learned Magistrate dismissed the motion of B&B and refused to set aside the default judgment.
On the hearing of the appeal before me on 17 March 2016, B&B submitted that an error of law had been committed by the learned Magistrate. That proposition was diligently and firmly resisted by counsel then appearing for Sur (who did not appear for Sur in the Local Court, but who did appear before me on the hearing of this application). The appeal called for the tender of a substantial amount of documentary evidence; as well as that, extensive written and oral submissions were received from both parties.
As I have said, having reflected on the matter, I upheld the appeal, set aside the default judgment and made certain ancillary orders. Amongst those was that, in accordance with the usual approach of costs following the event, Sur (having failed to succeed in the proceedings before me) must pay its own costs and those of B&B with regard to the appeal.
Submissions of the applicant
It was made clear in the present application that it pertained only to the costs of the appeal, not to any costs incurred in the Local Court.
Counsel for Sur submitted that, his client having lost an appeal founded upon an asserted error of law at first instance, it was open to my discretion, pursuant to the Act, to order that his client be reimbursed with regard to the costs order that I made on 22 April 2016.
His submission was that analysis of case law shows that the fact that his client firmly opposed the motion in the Local Court, and firmly opposed the success of the appeal in this Court, is by no means a barrier to a certificate being granted. He submitted that at neither stage did his client make submissions that were "irresponsible, improper or baseless" (to use the words of R v Hookham (No 2) (1993) 32 NSWLR 345 at 346), and that, in all of the circumstances, not only would it be open to my discretion to grant a certificate but indeed that I should do so.
He submitted that a certificate was usually granted as a matter of course to a respondent in a successful appeal on an error of law, and that there must be the presence of a disentitling factor to warrant the withholding of a certificate in the exercise of the Court's discretion. He submitted that there was no such disentitling factor in this case.
In short, he submitted that my discretion was enlivened in the circumstances of this case, and that it should be exercised in favour of his client.
For obvious reasons, counsel for B&B was not invited to make submissions on the application, and did not do so.
Determination
Turning to my determination, analysis of case law (including but not limited to those authorities to which I was invited by counsel for Sur) leads me to respectfully reject the submission of counsel for Sur. I shall discuss the cases that I have considered broadly chronologically.
The decision in Mir Bros Developments Pty Ltd v Atlantic Constructions Pty Ltd (1985) 1 NSWLR 491 (which was relied on by counsel for Sur in oral submissions) states at p 494 that the purpose of the section in the legislation is:
The relief of a party who incurs or becomes liable for costs not through his own decision or conduct but because of some error of law of the court appealed from.
[emphasis added]
The focus of that case was interpreting whether there was a "decision" as defined in the legislation; whether an appeal from the Supreme Court to the Court of Appeal was a decision of a "court" as defined; whether the appeal was on a question of law; and whether an indemnity certificate should not have been granted by reason of a corporate disqualification. But it was said at p 499 that the issuance of the certificate is "a matter for the discretion of the court", in line with the purpose of the Act being "to protect litigants who, for no fault of their own, would otherwise suffer the burden of costs by reason of what are found to be legal errors of subordinate courts" [emphasis added].
The decision of R v Hookham (No 2) outlines the following principles at p 346 in relation to the issuing of a certificate under the Act:
Absent the power given by the Act, the court would ordinarily order an unsuccessful respondent to pay the costs of the appeal and leave the respondent to bear the respondent's own costs. The Act gives the court the power to change this otherwise ordinary outcome of a successful appeal.
The reasoning behind the Act must be to the general effect that the court system, in what has happened prior to the appeal being upheld, has made a mistake and that there will be at least some circumstances in which cost caused by the fault of the system should not be visited on the respondent.
In light of this, it is possible to see how discretion should be exercised in some obvious cases. In a case for example where the respondent had succeeded below only because the court below erroneously took a view of law or the facts which the respondent had not put to the court, there could be no reason for withholding exercise of discretion in favour of granting the certificate. At the other end of the scale, if counsel persuaded the court below to act upon the basis of a decision which have been overruled, it could be said that it was not the system that had been the main cause of the mistake, but the respondent. Discretion would then be exercised against the respondent.
[emphasis added]
It was recognised in that decision that the facts did not fit into either obvious case, and the proceedings were in the nature of a test case in which the issues were "not so clear that any blame can be attached" in relation to arguments put in the court below. In that case the court exercised the discretion to issue a certificate.
In the decision of Robinson v Zhang [2005] NSWCA 439; (2005) 158 A Crim R 575 (which was relied on by counsel for Sur in his oral submissions) it was said at [38] that:
Where the power is available, a certificate is usually granted as a matter of course, in the absence of particular considerations which would warrant withholding a certificate in the exercise of the Court's discretion.
Although it was said that there were "no such circumstances in this case", the decision does not outline the circumstances in which a certificate will and will not be given, and instead simply provides an example of the exercise of the court's discretion to issue the certificate. In those circumstances, I consider that Robinson v Zhang must be read in the context of what was said in Mir Bros Developments Pty Ltd v Atlantic Constructions Pty Ltd and R v Hookham (No 2).
The recent decision of DPP v Bignill [2015] NSWSC 870 identified and applied the principle in Mir Bros Developments Pty Ltd v Atlantic Constructions Pty Ltd with regard to the underlying purpose of the legislation at [12]. Adamson J went on to state at [13] - [14] that, in that particular case:
[13] … the defendant nonetheless chose, in this Court, to oppose the setting aside of the Magistrate's order dismissing the charge and thereby caused the plaintiff to incur substantial additional costs over and above what would have been incurred had the appeal not been opposed. In these circumstances, the defendant was no hostage to fortune; rather, he ought be held to be responsible for what has occurred because he is bound by the conduct of his legal representative.
[14] I do not consider it appropriate in these circumstances to certify for the (albeit limited) recoupment of the costs out of a public fund.
[emphasis added]
Counsel for Sur also referred me to the recent decision of Adamson J in Sargeant v HE & FG Campbell Agricultural Machinery Repairs [2016] NSWSC 544, in which a certificate was issued. The entirety of the paragraph addressing the question of a certificate is at [76], and is as follows:
[Counsel for the respondent in the appeal] indicated that if the appeal were to be allowed, he was instructed to seek a certificate under s 6(1) of the Suitors' Fund Act 1951. I am persuaded that it is appropriate to issue a certificate in the present case. Although the irregularities in the pleading (which led, in my view, to the judgment being irregularly given) were the responsibility of his clients, the conduct of the hearing of the Magistrate was not influenced in any material respect by their legal representative, since the debate was almost entirely between [the legal representative for the opposing party] and the Magistrate. Almost no contribution to that exchange was made by [the legal representative who appeared in the Local Court], who appeared for the business name.
[emphasis added]
It is true that each one of those decisions must turn on its own facts (and no doubt there are countless others that can be located). But, to my mind, the authorities establish that the underlying rationale of such a certificate is to reimburse a party for its costs when they have been incurred due to a curial error in which that party played little or no part.
As I have shown, the focus of the case law is often on the behaviour of the legal representatives in the court below, and whether the party seeking the certificate played a role in the Magistrate or Judge at first instance falling into error. And consideration of the transcript of the application before the Magistrate to set aside the default judgment against B&B shows that the lawyer then appearing for Sur resisted the motion, and did play a role in the learned Magistrate falling into error. In saying that, I make not the slightest criticism of that advocate; I simply do so to demonstrate that here there was no question of a curial error having been made without the input of the lawyer for Sur.
As for the appeal, as I have said, it was firmly and diligently resisted by counsel for Sur. A stark contrast may be drawn between this case and cases such as Director of Public Prosecutions (NSW) v Richardson [2015] NSWSC 1753, in which the respondent conceded in the appeal that the appeal must be upheld on each of the grounds propounded by the appellant.
In short, I do not consider that this matter, when its forensic history is considered as a whole, gives rise to the circumstances in which the Act (as illuminated by decisions of the New South Wales Court of Appeal, the New South Wales Court of Criminal Appeal, and single judge decisions of this Court) envisages that my discretion would be exercised in favour of the application. And the undoubted fact that nothing wrongful (in the sense discussed in R v Hookham (No 2) at p 346) was said on behalf of Sur at first instance or on appeal is by no means determinative of the question.
If I am wrong in coming to that view, and my discretion is indeed enlivened, in the circumstances that I have outlined I would nevertheless decline to exercise it.
Costs
As I have said, counsel for B&B was present as an observer only. In those circumstances, each counsel explicitly agreed that, whatever the outcome of the application, I should make no order as to costs. I accept that joint submission.
Order
Accordingly, I make the following order:
1. The application for a certificate pursuant to s 6 of the Suitors' Fund Act 1951 (NSW) is refused.
[3]
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Decision last updated: 15 June 2016