Judgment
1WARD JA: I agree with Bergin CJ in Eq.
2BERGIN CJ in EQ: On 17 March 2014, leave was granted to the appellant, Kylie Baffico, to appeal from the order of the Judicial Registrar of the District Court dismissing the appellant's proceedings against the respondent, YMCA of Great Lakes Inc. The appeal was allowed and the order dismissing the proceedings was set aside: Baffico v YMCA of Great Lakes Inc [2014] NSWCA 61 (the Judgment). Pursuant to orders made on that day, the parties filed written submissions in respect of the appropriate costs orders to be made for both the appeal and the District Court proceedings (Judgment [96]).
3The appellant contends that the appropriate orders as to costs are:
- The respondent pay the appellant's costs in the Court of Appeal;
- The respondent pay the appellant's costs of the Summons (sic) heard in the District Court on 7 June 2013; and
- Costs of the District Court proceedings otherwise be reserved.
4The respondent contends that the appropriate orders as to costs are:
- Each party pay their own costs of the proceedings in the Court of Appeal; and
- The appellant pay the respondent's costs of the District Court proceedings thrown away in finalising the Rule 15.12 particulars including, but not limited to, the costs of the hearings on 13 February 2013, 29 January 2013, 29 November 2013 (sic) and 6 December 2013 (sic).
Costs in the District Court
5The appellant submitted that this Court should not make any costs orders in relation to the District Court proceedings, save in respect of the proceedings on 7 June 2013. Although the order sought by the appellant refers to a Summons, the process that was adopted by the appellant was a Notice of Motion. An order was sought under Part 36.15 of the Uniform Civil Procedure Rules 2005 (UCPR) setting aside the judgment or order on the basis that it had been made "irregularly, illegally or against good faith" (Red 33). The appellant failed in that application in the District Court and was ordered to pay the respondent's costs.
6In her Notice of Appeal filed on 4 July 2013, the appellant sought to appeal from that judgment and also contended that the Judicial Registrar had erred by failing to give adequate reasons for dismissing the Motion (Ground 5). This Ground was maintained in the Further Amended Notice of Appeal filed on 27 February 2014. The appellant abandoned Ground 5 prior to the hearing of the appeal and on the day of the appeal the appellant abandoned her application for leave to appeal in respect of the judgment of 7 June 2013 (Judgment [21]). There is no basis for disturbing the costs order made by the Judicial Registrar on 7 June 2013.
7In dismissing the proceedings on 5 April 2013 the Judicial Registrar made an order that the appellant pay the respondent's costs of the proceedings. The order dismissing the proceedings has been set aside and the costs order should in the circumstances also be set aside.
8The appellant submitted that the orders made by the Judicial Registrar on 6 December 2012 covered in an unexceptionable way the consequences of the default to that point and required the solicitors for the appellant to address themselves to reasons why they should not be liable rather than the appellant. The orders made by the Judicial Registrar on 6 December 2012 envisaged that on the next occasion the matter was before the Court on 13 February 2013 the appellant's solicitors would address the question of whether a costs order should be made under s 99 of the Civil Procedure Act 2005 (the CPA) that they personally pay any costs that the appellant was ordered to pay [AB 397-398]. This was overtaken by events and the Judicial Registrar did not deal with this matter.
9Under s 99 of the CPA, if it appears to the Court that costs have been incurred "without reasonable cause, in circumstances for which a legal practitioner is responsible" it may order the solicitor "to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs": s 99 (1)(b) and (2)(b)(ii). The solicitor must have a reasonable opportunity to be heard before such an order is made: s 99(2). The Court has "full power to determine by whom, to whom and to what extent costs are to be paid": s 98(1)(b) of the CPA. It will depend on the circumstances of the case, but if warranted the combination of these powers enable the Court to make an order that the solicitors pay the costs directly to the opposing party as opposed to the former client.
10In support of the order it seeks, the respondent submitted that the conduct of the appellant's solicitors in failing to comply with the order made by the Judicial Registrar necessitated the show cause hearings in the District Court and accordingly the costs of the respondent were incurred without reasonable cause.
11The appellant's solicitors' non-compliance with the orders made in the District Court are well documented (Judgment [8]-[10]). The solicitors accepted that the appellant bore no responsibility for that non-compliance (Judgment [15]). The appellant's solicitors were given an opportunity to be heard as to why an order under s 99 of the CPA should not be made (Judgment [90]). The solicitor's affidavit of 11 February 2013 indicated that it was not intended to make any submissions in respect of costs (Judgment [90]) and the appellant's written submissions in the District Court included the following (AB 340):
6. Appropriate Costs Order
6.1 It is submitted that the appropriate order for costs is the plaintiff to pay the defendant the costs of and referrable thrown away in finalising the rule 15.12 particulars including, but not limited to, the costs of 13 February 2013, 29 January 2013, 6 December 2013 (sic) and 29 November 2013 (sic).
6.2 The plaintiff's solicitors make no submissions in relation to a s 99 costs order and are in the court's hands in that regard.
12The appellant's alternative submission in its written submissions in this Court in respect of the appropriate costs order recognised the force in this approach. It was submitted that the appellant's solicitors should be made liable for the costs associated with the show cause hearings "down to 5 April 2013". I agree that this is a just and reasonable order in the circumstances. Those costs will include the costs of the hearings on 29 November 2012; 6 December 2012; 29 January 2013 and 13 February 2013. Otherwise the costs of the proceedings in the District Court should be reserved for consideration at the conclusion of the proceedings in that Court.
Costs of the Appeal
13The appellant submitted that the respondent should pay the costs of the appeal because she was successful and the general rule is that costs follow the event: UCPR 42.1. It was submitted that there is no fact or circumstance that justifies the departure from this general rule. It was submitted that there is greater justification for its application in this instance because the dismissal below was the result of the urging by the respondent that the Judicial Registrar should dismiss the proceedings. I do not think that this submission has force. The fact that a party urges an order to be made at first instance that is set aside on appeal is not an additional reason for costs to follow the event. It is the resistance to the setting aside of the order on appeal that is relevant.
14The appellant also relied in this regard upon what was described as her attempt to obviate the need for the appeal by seeking to have the Judicial Registrar's order set aside on 7 June 2013 (Judgment [20]; Red 33-41). I am of the view that this reliance is neither apt nor helpful. As I have said, the appellant failed in that application in the District Court and then on the day of the appeal abandoned her application for leave to appeal from it in this Court.
15The respondent submitted that the conduct of the appeal by the appellant demonstrates that costs have been unreasonably incurred by the respondent. First it was submitted there was a failure to recognise the requirement for leave which required the Summons for Leave to be filed with an Amended Notice of Appeal. Additional grounds of appeal were added, notification of which was not received by the respondent until 25 February 2014. A Further Amended Notice of Appeal was filed on 27 February 2014. Grounds 4 and 5 of the Further Amended Notice of Appeal were abandoned, notification of which was received by the respondent on 28 February 2014. The White Book was amended on three occasions. Finally the application for leave to appeal from the judgment of the Judicial Registrar of 7 June 2013 was abandoned at the hearing of the appeal.
16The respondent submitted that each of these actions by the appellant required, at least a re-consideration by the respondent of its position; the context of the appeal; and both the appellant's submissions and the judgment of the Judicial Registrar. The alterations to the White Book also required the respondent to consider any additional or deleted material. It was submitted that the combination of these matters meant that the appeal was not in its final form until the Friday before the hearing. This had the consequence that the respondent incurred unnecessary costs in its preparation. In those circumstances it was submitted that each party should pay their own costs of the appeal proceedings.
17I am not persuaded that the respondent's complaints about the changes to the White Book and the late filing of a Summons for Leave impact upon the appropriate order for costs. However I am persuaded that the abandonment of the Grounds of Appeal has an impact on the costs order to be made. Notwithstanding that allocation of percentages of costs is sometimes not appropriate because it may be seen to lack precision, I regard it in this instance as the most cost efficient and fair approach in the circumstances of this case. I am of the view that a fair allocation is a reduction of 20% of the appellant's costs. Accordingly the respondent should pay 80% of the appellant's costs of the appeal as agreed or assessed.
18The orders that I propose are: