Clarke v Fenn

District Court of NSW|2018-12-20|Before: Geoffrey Nettle J, Quarterly J

The application before the court

The plaintiff commenced proceedings for defamation on 10 September 2018 for a slander made by the defendant on 17 September 2015. In my judgment Clarke v Fenn [2018] NSWDC 336, I made orders dismissing those proceedings as follows: 1. Notice of motion filed on 30 September 2018 dismissed. 2. These proceedings are struck out and dismissed. 3. The plaintiff is to pay the defendant's costs. 4. Liberty to apply in relation to costs. 5. Exhibits retained for 28 days.
Pursuant to the liberty granted in order 4 above, the defendant brings an application pursuant to s 98(4) Civil Procedure Act 2005 (NSW) for a gross sum costs order.
The plaintiff does not challenge the making of a costs order against her, or the mechanics of the claim as quantified. Her objections relate essentially to the size of the sum sought, namely $7,000.

The evidence

The defendant relied upon the affidavits of Chloe Mae Ellis sworn on 5 and 13 December 2018 and a bundle of material relevant to the quantum of the costs. The costs as assessed are as follows: Professional costs $19,207.20 Disbursements (including counsel's fees and the filing of the notice of motion) $7,114.48 Total costs incurred $26,321.68 Reduction for potential solicitor/client $4,706.40 Total party/party costs $21,615.28 Gross sum costs order amount sought $7,000

The plaintiff relies upon her two affidavits sworn on 10 December 2018 and her additional affidavit sworn on 12 December 2018.
I briefly note the procedural history. This application was first listed for hearing on 6 December 2018, but the plaintiff sought an adjournment and the hearing was adjourned to 13 December 2018. The proceedings were stood over from 13 December 2018 to today, again at the request of the plaintiff, by reason of late service of Ms Ellis' affidavit of 13 December 2018, although this essentially set out the relevant dates for events in this litigation, as a form of chronology.
In addition to the issues between the parties, this costs application raises issues upon which there are conflicting approaches in different courts in relation to litigants in person, costs orders and case management. At all stages, I have been cognisant of my obligations to ensure that the plaintiff, a litigant in person, not only has a full and proper opportunity to put her case, but also to have time to read all relevant material, and I have had regard to observations to this effect made by the court in Clarke v South East Sydney Health District (No 2) [2018] NSWCA 226.

The relevant principles of law

The relevant principles for the making of a gross sum costs order are helpfully set out by the New South Wales Court of Appeal in Kostov v Zhang (No 2) [2016] NSWCA 279 at [19]-[26], which in turn referred to the principles set out in Hamod v New South Wales [2011] NSWCA 375.
Any application for a gross sum costs order involves a two-step process where the court must first be satisfied that such an order is appropriate and secondly that the relevant quantum can be established. The court's wide discretion in costs matters must be exercised judicially. The court should make a gross sum costs order only if it is fair and equitable in all of the circumstances of the case, and resort to the s 98 gross sum costs order provision should not be "too quick" (Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863). This is the case even in jurisdictions where there is a state of preference for gross sum costs orders, such as the Federal Court (Paciocco v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146 at [19]-[20]).

The parties' submissions

As noted above (and as occurred in Kostov v Zhang (No 2); see [29]), the plaintiff did not dispute the amount claimed by the respondents but sought instead to have the sum of $7,000 reduced further by reason of the discretionary factors she asked me to take into account.
Mr Sibtain's submissions were simple and to the point. He noted that the litigation was now concluded, and the plaintiff's limited financial resources meant that neither party would benefit from the additional costs of the assessment process. The sum sought was a very significant reduction from the total costs likely to be payable and represented the best result for the plaintiff as well as the defendant, given that the order for costs following the event was not challenged.
The issues raised by the plaintiff in opposition to a gross sum costs order of $7,000 were as follows: 1. The plaintiff had put a bona fide claim before the court, where the conduct of the defendant should be considered by me to be dishonest. This included not only the bringing of malicious complaints against her, but also using delaying tactics to cause her expense and money of the kind which occurred in Barach v The University of New South Wales [2011] NSWSC 1327; 2. The plaintiff was not a vexatious litigant, but a professional person who had worked in a successful career for two and a half decades and now could not work "because of this file note [i.e the matter complained of]"; 3. The plaintiff's rightful conduct would be "justified' in the other proceedings which she has brought in the Federal Circuit Court, the Federal Court and the Supreme Court. The plaintiff stated that she has two proceedings currently in the Federal Circuit Court (proceedings number 2018/SYG1333 and 2018/SYG3310) which will be transferred from the Federal Circuit Court to the Federal Court for the allocation of a hearing date, where issues of this nature will be ventilated at trial. In particular, in relation to Ms Fenn, "the falsity in her affidavits will be revealed in the Federal Court proceedings and also in the Supreme Court proceedings". (This latter reference is to proceedings 2017/101668, which I note are different to proceedings 2018/241478, which were the subject of the judgment of the Court of Appeal in Clarke v South East Sydney Health District (No 2)). The plaintiff also made assertions about the conduct of the defendant in those proceedings, which resulted in the setting aside of orders made by Adamson J, as being matters I should take into account in these proceedings. She also made assertions about the conduct of the defendant's legal representatives in proceedings before the List Judge in this court. 4. The plaintiff submitted that an assessment of $7,000 was "over the top" and that the court "must be able to make an order looking at the situation the plaintiff is placed in", rather than award a sum of this magnitude.

Should a gross sum costs order be made?

Costs orders, including gross sum costs orders, are an essential part of case management as well as being part of the justice process. This is one of the reasons for the wide discretion afforded to any judge making a costs order.
However, the principles upon which orders such as a gross sum costs order are made are not the subject of common approach. For example, gross sum costs orders are a "rare event" in Victoria: Wilson v Bauer Media Pty Ltd (Costs) [2018] VSC 161 at [13], whereas they are the starting point in the Federal Court under its costs rules. These potential inconsistencies are becoming more apparent now that courts are increasingly being confronted, both federally (Mbuzi v Griffith University [2014] FCA 1323 and Nyoni v Pharmacy Board of Australia (No 6) [2018] FCA 526) and at the state level (Clarke v South East Sydney Health District (No 2); Kostov v Zhang (No 2); Ghosh v Miller (No 2) [2017] NSWSC 791), with overlapping claims in a number of courts, in circumstances where the question of the appropriate costs order to make requires the court to carefully balance the relevant principles and case management procedure for the court in question while being aware that there is other litigation involving the same parties in different courts with different views.
An additional problem is that a number of these "overlapping" claims, including all those listed in paragraph 15 above, are brought by litigants in person. Thanks largely to the internet, there is what appears to be an irreversible rise in unrepresented litigants in Australia; Justice Geoffrey Nettle, 'Technology and the Law' (Paper presented at the Bar Association of Queensland Annual Conference, Brisbane, 27 February 2016) notes at 8 that 'technology is likely to increase the incidence of self-represented litigants' and, at 9, that the role of lawyers and judges would decrease as technology advanced. This has resulted in an "efficiency deficit" (Adrian Zuckerman, 'No Justice without Lawyers - the myth of an inquisitorial solution' (2014) 33 Civil Justice Quarterly 355, 355) for a legal system which is not designed to deal with the rise of litigants in person.
These problems are compounded by the absence of inter-court communication and differing views on the best methods for case management, the degree of assistance to be afforded to litigants in person, and the role of costs orders in that process. Some courts take the view that an order for costs against an indigent litigant in person is a waste of time (Sangare v Northern Territory of Australia [2018] NTCA 10; leave to appeal from the refusal of a costs order was granted by the High Court of Australia on 5 December 2018: The Northern Territory of Australia v Sangare [2018] HCATrans 254); others take the view that litigants in person are entitled to a greater degree of "tenderness" (Mowen v Rockhampton Regional Council [2018] QSC 44 at [11] and [20]), while still other courts take a more robust view (Ghosh v Miller (No 2) at [71]).
Despite the plaintiff's multiple cases in this court, the Supreme Court, the Federal Circuit Court and the Federal Court, any costs order this court makes needs to be seen in the context of the appropriate order to be made between the parties in these proceedings. However, some regard must be had to the context of there being other proceedings involving the same or similar parties. As noted above, how courts deal with either costs or case management is not a subject upon which there is a unanimous voice; I am aware, for example, that the case management procedures used in this court are different to those of the Federal Court, as I noted in my judgment at [27]-[37], in that it could be argued that the defendant in these proceedings is better off with a summary dismissal than the respondent in Nyoni v Pharmacy Board of Australia (No 6). These differences in procedure and case management can create potential costs unfairness for all parties in the proceedings.
The central touchstone for the orders in this court must, however, be the definition of the overriding purpose as set out in s 56 Civil Procedure Act 2005 (NSW).
The gross sum costs order sought by the defendant is demonstrably a reasonable sum for an application which involved not only the hearing of the application for summary dismissal (and the alternative application for dismissal on the grounds of absolute privilege), but also three adjourned dates for the hearing of this application. If the parties were to be sent to assessment, not only would the additional burden of a costs assessment process add to those costs, but the sum the defendant was likely to be awarded could be well in excess of the sum of $7,000 sought by the defendant.
The plaintiff's submission that the defendant has delayed in the action and used this delay to cause her financial hardship is hard to reconcile with the speed at which this application was brought. The application was notified on the first return date of 4 October 2018 and heard on 15 November 2018. While the plaintiff complains that she was obliged to personally serve the defendant because the solicitors who now act for the defendant refused to accept service, personal service is an obligation under r 10.5 Uniform Civil Procedure Rules 2005 (NSW). In addition, I am satisfied that the legal representatives for the defendant have at all times conducted themselves with propriety, and that the plaintiff's complaints are without foundation.
I acknowledge the plaintiff has significant financial difficulties, but there are steps that the plaintiff may take in this regard. The taking of those steps (including, if considered appropriate, being made a bankrupt: s 60(4) Bankruptcy Act 1966 (Cth)) should not impact upon her continued conduct of defamation proceedings.
Accordingly, I propose to make an order for gross sum costs order for the sum of $7,000.

Orders 1. Pursuant to s 98(4) Civil Procedure Act 2005 (NSW), the plaintiff is to pay the defendant's costs in the gross sum of $7,000.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 February 2019

Civil Liability Act 2005(NSW)

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