Meagher JA, Brereton JA, Garling J, Adams J, Johnson J
Catchwords
[2006] HCA 55
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
[2000] HCA 63
Katter v Melhem (2015) 90 NSWLR 164
[2015] NSWCA 213
Isbester v Knox City Council (2015) 255 CLR 135
Source
Original judgment source is linked above.
Catchwords
[2006] HCA 55
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337[2000] HCA 63
Katter v Melhem (2015) 90 NSWLR 164[2015] NSWCA 213
Isbester v Knox City Council (2015) 255 CLR 135
Judgment (1 paragraphs)
[1]
The application to set aside costs orders on basis made "irregularly, illegally or against good faith"
In Coles v Burke (1987) 10 NSWLR 429, Kirby P (Samuels and McHugh JJ agreeing) said of this phrase that it would be constituted by:
misconduct or dishonourable conduct of the person who procured the judgment which it is suggested undermines the authority of that judgment warranting the exceptional course for which [the rule] provides.
Having considered the material relied on by the applicant in support of her application under r 36.15, Garling J concluded at [44] to [45]:
Each of the orders for costs which are sought to be the subject of variation by the present Motion brought by the plaintiff were the ordinary orders that costs follow the event. They were conventional. A careful examination of the reasons of the judges who made those orders does not suggest that there was any reason to make those orders other than the fact that the plaintiff was the unsuccessful party. In other words, there was no evidence referred to, or submissions made, that any other costs order was warranted.
I am wholly unpersuaded that there is any evidence or material which is capable of establishing that these orders were made against good faith. Particularly is this so when the principal orders disposing of each of the Motions are not challenged or sought to be set aside. It follows, recognising the principle of finality in litigation, that there is no basis established for the plaintiff to obtain the relief which she seeks in the present Motion filed 18 August 2020. that that Notice of Motion must be dismissed.
The immediate difficulty is in identifying the conduct which is contended to have been "against good faith" and the respects in which it ultimately affected the making of any of the three costs orders in a way which might justify the variation of those orders.
Ms Eliezer's written submissions to this Court concerning "conduct against good faith" include that the "respondents' dominant purpose in litigation was to bankrupt the applicant"; that from 2016 she was forced to abandon her property "due to unsafe and hostile situation" created by the respondents; that it was "the intention of the respondents to oust the applicant from her property all along"; and that "subsequent conduct of respondents establishes the reverse of what was claimed in earlier judgments by the respondents, that is, they misled the court".
However, those allegations impugn the motives of the respondents, as plaintiffs, in the original Local Court proceedings. It was Ms Eliezer who was the plaintiff in the Supreme Court, complaining of malicious prosecution and abuse of process. None of the material referred to by her reveals conduct which could directly or indirectly have influenced or affected the making of the three costs orders. Each was made following an interlocutory application in which Ms Eliezer was unsuccessful, thereby attracting the general rule that costs follow the event unless it appears to the court that some other order should be made (UCPR r 42.1). Furthermore, the principal orders made by N Adams J and Garling J were also the subject of the unsuccessful application to this Court for leave to appeal.
The costs orders made in relation to that application for leave to appeal, and by Garling J in dismissing Ms Eliezer's application under r 36.15, had regard to the fact that for the most part those applications were conducted by the lawyers for the owners corporation, with the remaining respondents or defendants adopting its submissions. In those circumstances, only one set of costs was allowed.
In the three earlier applications, no such limited costs order was made. It follows that each of the defendants with the benefit of a costs order is entitled to recover their fair and reasonable costs incurred in the relevant proceeding. The assessment of those costs should take into account the extent to which the issues involved were common to other parties and were principally engaged with by one or more of those other parties for the benefit of all; and as such having the consequence that it may not have been reasonable for the remaining parties to have incurred similar costs in addressing the same issues.
Nevertheless, the position remained that the applicant made separate allegations against the owners corporations, strata manager and lot owners, so that each had or may have had different interests justifying their separate representation. As between the owners, the position may not have been so clear, although it appears that some allegations were made against individual owners and not against all. The fact that they were separately represented in circumstances where they at least had potentially different interests arising from the allegations made against them did not provide a basis for varying the costs orders. That much was known to the parties and readily apparent to the Court at the time. In each case, the order that was made is the one that would have been anticipated, in the absence of an application for a special order. It is not inconceivable that, had the point been argued at the time, a more limited costs order might have been made. But it was not, and it is not suggested that the Court was misled as to the need for separate representation when making the costs orders. In those circumstances, the applicant does not have reasonable prospects of establishing that Garling J erred in concluding that it did not appear that the costs orders made in favour of the lot owners three years earlier were procured "irregularly, illegally or against good faith".
It follows that leave to appeal from this order also should be refused, there being no arguable basis for its success.
Accordingly the orders of the Court are:
1. Dismiss summons seeking leave to appeal filed 8 February 2021.
2. Order the applicant pay the respondents' costs of the proceeding.
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Decision last updated: 16 September 2021
THE COURT: The applicant (Ms Eliezer) seeks leave to appeal from two orders made by the primary judge (Garling J) on 5 November 2020. On that day his Honour heard and determined Ms Eliezer's notice of motion filed on 18 August 2020 (Eliezer v The Owners - Strata Plan No 5162 [2020] NSWSC 1596). That motion sought an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 36.15(1) that earlier orders for costs made in the underlying proceedings on 22 March 2017 (N Adams J), 9 May 2017 (Johnson J) and 15 June 2017 (Garling J) be varied such that those orders not apply in favour of the second to eleventh defendants in the underlying proceedings. That variation, if made, would have left Ms Eliezer liable for the costs of the first defendant owners corporation in proceedings in which the remaining responding parties had common as well as separate interests to defend. Garling J dismissed the application and, in the course of doing so, rejected Ms Eliezer's application that he disqualify himself from hearing it (Eliezer v The Owners - Strata Plan No 5162 [2020] NSWSC 1600).
The application to Garling J for the order under r 36.15 was brought more than three years after the relevant costs orders were made, and the summons seeking leave to appeal from his order rejecting that application was filed and served on the last day of the three month period for doing so. There is no utility in granting leave to appeal from his Honour's rejection of the disqualification application unless leave is also granted to appeal from the principal order. In that event, if the disqualification appeal were successful that substantive order would also be set aside: Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55 at [2]-[3] (Gummow A-CJ), [117] (Kirby and Crennan JJ).
The underlying proceedings were brought by the applicant against the owners corporation, the strata manager and two of its employees, and the owners (either jointly or separately) of various lots in a strata title villa in West Ryde. The subject matter of the underlying proceedings were proceedings commenced in 2014 by the owners corporation against Ms Eliezer in the Local Court for recovery of outstanding strata levies and expenses. Although the original statement of claim pleaded five causes of action, eventually the applicant only pressed claims against each of the defendants for malicious prosecution and abuse of process.
The three costs orders
In December 2016, the applicant sought to join her husband, Joseph Eliezer, as a second plaintiff in the underlying proceedings, and to amend her statement of claim. Those applications were heard by N Adams J and dismissed on 22 March 2017 (Eliezer v The Owners - Strata Plan No 51682 & Ors [2017] NSWSC 278). The applicant was ordered to pay the defendants' costs of that motion. The defendants were separately represented as follows - the owners corporation by counsel, the strata manager and its employees by a solicitor, and the lot owner defendants by three solicitors (one acting for one lot owner, one acting for the joint owners of one lot, and the third acting for the owners, in each case joint, of two lots). The malicious prosecution and abuse of process were alleged to have been participated in by the lot owners. Her Honour's reasons record that separate, albeit short, oral submissions were made on behalf of the defendants other than the owners corporation in respect of matters focussing on their specific interests.
On 10 April 2017, Ms Eliezer filed a notice of intention to appeal from the orders made by N Adams J, and on 3 May 2017 filed a motion seeking to stay the execution of those orders. That application was heard and dismissed by Johnson J on 9 May 2017 (Eliezer v The Owners - Strata Plan No 51682 & Ors [2017] NSWSC 581). His Honour also ordered that Ms Eliezer pay the costs of each of the defendants, who again were separately represented as before. His Honour's short written reasons do not indicate the extent to which, if at all, each of the defendants participated in the opposition of what was an ambitious application.
On 15 June 2017, Garling J heard the owners corporation's motion for an order "pursuant to Uniform Civil Procedure Rule 13.1" that summary judgment be entered in favour of the defendants. The applicant's husband appeared on her behalf in opposing that application. Rule 13.1 refers to summary judgment in favour of a plaintiff on the application of a plaintiff. Rule 13.4 refers to summary dismissal in favour of a defendant. In the course of the hearing, his Honour gave the first defendant leave to amend that motion to identify r 13.4 as the rule pursuant to which relief was sought. The written outline of the defendants' joint submissions in support of that motion, which was filed and served on 26 May 2017, correctly identified the rule relied on as r 13.4. Garling J summarily dismissed the applicant's proceedings and ordered that she pay the defendants' costs of the proceedings. The application for summary judgment was conducted by the owners corporation's counsel, the solicitors for the other parties having nothing to add.
Earlier leave application to this Court
The applicant then sought leave to appeal to this Court from the orders made by N Adams J on 22 March 2017 and Garling J on 15 June 2017. On 7 December 2017, this Court dismissed that application and ordered that the applicant pay the owners corporation's costs in the Court of Appeal as agreed or assessed (Eliezer v The Owners - Strata Plan No 51682 [2017] NSWCA 325). No order for costs was made in favour of the remaining respondent defendants, notwithstanding that the strata managers and owners remained separately represented as before. That costs order was made in circumstances where written submissions were filed by the owners corporation only and none of the respondents sought to be heard in reply to the applicant's oral argument.
The present application for leave
The order appealed from dismissed Ms Eliezer's application under rule 36.15(1), which provides that a "judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith". At the time that application was made, it would seem that Ms Eliezer had resolved her dispute with the owners corporation. There remained the outstanding costs orders in favour of the strata manager, its employees and the lot owners. Having commenced the present application for leave, the applicant resolved her dispute with the strata manager and its employees, resulting in the discontinuance of the present application against those parties. There remained only the lot owners.
Ms Eliezer requires leave to appeal from the orders made by Garling J. The order refusing her application under r 36.15 to vary the costs orders was interlocutory. So too was his Honour's order refusing the application to disqualify himself. Accordingly leave to appeal was required under Supreme Court Act 1970 (NSW), s 101(2)(e) as Ms Eliezer's summons acknowledges.
Whether leave to appeal should be granted ordinarily requires consideration of whether the proposed appeal involves an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable: Choi v University of Technology Sydney (No 2) [2020] NSWCA 342 at [40] per Bell P and Emmett AJA. These considerations direct attention to the two orders sought to be challenged. It is convenient to deal first with the disqualification application for apprehended bias.
The apprehended bias application
Although it is not necessary on this leave application to decide, the primary judge was undoubtedly right to conclude that there was no basis for him to disqualify himself for apprehended bias.
The relevant question for Garling J was whether in the circumstances set out below:
… a fair-minded lay observer might reasonably apprehend that the judge may not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. (citations omitted)
(Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [6]).
As Gageler J noted in Isbester v Knox City Council (2015) 255 CLR 135; [2015] HCA 20 at [59], the application of this test involves three analytical steps:
Step one is identification of the factor which it is hypothesised might cause a question to be resolved otherwise than as the result of a neutral evaluation of the merits. Step two is articulation of how the identified factor might cause that deviation from a neutral evaluation of the merits. Step three is consideration of the reasonableness of the apprehension of that deviation being caused by that factor in that way.
The factor relied on by Ms Eliezer as giving rise to any apprehension of bias is his Honour's decision made on 15 June 2017 to permit the amendment of the owners corporation's motion for summary dismissal to allow reliance on r 13.4, rather than r 13.1. In the course of argument of that application, Mr Eliezer pointed out that the notice of motion identified r 13.1 rather than r 13.4 as the basis for the application; making its success in reliance on the first rule very problematic because the owners corporation was not a plaintiff seeking summary judgment. In response, his Honour suggested that matter could be addressed by the defendants seeking to amend their application.
However none of this, or what followed, provided any basis for a reasonable apprehension that his Honour may not deal with the underlying application on its merits. Indeed when the application to amend was made, Mr Eliezer, representing his wife, did not oppose it.
Following his Honour's comment, counsel appearing for the owners corporation applied to amend the motion to refer to r 13.4. That application was treated as made on behalf of all of the defendants. In response to questions as to why that amendment should not be permitted, Mr Eliezer correctly pointed out that the plaintiff had the right to know in advance "which ground is being relied on". In response, reference was made to the joint written submissions filed and served on 26 May 2017. As has already been noted, those written submissions expressly identified r 13.4, rather than r 13.1, as the rule relied upon. His Honour then asked Mr Eliezer if he had anything else to say as to whether leave to amend should be granted. He responded "I have no objection to the leave being granted but I do have objection to the motion then being heard today". Addressing that position, his Honour indicated that a way forward was to hear the defendants' argument and for Mr Eliezer to then respond on the basis that if he wanted to make further submissions he would be permitted to do so in writing before the motion was determined. That proposal was implicitly accepted and there was then a discussion about a timetable for the provision of further submissions, which was not finally resolved before Mr Eliezer concluded "that's okay", thereby indicating that he was content for the hearing of the motion to proceed, as it then did.
None of this conduct reveals any matter which, from the perspective of the reasonable bystander, might be thought likely to result in his Honour dealing with the substantive application otherwise than on its merits. Stepping back from the detail, the applicant and her husband had ample notice of the correct basis on which the application was made. In addition it was plain that r 13.1 could not apply because the applicants were defendants. As one would expect from a judge dealing with the matter fairly and with an open mind, his Honour focussed on the amendment application being made, whether there was possible prejudice to Ms Eliezer in allowing the application and permitting the motion to proceed, and whether any such prejudice could be cured by, as occurred, allowing further written submissions if required.
In her written submissions in this Court, Ms Eliezer referred to the judgment of this Court in Katter v Melhem (2015) 90 NSWLR 164; [2015] NSWCA 213, in which Campbell AJA, with whom McColl JA and Leeming JA agreed, said, in respect of an application under UCPR r 36.15:
[92] … When the correctness of her Honour's own handling of the
matter would have been in issue, there would have been an element of her
Honour being a judge in her own cause in deciding the submissions. Being a
judge in one's own cause is a species of breach of natural justice so long-
recognised that it is expressed in a Latin maxim, nemo debet esse judex in
propria causa.
[93] I recognise that sometimes judges are required to make decisions about the adequacy of their own conduct. For example, an application for a judge to
disqualify himself or herself from hearing, or continuing to hear, a case on the
ground of ostensible or actual bias should be made in the first instance to the
judge himself or herself. However, in circumstances where a judge is asked
to recuse because of actual or ostensible bias there is a practical necessity that the judge make that decision himself or herself, because nobody else is in a position to know the relevant facts and to act with the speed that would be necessary if an ongoing hearing were to be terminated. There was no such practical necessity for Gibson DCJ to hear the application to set aside or vary the judgment she had made.
These observations are confined to a case in which the correctness of a judge's own handling of a matter would be in issue, and even then have a narrow scope: it is commonplace for applications under UCPR rr 36.15 and 36.16 to be heard and determined by the judicial officer who made the original order in question. In this case, no question arises, because (save insofar as it concerned the disqualification application), the r 36.15 application did not involve any issue concerning the manner in which Garling J had handled the motion of which he disposed on 15 June 2017: as will appear, insofar as the applicant's complaint of irregularity, illegality or bad faith could be distilled, it was directed to the conduct of the respondents, not of the judge.
In the result, the challenge to the primary judge's refusal to disqualify himself has no realistic prospects of success.