Supreme Court of the ACT|2012-08-10

Ezekiel-Hart v Law Society of the Australian Capital Territory, Reis, King and Barnett (No 2) [2012] ACTSC 135 (10 August 2012)

EMMANUEL TAM EZEKIEL-HART v THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY, ROBERT REIS, LARRY KING and ROD BARNETT (NO 2)

[2012] ACTSC 135 (10 August 2012)

PROCEDURE - Costs - Impecunious unsuccessful litigant - Not sufficient reasons to deprive successful party of costs.

PROCEDURE - Costs - Costs of indulgence granted to party - Setting aside default judgment - Set aside for irregularity - Court still retains discretion as to costs.

Court Procedures Rules 2006 (ACT), rr 1721, 1728

High Court Rules 2004 (Cth), r 41.10

O'Brien, D, Special Leave to Appeal (Supreme Court of Qld Library, 2nd ed, 2007)

AON Risk Services (Australia) Ltd v Australian National University [2008] ACTCA 13; (2008) 227 FLR 388

Board of Examiners v XY [2006] VSCA 190; (2006) 25 VAR 193

Day v Mercedes-Benz Australia Pty Ltd [2010] FCA 1183

Dubbo Refrigeration Co v Rutherford (1898) 14 WN (NSW) 180

Ezekiel-Hart v The Law Society of the Australian Capital Territory and Ors [2012] ACTSC 103

Ezekiel-Hart v The Law Society of the Australian Capital Territory [2010] HCASC 210

Golski v Kirk (1987) 14 FCR 143

Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344

Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427

Johnsen v Duks [1963] NSWR 730

Northern Territory Fuels Pty Ltd v Hart (1985) 73 FCR 405

Re Zagoridis; Ex parte Q'Plas Group Pty Ltd [1990] FCA 459; (1990) 27 FCR 108

Russell v Adwan Pty Ltd (2000) ACTR 1

Scott v Secretary, Department of Social Security (No 2) [2000] FCA 1450

Woods v Walsh (1989) 22 FCR 204

Anlaby v Praetorius (1888) 20 QBD 764

Calderbank v Calderbank [1976] Fam 93

Dunnett v Railtrack Plc (in railway administration) [2002] EWCA Civ 303; [2002] 2 All ER 850

Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576; [2004] 4 All ER 920

J T Stratford & Son Ltd v Lindley [1969] 3 All ER 1122

Lai v Chamberlains [2006] NZSC 70; [2007] 2 NZLR 7

R (Cowl) v Plymouth City Council [2001] EWCA Civ 1935; [2002] 1 WLR 803

AND: THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY

1. Each party pay their own costs of the application and the order of the Registrar made on 21 November 2011 setting aside the default judgment dated 13 October 2011 in respect of which the costs were reserved.

2. Otherwise, the plaintiff pay the costs of the proceedings.

1. On 29 June 2012, I dismissed an appeal commenced by Mr Emmanuel Tam Ezekiel-Hart against a decision of the Registrar, setting aside a default judgment he had secured in these proceedings. I also struck out the Statement of Claim and entered judgment for the defendants: Ezekiel-Hart v The Law Society of the Australian Capital Territory and Ors [2012] ACTSC 103. The facts and circumstances of the matters over which Mr Ezekiel-Hart was suing are set out in those reasons. I do not need to repeat them.

2. On the date of judgment, I granted leave to the parties to file written submissions as to costs: Mr Ezekiel-Hart by 6 July 2012 and the defendants by 13 July 2012. I have now received those submissions, though somewhat late.

3. Mr Ezekiel-Hart sent by email a lengthy document which took issue with a number of findings that I made. That is, of course, not a matter that I can or will consider. It also attached a large bulk of material which included:

(a) a document headed "Plaintiff's Summary of Argument: Statement of [sic] against cost [sic] and questions as was [sic] before the High Court - High Court declined to make costs orders against Mr Ezekiel-Hart"; and

(b) a copy of the submissions originally filed in accordance with the leave I had given in the substantive proceedings: Ezekiel-Hart v The Law Society of the Australian Capital Territory and Ors at [15].

4. Mr Ezekiel-Hart then filed his written submissions as to costs, but on 17 July 2012. The defendants filed their reply on 18 July 2012. Despite Mr Ezekiel-Hart's submissions being so late, the defendants did not include in their submissions any suggestion I should reject Mr Ezekiel-Hart's submissions. That is an appropriate stance by a body such as the Law Society of the Australian Capital Territory (Law Society). Accordingly, I have had regard to both sets of submissions.

5. Mr Ezekiel-Hart relied on his earlier submissions (being (b) in [3] above). I have described them in my judgment: Ezekiel-Hart v The Law Society of the Australian Capital Territory at [119]. They were very difficult to read or to understand the points he was making. I have read them again and they are no clearer or easier to read.

6. They do not address the issue of how I should exercise my discretion as to the costs of my order of 29 June 2012. They are simply silent on that. They provided no assistance.

7. Mr Ezekiel-Hart also referred to the other document attached to his email (being (a) in [3] above). It repeated the history of the proceedings, but not in a way that seemed relevant to costs. It then referred to "Reasons why an order for costs should not be made in favour of the respondent [sic]".

(a) the defendants should not have their costs because the Law Society, while "[professing] rule of Natural Justice Procedural Fairness" allegedly made a decision that "denied the appellant [sic] right to be heard";

(b) while s 401 of the Legal Profession Act 2006 (ACT) empowered the Law Society to refer a matter to mediation, the Law Society had allegedly refused to mediate this matter, thus meaning it would "reward a person" (presumably the defendants) who sought to increase the burden of cases in the court though the person prefers otherwise in public;

(c) the Law Society is said to have issued an Unrestricted Practising Certificate to Mr Ezekiel-Hart after the proceedings had commenced; and

(d) making an order for costs in the Defendants' favour would "mean institutionalizing oppression in the community" because, the argument appeared to be, "[a] poor person [who] may seek redress against an oppressor can be technically manipulated after a more powerful person had [sic] been oppressive and adamantly unreasonable."

9. Mr Ezekiel-Hart then submitted that the submissions should be read in the light of the fact that the High court had declined to make a costs order against him when it refused him special leave to appeal: Ezekiel-Hart v The Law Society of the Australian Capital Territory [2010] HCASL 210.

10. Mr Ezekiel-Hart then referred to the Law Society "benefitting from 5 consecutive adjournments one of which none of their lawyers attended". I can only assume that these were in the earlier proceedings, since there were, including the appearance in Court to take judgment, and including the appearance before the Registrar when judgment was set aside, only five appearances all together in these proceedings, only one of which was an adjournment, and at all of which the defendants were represented. What happened in those earlier proceedings, especially of the kind to which Mr Ezekiel-Hart has referred, is irrelevant to the costs of these proceedings.

11. Mr Ezekiel-Hart also referred to a passage from the decision of the Supreme Court of New Zealand in Lai v Chamberlains [2006] NZSC 70; [2007] 2 NZLR 7, though Mr Ezekiel-Hart referred to it for the some reason as Chamberlains v Lai.

12. That decision, however, concerns the immunity from suit of barristers and the Court there held that it could no longer be retained in its present form. In the course of their reasons, the plurality, Elias CJ and Gault and Keith JJ, referred to whether avoiding abusive collateral challenge is sufficient protection of the integrity of the justice system. Their Honours commented (at 41; [73]):

Any loss suffered by one party as a result of negligence in representation can be properly addressed by a claim against the advocate without vexing the other party further and without distorting the system of civil justice.

13. Mr Ezekiel-Hart prefaced this quotation with a question: "Whether it is equitable for Mr Ezekiel-Hart to pay the law society costs [sic] for the ACT Supreme Court granting to him default judgment against the ACT Law Society and Others?" He did not answer the question, presumably suggesting it was rhetorical.

14. The defendants submitted that Mr Ezekiel-Hart's submissions appear to travel outside the directions and, to that extent, should be ignored.

15. They addressed the issue of the situation in the High Court, to which I refer below. They there submit that there is no reason why the court should depart from the usual order and that Mr Ezekiel-Hart should be ordered to pay the defendants' costs.

16. I do not need to canvass every issue raised for the reasons advanced by the defendants but consider that the following six matters need to be addressed:

17. The way in which Mr Ezekiel-Hart framed his submissions suggested that I should follow the decision of the High Court which declined to make an order for costs against him, despite dismissing his application for special leave to appeal against the decision of the Court of Appeal dismissing the appeal from the Chief Justice in turn dismissing the first set of proceedings in which he had sued the defendants for, as I found, essentially the same claims as in these proceedings.

18. The decision of the High Court made no mention of costs. That, it appears, is because of the way the proceedings were conducted, namely under r 41.10 of the High Court Rules 2004 (Cth). Mr Ezekiel-Hart was, of course, an unrepresented applicant and so that rule applied to him. It provides:

41.10.1 An unrepresented applicant shall present his or her argument to the Court in the form of a draft notice of appeal and written case, which, unless the Court or a Justice otherwise directs, shall not be served on any person who was a party to the proceedings in the court below.

41.10.2 The draft notice of appeal of an unrepresented applicant shall be in Form 24.

41.10.3 The written case of an unrepresented applicant:

(a) shall be in Form 18;

(b) shall not exceed 10 pages; and

(c) shall be filed within 28 days of the filing of the application, together with two additional copies of the written case, the draft notice of appeal and all of the documents filed by the applicant in accordance with rule 41.01.2.

41.10.4.1 If an unrepresented applicant does not comply with paragraph 41.10.3 (c), the application is taken to be abandoned unless the Court or a Justice orders or directs otherwise.

41.10.4.2 If the application is taken to be abandoned, the Registrar must, if asked by the respondent, give the respondent a certificate to that effect.

41.10.5 Where an unrepresented applicant has filed a written case, any two Justices may, without requiring any party to the proceedings in the court below to respond to the applicant's written case, determine that the application should be dismissed and direct the Registrar to draw up, sign and seal an order dismissing the application.

41.10.6 Where no direction has been given under rule 41.10.5, the Court or a Justice shall direct the applicant to serve a copy of the written case and the draft notice of appeal on the respondent and the provisions of these Rules relating to the filing and service of a summary of argument by the respondent and a reply by the applicant shall apply as if the applicant's written case were that party's summary of argument.

19. The Law Society's submissions state that the matter proceeded under this rule and that they were not served with the written case of Mr Ezekiel-Hart.

20. As is commented in D O'Brien Special Leave to Appeal (Supreme Court of Qld Library, 2nd ed, 2007) at 215,

[w]here an unrepresented applicant's application is dismissed pursuant to Rule 41.10.5, usually no order for costs is made, presumably because, pursuant to Rule 41.10.1, the applicant's written case is not necessarily served upon the respondent.

21. A review of decisions of the High Court where applications have been dismissed under r 41.10.5, show that is, indeed, the case. The vast majority of cases where costs have been ordered are where the application has been taken to be abandoned but then re-instated with an order for costs.

22. There is, then, no substance in the submissions of Mr Ezekiel-Hart that I can draw any conclusions about the order for costs in these proceedings from the decision of the High Court when dismissing his application for special leave to appeal.

23. Mr Ezekiel-Hart's reference to s 401 of the Legal Profession Act (ACT), is entirely misconceived. That provision appears in ch 4 relating to complaints and discipline. A simple reading of the section shows that it is inapplicable. It provides:

(1) If the relevant council for a person about whom a complaint is made considers that the complaint could be resolved by mediation, the council may suggest to the complainant and the person that they enter into a process of mediation.

Note The complaint may be withdrawn under s 400 if the matter is resolved by mediation.

(2) This section does not apply to a complaint about an Australian legal practitioner if the relevant council considers that the practitioner would be likely to be found guilty of professional misconduct if an application were made to the ACAT in relation to the complaint.

(3) This section extends to a complaint so far as it relates to some only or part only of the matters that form the subject of the complaint.

(4) This section does not require the relevant council to suggest a mediation_._

24. "Complaint" is defined in s 383(2) to mean a complaint under ch 4 which relates to the conduct of an Australian legal practitioner or an Australian lawyer former Australian lawyer (ss 385, 390) and must be made to a relevant Council (s 394(2)).

25. The commencement by Mr Ezekiel-Hart of proceedings in this Court does not amount to the making of a complaint for ch 4 and so the section is inapplicable.

26. Having said that, I do not suggest that, in appropriate cases, it is not relevant whether a party engaged in mediation or not. There is no doubt that the courts currently support parties seeking to avoid the expense and delay of litigation. As Einstein J said in Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 427 at [39]-[40]:

In a speech delivered at the LEADR Dinner on 9 November 2000 the Chief Justice commented on the "change of policy" within the Court to compel mediation. The Chief Justice referred to the position paper delivered in May 1999 by the Council of Chief Justices of Australia and New Zealand titled "Declaration of Principle on Court-Annexed Mediation". The speech was then republished in the Law Society Journal in March 2001.

The Chief Justice made the following comments:

Mediation is an integral part of the Court's adjudicative processes and the 'shadow of the court' promotes resolution.

Mediation enables the parties to discuss their differences in a co-operative environment where they are encouraged but not pressured to settle so that cases that are likely to be resolved early in the process can be removed from that process as soon as possible.

Consensual mediation is highly desirable but, in appropriate cases, parties can be referred where they do not consent, at the discretion of the Court.

In each case referral to mediation should depend on the nature of the case and be in the discretion of the Court.

The success of mediation cannot be measured merely by savings in money and time. The opportunity of achieving participant satisfaction, early resolution and just outcomes are relevant and important reasons for referring matters to mediation.

27. Brooke LJ pointed out in Dunnett v Railtrack Plc (in railway administration)

Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve. This court has knowledge of cases where intense feelings have arisen, for instance in relation to clinical negligence claims. But when the parties are brought together on neutral soil with a skilled mediator to help them resolve their differences, it may very well be that the mediator is able to achieve a result by which the parties shake hands at the end and feel that they have gone away having settled the dispute on terms with which they are happy to live. A mediator may be able to provide solutions which are beyond the powers of the court to provide.

28. In England, strong support has been given to mediation in cases such as R (Cowl) v Plymouth City Council [2001] EWCA Civ 1935; [2002] 1 WLR 803 and Hurst v Leeming [2002] EWHC 1051; [2003] 1 Lloyds Rep 379.

29. Nevertheless, even where mediation is compulsorily ordered, the Court cannot, and should not, try to order the parties to settle; they must do so, if at all, of their own free will.

30. There may be, however, consequences of a failure properly to engage in mediation. Just as the courts have made costs consequences follow a failure to act reasonably in respect of offers of compromise (as in Calderbank v Calderbank [1976] Fam 93), so the courts are likely to have to grapple with the need to provide sanctions for parties who fail to take reasonable opportunities to engage in other forms of dispute resolution, such as mediation.

31. In Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576; [2004] 4 All ER 920, the Court of Appeal of England and Wales had to consider when a court should impose a costs sanction on a successful litigant on the grounds that he, she or it refused to take part in alternate dispute resolution.

32. The court came to the view (at 925; [13]), that, where a party acted unreasonably in refusing to participate in some form of alternative dispute resolution, such as mediation that was offered or agreed to by the other party or other parties, the Court may impose a costs sanction.

33. The Court was emphatic, however, that it had to be recognised that (at 926; [16]),

ADR processes do not offer a panacea, and can have disadvantages as well as advantages: they are not appropriate for every case. We do not, therefore, accept ... that there should be a presumption in favour of mediation. The question whether a party has acted unreasonably in refusing ADR must be determined having regard to all the circumstances of the particular case.

34. The Court considered that, without suggesting that these formed an exhaustive checklist, the following matters should be considered: (a) the nature of the dispute; (b) the merits of the case; (c) the extent to which other settlement methods have been attempted; (d) whether the costs of ADR would be disproportionately high;

(e) whether any delay in setting up and attending the ADR would have been prejudicial; and (f) whether the ADR had reasonable prospects of success.

35. With the greatest of respect, I find this approach and analysis compelling and am satisfied that I should follow it.

36. The difficulty I have is that in this case I have no real evidence but merely assertions in submissions. If Mr Ezekiel-Hart were to be able to have made out a case that he should not have to pay the defendants' costs because they had not agreed to mediation, I would have to have had evidence, such as in an affidavit.

37. It seems to me, however, that the fact that I have found no merit in Mr Ezekiel-Hart's case is a barrier of almost insurmountable height. There may well be cases where mediation should be tried by the parties, even where the case of one party is strong. For example, where the costs of the proceedings are very high, there may be compromises available even though one party has a very strong case.

38. Nevertheless, the costs here were well quarantined because of the early stage at which the defendants sought to strike out the proceedings.

39. I do not consider that the failure, if it was (and I make no finding about that), of the defendants to engage in mediation should be reflected in any order for costs that I make.

40. Whether Mr Ezekiel-Hart was entitled to be heard before the Law Society refused to grant him an Unrestricted Practising Certificate or not does not seem to me to be a matter that should affect costs.

41. Mr Ezekiel-Hart had a remedy at hand in that he could have appealed the decision under s 81 of the Legal Profession Act. He chose not to do so.

42. As I have made no finding as to whether he was entitled to be heard (see my reasons at [73]) I cannot take this issue into account.

The issuing of the Unrestricted Practising Certificate

43. Mr Ezekiel-Hart says that the Law Society granted him an Unrestricted Practising Certificate after the proceedings commenced. There are references to this in the pleadings but it does not clearly appear to be admitted. There was no evidence of this matter.

44. Nevertheless, assuming that it was issued, it seems to me to be entirely irrelevant to the issue of costs. The proceedings were not about whether Mr Ezekiel-Hart was entitled to such a certificate ultimately, but whether the delay in issuing one was compensable. Indeed, the proceedings could not have resulted in - and Mr Ezekiel-Hart did not seek in the relief he pleaded - an order that he be granted such a certificate.

45. It has been long held that the fact that a party is impecunious is not a reason for not making a costs order. As Beaumont and French JJ said in Scott v Secretary, Department of Social Security (No 2) [2000] FCA 1450 at [4]:

The first ground relied upon relates to the financial position of the appellants. The appellants are litigants in person. They are impecunious. They rely on social security benefits. They are not able to satisfy any costs order made against them. However sympathetic one may personally be to arguments of this kind, inability to meet a costs order or the fact that the losing party has limited financial means has never been a sufficient reason to deny a successful party his costs: Yilan v Minister for Immigration and Multicultural Affairs [1999] FCA 1212; Hollier v Australian Maritime Safety Authority (No 2) [1998] FCA 975.

46. See also Board of Examiners v XY [2006] VSCA 190; (2006) 25 VAR 193 at 204; [35], Edwards v Stocks [2009] TASSC 11; (2009) 17 Tas R 454 at 460-1; [12].

47. Mr Ezekiel-Hart has not referred to any exceptional circumstances that would justify me taking into account any impecuniosity he might suffer. In any event, there is no evidence about whether he is, in fact, impecunious.

48. Mr Ezekiel-Hart is a lawyer who holds, or, at least, has held, an Unrestricted Practising Certificate. He is, therefore, presumed to know enough law to understand and assess the prospects of success of his action and to know the consequences of lack of success.

49. The discretion of the court to make an order for costs under r 1721 of the Court Procedures Rules 2006 (ACT), is unfettered: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 88; [39]-[40].

50. Nevertheless, the general practice is that costs follow the event unless there is reason to make an order to the contrary: Russell v Adwan Pty Ltd (2000) ACTR 1 at 14; [63].

51. On 21 November 2011, the Registrar set aside the default judgment that had been entered in circumstances which I described in my reasons for judgment (at [12], [21]) in dismissing the appeal from that order of the Registrar. The costs of the application were reserved.

52. Under r 1728 of the Court Procedures Rules, reserved costs that are not the subject of a specific order become costs in the cause. That rule, which follows the Federal Court Rules 2011 (Cth) r 40.03 (formerly Order 62 and 15), and the Uniform Civil Procedure Rules 1999 (Qld) r 698 (formerly r 699), was inserted because it had been found that parties often overlooked reserved costs when judgment was delivered and had to make separate subsequent applications to deal with reserved costs, especially where a special order should be made, thereby increasing the costs burden of litigants. Alternatively, the costs were never disposed of because of the parties overlooking them.

53. In Woods v Walsh (1989) 22 FCR 204 at 206-7, Lee J explained the operation of the rule (his Honour, of course, speaking of Order 62 r 15) as follows:

The rule has not provided for reserved costs to be payable without an order. It requires the costs to follow 'the event'. 'The event' to which the rule refers is the outcome of the principal proceedings: see Field v The Great Northern Railway Co (1878) 3 ExD 261; Creen v Wright (1877) 2 CPD 354.

The outcome of the principal proceedings would be the outcome relating to any order for costs of the proceedings: see Brotherton v Metropolitan District Railway Joint Committee [1894] 1 QB 666. Although the words 'follow the event' may mean 'according to who wins', (see Davies v Eli Lilly & Co [ 1987] 1 WLR 1136; [1987] 3 All ER 94, per Donaldson MR (at 1143; 99), per Lloyd LJ (at 1144; 100-101), Balcombe LJ (at 1146; 102) unless an order is made in respect of costs there would be no event in respect of which the provisions of r 15 could operate. If no order for the payment of costs is made on disposal of the cause or matter, or an order is made that no costs be paid, no foundation for the taxation of the reserved costs would be provided by r 15. The effect of the rule, therefore, is to make reserved costs of interlocutory proceedings costs in the cause of the successful party in the principal proceedings unless some other order is made in respect of them.

Historically, where interlocutory costs were reserved they had to be made the subject of a special order upon determination of the principal proceedings and were not included automatically in any general order as to the costs of the proceedings: see Gardner v Marshall [1845] EngR 751; (1845) 14 Sim 575. Such costs could not be allowed on taxation without an appropriate order being directed to them: see British Natural Premium Provident Association v Bywater [1897] 2 Ch 531; B C Cairns, Australian Civil Procedure (2nd ed, 1985), p 483; Oliver, Law of Costs, p 5.

54. Rule 1728 speaks of "costs in the cause" rather than costs following the event, as is referred to in the Federal Court Rules. The difference may be merely textual. As was explained in Dubbo Refrigeration Co v Rutherford (1898) 14 WN (NSW) 180 at 182, costs in the cause means the costs of the trial. Lord Denning MR commented in J T Stratford & Son Ltd v Lindley [1969] 3 All ER 1122 at 1123:

There is no definition in any law book of the words 'costs in the cause'. But every pupil on his first day in chambers is told what it means. 'Costs in the cause' means that the costs of those interlocutory proceedings are to be awarded according to the final award of costs in the action. If the plaintiff wins and gets an order for his costs, he gets those interlocutory costs as part of his costs of the action against the defendant. Vice versa, if the defendant wins and gets an order for his costs, he gets those interlocutory costs as part of his costs of the action against the plaintiff. (I may add in parenthesis that 'plaintiff's costs in the cause' means that, if the plaintiff wins, he gets the costs of the interlocutory proceedings; but, if he loses, he does not have to pay the other side's costs of them. 'Plaintiff's costs in any event' means that, no matter who wins or loses when the case is decided, the plaintiff is to have the costs of those interlocutory proceedings. 'Plaintiff's costs' means that the plaintiff is to have the costs of the interlocutory proceedings without waiting for a decision.)

55. Thus, as explained by Stone J in Day v Mercedes-Benz Australia Pty Ltd [2010] FCA 1183 at [3],

the party that is successful in the proceeding and in whose favour a costs order is made, will have its costs, including reserved costs, unless some order to the contrary is made. That being so, the order for costs to be reserved effectively dealt with the issue of costs.

56. Her Honour noted (at [4]) that where a party wishes another order to be made, as can be made under the rule, the party should act without delay. Preferably, of course, it should be dealt with at the time the costs order for the proceedings is made.

57. Thus, absent a special costs order, the costs of setting aside the default judgment would be part of the costs of the proceedings payable in accordance with, in this case, the usual order.

58. Ordinarily, however, a party who seeks an indulgence of the Court will be ordered to pay the costs of the indulgence, whether or not that party is ultimately successful in the proceedings, as Beaumont J, with whom Kelly J agreed on this point, said in Golski v Kirk (1987) 14 FCR 143 at 157. Thus, for example, a party seeking an amendment to pleadings will ordinarily be ordered to pay the costs of the application to amend and of the costs thrown away, even though the application for leave to amend is successful: Northern Territory Fuels Pty Ltd v Hart (1985) 73 FLR 405 at 412; AON Risk Services (Australia) Ltd v Australian National University [2008] ACTCA 13; (2008) 227 FLR 388 at 391; [14], 395-6; [56], 423; [238].

59. Similarly, an applicant for an order setting aside a default judgment will ordinarily be required to pay the costs of the application, even if successful: Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344 at 353; Re Zagoridis; Ex parte Q'Plas Group Pty Ltd [1990] FCA 459; (1990) 27 FCR 108 at 114.

60. That rule, however, is not inflexible and will depend on the circumstances of the case: Johnsen v Duks [1963] NSWR 730 at 733. As the Court said in Anlaby v Praetorius (1888) 20 QBD 764 at 769 per Fry LJ, "although the Court is bound to set aside an irregular judgment ex debito justitiae, it has always exercised a discretion as to costs" (see also at 770 per Lopes LJ).

61. While here the plaintiff sought judgment prematurely, the defendants did delay and conceded that they delayed in addressing the issue of a defence or, indeed, a strike-out application. Further, the defendants did not address the issue of the irregularity in the entry of judgment but sought to have the judgment set aside on the merits. It was I who raised the question of irregularity.

62. In my view, the just result in these circumstances is that there should be no order as to the costs of the application to set aside judgment.

63. Having carefully scrutinised the matters raised by Mr Ezekiel-Hart, there is, in my view, no reason why the usual order should not be made as to the proceedings, other than the application and order to set aside the default judgment. I will, accordingly, order that Mr Ezekiel-Hart pay the costs of the proceedings save as to the application and order to set aside judgment as to which there should be no order as to costs.

I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Acting Chief Justice Refshauge.

Federal Court Rules 2011(Cth)r 40.03

Procedures Rules 2006

Civil Procedure Rules 1999

Federal Court Rules 2011(Cth)r 40.03

Procedures Rules 2006

Civil Procedure Rules 1999

Ezekiel-Hart v Law Society of the Australian Capital Territory, Reis, King and Barnett

At a glance

Court

Decision date

Source

Judgment (124 paragraphs)

Ezekiel-Hart v Law Society of the Australian Capital Territory, Reis, King and Barnett (No 2) [2012] ACTSC 135 (10 August 2012)

Parties

Legislation Cited (10)

Cases Cited (9)