Each of the Four Proceedings arose out of attempts made by Mrs Young to have orders made on 19 February 2004 by the L&E Court set aside. The orders were made in the Original Proceedings, which had been brought by Mrs Young against Mr and Mrs King. The Original Proceedings arose out of drainage problems experienced by Mrs Young in relation to the King Property, which adjoins the Young Property, both of which are situated in Forestville. The King Property is lower than the Young Property, such that the natural flow of water is from the Young Property to the King Property. The King Property slopes to the rear, such that the natural flow of water is from the front to the rear of the King Property. The rear boundary of the King Property is a common boundary with properties that have frontage to another street in Forestville.
In 2002, Mr and Mrs King carried out work on the King Property, involving excavation on the boundary with the Young Property. In the Original Proceedings in the L&E Court, Mrs Young alleged that Mr and Mrs King had carried out various unlawful works on the King Property, including the construction of a footing, construction of a retaining wall and underpinning of existing footings to a dwelling house.
The Original Proceedings were fixed for hearing on 16 February 2004 before Justice McClellan, Chief Judge of the L&E Court. After an opening by counsel for Mrs Young and a position statement by the solicitor for Mr and Mrs King, the parties entered into negotiations that led to the Settlement Agreement, whereby the dispute was resolved, except in relation to costs. The Settlement Agreement entailed the giving of an undertaking by Mr and Mrs King to the L&E Court to carry out certain works on the King Property, in consideration for which Mrs Young agreed to the dismissal of the Original Proceedings.
On 19 February 2004, for reasons given on that day, McClellan CJ accepted that the retaining wall operated to interrupt the flow of sub-surface water and, accordingly, unless adequately drained, certain problems identified by one of the experts who gave evidence was likely to occur. His Honour was satisfied that the works that Mr and Mrs King had agreed to undertake were made necessary by reason of the construction of the retaining wall, which Mr and Mrs King conceded had been constructed without consent. His Honour therefore concluded that Mrs Young had succeeded in the Original Proceedings. His Honour noted the undertaking given to the L&E Court on behalf Mr and Mrs King, ordered that the Original Proceedings be dismissed and ordered Mr and Mrs King to pay Mrs Young's costs. [32] The orders were made by consent, except as to costs (the 2004 Orders).
On 8 March 2004, the undertaking given on behalf Mr and Mrs King was varied. The undertaking, as varied, was to:
carry out certain works identified in Exhibit A, which was in evidence in the Original Proceedings;
lodge a Development Application with the Council for the erection of a retaining wall on the boundary between the Young Property and the King Property, with such wall to include the drainage works referred to in Exhibit A;
make all reasonable endeavours to progress the development application; and
complete the retaining wall works following the Council granting development consent.
Mr and Mrs King lodged a Development Application with the Council, seeking approval of the works identified in Exhibit A. The works contemplated by Exhibit A involved some work on the Young Property, for which Mrs Young declined to give her consent. As a result, the Development Application was refused and the work contemplated by Exhibit A has not been carried out.
On 23 May 2008, Mrs Young filed a Notice of Motion in the L&E Court seeking such orders as the L&E Court deemed fit to compel compliance by Mr and Mrs King with their undertakings and declarations as to the effect of the orders made by the L&E Court in the Original Proceedings. In the alternative, the Motion sought an order that the order made on 19 February 2004 dismissing the Original Proceedings be vacated and that the Original Proceedings be reinstated. Ultimately, Sheahan J (the primary judge) made orders on 9 July 2015 that the 2008 Motion be dismissed, that other proceedings commenced by Mrs Young be dismissed and that Mrs Young pay Mr and Mrs King's costs of the Original Proceedings since 8 March 2004. [33]
[2]
Issues in the Four Proceedings
Mrs Young thereafter commenced the Four Proceedings. The substantive complaints that were agitated in the Four Proceedings were as follows:
1. The primary judge failed or omitted to give adequate reasons for rejecting Mrs Young's fraud allegations.
2. That failure occurred after a trial of eight days and after reserving judgment for eight months.
3. It should be inferred from the inadequacy of the reasons and the lengthy delay in giving judgment that the primary judge overlooked important pleadings and essential evidence and argument, resulting in a miscarriage of justice.
4. The primary judge failed or omitted to consider submissions by Mrs Young that the elements of unilateral mistake at general law, and in particular the requirement that Mrs Young's legal representatives were affected by the same actual mistake, were not a condition precedent to the application of UCPR, r 36.15 in circumstances otherwise analogous to "unilateral mistake".
5. The Original Orders were obtained by reason of fraudulent representations on the part of one or all of Mr Griffiths, Mr Robert Springett (an expert retained for Mr and Mrs King), and Mr and Mrs King, which was prima facie established by incontrovertible written evidence, in that, in a letter of 5 January 2004, Mr Springett confirmed that the 65 mm drain referred to in Exhibit A was draining to the rear of the King property, whereas the L&E Court was told that the Exhibit A solution involved disconnecting the 65 mm drain from draining to Calca Crescent and taking it to an outlet in the rear. The contents of the letter of 5 January 2004 were known to Mr King.
6. A finding or determination by the primary judge that fraud cannot be established against "anyone involved in the matter", in the absence of reasons to displace the prima facie inference of fraud, was unsafe and the occasion of a miscarriage of justice.
7. The primary judge erred in applying Briginshaw principles without demonstrating reasoned regard to the totality of Mrs Young's evidence.
8. The primary judge erred in excluding evidence of Mr Hones and Mr Hemmings, who acted for Mrs Young, and the exclusion of that evidence was, for a variety of reasons, productive of a miscarriage of justice.
9. The primary judge erred in excluding evidence of Dr Perrens and Mr Warwick Davies, engineers retained on behalf of Mrs Young, and the exclusion of that evidence was, for a variety of reasons, productive of a miscarriage of justice.
10. The cumulative effect of the primary judge's reasons in the multiple judgments given in connection with the ongoing dispute between Mrs Young and Mrs and Mrs King discloses a reasonable apprehension of bias against Mrs Young's claim.
The entire thrust of Mrs Young's complaints in the hearing of the Four Proceedings was against the conduct of her former legal advisers and witnesses, as well as Mr and Mrs King and their advisers and the Council. Despite the very extensive and complex allegations of fraud, there was no evidence to support an alleged conspiracy involving Mr and Mrs King or their advisers or Mrs Young's former advisers or the Council, as was asserted in the course of the hearing. The primary judge was not directed to any evidence of conspiracy involving Mrs Young's advisers. There were simply assertions, without reference to evidentiary support, despite the extremely serious nature of the allegations. It was never suggested, for example, that Mrs Young's former advisers acted without authority. There was nothing to suggest that her former solicitor or barrister had exceeded their authority by entering into the Settlement Agreement or consenting to the 2004 Orders. Mrs Young's former advisers were, at all times, acting within the scope of their authority in resolving the Original Proceedings by entering into the Settlement Agreement and the Consent Orders.
The adequacy of the primary judge's reasons in rejecting the fraud allegations was originally the only ground of appeal raised on behalf of Mrs Young. Amendments were made to assert that the primary judge had delayed in delivering judgment and had overlooked important pleadings and essential evidence. Those grounds were rejected in the Principal Reasons, on the basis that the primary judge had made perfectly clear his reasons for rejecting the allegations of fraud, namely, the lack of evidence of any real probative value that would warrant a finding of fraudulent behaviour, especially given the Briginshaw standard. The absence of any evidence in relation to those critical allegations of fraud and mistake is significant in the light of the procedural history of the proceedings since 2008 and the express statements by the primary judge that he was anxious at all times in the course of case management to ensure that Mrs Young was given every opportunity to tell her story.
[3]
Complaints of Mr and Mrs King
In the present applications, Mr and Mrs King contend that several features of the conduct of the Four Proceedings by Mr Muriniti and Mr Newell demonstrate serious neglect and serious incompetence that caused costs to be incurred improperly and without reasonable cause. Three categories of conduct are said to justify the making of an order under s 99 as follows:
1. bringing the Four Proceedings in circumstances where they had no reasonable prospect of success;
2. making very serious allegations of fraud that were wholly unsupported by evidence and that should never have been made, in circumstances where there was no evidence to support the serious allegations in the L&E Court;
3. the manner in which the Four Proceedings were conducted in this Court both before and during the hearing.
I shall deal with the first two of those categories together and then say something about the third.
[4]
No reasonable prospect of success and no evidence
In relation to the first two categories of conduct, Mr and Mrs King assert the following:
The fraud allegations were extensive and unduly complicated and the pleadings were verbose and voluminous. The allegations of fraud and submissions made on behalf of Mrs Young were summarised in schedules to the Principal Reasons, which run to some 16 pages.
The primary judge gave Mrs Young repeated opportunities over a number of years to plead her fraud case and to marshal evidence in support of that case but she and those advising her were unable to produce "a skerrick of evidence" to support the serious allegations made.
The allegations concerning common and unilateral mistake were mutually inconsistent and misconceived.
The ground of appeal concerning apprehended bias, relying upon the cumulative effect of five separate judgments, was misconceived.
The primary judge specifically directed that the pleadings in the L&E Court be certified by Mr Muriniti as having reasonable prospects of success. His Honour gave that direction because of the seriousness of the allegations made. Mr and Mrs King emphasise the fact that Mr Muriniti was thereby required to turn his mind to the questions of the prospects of success of the allegations and certify that the allegations had reasonable prospects of success on the basis of provable facts and a reasonably arguable view of the law.
Mr and Mrs King assert that, under s 56 of the Procedure Act, a legal practitioner has an independent duty. Whether or not Mr Muriniti or Mr Newell gave advice to Mrs Young that the claims she was making were untenable and whether or not she gave express instructions to make the claims, with or without that advice, they say that the allegations should not have been made by a responsible legal practitioner if to do so would have involved a breach of the legal practitioner's duty under s 56. They assert that a rational and competent assessment of the pleadings and evidence would have revealed to a legal practitioner of ordinary competence that the allegations could not succeed and should never have been made. In any event, they say, the attitude of Mrs Young or her instructions could not excuse prolix and complicated allegations unsupported by evidence. Mr and Mrs King assert that Mr Muriniti could not have held a reasonable belief that Mrs Young's pleaded case had a reasonable prospect of success based upon either provable facts or a reasonably arguable view of the law.
[5]
Conduct of the proceedings in this Court
Mr and Mrs King make the following complaints about the manner in which the Four Proceedings were conducted in this Court:
The grounds of appeal raised were extensive and poorly articulated.
The grounds of appeal in relation to the adequacy of the reasons of the primary judge that were without substance and, in relation to apprehended bias, were fundamentally misconceived.
There was substantial departure from the grounds of appeal in oral submissions, thereby prolonging the hearing.
There were unduly lengthy oral submissions during the hearing without taking the Court to any evidence to support the allegations of fraud, despite being pressed repeatedly by the Court to do so.
Mrs Young's application to set aside the orders made by the L&E Court was based on r 36.15 of the Uniform Civil Procedure Rules 2005. Rule 36.15 relevantly provides that a judgment or order may, on sufficient cause being shown, be set aside if the judgment was given or entered or the order was made irregularly, illegally or against good faith. One of the complaints made on behalf of Mrs Young was that the primary judge failed or omitted to consider submissions made on her behalf that the elements of unilateral mistake at general law and in particular the requirement that Mrs Young's legal representatives were affected by the same actual mistake were not a condition precedent to the application of r 36.15.
Mr and Mrs King assert that Mrs Young was given ample opportunity to produce evidence as to mistake on the part of her legal advisers but there was simply no evidence. Attempts were made to impugn the exercise of discretion by the primary judge to refuse extremely belated attempts to lead evidence from lawyers and witnesses who had been retained by Mrs Young. No reason was advanced in support of the contention that the primary judge acted in accordance with a wrong principle or ignored relevant material or decided on the basis of a misapprehension of the facts in exercising his discretion to refuse Mrs Young the opportunity of calling the four further witnesses. There was simply no basis for admitting fresh evidence as was sought. There was no basis whatsoever in the evidence at trial to conclude that Mrs Young's advisers were induced to advise her to enter into the Settlement Agreement by reason of any misapprehension or misunderstanding of the facts.
Further, Mr and Mrs King say, the ground of appeal of apprehended bias was completely without substance, amounting to no more than a complaint that Mrs Young had been unsuccessful in all her attempts to set aside the 2004 Orders. There had been no application for the primary judge to recuse himself during the trial.
In the course of the hearing of the Four Proceedings, Mr Newell suggested that an apprehension of pre-judgment arose from the cumulative effect of a number of the primary judge's judgments, including two delivered after the judgment under appeal. Mr Newell either misunderstood or misstated the test of apprehended bias. The test of apprehended bias is objective, looks forward and is distinct from actual bias. An inquiry based on the content of a judgment could be a mechanism for identifying actual bias but not apprehended bias. Actual bias was not alleged. Mr and Mrs King assert that, even if it had been, the material relied upon was self-evidently inadequate for that purpose. The ground was imprecisely articulated and Mr Newell departed substantially from it during oral argument. Ultimately, the ground was confined to the nature of any order for remitting if the appeals otherwise succeeded.
The hearing of the Four Proceedings occupied two full days, with the Court sitting longer than usual hours on both days. Most of the first day was taken up with Mr Newell's submissions relating to the allegations of fraud and the alleged inadequacy of the reasons of the primary judge in relation to his rejection of the allegation of fraud. Mr Newell was pressed repeatedly to identify the evidence supporting the allegations of fraud but failed to do so.
Mr Newell was unable to answer how the Settlement Agreement could be avoided or why it was that Mrs Young was not bound by the conduct of her duly authorised agents in entering into it on her behalf. The inability of Mr Newell to answer specific questions from the Court in the course of the hearing, particularly in relation to the fraud and conspiracy allegations and the mistake ground, added very considerably to the length of the hearing.
[6]
Mr Muriniti's response
Mr Muriniti relied on written submissions dated 20 June 2017 in response to the submissions summarised above. In addition, he relied on 47 further pages of written submissions dated 18 December 2017 entitled "Conspiracy Submissions". Finally, Mr Muriniti relied on a short written submission of 18 December 2017 dealing with the application of s 91 of the Evidence Act 1995 (NSW) (the Evidence Act).
Mr Newell contended on behalf Mr Muriniti that, in considering the question of whether or not any of the Four Proceedings had reasonable prospects of success and whether the conduct of the Four Proceedings exhibited serious neglect or serious incompetence, it was not open to this Court to have regard to any findings made in the Principal Reasons. In particular, he contended that, notwithstanding that this Court concluded in the Principal Reasons that there was not a skerrick of evidence to support the allegation of fraud or conspiracy and that the allegations should not have been made, Mr Muriniti was entitled to make further submissions in order to persuade the Court to a different conclusion. In that regard, Mr Muriniti relied on s 91 of the Evidence Act.
Section 91 relevantly provides that evidence of the decision, or of a finding of fact, in an Australian proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding. However, s 190(3)(b) relevantly provides that, in a civil proceeding, the Court may order that s 91 does not apply in relation to evidence if the application of that provision would cause or involve unnecessary expense or delay.
Mr Muriniti's contention appears to be that, notwithstanding the conclusions reached by this Court following full argument on the hearing of the Four Proceedings, if the Court could now be persuaded to reach a different conclusion on precisely the same material, the stance adopted by him in the conduct of the Four Proceedings would be vindicated. The position taken by Mr and Mrs King, through their counsel, is that, if that approach were to be accepted, they repeat all of their submissions made in June 2016 that led to the conclusions of the Court in the Principal Reasons.
On the hearing of the present applications, in seeking to develop the conspiracy and fraud case, Mr Newell said that Mrs Young was induced, by representations made by various people, to believe that she was receiving a "drain and retain solution" to the problems created by the work carried out in 2001 by Mr and Mrs King. It was asserted that knowingly false representations were made by the lawyers both for Mr and Mrs King and for Mrs Young and the expert witnesses called by both of them.
Thus, it was put to McClellan CJ that was what proposed was a "drain and retain solution". That is to say, if Mr and Mrs King excavated on the King Property, they would be required to retain the cut face and drain the water on the King Property. However, if there was previously a retaining wall on the boundary, any drainage would be on the Young Property. It was asserted that Mr and Mrs King knew that Mrs Young had been induced to believe that only a "drain and retain" remedy was being sought whereas in fact it was always intended to create something different. It was asserted that the legal representatives had an agreement to mislead Mrs Young. When McClellan CJ said that he understood a "drain and retain" solution was being proposed, Mr Griffiths, the solicitor acting for Mr and Mrs King, should have indicated that that was not what was foreshadowed. Therefore, Mr Newell asserts, an inference should have been drawn that a different proposal was deliberately planned.
Mr Newell referred to discussions concerning a pit on the King Property, which was represented to be an "absorption pit". He asserted that that representation was known by Mr and Mrs King to be false. The lawyers for both sides and the engineers for both sides were also alleged to have known that that representation was false because a report had previously been provided that described it as a discharge pit. Mr Newell asserted that all of the persons alleged to have been involved in the conspiracy, Mr and Mrs King, their lawyers and Mrs Young's lawyers and the engineers, believed that the misrepresentation would not be discovered by Mrs Young. Mr Newell asserted that there could never be drainage to the pit and that it was necessary to devise the theory that the watercourse ran parallel to the retaining wall. No one told the Chief Judge about the watercourse. Accordingly, Exhibit A could never be a solution to the problem experienced by Mrs Young.
Mr Newell referred to evidence that an easement of 2.4 m would be required to drain the water. However, Mrs Young's house was only 1.4 m from the boundary. Accordingly, he submits that it should have been obvious to the lawyers and to the engineers that the proposed drain could not fit in the area proposed.
Mr Newell said that the proposition was that there would be a water detention system on the Young Property, which assumed a watercourse passing through the Young Property. Another path for the water therefore had to be found but Mrs Young was not told of that necessity. Rather, he said, Mrs Young and the Chief Judge were told something that was completely false, because the only way in which the watercourse could be constructed entailed the demolition of her home. He asserted that the retaining wall proposed by Exhibit A could never have been approved because the watercourse went under the house on the King Property.
Even if it be assumed that the solution proposed as the compromise in the Settlement Agreement, which was approved by the Chief Judge, was impracticable for the reasons advanced, the issue was whether that was by reason of mistake or fraud. As indicated above, in the alternative, Mrs Young asserted that there was a common mistake. However, in the absence of evidence demonstrating mistake on both sides, that thesis could not succeed. A fortiori, the hypothesis of conspiracy could not succeed.
The highest that the matter appears to be put on behalf of Mr Muriniti is that it must have been obvious to the lawyers and to the engineers that the so called solution of Exhibit A could not succeed. Therefore, Mr Newell contends on behalf of Mr Muriniti, an inference should be drawn that the lawyers and engineers deliberately misrepresented the position both to Mrs Young and to the Chief Judge.
The motive for the alleged conspiracy was said to be that the Council needed a solution for a drainage problem from the street and the lawyers and the engineers sought to assist the Council in deceiving Mrs Young into accepting a solution that would have required the demolition of her house in order to give the Council a solution to its drainage problem. There was simply no evidence to enable the Court to draw that inference or to conclude that any of those alleged to have been participants in the conspiracy had in fact been guilty of conspiracy or knowingly making false representations.
[7]
Conclusion
As I have said above, it is significant that Mr Newell, who appeared for Mrs Young in the Four Proceedings, also appeared for Mr Muriniti on the hearing of the present applications. Unsurprisingly, it was not suggested by Mr Newell that his conduct of the Four Proceedings was incompetent so as to justify making further submissions to persuade the Court to reach a different conclusion from that reached in the Principal Reasons. It was not suggested that the material covered the submissions advanced in the additional 47 pages were to overcome some oversight. There was no other explanation as to why the new submissions on conspiracy and fraud that were made on the hearing of the present applications were not made on the hearing of the four proceedings.
More significantly, there was no evidence from Mr Muriniti that sought to justify the conduct of the Four Proceedings. There was no evidence from Mr Muriniti or anyone else on his behalf explaining why the fraud grounds were pressed. For example, Mr Muriniti might have adduced evidence explaining his thought processes and referring to the material relied upon by him to justify his certification of the pleadings alleging fraud and the preparation and the filing of the amended notice of appeal and detailed submissions in support of the grounds in the Four Proceedings. He chose not to do so. Rather, Mr Newell set about arguing, afresh, over some 47 pages, as to why the allegation of fraud should have succeeded.
There is no justification whatsoever for the Court to have regard to the 47 pages of detailed submissions in support of a finding that there was in truth a conspiracy involving the lawyers for Mr and Mrs King, the lawyers for Mrs Young, the expert witnesses called by both of them as well as officers of the Council. Whether or not s 91 of the Evidence Act applies, so as to preclude reliance on any finding made earlier, this would have been an appropriate case for the making an order under s 190.
In any event, it is by no means clear that s 91 has any application. The Court is being asked to make orders as to the costs of proceedings that have been decided by the Court. It is artificial to treat the four applications presently before the Court as separate proceedings simply because Mr Muriniti was not formally a party to the Four Proceedings. He was, of course, intimately involved in the Four Proceedings. On the hearing of the present applications, Mr Newell asserted that the thrust of the contentions that were intended to be advanced in the hearing of the Four Proceedings was that the primary judge failed to give adequate reasons for rejecting the allegations of fraud and conspiracy. He asserted that the extended oral argument in ventilating the fraud and conspiracy case during the hearing of the Four Proceedings was the result of questioning by the Court.
However, as indicated in the Principal Reasons, the primary judge endeavoured to have Mrs Young's case of fraud and conspiracy particularised. This Court, on the hearing of the Four Proceedings, endeavoured to have Mr Newell explain the fraud and conspiracy case by reference to the evidence. In order to consider Mr Newell's arguments on behalf of Mrs Young that the primary judge had failed to give adequate reasons for dismissing the fraud and conspiracy case, it was essential for this Court to understand precisely what the fraud and conspiracy case consisted of. It was not possible for this Court to entertain arguments that the primary judge had failed to give adequate reasons for dismissing a case unless the Court understood precisely what the case was. One might have expected that it would have been a reasonably straightforward exercise for Mr Newell to outline the elements of the fraud and conspiracy case that had been advanced to the primary judge that he was contending had not been adequately dealt with by the primary judge in his Honour's reasons.
Of course, it is not sufficient to attract s 99 to demonstrate that a case is hopeless. The conduct of the legal practitioner, Mr Muriniti in this case, must go beyond that. However, I am not persuaded that there was material available to Mr Muriniti that would have justified making the allegations that were made before the primary judge, on the hearing of the Four Proceedings or on the hearing of the present applications. Had the fraud and conspiracy claim been formulated with some greater clarity, the primary judge may have been in a position to explain in greater detail his reasons for concluding that the fraud or conspiracy case was not made out. That deficiency was the result of the way in which the case was conducted before his Honour.
I am satisfied that Mr Muriniti was responsible for the incurring of Mr and Mrs King's costs in the Four Proceedings and that the costs were incurred by serious incompetence and serious neglect on his part and on the part of those employed by him. It is therefore appropriate for the Court to make an order under s 99 of the Procedure Act against Mr Muriniti in favour of Mr and Mrs King.
One course would be to order Mr Muriniti to pay to Mr and Mrs King the costs that Mrs Young has been ordered to pay to them. However, Mr and Mrs King would then be out-of-pocket to the extent that the costs actually incurred exceeded the costs recoverable under an order for costs on the ordinary basis. I consider, therefore, that the appropriate order is that Mr Muriniti pay to Mr and Mrs King the amount of costs reasonably incurred by them in responding to the Four Proceedings. Mr Muriniti should pay the costs incurred by Mr and Mrs King in the present applications.
[8]
Endnotes
Civil Procedure Act, s 3(1) costs.
[2015] NSWCA 19 at [16].
Re Felicity at [18].
[1940] AC 282.
Ibid at 319.
J D Heydon, Cross on Evidence (Lexis Nexis, 10th ed, 2015) at [5190].
Evidence Act, s 178(3).
Mercantile Bank of India Ltd v Central Bank of India Ltd [1938] AC 287 at 297 (PC, Lord Wright), cited in Heydon, Cross on Evidence, at [5240].
[2015] NSWSC 1372.
Martin at [20] and [29].
[2014] NSWCA 125.
Teoh at [52].
Teoh at [53].
[2018] HCA 4.
[2016] NSWSC 1823.
Mohareb at [28]-[29].
Vexatious Proceedings Act, s 8(2)(c).
[2018] NSWCA 18.
Comeskey at [48].
Comeskey at [48].
Comeskey at [6].
[1940] AC 282 at 318 (Lord Wright), applied in Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [85] (McColl JA).
Uniform Civil Procedure Rules 2005 (NSW), r 36.16.
(2015) 91 NSWLR 190; [2015] NSWCA 276.
Young v King [2016] NSWCA 282 (the principal judgment).
See Young v King [2016] NSWCA 282.
See Re Felicity (No 4) [2015] NSWCA 19 at [16] and [52].
See s 56(1) of the Procedure Act.
See s 57 of the Procedure Act.
See Ireland v Retallack (No 2) [2011] NSWSC 1096 at [6]; Kendirjian v Ayoub [2008] NSWCA 194 at [209].
See Re Felicity (No 4) at [23] and [37]-[38].
Young v King [2004] LEC 93.
See Young v King (No 6) [2015] NSWLEC 111.
[9]
Amendments
11 May 2018 - [68] Amending "Mrs King" to read "Mrs Young".
[98] Amending "Mrs King" to read "Mrs Young" in third sentence.
27 March 2019 - [2] Changing "Evidence Act 2005" to read "Evidence Act 1995".
[33] Amending name of Act to "Vexatious Proceedings Act".
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: 27 March 2019
Terence Stern, Solicitor & Attorney (First and Second Applicant on Notice of Motion)
LC Muriniti & Associates (Respondent to Notice of Motion)
File Number(s): 2015/229797; 2015/229805; 2016/76373; 2016/76351
Decision under appeal Court or tribunal: Land and Environment Court of New South Wales
Citation: [2015] NSWLEC 111; [2016] NSWLEC 4
Date of Decision: 09 July 2015
Before: Sheahan J
File Number(s): 2014/40449; 2003/40417
headnote
[This headnote is not to be read as part of the judgment]
On 19 October 2016, the Court of Appeal dismissed four proceedings brought by Margo Young against Brendan King and Kristina King ("the applicants"), and ordered that Ms Young pay the applicants' costs in each proceeding. Ms Young is now a bankrupt; no amount of the costs order has been paid by her to the applicants.
The submissions made on behalf of Ms Young in the four proceedings had involved extensive and complex allegations of fraud. In its principal judgment, the Court found that there was not a "skerrick of evidence" to support the fraud allegations.
Leonardo Muriniti ("the respondent") represented Ms Young in the four proceedings. On 31 October 2016, the applicants filed a notice of motion, seeking that the respondent pay to them the costs ordered against Ms Young.
The key issues considered by the Court on the application were:
(i) whether the court could rely on findings made in the four proceedings when determining whether costs should be ordered against the respondent;
(ii) whether a costs order should be made against the respondent in respect of the four proceedings;
(iii) the appropriate form of any costs order made.
The Court (Basten JA, Gleeson JA and Emmett AJA) held:
In relation to (i):
(Per Basten JA, Gleeson JA agreeing)
Section 91 of the Evidence Act 1995 (NSW) does not prevent a court, exercising the jurisdiction conferred by Civil Procedure Act 2005 (NSW), s 99, from having regard to findings in its principal judgment. It would be an abuse of process for the respondent to be allowed to challenge the findings made in the substantive proceedings: [44]-[46], [49].
Attorney General for the State of New South Wales v Mohareb [2016] NSWSC 1823; Attorney General of New South Wales v Martin [2015] NSWSC 1372; Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; Prothonotary v Comeskey [2018] NSWCA 18; Teoh v Hunters Hill Council (No 8) [2014] NSWCA 125; Yu v Cao (2015) 91 NSWLR 190; [2015] NSWCA 276, considered.
The principal judgment did need not be tendered as evidence in order for the Court to rely on findings made in the substantive proceedings: [45], [49].
(Per Emmett AJA)
If s 91 applies, this would be an appropriate case for waiving the effect of the section under Evidence Act, s 190: [96]. In any event, it is by no means clear that the section applies; it is artificial to treat the present proceedings as "separate" to the proceedings dismissed in 2016, merely because the respondent was not formally a party to the latter: [97].
In relation to (ii):
(Per Basten JA, Gleeson JA agreeing)
The power under s 99(2)(c) is not limited to court-ordered costs, and extends to the contractual liability of a party to pay his or her own lawyers. An order can therefore be made, requiring that the respondent indemnify the applicants in respect of costs payable by them to their lawyers in relation to the proceedings: [5], [9], [51].
Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19, not followed.
The findings made in the principal judgment warrant the drawing of the necessary inferences to order costs against the respondent: [46], [50].
(Per Gleeson JA): if it were necessary, the additional reasons given by Emmett AJA further engage the court's power to award personal costs against the respondent: [50].
(Per Emmett AJA)
The court, both at first instance and on appeal, endeavoured to have Ms Young's representatives clearly explain the allegations of fraud. They failed to do so. The applicants' costs were incurred due to the serious incompetence and neglect of the respondent, and those employed by him. Accordingly, an order under s 99 should be made: [101].
In relation to (iii):
(Per Basten JA, Gleeson agreeing)
As the applicants sought only the amount of costs Ms Young was ordered to pay, any costs order made in respect of the principal proceedings should be limited to that amount; accordingly, costs were to be assessed on the ordinary basis: [10], [11], [51]-[52].
(Per Emmett AJA)
The respondent should pay the costs reasonably incurred by the applicants in responding to the four proceedings: [101].