Knight v FP Special Assets Ltd

Knight v FP Special Assets Ltd - [1992] HCA 28 - HCA 1992 case summary — Zoe

[77]

The relevant provisions which are in force in Queensland are, therefore, O. 91, r. 1 and s. 58 of the Supreme Court Act 1867. The respondents' primary submission is that either O. 91, r. 1 or s. 58 is sufficient to authorize the Supreme Court, in a proper case, to award costs against a person not a party to the proceedings before it. This submission basically raises no more than a question of construction. But the respondents also rely upon the recognized exceptions to the general principle that costs may not be awarded against a non-party. They say that this case falls within those exceptions or is sufficiently analogous to be included in them. In one sense, the exceptions, which admittedly do exist, create a logical difficulty in the way of the appellants' argument. If there are exceptions allowing costs to be awarded to non-parties, then the provisions conferring jurisdiction to award costs must encompass them. That is to say, the provisions must contemplate the award of costs to a non-party, if only in an exceptional case. Moreover, there is a certain artificiality in any proposition that an award of costs cannot be made against a person merely because he is not a party to the proceedings. If that were all, then it would be possible simply to join the person as a party for the purpose of obtaining an order for costs against him. Indeed, in the case of Mathias v. Yetts [46] that was said to have been the practice where it was otherwise appropriate to make an award of costs against a person who was not a party. When it is said that as a general principle costs ought not be awarded against a person who is not a party to the proceedings, what is really being asserted is, not that there is no jurisdiction to do so, but that there is no justification for it because generally speaking persons who are not parties lack a sufficient connection with the litigation to provide a proper basis upon which to award costs against them. Mere lack of joinder is not the reason and, as I have said, if it were, it could easily be cured. I am not sure that this distinction was always observed during argument.

[85]

I do not find that Reg. v. Greene has ever been overruled or questioned. It is, I think, an authority in an application of this kind to give costs against the party who is the real litigant, although his name does not appear as the applicant making the motion. Middleton J. summarized the power to award costs at common law [5] : It is quite true that the jurisdiction of the Common Law Courts to award costs must, in general, be found in some statute; but it is equally a recognized exception to this general statement that the Common Law Courts always had power to award costs against one unsuccessfully invoking the aid of its process, even when the Court had no jurisdiction to entertain the application: R. v. Bennett [6] ; Re Cosmopolitan Life Association [7] ; In re Bombay Civil Fund Act [8] . And the Court always had power to award costs against the real applicant when the motion was made by him in the name of a man of straw for the purpose of avoiding liability. The Courts were never so blind as to be unable to see through the flimsy device nor so impotent as to be unable to act. He then dealt with the power to award costs in equity [9] : In Chancery, there never was any such limitation suggested as to the power of the Court over costs. The books contain many references as to the mode in which payment of costs may be enforced against persons not parties to the suit ; but singularly do not contain, so far as I can ascertain, any case in which the foundation of that jurisdiction or the principles by which the discretion of the Court was governed, are discussed. It should be added that in Re Sturmer and Town of Beaverton , s. 119 of the Ontario Judicature Act applied and was in the same terms as s. 5 of the English Act of 1890 [10] . 1. (1912) 25 O.L.R. 566. 2. ibid., at p. 571. 3. ibid., at p. 572. 4. (1902) 4 O.L.R. 205. 5. (1893) 15 P.R. 185. 6. (1888) 40 Ch. D. 288. 7. (1912) 25 O.L.R., at pp. 575-576. 8. cf. Rockwell Developments Ltd. v. Newtonbrook Plaza Ltd. (1972), 27 D.L.R. (3d) 651; Alexanian v. Dolinski (1973), 43 D.L.R. (3d) 649; see also Oasis Hotel Ltd. v. Zurich Insurance Co. (1981), 124 D.L.R. (3d) 455; Basran v. Basran (1981), 123 D.L.R. (3d) 508; Baker Acceptance Corporation Ltd. v. Gordon, Gordon and Electric Circus (1986), 70 B.C.L.R. 140; Young v. Young (1990), 75 D.L.R. (4th) 46; Burns Philp & Co. Ltd. v. Bhagat (unreported; Supreme Court of Victoria; 31 January 1992).

[116]

But the authority of the Courts at Westminster is derived from the Queen's Writ, directing them to take cognizance of the suits mentioned in the writs respectively, and thus bringing the parties before them. This being so, they have no power to order any particular individual to come before them at their pleasure. Exceptionally, the Court of King's Bench had jurisdiction to order the real party in ejectment proceedings to pay the costs [33] . In Mobbs [34] , Blackburn J. said that in: ordinary cases, where there has been no abuse of its process, the Court has no jurisdiction to order a person not a party on the record to pay costs. But the action of ejectment was an anomaly. In Hutchinson , Lord Campbell C.J. expressed the view that even the jurisdiction to order costs against non-parties in ejectment actions arose out of the power of the court to protect its process against abuse. He said [35] : The principle is that the individuals who order an appearance to be entered in ejectment, in the names of those not really defending the suit, abuse our process, and that, as they substantially are the suitors, we have jurisdiction to make them pay the costs. The courts also had jurisdiction to order a person to pay costs if the Attorney-General had proceeded "at the relation of" that person. Although the relator was not a party to the proceedings, the relator's name was inserted in the proceedings as a matter of practice so that that person could be made liable for costs [36] . 1. (1843) 4 Q.B. 646 [114 E.R. 1042]. 2. Hayward v. Giffard (1838), 4 M. & W. 194 [150 E.R. 1399]; Evans v. Rees (1842), 2 Q.B. 334 [114 E.R. 131]; Ram Coomar Coondoo v. Chunder Canto Mookerjee (1876), 2 App. Cas. 186; Coffee Tavern Co. v. De Young (1880), 6 V.L.R., L. 289; Calder v. Slattery (1885), 2 W.N. (N.S.W.) 38. 3. (1838) 4 M. & W., at p. 196 [150 E.R., at p. 1400]. 4. Doe dem. Masters v. Gray (1830), 10 B. & C. 615 [109 E.R. 579]; Hutchinson v. Greenwood (1854), 4 El. & Bl. 324 [119 E.R. 125]; Mobbs v. Vandenbrande (1864), 33 L.J.Q.B. 177. 5. ibid., at p. 180. See also Hayward v. Giffard (1838), 4 M. & W., at pp. 196-197 [150 E.R., at p. 1400]; Evans v. Rees (1842), 2 Q.B., at p. 340 [114 E.R., at p. 133]. 6. (1854) 4 El. & Bl., at p. 326 [119 E.R., at p. 126]. 7. Attorney-General v. Logan , [1891] 2 Q.B. 100, at p. 106.

[124]

We take the true rule to be that the Court may adjudge from all circumstances who is the party, and give costs against any party, or against an attorney, if the affidavit of the person sought to be charged, or any affidavit produced by an attorney, shews good ground for imposing them upon them respectively. But, if the claim for costs should arise from the affidavits produced in answer, there must be a special application. In the present case costs are asked in respect of the statements made in opposition to the rule. The court held an order for costs could not be made in that case without a special application. After the costs were taxed, a rule was obtained calling on Simpson, the applicant's attorney, to show cause why he should not pay the amount of the taxed costs to the defendant. The court held that Simpson was liable for the costs. Lord Denman C.J. said [7] : The question is, whether a person who, on a motion for a quo warranto information, acts as an attorney, is on that account to avoid payment of costs, when he has, in fact, been the relator, but has put forward another person in that capacity, who is unable to pay costs. I have no doubt that he is liable, where it appears that he is actually and virtually a relator. It was not necessary in this case that the defendant should have made an application for the costs to Simpson, which, it may be supposed, would only have met with defiance. The ground of the decision, therefore, was narrower than the earlier dictum of Lord Denman C.J. in the same case. Simpson seems to have been held liable on the basis that he acted as attorney on the motion and was the real relator. It was well established that the court had power to order a solicitor to pay the costs of the proceedings if he had been guilty of professional misconduct in respect of the proceedings. In Myers v. Elman [8] , Lord Wright pointed out: But alongside the jurisdiction to strike off the Roll or to suspend, there existed in the Court the jurisdiction to punish a solicitor or attorney by ordering him to pay costs, sometimes the costs of his own client, sometimes those of the opposite party, sometimes, it may be, of both. The ground of such an order was that the solicitor had been guilty of professional misconduct (as it is generally called) not, however, of so serious a character as to justify striking him off the Roll or suspending him. This was a summary jurisdiction exercised by the Court which had tried the case in the course of which the misconduct was committed It was a summary jurisdiction, in which the intervention of the judge was invoked at the conclusion of the case either by motion in the Chancery Court or by a motion or application for a rule in the Courts of Common Law. 1. (1843) 4 Q.B., at p. 650 [114 E.R., at p. 1044]. 2. ibid., at pp. 652-653 [pp. 1044-1045]. 3. [1940] A.C. 282, at p. 318.

[132]

Some limitation must be put upon the generality of the words. They cannot enable the Court to order the costs to be paid by a stranger to the proceedings; they can only mean that the Court may order the costs to be paid by any of the parties. This view prevailed until Aiden Shipping Ltd v. Interbulk Ltd. [16] where the dictum of Collins L.J. was rejected and John Fairfax & Sons overruled. In Aiden, the House of Lords held that s. 51(1) of the Supreme Court Act 1981 U.K., which was relevantly in the same terms as s. 5 of the Supreme Court of Judicature Act, authorized the making of an order for costs against a person who was not a party to the action. Lord Goff of Chieveley said [17] that it was important to remember that s. 51(1) was concerned with the jurisdiction of the Court to make orders as to costs and that the jurisdiction was expressed to be subject to rules of court. His Lordship went on to say [18] : The subsection simply provides that "the court shall have full power to determine by whom the costs are to be paid." Such a provision is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the Court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. Such a policy appears to me, I must confess, to be entirely sensible. It comes therefore as something of a surprise to discover that it has been suggested that any limitation should be held to be implied into the statutory provision which confers the relevant jurisdiction. 1. Forbes-Smith v. Forbes-Smith , [1901] P. 258; John Fairfax & Sons Pty. Ltd. v. E. C. De Witt & Co. (Australia) Pty. Ltd. , [1958] 1 Q.B. 323; Allman v. Daly [No. 2] , [1959] V.R. 614; Rockwell Developments Ltd. v. Newtonbrook Plaza Ltd. (1972), 27 D.L.R. (3d) 651; Alexanian v. Dolinski (1973), 43 D.L.R. (3d) 649; A. v. S. , [1982] 1 N.Z.L.R. 726; Australian Guarantee Corporation Ltd. v. De Jager , [1984] V.R. 483. 2. [1901] P., at p. 271. 3. [1986] A.C. 965, at pp. 981-982. 4. ibid., at p. 975. 5. (1933) 48 C.L.R. 677, at p. 681.

At a glance

Court

Decision date

Before

Source

Judgment (142 paragraphs)

Parties