Plain v Howard; Howard v Plain [2004] VSC 539

Supreme Court of Victoria|2004-12-22|Before: Cummins J

Application for Orders that costs be paid by non-party - considerations applicable - applications refused.

On 2 July 2004 in the primary proceeding (number 6805 of 1999) I gave judgment in favour of the five defendants, and in the subsidiary proceeding (number 7287 of 1999) in favour of the plaintiffs. Effectively, that meant that the members of the Howard family were successful, that Mrs Plain, the plaintiff in the primary proceeding and a defendant in the second proceeding failed, and that the fifth defendant, the Commonwealth Bank, was successful. The question of costs was reserved while parties had time to consider the judgment which was lengthy and had been published on that day.

On 15 October 2004 by summons the fifth defendant in the primary action, the Commonwealth Bank, made application that the plaintiff, Mrs Plain, pay the fifth defendant's costs including reserved costs and the cost of that application, on an indemnity basis. Likewise, the first four defendants in the primary action and the plaintiffs in the subsidiary action by summons dated 26 October 2004 made application that the plaintiff, Mrs Plain, pay the costs of the first four defendants of the proceedings including reserved costs and the costs of he application, on an indemnity basis. Although not formally on the summons, the two plaintiffs in the subsidiary action (No. 7287) also sought their costs which I granted, and which I confirmed on the last occasion we were here, that is to say 16 December 2004.

In the event as appears in Costs Ruling Number One given on 28 October 2004 in relation to the costs sought by the Howard family in the respective ways I have stated I granted the summons for their costs on a party and party basis, and from 13 February 2002 on an indemnity basis, for the reasons stated in that Ruling. I also ordered Mrs Plain to pay the costs of the Commonwealth Bank of the primary proceedings on a party and party basis for the reasons which there appear.

On the summonses of 15 October and 26 October 2004, the respective applicants in paragraph 2 of each summons sought "further and alternatively" that Mr Sydney John Plain, a non party, pay the costs of the respective defendants including reserved costs and the costs of the application, on an indemnity basis. Mr Plain had in fact not properly been served at that stage, and accordingly that application was stood over for proper service to be effected and for Mr Plain to have an opportunity to come before the Court.

The Court convened on 4 November 2004 where Mr Plain was represented by counsel, and again on 16 December 2004 when Mr Plain, then unrepresented, appeared on his own behalf in response to a subpoena to give evidence, and gave evidence before me. Thus the matter of non-party costs finally comes before me today for determination.

Mr Plain was the husband of Mrs Plain in earlier times, and has assisted her significantly in the conduct of the overall proceedings first by underwriting her costs, because she was not in a financial situation to undertake the substantial litigation which she undertook, and second in the conduct of the proceedings by attending to numerous matters of proof and procedure. The question arises as to whether it is appropriate and just to make a costs order against the non party, Mr Plain, of the substantial costs of these proceedings. The matter is far from academic because the Howards and the Bank have been visited with very substantial costs, and not of their own choosing, and it would appear that Mrs Plain is not in a position to meet the Orders I have made, let alone the full costs that the Howards and the Bank have suffered.

The principles which are relevant to the ordering of non party costs are well known and are set forth in a series of cases notably Knight & Anor v FP Special Assets Ltd & Ors[1]; Bischof & Anor v Adams & Ors[2]; Re Bonlac Foods Ltd[3] and Vestris v Cashman[4]. The principles are, first, that a Court does have jurisdiction to make a costs order against a person who is not a party to the action. Second, costs are in the discretion of the Court. Third, the discretion is a wide, untrammelled discretion. Fourth, the costs must be awarded according to principle and must be just. And finally, the Court must have a realistic view of what has actually occurred in the litigation.

There is no doubt in this case that Mr Plain played a very substantial part in the litigation. First, he underwrote Mrs Plain's costs. However, I consider Mr Plain took the view that he should support his former wife in her difficulties with her family. He took the view that she had been wronged, that her cause was just, and that it was the right and proper thing to support his former wife in those circumstances. Next, it is doubtless the case that Mr Plain took a very substantial and active part in the actual organisation underlining the litigation. He constantly took part in attendances, phone calls, meetings, conferences and advice. He had input into decisions of the plaintiff Mrs Plain; but they were her decisions. The real question, as I said to Mr Kewley on the last occasion, is not the quantum of Mr Plain's conduct but its character. I was most assisted by the written and oral submissions of Mr Watts, Mr Kewley and Mr Crofts respectively on behalf of the first four defendants, the fifth defendant and the non-party. I have regard to the affidavits filed in support, of Mr G.S. Moffat, solicitor for the fifth defendant of 14 October 2004 and supplementary affidavit of 8 December 2004, and of Mr S.A. Dunn, solicitor for the first four defendants of 26 October 2004 and the exhibits thereto. Subject to one matter to which I shall in a moment refer, the history of the conduct of Mr Plain is quite apparent. The question is, what was its character?

I am affirmatively satisfied that Mr Plain was not acting as a party or client in any sense in respect of these proceedings. He acted, I consider, to support his wife and not for any benefit himself. In my view he gave truthful evidence both at the trial and on the hearing before me on the occasion of 16 December 2004 as to his dealings and his motivations in respect of these proceedings.

As I said in the judgment - and I said it with no disrespect to Mr Plain - he has a domineering personality. I am quite satisfied he was convinced, although I was not convinced, that his wife had been wronged by the family and I consider he acted from that motivation and according to his strong personality. That is a far cry from being a party or a client in the proceedings as contemplated by the authorities or being responsible for the costs of the litigation.

The principles are with every respect, clearly set forth in Re Bonlac Foods Ltd[5] - per Warren J (as then she was) - and in my view the character of the conduct of Mr Plain falls far short of the categories which would justify a costs order against him as a non party.

The single matter to which I alluded in paragraph 8 is an admission by Mr Plain in County Court proceedings as set forth in exhibits to the affidavit material of Mr Dunn. The relevant exhibits are SD8 (County Court statement of claim) and SD9 (County Court Third Party Defence). Following the handing down of judgment by me on 2 July 2004 the solicitors for the plaintiff, S.V. Winter and Co, filed Notice of solicitor ceasing to act on 24 September 2004. Unfortunately counsel for Mrs Plain had to sue for his professional fees. That occurred in County Court proceeding no. C1-04-00548 wherein the solicitor was the defendant and Mr S.J. Plain the Third Party. In those proceedings in a third party defence Mr Plain by paragraph 4 admitted the allegations in paragraph 4 of the statement of claim which were that Mr Plain "was a client within the meaning of the Legal Practice Act" in three separate proceedings including "Howard v Plain".[6] In my view that admission is far from conclusive of the question of non-party costs before me. First, the allegations which Mr Plain admitted were rolled-up (concerning three separate proceedings, and of mixed fact and law). Second, Mr Plain drew the admission himself (although with the informal help of a lawyer friend). Third, and significantly, Mr Plain considered himself responsible for the costs of retained counsel and the admission was made in that essential context. In all the circumstances I do not consider the County Court admission by Mr Plain is conclusive of the matter before me. That admission was made in the very limited context of the obligation to pay counsel's fees. Mr Plain himself had undertaken to pay counsel's fees. The admission should be viewed in that context. It does not constitute a general admission that he was a party or client in these proceedings or acting as either. I consider it does not properly found an Order against him in this case of itself or as part of the whole context.

Accordingly I am unsatisfied that the criteria for ordering payment of costs by a non party are made out, and I refuse the application both by the first four defendants and by the fifth defendant to make Mr Plain liable for the costs of the proceedings or any part of them.

Accordingly I dismiss the two costs summonses in respect of Mr Plain. I direct that the fifth defendant, the Bank, pay the costs of Mr Plain of the proceeding since 28 October 2004, that is the costs of the November 2004 wherein he retained counsel.

As I apprehended it, there are no substantial costs of 16 December and 22 December, because Mr Plain appeared in person, so for all practical purposes the award for costs in favour of Mr Plain and against the Bank is for the appearance on the 4th of the 11th line when he was represented by counsel. In the exercise of discretion I made no order that the first four defendants pay Mr Plain's costs, and limited to the bank paying those costs of that date - - -

Mr KEWLEY: Would Your Honour be prepared to hear me in relation to that, Your Honour?

Mr KEWLEY: Your Honour, it would be the bank's submission that - I want to address my submissions specifically to Your Honour's comments with regard to the costs involved in the appearance on 4 November. Your Honour will recall that at that time the first to four defendants were represented by Mr Watts, and the bank was represented by myself. Mr Plain was represented by Mr Crofts.

In my submission, at that point in time each of the defendants, the first to fifth defendants had equal carriage of the application for non party costs and in my submission, in that respect therefore appropriate for the costs of that application which you are awarding to Mr Plain to be borne by the defendants in two groups if you like, that the costs of that day should be shared as between the first to fourth defendants on the one part, and the fifth defendant to the other part.

HIS HONOUR: Intellectually I think you are right, but I think looking at the matter as a matter of practicality the first four defendants I think have had very substantial costs, the Bank has also, but I think - looking at the matter globally and holistically - it is fair and just that I make the Order I made.

HIS HONOUR: Accordingly I make no Order in relation to the first four defendants.

[6] By paragraph 9 of the Third Party Notice it was alleged that at all times the solicitor acted "as agent for the third party (the client) as a disclosed principal in engaging the plaintiff to carry out work and provide legal services from time to time" which allegation was by paragraph 9 of the Third Party Defence denied.

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Judgment (27 paragraphs)

Cases Cited (3)