Plaintiff v Defendant

3 The Commissioner has applied for costs on the basis that they should follow the event. He does not seek costs in relation to his appearance, at times as amicus curiae, in the application for leave which Mr Knight was obliged to make as a vexatious litigant.[2]

4 Costs are awarded at the discretion of the Court.[3] In the interests of fairness, and on policy grounds, this discretion is ordinarily exercised in favour of the successful party.[4]

5 Mr Knight acknowledges that special circumstances must exist before a departure from the general rule as to costs will be warranted in the interests of justice. He argues that those special circumstances exist in his case for a number of reasons.

6 Mr Knight submits that he acted in good faith. The Commissioner does not rely on any allegation of bad faith on his part when seeking costs. Whilst bad faith might well militate in favour of an adverse costs order, good faith does not on its own amount to a 'special circumstance' justifying the refusal of costs to the successful party.

7 Mr Knight also correctly submits that a proceeding's character as one 'in the public interest' or 'as a test case' would be relevant, but not decisive, in relation to the question of whether the requisite special circumstances exist.[5]

8 Mr Knight contends that the public has an interest in proper sentence management. Further, there is a public interest in the outcome of his application as it was brought in relation to the as yet 'untested' Corrections Regulations 2009 ('the regulations'). He relies upon Emerton J's statements when granting leave, to the effect that it remained to be authoritatively determined what is now involved in a classification review and a sentence management plan under the regulations.[6]

9 Mr Knight maintains that his private interest in the litigation should not militate against a finding of special circumstances. He argues that it is 'inevitable that the public interest will be combined with a private interest', citing Smith v Airservices Australia.[7] In Smith, Stone J of the Federal Court recognised the applicant's 'emotional investment in and commitment to reforms' to the public regulation of air safety[8] and yet made no order as to costs when the applicant discontinued the proceeding which his Honour considered involved the public interest.[9]

10 The Commissioner responds that this was neither a 'public interest' case nor a test case. Citing the dissenting judgment of Brennan CJ in Oshlack,[10] he argues that, whilst there is an undoubted public interest in the proper administration of the act and the regulations, not every case brought relating to conduct under them involves the public interest in the relevant sense. Mr Knight's case did not test the regulations. He unsuccessfully argued that he had no sentence plan and that he should have had a different security classification and sentence plan.

11 Kirby J in Oshlack pointed out that the real 'issue is not the subjective motivation of the litigant but the public or private character of the litigation'.[11] The Commissioner argues that Mr Knight's application so specifically concerned his own interest that it should not be categorised as involving a pursuit of the public interest.

12 I agree with the Commissioner that the application did not involve any meaningful testing of the requirements of the regulations. Further, even if the proceeding concerned the public interest, its major focus was on Mr Knight's own particular situation. All in all, I am not satisfied that there were special circumstances justifying a departure from the general rule as to costs on the grounds that the proceeding was a test case or one involving the public interest.

13 Mr Knight submits that it is common in 'prison cases' for no order as to costs to be made. He relies on the comments of Burchett AJ in McCallum v Commissioner of Corrective Services (NSW):

The application must be dismissed. The defendant asks the Court to dismiss it with costs. That is a matter of discretion. It would not be appropriate to place the obstacle of the threat of a costs order in the way of any reasonable attempt by a prisoner to have the Court ensure the legality of significant action taken by the Commissioner. Not uncommonly, an application such as this, if dismissed, is dismissed with no order as to costs.[12]

14 Mr Knight has been the subject of adverse costs orders where proceedings initiated by him have been found to be 'futile and hopeless',[13] 'unmeritorious'[14] or 'lack[ing] substance or merit'.[15] But, as Kellam J said in Knight v Secretary to the Department of Justice (Re Costs),[16] there is no principle that costs orders should not be made against prisoners unless proceedings are vexatious.[17] It is significant in this case that it was held that it would have been inappropriate and futile to grant the relief sought[18] and that the Court lacked jurisdiction to grant the relief which Mr Knight effectively sought.[19]

15 As Burchett AJ accepted in McCallum, an application for costs demands the exercise of discretion. Mr Knight's status as a prisoner is not determinative of this application.

16 Mr Knight also argues that he is impecunious and should not be ordered to pay costs in circumstances in which he maintains he will have minimal prospects of employment upon release on parole. He states that he has limited means as a prisoner and no prospects of acquiring funds through inheritance or otherwise. The Commissioner will not be able to recover costs against him because he would apply for voluntary bankruptcy. Any costs order would be futile, as a result, and would involve a waste of public funds if the matter were to be pursued.

17 The Commissioner points out that, in Knight v State of Victoria and Wise,[20] Mr Knight unsuccessfully relied upon his impecuniosoty when challenging an order for costs made against him at the Victorian Civil and Administrative Tribunal. Neither the impecuniosoty of the unsuccessful party nor that party's inability to pay costs will constitute special circumstances justifying refusal of an application for costs by the successful party.[21]

18 Citing the Full Federal Court's decision in Yilan v Minister for Multicultural Affairs[22] Mr Knight argues that, whilst impecuniosoty generally is never a sufficient reason to deny a successful party its costs, there may be special reasons to do so. He submits that there are special reasons for not making a costs order in his case. They relate to the nature of the application, his financial state and his personal circumstances, which include his status as a prisoner serving a life sentence.

19 Mr Knight also asserts that the Commissioner must be applying for costs for an ulterior purpose because he will not recover them. This, too, amounts to a special reason or circumstance for refusing the application. This allegation lacks substance. The Commissioner was entitled to oppose Mr Knight's application and to try to recoup public monies spent in the process of defending an unsuccessful proceeding in which the Court recognised the futility of a grant of the relief sought.

20 The Commissioner agrees that special circumstances will alter the general situation and that the law was correctly stated in Yilan. He nevertheless contends that those circumstances do not exist here. I agree.

21 Finally, Mr Knight seeks to rely upon the outcomes of other proceedings brought by him. The results of other applications are irrelevant and this one must be determined on its merits. Mr Knight has not satisfied me that special circumstances exist justifying an exercise of the Court's discretion against the successful party seeking an award of costs.

22 I will order that he pay the Commissioner's costs of the proceeding.

[1] Knight v Hastings [2012] VSC 203.

[2] See Attorney-General (Vic) v Knight [2004] VSC 407.

[3] Supreme Court Act 1986 (Vic) s 24.

[4] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 97, [67] (McHugh J) ('Oshlack').

[5] See Oshlack 91, [49] (Gaudron and Gummow JJ).

[6] Knight v Hastings & Roach [2010] VSC 99, [6]-[7].

[7] 2005] FCA 997.

[10] [1998] HCA 11; (1998) 193 CLR 72, 75 [1]-[2].

[12] [2002] NSWSC 497, [13] ("McCallum").

[13] Knight v State of Victoria and Wise [2003] VSC 459, [33].

[14] Knight v Minister for Corrections [2003] VSC 413, [1].

[15] Knight v Secretary to the Department of Justice (Re Costs) [2004] VSC 29, [19].

[16] [2004] VSC 29.

[18] Knight v Hastings [2012] VSC 203, [40], [48].

[20] [2003] VSC 459.

[21] Knight v Secretary to the Department of Justice (Re: Costs) [2004] VSC 29 [5] (Kellam J).

[22] [1999] FCA 1212.