Plaintiff v First Defendant Second Defendant

1 On 11 August 2009, the Magistrates' Court of Victoria ('Magistrates' Court') constituted by Magistrate Rozencwajg ('the Magistrate') made orders in proceeding number U00770750. Among other orders, the first defendant to this proceeding, Victoria Legal Aid ('VLA'), was ordered to pay the costs of the plaintiff in this proceeding, Gabriel Kuek (trading as Access Law) ('Access Law'). That order states that the costs are 'to be agreed upon, failing which liberty to apply'.

2 VLA and Access Law did not reach agreement on quantum and an application was made to the Magistrates' Court. On 24 March 2011, the Magistrate ordered, inter alia, that VLA pay Access Law's costs in the sum of $8,692.85 ('March 2011 Order'). It was subsequently agreed by VLA and Access Law that the Magistrate had failed to provide adequate reasons for that order and that the order should be quashed. On 24 May 2011, the Supreme Court of Victoria constituted by Mukhtar AsJ ordered by consent that, inter alia, the March 2011 Order be quashed and its subject-matter be determined according to law by a magistrate other than Magistrate Rozencwajg..

3 The dispute in respect of the costs to be paid by VLA to Access Law, together with another related matter, was heard and determined afresh by the Deputy Chief Magistrate ('DCM'). On 29 July 2013, the DCM published reasons for her decision ('Reasons') and ordered, inter alia ('Orders'):[1]

(a) that VLA pay Access Law's costs in the sum of $20,753 (excluding 29 July 2013);

(b) that Access Law pay Counsel's fees incurred by VLA of $1,716;

(c) that VLA pay Counsel's fees (excluding fees in relation to the costs matter):

(i) D Perkins $5,050;

(ii) J Lavery $7,643;

(iii) Re bill 14 May 2009 - J Lavery $2,200 and D Hancock $2,200;

(iv) Re bill 9 August 2011 - D Hancock $880 and D Perkins $1,660;

(d) Re Access Law bill 24 July 2013, costs of $5,148; and

(e) Re Access Law bill 24 July 2013 - J Lavery of counsel $5,500.

4 Orders (d) and (e) above are orders to the effect that VLA must pay the amount stated therein, although no payer is specified. Pursuant to the Orders, which were extracted in the Second Amended Originating Motion, VLA was ordered to pay $51,034 and Access Law was ordered to pay $1,716. In a note filed by consent following the proceedings before me on 23 October 2014, Access Law and VLA agreed that:

(a) the total amount of the costs which had been sought by Access Law in the proceedings before the DCM was $138,087;

(b) the total amount that had been allowed to Access Law in the Orders made by the DCM was $48,504; and

(c) the difference between what was claimed by Access Law and that which was allowed by the DCM was $89,583.

5 By its Second Amended Originating Motion Access Law seeks:

(a) an order in the nature of certiorari, to quash the Orders;

(b) an order remitting the question of costs to the Magistrates' Court, differently constituted, to be determined in accordance with law; and

(c) an order that VLA pay Access Law's costs of, and incidental to, this proceeding.

Those orders which are sought to be quashed include (c)(iv), (d) and (e) of the Orders as set out in para [3] above. Whilst the Second Amended Originating Motion sought an order quashing these orders, no submissions were advanced before me that the Orders were affected by jurisdictional error or error on the face of the record.

6 Access Law's Second Amended Originating Motion set out 14 grounds in support of the relief set out at [5] above. Several of these grounds included multiple sub-grounds. The proceedings in this court are by way of judicial review pursuant to O 56 of the Supreme Court (General Civil Procedure) Rules 2005 ('Rules'). The plaintiff accepted that the court's jurisdiction to grant relief in the nature of certiorari is contingent upon establishing error on the face of the record or jurisdictional error. A cursory review of the grounds contained in the Second Amended Originating Motion discloses that many of them, whilst apposite for an appeal by way of rehearing, could on no view sustain a finding of jurisdictional error or error on the face of the record. I raised this deficiency with Mr Nash QC, who appeared with Mr Lavery of counsel for the plaintiff, at the outset of the p[2]oceedings.2 Following this exchange, Mr Nash refined the 14 grounds in the Second Amended Originating Motion to four grounds, comprising two grounds alleging jurisdictional error by reason of a denial of procedural fairness, and two grounds alleging error on the face of [3]he record.3 The four grounds are as follows:

(i) Denial of procedural fairness by reason of the plaintiff not being given an opportunity to make submissions about whether or not items of costs should be disallowed by reason of not being prescribed by Scale G of the Scale of Costs of the Magistrates' Court of Victoria (Ground 1).

(ii) Denial of procedural fairness by reason of the plaintiff not being given an opportunity to provide further particulars of counsel's fees which were disallowed or reduced by reason of the DCM considering that the lack of particulars in respect of the fees claimed prevented an assessment of whether the costs had been reasonably incurred (Ground 2).

(iii) Error of law on the face of the record as a result of the DCM using Scale G as a bar to recovery of costs which might otherwise be properly incurred (Ground 3).

(iv) Error of law on the face of the record as a consequence of the DCM not granting the plaintiff indemnity costs in circumstances where no reference was made by the DCM to s 132 of the Magistrates' Court Act 1989 ('Magistrates' Court Act') as a relevant consideration (Ground 4).

7 Section 131(1) of the Magistrates' Court Act provides:

The costs of, and incidental to, all proceedings in the court are in the discretion of the court and the court has full power to determine by whom, to whom and to what extent the costs are to be paid.

At para 10 of her Reasons, the DCM stated, in reference to s 131 of the Act:

The discretion is extremely wide. It confers a wide and unfettered discretion of the court. It is trite to state that the discretion must be carefully exercised. Reasons must be stated. In determining an award of the costs, a court must consider and reference what is just and reasonable in the circumstances, that is, to apply a 'touchstone of reasonableness'.[4]

8 The DCM further stated at para 49 of her Reasons:

I have taken the view that in the exercise of my discretion, the most appropriate, reasonable, transparent and fairest manner in which to determine Mr Kuek and Access Law's costs is to apply Scale G of the Magistrates' Court Civil Procedure Rules 1999, Appendix A. In applying this scale, I am applying costs which are deemed appropriate in the Magistrates' Court, and applying them at the highest rate, thereby affording the applicant for costs recognition of his seniority and the gravity of the matter.

9 For reasons which are discussed in more detail in the context of Appeal Ground 4, paras 10 and 49 of the Reasons do not disclose any error.

10 The introduction to the Magistrates' Court scale of costs effective 1 January 2013 is as follows:

Scale of costs and fees which may be claimed by Australian lawyers and counsel as between party and party as well as between Australian lawyer and client. If in any case the court or registrar thinks that any item is inadequate or excessive, the court or registrar may allow a greater or lesser sum than the scale provides. If the scale of costs does not provide for any case, the court or registrar may allow reasonable costs.

11 Annexure 2 to the DCM's Reasons is her Honour's taxation of the plaintiff's bills of costs dated 5 April 2011; 23 September 2009; 14 May 2010 and 19 August 2011. Annexure 2 records, in respect of 61 items totalling $2,673: 'disallowed on [the] basis that this item is not recoverable under Scale G'. The overwhelming majority of the 61 items relate to the sending or the receipt of facsimile transmissions and/or emails.

12 Access Law contends that it has been denied procedural fairness by reason of non-disclosure constituted by the failure of the DCM to disclose that she was considering refusing any allowance for the 61 items because no provision was made for these items in Scale G. Access Law submits that this occurred in circumstances where VLA had not submitted that no allowance should be made for these items because they were not prescribed by Scale G. Effectively, Access Law submits that the prospect of no allowance being made for the items by reason of them not being prescribed by Scale G was not 'in the ring'. Access Law points out that in respect of each of the 61 items disallowed, VLA had proposed that allowance for the items should be made by reference to Scale D of the County Court scale. For example, VLA's written response to Access Law's bill of costs dated 14 May 2010 stated: 'Allow fee in County Court scale as there is no equivalent fee in the Magistrates' Court.' Under the heading 'Entitled Costs', VLA's written response stated: '(subject to objection) $11 County Court Scale D item 26(f)'. Access Law submits that in circumstances where VLA conceded that allowance should be made in respect of the 61 items, it was incumbent upon the DCM to disclose to Access Law the potential for no allowance to be made on the grounds of non-prescription by Scale G.

13 During the proceedings before me, counsel for VLA acknowledged that it had not submitted to the DCM that items should be disallowed if they were not specifically prescribed by Scale G.[5] Counsel submitted that the DCM 'had not accepted the submissions of either party'.[6] He also submitted that proceedings before the DCM could be contrasted with those in which there were pleadings which defined the issues in dispute. He submitted that VLA, as a guide to help the DCM, had identified Scale D of the County Court scale. Counsel submitted that even in circumstances where there was no dispute between the parties, it was open to the DCM to decide whether items claimed should or should not be allowed.[7] VLA submitted that the present case involved Access Law's claim for an entitlement to costs under s 131 of the Magistrates' Court Act and it was a matter for Access Law to establish an entitlement to costs. Access Law was aware that the critical issue was whether, by applying the touchstone of reasonableness, Access Law was entitled to an award of costs for any of the items of work claimed, and if so, in what amount. VLA submitted that Access Law must be taken to have been aware that the DCM might determine the costs entitlement within a possible range from zero to the full amount claimed for any particular item.[8]

14 In Victims Compensation Fund Corporation v Nguyen, the New South Wales Court of Appeal observed that 'the scope of any opportunity to make submissions may depend on the issues perceived as being "in the ring".' [9] Other authorities support the proposition that disclosure of an adverse conclusion will be necessary where the conclusion is not 'obvious'[10] or 'anticipated'[11] or is not 'reasonably to be expected'.[12] In Sobh v Children's Court of Victoria,[13] Mandie J stated:

In addition, it is likely, upon a fair reading of his Reasons, that the learned magistrate having "carefully considered all the items listed in the solicitor's bill", proceeded to disallow or reduce items which were not even challenged or argued before him. The items are not identified. This is unfair to the plaintiff. I do not think that the magistrate adhered to his originally stated intent to assess the bill globally rather than on an item by item approach, or, if he did, I do not think that he put the parties on sufficient notice of his continued intent to do so, after the argument was confined to the disputed items.

15 In Wales v Wales,[14] the Court of Appeal considered a number of situations in which non-disclosure by a decision-maker may constitute a vitiating denial of procedural fairness. Ashley JA referred to the joint judgment of Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ in Farah Constructions Pty Ltd v Say-Dee Pty Ltd:[15]

It was unjust to the appellants to decide the respondent's appeal to the Court of Appeal on an independent ground which was never pleaded by the respondent, never argued by the respondent before the trial judge, and never argued by the respondent in the Court of Appeal. The authorities and writings relied upon by the Court of Appeal were not put to the Court of Appeal for that purpose. The relevant part of the Court of Appeal's judgment would have come as a complete surprise to all parties. The Court of Appeal said that the question of restitution-based liability 'was not specifically exposed in any detail by the parties but nevertheless warrants consideration as it bears upon the true foundation of the first limb of Barnes v Addy upon which Say-Dee did clearly rely'. The true position, as counsel for the respondent accepted with commendable candour and straightforwardness during argument on the special leave application, is that the question was not discussed at all - specifically or non-specifically, in detail or not in detail. It is conceivable that the appellants might have wished to defeat restitution-based liability, not merely by advancing argument about its want of intellectual merit and its inconsistency with Australian authority, but also by calling evidence to show, for example, a change of position.[16]

16 Referring to the passage set out above, Ashley JA stated:[17]

There, what happened was not unexpected fact finding at first instance, but unexpected legal analysis by the Court of Appeal. It is, I think, implicit in the passage cited that what the court did might successfully have founded a complaint of denial of procedural fairness because the unsuccessful parties were precluded from calling evidence to meet the point.

17 I accept Access Law's contention that it was denied procedural fairness by reason of non-disclosure by the DCM of the prospect of non-allowance of the 61 items on the basis that Scale G does not prescribe an amount for these items. VLA had not made any such submission. To the contrary, it had submitted that absent any allowance being made by Scale G, allowance should be made by reference to Scale D of the County Court cost scale. Whilst VLA contended that the amount claimed by the plaintiff in respect of these items was excessive, it made no submission to the effect that no allowance should be made. The prospect of this being an outcome was not 'in the ring'. Had Access Law been alerted to this possible outcome, it would have been able to make submissions in opposition to it.

18 Ground 1 is only relevant to Access Law's challenge to para 1 of the DCM's Orders made on 29 July 2013 'that VLA pay Access Law's costs in the sum of $20,753'. I am mindful that the quantum of the amount in issue was insignificant. The total amount claimed by Access Law in respect of the 61 disallowed items is $2,673. This represents less than 3% of the total amount of $89,583 which is in dispute between the parties. VLA urged me in the exercise of the court's discretion to refrain from making any orders quashing the DCM's Orders.

19 It is beyond argument that the present proceedings have a lamentable history. The amount of judicial resources which have been consumed by litigation in respect of Access Law's disputed costs claim, is out of all proportion to the amount in issue. Further, whilst I have found that Access Law was denied procedural fairness in respect of the non-allowance of the 61 items, the consequences flowing from that denial are insignificant. If the DCM had simply followed the course proposed by VLA and made an allowance based on Scale D of the County Court scale, the total amount allowed for the 61 items would have been less than $1,000. Access Law would have had no basis for complaint on grounds of non-disclosure because that outcome would have been 'in the ring'.

20 I am mindful that save for her Honour's decision to disallow the 61 items totalling $2,673 on the basis that Scale G does not prescribe any amount for these items, there is no legal flaw in her Honour's otherwise well-reasoned decision to allow the plaintiff $20,753 based on the application of Scale G. Plainly, there is no jurisdictional error inherent in her Honour's reasoning at paragraph 49 of her Reasons to refer to Scale G of the Magistrates' Court Civil Procedure Rules 1999, Appendix A.[18]

21 Notwithstanding the force of the matters set out above, I have concluded that having found a breach of procedural fairness, the appropriate course is to quash paragraph 1 of the DCM's Orders and remit the hearing of the taxation of the plaintiff's bill of costs to be heard by a magistrate other than the DCM.

22 Ultimately, the amount in question relating to the 61 disallowed items is not determinative. In Ucar v Nylex Industrial Products Pty Ltd[19] Redlich JA stated:

Procedural fairness must be upheld for its own sake, as well as for its consequences because "the experience of the common law is that, out of fair and lawful procedures, fair and lawful outcomes will more commonly emerge."

The concern is with the fairness of the procedure adopted rather than the fairness of the outcome; with the decision-making process not the decision. The true legal issue "is not only, whether the person adversely affected by the decision has had his or her legitimate expectations disappointed. That may be a consequence of the departure from the legal standard; but it is not the invalidating cause".[20]

The passage set out above was cited with approval by the Victorian Court of Appeal in Wales v Wales.[21] In Bahonko v Moorefields Community, Nettle JA, with whom Buchanan and Redlich JJA agreed, stated:

The authorities are clear that, once a breach of natural justice is proved, a court should refuse relief only when it is confident that the breach of natural justice could not have made a difference, and that is no easy task for a court to satisfy itself that what appears on its face to have been a denial of natural justice could not have a bearing on the outcome. In effect, the onus is on the respondents, therefore, to demonstrate that whatever the appellant might have wished to submit or adduce in evidence to oppose the reference to VCAT, it would 'inevitably result in the making of the same order as that made by the primary judge at the first trial'.[22]

23 Consistent with the authorities set out above, I am not satisfied that had Access Law been given an opportunity to make submissions in respect of the disallowance of the 61 items, the DCM would inevitably have come to the same conclusion. In these circumstances, the finding of a denial of procedural fairness justifies the quashing of para 1 of the Orders made on 29 July 2013 and the remittal of the taxation of the bill of costs as set out in Annexure 2 of the Reasons for rehearing by a different magistrate. That magistrate will not be bound by the decision of the DCM to apply Scale G. Whether he or she decides to apply Scale G will be a matter for the magistrate to determine in the exercise of the broad discretion conferred by s 131 of the Magistrates' Court Act. Indeed, upon a re-hearing, it will be a matter for the magistrate to determine whether no scale or a lower scale of costs than Scale G is appropriate. As noted by DCM at para 10 of the Reasons, the primary consideration in the exercise of the discretion conferred by s 131 of the Magistrates' Court Act is what is just and reasonable in the circumstances.

24 The total amount of costs claimed by Access Law was $138,087. Of this figure, $42,434 consisted of counsel's fees. The total amount of counsel's fees which VLA was ordered to pay Access Law was $19,643.

25 Access Law contends that it was denied procedural fairness by reason of the DCM disallowing or reducing certain items of counsel's fees for preparation and/or conferences on the grounds of inadequate particulars, without having disclosed to the parties that it was her intention to do so.

26 Ground 2 relates to the relief sought in para 3 of the Second Amended Originating Motion. That para seeks an order quashing the DCM's Orders:

That VLA pay counsel's fees (excluding fees in relation to the costs matter)

(a) D Perkins $5,050

(b) J Lavery $7,643

(d) Re bill 14 May 2009 (sic) - J Lavery $2,200 and D Hancock $2,200

(e) Re bill 19 August 2011 - D Hancock $880 and D Perkins $1,660

27 It is to be noted that the reference in para 3(d) is incorrect, the actual date of the bill was 14 May 2010.

28 The DCM disallowed or reduced claims for counsel's fees on a number of different grounds. The ground of inadequate particularisation in respect of counsel's fees for preparation and/or conferences only relates to three items of counsel's fees:

(a) 29 September 2008 - Mr D Perkins - preparation and conferences: amount claimed $825 - amount allowed $660.[23]

(b) 9 February 2009 - Mr J Lavery: reading materials, preparation and conferences (say one day): amount claimed $2,750 - amount allowed $1,100.[24]

(c) 22 March 2010 - Mr D Hancock: preparation - amount claimed $2,200: amount allowed - nil.

29 It is necessary to distinguish between the approach adopted by the DCM to the reduction in Mr Perkins' fees for preparation and conferences compared to those of Mr Lavery and Mr Hancock. At para 50 of her Reasons, the DCM stated in reference to counsel's fees of $825.00 for preparation and conferences on 29 September 2008:

The 'preparation and conferences' item is not particularised. It is not indicated, for example, with whom the conferences were held, the duration of the conferences or the time expended on preparation. The lack of specificity renders it impossible to determine whether the sum has been reasonable (sic) incurred.

Immediately after the passage set out above, the DCM stated:

I have made provision for the preparation of the matter by fixing the sum of $660 made up of 4 hours preparation at $150 per hour and GST of $60.

30 The DCM's reduction in the amount of counsel's fees from $825.00 to $660.00 is explicable by the application of a reduced hourly rate of $165. Given Mr Perkins' daily fee of $3,300, the preparation and conference fee of $825 could not have involved more than the four hours allowed by the DCM. It almost certainly will have been based on two-and-a-half hours at an hourly rate of $330. Access Law's contention that it has been denied procedural fairness by not being given an opportunity to provide more particulars of the work undertaken by Mr Perkins must be rejected. The reduction from $825.00 to $660.00 is attributable to the DCM's allocation of a reduced hourly rate multiplied by four hours. Assuming in the plaintiff's favour that he could establish that a denial of procedural fairness occurred by reason of not being given an opportunity to provide further details of the work undertaken, relief must be rejected on the grounds of futility.[25] The amount of four hours allowed by the DCM for preparation and conference is almost certainly more generous than the amount of time which would have actually been expended by Mr Perkins as reflected in the costs of $825.00 for preparation and conferring.

31 Access Law's bill dated 23 September 2009 included an item dated 9 February 2009 for Mr Lavery of counsel in the sum of $2,750 for reading materials, preparation and conference (say one day). The DCM allowed $1,100. Her reasons for reducing the amount claimed as set out at para 30 of the Reasons are as follows:

In view of there being no indication of when counsel undertook reading and preparation (ie whether some or all of the reading took place after VLA's correspondence of 5 and 6 February 2009), I allow $1,100 for the conference, reading and preparation.

32 The significance of the DCM's reference to VLA's correspondence of 5 and 6 February 2009, is that her Honour concluded that Access Law was not entitled to any costs post 5 February 2009 leading up to a hearing which took place on 9 February 2009. Her Honour concluded that Access Law acted unreasonably in failing to accept the terms of consent orders which were forwarded to it by VLA on 5 February 2009,[26] and which would have avoided the need for a hearing on 9 February 2009.

33 Unlike the position in respect of Mr Perkins' fees, no question of futility arises in relation to the question of whether, if given the opportunity to do so, Access Law might have been able to place evidence before the DCM which would have had an impact upon her decision to reduce the amount allowed in respect of Mr Lavery's fees of $2,750.

34 Access Law's bill of costs dated 14 May 2010 included an item in respect of 22 March 2010 for Mr Hancock of counsel for 'preparation' in the sum of $2,200. At para 54 of her Reasons, the DCM stated:

In the absence of any particularisation of the preparation by Mr Hancock for the proceedings leading up to the appearance on 22 March 2010, I do not allow preparation fees.

35 The principles in respect of denial of procedural fairness by reason of non-disclosure discussed in respect of Ground 1 are equally applicable to the DCM's reduction in the allowance made for Mr Lavery's preparation fees and the refusal to make any allowance for Mr Hancock's preparation fees. VLA accepted that during the proceedings before DCM on 14 November 2011, no submission was advanced that counsel's fees should be reduced or disallowed by reason of inadequate particularisation. However, counsel for VLA submitted that VLA's written submissions did raise the issue of inadequate particulars. The written submissions were those dated 16 March 2010 ('VLA's submissions').[27]Paragraphs 25 and 26 of VLA's submissions are as follows:

In any event, the material on which Mr Kuek relies in support of the costs of briefing counsel do not disclose:

(a) when counsel was in fact briefed, or

(b) whether the brief was in respect of VLA's application for costs against Mr Kuek or, for example, Mr Kuek's application for indemnity costs against VLA.

The point is important because an order for costs can only be made in respect of costs actually spent or incurred, for example see Norton v Morphett at [93].[28]

36 There are two points to be made in respect of VLA's submission at [35] above. First, the submission related to the question of whether or not Access Law was entitled to its costs in respect of the hearing on 9 February 2009 in circumstances where VLA had put forward proposed consent orders on or about 5 February 2009 which would have avoided the need for a hearing on that day. As noted above, the DCM concluded at para 29 of her Reasons that Access Law had no entitlement to costs in respect of the hearing on 9 February 2009 because it should have agreed to the proposed consent orders put forward by VLA. Second, the issue raised by VLA's submission is concerned not with the adequacy of the particulars of the fees claimed by counsel, but rather with whether the costs were actually incurred by Access Law. This is apparent from the reference to Norton [29]Morphett.29

37 I have concluded that VLA did not submit before the DCM that Mr Lavery's fees for preparation prior to 9 February 2009 should be reduced by reason of inadequate particulars and/or that Mr Hancock's fees for preparation prior to 22 March 2010 should be disallowed by reason of lack of particulars. The prospect that the fees of Mr Lavery and Mr Hancock would be reduced or disallowed on this basis was not an issue which was raised by either VLA or by the DCM. Consistent with the authorities which are referred to earlier in this judgment in respect of Ground 1, Access Law was denied procedural fairness by being denied the opportunity to provide further particulars relating to the preparation which was undertaken by Mr Lavery in advance of the hearing on 9 February 2009 and by Mr Hancock in advance of the hearing on 22 March 2010.

38 As with Ground 1, the amount in issue as a result of upholding Ground 2 in respect of the reduction of Mr Lavery's preparation fees, and the disallowance of Mr Hancock's preparation fees - being $3,850 - is insignificant. Nevertheless, consistent with the Court of Appeal judgments in Ucar and Bahonko a finding that there has been a denial of procedural fairness, coupled with the conclusion that there is utility in a rehearing taking place, leads to the conclusion that paras 3(b) and (d) of the DCM's Orders must be quashed. Consequently, the taxation of the items of counsel's fees will need to be heard afresh by a different magistrate.

39 Access Law contends that order number one of the Orders - 'that VLA pay Access Law's costs in the sum of $20,753' - is liable to be set aside on the ground of error of law on the face of the record. This ground is advanced independently and in addition to the ground of denial of procedural fairness by reason of non-disclosure which underpins Ground 1. As I have already upheld Ground 1, no practical consequence turns upon whether Ground 3 is upheld. Nevertheless, in deference to the submissions which were advanced by the parties in respect of Ground 3, I will deal with the matter.

40 Error of law on the face of the record constitutes a separate and distinct basis from jurisdictional error, on which the Supreme Court can make an order in the nature of certiorari to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power under a State statute.[30]

41 Annexure 2 of the Reasons of her Honour identifies 61 items which were 'disallowed on [the] basis that this item is not recoverable under Scale G.' Annexure 2 forms part of the DCM's Reasons. As such, it constitutes part of the record.[31] The statement constitutes an error on the face of the record.

If the scale of costs does not provide for any case, the court or registrar may reasonably allow reasonable costs.

The scale of costs proceeds from the premise that the fact that the scale does not provide for a particular item of costs does not preclude a finding that work was reasonably undertaken and deserving of an allowance of reasonable costs. Doubtless, it was for this reason that VLA proposed an allowance of costs based on Scale D of the County Court scale in respect of those items for which no allowance was made by Scale G.

43 Insofar as Annexure 2 of the decision records a finding that no allowance would be made for 61 items on the basis that the item is not recoverable under Scale G, this constitutes an error on the face of the record. The DCM was required to consider whether the work the subject of the 61 items was reasonably undertaken, and if so, to allow reasonable costs.

44 Independently of Ground 1, order number one of her Honour's Orders is set aside on the ground that it is underpinned by an error on the face of the record.

45 Access Law contends that all of the orders made by her Honour should be set aside on the basis that they are underpinned by an error on the face of the record, by reason of the failure of her Honour to award costs on an indemnity basis in circumstances where no reference was made by the DCM to s 132 of the Magistrates' Court Act. I confirmed with Mr Nash QC that the basis of Ground 4 was as follows:

His Honour: And the final point is that there is an error on the face of the record in not granting indemnity costs in circumstances when no reference has been made by her Honour to s 132 as a relevant consideration in the exercise of her discretion. Have I summed those points up Mr Nash?

Mr Nash: I wish I had your Honour to conduct my case, yes.[32]

46 Before considering this ground it is necessary to set out some of the background to the proceedings which preceded the hearing before her Honour in November 2011. This background is derived from Annexure 1 to her Honour's Reasons:

On 23 March 2006 President Torney was charged under the Control of Weapons Act 1990 with being in possession of a prohibited weapon on 29 December 2005.

...

On 26 September 2008, Mr Kuek appeared for the accused and indicated to Magistrate Gurvich, who was seized of the matter, that an application for the magistrate to disqualify himself would be made. The case was then adjourned.

On the same day, Kuek had subpoenas issued and served against four officers of Victoria Legal Aid, to attend to testify and produce documents in the hearing of the application for His Honour to disqualify himself.

On 30 September 2008, Ms Ellyard of counsel appeared for the respondents to the subpoena and applied to have them struck out.

Mr Perkins of counsel appeared for Torney. During the course of submissions, Ms Ellyard sought to produce a document to the court that fell within the scope of the subpoena. Mr Perkins objected to the tendering of the document submitting it should be proved by the calling of witnesses. This resulted in the document not being placed before the Magistrate due to the objections of counsel for the accused.

...

The matter was adjourned to 3 October for ruling, when Ms Zantuck appeared for legal aid. On that date, Magistrate Gurvich struck out the subpoenas stating:

I am not persuaded Mr Perkins identified any legitimate forensic purpose for the witness summonses. On the material before me I am unable to conclude that any witness could give relevant and admissible evidence as to the principal application. I think the submissions of Ms Ellyard and Senior Constable Collins are correct, and particularly that the summonses have been issued for an impermissible purpose - that is a fishing exercise.

Ms Zantuck then applied for costs on behalf of VLA and asked the magistrate to exercise his discretion under s 132 of the Magistrates' Court Act to order indemnity cost against Mr Torney's practitioner, Access Law.

At page 32 of the transcript, the following exchange occurs in relation to the cost application:

Magistrate: Are you seeking - are you seeking against the defendant or against the solicitor?

Ms Zantuck: Against the solicitor pursuant to section 132

Mr Kuek then felt compromised in continuing to represent Torney and due to previous proceedings in the Supreme Court in an unrelated matter involving a ruling of Magistrate Gurvich, made application that he disqualify himself from hearing the cost argument itself.

The matter was adjourned to 1 December 2008. The issue of particulars of costs was raised and the matter adjourned yet again to 9 February 2009.

On 2 February VLA wrote to Access Law that they would no longer pursue costs against Kuek, but against Torney.

On 4 February, VLA again wrote to Access Law offering to pay Kuek's 'reasonable costs'. This offer was rejected on the 5 February with Kuek seeking costs on an indemnity basis.

On the 6 February, this counter-offer was rejected by VLA.

On 9 February 2009, the learned Magistrate heard submissions for his disqualification on the ground of apprehended bias in relation to both the substantive charge and the cost issue, and determined that both should be heard by a different magistrate.

47 Mr Nash QC submitted that the application which was made by VLA pursuant to s 132 of the Magistrates' Court Act for an order seeking indemnity costs against Access Law was misconceived. He submitted that her Honour's Reasons disclosed an error on the face of the record arising from her failure to place any weight on the consideration that the application brought by VLA under s 132 was misconceived. He submitted that had the DCM done so this would have been a significant factor weighing in favour of an order for costs on an indemnity basis.

48 Ground 4 must be rejected. First, it is necessary to have regard to the very broad nature of the discretion to award costs under s 131 of the Magistrates' Court Act. That discretion has been described as being extremely wide[33] and unfettered.[34] In McCabe, T Forrest J summarised the principles governing judicial review of the exercise of the power conferred by s 131 as follows:

• there is a strong presumption in favour of the correctness of a discretionary judgment, especially where that discretion concerns the award of costs;
• it is irrelevant that an appellate court might have exercised the discretion differently - what is necessary is that the decision was clearly wrong;
• the presumption in favour of the correctness of the decision may be overcome where there is identifiable error. This may occur where the discretion is exercised capriciously or for an improper purpose, where the court takes into account an extraneous or irrelevant matter or fails to take into account a relevant matter, acts upon a wrong principle or exercises the discretion on the basis of a mistaken fact or assumption;
• where the error is said to be one of quantum a court will only interfere in an extreme case, that is, where the result is so unreasonable or plainly unjust that the exercise of the discretion has effectively miscarried.

In my view, these principles apply equally where a court exercises a supervisory jurisdiction and in many ways resembles standard administrative law grounds. There is, in any event, a "close analogy" between the function of a court conducting judicial review and that of an appellate court reviewing the exercise of a judicial discretion. In judicial review proceedings, however, orders in the nature of prerogative writs will only issue to remedy an error that amounts to jurisdictional error.[35]

49 It is beyond argument that it was a legitimate exercise of the discretion conferred by s 131 of the Magistrates' Court Act for the DCM to refer to the Scale G when conducting the taxation of Access Law's bills of costs.[36] Plainly, the decision of the DCM to utilise Scale G as a basis for conducting the taxation did not constitute jurisdictional error.

50 Access Law's attempts to enliven the court's jurisdiction to grant prerogative relief on the basis of error on the face of the record is misconceived. Contrary to the submissions of counsel for Access Law, the DCM did give consideration to the submissions which had been advanced by Access Law that costs on an indemnity basis should be awarded because of the (alleged) unreasonable conduct on the part of VLA in having made an application for costs against Access Law. At paras 13 to 17 of the Reasons, her Honour stated:

The applicant's grounds for seeking costs being paid on an indemnity basis are set out in two submissions, the submissions on costs filed by Access Law on 7 April 2009 and the submissions for 14 November 2011 dated 26 October 2011. In the former document, the relevant submissions are under the heading 'costs should be on an indemnity basis' on page 4. In the latter document, the submissions relevant to the indemnity issue are under the heading 'Unreasonableness on the part of VLA' at page 6. The 26 October 2011 submissions are largely a restatement of the 7 April 2009 submissions.

I note that the 26 October 2011 submissions rely on the wording of Redlich J, namely that 'VLA failed or was unwilling to address the weakness of its position for a long time'.

Paragraph 30 of the submission goes on:

Irrespective of whether that was borne of intransigence, careless indifference or an extensive dismissive refusal, that conduct was irresponsible.

The submissions in reply filed by VLA marked 'submissions in response to Mr Kuek's application for indemnity costs', and dated 21 April 2009, in effect address both sets of Access Law's submissions. I have also read and noted the reply by Mr Kuek to VLA's response, dated 30 April 2009. The VLA submissions effectively rebut the assertions made by Access Law and as a result, I am not satisfied that the conduct of VLA was 'intransigent, carelessly indifferent or amounted to an extensive dismissive refusal', and I am not satisfied that the conduct of VLA was irresponsible or unreasonable.

I am not satisfied that any 'special reasons' can be attributed to the manner in which this matter was conducted on the part of VLA and am therefore not satisfied that it is appropriate to deviate from the usual course of fixing costs on a party-party basis. I am not persuaded by the applicant that an order granting indemnity costs is appropriate.

In my view, Access Law's insistence on costs being awarded on an indemnity basis as opposed to the usual basis has been misconceived and has unnecessarily prolonged the proceedings.

Accordingly, it is my view that reasonable costs be paid on a party-party basis.

51 It is clear from the extracts from her Honour's Reasons set out at [50] above that the DCM expressly considered the submissions advanced by Access Law that indemnity costs should be awarded by reason of the conduct on the part of VLA. There is no error on the face of the record. Her Honour considered the submissions of Access Law and rejected them. Ground 4 must therefore be dismissed.

52 Access Law has established that it was denied procedural fairness:

(a) by reason of non-disclosure by the DCM of the possibility that no allowance would be made in respect of the 61 items which were not prescribed by Scale G; and

(b) by reason of not having been provided with an opportunity to provide further particulars regarding the preparation undertaken by Mr Lavery prior to the hearing on 9 February 2009 and by Mr Hancock prior to the hearing on 22 March 2010.

Access Law has also established an error on the face of the record by reason of the statements in Annexure 2 of the Reasons that the 61 items were 'disallowed on the basis that this item is not recoverable under Scale G.'

53 The total value of the items which are the subject of the grounds which have been upheld is approximately $6,450. This is less than 10% of the $89,583 in dispute between VLA and Access Law. Given the disparity between the quantum of the costs referrable to the grounds which have been upheld, as a proportion of the total amount in dispute, a question arises as to what orders for costs, if any, should be made in the present proceedings.

54 The DCM stated in her Reasons that Access Law's insistence on costs being awarded on an indemnity basis as opposed to the usual basis has been misconceived and has unnecessarily prolonged the proceedings. As noted earlier in this judgment, her Honour's decision to refer to Scale G when undertaking the taxation of Access Law's bill of costs, was not attended by any legal error.

55 Plainly, Access Law has been unsuccessful in challenging the key aspect of the DCM's Reasons for decision, namely, her refusal to assess costs on an indemnity basis. The insignificant quantum of the items which underpin Grounds 1, 2 and 3 is out of all proportion to the legal costs and judicial resources which have been expended on this matter.

56 I shall provide the parties with an opportunity to file and serve written submissions as to what orders for costs, if any, should be made. These submissions are to be filed by 4:00pm on 20 March 2015. I shall pronounce final orders in this matter once I have had an opportunity to consider these submissions.

[1] Exhibit P1: Affidavit of Gabriel Kuek affirmed 11 November 2013 together with 25 exhibits; Exhibit GK9.

[2] Transcript of Proceedings, Gabriel Kuek (Trading as Access Law) v Victoria Legal Aid and Magistrates' Court of Victoria (Supreme Court Victoria, S CI 2013 4918, McDonald J, 23 October 2014) T24 LL15-21, T33 LL2-5.

[3] Ibid T33 LL1-28, T34 LL29-31, T36 L1, T 37 L3.

[5] Transcript of Proceedings, Gabriel Kuek (Trading as Access Law) v Victoria Legal Aid and Magistrates' Court of Victoria (Supreme Court Victoria, S CI 2013 4918, McDonald J, 23 October 2014) T62.

[7] VLA outline of submissions dated 23 July 2014 para 52.

[8] VLA's Response to the Plaintiff's Note referring to natural justice cases dated 29 October 2014, para 3(b).

[9] [2001] NSWCA 264; (2001) 52 NSWLR 213, 220-221.

[10] Somaghi v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 389; (1991) 31 FCR 100, 107-8.

[11] Waniewska v Minister for Immigration and Ethnic Affairs (1986) 70 ALR 284, 296.

[12] Pancharatnan v Minister for Immigration, Local Government and Ethnic Affairs (1991) 26 ALD 217, 222-3.

[13] (1994) 74 A Crim R 453, 460.

[14] [2014] VSCA 101 ('Wales v Wales').

[15] [2007] HCA 22; (2007) 230 CLR 89.

[18] See Norton v Morphett [1995] 83 A Crim R 90, 96 (Phillips JA).

[19] [2007] VSCA 181; (2007) 17 VR 492 ('Ucar').

[21] [2014] VSCA 101 [73]-[74] (Ashley JA, with whom Almond AJA agreed).

[22] [2008] VSCA 6 [30] ('Bahonko') (citations omitted).

[25] Ucar v Nylex Industrial Products Pty Ltd [2007] VSCA 181; (2007) 17 VR 492 [75] (Redlich JA); Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145.

[27] Exhibit P1: Affidavit of Gabriel Kuek affirmed 11 November 2013 together with 25 exhibits; Exhibit GK9.

[29] [1995] 83 A Crim R 90, 93.

[30] Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; (2013) 303 ALR 64 [26]; Agar v McCabe [2014] VSC 309 [36]-[44] (T Forrest J) ('McCabe').

[31] Administrative Law Act 1978 s 10.

[32] Transcript of Proceedings, Gabriel Kuek (Trading as Access Law) v Victoria Legal Aid and Magistrates' Court of Victoria (Supreme Court Victoria, S CI 2013 4918, McDonald J, 23 October 2014) T36 LL28-31, T 37 LL1-3.

[33] Derwent v Dickens [1993] VicRp 39; (1993) 1 VR 557, 567.

[34] Delvecchio v Stirling, unreported, O'Bryan J, reported in Magistrates Cases, 38 of 1991, 202.

[36] Norton v Morphett (1995) 83 A Crim R 90, 96-8; Lovejoy v Johnson (Unreported, Supreme Court of Victoria, Coldrey J, 20 October 1997) 4; Brown v Glen Eira [2012] VSC 198 [37]-[38] (Daly AsJ).