Plaintiff v Second Respondent

2 The order the subject of that application was an order for costs against the plaintiff arising out of the issuing by him of a subpoena in the context of his prosecution for a traffic violation.

3 After publication of my reasons for refusing the application, the parties (the plaintiff and the first defendant) agreed to make written submissions as to the appropriate orders as to costs. These reasons deal with the competing arguments relating to the costs of the application.

4 The background to the application is set out in my primary reasons,[1] and involves a challenge to a costs order of the Magistrates' Court made following the remittal of the question of costs to the Magistrates' Court by Justice T Forrest.[2] The original costs order arose out of an order setting aside a subpoena issued at the request of the plaintiff pursuant to Rule 24 of the Magistrates' Court Criminal Procedure Rules 2009.

5 Before Justice T Forrest, the plaintiff had applied for a judicial review, pursuant to Order 56 of the Rules, of the orders made by the Magistrate. In broad terms there were two decisions the subject of the review. First, the decision to set aside the subpoena. Second, an order as to costs. His Honour Justice T Forrest did not touch the order setting aside the subpoena, but did find that the Magistrate failed to exercise the jurisdiction as to costs (conferred upon him by s 131(1) of the Magistrates' Court Act 1989) in failing to consider relevant matters, being the principles of consistency and proportionality. This constituted a jurisdictional error.[3] Accordingly, his Honour quashed the costs order and directed the Magistrates' Court to rehear and determine the costs application according to law.

6 A different Magistrate re-considered the question of costs and made his decision, coming to the same conclusion as the first Magistrate, but gave reasons that took into account the principles of consistency and proportionality. The plaintiff again applied to quash that decision by application pursuant to Order 56 of the Rules. There were six grounds for the review, and the plaintiff failed on all of them. I dealt with them all in my primary reasons and concluded that the plaintiff's application should be dismissed.

7 The first defendant (I will refer to her as the 'defendant') submitted that there was nothing in the current case to take it out of the general practice that as a successful litigant she should receive her costs. She submitted that the considerations adverted to by Justice Macaulay in Agar v Dolheguy[4] were relevant. His Honour said:

The parties each addressed written submissions to me on the question of costs. Costs are at the discretion of the court. In essence Mr Agar submits that, if he fails, he should not have to pay the Crown's costs because the matters he has raised need to be resolved "in order that all Victorian motorists can have certainty as to the integrity of speed measuring devices".

Such an argument presupposes that there has been widespread public uncertainty about such integrity. I am not aware of there being any evidence on that subject, and I am not prepared simply to assume it in Mr Agar's favour. It may well be a matter on which Mr Agar, and some others, have great personal interest but, subject to any other argument the parties may raise, I am not persuaded there is sufficient public interest in the questions he has raised to displace the usual practice that costs should follow the event.

8 The defendant submitted that the factors relevant to the awarded costs in this case are:

(a) this is the fourth case dealing with the issue of the subpoena and subsequent costs flowing from the Magistrates' Court decision at Frankston on 29 August 2013;

(b) the defendant has attempted to minimise the costs and made an offer to settle the matter before its return to the Magistrates' Court pursuant to the order of T Forrest J;[5]

(c) the plaintiff was unsuccessful on every ground and was aware that if he was unsuccessful costs should follow the event; and

(d) although not overly complex, the hearing was of a Supreme Court application requiring significant attention to the many matters raised by the plaintiff and was separate to the prosecution under the Road Safety Act 1989. In that regard, it is noted that a review of the subsequent conviction of the plaintiff for the speeding offence was dismissed by Justice Zammit on 11 August 2015.[6] No order for costs were sought in that case because it was directly concerned with the prosecution of the offence.

9 On 19 October 2015, the defendant gave details of the costs by reference to the Supreme Court Scale of Costs and Disbursements. Those costs amount to $9,148.96 plus disbursements of $7,500.00 for counsel, a total of $16,648.96.

10 The plaintiff submitted that in relation to the comments made by Macaulay J in Agar v Dolheguy (supra), there was neither a costs order sought in that matter nor any cost orders made. The comments concerned written submissions made during the course of the hearing regarding tests undertaken on a mobile speed camera. The plaintiff submitted that this was a matter of public interest. The plaintiff contended that the public interest (or at least the public interest advanced before Macaulay J) is not relevant in this case.

11 The plaintiff also referred to the decision of T Forrest J in Agar v McCabe & Anor (No 2)[7] where His Honour said:

Second, I consider that the principles of consistency and proportionality, to which I have referred in the reasons for judgment in this matter, are arguments against an order as to costs. If costs are now awarded the total pecuniary outcome of the plaintiff's criminal proceeding will be disproportionate to the seriousness of the alleged offending, one measure of which is the on the spot penalty of approximately $180.

12 The plaintiff submitted that the public issue relevant in this matter is the use of private counsel by the informant and the threat of substantial financial penalty involved in that use. This acts as a deterrent to the public challenging speed camera readings. He referred to his understanding that persons who seek to subpoena test results from fixed cameras on Eastlink will first receive a letter from a private law firm advising that the request will be opposed and threatening costs of up to $20,000.00 if that opposition is successful. That was the case, he submitted, in State of Victoria v Lane.[8]

13 The plaintiff referred to other cases in which he believes that to be the case and argued that my decision in this matter (if I award costs against him) has the effect of validating the approach taken by the informant in such cases. The effect, he submitted, is to use the costs as a substantial financial penalty to supress objections to speeding fines through the courts. In this connection he refers to the budget papers for the 2014-2015 State budget showing the target revenue for road safety camera fines as being $376,400,000.00.

14 The plaintiff also submitted that a dangerous precedent is likely to be set if costs are awarded against him. This would purportedly reflect the actual costs of engaging a private law firm and counsel to set aside subpoenas issued at the request of persons facing road safety camera fines because there is only limited rights of appeal in relation to questions of costs, they being discretionary. He also refers to the observations of T Forrest J in Agar v McCabe[9] where His Honour said:

If proportionality and consistency set limits on the valid exercise of the discretion this is because they are an aspect of the ground of reasonableness.[10] A challenge to quantum on the basis of its alleged disproportionality or inconsistency will only succeed where the costs order is so unreasonable or plainly unjust that the exercise of the discretion has effectively miscarried.[11] It follows that unless the award is so disproportionate and/or inconsistent that it is manifestly unreasonable or plainly unjust, it will be irrelevant that a reviewing court might form the view that the award was inconsistent or disproportionate.

15 It was also submitted by the plaintiff that he was not in a position to pay costs of the order sought by the defendant and that, in consequence, he faced arrest. He produced his PAYG payment summary for the 2014/15 financial year showing annual income of $4,998.00. He is 61 years of age and supports three children aged from 10 to 19. His wife's income is limited and the plaintiff is servicing debts associated with a business of $525,000.00 in addition to other debts. He asserts that his financial reserves are exhausted.

16 He referred to principles applicable to the punishment of offenders, including that the sentence imposed should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances.[12]

17 Under s 24 of the Supreme Court Act 1986 the power to award costs is in the discretion of the Court. Whilst the discretion is absolute and unfettered, it has to be exercised judicially, that is, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation.[13] In the exercise of the discretion, practices or guidelines have developed.[14] These practices are not legal rules that confine the exercise of the discretion.[15]

18 Although costs are in the discretion of the Court, there is a settled practice (sometimes called a general rule) that in the absence of good reason to the contrary, a successful litigant should receive his or her costs.[16] It is not, however, a legal rule devised to control the exercise of the discretion.[17]

19 It is relevant to observe that the purpose of a costs order is to compensate the successful party for the costs incurred, and not to punish the unsuccessful party. That purpose is a guide to the exercise of the discretion.[18]

20 The decision of T Forrest J in Agar v McCabe & Anor (No 2)[19] sent the costs decision back to the Magistrates' Court for re-hearing with his Honour making no order as to costs. The factors that were taken into account in relation to the question of costs were:

(a) both parties had some success and courts often make orders that reflect the parties' relative success and failure. In the circumstances, the parties' relative successes and failures are best represented by making no order as to costs, so that each party will bear their own costs;

(b) although access to the subpoenaed documents was the primary issue and the costs order clearly ancillary in the matter before the Magistrate, that distinction could not be easily maintained upon review. They were more or less evenly matched in terms of complexity;

(c) the principles of consistency and proportionality were arguments against an order as to costs. If costs were awarded the total pecuniary outcome of the plaintiff's criminal proceeding will be disproportionate to the seriousness of the alleged offending, one measure of which is the on the spot penalty of approximately $180.00; and

(d) although the first defendant was commendably represented by senior and junior counsel, the case did not require two counsel.

21 It is relevant to the determination of the question of costs in this case that the application under Order 56 is a civil proceeding, even though it concerns costs awarded in connection with a criminal proceeding. The Civil Procedure Act 2010 ('the CPA') applies and brings with it the overarching obligations that are imposed upon the litigants and their lawyers. The relevant overarching obligations are:

(a) to use reasonable endeavours to resolve a dispute by agreement;[20]

(b) to narrow the issues in dispute;[21] and

(c) to ensure costs are reasonable and proportionate to the complexity or importance of the issues in dispute and the amount in dispute.[22]

22 These three obligations are relevant to the exercise of the discretion as to costs in this case in the following ways:

(a) the defendant made a reasonable offer to resolve the costs dispute before the rehearing in the Magistrates' Court;[23]

(b) the issues raised encompass matters that would not have been advanced by the plaintiff if he had been properly advised. These are the second, third, fourth and fifth issues referred to in my primary reasons; and

(c) the amount in dispute is the recovery of costs ordered rather than the ultimate speeding fine that may have been imposed.

23 The passage from the decision of Macaulay J in Agar v Dolheguy to which the defendant referred clearly concerns submissions made as to the costs in that proceeding, regardless of whether or not any order was ultimately made. It is true to say, as the plaintiffs submitted, that it concerned whether there was any public interest in the determination of the matter which effected the question of costs. The significance of the reference to the passage by the defendant is that it rejects the application of any public interest in the absence of evidence of it, and refers to the usual practice that costs follow the event.

24 The plaintiff seeks to raise in this case a public issue to justify a departure from the usual practice that costs follow the event. But like the circumstances facing Macaulay J in Agar v Dolheguy, there is no evidence to sustain the plaintiff's submission. That submission was that the informant is using the threat of a costs order as a substantial financial penalty to discourage accused persons from challenging speed camera readings. An examination of the decision in State of Victoria v Lane as raised by the plaintiff does not reveal that a letter was sent from a private law firm threatening the offender. There is no other evidence in relation to that case, or any other case before me of this practice.

25 The plaintiff submitted that an order for costs against him will create a dangerous precedent for other cases. If that is so, it is a consequence of the operation of the principles of law applicable to decision making. However, decisions as to costs of the kind arising in this case create only a very limited precedent because:

(a) the applicable principles are well established; and

(b) the factors relevant to the exercise of the discretion turn almost entirely upon the facts of each particular case.

26 Therefore, the impact of this decision as a precedent is very limited.

27 The question of the plaintiff's ability to pay the costs ordered is not relevant to whether a costs order should be made. In any event, the plaintiff's submissions concerning his financial position is hard to comprehend and has not been the subject of an affidavit or any other admissible evidence. That material seems to show that with an income of only $4,998.00 he nevertheless is servicing debts associated with his business as high as $525,000.00. I have little doubt that there is a great deal of information that has been left out of the equation. Even if the plaintiff's ability to pay costs were relevant, I am not persuaded by the evidence before me that he lacks the ability to pay.

28 It is wrong to submit, as the plaintiff did, that for non-payment of an order for costs he faces arrest or imprisonment. Non-payment of an order for costs in a civil proceeding cannot give rise to arrest, as might be the case arising from the non-payment of a penalty or fine. What may occur is that a bankruptcy notice is served on the plaintiff.

29 The most relevant submission on behalf of the plaintiff concerns the application of the principles of consistency and proportionality. In this regard, I consider that this civil proceeding has a Janus like quality. It concerns both an order for costs made in connection with a criminal prosecution; but at the same time it is in fact a civil proceeding governed by the CPA.

30 It can be said (and I take it that this is what the plaintiff submits) that the outcome of an interlocutory application in a criminal proceeding forms a part of the total outcome of that criminal proceeding.[24] Thus the order for costs made by the Magistrate is a part of the totality of the costs of the criminal proceeding. By parity of reasoning, so is the order for costs in this proceeding, but one step further removed.

31 On the other hand, it can also be said that by the plaintiff's conduct in seeking to quash the Magistrates' order for costs, the defendant has been put to the expense of engaging a solicitor and counsel to undertake a civil proceeding involving a specialist area of law. This is an area of the law outside that usually undertaken by prosecutors engaged by the Victoria Police, or the Traffic Camera Office. One may ask rhetorically, why should the defendant in this case bear those costs where they are brought about by the actions of the plaintiff? The plaintiff has been aware from the very first time the defendant engaged independent solicitors and counsel to set aside his subpoena that the informant had gone outside the usual channels employed in the prosecution of traffic offences.

32 Why should the State of Victoria, and therefore its taxpayers, bear the expense of resisting this application by the plaintiff? There are several good reasons why, in my view, they should not:

(a) the plaintiff initiated the application and has lost on all grounds. I consider that four of those grounds were weak or hopeless, as referred to in my primary reasons;

(b) the defendant had little choice but to resist the application or concede entirely. The defendant made a reasonable offer to resolve the costs issue, before the re-hearing in the Magistrates' Court, for the sum of $2,500.00 (compared with $6,140.00 ordered in the first costs determination). The plaintiff responded in uncompromising terms rejecting the offer;[25]

(c) the hearing was of a Supreme Court application in a specialist area of the law outside the usual matters conducted by the Crown at the taxpayers' expense. The application required attention to the many grounds or issues raised by the plaintiff and was separate from the prosecution under the Road Safety Act 1989;

(d) the principles of proportionality and consistency have, in the context of a civil proceeding to which the CPA applies, a potentially different character and consequence when compared with the underlying criminal prosecution. It is much more in tune with the nature of the proceeding to recognise that the matter in dispute is not a speeding fine of about $180.00 but an order for the costs occasioned by the defendant resisting a 'fishing' subpoena. That is a matter quite different from, and often more difficult than, the prosecution of a speeding offence, particularly where provisions of the legislation create an offence of strict liability and certificates provide prima facie proof;

(e) the principle of proportionality may be considered by reference to the subject matter of the review application, namely the order for costs, and not the prosecution for the offence. In my view, such an approach is preferable to considering the costs of the defendant as a part of the total outcome of the prosecution of the plaintiff for a speeding offence. The prosecution of the offence has, in any event, been dealt with separately, reviewed by the plaintiff and that review was dismissed without an adverse costs order;

(f) the purpose of a costs order is to compensate the successful party for the costs incurred, and not to punish the unsuccessful party. It is thus distinct from any punishment and the application of the principle that the punishment should 'fit the crime'; and

(g) none of the other matters raised by the plaintiff are good or persuasive reasons that convince me to differ from the usual practice of ordering that the costs follow the event.

33 Insofar as the defendant sought, by implication, that I should fix the costs, I respectfully decline. The costs should be fixed by the Costs Court if they are not agreed.

34 For the foregoing reasons the first defendant's costs of the proceeding should be paid by the plaintiff. I will therefore order:

(a) the plaintiffs proceeding commenced by Originating Motion filed on 8 September 2014 is dismissed; and

(b) the plaintiff shall pay the first defendant's costs of the proceeding, to be taxed in default of agreement.

[1] Agar v McCabe (No 3) [2015] VSC 543 at [2]- [7].

[2] Agar v McCabe [2014] VSC 309; (2014) 67 MVR 81.

[3] Agar v McCabe [2014] VSC 309; (2014) 67 MVR 81, 103-104 [92]-[95].

[4] [2010] VSC 506 at [78]- [79].

[5] Letter dated 14 July 2014, Court book page 109.

[6] Agar v McCabe & Anor [2015] VSC 378.

[7] [2014] VSC 333 at [4].

[8] [2012] VSC 328.

[9] [2014] VSC 309 at [81].

[10] See, in the context of an administrative decision, Li [2013] HCA 18; (2013) 249 CLR 332, 352 at [30] (French CJ): "... a disproportionate exercise of an administrative discretion, taking a sledgehammer to crack a nut, may be characterised as irrational and also as unreasonable simply on the basis that it exceeds what, on any view, is necessary for the purpose it serves".

[12] Citing R v Young [1990] VicRp 84; [1990] VR 951; Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354.

[13] Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 537; cited with approval in Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 at 86 at [34].

[14] Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 at 86 at [35].

[15] Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 537; Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 at 86 at [35].

[16] Ritter v Godfrey [1920] 2 KB 47 at 52; Donald Campbell and Co Ltd v Pollak [1927] AC 732 at 809; Milne v Attorney-General for the State of Tasmania [1956] HCA 48; (1956) 95 CLR 460 at 477.

[17] Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 at 86 at [35].

[18] Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 563 per Toohey J, Mason CJ agreeing; McHugh J at 567; Ohn v Walton (1995) 36 NSWLR 77 at 79.

[19] [2014] VSC 333 at [4].

[23] See Court book page 109, letter dated 14 July 2014 from the first defendant to the plaintiff.

[24] Agar v McCabe [2014] VSC 309 at [79].