Practice and procedure - costs - litigant in person successful in appeal brought against decision in her favour - entitlement of successful litigant in person to order for costs - discussion of principles applicable to quantification of that entitlement.

Federal Court of Australia Act 1976, S.43

Federal Court Rules, Order 62, rules 1,2 and 4; Second Schedule, Items 47, 48 and 49.

Solicitors for the Appellant: Australian Government Solicitor

1. The appellant pay to the respondent her out of pocket expenses necessarily and reasonably incurred in relation to the appeal, such out of pocket expenses to include earnings (if any) actually lost as a result of the need to prepare her case and to attend Court to present it.

2. There be no order as to the costs of any party in relation to the submissions made on the question of costs.

3. The costs and expenses of any taxation which becomes necessary are to be in the discretion of the taxing officer.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

SHEPPARD, HILL AND COOPER JJ. On 3 July 1992 this Court made an order dismissing the appeal in this matter. The Court reserved leave to the respondent, who appeared in person, granting her liberty to apply for an order that her costs of the appeal be paid by the appellant provided that any such application be made in writing delivered to my Associate on or before 17 July 1992. Such an application has been made and the Court has received written submissions from both the respondent and the appellant on the question. The submissions have raised a point of some difficulty concerning the entitlement of a successful litigant in person to costs.

2. The questions to which the submissions give rise have been dealt with recently in two decisions of the New South Wales Court of Appeal, Cachia v. Isaacs (New South Wales Court of Appeal, 23 March 1989, unreported), and Cachia v. Hanes (1991) 23 NSWLR 304. In each case Kirby P. dissented. The second of the decisions was the subject of an application for leave to appeal to the High Court. Leave was granted on 10 April 1992, but it is unlikely that the appeal will be heard this year. In the circumstances, it seems desirable to give judgment in this case without waiting for the judgment of the High Court.

3. The judges forming the majority of the Court of Appeal in each of the Cachia cases, Samuels and Clarke JJ.A. in Isaacs and Clarke and Handley JJ.A. in Hanes, applied the principles propounded by the English Court of Appeal in Buckland v. Watts (1970) 1 QB 27. It was there held that a litigant in person other than a solicitor was not entitled to claim costs in respect of the time which he had expended in preparing his case. He was only entitled to his out of pocket expenses. The submissions before us raise the question whether we should follow the principles propounded in Buckland v. Watts, in a number of earlier cases, and in the two Cachia cases to which reference has been made.

4. In the submission of counsel for the appellant in the present case we are bound to apply those principles because of the decision of the High Court in Guss v. Veenhuizen [1976] HCA 57; (1976) 136 CLR 47. That case dealt with an application for costs by a solicitor who had successfully brought proceedings in the High Court to have his name placed on the roll of practitioners entitled to practice in that Court. He represented himself. It was held that he was entitled to have his bill taxed to the extent of the filing fees and counsel's fees covered by it and, by majority, that he was also entitled to recover his professional costs. The majority (Gibbs A.C.J. and Jacobs and Aickin JJ.) held that there was a rule of practice that a solicitor who acts for himself in litigation is entitled to his professional costs. The majority judgment referred to the decision of the English Court of Appeal in London Scottish Benefit Society v. Chorley, Crawford and Chester (1884) 13 QBD 872 saying (p 51) that there the applicant sought taxation of costs on the basis that he was a solicitor who had acted for himself and did so according to the well established rule of practice which entitles a person, being a solicitor, to certain professional costs in those circumstances. The judges said that the authorities established that a litigant in person did not recover costs in such circumstances in the capacity of a solicitor but "because, he happened to be a solicitor, his costs are able to be quantified by the Court and its officers."

5. Reference was then made to what was said by Brett M.R. and Bowen L.J. in the London Scottish Benefit Society case. The judgment continued (p 52):-

"In these circumstances, s.55B of the Judiciary Act does not

create a statutory bar to the allowance of professional

costs because the appellant does not claim assessment of

costs on the basis that they were in respect of work done in

a capacity which by force of the statute he was not entitled

to exercise. The work was done by him in person and the

only question is whether in the special circumstances here

existing he was entitled to the benefit of the rule of

practice established by the authorities to which we have

referred. The answer depends on the true basis of the rule.

Since its basis is not one of privilege to a solicitor (in

which case it might be argued that the precise qualification

must be satisfied) but is that work done by a solicitor can

be quantified on a taxation of costs, there is no reason why

work done by the appellant whose lack of the precise

qualification was the result of an error of an officer of

the Court, should not have the benefit of the rule of

practice. If the error had not been on the part of an

officer of the Court but had been the fault of the party

himself, the Court would not attempt to assess his capacity

to do the work done by him. He would be regarded as in the

same position as an ordinary layman. But when the lack of

qualification cannot be regarded as a lack of capacity

because it has occurred simply through the error of a Court

officer, then the principle to which we have referred

earlier in these reasons is applicable and the Court should

treat him as though he had the qualification which brings

him within the rule of practice."

6. Mason and Murphy JJ. differed from the majority in only one respect. They agreed that the solicitor was entitled to recover filing fees and counsel's fees but would have refused him any entitlement to professional costs. Their conclusion in this regard was based upon the provisions of s.55B and s.55C of the Judiciary Act. They relied particularly on subsec.55B(3) which denied the existence of any entitlement to practice in the High Court unless the name of the solicitor appeared in the Register of Practitioners. They said (p 59):-

"These words are too clear and too strong to permit of any

qualification by reference to any pre-existing entitlement

to practise which might be thought to have arisen under the

less stringent terms of the superseded s.49. And it is not

to be thought that the words of s.55B(3) give expression to

a requirement which is merely formal in character and has no

intrinsic or historic importance. Entry on a roll or

register is the traditional mark of entitlement to practise

in the courts and it provides the court with a ready means

of ascertaining whether a person is entitled to practise

before it. It would indeed be remarkable if it were

otherwise, for then there would arise all the attendant

complications which would flow from the necessity for making

inquiries of a particular practitioner as to the source

which he claimed for his entitlement and for verifying that

source."

7. The dissent was therefore based upon the special circumstances of the case and does not affect the more general questions wich have arisen in the present case.

8. Buckland v. Watts was not referred to by the High Court in Guss' case but the London Scottish Benefit Society case was referred to and formed a basis for the High Court's decision. It was also relied upon in Buckland v. Watts. Buckland v. Watts was a case where a surveyor, appearing in person, had successfully appealed against a judgment given in proceedings which he had taken against a solicitor. The surveyor sought to recover charges made in respect of the expenditure of very considerable time by him in the preparation of documents and in the conduct of the case. Danckwerts L.J. said (p 35) that it was a well settled principle that, although a solicitor who acts in person for himself can claim to be remunerated for his professional services, a layman who is not a skilled legal person can only recover his out of pocket expenses. His Lordship referred to the London Scottish Benefit Society case and said (p 37):-

"Of course, that case was dealing with the position of the

solicitor, and therefore it might be said to be not directly

in point on the problem which we have to consider, but it

appears quite clear from the words used by Bowen L.J. that, in

the case of a layman, he could not charge for his time, and

this seems to me to cover the issue in the present case with

regard to the disallowance of the claims for time and labour

tendered by Mr Buckland."

"What a successful party who has got an order for costs is

entitled to recover falls, as is well known, under two

headings. One heading covers his disbursements; that is to

say, money which he has actually had to pay out to other

people, such as witnesses, counsel, professional advisers

and so forth. The other heading is described as 'costs.'

This is intended to cover remuneration for the exercise of

professional legal skill. This, I think, is in accordance

with the views expressed by Bowen L.J. in the judgment which

my Lord has already read (this was a reference to the

judgment of Bowen L.J. in the London Scottish Benefit Society

case). It is because there has been an exercise of

professional legal skill that a solicitor conducting his own

case successfully is treated differently from any other

successful litigant in person conducting his own case. We

are not concerned with the exercise of other professional

skills. Other professional people, who become involved in

litigation and conduct their own cases, may recover

something in respect of their own professional skill in so

far as they qualify as witnesses and are called as such.

Nobody else, however, except a solicitor, has ever been held

entitled to make any charge, as I undersand it, in respect

of the exercise of professional legal skill and it is this

which the appellant has sought to do in the present case. I

have much sympathy for him, as indeed had Donaldson J., but

I can find no ground, either in principle or on authority,

for allowing him anything by way of remuneration for the

exercise of a professional skill which he has not got."

10. The authorities to which we have referred and some others were discussed by the members of the Court of Appeal in the two Cachia cases earlier referred to. In his dissenting judgment in the second of the two cases Kirby P. refered to some reports of law reform commissions, the International Covenant on Civil and Political Rights to which Australia is a party and to s.15 of the Canadian Charter of Rights and Freedoms. He concluded (23 NSWLR at p 313) that the relevant provisions of the New South Wales Supreme Court Rules should not be given a meaning which was "both artificial and discriminatory." He said that the rule in its terms made no distinction whatever between lay or professional litigants in person. No distinction should therefore be introduced by court decisions. It followed that the master was obliged to permit taxation of all costs incurred by the appellant, including loss of earnings, which were "necessary and proper" within the language of the rule. Later he said (pp 314-5):-

"The language of Pt 52, r23(2) of the Supreme Court Rules

should be given its natural meaning. It should not be

encumbered with illogical, discriminatory principles which

have no place in the law of this State. The rule in

question is stated in broad terms. The meaning of 'costs'

within the context of the rule is also very broad. These

features of the rule should be recognised. Master Gressier

erred in declining to reverse the taxing officer's decision

in relation to twenty-four items on the basis of what he

took to be the requirement of Buckland v. Watts. The term

'costs' in Pt 52, r23(2) should be interpreted to include

all of the items listed in Schedule G of the Supreme Court

Rules. But that schedule, being addressed to the costs of

solicitors, cannot of itself determine whether costs

actually incurred by a litigant in person were 'necessary

and proper'. That will involve a decision to be made, where

necessary on evidence, in each case of a disputed claim."

11. Handley J.A. delivered the principal majority judgment. Clarke J.A. agreed in the judgment of Handley J.A. but said (pp 315-6):-

"I should not be taken, however, as being unsympathetic to

the arguments which the appellant has put forward both in

this case and in the earlier one. It would seem clear that

he put in a lot of effort in preparing and arguing his case

and there is something to be said for the point of view that

if a litigant who is represented is entitled under the

Supreme Court Rules 1970, Pt 52, r23(2) to reimbursement in

some circumstances for time spent in court (Australian Blue

Metal Ltd v. Hughes (1970) 2 NSWR 119; Kerridge v. Foley

(Street J, 19 August 1970, unreported) and Petrunic v.

Barnes [1989] VicRp 81; (1989) VR 927), a litigant who is not represented and

whose appearance in court is clearly necessary, should be

reimbursed if not for his time and effort generally at least

in respect of the time he spent in court."

12. Handley J.A. expressed the view (pp 317-8) that any principle that entitled litigants in person to be remunerated for time spent in preparing and conducting their own cases would be mischievous in practice. With respect, we do not ourselves perceive why any such principle should be considered as mischievous. Nevertheless, we think the authorities to which reference has been made establish that a litigant in person who is not a solicitor may not receive any remuneration for work done in the preparation of a case or for appearing in court. But they also establish that litigants in person are entitled to recover their out of pocket expenses. We can find nothing in the cases which obliges this Court to hold that a litigant in person who has had to have time away from his or her employment or business in order to prepare a case or to attend Court to present it should not recover an indemnity for any loss of earnings suffered in consequence. That is not to permit a litigant in person to charge a sum in the nature of professional costs; rather it is to provide an appropriate indemnity against loss of earnings incurred whether in the preparation of a case or in actual attendance at Court. Of course the touchstone is that of what was necessary and reasonable in all the circumstances. So long as this is the approach, no injustice can result.

13. We are reinforced in that view by the judgment of Street J. (as he then was) in Kerridge v. Foley (Supreme Court of New South Wales in Equity, 19 August 1970, unreported), referred to by Clarke J.A. in the passage quoted from his judgment in the second of the Cachia cases and also by Samuels J.A. in his judgment in the first of those cases. Kerridge was not a case where the successful defendant was unrepresented. He had been represented throughout the proceedings by counsel and solicitor. On the taxation of his costs the question arose whether he was entitled to recover (or rather whether the solicitor could recover on his behalf) out of pocket expenses and loss of earnings incurred by him both in carrying out certain investigations advised by his legal representatives and in attending Court. Those items were disallowed by the taxing officer.

14. In his report, the taxing officer said that it had never been the practice to allow a fee or out of pocket expenses to a party (not being a solicitor) attending court as a litigant interested in the proceedings whose attendance was not required for the purpose of giving evidence. In relation to this practice, Street J. said (pp 6-7):-

"In view of the long-standing nature of the practice which

the taxing officer has applied in the present case, and in

accordance with a course which is at times followed by a

court entertaining an appeal from the decision of a taxing

officer, I have overnight consulted with the Chief Judge in

Equity and my three brother Judges who sit in this

jurisdiction to ascertain their views upon the validity of

this practice. None of us sees any validity in a practice

which would result in the arbitrary rejection of a claim by

a litigant in respect of his expenses of attending at the

hearing. It is not, as the practice would seem to suggest,

necessary to demonstrate that the litigant was to be called

as a witness or to be cross-examined. There is, within the

scope of Rule 23, express jurisdiction in the taxing officer

to consider in each case whether or not the attendance of a

litigant during all or part of the hearing was 'necessary or

proper for the attainment of justice or for maintaining or

defending the rights of any party.'

In particular, in a suit in this Court (and I have confined

my consultantions with my brethren to the Judges of this

jurisdiction) a defendant to an injunction suit has a very

real interest in being present at the hearing. The relief

sought in such a suit is relief against him in personam -

relief which carries with it the ultimate sanction of

committal for contempt if he disobeys any injunction the

Court may grant against him. Injunction suits do not

necessarily follow a set pattern. The situation of the

parties can change significantly as the fabric of the

hearing is woven. I should have thought that it would be at

least unusual to contemplate counsel being prepared to

conduct the defence in an injunction suit without the

defendant himself being immediately available to give such

instructions as might from time to time be required.

Whatever, then, may be the justification for clinging to

some vestiges of this practice in other jurisdictions, (and

I do not myself see any such justification), the views of my

brother Equity Judges fortify me in over-ruling any future

application in this jurisdiction of the arbitrary practice

to which the taxing officer refers. Each item which would

heretofore have been rejected pursuant to the practice is to

be considered and decided on its merits, the relevant

principle being that stated in Rule 23.

The rule of practice appears also to have coloured the

taxing officer's approach to the claim by Mr Foley for the

preparatory work he carried out. Here again I see no

justification for refusing to entertain and adjudicate upon

claims for preparatory work carried out by a litigant

personally - Rule 23 is sufficiently wide to entitle such

claims to due consideration."

15. There is no counterpart of rule 23 of the rules considered by the Court in Kerridge in the Federal Court Rules. The relevant provisions of the Federal Court of Australia Act 1976 are to be found in s.43 which provides that a court or a judge has jurisdiction to award costs in all proceedings before the Court other than proceedings in respect of which any other Act provides that costs shall not be awarded. The award of costs is in the discretion of the Court or judge. Costs are dealt with in Order 62 of the Rules. Rule 2 of the Order provides that its provisions apply to costs payable or to be taxed under any order of the Court or under the Rules and costs to be taxed in the Court under any Act. Rule 4 provides that where costs are to be paid to any person, that person shall be entitled to his taxed costs. The expression "taxed costs" is defined in rule 1 to mean costs taxed in accordance with Order 62. Rule 8 provides that bills of costs and fees which are payable to barristers and solicitors in respect of business transacted by them in the Court and have been directed by a judgment or order to be taxed under the Rules shall be taxed allowed and certified by a registrar who is referred to as the taxing officer.

16. The Second Schedule to the Rules is headed "COSTS ALLOWABLE IN RESPECT OF WORK DONE AND SERVICES PERFORMED". The bulk of the items in the schedule are items for work done by solicitors. They specify amounts which will be allowed solicitors for various tasks. The schedule concludes, however, with items which are disbursements or expenses. The first of these refers to counsels' fees which are not relevant in the present case. The second series of items is relevant to witnesses' expenses and provides a scale according to which the daily rate allowable to witnesses may be arrived at. Item 46 provides that witnesses who are remunerated in their occupation by wages, salary or fees are to be reimbursed the amount lost by their attendance at Court. Item 47 provides for the payment to the witness of a sum that the taxing officer thinks reasonable for the actual cost of conveyance, together with a reasonable amount for sustenance or maintenance. Disbursements are provided for in items 48 and 49, item 48 providing for the allowance of Court fees and other fees and payments to the extent to which they have been properly and reasonably incurred.

17. Having considered the various authorities to which reference has been made, the Court has reached the conclusion that the decision of the High Court in the Guss case, which is binding on this Court, is determinative of this matter. It is true that the circumstances dealt with in it were of a special kind but the statement by the judges of the underlying principles which enabled them to reach their conclusion is clear. As mentioned, reference was not made to Buckland v. Watts but its predecessor, the London Scottish Benefit Society case, was mentioned and assumed correctly to state the law. In those circumstances, notwithstanding that we have a sympathy for the respondent here just as Clarke J.A. had for Mr Cachia in the second of the Cachia cases, the applicable principles are those propounded by the majorities of the Court of Appeal who decided those cases. In a case such as the present it is not appropriate that the respondent recover anything apart from her out of pocket expenses. But the Kerridge case, notwithstanding what was said about it by Samuels J.A. in the first of the Cachia cases (see pp 17-24 where, although he was critical of Kerridge and some other cases, he did not disagree with the result of them), remains authority for the proposition that a party, whether represented or not, who has a real need to be present in court throughout the hearing, is entitled to recover at least the out of pocket expenses (including loss of earnings) incurred as a consequence of that attendance. That need will be more easily established where a party is conducting his or her own case. Here the proceedings were by way of appeal and the only person to conduct them on behalf of the respondent was the respondent herself. Even in a witness action, where a litigant in person is a witness, costs should normally include the expenses of the party being in court throughout the whole of the hearing because it is the party who perforce must conduct the case.

18. Street J. in Kerridge relied upon a particular rule which has no counterpart in the Rules of this Court. But, in our opinion, the position is no different because the matter may be decided as a matter of principle. We have given consideration to the question whether the respondent should also be entitled to recover out of pocket expenses (in the sense of loss of earnings) for time reasonably taken to prepare her case. We see nothing in the authorities which prevents the making of an order providing for such a payment, but we emphasise that no allowance can be made unless a real loss of earnings is demonstrated. Furthermore, the time which will be allowed must have been time reasonably taken for necessary preparation.

19. The provisions of Order 62 rule 8, which has earlier been referred to, seem to envisage only the taxation by the taxing officers of the Court of bills of costs and fees which are payable to practitioners. This case therefore requires a special order. The order we make is that the appellant pay to the respondent her out of pocket expenses necessarily and reasonably incurred in relation to the appeal, such out of pocket expenses to include earnings (if any) actually lost as a result of the need to prepare her case and to attend Court to present it. We should add that we have considered the amounts claimed by the respondent in the written submissions lodged by her and the way in which those amounts have been calculated. In our opinion the claim has about it some of the hallmarks of extravagance. It provides no safe guide to what is involved; otherwise we would have endeavoured to make an assessment of the amount which, in our opinion, would have been proper for the appellant to pay. In order to save the expense of taxation, it is to be hoped that the parties with the aid of this judgment will be able to reach agreement on the amount which should be paid. The respondent should understand that it is unlikely that the amount she will recover will be as substantial as her claim appears to contemplate.

20. No order is made for the payment of any part of the respondent's expenses incurred in relation to the presentation of the argument on costs. Nor do we make any order in respect of the appellant's costs of that argument, but we express our appreciation for the careful and helpful submission which was made on his behalf. The costs and expenses of any taxation which becomes necessary will be in the discretion of the taxing officer.