On 15 September 2023, I delivered reasons for judgment in the proceeding. The judgment was published on Caselaw (Robust Builders Pty Ltd v Barai & Anor (No.6) [2023] NSWDC 376. By order 5, I ordered that the builder pay the owners' costs of the proceeding.
On 3 October 2023, I dismissed the Builder's application which was, in substance, to set aside the costs order made on 15 September 2023. My reasons for judgment were also published on Caselaw (Robust Builders Pty Ltd v Barai & Anor (No.7) [2023] NSWDC 404).
Unbeknownst to me, by 3 October 2023, the Owners had filed (on 29 September 2023) their own notice of motion about costs. My ignorance of that was the result of a combination of circumstances: the fact that the case was heard in Parramatta but the judgment of 3 October was delivered whilst I was sitting in Sydney (requiring transmission of the owners' motion from the Parramatta registry to Sydney registry of the Court) and the Public Holiday (on 2 October 2023).
At any rate, the owners' notice of motion was filed within the 14 day period which parties have to apply for variation of orders (r 36.13(3A) of the Uniform Civil Procedure Rules 2005 ('UCPR') and the period referred to in order 6 of the judgment on 15 September 2023.
By their notice of motion, the owners bring the following applications:
1. an application (brought under r 42.5 of the UCPR) that the Owners' costs be paid on an indemnity basis; and
2. an application (brought under s 98(2) of the Civil Procedure Act 2005 (NSW) (the 'CP Act') that Mr Ravi Mehndiratta make payment of the costs of the proceeding "as agreed or assessed".
The notice of motion is partly supported by an affidavit of Daniel Lambley sworn 28 September 2023. Mr Lambley is not only a solicitor employed by the firm of solicitors retained by the owners (Michael Vassili Lawyers) but appeared, as a solicitor advocate, for the owners during the hearing. The 'body' of his affidavit was 14 pages in length and 'annexed' a voluminous number of annexures which meant that the affidavit ran to 287 pages in total.
It was also partly supported by an affidavit from Shelley Chen, another solicitor employed by Michael Vassili Lawyers, affirmed on 29 September 2023.
Once the owners' notice of motion was brought to my attention, I made directions (notified, by email, to the parties on 4 October 2023) for the preparation of further evidence (by the builder in response and by the owners, in reply) and the exchange of written submissions, with specified page limits. The parties were warned that submissions in excess of those page limits were liable to be disregarded. Unfortunately, one of the parties did not heed that warning.
Then on 16 October 2023, it was brought to my attention that Ms Chen affirmed a supplementary affidavit (13 October 2023) which the owners also sought to rely upon. This resulted in blowing out the timetable set on 4 October 2023 so that the parties had an additional week to conform with the directions indicated in my Associate's email of 4 October 2023.
On 25 October 2023 (at 8:15am), after the date had passed for Mr Mehndiratta to serve evidence in response to the owners' evidence on the application, Mr Mehndiratta sent an email to my Acting Associate (amongst others). Because of its brevity, I set it out (omitting formalities):
"Good morning
Robust Builders is no longer active and therefore emails are not monitored on a regular basis.
I have not received any hard copies by email as yet. I will prepare an affidavit and lodge but will need an extension of time.
I have filed an appeal on 12.10.23
I request all Court orders, Notices of Motion or Affidavits be set aside until my appeal has been finalised."
In response to this email from Mr Mehndiratta, I arranged for my Acting Associate to send an email to the parties. This was sent at 10:00am on 25 October 2023. The email clearly indicated that the Court rejected Mr Mehndiratta's informal request for an extension of time and suspension of the adjudication of the owners motion until his asserted appeal was heard.
Later that same day, Mr Mehndiratta served an affidavit, expressed to be 'in reply' to the owners' motion for costs and the affidavits of Daniel Lambley and Shelley Chen.
[2]
the background to the applications
What follows is largely derived from Mr Lambley's affidavit, although familiarity with the content of my judgment on 15 September 2023 is assumed.
As noted in earlier judgments, the disputes concerned events in the second half of 2016 through to the second half of 2018. The builder ceased performing works in August 2018. On 23 August 2018, the builder commenced the proceeding.
[3]
Absence of legal representation and Mr Mehndiratta's authority to carry on the proceeding
One of the annexures to Mr Lambley's affidavit was a company search of Robust Builders Pty Ltd. The document indicated that Mr Ravi Mehndiratta was the sole director and secretary of this company. Mr Mehndiratta was identified as having an address at 8 Myra Avenue, Ryde. This was also the registered address of Robust Builders Pty Ltd. The document also indicates that Robust Builders Pty Ltd was wholly owned by another entity, SRV Holdings Pty Ltd. Although no additional company search was annexed in relation to the latter company, it is apparent that the registered address for that company is the same as the residential address for Mr Mehndiratta (being also the same registered address for Robust Builders Pty Ltd). Plainly, there is a strong connection between these two companies.
The company search for the plaintiff company also indicated that on 2 June 2022, Robust Builders Pty Ltd had been put on notice of winding up proceedings (reliant upon any or all of ss 459P, 462 or 464 of the Corporations Act 2001 (Cth)).
For some part of this proceeding, the builder was legally represented. But that ceased on or about 14 November 2020. From then on, at all times until the conclusion of the hearing, Mr Mehndiratta carried on the proceeding for the builder, in a de facto sense. It was not apparent that the owners took any point about his authority to do so, before the hearing when the Court directed Mr Mehndiratta to file an affidavit as to his authority (in circumstances set out in Robust Builders Pty Ltd v Barai & Anor [2023] NSWDC 371).
In that judgment, I noted the circumstance that Mr Mehndiratta had refused to acknowledge that he may be liable to pay some or all of the costs of the proceeding (as a precondition to his carrying on the proceeding for the plaintiff). But I observed (at [6] & [17]) that he may potentially be amenable to a costs order against him at the conclusion of the proceeding. In one exchange that I had with Mr Mehndiratta, at the point when he appeared ambivalent as to whether he wished to continue to carry on the proceeding for the plaintiff when this prospective personal liability for costs was pointed out to him, Mr Mehndiratta indicated that the company could not fund the continuing litigation. Further, on the first day of the hearing, when I asked him about the plaintiff's absence of legal representation, Mr Mehndiratta responded (T 1-2):
"I hired a lawyer around three years ago. He represented me and I don't have money to pay them, so thing is they (ie the owners) owe me more than $300,000 and they can afford a lawyer, but I cant (sic) because they have my money. So, right now, I can apply for the pro bono, but it used to be a lawyer representing me when I was running my business. Now I am not running my business, I'm basically in no position to run my business the way things are happening. So, yes, it used to be a lawyer before."
[4]
The builder's claim for loss of equipment
Mr Lambley referred to the circumstance that part of the builder's claim concerned an alleged claim that the owners detained equipment. I addressed this claim at [222]-[233] in my reasons for judgment on 15 September 2023. In short, it was dismissed for want of evidence.
[5]
The owners' complaints about pre-trial processes
Mr Lambley sets out, in extensive detail, the owners' complaint about the delay in the builder responding to the owners' request for further and better particulars of the builder's claim, between 11 September 2018 until 1 May 2019 which the owners say was in breach of certain directions.
Mr Lambley also set out in greater detail the sequence of events concerning the owners' Notice to Produce dated 18 February 2021. This procedural dispute surfaced during the hearing, in the course of Mr Mehndiratta relying upon what was ultimately an inconclusive report of a forensic examiner which related to an issue in the proceeding: being whether a contract was entered into in December 2016. The dispute about this notice ran until 3 December 2021 when documents were produced; but not before the owners' solicitor had engaged in significant correspondence with the builder about the issue, several directions hearings were occasioned and a costs order was made against the builder (which remains unpaid).
[6]
Vacations of court hearings
This was a topic which I touched upon in some of the interlocutory judgments I delivered. Earlier scheduled hearings for the July 2022 and May 2023 Parramatta sittings were vacated. Although Mr Lambley did not attribute blame to the builder for the vacation of the July 2022 scheduled hearing, he did argue that the vacation of the May 2023 scheduled hearing was the builder's responsibility.
[7]
Numerous Court listings prior to the hearing
Mr Lambley calculated that prior to the commencement of the hearing, the proceeding had been listed before the Court on forty seven occasions.
Mr Lambley catalogued various non-attendances by the builder during the proceeding. These were: 15 November 2021, 30 June 2022, 28 April 2023 (a pre-trial review), 4 May 2023 (another pre-trial review).
[8]
Earlier costs orders
Prior to the hearing of the matter, Mr Lambley indicated that certain orders for costs were made when Mr Mehndiratta was acting on the builder's behalf. The details were: (a) 28 March 2019 (when it was ordered that "costs are reserved in favour of the defendant"); (b) 3 December 2021 (where the builder was ordered to pay the costs of the owners' motion); (c) 8 May 2023 (where an earlier hearing was vacated with costs being in the cause after Mr Mehndiratta indicated that he had booked tickets for air travel during the period encompassing the May 2023 Parramatta civil list sittings and was only available on two days).
[9]
Mr Mehndiratta's conduct during the August 2023 hearing
The hearing ran for 12 days. Mr Lambley was critical of the length of the hearing (which had been given a pre-hearing estimate of a day plus) which he blamed on Mr Mehndiratta's initiation of serial procedural applications which were determined adversely to the builder (judgments about which are referred to in my judgment on 3 October 2023, published on Caselaw, at Endnote 1).
Mr Lambley contended that generally, these applications had no prospects of success and merely delayed the proceeding; and many of them would, if acceded to, would have required the effective adjournment of the hearing generally.
Mr Lambley was also critical of the long cross-examination of the owners' witnesses.
During the hearing, Mr Lambley reminded me that on 25 August 2023, the matter needed to be adjourned at a point where Mr Mehndiratta was not prepared to continue the cross-examination of Mr Barai, at that point, and I reserved costs following the grant of the adjournment.
[10]
Quantification of the owners' costs
Ms Shelley Chen is a solicitor employed by the owners' solicitors. She has a double degree in Law and Business, majoring in Accounting. One of her roles at the firm is to issue costs and retainer agreements and prepare (and respond to) costs assessments.
In her first affidavit (29 September 20223), Ms Chen deposed to the costs and retainer agreements that her firm had engaged with the owners from 27 July 2018 through to 20 September 2023 and indicated the costs actually incurred by the owners ($167,730.42). She itemised all of the invoices.
By reference to each of what I would describe as the species of unreasonable conduct identified by Mr Lambley, in the latter's affidavit, (as summarised above) how much more the owners' costs had been increased by. That amounted to an aggregate figure of $56,861.39.
In her second affidavit (13 October 2023), she pointed out that the owners' expert, Mr O'Donnell was required to attend Court between 28 to 30 August 2023. However he had also been on standby to give evidence earlier on 14, 15, 22, 24 and 25 August 2023. She deposed to receiving all invoices by Mr O'Donnell's firm (CSI), which detailed his expenses for preparing the report and, in addition, his attendances at Court to give evidence. The owners had presently paid a portion ($12,445) of the amount claimed by Mr O'Donnell ($19,525).
[11]
Mr Mehndiratta's evidence in opposition to the motion
I now refer to Mr Mehndiratta's affidavit of 25 October 2023. This affidavit did not accord with the prescribed form for affidavits: the form that was used was appropriate for notices of motion. Be that as it may, the gist of the evidence may be concisely stated:
1. On 22 August 2023, on the first day of the hearing, the Court dispensed with the requirement for Mr Mehndiratta to make a statement complying with sub-rule 7.2(a)(iv) of the Uniform Civil Procedure Rules 2005 (NSW).
2. In the reasons for judgment on 15 September 2023, the Court ordered monetary judgments for both parties. Therefore no party should be disadvantaged by paying any costs to the other party.
3. An appeal of the judgment made on 15 September 2023 has been lodged, so it is requested that no orders be enforced until the appeal has been completed.
In the affidavit, Mr Mehndiratta (irregularly) sought orders (without bringing another notice of motion). I will treat what he stated as submissions. These were:
"1. Neither party to claim costs.
2. Request to the costs of the Defendants/Cross Claimants of the proceedings to be paid on an indemnity basis to be rejected.
3. Builder's director Ravi Mehndiratta to not be held personally liable for any costs incurred by the other party.
4. Any other orders/requests made by Pankaj Barai and Fahima Mahjabeen and their solicitors be rejected.
5. No orders be enforced until the conclusion of Robust Builders appeal, lodged 12.10.23".
[12]
Power and principles
Although the owners cited r 42.5 of the UCPR as the basis for bringing this application, this rule is facultative. The power to order indemnity costs lies in s 98(1)(c) of the CP Act.
The usual basis for a costs order is that it is paid on a party and party basis (UCPR, r 42.2). But the purpose of an indemnity costs order is to compensate the successful party for the costs they should not have been required to incur, rather than to punish the unsuccessful party, or deter other litigants from commencing cases that might be attended by uncertainty [1] . Of course, those on the receiving end of such orders might view them as punitive, at least in effect, but some protection is afforded, and the compensatory function underscored, by the causal requirement that the costs are incurred by reason of the impugned conduct [2] .
In Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233, Sheppard J indicated that it takes some 'special or unusual feature' to justify a Court to depart from the usual basis for awarding costs. It is well accepted that an order for indemnity costs may be imposed against a party where there has been some 'relevant delinquency' as a litigant: perhaps most commonly, being the unreasonable rejection of an offer of compromise (under Court rules).
In their commentary on r 42.5 of the UCPR, in J Hamilton & Ors, New South Wales Civil Procedure Handbook 2023 (Thomson Reuters, 2023), whilst emphasising that the categories of cases in which such an order may be made are not closed, the learned authors (at [r 42.5.40]) usefully identified certain categories of case in which such orders can be made:
hopeless cases;
abuse of process;
unreasonable conduct in the course of proceedings;
fraud or deception
unreasonable rejection of rules offers (and Calderbank letters)
In commentary about r 42.5 in Ritchie's Uniform Civil Procedure (NSW) (looseleaf, LexisNexis) at [42.5.7], the learned authors posit the following types of situations in which indemnity cost orders may be made are (to paraphrase):
where the Court is misled;
where a proceeding is maintained (or defended) with no real prospect of success;
a party's abandonment of claims (or defences) (although not where the purpose is compliance with case management objectives);
maintenance of proceeding (or defence) for an ulterior purpose;
where the conduct of a proceeding has caused unreasonable delay or expense;
where a party has unreasonably delayed an admission of liability to obtain tactical advantage;
where a party is declared to be a vexatious litigant or has been held to be in contempt
unreasonable rejection of settlement offers
When considering applications of the present kind, it is not sufficient to simply identify a category of case where orders have been made. All of the circumstances have to be considered.
That includes the circumstance that the owners rightly do not contend that the builder, as the moving party, did not have a reasonable case. As indicated the owners were correct not to suggest that this was so since the builder did in fact partially succeed with its claim for unpaid costs. Further, the owners correctly did not suggest that the builder's opposition to their claim for defective or incomplete works was inherently unreasonable. The builder had in its favour a contemporaneous occupation certificate and the owners did not put on expert evidence until later in the piece. Whilst there were questions about Mr Mehndiratta's honesty and the authenticity of documents the builder relied upon, as was apparent from the reasons for judgment on 15 September, that was not dispositive of the case either (although it did not help the builder).
Nevertheless, the application of some or more of these categories of case in which indemnity costs orders have been made provides some guidance. Of all of these categories, the ones which are most apposite, given the material relied upon by Mr Lambley, are the categories of 'unreasonable conduct in the course of the proceeding' which may be taken to subsume the category of conduct causing 'unreasonable delay or expense' [3] . An example of where indemnity costs were awarded for conduct causing delay was in Ingot v Macquarie Equity Capital Markets Ltd [2003] NSWSC 1102 at [26] (a belated application to amend). Another example, from the same litigation, was an unsuccessful party's pursuit of a case where it must have known that it could not prove its case on damages (Ingot Capital Investment v Macquarie Equity Capital Markets Ltd (No.7) [2008] NSWSC 199 at [65]). Yet a further example of where indemnity costs order may be appropriate was in Wentworth v Rogers [1999] NSWCA 403 at [83]-[87], where it was found that a party conducted themselves at a hearing of protracted length which served no useful purpose.
It is notable that, conceptually, the conduct that sustains an order for indemnity costs against a party can sustain a personal costs order against a director carrying on the proceeding for the company.
A brief perusal of Mr Lambley's affidavit in support touched upon what were said to be the builder's non-compliance with directions made during the course of the proceeding prior to hearing. In the course of refusing Mr Mehndiratta's recent application to set aside the costs order made on 15 September 2023, in the judgment given on 3 October 2023, I observed (at [22]):
" … it is a commonplace, even if it is sometimes regrettable, in building litigation that timetables for directions, including the service of evidence are sometimes not complied with. When that occurs, if a breach of a court timetable occasions financial detriment to a party not in breach, then it behoves that party to seek a costs order at or about the point of breach; i.e. to the Registrar or judicial officer who is in a position to make such order proximate to the time when the direction is not complied with. It is not to store it up at the end of the proceeding, once the (ultimate) result is known as a basis for seeking an exception or modification to the final order for costs made by the Court. Trial judges in this Court are in a different position to judges in other courts that operate under a 'docket' system, who have regular oversight over proceedings, including pre-trial directions and motions. It is not automatically the case that even when judges in this Court do have oversight or familiarity with proceedings, by reason of their being involved in pre-hearing directions or motions (such as when they perform the function of being a List Judge) that they will go on to preside at the hearings of the proceedings. Accordingly once trial judges have given their decision, they should not, be expected to trawl through the entrails of the entire proceedings (this one being of 5 years' duration) with a view to determining modifications or exceptions to the final costs order because of suggested non-compliance with directions throughout the proceeding"
[13]
The owners' submissions
These were partly contained (in effect) in Mr Lambley's affidavit, but were partly also apparent in his separate written submissions (dated 31 October 2023).
In the affidavit supporting the application for indemnity costs fastens upon the category of unreasonable conduct of the builder's case, with serial complaints of 'delinquency' against the builder:
1. in not complying with case management directions;
2. delay in complying with court processes, being the request for particulars and the notice to produce;
3. in unreasonably bringing the claim for items of personal property not returned to the builder;
4. causing the vacation of the May 2023 scheduled hearing;
5. bringing serial interlocutory applications during the hearing which were caused by the builder's own omissions to prepare its case prior to the hearing.
In the owners' written submissions, they also cited non-attendances by the builder throughout the proceeding at directions. The owners also criticised Mr Mehndiratta's conduct after the Court had delivered judgment on 15 September 2023 when he did not serve the builder's motion that gave rise to my judgment on 3 October.
The owners responded to points raised by Mr Mehndiratta in his affidavit of 25 October 2023. In relation to Mr Mehndiratta's point that the Court waived the requirement for him to expressly acknowledge his prospective liability to costs, the owners indicated that this did not immunise him from a personal order for costs. In relation to the second point, concerning two competing judgments, the owners explained that by operation of (statutory) set-off, the builder's claim was extinguished. As to Mr Mehndiratta's third and final point, the builder's lodging of an appeal was irrelevant to the disposition of the present application.
[14]
The builder's submissions
Mr Mehndiratta drafted written submissions dated 2 November 2023, amounting to 9 pages (in excess of the 5 page limit stipulated despite my express warning on 4 October 2023 that the page limit for submissions would be strictly enforced). The document was not paginated.
The preponderant part of theses written submissions (occupying pages 2 - 8) did not address the costs consequences of my judgment of 15 September 2023. Instead, Mr Mehndiratta merely submitted factual matters which went to the correctness of that judgment. In other words, he interpreted the invitation for him to make submissions as costs in response to the owners' applications for special costs orders as an opportunity instead to argue for a different substantive result in the proceeding explained in my reasons of 15 September 2023.
As to the balance of his written submissions, he repeated the grounds expressed in his affidavit of 25 October 2023, referred to earlier.
His reasons (pages 1 and 2) dealt with matters that Mr Mehndiratta had previously referred to, which related to the raft of procedural applications he had made during the hearing.
[15]
The owners' submissions in reply
In the course of managing the motion by directions, one of those directions had been for the owners to make submissions in reply. However, in light of the content of the builders' submissions in response I indicated to Mr Lambley that it was unnecessary for the owners to reply to those.
[16]
Rejection of Mr Mehndiratta's points
For substantially the reasons identified by the owners in their written submissions on the application, none of the matters alluded to in Mr Mehndiratta's affidavit of 25 October 2023 represent a proper basis for opposition to the owners' motion. Indeed, his points or arguments are substantially directed to the question about whether, as a party, the builder should pay any costs at all. That issue was addressed and resolved in Robust Builders Pty Ltd v Barai & Anor (No.7) [2023] NSWDC 404 delivered on 3 October 2023.
Mr Mehndiratta's points raised about (a) the effect of the Court's waiver of the requirement that he make a statement as a precondition to his carrying on the proceeding for the company and (b) the circumstance that monetary judgments were awarded to both parties could have been raised in the arguments on Mr Mehndiratta's application determined by my judgment on 3 October 2023. It is too late now to consider them as no application has been brought to set aside the orders made on 3 October 2023 under r 36.16(3A) of the UCPR.
As to Mr Mehndiratta's last point about the lodgement of an appeal, that act by him does not operate as a stay on the continuation of this proceeding and even if it did, it would not be appropriate to stay any order until this Court has finally made orders to dispose of the proceeding, which requires my consideration of the owners' motion, which they have the right to have determined. Nor is it appropriate simply to defer consideration of the owners' motion until the Court of Appeal has determined the appeal which Mr Mehndiratta says he has filed. As the Court of Appeal recently observed in Jaken Properties Australia Pty Ltd v Naaman (No.2) [2023] NSWCA 254 at [4], "(P)artly determined proceedings pending in multiple courts are generally to be avoided".
Mr Mehndiratta's reference to his lodging an appeal is, however, relevant to a stay application which he muted in his affidavit of 25 October 2023, and I return to that topic at the conclusion of these reasons.
I note that there is nothing in Mr Mehndiratta's affidavit that contests the evidence that the owners rely upon to substantiate their application.
Mr Mehndiratta's submissions (at pages 2 - 8) do not advance his position. They amount only to arguments on the merits of the parties' positions leading up to the judgment delivered on 15 September 2023. Mr Mehndiratta misinterprets or misunderstands that the opportunity for him to make submissions in response to the owners' application for special costs orders is not the occasion to cast doubt upon the correctness of that judgment.
Mr Mehndiratta's submissions (at pages 1-2) relate to his generalised complaint of being disadvantaged during the case and canvasses the correctness of a number of procedural judgments made during the hearing which were adverse to Mr Mehndiratta. This also amounts to a misunderstanding of the opportunity Mr Mehndiratta was given to make submissions in opposition to the owners' applications.
Mr Mehndiratta's submissions (on pages 8 & 9) amount only to suggested orders that Mr Mehndiratta would like the Court to make; which mainly seek the setting aside of orders made on 15 September 2023 and 3 October 2023. These submissions are not responsive to the owners' application either.
Following my rejection of Mr Mehndiratta's submissions, he has not identified any proper basis for opposition to the owners' applications. That does not mean that the owners' applications should be acceded to. I will now deal address those applications.
[17]
Analysis
Indemnity costs orders represent a departure from the general rule (UCPR, r 42.2). Whilst I have catalogued categories of case where indemnity orders are made, those categories are only illustrative. The task for a Judge before whom applications of this kind are made is not simply to ascertain whether there is precedent for an order to be made (by reference to familiar categories of case where the order has been made). Even where a case fits a category, the Court must still exercise its discretion all of the relevant circumstances.
In what follows, it is convenient to divide assessment of conduct between pre-hearing conduct and conduct at the hearing. That division broadly reflects, amongst other things, the level of my own oversight of the proceeding (at the hearing) and generally, the oversight of judicial registrars and other judicial offices in case managing the proceeding (before the hearing) [5] .
From the perspective of the overriding case management objects of civil litigation, or at least many of them, the circumstance that the proceeding, commenced in August 2018 was not determined before September 2023 suggests that something has gone wrong in the delay that it took for the case to get to hearing.
[18]
Pre-hearing conduct
I accept Mr Lambley's submission that in certain instances in the lead up to the hearing, there was demonstrable delay by (or on behalf of) the builder in compliance with certain pre-trial processes, concerning the requests for particulars and the notice to produce. The submission really amounts to a catalogue of miscellaneous complaints under which the owners suggest an all-encompassing characterisation of unreasonable conduct.
But as I indicated in my observations in the judgment on 3 October 2023 dismissing Mr Mehndiratta's application to set aside the extant costs order, trial judges (in this Court) should not be vexed with the task of conducting a comprehensive and detailed inquiry as to such things as to why requests for particulars or notices to produce had not been complied with at all or had only been belatedly complied with. Inquiries of that kind have the tendency of engendering further factual disputation between combatants in a form of satellite litigation when a fuller appreciation of the circumstances concerning a lack of compliance is more likely to be had at the point of non-compliance; a point where, obviously, the reasons for a default are fresher in the minds of the litigants. In saying this, I recognise, of course, that much of the disputation over a pre-trial dispute is likely to be substantially documented at the time of the dispute, but that does not entirely discount the relevance of a lawyer's recollections of why things occurred as they did. Those recollections become more unreliable as time goes by.
The spectre of satellite litigation has multiple aspects: forcing the parties after the Court has resolved the underlying substantive dispute, into another round of litigation in circumstances where (often) their financial resources or even emotional wherewithal, in fighting litigation has been drained, if not exhausted; and also diminishing the Court's judicial and administrative resources available for the important task of moving on to resolve the pressing disputes of other parties in other proceedings.
If a party has, in the view of the other party, unreasonably delayed in compliance with a process of the Court, it is not only open for the 'innocent' party to apply for a costs order at the earliest practicable occasion, but also to apply for it on an indemnity basis (I recognise that applications for costs to be payable forthwith are more difficult).
The same principle applies in relation to non-attendances in Court in the run up to a final hearing. I appreciate, of course, that it would likely be an unusual thing for a party who fails to attend a directions hearing on an isolated or first occasion to be subject to an indemnity costs order as a sanction, but where there have been previous non-attendances by a party, it may be open for the 'innocent' party to persuade the Court that given the historical circumstance of previous non-attendance(s), costs payable on an indemnity basis may be more appropriate than a costs order on the usual basis on the next, or future occasions of non-attendance.
As to the specific instance of the vacation of the May 2023 scheduled hearing, this was an instance where it was open to the owners to apply for costs of the vacation on an indemnity basis before Andronos SC DCJ. It is not clear whether or not that application was made to his Honour. If it was, then his Honour rejected it and it would be too late now to appeal that rejection. If it was not, it is too late now for an application to effectively be made to vary the costs order his Honour made.
There is not much in the owners' point about the unreasonableness of part of the builder's claim, concerning loss of equipment. An obvious retort is that if the claim was unreasonable, why was it not the subject of an application for summary dismissal? As it was, this claim, although maintained by the builder, scarcely assumed any prominence at the hearing.
I am also mindful that it is not apparent that, prior to the commencement of the hearing in August 2023 that the owners ever put the builder on notice that it regarded the builder's pre-hearing conduct as so unreasonable such that it envisaged bringing an application for indemnity costs should it 'succeed' in the end result of the litigation.
I am not persuaded that, on the basis of the builder's conduct prior to the commencement of the hearing on 22 August 2023, the owners should receive an order that their costs be payable on an indemnity basis.
[19]
Conduct during the hearing
Mr Mehndiratta carried on the hearing for the builder. In effect, for reasons to be advanced in the next section, his position is roughly assimilated to that of a self-represented litigant. Put slightly differently, for the purpose of deciding whether the plaintiff company is liable for an order for indemnity costs, Mr Mehndiratta's conduct is imputed to the plaintiff.
Most of Mr Lambley's criticisms of Mr Mehndiratta's conduct during the hearing centred upon the series of interlocutory applications the latter brought.
On this point, for reasons explained by Kenny J in Spalla, it can be difficult to achieve the right balance when deciding what is 'unreasonable' when a party brings an interlocutory application during the hearing: there is a natural concern that self-represented litigants would be exposed to more burdensome costs order for unsuccessful interlocutory applications in a hearing when, because of their status, they may generally be taken to be ignorant of the rules of procedure and thereby labour under a disadvantage compared to represented parties.
I am conscious of that concern, but it depends on all the circumstances. Company directors or officers are not immune from being subjected to costs orders for unreasonable conduct occasioning delay and expense to parties. That would thwart the compensatory justification for indemnity costs orders that I have referred to. It would also cast them as being an exception to the rule that all parties are subject to the obligation of furthering the case management objectives contained in s 56(3) of the Civil Procedure Act 2005 (NSW).
In this litigation, one of the interlocutory judgments that I delivered concerned Mr Mehndiratta's application to call Ms Devi, a prospective lay witness to give oral evidence. This application was rejected (Robust Builders Pty Ltd v Barai & Anor (No.2) [2023]) but what is presently pertinent was that the application had actually been foreshadowed prior to the commencement of the hearing and dealt with on the first day of the hearing. Mr Mehndiratta had evinced an appreciation, before the hearing, that he needed to supplement the evidence in the builder's case; even if a question arose as to why he left it so late, on the eve of the hearing (which was one reason why the application did not succeed).
The Court record shows that thereafter Mr Mehndiratta inundated the hearing with serial other interlocutory applications, which also amounted to attempts to supplement the builder's evidence. For a reasonable director carrying on a proceeding for a company, it would have been obvious, for example, that it might be prudent for the builder to conduct a site inspection of the property for the purpose of enabling an expert witness to put on a report which dealt with the matters referred to by the owners' building expert, Mr O'Donnell. As indicated, to an extent, Mr Mehndiratta did actually consider whether the evidence in the builder's case was deficient before the hearing, by applying to call Ms Devi as a witness. It was not explained why he did not have the foresight to consider bringing the other interlocutory applications he brought during the hearing before it commenced. If, to surmise, he commenced the hearing overestimating the strength of the evidence in the builder's case, or underestimating the owners' evidence, and what emerged through the hearing forced him to reconsider his position, I do not consider that it is unfair that he bear responsibility for the costs the owners bore by reason of the delay in progressing the hearing caused by his many applications to put on more evidence.
The same result applies if he did not, in fact, engage in the task of considering the strength of his evidence before he ran the case for the builder at the hearing. All of these applications for more evidence might, in retrospect, be viewed as a somewhat desperate attempt by Mr Mehndiratta to overcome the problems of deficiencies in the builder's evidence which he only perceived during the hearing.
But whatever were the real circumstances surrounding the lateness of the applications, I find that the nature and quantity of them was such that bringing them during the hearing was unreasonable. As the judgments on the serial interlocutory applications brought during the hearing commonly indicated, they were brought so late and so offended case management principles that their prospects of success were poor. They substantially prolonged the hearing and, in so doing, they caused the owners to incur substantially more legal fees than if they were not brought at all. I note that in Ms Chen's first affidavit, she indicated that the legal costs associated with the case exceeding the estimate were $32,339.79 and the additional costs of Mr Mehndiratta not showing up on some of those days (25 August and 28 August 2023) were $4,508.20.
Further, as was pointed out in specific detail in paragraph 42 of Mr Lambley's affidavit, it was not just the interlocutory applications for him to serve further evidence that were raised. Mr Mehndiratta also occasioned delay and expense to the owners by means of spurious applications for adjournments (which, by their terms were sought to be of significant length, being 4 to 6 weeks) on the basis of 'ill health' that were unsupported by proper evidence. It was patently unreasonable for Mr Mehndiratta not to show up to Court without the Court's prior leave, citing ill-health in a way that was not supported by persuasive medical evidence. That conduct forced an adjournment (if not of an especially long duration) upon the owners and forced them to incur more legal fees than if the unreasonable conduct had not occurred. In particular, some of that expense arose from the prolongation of the process of Mr O'Donnell, the owners' expert, giving evidence, set out in detail in Ms Chen's second affidavit.
Further, it was also unreasonable, in the relevant sense, for the hearing to be adjourned because Mr Mehndiratta was unprepared, at that point, to continue his cross-examination of Mr Barai. This also meant that the owners incurred unnecessary costs.
I agree with the owners that the cross-examination by Mr Mehndiratta of the owners and their building expert was longer than it needed to be, but in this instance, care needs to be exercised. As Sackville AJA observed in May (at [103]) firstly, the comparison cannot fairly be made between a self-represented litigant and a (reasonably competent) legal practitioner; and secondly, (in an adaptation of what his Honour said) if the asking of improper questions was regarded as conduct so unreasonable as to warrant an order for indemnity costs, "the courts would do little but adjudicate costs applications".
Further, although it is not apparent that there was any warning given by the owners to the builder that it may seek costs on an indemnity basis, for the most part, such warnings usually have efficacy well before a hearing commences.
Nevertheless, at about the time this hearing commenced, the Court had raised with Mr Mehndiratta the issue of costs and his prospective liability for personally incurring them; and I have noted his response. I accept the owners' submission that a substantial explanation for the case running for 12 days was Mr Mehndiratta's attempts to delay the natural progression of the hearing, resulting in the owners' incurring substantial additional costs against a party (the building company) who Mr Mehndiratta effectively or impliedly conveyed would not be able to repay any costs order that the owners might recover.
Noting that the case ran for 12 days (with 3 lay witnesses - including Mr Mehndiratta himself - and a single expert witness, with the evidence in chief having been given by affidavits or witness statements or a written report), taking into account Mr Mehndiratta's disadvantages in representing the builder, and adopting a very rough and ready approach, I would (conservatively) estimate that unreasonable conduct by or on behalf of the builder, caused a delay of 3 days of the hearing that would not have been occasioned if the case had been presented by a director, carrying on a proceeding for the company, who had not engaged in the unreasonable conduct I have chronicled. What constitutes reasonable conduct during a hearing by a company director is, admittedly, a challenging construct but there are many analogous legal constructs of a reasonable person in a party's circumstances throughout substantive law (such as in the tort of negligence, contract, defamation, or the law of misleading or deceptive conduct). I have in mind the intelligent director, not necessarily au fait with procedural niceties but who has conscientiously prepared their case on the basis of the evidence that is available and is endeavouring to comply with the obligation, placed on all litigants - whether they be represented or not - to comply with s 56(3) of the Civil Procedure Act 2005.
Further, in this regard, in a counterfactual scenario of the builder being represented by a legal practitioner, I am inclined to think that, on the basis of the evidence (which I repeat was given by affidavit or statement) as it was available to the parties at the beginning of the case, the case should have been concluded within 5 days (another conservative estimate).
It is unnecessary, for the purpose of deciding the present applications, to quantify the exact cost: the owners have not applied for a gross lump sum costs order. It suffices from Ms Chen's affidavit that the owners have demonstrated additional legal costs incurred through the unreasonable conduct (during the hearing) that I have identified. Quantification will be the task of a costs assessor, if agreement between the parties cannot otherwise be reached.
The owners' application for indemnity costs is thus partially successful in the sense that (subject to the application I am about to determine) the plaintiff should pay 25% of the costs of the hearing that commenced on 22 August 2023 and ended on 7 September 2023 on an indemnity basis. The balance of the defendants/cross-claimants' costs of the proceeding should be paid on the usual basis.
[20]
Power and principles
Section 98(1)(b) of the CP Act empowers the Court to determine by whom (and to what extent) costs are to be paid. Section 98(2) provides that subject to the rules of Court, to the CP Act (and any other Act), a party to a proceeding may not recover costs from any other party otherwise than pursuant to Court order.
Section 98 has been construed as a power broad enough to enable the Court to make orders against non-parties [6] .
In FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340 ("FPM Constructions"), Basten JA (Beazley JA - as her Excellency then was - agreeing and Giles JA agreeing on this point) noted (at [214]) the power to order costs against a non-party is only to be exercised in exceptional circumstances.
His Honour also observed (at [210]) observed:
"It is clear that the categories of case which may attract the exercise of the power (ie to award costs against a non-party) are by no means closed, nor should they be. Nevertheless, the requirements of justice should not be allowed to expand an exception to the general rule, so as to undermine the rule itself. What is significant from a survey of the cases in which orders have been made against non-parties is that they tend to satisfy at least some, if not a majority, of the following criteria:
(a) the unsuccessful party to the proceedings was the moving party and not the defendant;
(b) the source of funds for the litigation was the non-party or its principal;
(c) the conduct of the litigation was unreasonable or improper;
(d) the non-party, or its principal, had an interest (not necessarily financial) which was equal to or greater than that of the party or, if financial, was a substantial interest, and
(e) the unsuccessful party was insolvent or could otherwise be described as a person of straw."
In the same decision, Basten JA closely considered the High Court's decision in Knight v FP Special Assets (1992) 174 CLR 178 ("Knight") and (at [211]-[213]) identified three particular criteria: (a) the party was insolvent or a person of straw; (b) the non-party had played an active part in the litigation; and (c) the non-party must have an interest in the subject of the litigation. His Honour further emphasised (at [214]) that:
"Careful attention is required to the conduct of the party said to be involved in the litigation and the nature of the "interest" in its outcome or subject-matter"
In Knight Mason CJ and Deane J had identified, as the paradigm case for when a personal costs order may be visited upon a non-party where it is the 'real party' to the suit; the touchstone which Basten JA adopted in FPM Constructions.
In May v Christodoulou (2011) 80 NSWLR 462 ("May"), a decision which I alluded to in Robust Builders Pty Ltd v Barai & Anor [2023] NSWDC 371 (at [6] & [17]), Sackville AJA (Macfarlan JA agreeing; Handley AJA dissenting) referred to both Knight and FPM Constructions in the context, applicable to this case, of an application for a personal costs order being made against a director of an insolvent company. In that case, unlike this case, the director did prepare an affidavit by which he acknowledged that he may be liable to pay some or all of the costs of the proceedings. In May, Sackville AJA (at [97]-[98]) did not treat the acknowledgment in the affidavit as an especially weighty consideration when a Court is to consider imposing a personal costs order against a director carrying on the proceeding for the company.
In Robust Builders Pty Ltd v Barai & Anor [2023] NSWDC 371, although I waived the requirement for Mr Mehndiratta to state this in his affidavit an acknowledgement that he may be liable to pay some or all of the costs, I alluded (at [6] and [17]) to the possibility - whilst indicating that I was not expressing any view as to the likelihood - that he may nevertheless be exposed to an application for costs under s 98 at the conclusion of the proceeding.
In May, Sackville AJA (at [96]) emphasised that a director's mere representation of an unsuccessful company would not satisfy any of the criteria identified by Basten JA in FPM Constructions.
[21]
The owners' submissions
By Mr Lambley's affidavit, the owners submitted that during the period of time he conducted the proceeding on the builder's behalf, Mr Mehndiratta was, in reality, the 'real party' and controlling the litigation on behalf of the builder. The owners cited the following circumstances indicative of his control:
1. he was a director of Robust as at the commencement date (22 August 2023) of the hearing;
2. with certain exceptions, he attended all court appearances for the builder (the exceptions being the retainer of Mr Mak of the firm Legal Vision ILP Pty Ltd, from March 2020 to November 2020; and when a person who was not a legal practitioner - Mr Lazanas - attended Court);
3. shortly before the hearing, on 18 August 2023, Mr Mehndiratta swore an affidavit deposing to his authority to carry on the proceeding for the builder.
4. no other officer of the company was identified as acting on behalf of the builder.
The owners submit that it was Mr Mehndiratta's conduct that caused them to incur costs. This was so in relation to:
1. their appearances in Court on occasions when Mr Mehndiratta did not attend;
2. his delay in complying with the pre-trial processes of providing particulars and a notice to produce.
Perhaps implicitly, it struck me that the owners argued that it was Mr Mehndiratta who was singularly responsible for what they contend was unreasonable conduct throughout the proceeding by the builder.
[22]
Consideration
In May, Sackville AJA indicated (at [108], with Macfarlan JA concurring at [2])) that in applications for personal costs orders against non-parties, trial judges should take into account the principles articulated in FPM Constructions, which I take to be a reference to the indicia identified by Basten JA. I shall address those criteria first.
The builder commenced the litigation on 23 August 2018. A cross-claim was filed (originally by only one of the owners, Mr Barai) a year later, on 21 August 2019. The builder was the moving party to the litigation. For reasons reflected in the orders made on 15 September 2023, the builder was substantially the unsuccessful party.
I find that based upon Mr Mehndiratta's own explanation, the builder could be described metaphorically as being an entity 'of straw.' It could no longer afford a solicitor to run its case. The owners drew attention to the circumstance that in the builder's notice of motion supplied (informally to the Court, but which was not, as it should have been, supplied to the owners' solicitor) on 27 September 2023, Mr Mehndiratta had asserted that the builder had lost its builder's licence, had no source of income and cannot pay its costs due to the loss of the licence. Most recently, Mr Mehndiratta said in his email to the Court on 25 October 2023 (referred to in paragraph 10 of these reasons) that it was not 'active'.
It is not the case that Mr Mehndiratta is the source of funds for the litigation in the analogous sense of a receiver providing funds in the manner contemplated in Knight, or perhaps in more recent times, a litigation funder of a class action.
As to the extent of the benefit Mr Mehndiratta received, he is a director and secretary of the building company and, to the extent it is relevant, there appears to be a connection between the building company and its majority shareholder, SRV Holdings Pty Ltd (in view of their common registered address, which is also Mr Mehndiratta's residential address). More importantly, I find that he practically controls Robust Builders Pty Ltd. A symbolic indication of this throughout the hearing were the many references in his advocacy where he referred to himself as the 'builder.' In a real sense, he stood to benefit financially from the litigation. He appeared to treat the company and himself synonymously (see, for example, paragraph [54] above) He was a 'real party' in the litigation. I agree further with the personal financial stake for Mr Mehndiratta in the fate of the litigation, given his repeated references to the parlous financial position of the building company.
I have already addressed the points the owners made about unreasonable or improper conduct. To address the point raised by Sackville AJA in May this is not just a case of a director unsuccessfully carrying on a case for the builder. Even after allowances are made for his not being a lawyer, I have found that the case was substantially more protracted than it would have been had it been conducted by a reasonable director carrying on the hearing for the company.
I take into account the circumstance that shortly before commencement of the hearing, Mr Mehndiratta provided an affidavit of his authority in response to a direction of the Court. This itself is of limited weight (though it does fortify my view as to his de facto control over the plaintiff) on the question of whether a personal costs order should be made against him, but what is of greater significance is that in the first of my many interlocutory judgments, I effectively put Mr Mehndiratta on notice that, notwithstanding my dispensing with a procedural requirement for him to carry on the proceeding for the builder (his acknowledgement that he may be liable for costs), that circumstance did not derogate from the possibility that he could be exposed, at the conclusion of the proceeding, to an application for a personal costs order under s 98 of the CP Act.
The builder ceased being legally represented on 14 November 2020. It would not be appropriate to impose any personal costs order against Mr Mehndiratta for costs the owners occurred before that date. But that circumstance is somewhat beside the point where I have found that the unreasonable conduct warranting special costs orders occurred during the hearing that Mr Mehndiratta conducted. It was Mr Mehndiratta's conduct that I have found was unreasonable. His conduct is fairly to be treated as the builder's conduct.
The basis for the costs order has been altered, for reasons explained in the earlier section of these reasons, to a partial indemnity costs order.
[23]
Costs of the motion
The owners have been partly successful in their costs application, although not to the full degree that they sought. It was not unreasonable for the builder to defend either application. Some deduction should be made to reflect the Court's rejection of the owners' applications relating to their costs incurred up to the hearing.
If either party wishes to seek a different result on the costs outcome of the owners' application, they should file a short submission (not exceeding one page) within 7 days.
[24]
Mr Mehndiratta's stay application
As indicated, in the course of his evidence and submissions in response to the owners' application for special costs orders, Mr Mehndiratta referred to his lodgement of an appeal to the Court of Appeal from this Court's judgment of 15 September 2023 on 12 October 2023. At that point, Mr Mehndiratta did not attach to his affidavit a copy of the Notice of Appeal (or alternative process in the Court of Appeal).
At any rate, these reasons explain that his lodging of an appeal, and the consequences of lodging the appeal, provided no ground of opposition to the current application by the owners. He should have awaited the determination of this costs application before raising the circumstance, as he asserted, of filing an appeal.
Taking into account Mr Mehndiratta's position, however, as a matter of substance, I presumed that having determined the owners' costs applications, Mr Mehndiratta continued to request the enforcement or execution of orders made by this Court - by its primary judgment on 15 September 2023 and the costs judgments of 3 October 2023 and today.
Acting on that apprehension, on 7 November 2023, I invited the owners (by email from my Associated at 11:17am), in their submissions in reply on this application, to also express its position and make submissions about Mr Mehndiratta's stay application, including amongst other things, any terms that might be appropriate should the Court agree to stay its orders. On 8 November 2023, through my Associate, I also requested (by email at 11:12am) an indication whether the owners had been served with the Notice of Appeal (or alternative process in that Court) and, if so, for the owners' legal representative to supply me with a copy of the same.
At 11:15am on 8 November 2023, Mr Lambley responded to my Associate's email by explaining that to that point, and despite previous requests, he had not been served by Mr Mehndiratta with any documentation or originating process associated with appeal proceedings lodged by the builder.
In response to that indication, at 2:20pm on 8 November 2023, through my Associate I inquired of Mr Mehndiratta whether: (a) he intended to press for a stay of orders already made by the Court on 15 September 2023 and 3 October 2023 and any orders I made which were adverse to the builder, or himself, by the owners' application I am now dealing with; and (b) he was willing to supply to the Court (and copy to Mr Lambley) a sealed copy of the originating process he had filed in the New South Wales Court of Appeal. The message requested a response by 4:30pm.
In response to this inquiry and request, Mr Mehndiratta sent a message to my Associate on 8 November 2023 (at 3:59pm), in which: (a) he confirmed that he seeks a stay of orders made by me (actual or prospective); (b) he reaffirmed that he had lodged a Notice of Appeal with the Court of Appeal; (c) declared that he would "wait, with the Court's permission, for this outcome before providing any documents to the other party."
[25]
Principles for stay applications
The Court's power to order the stay of execution arises under s 135 of the Civil Procedure Act 2005 (NSW).
The principles to be applied when exercising the Court's power to grant a stay pending an appeal are well-known: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694-695 and Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737 ("Kalifair") at [17]-[20]. It is appropriate first to consider (a) whether the appeal raises a serious question to be tried, in the sense of arguable grounds, (b) whether there is a real risk that the applicant will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal; and, if so (c) where the balance of convenience lies.
As to the first of these considerations, the Court does not generally speculate upon the appellant's prospects of success but may make some preliminary assessment about whether the appellant has an arguable case, in order to exclude an appeal lodged without any real prospects of success simply to gain time: Kalifair at [18]-[19].
As indicated, Mr Mehndiratta has not served his originating process in the Court of Appeal nor supplied a copy of it to the Court, despite my request. In the last of his emails to me on 8 November 2023, he declared that he had no present intention of providing any documents (including the Notice of Appeal) on the owners. In the circumstances, the Court is not prepared to speculate upon grounds of appeal. It cannot therefore find that there are arguable grounds, or real prospects for success for the plaintiff's (and/or Mr Mehndiratta's) appeal.
Mr Mehndiratta's application for a stay is for that reason refused.
[26]
Orders
For the foregoing reasons, the Court orders that:
1. Order 5 made on 15 September 2023 is varied so that the order is to read:
"Subject to order 2 made on 10 November 2023, the defendants/cross-claimants' costs of the proceedings are payable as follows:
1. 25% of the defendants/cross-claimants' costs of the hearing (22 August 2023 to 7 September 2023) are:
1. payable on an indemnity basis; and
2. those particular costs are to be paid by Mr Ravi Mehndiratta;
1. the balance of the defendants/cross-claimants' costs of the proceedings are payable on the ordinary basis by the plaintiff/cross-defendant."
1. The plaintiff/cross-defendant is to pay 50% of the defendants/cross-claimants' costs of their notice of motion dated 29 September 2023.
2. If either party wishes to seek a different order to order 2, they should file a short submission (not exceeding one page) within 7 days.
3. The builder's (informal) application for a stay of the orders made on 15 September 2023, 3 October 2023 and the orders in these reasons is refused.
[27]
Endnotes
Hamod v New South Wales (2002) 188 ALR 659 at [20]
Liverpool City Council v Estephan [2009] NSWCA 161 per Giles JA (McColl JA agreeing and Basten JA agreeing in principle) at [95]
Cabport Pty Ltd v Marinchek (No.2) [2013] NSWCA 131 at [6]
Huntsman Chemical Co Aust Ltd v International Pools Aust Pty Ltd (1995) 36 NSWLR 242 per Kirby P at 249-250
That is not a hard and fast distinction. I previously dealt with a procedural application in the matter in August 2020 when administering the Parramatta Civil List sittings.
Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [33]
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Decision last updated: 10 November 2023
I will return to the significance of those observations later in these reasons.
Later in these reasons I will also address the question of Mr Mehndiratta's personal liability for costs. It suffices to note, for the purposes of considering the application for an order for indemnity costs, that for a considerable proportion of the proceeding, including the hearing, the builder, in real and effective terms, was self-represented, in the sense of the director, who is not a lawyer, carrying on the proceeding for the company. In this context, in Spalla v St George Motor Finance Ltd (No.8) [2006] FCA 1537 Kenny J observed (citations omitted):
"20… litigants in person, even if partially assisted by lawyers, often produce significant difficulties and unnecessary expense for the parties against whom they proceed …. These difficulties arise from their lack of knowledge of the law, unfamiliarity with court practice and, sometimes, lack of objectivity and want of lawyerly skills in reading and writing…. There may be other factors too that compound a self-represented litigant's inability to utilise court procedures appropriately. On the other hand, a person's capacity to gain redress for legal wrongs in the courts should not depend on his or her ability to pay for legal representation. In seeking to balance these considerations, the courts have been generally more reluctant to make orders for indemnity costs against self-represented litigants than against legally represented litigants."
There is authority, also, that a party's application for indemnity costs against its adversary will be strengthened if it has warned the adversary that it may make such application [4] .