State of New South Wales v Beck; Commissioner of Police v Beck

Procedural history

1. By Statement of Claim filed 9 October 2008, Mr Beck commenced proceedings against the State for malicious prosecution, claiming: damage to his reputation; loss and damage including special damage; and an award of exemplary damages. The plaintiff also commenced judicial review proceedings, seeking to quash the decisions made by the Commissioner on 16 August 2007 ("the promotion decision") and 22 September 2008 ("the demotion decision").
2. The two proceedings were heard together in 2012 by Adams J, who found for Mr Beck in the malicious prosecution proceedings and quashed the demotion decision: Beck v State of New South Wales; Beck v Commissioner of Police New South Wales [2012] NSWSC 1483. His Honour dismissed the plaintiff's claim for prerogative relief in respect of the promotion decision. The plaintiff was awarded $50,000 in general damages and $80,000 in exemplary damages, as well as costs on an indemnity basis against the State. The Commissioner was ordered to pay the plaintiff's costs of the demotion decision proceedings.
3. That was not the end of the matter. The State and the Commissioner prosecuted successful appeals in the Court of Appeal in 2013: see State of New South Wales v Beck; Commissioner of Police v Beck [2013] NSWCA 437. The Court of Appeal set aside the order of Adams J quashing the demotion decision made by the Commissioner and allowed the State's appeal, remitting the plaintiff's damages claim against the State to the Common Law Division for rehearing. The plaintiff was ordered to pay the costs of both appeals.
4. The matter was listed for re-hearing by Adamson J on 8 December 2014 but Orders were made on 27 November 2014 to vacate the listing and dismiss the proceedings with effect from 8 December 2014 for want of due dispatch on the State's application. Her Honour ordered that the plaintiff pay the State's costs of the proceedings. The State's application was based upon the failure of the plaintiff to comply with the Court's practice for exchange of evidence and other relevant material prior to trial which was due to the repeated failure of the plaintiff to communicate with his legal representatives in the pre-hearing period. The order was fashioned to provide the plaintiff with an opportunity to mend his hand before it took effect of which he did not avail himself.
5. These orders did not finally quell the controversy for the plaintiff then brought unsuccessful proceedings for unfair dismissal in the Industrial Relations Commission ("the IRC"). An appeal by the plaintiff to a full bench of the IRC remains pending. In his appeal the plaintiff made bald assertions of contempt of court on the part of the State. The IRC referred these matters to the Industrial Court. Following that Court's abolition those matters have been transferred to this Court, according to the account given by Mr Hutchings which I accept.

Allegations of contempt and abuse of process

1. In his response filed 2 March 2017 to the motions brought by the State and the Commissioner under s 98(4), the plaintiff raised allegations both of contempt of court and abuse of process by the defendants and/or their legal representatives. Such allegations, if well founded, could have implications for the defendants' ability to bring these applications in this Court. From the response and an accompanying affidavit dated 7 April 2017, however, it is difficult to discern the substance of the plaintiff's complaint.
2. From [1] of the plaintiff's response (PR), it is clear that the allegations of contempt of court are references to the allegations raised in appeal proceedings before the IRC in the latter half of 2016. The plaintiff argues that before the allegations "have been purged" the defendants "are under a disability and have no standing in any proceedings … for a cost order". Consequently, it is said that any further "motions and written submissions filed by the defendants to date may [themselves] constitute contempt of court".
3. From what I can make of the response, further allegations relate, inter alia, to purported tampering of evidence, said to be the transcripts of the primary proceedings before Adams J (see PR [4]); failures in the production of documents (see PR [7b]); and destruction of key evidence (see PR [7c]). These matters if made good could found a case of contempt. Bearing in mind their seriousness, and from my review of his affidavit, the allegations raised by the plaintiff are wholly without evidential foundation.
4. When the matter was before me on 23 May 2017, I invited the plaintiff to make submissions about these allegations and to point to any evidence substantiating his claims. He declined this opportunity, contenting himself with reading through a prepared statement which did not provide evidence to support his complaints. He then stated that he did not wish to be involved any further with the proceedings and left the courtroom. Before he did I advised the plaintiff that should he leave, the proceedings would continue and be dealt with in his absence. This is what occurred and I continued with the assistance of Mr Hutchings.
5. It is settled principle that "a party guilty of contempt should not be heard on any application for relief beyond an application to set aside or vary an order (or undertaking to the court) in respect of which he, she or it is in contempt or an appeal designed to set aside or vary that order or undertaking": see Stokes (by a tutor) v McCourt [2013] NSWSC 1014 at [18]-[52] and the authorities there referred to, per Lindsay J. A commonly cited authority for this proposition is Young v Jackman (1986) 7 NSWLR 97 (Young J, as his Honour then was). Young J points out that it is sufficient to engage the principle that the party seeking relief is prima facie in contempt. I reiterate, however, that there is no evidence before me in this case that the defendants are in contempt of court as alleged by the plaintiff. Accordingly, this principle presents no bar to their application proceeding.

Principles applying to the making of specified gross sum costs orders

1. The powers of this Court to award costs stems from s 98 Civil Procedure Act 2005 (NSW). Further provision is made in relation to costs in Part 42, Div 1 Uniform Civil Procedure Rules 2005 (NSW).
2. Section 98 is in the following terms: (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount. (5) The powers of the court under this section apply in relation to a married woman, whether as party, tutor, relator or otherwise, and this section has effect in addition to, and despite anything in, the Married Persons (Equality of Status) Act 1996. (6) In this section, costs include: (a) the costs of the administration of any estate or trust, and (b) in the case of an appeal to the court, the costs of the proceedings giving rise to the appeal, and (c) in the case of proceedings transferred or removed into the court, the costs of the proceedings before they were transferred or removed. (My emphasis.)
3. It is evident from the terms of s 98 that the Court's discretion relating to costs in general is very wide. The discretion to make a specified gross sum order is itself wide. As was stated by Giles JA in Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 at [21]-[22], "[i]t may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment".
4. In Hamod v State of New South Wales [2011] NSWCA 375, Beazley JA, as her Honour then was, at [816] set out four key principles that inform the exercise of the Court's discretion under s 98(4): The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred; the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability (Citations omitted.)
5. In that case, the principal complaint of Mr Hamod related to an alleged denial of his fundamental right to have costs assessed via a formal costs assessment process. Her Honour made it clear that this was misconceived, there being "no such fundamental right": [821]. Her Honour said that so much could be gleaned from the existence of the Court's statutory power to make such a lump sum order.

Determination of this case

1. Mr Hutchings of counsel points to the protracted nature of these proceedings which concern an event occurring back on 25 September 2006. No doubt, their continuation to assessment would result in the incurring of further costs by the defendants, and it is with this fact in mind that they seek an order for a specified gross sum instead of being required to proceed to assessment.
2. I consider it to be significant in light of the authorities set out above that the plaintiff in this case is impecunious. He concedes as much at PR [3b], pointing to: the fact that he was forced to sell his home; that he is unable to work and receives unemployment benefits; and that his inability to work arises from a medical condition allegedly related to his former employment in the Police Force and the strain of these proceedings.
3. The ability of a party unsuccessful in litigation to satisfy any costs liability was a factor highlighted by Beazley JA in Hamod. Indeed at first instance in that case, Harrison J stated that although the award of costs in favour of the defendants appeared "no more than a completely theoretical exercise", the plaintiff having no money, "[t]he same [was] not true of the costs that might be incurred if the ordinary assessment process were to proceed for the obvious reason that those costs have not yet been incurred and could still actually be saved": Hamod v State of New South Wales (No 13) [2009] NSWSC 756 at [27]. The same can be said of the present case.
4. Observing the conduct of the plaintiff before me in court, I think it unlikely that he would meaningfully engage in a process of costs assessment. He clearly harbours a deal of frustration toward the defendants and their legal representatives and made plain his desire not to continue involvement in this matter by leaving the courtroom. Further, the plaintiff's complaints about specific items of the defendants' costs claims are tied only to his allegations of abuse of process. As I have said, these are wholly without evidentiary foundation.
5. I must say that I had initial concerns about the long delay in bringing this application, given that it was foreshadowed back in December 2014 before Adamson J. However, I am satisfied with Mr Hutchings' explanation that the delay was owing to the fact that Mr Beck commenced the further proceedings for unfair dismissal in the IRC. In the circumstances the delay is not a reason for refusing relief.

Quantum and the appropriate reduction in costs to be applied

1. In considering whether the costs stipulated by the defendants are "logical, fair and reasonable" (see Harrison v Schipp at 743), the Court is not required to undertake a detailed examination of the evidence, but instead to adopt a "broad brush" approach. Indeed, as was recently pointed out in Kostov v Zhang (No 2) [2016] NSWCA 279 at [25], "[t]o require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order".
2. The defendants submit, and I accept, that the State and the Commissioner obtain legal services in at an economical, and comparatively, modest rate compared to market rates of private legal representation. This is consistent with the experience of the Court.
3. It is customary when seeking an order under s 98(4) for the sum claimed to be discounted to reflect the contingencies of any formal costs assessment. In my view the differences between solicitor and client costs and costs on the ordinary basis should also be kept firmly in mind. This is the basis upon which courts have typically assessed gross sum costs: Hamod per Beazley JA at [814]. While the defendants have incorporated a discount to the total sums incurred in the order of 12-15%, I am minded to apply a discount of a further 10%, aware of the fact that I am depriving the plaintiff of at least an opportunity to seek an independent assessment of costs.
4. My orders are as follows: 1. In matter number 2008/00289793, pursuant to section 98(4) Civil Procedure Act 2005 (NSW), the plaintiff is to pay the costs of the Commissioner of Police in the specified gross sum of $148,500; 2. In matter number 2008/00289568, pursuant to section 98(4), the plaintiff is to pay the costs of the State of New South Wales in the specified gross sum of $261,000. (3) In each matter, the plaintiff is to pay the costs of and incidental to the defendants' Notices of Motion filed 16 December 2016.

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