Wang v Farkas

Judgment 1BATHURST CJ: I agree with Basten JA. 2BEAZLEY P: I agree with Basten JA. 3BASTEN JA: The substantive issue in these lengthy proceedings concerned the power to award professional costs in favour of a litigant in person who was a legal practitioner. The Court held that such an order fell outside the scope of s 215 of the Criminal Procedure Act 1986 (NSW) and the definition of "professional costs" in s 211 of that Act: Wang v Farkas [2014] NSWCA 29. The proceedings in this Court were brought in its supervisory jurisdiction pursuant to s 69 of the Supreme Court Act 1970 (NSW). A question arose as to whether there were discretionary grounds for refusing relief, to which the applicants were otherwise entitled. The Court concluded that there were not, recognising, however, that there had been significant delay on the part of the applicants in raising and litigating the ground on which they were ultimately successful. The Court noted that the respondent (Mr Farkas) had been unable to obtain the proceeds of the order for costs, to part of which he was still entitled, although to most of which the judgment concluded he was not entitled. The principal judgment concluded at [49]: "There is prejudice, but largely limited to the costs incurred by him in putting in motion action to enforce the court order. To the extent that disbursements have been made to that end, he should be entitled to recover them, as a condition of any grant of relief to the applicants." 4The manner in which the Court sought to give effect to that condition was to be found in proposed order (4) as set out at [55] in the following terms: "In place thereof, direct that the applicants pay the expenses and disbursements of the defendant (Mr Farkas) incurred in relation to the challenge to the apprehended personal violence orders and that Mr Farkas pay so much of the applicants' costs as are attributable to the orders made in the Local Court with respect to costs, subject to an allowance for any disbursements incurred by Mr Farkas in seeking to enforce the orders of the District Court prior to the commencement of the proceedings in this Court." 5The parties were given an opportunity to make submissions with respect to the proposed orders, including (4). 6Mr Farkas availed himself of that opportunity, submitting that order (4) should not be made and that the question of costs should be remitted to the District Court. Those submissions were accepted: Wang v Farkas (No 3) [2014] NSWCA 111 at [15]-[16]. 7Proposed order (5) was that no order should be made as to the costs in this Court. The respondent did not take issue with that proposed order. In the event, orders (4) and (5), as made on 8 April 2014 were as follows: "(4) Remit the matter to the District Court for final orders disposing of the appeal to that Court, in accordance with the judgments of this Court. (5) Make no order as to the costs of the parties in this Court." 8On 10 April 2014, within two days of the orders being entered, Mr Farkas noted that the condition permitting him to recover disbursements incurred in seeking to enforce the costs orders of the District Court had fallen away. He said that he had sought a 'stand alone' order to that effect. Further, he noted that in his submissions with respect to that order, he had contended that it should not be limited to the disbursements incurred "prior to the commencement of the proceedings in this Court on [24 January 2013]", as proposed in the tentative orders prepared by the Court. 9The respondent noted that after the commencement of the proceedings in this Court significant expenses had been incurred by him in seeking to enforce the writs of execution which had already been issued. He relied on the fact that, when granting a stay of the execution of the writ on 9 September 2013, this Court had made the stay conditional upon lodgement by the applicants of a bank guarantee for the full amount of the debt and costs and disbursements with respect to the execution of the writ incurred up to 9 September 2013. 10On the direction of the Registrar, Mr Farkas filed a notice of motion seeking the following orders: (1) The applicants are to pay the disbursements, including solicitors' fees, incurred by the first respondent Mr Farkas in seeking to enforce the orders of the District Court up to 9 September 2013 as well as the costs of cancellation at Land & Property Information of the registrations of the Writ on the properties, incurred as a result of the Court's order, consequent upon the applicants lodging the bank guarantee. (2) The applicants pay Mr Farkas' costs of this application limited to the filing fee incurred by Mr Farkas. 11Mr Farkas submitted that a variation of the orders entered on 8 April 2014 could be made under the "slip rule": see Uniform Civil Procedure Rules 2005 (NSW), r 36.17. However, that rule is not available for that purpose. Although Mr Farkas' submissions with respect to the proposed 'stand alone' order (incorporating the conditions upon which relief was granted to the applicants) were overlooked by the Court on the earlier occasion, making the order in the terms sought would involve a substantive alteration to the rights of the parties, requiring an independent exercise of discretion, which is not to be made as a matter of course: Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 390G-391A (Lockhart J, Black CJ agreeing). Arguably a stand alone order in the terms of the last limb or condition in proposed order (4) might be made under the slip rule: however, the extension of the period during which costs and disbursements accrued after the commencement of proceedings in this Court, requires justification. This matter could not properly be dealt with under the slip rule. However, Mr Farkas gave written (though not formal) notice of his application to vary the orders within the time provided by r 36.16(3A); the Court should waive any requirement that the notice of his motion be in a particular form: Civil Procedure Act 2005 (NSW), s 14; Hancock v Arnold (No 2) [2009] NSWCA 19 at [11]. The substance of the proposed change should be addressed. 12The justification proffered by Mr Farkas was twofold. First, he called in aid the fact that when the stay was granted, the bank guarantee was required to cover costs and disbursements incurred up to 9 September 2013 (the date the stay was granted). Secondly, he relied upon a substantive ground, namely that the applicants ultimately succeeded on a point which had not been articulated prior to 9 September 2013. For that reason, the respondent contended, he was entitled to continue to seek to enforce his judgment by way of a writ of execution up to that time, together with the costs of cancelling the registrations of the writ on the three properties owned by the applicants, which were consequential on the orders made on 9 September 2013. 13The first proposed justification should not be accepted. The purpose of the bank guarantee was to free the applicants' properties from the constraint imposed by registration of the writ, while protecting the respondent for the full amount of his entitlements, in the event that the challenge to the orders of the District Court failed. The inclusion of fees and disbursements up to the date on which the order was made did not carry any implication that the respondent would be entitled to recover such costs and disbursements in any event. 14The second point is one of substance. As the Court pointed in Wang v Farkas (No 3) at [18], the applicants were ultimately successful on a basis which was largely undeveloped until the hearing in this Court. The submissions had focused on the scope of the so-called Chorley principle, as to which the respondent was entitled to submit (as he did) that there was extensive authority in Australia for the application of the principle as part of the general law. The decision of this Court turned on the proper construction of the statutory provisions with respect to costs in criminal proceedings. Although, as an experienced legal practitioner, the respondent might have been expected to pay close attention to the statutory power to award costs, he was correct to note that the applicants had not presented their case in those terms prior to September 2013. Nor did the submissions for the applicants in response to the present motion deny those propositions. That circumstance, when combined with the fact that the process of execution was set in place well before the applicants commenced their challenge in this Court, demonstrates that the steps taken by the respondent to enforce the judgment debt were neither premature nor unreasonable. 15For these reasons, the first order sought by the respondent and set out at [10] above should be made. The second order reflects the entitlement of the applicant as a result of his success on a contested motion and should also be made.