Yakmor v Hamdoush

CATCHWORDS: COSTS - party under disability appealing by tutor - tutor's liability for costs - whether costs order direction against tutor - whether tutor a "party" within UCP Rules r 42.3.

LEGISLATION CITED: Civil Procedure Act 2005, s 3, s 22, s 98Crimes (Criminal Trials) Act 1999 (Vic), s 25Legal Profession Act 2004, Pt 3.2, Div 11Supreme Court Rules 1970, Pt 52Uniform Civil Procedure Rules 2005, Pt 7 Div 4, r 42.3, r 42.27

ACP Magazines Pty Ltd v Motion [2000] NSWSC 1169; in the matter of Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 879; Buckly v Buckeridge(1767) 1 Dick 395; 21 ER 323 ex parte Brocklebank (1877) 6 Ch D 358; Caley v Caley (1877) 25 WR 528; Catt v Wood (1908) 2 KB 458; Darke v Eltherington (1963) QdR 375; ex parte Davis (1901) 1 SR (NSW) 187; Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200; Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Dissidomino v Butcher Paull & Calder [2005] WASCA 210; Farrell v Royal Kings Park Tennis Club (Inc) [2007] WASCA 173; Fisher v Marin [2008] NSWSC 1357; Jackson v Roberts (1941) ALR 365; CASES CITED: Law Society of New South Wales v Jackson (1981) 1 NSWLR 730; Nadine v Protective Commissioner (Young J, 6 October 1993, unreported); NSW Insurance Ministerial Corporation v Abualfoul [1999] FCA 433; Masling v Motor Hiring Company (Manchester) Ltd (1919) 2 KB 535; O'Brien v O'Brien (1995) 35 NSWLR 664; O'Brien v The Herald and Weekly Times Ltd (1937) VLR 135; Pink v J A Sharwood & Co Ltd (1913) 2 Ch 286; Radford v Cavanagh (1899) 15 WN 226; Rhodes v Swithenbank (1889) 22 QBD 577; Spina v Permanent Custodians Ltd [2008] NSWSC 561; Spina v Permanent Custodians Ltd [2009] NSWCA 206; State Rail Authority of New South Wales v Hammond (1988) 15 NSWLR 395; Steeden v Walden (1910) 2 Ch 393; Victoria Legal Aid v The County Court of Victoria [2004] VSCA 113; Woolf v Woolf (1899) 1 Ch 343; Yakmor v Hamdoush [2009] NSWCA 137.

TEXTS CITED: Daniell's Chancery Practice, 8th ed, vol 1

PARTIES: Shady Yakmor (by his tutor Nadine Yakmor) - Appellant Mohamad Hamdoush - Respondent

COUNSEL: Appellant: Unrepresented Respondent: V M Heath

SOLICITORS: Appellant/tutor: Unrepresented Respondent: Moray & Agnew Solicitors

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40151/08 DC 1577/06

GILES JA IPP JA TOBIAS JA

7 October 2009 YAKMOR v HAMDOUSH (No 2) Judgment 1 GILES JA: Judgment in the appeal was give on 9 June 2009. The Court published reasons in which it was proposed that the appeal should be dismissed with costs: Yakmor v Hamdoush [2009] NSWCA 137. The respondent applied for special orders as to costs. In consequence, the only order made was that the appeal be dismissed, and directions were given for written submissions in relation to costs. 2 The appellant had appealed by a tutor, Mrs Nadine Yakmor. On my understanding this was because, from injury in the motor vehicle accident, the appellant was incapable of managing his affairs. In broad terms the respondent sought orders with a view to ensuring that the tutor was liable to pay the costs of the appeal. 3 Pursuant to the directions as subsequently varied, the respondent was to provide written submissions no later than 30 June 2009 and the appellant/tutor was to provide written submissions within seven days thereafter. The respondent's written submissions were provided on 30 June 2009. However, on 17 June 2009 the appellant's solicitors had filed a notice of intention to file a notice of ceasing to act, and on 1 July 2009 they filed a notice of ceasing to act. No written submissions were provided by the appellant/tutor. 4 At the Judges' request, the Registrar wrote to the tutor at the address given in the notice of ceasing to act enclosing a copy of the respondent's written submissions and inviting written submissions in relation to the orders sought by the respondent. No written submissions were received. 5 In his written submissions the respondent sought the orders - "(1) The Appellant pay the Respondent's costs of the appeal as agreed or assessed.

(2) The Appellant's tutor pay to the Respondent the costs the Appellant is ordered to pay.

(3) Alternatively to (2), liberty to apply by motion for further orders in respect of the tutor on 7 days notice." 6 In the ordinary course it would be ordered that the appellant pay the respondent's costs of the appeal, as was proposed in the Court's reasons published on 9 June 2009. That would accord with order (1). The respondent said that he could without more look to the tutor for payment of the costs, but sought order (2) for "additional clarity" and the alternative order (3) so that, if a difficulty arose, further application could be made. He expressed concern that, without an express order that the tutor pay the costs the appellant was ordered to pay, the tutor might not be bound by a costs assessment made under Pt 3.2 Div 11 of the Legal Profession Act 2004.

Bringing proceedings by a tutor 7 "Person under legal incapacity" is defined in s 3 of the Civil Procedure Act 2005 ("the Act") to mean any person who is under a legal incapacity in relation to the conduct of legal proceedings, with instances of a child under the age of 18 years; a mental health patient, a person under guardianship and a protected person variously under relevant legislation; and an "incommunicant person" as more fully described. Under the Uniform Civil Procedure Rules 2005 ("the Rules") the phrase includes a person who is incapable of managing his or her affairs (r 7.13). 8 A tutor is a person appointed to represent a person under legal incapacity, whether by the court or otherwise, in accordance with Pt 7 Div 4 of the Rules (the Rules, Dictionary). 9 A person under legal incapacity may not commence or carry on proceedings except by his or her tutor (r 7.14). Anything the Rules authorise or require a party to do in relation to the conduct of proceedings may, if the party is a person under legal incapacity, be done on his or her behalf by his or her tutor (r 7.15(2)). 10 Neither a formal instrument of appointment nor a court order is necessary for a person to become the tutor of a person under legal incapacity (r 7.15(1)). A tutor may not commence or carry on proceedings on behalf of a person under legal incapacity unless a form of consent to act as tutor, and a certificate signed by the tutor's solicitor to the effect that the tutor does not have any interest in the proceedings adverse to the interests to the person under legal incapacity, have been filed (r 7.16). 11 The Court may appoint a tutor if a party is a person under legal incapacity and does not have a tutor, and may remove a party's tutor and appoint another tutor (r 7.18). 12 The appointment of the appellant's tutor was evidenced by the tutor's consent to act and her solicitor's certificate. She was not appointed by the court. 13 The Rules do not say anything about the tutor's responsibility for costs. The form of consent does not and did not say anything about the tutor's responsibility for costs.

Costs 14 Under s 98 of the Act, subject to the rules and the Act and other Acts costs are in the discretion of the court and the court "has full power to determine by whom, to whom and to what extent costs are to be paid". 15 The Rules relevantly provide -

(1) Subject to rule 42.27, the court may not, in the exercise of its powers and discretions under section 98 of the Civil Procedure Act 2005 , make any order for costs against a person who is not a party.

(2) This rule does not limit the power of the court: (a) to make an order for payment, by a relator in proceedings, of the whole or any part of the costs of a party to the proceedings, or (b) to make an order for payment, by a person who: (i) is bound by an order made, or judgment given, by the court in proceedings or is bound by an undertaking given to the court in proceedings, and (ii) fails to comply with the order or the judgment or breaches the undertaking, of the whole or any part of the costs of a party to the proceedings occasioned by the failure or the breach, or (c) to make an order for payment, by a person who has committed contempt of court or an abuse of process of the court, of the whole or any part of the costs of a party to proceedings occasioned by the contempt or abuse of process, or

(d) to make an order for costs against a person who purports, without authority, to conduct proceedings in the name of another person, or

(e) to make an order for costs against a person who commences or carries on proceedings, or purports to do so, as an authorised director of a corporation, or

(e1) in the case of proceedings in the Land and Environment Court, to make an order for costs against a person who carries on proceedings as a party's agent, or

(f) to make an order of the kind referred to in rule 42.27, or

(g) to make an order for costs in exercise of its supervisory jurisdiction over its own officers, including solicitors, barristers and court appointed liquidators." 16 Rule 42.27 does not arise in the present case.

A tutor's liability for costs 17 The provisions in the Rules concerning carrying on proceedings by a tutor come with a long history. In earlier times a guardian ad litem could be appointed for a person under legal incapacity or, beginning with creation of the office by the Statute of Westminster the First of 1275 and its extension by the Statute of Westminster the Second of 1285 in England, the proceedings could be brought and carried on through a next friend (a "prochein ami"). The Supreme Court Rules in force until supplanted by the Rules in 2005 retained reference to these offices, but brought them both within the office of a tutor (Pt 63 rr 1, 2). 18 In many cases it has been held that a next friend is personally liable for costs or responsible for costs. The language varies, and other language is used. 19 The report of Buckly v Buckeridge (1767) 1 Dick 395; 21 ER 323 states simply that, on dismissal of an infant's motion, Lord Campbell "directed the prochein amy to pay the costs of the application". 20 In Daniell's Chancery Practice, 8th ed, vol 1, p 100 it is said that an infant brings proceedings by a next friend "on account of [the infant's] supposed want of discretion, and his inability to bind himself and make himself liable to the costs", and that "a next friend is required for the benefit of the defendant in order that there might be a person answerable to him for costs". The learned author refers to ex parte Brocklebank (1877) 6 Ch D 358, in which James LJ said at 360 that an infant's suit in Chancery was brought in his name by a next friend "in order to provide security for the costs to the Defendant", but that the suit could be prosecuted without a next friend if the defendant chose to appear and waived the irregularity. 21 Responsibility for costs is not the only purpose of appointing a next friend; a next friend is appointed principally to bring and conduct proceedings on behalf of a person who, through legal incapacity, cannot do so himself or herself. But on this partial rationale, the next friend should be directly liable to the opposite party for costs ordered in the proceedings. In Rhodes v Swithenbank (1889) 22 QBD 577 the compromise into which the next friend entered was not beneficial to the infant, and in permitting an appeal it was said that the next friend "alone is liable for the costs" (per Lord Esher MR at 578) and could not recover from the impecunious infant the costs "to which he makes himself primarily liable" (per Bowen LJ at 579). 22 So in ex parte Davis (1901) 1 SR (NSW) 187 at 189 the Chief Justice said that a next friend is "liable for the costs of the suit", and in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Rich J at 85 referred to a next friend's "responsibility for costs" and Williams J at 113 said (the punctuation is astray: it is not part of a citation from Bowen LJ in Rhodes v Swithenbank) that "[o]ne of the purposes of appointing a next friend is to have a person on the record who is personally liable for costs". This was part of a passage adopted by Hodgson J (as his Honour then was) in Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200, although the punctuation error led his Honour to attribute it to Bowen LJ as quoted by Williams J. In Darke v Eltherington (1963) QdR 375 Stable J said at 385, referring to ex parte Brocklebank, that "it seems that the function of a next friend is to overcome the inability of an infant to render himself liable for the costs of an action, and to afford protection in that respect to the defendant". 23 See also NSW Insurance Ministerial Corporation v Abualfoul [1999] FCA 433; Dissidomino v Butcher Paull & Calder [2005] WASCA 210; and Farrell v Royal Kings Park Tennis Club (Inc) [2007] WASCA 173. In the last of these cases Buss JA ordered that security for the costs of an appeal be provided where the next friend was bankrupt, saying at [17] that "it is well established that if an action brought by a plaintiff under a disability is dismissed, and the defendant is awarded costs, the next friend of the plaintiff is personally liable to the defendant for the costs". 24 In my opinion, and subject to consideration of r 42.3 of the Rules, these principles apply to the liability of a tutor appointed under the Rules to represent a person incapable of managing his or her affairs. They do not depend on particular rules governing the appointment of a next friend and the next friend's responsibilities, but ascribe to the office of next friend a responsibility in relation to costs for the benefit of the opposite party. As is apparent from NSW Insurance Ministerial Corporation v Abualfoul, an undertaking to be responsible for costs is not required - an undertaking had been given by the next friend in the District Court, but the rules requiring and giving effect to an undertaking were not in force and the general law principles were accepted. The responsibility was an incident of the office of next friend, and now is an incident of the office of tutor. 25 The cases generally do not distinguish between the tutor's liability to pay costs pursuant to an order made against the person under an incapacity, and the tutor's liability to pay costs pursuant to an order made against the tutor himself or herself. The liability, however, is clear, and (still subject to r 42.3) I see no reason why it should not expressly be stated in the manner sought by the respondent in order (2). This is ultimately an exercise of the discretion in s 98 of the Act, and in my opinion it should be exercised by making order (2). 26 An order was made against the next friend in 1767 in Buckly v Buckeridge, in Caley v Caley (1877) 25 WR 528, and in Steeden v Walden (1910) 2 Ch 393. In Radford v Cavanagh (1899) 15 WN 226 it was ordered that the next friend be attached for non-payment of the costs of an action. An order directly against a next friend or tutor was made in Nadine v Protective Commissioner (Young J, 6 October 1993, unreported). In O'Brien v O'Brien (1995) 35 NSWLR 664 in this Court an order was made (at 667) that the next friend pay the costs of a motion in the District Court. An order directly against a tutor was contemplated in Fisher v Marin [2008] NSWSC 1357 (Rothman J). 27 As a recent example, in Spina v Permanent Custodians Ltd [2008] NSWSC 561 Hammerschlag J ordered that the plaintiff's tutor pay the costs which the defendant did not recover by recourse to the mortgaged property. The order fell away with a partly successful substantive appeal, but Young JA (with whom Tobias and Campbell JJA agreed) observed (Spina v Permanent Custodians Ltd [2009] NSWCA 206 at [147]) that "[i]t is true that a tutor is personally liable for costs", and did not cast doubt on the form of order. 28 Compare, however, State Rail Authority of New South Wales v Hammond (1988) 15 NSWLR 395 at 400, where Kirby P referred to a next friend "who can bear any costs as are ordered against the person with the disability". Orders have been and are commonly made only against the person who sues or defends by a next friend or tutor. Ordinarily it will not matter, or will not be thought to matter; but if it does, the machinery for taxation (as it was) or assessment (as it now is) and enforcement of a costs order could and can not readily work, if work at all, unless the next friend's or tutor's liability for costs was or is pursuant to an order against the next friend or tutor. 29 There may be a question whether the ordinary course to which I earlier referred would be appropriate; that is, whether it should be ordered that the person under incapacity pay the respondent's costs of the appeal. The basis for the appointment of the tutor was the appellant's incapacity and inability to make himself liable for costs. It does not follow, however, from any legal inability of a person under incapacity to undertake obligations that the person should not be subject to obligations imposed by law, under the general law of the land or pursuant to a court order. In Woolf v Woolf (1899) 1 Ch 343 Kekewich J pertinently suggested that there was "something … inconsistent, apart from strict law, in saying that the Court can pronounce a decree against an infant and cannot follow it up by ordering the infant to pay costs", and an order was made against the infant. 30 Even if an opposite party has the benefit of orders against both the person under incapacity and the tutor, it is for the benefit of that party to be free from the complications of recovery from the incapable person. In Masling v Motor Hiring Company (Manchester) Ltd (1919) 2 KB 535 the means of both the infant and the next friend were material to an application for security for costs, and O'Brien v The Herald and Weekly Times Ltd (1937) VLR 135 proceeded on the basis that the means of both the infant and the next friend were material to an application to remit proceedings. In the absence of an active contradictor, this is not the case to entertain the question. As at present advised, I consider that order (1) should be made as well as order (2).

Consideration of r 42.3 of the Rules 31 The rule provides that, subject to a number of exceptions, the court may not in the exercise of its powers and discretions under s 98 of the Act make an order for costs against a person "who is not a party". 32 The only exception which could apply in the present case is that in r 42.3(2)(g). Perhaps out of order, I first address whether that exception applies. 33 In ex parte Davis at 189 the Chief Justice said that a next friend "is, when appointed, as is said in the old cases upon the subject, a servant of the Court, although liable for the costs of the suit". His Honour continued, "A guardian, in this sense, was very frequently an officer of the Court", and may not have equated a servant of the court with an officer of the court. In Rhodes v Swithenbank at 579 Bowen LJ said that "[t]he only reason that the next friend of an infant is entitled to bind the infant in matters connected with the cause is that he is the officer of the Court to take all measures for the benefit of the infant in the litigation in which he appears as next friend". This was cited by Williams J in Dey v Victorian Railways Commissioners at 113. In New South Wales Insurance Ministerial Corporation v Abualfoul at [29] Sackville J said, referring to these cases, that the next friend "was regarded as an officer of the court appointed to safeguard the interests of the infant" and "derived his or her authority from the court, not the infant, and could be removed if, for example he or she acted improperly or had an interest adverse to that of the infant … ". 34 Under the Rules a tutor need not be appointed by a court order, and in this case the tutor was not appointed by a court order. It may be that the view that a next friend was an officer of the court involved appointment by court order. I have not gone into the appointment of a next friend in earlier times, because even if a tutor is regarded as an officer of the court I do not think that an order that a tutor pay costs would ordinarily be an order made "in the exercise of [the court's] supervisory jurisdiction over its own officers". Such an order would ordinarily not be consequential on or incidental to supervision of the tutor's discharge of his or her office; as I have said, it falls to be made as an incident of the office. Perhaps if a tutor misconducted himself or herself and a costs question thereby arose, r 42.3(2)(g) could be invoked. That is not this case. 35 The question then is whether a tutor, or more specifically the tutor in this case, is "a party" for the purposes of r 42.3. A related question was noted by Sackville J in NSW Insurance Ministerial Corporation v Abualfoul at [34]-[36], but not decided, being whether the District Court's power to award costs between "party and party" authorised a costs order against a next friend. "Party" is not defined in the Act or the Rules. 36 The definition of "opposite party" in the Dictionary to the Rules to mean defendant in relation to a plaintiff and plaintiff in relation to a defendant takes one to what is meant by plaintiff or defendant. In the case of plaintiff it means (in the definition in the Act) a person by whom proceedings are commenced "or on whose behalf proceedings are commenced by a tutor", although there is no corresponding reference to conduct of proceedings by a tutor in the definition of defendant. There is some support in these definitions for a tutor appointed to represent a plaintiff or a defendant being distinct from the party he or she represents. 37 The rules concerning tutors also appear to distinguish between the tutor and the party he or she represents, see for example r 7.15(2) referring to a tutor doing what a party can do, r 7.18(1) and (3) referring to a "party's tutor", and r 7.18(2) - "(2) In any proceedings concerning a person under legal incapacity who is not a party, the court may appoint a tutor of the person and join the person as a party to the proceedings." 38 It has also been said in a number of cases that a next friend is not a party to the action: Pink v J A Sharwood & Co Ltd (1913) 2 Ch 286 at 289, adopted in New South Wales Insurance Ministerial Corporation v Abualfoul at [29] and Farrell v Royal Kings Park Tennis Club (Inc) at [15]; Dissidomino v Butcher Paull & Calder at [20], also adopted in Farrell v Royal Kings Park Tennis Club (Inc) at [16]. The original statement in Pink v J A Sharwood & Co Ltd was in relation to the next friend's obligation to file an affidavit of documents pursuant to a rule whereby a "party" could be required to give discovery, and it was said that discovery by the next friend could not be ordered. See also Jackson v Roberts (1941) ALR 365, in which it was held that interrogatories could not be administered as to next friend's personal knowledge. 39 Whatever be the position in that respect, in relation to costs some expansion of "party" from the plaintiff or defendant on the record has been recognised, albeit in other contexts. In Law Society of New South Wales v Jackson (1981) 1 NSWLR 730 it was held that the Law Society was a party within s 77(1) of the Legal Practitioners Act 1898 because, although it was not the complainant, it had taken part in the proceedings before the Statutory Committee to which that subsection related by appearing and actively participating. In ACP Magazines Pty Ltd v Motion [2000] NSWSC 1169 a subpoenaed company was held to be a party, principally by reason of a definition having the effect of including within a party a person against whom a claim for relief was made but also in reliance on Law Society of New South Wales v Jackson. In Victoria Legal Aid v The County Court of Victoria [2004] VSCA 113 a subpoenaed entity was regarded as a party to criminal proceedings within s 25 of the Crimes (Criminal Trials) Act 1999 (Vic), principally because of a definition extending to any person served with notice of or attending at a hearing but also because (at [20]) the underlying purpose of providing for orders that practitioners pay costs due to the practitioners' wrongful acts indicated that the power should extend to the costs of a non-litigant. 40 These cases were taken up in In the matter of Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 879 in holding that a subpoenaed person and company were parties within r 42.3 of the Rules. One reason was that there was a claim for relief within s 22 of the Act and the subpoenaed person and company became parties by force of that provision. The other (at [14]) was that the cases showed that the concept of "party" was not confined to a person on the record in the proceedings. 41 Cases decided on particular statutory provisions or rules provide only limited assistance in the present case. Of more importance, it would be astonishing that, given the established liability of a tutor for costs, it was intended by r 42.3 to exclude the power to make an order for costs against a tutor. 42 Possibly it was thought that a tutor's liability for costs was given effect through an order made against the person under incapacity, which then engaged the tutor's liability, so that the rule did not disturb an established position. That does not seem likely, for at least three reasons. First, orders directly against next friends were known. I have referred to a number of instances. Secondly, as I have indicated the machinery for taxation or assessment and enforcement generally works on an order against the person liable for the costs. Thirdly, the law generally does not permit to be done indirectly what cannot be done directly, which would be the case if an order could not be made against a tutor but the tutor's liability for costs was given effect through an order against the person under incapacity. 43 The preferable view is that it was thought that the rule still permitted an order for costs against a tutor. The restriction on costs orders against non-parties now found in r 42.3 was first introduced in 1993, in Pt 52 r 4(2) of the Supreme Court Rules, and it may be noted that the orders made in Nadine v Protective Commissioner and O'Brien v O'Brien were made when the restriction was in place. 44 In my opinion, a tutor is a party for the purposes of r 42.3. In Catt v Wood (1908) 2 KB 458 rules of a friendly society provided that an arbitration committee could charge "either party" with costs. A member took a dispute to arbitration on behalf of his son, a lunatic, who was also a member. He contended that costs had not properly been charged against him. Kennedy LJ gave a judgment prepared by Farwell LJ, with which he agreed, in which it was held that "party" included a person who claimed on behalf of a member as well as a member who claimed in his own right, and meant (at 473) "all persons who initiate claims, whether they do so for themselves or on behalf of others". So here, in my view, "party" in the rule includes a tutor who commences or carries on proceedings on behalf of a person under legal incapacity. 45 A tutor represents the person under incapacity, and does on the person's behalf in relation to the conduct of the proceedings whatever the person could do. A tutor is on the record at least in the sense that consent to act has been filed. The person under incapacity is named on the record, but cannot do anything for himself or herself. The tutor cannot have any conflicting interest. There is practical identity between the tutor and the represented party in bringing and conducting the proceedings, albeit the name on the record as plaintiff or defendant (in this case, as appellant) is the name of the person under incapacity. The costs liability of the tutor, as an incident to the office, gives legal identity for costs purposes, on the rationale that one of the reasons a tutor is required is that there should be a person answerable for costs. For costs purposes, then, the tutor is to be regarded as a party.

Costs of this application 46 The tutor did not participate. I do not think that she should be required to pay the respondent's costs of this application, and the costs of the appeal in order (1) do not include those costs.

The result 47 An order might have been made that the tutor pay the costs of the appeal, but I adopt the form of order sought by the respondent. I propose the following orders -

(1) The appellant pay the respondent's costs of the appeal.

(2) The appellant's tutor pay to the respondent the costs the appellant is ordered to pay. 48 IPP JA: I agree with Giles JA. 49 TOBIAS JA: I agree with Giles JA. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.