Young v King

Young v King - [2015] NSWLEC 187 - NSWLEC 2015 case summary — Zoe

[3]

Judgment

The respondents ("The Kings") have finally succeeded in defeating in this Court two proceedings brought by the applicant ("Young") to have set aside consent orders made in settlement of her 2003 proceedings and based upon an undertaking given by the Kings: see Young v King [2004] NSWLEC 93, and Young v King (No. 6) [2015] NSWLEC 111.
The consistent claim put to the Court by Young over the years has been that the 2004 decision and orders worked an injustice against her, as a result of an "unlawful means conspiracy" involving Kings, Warringah Council, and a range of others, devised by Council from at least 2001, and aimed at forcing an easement and drainage works on to her land.
I said (No. 6, at [234]): The Kings appear to be clearly entitled to an order for their costs, but, after the 2012 decision (judgment No 4), they sought indemnity costs, against Young, and personal costs orders against Newell and Muriniti, and Young sought different orders … and I ordered ([237], at (3) and (4)): (3) The applicant is ordered to pay the respondents' costs of the proceedings in this Court since 8 March 2004, on a party-party basis, as agreed or assessed. (4) Order 3 is stayed for 42 days and the parties are directed to file any notices of motion seeking a different costs order by 20 August 2015.
Young has appealed against judgment No 6 on the ground that I erred in law in not providing adequate reasons for rejecting her fraud allegations.
As expected, Kings have put on Notices of Motion ("NsOM") seeking indemnity costs against both Young and her solicitor, Leonardo Muriniti ("Muriniti").
However, Young has sought (1) indemnity costs against the Kings, and sixteen other respondents who have never been parties to these proceedings, and (2) an order that those sixteen indemnify her against any order for costs made in favour of the Kings.
The sixteen respondents she now targets are: Respondents 3 to 5: her 2003 - 2004 legal representatives Respondents 6 & 7: her 2003 - 2004 water expert (Perrens and his firm) Respondent 8: another of her experts, Warwick Davies Respondent 9: Kings' 2003 legal representative, Stephen Griffiths Respondents 10 to 17: other experts involved in the case Respondent 18: Warringah Council
All eighteen respondents resist any orders in Young's favour.
Yesterday I heard argument on NsOM, seeking summary dismissal of Young's claims against them, brought by the 8th respondent Davies, the 9th respondent Griffiths, the 10th respondent (Kings' hydraulic engineer Bob Springett), 13th respondent (town planner Tony Tuxworth), the 14th, 15th and 16th respondents (surveyor Copland Lethbridge, his company, and town planner Geoff Goodyer), and the 18th respondent (Warringah Council).
Those NsOM variously invoked: (A) The court's "inherent" or "implied" power to control its own process: (B) Uniform Civil Procedure Rules 2005 ("UCPR") r 13.4, which provides: (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1). (C) Civil Procedure Act 2005 ss 98 and 99, which provide 98 Courts powers as to costs (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. 99 Liability of legal practitioner for costs (1) This section applies if it appears to the court that costs have been incurred: (a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or (b) improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible. (2) After giving the legal practitioner a reasonable opportunity to be heard, the court may do any one or more of the following: (a) it may, by order, disallow the whole or any part of the costs in the proceedings: (i) in the case of a barrister, as between the barrister and the instructing solicitor, or as between the barrister and the client, as the case requires, or (ii) in the case of a solicitor, as between the solicitor and the client, (b) it may, by order, direct the legal practitioner: (i) in the case of a barrister, to pay to the instructing solicitor or client, or both, the whole or any part of any costs that the instructing solicitor or client, or both, have been ordered to pay to any other person, whether or not the solicitor or client has paid those costs, or (ii) in the case of a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs, (c) it may, by order, direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party. (3) Before making such an order, the court may refer the matter to a costs assessor (within the meaning of Part 7 of the Legal Profession Uniform Law Application Act 2014) for inquiry and report. (4) The court may direct that notice of any proceedings or order under this section with respect to a legal practitioner be given: (a) in the case of a barrister, to the instructing solicitor or client, or both, as the court may direct, or (b) in the case of a solicitor, to the client. (5) The court may give ancillary directions to give full effect to an order under this section, including directions to a legal practitioner to provide a bill of costs in assessable form: (a) to the court, or (b) to a party to the proceedings, or (c) in the case of a barrister, to the instructing solicitor or client, or both, or (d) in the case of a solicitor, to the client. (6) A party's legal practitioner is not entitled to demand, recover or accept: (a) in the case of a barrister, from the instructing solicitor or client, or (b) in the case of a solicitor, from the client, any part of the amount for which the legal practitioner is directed by the court to indemnify any party pursuant to an order referred to in subsection (2) (c). (7) In this section, client includes former client.
There are important discussions of ss 98 and 99 in recent Court of Appeal decisions - s 98 in Yu v Cao [2015] NSWCA 276, and s 99 in Re Felicity, FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19.
Yu v Cao dealt at length with, and applied, Balcombe LJ's judgment in Symphony Group Plc v Hodgson [1994] QB 179
All yesterday's moving parties sought an order for their costs on the summary dismissal motions, the 9th and 13th respondents seeking them on an indemnity basis under s 98.
Those respondents (13th to 16th) who sought in their NsOm to invoke s 99 against Muriniti in respect of their summary dismissal motions were happy not to argue it at this stage.
The 10th respondent (Springett) sought damages in his written submissions, but his NOM was silent in that regard.
The summary dismissal case was led by Mr Faulkner SC, appearing for Davies, but each moving party supplemented his submissions.
The central argument is that Young's broad costs NOM is an "abuse of process", as it is "not a proper resort to the Court's costs jurisdiction", and "seeks to re-litigate issues decided or barred" by judgment No. 6.
It fails the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 (per Barwick CJ), in that the Court can be satisfied that it cannot succeed, and that it would amount to a "collateral attack" on judgment No 6, against which Young has appealed.
The costs argument against non-parties "threatens to become new and costly satellite litigation", contrary to the principles in Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 (see McColl JA at [92]).
The purpose of a costs order is to compensate a successful party for the expense of conducting the proceedings, not to punish an unsuccessful party: see Latoudis v Casey (1990) 170 CLR 534, and Oshlack v Richmond River Council (1998) 193 CLR 72.
Nor is its purpose to compensate for loss caused by substantive wrongdoing: Harrison v Schipp [2001] NSWCA 13.
Costs orders against non-parties are generally "inappropriate". To achieve one, the circumstances need to be "exceptional" and the Court must be satisfied that considerations of justice require it: see Knight v FP Special Assets Ltd (1992) 174 CLR 178, at 192 and 203.
A clear interest in the subject, and an active role in the conduct of proceedings, would appear to be required (eg. solicitor, insurer, funder, director, receiver): FPM Constructions v City of Blue Mountains [2005] NSWCA 340.
It is sometimes said that the party against whom costs are claimed has to be "the effective litigant". In the present case, Mr Newell says Council is the "real party", aided and abetted by the other respondents (T30.11.15, P59, LL24 - 25). Orders were entered which ought not have been entered had the respondents done their duty to the Court and not "flagrantly misconducted themselves" (T30.11.15, p58, LL14 - 16).
The respondent Griffiths, and the witnesses against whom Young claims, enjoy immunity under the principles in Young v Hones (No 2) [2013] NSWSC 19, which were not disturbed on appeal by the Court of Appeal (Young v Hones [2014] NSWCA 337). (See Dr Berveling's submissions, at pars 7 to 12, 12.B and 12.C.)
Mr Faulkner specifically submits (par 33) that Young's proposed costs order has nothing to do with the conduct of her two applications to set aside the 2004 orders. The arguments raised by Young in her affidavit and submissions in support of her costs NOM of 20 August 2015 were among those I rejected in judgment No 6, and Mr Newell admitted before the Registrar that the allegations in the present motion are "in essence the same" (T10.9.15, p12, L29).
I agree with Mr Faulkner and other counsel that there is no basis for an order that the presently moving parties should pay Young's costs of those applications.
The issues she raises now have been raised, argued and dealt with by the Court, and, if there were others she wanted to raise, she should taken the ample opportunity she was given to do so. As I warned her in 2012 (in judgment No 4 [2012] NSWLEC 236, at [26]): Regrettably for Mrs Young, in respect of costs, the High Court has said on many occasions that a party is bound by the conduct of litigation by its legal representatives - eg, University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 60 ALR 68, at 71, and Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1; see also the judgment of this court in Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68, at [44]-[55].
Mr Faulkner relied also in this regard on the principles in Hunter v Chief Constable of the West Midlands Police [1982] AC 529, as applied in Australian estoppel-type cases, such as Rippon v Chilcotin Pty Ltd ("Rippon") (2001) 53 NSWLR 198 (per Handley JA, with whom Mason P and Heydon JA agreed).
In Rippon, Handley JA set out the key principles (at [31] - [32]): 31 In Haines v Australian Broadcasting Corporation [(1995) 43 NSWLR 404] Hunt CJ at CL distilled the following statement of principle from the authorities: "There are obviously limitations to striking out pleadings or causes of action as an abuse of process upon the basis stated in Reichel v Magrath [(1889) 14 APP CAS 665] … The issue determined in the earlier case which is sought to be litigated in the later case must be one which the party propounding it in the latter lost in the former … It must be an issue which was necessarily determined in the earlier case, and one of importance to the final result. It must have been properly argued - by which I mean that … the tribunal which decided it was an appropriate one to do so, that the parties were appropriate contradictors and that the issue was regarded by them as one of importance … In normal circumstances, the decision disposing of the issue must have been a final one … There may also be circumstances in which, notwithstanding the absence of an appeal, it is clear that the earlier decision has overlooked some binding authority, or that it has caused the unsuccessful party a manifest injustice … all the circumstances of the determination in the earlier case may be considered … ." 32 In State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423 (64,077) at 64,089, another case involving abuse of process in seeking to re-litigate an issue, Giles CJ Comm D said: "… The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are - (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or ultimate issue; (b) the opportunity available and taken to fully litigate the issue; (c) the terms and finality of the finding as to the issue; (d) the identity between the relevant issues in the two proceedings; (e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; … (f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and (g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process."
I also agree with Mr Faulkner's submission (pars 50 - 53) that, as against the parties moving for summary dismissal, the second limb of Young's motion (the indemnification claim) ought also be dismissed.
Leaving aside for a moment the future of the foreshadowed claims by the moving parties for additional orders, including against Muriniti, the Court now orders: 1. That the Applicant's claims for costs against the 8th, 9th, 10th, 13th, 14th, 15th, 16th and 18th Respondents are summarily dismissed. and 1. That the Applicant is to pay their costs on their motions for summary dismissal.

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