[2004] VCAT 1753

1. Application is made for orders under s109(4) of the Victorian Civil and Administrative Tribunal Act 1998. Alternatively, as I read the Summons, application is made under s131 of such Act, and/or under s120, that orders made by me on 26 March 2004 be reviewed and/or varied.

1. Pursuant to Section 126 of the Victorian Civil and Administrative Tribunal Act 1998, if need be, I extend time to enable an application to be brought under Section 120 of such Act to revoke or vary the orders made on 11 December 2003.

2. In accordance with Section 120 of such Act, I am satisfied that the First Respondent had a reasonable excuse for not attending the hearing on 11 December 2003 and for not being represented at the same.

3. As regards paragraph 2 I am satisfied as the reasonable excuse for not attending and not being represented that the First Respondent did not know that on 11 December 2003 application would be made under Section 131 of the Act to revoke or vary the orders made on 10 September 2003.

4. In consequence I revoke the orders made on such date.

5. Under Section 80 of the Act I direct that the Applicant, if desiring to maintain that the orders made on 10 September 2003 should be varied or revoked, must file and serve a summons setting out the grounds on which she makes application supported by any affidavit or affidavits.

6. Under Section 109 of the Act, being satisfied it is fair to do so, having regard to Section 109 (3) of the same including Section 109 (3)(a) and (e), I order the Applicant to pay the costs of the First Respondent of and incidental to this day. In default of agreement by 26 April 2004 the First Respondent must file and serve a bill of costs in taxable form by 17 May 2004 and the Applicant, if objecting, must do so in writing by document filed and served by 18 June 2004. Thereafter I refer the assessment of costs to the Principal Registrar under Section 111 of the Act and I direct that he carry out his assessment of such costs on an indemnity basis. I empower him to make any directions for that purpose as may be necessary.

7. As regards the indemnity costs ordered under paragraph 5 my reasons include these - namely, the wrong impression unintentionally which the Tribunal gained on 11 December 2003 and the terms of the letter of 22 January 2004 and the need for the First Respondent to attend this day to have the orders made on 11 December 2003 revoked or varied.

3. Earlier on 11 December 2003 I had ordered as follows:

1. The proceedings as regards to the Second and Third Respondents are struck out with a right to apply for reinstatement.

2. I amend the title of the First Respondent to "Vero Insurance Ltd".

3. Having heard submissions, I revoke the orders made on 10 September 2003 under S.131 of the 1998 Act.

4. I re-refer the assessment of the question of costs to the Principal Registrar under S.111 of the Act.

4. My orders made on 11 December 2003 follow orders which I made on 10 September 2003:

1. I adjourn the further hearing of this proceeding pending the outcome being known of the proceeding (by way of appeal) in the Supreme Court of Victoria (Court of Appeal) in matter 2002 No. 4758 or if such proceedings are abandoned.

2. My reasons for so ruling are that a matter in issue in this hearing (the meaning of the term "reasonable legal costs and expenses incurred... associated with the enforcement of claims against the insurer") is, I am satisfied (upon a perusal of the Notice of Appeal dated 1 April 2003), to be the subject of a ruling by the Court of Appeal in matter 2002 No. 4758 if the appeal in such matter is not abandoned. Accordingly, it is proper, in my view, to await the ruling of the Court of Appeal. If I were not to do so, I might be proceeding in this matter upon an erroneous view of proper legal principles.

3. The assessment of costs is adjourned in consequence.

4. The parties must notify the Tribunal accordingly and in writing when the result of the appeal in 2002 No. 4758 is known or if it is learned earlier it is abandoned.

5. It is now sought that I should make the orders set out in the Summons as follows:

1. Pursuant to section 131 of the Act, the sixth Order made by the Tribunal on 26 March 2004 be revoked so far as the Order requires the Applicant to pay the costs of the First Respondent.

(a) Mr Julian Ireland pay the costs of the First Respondent as ordered against the Applicant on 26 March 2004:

(b) Mr Julian Ireland pay the costs of the Applicant of and incidental to the applications and hearings of 11 December 2003 and 26 March 2004 on an indemnity basis: and

(c) Mr Julian Ireland refund fees charged in respect of the hearing on 11 December 2003 and withdraw fees charged in respect of the hearing on 26 March 2004.

6. At the hearing of this matter on 30 August 2004 the Applicant was represented by Counsel as was the First Respondent (Vero) and Mr Julian Ireland was separately represented. Counsel for the Applicant stated it was not his intention to apply to have the orders made on 26 March set aside "in toto". In such circumstances Counsel for the First Respondent (Vero) said that his client neither consented to nor opposed the making of the orders sought. On the other hand, Counsel for Mr Ireland indicated his position was that the Tribunal had no jurisdiction to hear and determine the application. It was his submission that I should determine the question of jurisdiction in the first place. I agree to that course. I pointed out to the parties that Mr Ireland was known to me.

7. Counsel for the Applicant submitted that the application, in effect, consisted of 2 parts. The first part, he said, relates to my having been misled by Mr Ireland on 11 December 2003. The second part, he said, relates to legal advice given by Mr Ireland concerning a proposal in a letter dated 22 January 2004. That letter is sent from the First Respondent's solicitors (Sparke Helmore) to the Applicant's solicitors (Zolis Lawyers) and reads as follows:

We refer to our letter dated 8 January 2004, and note that we have not received a response from you.

Since we wrote that letter, we have obtained a transcript of the directions hearing that occurred on 11 December 2003.

We have also obtained instructions to issue a Summons for Directions to have the orders of 11 December 2003 set aside. We enclose the Summons for Directions and Affidavits of James Sage Ferry, Nigel Kemp and Cynthia Collins, by way of service.

We will be seeking our indemnity costs and disbursements of attending to, and preparing for, the Application, from your client and/or yourself and/or your barrister. We will inform you of the date of the Application when we are notified by the Tribunal.

1.1 the orders of 11 December 2003 be revoked; and

1.2 the orders dated 10 September 2003 being reinstated; and

1.3 do everything necessary, at your client's cost, to obtain such orders from the Tribunal; and

2 pay our costs of obtaining the transcript (see attached invoice for $79.05) and our indemnity costs of preparing the summons and affidavit material. Our costs are $4,821.47 and we are prepared to accept $4,000.00.

If your client does not consent to paragraphs 1 and 2 above by 4pm on 28 January 2004, our client will brief counsel and produce this letter to the Tribunal in support of an application that our client's costs relating to the issues arising from the directions hearing on 11 December 2003, be paid on an indemnity basis.

Finally, please note that our client's costs consultant, Mr Weingart, is not available on 17 February 2004. Accordingly, should the orders sought by our client not be granted and the assessment proceed, we will apply for it to occur on 18 February 2004, or later.

8. The first part - relating to my having been "mislead" by Mr Ireland - may strictly overstate what I have found was the case. The true state of affairs is, I consider, that which is set out in the Affidavit of George Adrian Zolis sworn 6 August 2004 in support of the Application. It appears clear, by para 18 of that Affidavit, that I indicated I had formed the view that I had been given "the wrong impression". This is repeated in the orders which I made on 26 March 2004: see para 7 of the same where I indicate that the Tribunal, constituted by myself, gained "the wrong impression unintentionally ... on 11 December 2003". I am dealing with allegations being made against a member of Counsel and an allegation that a member of Counsel has "mislead" a court or tribunal is a very serious one to be made. That is why I wish to draw attention to this point and to the careful phraseology I have adopted. Counsel's duty not to mislead the court is emphasized by Mason CJ in Giannarelli v Wraith (1988) 165 CLR 543 at 556.

9. In my view, foundation for the application being made under s120 of the Act is lacking. By s120(1):

"A person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made."

(a) hear and determine the application if it is satisfied that the applicant had a reasonable excuse for not attending or being represented at the hearing; and

(b) if it thinks fit, order that the order be revoked or varied.

As I see it, the difficulty with applying s120 to this case is that, at the hearing on 26 March 2004, both parties appeared and were represented. In such circumstances it seems to me to follow that s120(1) does not apply. Therefore, under s120(4), no occasion can arise for revoking or varying the orders which I made.

10. Further, I am not satisfied either that s131 of the Act provides an avenue to revoke or vary the orders in question. That reads as follow:

"An order or direction as to the procedure to be followed in a proceeding may be varied or revoked at any time by any member empowered by or under this Act or the rules to make such an order or give such a direction."

Clearly, by virtue of this provision, I may only revoke or vary orders or directions if they are orders or directions "as to the procedure to be followed in a proceeding." What is particularly in issue under the orders I made on 26 March 2004 is the order in para 6 of the same whereby I ordered "the Applicant to pay the costs of the First Respondent of and incidental to this day." Thereafter I made directions or orders regarding the assessment of such costs which I directed or ordered were to be assessed "on an indemnity basis". However, I do not consider that para 6 of such orders is an order or direction "as to the procedure to be followed in a proceeding" under s131, except as it gives directions to or orders the Principal Registrar to carry out an assessment of costs under s111 of the Act in default of agreement between the parties. Otherwise, there is nothing at all about either para 6 or the other orders I made, it seems, which is of a procedural nature. Consequently, it seems to me there is no basis in s131 for the kinds of orders which are sought to be made against Mr Ireland. The costs order in question, it seems to me, is a substantive order and not merely a procedural one.

11. I turn, then, to s109(4) of the Act. By this provision:

"If the Tribunal considers that the representative of a party, rather than the party, is responsible for conduct described in sub-section (3)(a) or (b), the Tribunal may order that the representative in his or her own capacity compensate another party for any costs incurred unnecessarily."

Section 109(3)(a) relates to conduct where a party has conducted a proceeding in a way that unnecessarily has disadvantaged another party to the proceeding. Section 109(3)(b) relates to conduct where a party has been responsible for prolonging unreasonably the time taken to complete a proceeding.

12. I am not in doubt that under s109(4) a "representative" of a party includes a legal practitioner. I am not in doubt either that the representative of a "party" under s109(4) includes the representative of an applicant.

13. It is submitted I should be able to make the orders sought against Mr Ireland as supplementary orders to those which I made on 26 March. Reliance was placed on Chan v Housing Guarantee Fund Ltd [2004] VCAT 247. This was said in response to my concern that I am now functus officio as regards the 26 March orders which, if so, cannot now be revisited.

14. The decision in Chan supports a view that supplemental orders in costs can be made despite the passage of time since the making of original orders. Member Aird (as she then was) applied the decision of Chernov J. in UTSA Pty Ltd (in Liquidation) v Ultra Tune Australia Pty Ltd [1998] VSC 13. In that case his Honour said (at [19]): "the consideration by the Court of an application for costs against a non-party, even after it has given judgement on the issue of costs inter-partes in the proceeding, would amount to the exercise of a new discretion and not a re-agitation of issues previously considered...."

15. I consider there is a material difference between Chan's case and the present. In Chan's case Member Lothian at the hearing on 4 June 2003 when the costs orders were made against the Applicants expressly gave leave in her orders for the Applicants to make application under s109(4) against their solicitor. This was clearly an important consideration in Member Aird's decision: see at para [8]. In this case, however, when I made my orders on 26 March I gave no leave to the Applicants, or anyone else, to make an application under s109(4) and as I recall no mention was made to me of s109(4) in the orders sought on that occasion.

16. I do not consider, therefore, that Chan's case requires me in this case to hold that the orders sought against Mr Ireland are able to be made supplementally. I have several difficulties with saying such orders are able to be made supplementally in any event. Although "Liberty to apply" was reserved by para 8 of the orders which I made, I consider that this merely enabled the parties to re-mention the matter for obtaining further or other procedural orders - the better for giving effect to the other orders I made on 26 March but not for re-arguing those orders or making new substantive ones. That being so, I consider that, as regards the substantive orders made and authenticated on that occasion, I am, in reality, functus officio. My own decision in Walpole v Rangeville Manor Pty Ltd [2000] VCAT 31 relates to self executing orders and the Tribunal's power to set them aside subsequently. But self executing orders stand in a different position to actual orders made and entered after argument. Clear natural justice implications arise in the case of the former which do not arise in the case of the latter where the parties have actually been heard.

17. Being of the view that I am functus officio in relation to the orders I made on 26 March - over 5 months ago - I am also of the view that those orders now stand and operate according to their tenor. If it was considered that my discretion under s109 miscarried in law on that occasion - such that I should have taken s109(4) into account - then, I am of the view, that consideration should have been given to an appeal under s148 of the Act. But no appeal has ever been taken. Furthermore, as I say, I do not recall being addressed on s109(4) at the hearing on 26 March.

18. Even if I was not functus officio, I would have significant doubts, in any event, about my capacity to make orders under s109(4). It seems to me that the power in s109(4) is, in effect, punitive or at least extraordinary and it is not one, in my view, which should be exercised except in cases which clearly fall within its terms fairly construed. Yet, it is limited to making orders against "the representative of a party". How, may I ask, may I make orders against Mr Ireland if he is no longer "the representative of a party"? But if, in some way, he is still "the representative of a party", namely, the Applicant, how might I now find that he is "responsible for conduct described in sub-section (3)(a) or (b)"? To do so, presumably I would need to revisit matters raised with me on 26 March when the costs order was made. But this would mean those matters would need to be re-agitated - for, I would think, Mr Ireland would be entitled to be heard on them (see ss97 and 98(1)(a) of the Act) - yet it cannot be proper in law to suggest that final orders, properly made and regularly entered, can be reviewed in this way. Final orders might not be final orders after all, if this were right. The possibility would be opened up also, on this analysis, that on 26 March I found the Applicant represented by Mr Ireland engaged in conduct under ss109(3)(a) and (b) whereas, upon a re-agitation of the same matters some 5 months later, I could now find Mr Ireland was not responsible for that conduct possibly because, at this later point, I could not be satisfied, having heard argument, that such conduct had taken place. This would be preposterous, and Parliament could not have intended to allow this to follow. It seems to me, then, that, if an order is to be sought under s109(4), it should be sought at the time when costs themselves are under consideration and not later. If something comes to light later, which means a costs order under s109(4) should have been applied for at the time, then the remedy, it seems to me, lies elsewhere.

19. Lastly it was submitted to me that I could not make an order against Mr Ireland considering the terms of s143(2) of the Act. That provision states:

"A person representing a party in a proceeding [in the Tribunal] has the same protection and immunity as a legal practitioner has in representing a party in proceedings in the Supreme Court."

I was then referred to Giannarelli v Wraith, above, and it was submitted that Mr Ireland has immunity from liability for negligence in respect of conduct in court (or in the Tribunal) and in respect of out of court conduct if connected with conduct in court (or in the Tribunal). It was submitted that Mr Ireland's advice regarding the letter of 22 January 2004 fell into the latter category.

20. I cannot agree that s143(2) gives immunity of this kind. I refer to Rule 63.23(1) of the Supreme Court (General Civil Procedure Rules) 1996, which reads as follows:

Where a solicitor for a party, whether personally or through a servant or agent, has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the Court may make an order that -

(a) all or any of the costs between the solicitor and the client by disallowed or that the solicitor repay to the client the whole or part of any money paid on account of costs;

(b) the solicitor pay to his client all or any of the costs which the client has been ordered to pay to any party;

(c) the solicitor pay all or any of the costs payable by any party other than the client.

This rule applies with equal force to a barrister: see r 63.23(7). It seems to me to follow from r 63.23(1) that the immunity which a barrister has under s143(2) does not extend to conduct within r 63.23(1). If there is conduct within r 63.23(1) then under s109(4) an order may be made against the barrister concerned and s143(2) offers no protection to that extent.

21. However, I have formed the view that I cannot act to make orders against Mr Ireland under s109(4) in any event.

22. Lastly, I should indicate that s109(4), in my view, is limited to ordering a representative of a party to pay compensation to another party. Whatever else might be so, I cannot see that I would have any power under this provision to order a refund of fees, by a representative, to the party being represented, or to order that a claim for fees, by a representative made upon the party being represented, be withdrawn. These concern para (c) of the orders sought in the Applicant's Summons. The provision in r 63.23(1) might allow orders to be made to this effect, but not s109(4) in my view.

23. For these reasons, I consider I must mark the Summons as dismissed. There is no jurisdiction or authority in the Tribunal to make any of the orders sought.

24. Despite this being my conclusion, I doubt it can have any costs implication in terms of s109 for the Applicant, or for the First Respondent either, I should add. For, s109 is based upon there being parties and Mr Ireland is not as such a party to a proceeding.