Wilkie v Brown

BEAZLEY P: On 29 April 2016, the Court dismissed the applicant’s summons for judicial review. The respondent, who is a solicitor who acted for himself on the summons, sought an order that he be paid the costs of the summons by way of a gross sum, including costs for the professional work he performed on the matter. This raised the question whether a solicitor can recover his costs of representing himself.

The principal proceedings related to a dispute as to the costs payable in respect of legal services provided to the applicant by the respondent, her former solicitor. After that dispute arose, the respondent sought an assessment of costs under the Legal Profession Act 2004 (NSW) (now repealed). On 26 February 2014, costs were assessed in the sum of $32,917.38. That assessment was affirmed by a costs review panel on 12 August 2014. The respondent subsequently filed the certificate of determination of costs by the costs review panel in the Liverpool Local Court. On 25 November 2014, judgment in the sum of $33,003.98 was entered in the respondent’s favour pursuant to the Legal Profession Act, s 368(5).

The applicant sought leave to appeal against the assessment in the District Court pursuant to the Legal Profession Act, s 385. The matter was listed before Maiden DCJ on 9 June 2015. The applicant did not appear personally and nor was she represented by a legal practitioner. The summons seeking leave to appeal was dismissed.

A summons was filed by the applicant in the supervisory jurisdiction of this Court on 10 July 2015. The applicant subsequently failed to file submissions and notice was issued to show cause why the summons should not be struck out for want of prosecution pursuant to the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 13.6. In the event, proceedings were not struck out: Wilkie v Brown (Ward JA, Court of Appeal, 7 December 2015, unreported), but procedural orders and orders for the costs of the show cause proceedings were made in the respondent’s favour. The applicant subsequently filed an amended summons and submissions.

The matter was set down for hearing before this Court on 29 April 2016. On 28 April 2016, the applicant informed the Court by telephone that she would be withdrawing her application. The applicant was represented at the hearing by her solicitor, Mr Darvill, who confirmed that the applicant wished to withdraw the application. The respondent appeared in person. He filed a notice of motion by which he, relevantly, sought his costs of the proceedings in this Court, assessed in a lump sum of $5,161.20. He also filed an affidavit affirmed by him on 26 April 2016.

The Court made orders dismissing the applicant’s summons and directing the respondent and the applicant to file and serve submissions as to costs by 6 and 13 May 2016 respectively. Submissions were received from the respondent but not from the applicant. Although a solicitor appeared for the applicant on 29 April 2016 it is reasonable to infer that the applicant was unlikely to have any further representation in the matter. The respondent’s submissions have helpfully assisted the Court in its determination although, as I indicate below, the question raised is an important one and the Court has had to determine it without the assistance of an active contradictor.

There can be no dispute that, had he been represented, the respondent would have been entitled to his costs of the proceedings. The applicant only informed the Court the day prior to the hearing that she did not wish to proceed with her summons.

The general rule is that a litigant in person who is successful in the litigation is entitled to recover disbursements but is not entitled to claim costs for time spent in the conduct of litigation: Cachia v Hanes [1994] HCA 14; 179 CLR 403 at 412-3. The question in issue here is whether that position is altered by the circumstance that the respondent is a solicitor representing himself. That question turns on whether the principle from London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 (Chorley) applies to proceedings in this Court.

The respondents in Chorley, a firm of solicitors, successfully defended themselves against a civil action and claimed costs, including professional costs, for the time spent in the conduct of the litigation. At 875-6, Brett MR held:

The respondent submitted that the principle from Chorley, that a solicitor appearing in person may recover costs for time spent conducting the case, was applied in Guss v Veenhuizen (No 2) [1976] HCA 57; 136 CLR 47. In that case, a solicitor who had conducted a successful appeal on his own behalf in the High Court was awarded costs. On taxation, however, it emerged that, as a result of a clerical error, the solicitor’s name had not been entered on the Register of Practitioners and he was not entitled to practice in the High Court. The Registrar disallowed the bill of costs for that reason.

A majority of the High Court (Gibbs ACJ, Jacobs and Aickin JJ), relying on Chorley, held that the solicitor was entitled to recover costs. Their Honours outlined the basis of the rule and of their determination at 52, as follows:

It is clear from the above passage that, while the rule derived from Chorley was applied in Guss v Veenhuizen, that was not the central issue in the case. Rather, the issue, as framed at 53, was “the extension of that rule to the very special circumstances of [the] case”: see Cachia v Hanes at 412; Wang v Farkas [2014] NSWCA 29 at [24].

Reservations were expressed in Cachia v Hanes about the approach in Chorley to the costs of a solicitor litigant. The appellant in that case, an engineer, had successfully defended himself in civil proceedings and was awarded costs. On taxation, his claims for out of pocket expenses and for compensation for loss of time spent, calculated by reference to his fees as an engineer, were disallowed. After considering the statutory basis for the awarding and taxation of costs (then the Supreme Court Act 1970 (NSW) and the Supreme Court Rules 1970 (NSW)), a majority of the High Court (Mason CJ, Brennan, Deane, Dawson and McHugh JJ) held, at 409:

Importantly, at 411, their Honours identified the statutory basis of costs and the purposes for which they are awarded, as follows:

Their Honours considered the “somewhat anomalous exception” to the general rule that litigants in person could not recover costs, derived from Chorley, at 411 ff. At 412, the majority doubted assertions in Chorley that it would be “absurd” to refuse to allow solicitors to charge for work done by themselves but allow them to charge for work for which they engaged another. They considered that those assertions “ignore the questionable nature of a situation in which a successful litigant not only receives the amount of the verdict but actually profits from the conduct of the litigation.” Their Honours further stated, at 412-413:

At 414, their Honours considered (albeit in obiter) that, under the rules then applicable concerning taxation of costs, costs could not be recovered by a litigant in person regardless of whether she or he was a solicitor:

In Dobree v Hoffman (1996) 18 WAR 36, the Full Court of the Supreme Court of Western Australia refused to apply the Chorley exception in favour of a solicitor litigant. At 45, Parker J, with whom Rowland and Steytler JJ agreed, held that Guss v Veenhuizen was not binding. The bases for the Court’s determination were: first, that the application of the Chorley principle in Australia was not directly in issue in Guss v Veenhuizen, such that the judgment did not have the force of binding precedent on that point; and secondly, “more importantly”, that Guss v Veenhuizen was concerned with the practice of the High Court, not with that of the Supreme Court of Western Australia as regulated by the Supreme Court Act 1935 (WA) and the relevant rules. Thus, Parker J held:

Parker J considered that the relevant statutory provisions and instruments provided no foundation for the application of the Chorley rule in Western Australia and that, having regard to the criticism of the rule in Cachia v Hanes, it ought not be applied: see at 51.

Parker J’s approach has not been applied in New South Wales. In Atlas v Kalyk [2001] NSWCA 10, Handley JA, with whom Meagher and Sheller JJA agreed, dismissed an appeal against a costs order made on the basis of the Chorley rule. His Honour, after considering the statements in Cachia v Hanes, stated:

In Khera v Jones [2006] NSWCA 85, leave to appeal a costs decision in which the Chorley principle was applied was refused on the authority of Atlas.

Wang v Farkas concerned an appeal against the award of costs to the respondent, a solicitor, in proceedings brought under the Crimes (Domestic and Personal Violence) Act 2007 (NSW) in which he represented himself. A specific costs regime applied under the Crimes (Domestic and Personal Violence) Act: see s 99 and the Criminal Procedure Act 1986 (NSW), Ch 4 Pt 2, Div 4. One feature of that regime was that the costs which could be awarded were, relevantly, “professional costs”: Criminal Procedure Act, s 215. Basten JA, with whom Bathurst CJ and I relevantly agreed, considered those provisions in some detail. Basten JA held that:

Basten JA then considered the scope of the relevant authorities, and in particular Guss v Veenhuizen as follows, at [29]:

At [37], his Honour concluded:

Dobree v Hoffman was expressly overruled in Soia v Bennett [2014] WASCA 27; 46 WAR 301 at [78]-[86] per Pullin JA, with whom Newnes and Murphy JJA agreed. Pullin JA was particularly critical of statements in Dobree to the effect that Guss v Veenhuizen did not have precedential effect on the unargued question of the validity of the Chorley principle in Australia. His Honour stated, at [80]:

His Honour also found it relevant that other Australian jurisdictions, including New South Wales, Victoria, Queensland, South Australia and the Federal Court, had applied the Chorley exception and had not followed Dobree v Hoffman: see at [77] and [81] and the cases cited therein. He also considered that it was highly desirable that the same rule of practice should apply in all jurisdictions until the High Court decides otherwise: at [82]. Special leave to appeal from Soia v Bennett to the High Court was refused: Soia v Bennett [2014] HCASL 248.

The question for determination is whether the respondent, who is a solicitor, is entitled to costs in circumstances where he has acted for himself in the proceedings. In this regard, it should be noted that the respondent described himself as the principal of the incorporated legal practice “Browns the Family Lawyers”. However, he deposed that he acted for the applicant as a sole practitioner prior to incorporation of his legal practice.

It is apparent from the case law to which I have referred that it is accepted that it was part of the ratio of the High Court’s decision in Guss v Veenhuizen that the Chorley principle applies in Australia: see Soia v Bennett at [80]; Atlas v Kalyk at [11]. There was nothing before the Court to indicate that either decision was plainly wrong: Gett v Tabet [2009] NSWCA 76; 254 ALR 504 at [294]. Indeed, to view Guss v Veenhuizen as authority only for the narrow circumstances which gave rise to the issue in the case has the unlikely result of there being High Court authority that a solicitor in the unusual position of the respondent in that case could recover costs, but no authority (and potentially no ability to recover costs) beyond that narrow circumstance. It should also be emphasised that no aspect of Guss v Veenhuizen was overruled in Cachia v Hanes.

However, the binding effect of Guss v Veenhuizen in respect of the Chorley principle must give way to any statutory provision to the contrary or which is relevantly different: Wang v Farkas and Cachia v Hanes. As Basten JA observed in Wang v Farkas at [29], Guss v Veenhuizen will not be binding “in respect of a materially different statutory provision” (emphasis added).

The High Court’s power to award costs in Guss v Veenhuizen was contained in the Judiciary Act 1903 (Cth), s 26, which provided that “[t]he High Court and every Justice thereof sitting in Chambers shall have jurisdiction to award costs in all matters brought before the Court ...”. “Costs” was not defined and no other provision was of significance to the present question. Thus, where a statute provides a general power to award costs, and that power as framed does not limit or define it in any relevant way, Guss v Veenhuizen is authority that costs may be awarded to solicitors appearing for themselves.

In Wang v Farkas, the Criminal Procedure Act 1986 (NSW) contained very different statutory provisions from those applied in Guss v Veenhuizen. The particular costs provision was for “professional costs”. As a matter of statutory construction, the Court held that professional costs were not payable to a self-represented party regardless whether the party was a legal practitioner. Guss v Veenhuizen was therefore distinguished: see at [29].

In the present case, the Civil Procedure Act 2005 (NSW) provides for the power of the Court to award costs in s 98(1), as follows:

Section 3(1) defines “costs” and “ordinary basis” as follows:

Prior to the enactment of the Civil Procedure Act, “costs” were relevantly defined in the Supreme Court Act, s 19, as follows:

In Wang v Farkas at [28], Basten JA commented, in relation to proceedings under the Civil Procedure Act, that:

Part 7 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the Application Act) creates a scheme of costs assessment. It applies to “Uniform Law costs and ordered costs”. Section 63 provides definitions of those terms:

Section 3(2) provides that terms used in the Application Act and also in the Legal Profession Uniform Law (NSW) (the Uniform Law) have the same meanings in the Application Act as they do in the Uniform Law.

The Legal Profession Uniform Law, s 6, defines “costs assessment” and “legal costs” as follows:

There are numerous authorities on the meaning of costs, including the meaning of party/party costs (the previous terminology for costs on the “ordinary basis”). In Re JJT; Ex parte Victoria Legal Aid [1998] HCA 44; 195 CLR 184, the High Court considered the meaning of “costs” in the Family Law Act 1975 (Cth). Relevantly, Hayne J, after making reference to the passage from Cachia v Hanes extracted above at [13], held, at [91]:

In Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [813]-[820], in determining whether to make a gross sum order I referred to costs, for the purposes of the Civil Procedure Act, s 98(4) in terms of “costs incurred”, but that case did not call for a consideration of whether costs included the professional costs of a self-represented legal practitioner. However, as is apparent from the above, the definition of “costs” in the Civil Procedure Act is different from the previous definition in the Supreme Court Act and is different from the provisions under consideration in Guss v Veenhuizen.

The question raised, therefore, is whether the introduction of the word “payable” in the definition of “costs” has the effect that “costs” refers only to those costs which the parties have incurred, including those professional costs incurred by reason of having engaged legal representation. That is one possible interpretation of the language and it would have the effect that the respondent could not claim for his own professional costs. The respondent in this matter suggests another interpretation: that the definition also extends to any costs “payable” pursuant to costs orders made in proceedings. On this construction it would follow that if a costs order was made which included his own costs in acting for himself including his professional costs, those costs would be “payable” to him.

The usual process of statutory construction requires the definition to be read into the provision or provisions in which the term as defined is used, assuming it is not expressly or impliedly excluded in that context: Kelly v The Queen [2004] HCA 12; 218 CLR 216 at [103] per McHugh J. In this case, that requires, relevantly, the definition of “costs” in the Civil Procedure Act, s 3 to be read into s 98. When that task is undertaken, s 98 reads as follows:

The starting point of statutory construction is the language of the provision in the context in which it appears in the statutory scheme: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27 at [47]. The phrase “costs payable in or in relation to the proceedings” is of wide import and, on that basis, the construction for which the respondent contends is arguable, subject inter alia to what it means to order costs on the ordinary or indemnity basis: s 98(1)(c). That question requires consideration of the scheme for the assessment of costs in Pt 7 of the Application Act and of the relevant costs provisions of the Uniform Law which are set out above at [35]-[ 37]. It is also necessary to have regard to the Legal Profession Uniform Law Application Regulation 2015 (the Regulation).

The Application Act, Pt 7 is entitled “Legal Costs – costs assessment”. It refers to “Uniform Law costs” and “ordered costs”. Those terms are both defined in 63, although “Uniform Law costs” are defined by reference to the Uniform Law. The word “costs” is not separately defined. The definition of “Uniform Law costs” includes the phrase “legal costs”, which is itself a defined term in the Uniform Law (set out above at [37]). That definition refers to amounts that a person is or may be liable to pay to a law practice for the provision of legal services. Prima facie, such amounts are costs that are incurred by the person in respect of legal services provided. At least on a preliminary view, the language does not appear to be apt to extend to the professional costs of a solicitor acting in person.

Part 7, Div 2 of the Application Act is entitled “Costs assessment generally”. Relevantly, s 67 provides that subject to the Application Act and the Uniform Law, assessments of “legal costs” are to be conducted in accordance with the costs assessment rules. Section 68, which is headed “Applications for costs assessments” refers in subs (1) to the assessment of “legal costs”. However, subs (2) refers to an application for the assessment of “costs”. Thereafter, the provisions of Div 2 refer to “costs”. For example, s 70 requires the costs assessor to issue a certificate that “sets out the determination” and is to include “the amount of costs determined”: para (a).

Part 7, Div 3 of the Application Act provides for additional provisions in respect of “ordered costs” and Div 4 provides an additional provision in respect of “Uniform Law costs”. Accordingly, notwithstanding the terminology of the heading to Pt 7 and the terms of s 68(1), the scheme of the costs assessment provisions of the Application Act otherwise maintain a distinction between “ordered costs” and “Uniform Law costs”. It would seem therefore that the provisions of Div 2, with the exception of s 68(1) applies to both categories of costs and it must be questionable whether the reference to “legal costs” in s 68 is a drafting error.

By contrast, the Uniform Law deals with “legal costs”. It does not deal with “ordered costs”. Part 4.3 is headed “Legal costs”, and falls within that Chapter of the Law that governs “Business practice and professional conduct”. Division 2 of Pt 4.3 provides that “legal costs” must be fair and reasonable. Other Divisions relate to costs disclosure: Div 3; costs agreements: Div 4; billing: Div 5; unpaid legal costs: Div 6; and costs assessment: Div 7.

Questions also arise as to the proper construction and application of the Regulation. Part 6 of the Regulation is entitled “Legal Costs – costs assessment”. Division 2 governs applications for costs assessment. Regulation 32 is headed “Applications for Costs assessment – section 68 of the application Act”. Regulation 32(1) provides that “for the purposes of s 68 (1) an application for costs assessment is to be made on the approved form and accompanied by the [prescribed fee]”. “Costs assessment” is defined in the Uniform Law by reference to “legal costs”: see above at [37]. However, and notwithstanding the heading to Pt 6, reg 34 deals separately with “Uniform Law costs” and reg 35 provides for the procedures which must be followed in respect of application for assessment of “ordered costs”.

If, as I have indicated, “legal costs”, as defined in the Uniform Law, do not extend to the professional costs of a solicitor acting in person, questions are raised as to whether that limitation must be read back into the Application Act, by reason of the references to “legal costs” in that Act and in the Regulation. In particular, there is a question as to whether “ordered costs” under the Application Act are limited to “legal costs” which are ordered by a Court or Tribunal. If so, there would be a further question as to whether the limitation must also be read into the definition of “ordinary costs” in the Civil Procedure Act and whether, for that reason or otherwise, that is a factor weighing in favour of the narrower reading of the phrase “costs payable” in the definition of “costs”.

The costs regime under the Application Act and the Uniform Law is labyrinthine and, at this stage, largely unexplored in the case law. The relevance of cases dealing with previous statutory schemes may be questionable. I have come to the conclusion that, in circumstances where there is a significant question as to whether the costs provisions now in force are materially different from those applied in Guss v Veenhuizen but the Court has not had the benefit of submissions from a contradictor, it is not appropriate to finally determine the questions of principle raised. In the absence of any submissions put by the applicant, she may be taken to have conceded the point. In that circumstance, I am inclined to accept that the respondent should have his costs of the summons.

The Court has a discretion to order costs in a gross sum pursuant to the Civil Procedure Act, s 98(4). That section provides, relevantly:

I set out the principles relevant to the exercise of that discretion in detail in Hamod at [813]-[820]. It is convenient to extract the relevant principles from what I said there:

This matter has had a lengthy and unfortunate history. Costs were first assessed in February 2014. The applicant contested her liability to pay, unsuccessfully, at every stage. Her conduct, including her failure to attend court on multiple occasions, added significantly to the delay and cost which occasioned the case. I accept the respondent’s submission that further costs assessment would likely be contested, and that the respondent would likely never recover the costs of such assessment. In those circumstances, I am satisfied that a gross sum costs order is appropriate.

The respondent annexed to his affidavit of 26 April 2016 an itemised list of costs incurred. Those costs amount, in sum, to $5,161.20. I am satisfied that the costs itemised are reasonable. Indeed, as they do not include costs of the (admittedly brief) hearing on 29 April 2016, or costs incurred in the preparation of submissions on costs, it is likely that they represent a discount on the costs which would otherwise be assessed: see Hamod at [814].

The following orders should be made:

McCOLL JA: I agree with Beazley P.

GLEESON JA: I agree with Beazley P.