FEDERAL COURT OF AUSTRALIA

von Reisner v Commonwealth of Australia (No 2) [2009] FCAFC 172

COSTS – appeal – successful litigant in person was owner of a business providing litigation services – whether entitled to be compensated by a costs order for time spent or earnings lost in conducting proceeding – whether Chorley exception applies.

Federal Court of Australia Act 1976 (Cth) s 43

Federal Court Rules O 62 r 9

von Reisner v Commonwealth of Australia (2009) 177 FCR 531 cited

Cachia v Hanes (1994) 179 CLR 403 followed

Murphy v Arnoldus-Lewis and Anor [2009] NSWCA 142 cited

Latoudis v Casey (1990) 170 CLR 534 referred to

Secretary, Department of Foreign Affairs and Trade v Boswell (No 2) (1992) 39 FCR 288 disapproved

Kerridge v Foley (unreported, Supreme Court of New South Wales, 19 August 1970) cited

London Scottish Benefit Society v Chorley, Crawford, and Chester (1884) 13 QBD 872 disapproved

Croker v Commissioner of Taxation (2002) 124 FCR 286 approved

Ex Christmas Islanders Association Inc v Attorney-General (Cth) (No 2) (2007) 233 ALR 97 distinguished

Fingleton v The Queen (2005) 227 CLR 166 referred to

Sirros v Moore [1975] QB 118 referred to

Bahonko v Sterjov [2007] FCA 1717 referred to

Lawrence v Nikolaidis (2003) 57 NSWLR 355 approved

KOIDU VON REISNER v COMMONWEALTH OF AUSTRALIA and STATE OF NEW SOUTH WALES

NSD 626 of 2008

SIOPIS, COWDROY AND REEVES JJ

8 DECEMBER 2009

SYDNEY

THE COURT ORDERS THAT:

1.                  The Respondents are to pay the Appellant’s out of pocket expenses (if any), as were actually, necessarily and reasonably incurred in the conduct of this appeal and in the proceeding before the primary judge.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT ON COSTS

THE COURT:

INTRODUCTION

1                     Ms von Reisner was successful before us in an appeal against an order made on 31 March 2009 that she not be able to commence any proceedings in this Court without prior leave of the Court: see (2009) 177 FCR 531. Ms von Reisner represented herself throughout this appeal and in the Court below.

2                     Consequent upon her success, Ms von Reisner has now claimed a number of different costs orders. In summary form, they are:

(a)                that the Commonwealth of Australia pay the full amount of her costs as taxed;

            In this regard, Ms von Reisner contended that the costs order was to compensate her for the time she spent as the owner of a registered business, Litigation Services, in conducting the appeal, and should be taxed in the scale for paralegal and clerical tasks. Ms von Reisner also sought to be reimbursed for certain expenses.

(b)               that there be a personal costs order against the barrister who appeared for the State in the Court below, to the effect that he pay Ms von Reisner $2,000 immediately and that he indemnify the Commonwealth in respect of 50% of the costs payable by it to Ms von Reisner; and

(c)                that, if there was a power to do so, the trial judge should be ordered to pay the costs.

CONTENTIONS

3                     In support of her various claims for costs, Ms von Reisner has filed a set of submissions that extends to more than eighty pages. Those submissions are too prolix and discursive to permit of a summary. However, the essence of Ms von Reisner’s claims, so far as we have discerned them, are set out in [2] above.

4                     The Commonwealth has submitted that Ms von Reisner is simply not entitled to a costs order. The State has submitted that a self-represented litigant does not have any entitlement to legal costs, only nominal ‘expenses’ incurred. In support of its submissions, the State referred the Court to the High Court of Australia decision in Cachia v Hanes (1994) 179 CLR 403 (Cachia) and the more recent decision in the New South Wales Court of Appeal in Murphy v Arnoldus-Lewis & Anor [2009] NSWCA 142.

5                     On the question of the expenses incurred by Ms von Reisner, the State also made the following submissions:

(a)                the appeal books in this appeal were prepared by the State, at the request of the Federal Court Registrar, and the State has therefore incurred significant costs that would not normally be borne by it as a respondent to an appeal;

(b)               the appeal book filed by Ms von Reisner at 5.00 pm on the day prior to the hearing was objectionable; and

(c)                Ms von Reisner did not attend the two callovers of this appeal and her only entitlement to travelling expenses would be limited to her travel to and from the hearing of the appeal on 27 May 2009.

6                     We shall deal with the different costs orders claimed by Ms von Reisner in the order set out in [2] above.

ORDER FOR COSTS AGAINST THE COMMONWEALTH

7                     It is a well established principle that an award of costs in favour of a successful party in civil litigation is made to compensate that party in respect of the expenditure which that party has incurred in the conduct of the litigation. However, such an award is not made to punish the unsuccessful party and is purely compensatory in nature: see Latoudis v Casey (1990) 170 CLR 534 at 565 per Toohey J.

8                     In Cachia, a majority of the High Court held that: an order for costs is ‘confined to money paid or liabilities incurred for professional legal services’ (see at 409), and that: ‘costs are awarded by way of indemnity…for professional legal costs actually incurred in the conduct of litigation’ (see at 410). The High Court went on to make it clear that it is not the purpose of a costs order to compensate litigants for the time lost in the preparation or presentation of their cases (see at 412-414). Furthermore, it ruled that unless allowed for in the relevant legislation or rules, it is not permissible to treat as a disbursement any loss of earnings incurred by a litigant in presenting and conducting a case (see at 417).

9                     In Secretary, Department of Foreign Affairs and Trade v Boswell (No 2) (1992) 39 FCR 288 (Boswell) the Full Court of the Federal Court held that a self-represented litigant was entitled to recover, as costs, out of pocket expenses including loss of earnings. In so holding, the Full Court considered that it was making an exception to the general rule and relied upon a decision of the Supreme Court of New South Wales in Kerridge v Foley (unreported, Supreme Court of New South Wales, 19 August 1970). However, in Cachia the High Court appears to have disapproved of Boswell insofar as lost earnings were considered recoverable by a litigant.

10                  It follows from these rulings in Cachia that Ms von Reisner, a self-represented litigant, would not be entitled to an order that the Commonwealth pay her costs founded on the basis of her time spent, or earnings lost, in relation to the preparation or presentation of her case in this Court, or in the Court below.

11                  In her submissions on costs, Ms von Reisner sought to distinguish Cachia and rely upon a variation of the principle in London Scottish Benefit Society v Chorley, Crawford, and Chester (1884) 13 QBD 872, which permits a successful litigant solicitor to obtain a costs order in respect of the work undertaken in conducting the litigation in question. Ms von Reisner said that she was the owner of a registered business, Litigation Services, and in that capacity she performed paralegal services and clerical services in preparing and conducting the appeal. Accordingly, said Ms von Reisner, she was entitled to a costs order taxed on the scale for the provision of paralegal and clerical services. It is not clear whether Ms von Reisner has any training or experience which would allow her to claim to be a paralegal. However, as appears below, this is of no moment.

12                  A similar argument was put to Madgwick J in Croker v Commissioner of Taxation (2002) 124 FCR 286. In that matter, Mr Croker claimed that he was undertaking some legal studies and had worked as a paralegal, or as a solicitor’s clerk. He therefore claimed that he could resort to the Federal Court’s Scale of Costs to claim as costs the time and services he had provided as a paralegal in preparing and presenting his case. Madgwick J considered the High Court’s decision in Cachia (at [7] and [8]) and noted that the majority there had held that a ‘costs’ order does not include any measure of compensation for a litigant’s loss of time in preparing a case or attending court. His Honour also noted that the majority was critical of the exception that a solicitor, who acts for himself, may charge for his work, or that of his clerk. His Honour then concluded (at [8]) that:

…There is no warrant in authority for making an exception for a litigant in person who is a paralegal, or is qualified to be, or has in the past worked as a solicitor’s clerk. Nor, consonant with the general principle enunciated by the majority in Cachia v Haines, and the Court’s criticism of the exception for solicitors, is there any reason in principle to make an extension of that exception for persons in the position of Mr Croker.

13                  We respectfully agree with his Honour’s reasoning. It follows that whether or not Ms von Reisner has any qualifications as a paralegal, and whether she did the clerical and paralegal work in preparing and presenting her case directly, or indirectly, through her registered business, Litigation Services, there is no basis for concluding that either circumstance provides an exception to the High Court’s ruling in Cachia. It follows that Ms von Reisner is not entitled to a costs order on the basis for which she has contended.

14                  Accordingly, save for an entitlement to recover certain kinds of out of pocket expenses (which we deal with below), Ms von Reisner is not entitled to a costs order against the Commonwealth, or indeed the State.

ORDER FOR COSTS AGAINST LEGAL PRACTITIONER

15                  There are two bases upon which the Court may make an order for costs personally against a legal practitioner. The first is s 43 of the Federal Court of Australia Act 1976 (Cth). An example of the exercise of this discretion is to be seen in the case of Ex Christmas Islanders Association Inc v Attorney-General (Cth) (No 2) (2007) 233 ALR 97, where French J (as he then was) required that a barrister and solicitor pay the Commonwealth’s costs personally.

16                  The second basis is to be found in O 62 r 9 of the Federal Court Rules which allows the Court to award costs against a legal practitioner if it appears to the Court that ‘costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default…’

17                  Ms von Reisner relied upon both of these bases to visit a personal liability on counsel for the State in the Court below. The counsel against whom Ms von Reisner sought costs did not appear in the appeal.

18                  In support of her claim, Ms von Reisner referred to some criticisms of the conduct of counsel made by the judge who heard the application for leave to appeal from the decision in the Court below. However, the conduct of counsel which was criticised fell below the type of conduct which would justify the making of a personal costs order. There was no evidentiary basis before us which would justify the making of such an award of costs; and this part of Ms von Reisner’s application for costs must be rejected.

19                  In any event, in light of the fact that we have found that Ms von Reisner is not entitled to the costs orders which she has claimed against either the Commonwealth or the State, no personal liability in counsel for those costs, could arise.

ORDER FOR COSTS AGAINST THE JUDGE

20                  Finally, Ms von Reisner has sought an order that the primary judge be ordered to pay the costs.

21                  It is a well-established principle that a judge is entitled to immunity in respect of any act done by him in the exercise of his jurisdiction: see Fingleton v The Queen (2005) 227 CLR 166 per Gleeson CJ at [36] in which his Honour quoted the observations of Lord Denning in Sirros v Moore [1975] QB 118 at 132; see also Bahonko v Sterjov [2007] FCA 1717 per Lander J at [63]-[67]. At [64] his Honour Lander J quoted the observations of Lord Denning in Sirros:

Ever since the year 1613, if not before, it has been accepted in our law that no action is maintainable against a judge for anything said or done by him in the exercise of a jurisdiction which belongs to him. The words which he speaks are protected by an absolute privilege. The orders which he gives, and the sentences which he imposes, cannot be made the subject of civil proceedings against him. No matter that the judge was under some gross error of ignorance, or was actuated by envy, hatred and malice, and all uncharitableness, he is not liable to an action.

22                  Quite apart from the fact that judicial immunity would prevent any such order being made, there is absolutely no basis for any of the spurious and scandalous allegations made by Ms von Reisner against the primary judge in her written submissions on costs. This part of Ms von Reisner’s application for costs orders must also be rejected.

OUT OF POCKET EXPENSES

23                  A litigant in person is normally entitled to out of pocket expenses actually, necessarily and reasonably incurred: see Boswell at 295, Lawrence v Nikolaidis & Co (2003) 57 NSWLR 255 at [35]. It follows that, if Ms von Reisner can show that she has incurred expenses of this kind, she would be entitled to be compensated for them. It will be for Ms von Reisner to establish that she has incurred compensable out of pocket expenses before the Taxing Officer. In that context, the submissions of the State as to the extent of the expenses actually incurred by Ms von Reisner will be relevant.

24                  For all these reasons, we conclude that Ms von Reisner is not entitled to any order for costs save in respect of out of pocket expenses (if any) actually, necessarily and reasonably incurred by her in the conduct of this appeal and in the proceedings before the primary judge.

Associate:

Dated:         8 December 2009