FEDERAL COURT OF AUSTRALIA

Nyoni v Shire of Kellerberrin (No 3) [2013] FCA 1090

THE COURT ORDERS THAT:

1.    The applicant pay each of the respondents’ costs of the interlocutory applications filed 15 May 2012 on an indemnity basis.

2.    The costs of today be in the cause.

3.    The interlocutory application filed 8 July 2013 is adjourned.

4.    The directions hearing is adjourned to 10.15 am on 9 September 2013.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 21 December 2012, I published reasons for judgment on the respondents’ applications to strikeout the applicant’s substituted statement of claim (Nyoni v Shire of Kellerberrin (No 2) [2012] FCA 1477).

2    The circumstances in which the respondents brought those applications are set out in that judgment. I do not intend to repeat the circumstances in full.

3    In outline, the position is that on 14 November 2011, I struck out Mr Nyoni’s statement of claim but rejected an application by the respondents for the summary dismissal of Mr Nyoni’s claim (Nyoni v Shire of Kellerberrin [2011] FCA 1299). After that decision, as had been foreshadowed in the reasons for decision, the Court made a referral for the appointment of pro bono counsel to assist Mr Nyoni with the drafting of an amended statement of claim and, thereafter, to represent Mr Nyoni in the proceeding.

4    The District Registrar was able to find senior and junior pro bono counsel who were prepared to assist Mr Nyoni. An amended application and amended statement of claim was, in due course, drafted and filed by pro bono counsel on behalf of Mr Nyoni.

5    The amended application and amended statement of claim confined Mr Nyoni’s claim to a number of sustainable causes of action, and withdrew the causes of action against Mr Peczka, the fourth respondent. In drafting the amended statement of claim, pro bono counsel had regard to the fact that the Court had struck out the whole of Mr Nyoni’s statement of claim on the grounds that it contained unsustainable pleas of fraud, embezzlement of public funds, conspiracy and racial discrimination, and pleaded a number of scandalous allegations.

6    However, after the amended statement of claim had been filed and served, Mr Nyoni withdrew his instructions from pro bono counsel. Mr Nyoni then filed and served a re-amended application and substituted statement of claim.

7    The substituted statement of claim reintroduced the offensive pleas which had been struck out in 2011. The substituted statement of claim also pleaded claims against Mr Peczka, including claims that Mr Peczka and the Shire of Kellerberrin (the Shire), in effect, were liable as joint tortfeasors in relation to a trespass onto Mr Nyoni’s pharmacy premises, and that Mr Peczka, along with other persons from the Shire, had made statements disparaging of Mr Nyoni’s pharmacy business.

8    On 21 December 2012, I struck out a large number of the paragraphs of the substituted statement of claim, but I did not give Mr Nyoni leave to replead. Rather, I found that the matter should not proceed on pleadings, but rather by reference to a statement of issues and contentions.

9    I also said that I would give Mr Nyoni an opportunity to provide information in support of some of the causes of action which he had purported to plead in his substituted statement of claim. Those causes of action were the trespass involving Mr Bateman, and the making of the disparaging statements to which Mr Nyoni referred at para 37.1 of his substituted statement of claim. Mr Nyoni has been engaged in that process since then. The process has caused delay to the progress of the matter. However, the process has demonstrated that there is enough information in the particulars provided by Mr Nyoni to support a sufficiently comprehensible claim against the Shire and Mr Peczka, as joint tortfeasors, in respect of the alleged trespass by Mr Bateman, so as to permit Mr Nyoni to proceed with the claim.

10    Mr Nyoni has also now supplied particulars in support of his claims that Mr Peczka and persons from the Shire have made statements which were disparaging of his pharmacy business. Although the particulars are somewhat diffuse, there is sufficient in the particulars to permit at least some of Mr Nyoni’s claims based on the disparaging statements claims, to be advanced. Thus, for example, it appears the particulars disclose a sufficiently comprehensible cause of action in injurious falsehood, to permit the claim to be advanced. However, there is a very serious question as to whether I will permit Mr Nyoni to advance the claim in defamation which he had purported to plead in his substituted statement of claim.

11    Accordingly, I will permit Mr Nyoni to advance, at trial, causes of action founded on the allegations in relation to the trespass by Mr Bateman and the statements disparaging of Mr Nyoni’s pharmacy business.

12    The next question is the question of costs of the respondents’ successful strike out applications.

13    The respondents claim that Mr Nyoni should pay costs on an indemnity basis. The respondents rely particularly on the case of Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Limited) (No 2) [2007] FCA 179 (Cirillo). The respondents argue that Mr Nyoni’s conduct in repleading the scandalous allegations and causes of action that had been previously struck out had put them to unnecessary expense and had delayed the progress of the matter to trial.

14    The position in relation to indemnity costs where litigants in person are concerned is a complicated one. The courts are generally cautious about making indemnity costs orders against litigants in person. The reason for this is that there is a very strong public policy consideration to ensure that courts are open to everybody. There will be occasions when persons, who are unable to afford legal representation, are left with no option but to seek to vindicate their claims by litigating without the benefit of legal assistance. Of course, a litigant in person will generally not bring the same skill and judgment to bear to the conduct of his or her case as would a skilled legal practitioner.

15    However, those considerations are to be balanced against two further considerations.

16    First, the Court must have regard to the effect of the conduct of a litigant in person in prolonging and increasing the costs of litigation on the other party to the litigation.

17    Secondly, whilst the legal process provides an absolute privilege to a party to make serious allegations of misconduct against the other party to litigation where those allegations are germane to the litigation, the courts are also concerned to protect parties from undue harassment and humiliation arising from the other party abusing that privilege by making scandalous claims.

18    Further, Mr Nyoni is in a different position to many other litigants in person because he had been in receipt of pro bono legal advice before he sought to reintroduce the objectionable claims and scandalous allegations in his re-amended application and substituted statement of claim. Mr Nyoni effectively took it upon himself to ignore the legal advice which had been given to him by pro bono counsel and to seek to reintroduce the objectionable claims and scandalous allegations which had been struck out. Therefore, the considerations referred to above about the difficulties which litigants in person face when trying to plead claims do not apply with the same force to Mr Nyoni in these circumstances.

19    Mr Nyoni seeks to defend a claim for indemnity costs on the basis that he, at least, has been successful in having the Court permit him to advance two of his claims which had not formed part of the statement of claim filed by pro bono counsel. However, in my view, that is not a sufficient answer to the respondents’ contentions. This is because the respondents were, in any event, required to bring this application to strike out the scandalous and objectionable parts of a pleading which had previously been struck out after a contested application. Secondly, I am not able to assess the ultimate strength of those claims. All that I am able to say, at this stage, is that Mr Nyoni has provided material which at least provides a foundation for making those claims.

20    In my view, Mr Nyoni’s conduct has subjected the respondents to undue harassment and caused them to incur additional expenditure in responding to his conduct in his re-amended application and substituted statement of claim. I am of the view that the circumstances of this case fall directly within the scope of the following observations of Finn J in Cirillo at [6]:

I am satisfied that this is a matter in which it was unreasonable for the applicant to have subjected the respondents to the expenditure of costs in responding to the application.

21    I will, therefore, order that Mr Nyoni pay costs of each of the respondents in relation to the strike out application on an indemnity basis. However, in light of the fact that Mr Nyoni did have some limited success, I will not order that the indemnity costs be paid forthwith.

Associate:

Dated:    22 October 2013