Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Huang v Attapallil & Ors [2017] NSWCA 181 Hearing dates: 17 July 2017 Decision date: 17 July 2017 Before: Meagher JA at [1] and [42]; White JA at [2] Decision: Order that the applicant's summons seeking leave to appeal filed on 10 February 2017 be dismissed with costs. Catchwords: COSTS – Indemnity basis – whether primary judge erred in awarding indemnity costs against applicant APPEAL AND NEW TRIAL – Appeal – General principles – leave to appeal required – whether House v The King type error identified – no issue of principle – leave to appeal refused Legislation Cited: Civil Procedure Act 2005 (NSW) Crimes Act 1900 (NSW) District Court Act 1973 (NSW) Jurisdiction of Courts (Cross-vesting) Act 1987(NSW) Legal Profession Act 1987 (NSW) Trans-Tasman Proceedings Act 2010 (Cth) Cases Cited: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 Gibson v Drumm [2016] NSWSC 570 House v The King (1936) 55 CLR 499; [1936] HCA 40 The Age Company Ltd & Ors v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 Category: Principal judgment Parties: Biru Huang (Applicant) Alexander Attapallil (1st Respondent) Joseph Assi (2nd Respondent) Charles Thornley (3rd Respondent) Representation: Counsel: In person (Applicant) D F Elliott (3rd Respondent) Solicitors: n/a (Applicant) Lander & Rogers (3rd Respondent) File Number(s): 2016/340280 Decision under appeal Court or tribunal: District Court Jurisdiction: New South Wales Citation: n/a Date of Decision: 11 November 2016 Before: Gibb DCJ File Number(s): 2016/223849 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. MEAGHER JA: I will ask White JA to give the first judgment. 2. WHITE JA: This is an application for leave to appeal against orders made in the District Court (Gibb DCJ) on 11 November 2016. The summons seeks leave to appeal from the whole of the decision below. It is clear from the draft notice of appeal and from the applicant's (Ms Huang's) submissions that she seeks to appeal only from orders as to "costs and quantum". The other orders made on 11 November 2016 were made with her consent or were not opposed. 3. Leave is required pursuant to s 127(2)(b) of the District Court Act 1973 (NSW), because the orders sought to be appealed from are as to costs only. 4. Generally it is appropriate only to grant leave to appeal in cases that involve issues of principle, questions of public importance, or where it is reasonably clear that an error has been made, going beyond what is merely arguable, that occasions an injustice (Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38]; The Age Company Ltd & Ors v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]). 5. The primary judge was called on to make a discretionary judgment in relation to costs. The principles in House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40 apply to an appeal from the exercise of that discretion. On an appeal it would be necessary for Ms Huang to show an error of legal principle, or that the primary judge took into account irrelevant matters, or mistook the facts or failed to take into account or give sufficient weight to material matters, or otherwise to show that the order was so plainly unreasonable or unjust that some such error must have occurred. 6. The proceedings in the District Court were commenced by Ms Huang by summons on 25 July 2016. The proceeding was satellite litigation relating to an earlier proceeding in the District Court (2016/96823) between Ms Huang and a Mr Bernard Drumm. Mr Drumm sought and obtained an order from the District Court for a stay of those proceedings under s 17 of the Trans-Tasman Proceedings Act 2010 (Cth). In those proceedings the third respondent, Mr Thornley, acted for Mr Drumm. Ms Huang says that she was represented by the third respondent, Mr Attapallil, and the second respondent, Mr Assi. 7. In her summons of 25 July 2016 she sought declarations to the effect that Mr Assi had breached s 25 of the Legal Profession Act 1987 (NSW) (sic) by doing work of a legal nature and obtained money by deception, contrary to s 178BA of the Crimes Act 1900 (NSW). She sought a declaration that Mr Attapallil was in breach of his obligations as a solicitor under the Legal Profession Act 1987 in allowing Mr Assi to perform legal services on his behalf and under his trading name Lexes Legal or Lexes Lawyers. She sought an order that "the matter" be referred to the Director of Public Prosecutions for investigation of both Mr Attapallil and Mr Assi and also Mr Thornley, and she sought an order that Mr Assi be restrained from providing services of a legal nature normally associated with the performance of solicitors' duties. She also sought an order that Mr Attapallil pay costs incurred by her in proceeding 2016/96823 and in another matter in the Local Court. That relief was claimed under s 99 of the Civil Procedure Act 2005 (NSW). 8. Mr Thornley filed a notice of motion on 12 August 2016 seeking the summary dismissal of the proceedings against him. 9. It appears that Ms Huang served an amended summons on 7 September 2016. 10. On 20 September 2016 Ms Huang filed in the District Court a document described as a second amended summons. That document was filed without leave. It sought to join a Dr O'Shea as fourth defendant. He had been briefed to appear for Ms Huang in earlier proceedings. She sought declarations that all four defendants were in breach of the Crimes Act for: "corruptly disrupting the applicant's proceedings in District Court matter number 2016/96823 and/or allowing and/or assisting a struck off lawyer in NSW to effectively conduct legal practice in NSW and corruptly disrupting the applicant's claim to avoid the consequence of a complaint to the NSW Law Society in relation to the first and fourth respondents." 1. The second amended summons also sought an order that the proceeding be transferred to the Supreme Court "under the applicable Cross-Vesting Laws of NSW" (sic). 2. The Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) does not confer jurisdiction on the District Court to transfer proceedings to the Supreme Court. 3. On 20 September 2016 Ms Huang also filed a notice of motion seeking leave to join Dr O'Shea as a party. 4. On 8 November 2016 Ms Huang filed a summons in the Supreme Court (2016/332818) that sought in substance the same relief as had been sought in the District Court. 5. On 8 November 2016 Ms Huang filed a notice of motion seeking an order that the summons in the District Court be stayed pending determination of the summons filed by her in the Supreme Court or, alternatively, an order that the proceedings be transferred to the Supreme Court, and that any costs be held in abeyance pending determination of the summons filed in the Supreme Court and that the parties bear their own costs. 6. At the hearing on 11 November 2016 Ms Huang acknowledged that the District Court did not have jurisdiction to grant, at least, much of the relief sought in the summons. 7. On 11 November 2016 Gibb DCJ dismissed the summons, the amended summons and the second amended summons, noting that the latter were filed without leave. She dismissed Mr Thornley's notice of motion of 12 August 2016 and she dismissed Ms Huang's notice of motion of 20 September 2016 seeking leave to add Dr O'Shea as a party. Her Honour ordered that Ms Huang pay the costs on an indemnity basis of each of the other parties jointly and severally for the whole of the proceedings, including motions filed and the appearance before the court that day. On the application of the third defendant, Mr Thornley, her Honour ordered that the costs payable by Ms Huang to him be fixed in the sum of $19,695 in accordance with s 98(4) of the Civil Procedure Act 2005. All costs were ordered to be payable forthwith. 8. In fixing the amount of the gross sum costs order the primary judge relied on an affidavit of Mr Thornley in which he deposed that the third respondent's costs on a solicitor and client basis were $15,539 and disbursements including counsel's fees were $8,818. Mr Thornley proposed a "broad brush discount" of solicitors' costs of 30 per cent. The primary judge adopted his figures and adopted that approach. 9. Save as to the application for costs orders sought under s 99 of the Civil Procedure Act in relation to proceedings in the District Court, the District Court did not have jurisdiction to make the orders sought by Ms Huang. By the time of the hearing she had commenced a separate proceeding in the Supreme Court. Even if, as the primary judge assumed, the District Court had power to transfer the proceeding to the Supreme Court, the primary judge was plainly correct in refusing to transfer the proceeding, which would have resulted in a duplication of proceedings in the Supreme Court. That order is not challenged. 10. It was within the discretion of the primary judge to make the order for indemnity costs that she did and to make a gross sum costs order. In relation to indemnity costs her Honour said: "Well what I'm going to do is order that the plaintiff pay the costs of all the parties on an indemnity basis because if we don't have jurisdiction, we shouldn't have been here and the whole thing was a waste of time. It is a total waste of time." 1. Even if Ms Huang could demonstrate that it was reasonably arguable that the primary judge's discretion miscarried, that would not be a sufficient basis for the grant of leave. Leave is required to appeal from a "judgment or order as to costs only" because in many cases it is contrary to the public interest and creates injustice to the parties for costs to be incurred in arguments about costs. One of the reasons for the requirement of leave in small claims and in claims involving costs only is that the costs involved may swamp the money sum involved in the dispute. In the present case Ms Huang could have no cause for complaint if her proceedings in the District Court had simply been dismissed with costs, that being the prima facie position under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The difference between an assessment of costs on the ordinary basis and on the indemnity basis might well be less than the costs involved in the application for leave to appeal and any appeal. Particularly is that so in the case of Mr Thornley where the gross sum costs order, although expressed to be made on the indemnity basis, contained a 30 per cent discount for solicitors' costs. 2. Ms Huang's primary submissions contained in her summary of argument filed with the Court appeared to be that the primary judge erred in failing to take into account that she made an inadvertent error in filing proceedings in the District Court; that the defendants were obliged to inform the Court that it did not have jurisdiction; and the primary judge failed to have regard to the importance and complexity of the subject matter in dispute. 3. Ms Huang has at all material times, so far as these proceedings are concerned, been self-represented. 4. On the hearing of the application the Court was informed that the applicant had sent a submission to the Court on 18 May 2017. That submission was provided to the Court today. The submission was 38 pages long (contrary to UCPR r 51.12(3)(a) which limits a summary of argument on an application for leave to appeal to ten pages), and was sent by email, but to the wrong email address. It was not received by the Court. In the result, and in any event, the applicant did not rely on that submission, but instead relied on a submission provided today. I have not had regard to the submission of 18 May 2017. 5. The applicant provided a new summary of argument today. It also exceeds the permitted length, but the Court has allowed her to rely on it. 6. In that submission, and in her oral submissions, Ms Huang essentially relies on three additional matters. 7. First, she submitted that the Lander & Rogers solicitors' rates, which formed the basis for the gross sum costs order, were deliberately inflated to obtain a greater recovery from her, when in truth there was no effective discount and the Court had been misled. 8. Secondly, she submitted that the District Court ought to have dismissed her summons at a directions hearing on 26 September 2016 before Leatherbarrow DCJ and the respondents, who were the defendants in that court, ought to have applied for its dismissal because she accepted that the Supreme Court would be the right court. Presumably this was said to be a material consideration not taken into account by the primary judge. 9. Thirdly, she submitted that Mr Thornley was not entitled to costs of the District Court proceedings because he had sworn a false affidavit in the earlier proceeding against Mr Drumm. 10. The first and third submissions raise a serious allegations. As to the first, Mr Thornley deposed in his affidavit of 10 November 2016 what were the hourly rates of charge for partners, senior associates and other lawyers. Ms Huang was represented at the hearing of 11 November 2016 by a Dr Gibson who acted as her McKenzie friend. Dr Gibson said that Mr Thornley was not required for cross-examination (T14). Dr Gibson submitted that the hourly rates of Lander & Rogers that were given to Young AJ in earlier proceedings between Dr Gibson and Mr Drumm (Gibson v Drumm [2016] NSWSC 570) were substantially lower than the rates to which Mr Thornley deposed and that Lander & Rogers had "jacked, incredibly the hourly rates in this document". There was no evidence to that effect. The primary judge evidently did not accept the submission. This involved no arguable error. 11. As to the second submission, the applicant submitted that on 17 August the judicial registrar: "suggested she get a lawyer and raised that there were difficulties with her Summons as filed. That difficulty appear[ed] to be that there was a jurisdictional issue arising that meant the court below did not, in fact, have the power to grant the declarations and orders sought in the writer/applicant[']s Summons." 1. It did not appear from the transcript that the judicial registrar referred to jurisdictional issues. It may be that the difficulty referred to is the difficulty that the applicant correctly understood, or at least came to understand, about the District Court's jurisdiction. 2. On 16 September 2016 Lander & Rogers, of which firm Mr Thornley is a partner, wrote to Ms Huang explaining that the District Court did not have jurisdiction to make the declarations sought as well as pointing out other defects in the summons. 3. As to the events of 26 September 2016, it is sufficient to say that the applicant did not ask the Court to dismiss the summons or give her leave to discontinue. She had earlier been advised by the Court to obtain legal advice. She informed Leatherbarrow DCJ that at a directions hearing on 12 September 2016 Norton DCJ had suggested to her that she look into the question of jurisdiction. She said "we did do some research and think the Supreme Court will be the right court …". The fourth respondent, Mr O'Shea, said: "The matter fails on jurisdiction. Our argument will be that the District Court has no power to actually transfer it." 1. The applicant submits: "10. By 26 September 2016, therefore, all of the parties were in agreement that [a] the District Court of NSW did not have the power to grant the orders and declarations set out in the writer/appellant's Summons, and [b] the District Court of NSW did not have the power to transfer the file to the Supreme Court of NSW. 11. At that point the court ought to have evoked its power to strike out the writer/applicant[']s Summons. Instead it granted leave to vary the notice of motion of the third respondent, allowing all of the respondents to join that motion. Pursuant to s.56 of the CPA 2005 and its dictates to case management, the Court ought to have simply struck out the Summons at the earliest opportunity once the lack of power to grant the declarations and orders sought was identified." 1. This over-states the position taken by the applicant. She expressed a tentative view about jurisdiction. She agreed to a hearing date being fixed for argument as to whether her summons should be struck out as against all parties. It would have been a denial of procedural fairness for the primary judge to have summarily disposed of the proceeding without prior notice. The primary judge did not arguably err in not accepting her contention that the continuation of the proceeding in the District Court until its ultimate dismissal on 11 November 2016 was the defendants' fault. 2. As to the submission concerning Mr Thornley's evidence in the proceedings against Mr Drumm, that forms part of her substantial complaint against the defendants which she accepted the District Court did not have jurisdiction to entertain. There can have been no error on the part of the primary judge, in dealing with the costs application, not to have assumed the correctness of the assertions or rather the complaints that Ms Huang makes in that regard. 3. Ms Huang emphasises that she has represented herself in these proceedings. The primary judge was not precluded from making an order for indemnity costs on the basis that the application should never have been brought in the District Court because Ms Huang did not have legal representation. That was a discretionary factor that could be taken into account, but it did not bespeak a House v The King error. 4. The complaint that the primary judge did not have regard to the importance or complexity of the subject matter in dispute appears to be a complaint invoking s 60 of the Civil Procedure Act 2005 that requires that the practice and procedure of the court be implemented with the object of resolving the issues in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute. Here the issues between the parties were not to be resolved in the proceedings Ms Huang brought in the District Court. Whatever was the importance or complexity of the subject matter of the proceedings, was not material to the exercise of the costs discretion on the ground upon which the primary judge proceeded, namely, that the proceedings should never have been commenced in the District Court so that the costs were wasted. It would have been necessary for the Court to go into the merits of the proceedings which were then before the Supreme Court to entertain the submission. There was no error in the primary judge's not doing so. 5. For these reasons, in my view, leave to appeal should be refused. 6. I would order that the applicant's summons seeking leave to appeal filed on 10 February 2017 be dismissed with costs. 7. MEAGHER JA: I agree with White JA. 8. Accordingly, the order of the Court is that the applicant's summons seeking leave to appeal be dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 July 2017