Mbuzi v Hall[2009] QCA 405

SUPREME COURT OF QUEENSLAND

1. McMURDO P:  The application for leave to appeal should be dismissed with costs on the standard basis. 

2. I agree generally with Fryberg J's reasons for doing so. In this case, however, I am not persuaded of the need for this Court, in the absence of submissions from the parties, to make observations about the appropriate possible directions as to the parties' conduct of this matter in the Trial Division.^[1]

3. McMeekin J has articulated sound reasons for ordering that the applicant pay the respondents' costs of this application on an indemnity basis. Such an order is well open in the circumstances. I prefer, however, to order costs on the standard basis in light of the fault of the respondents, as well as the applicant, in not bringing the Court's early attention to the fact that the Small Claims Tribunal had ordered the removal of the third to sixth respondents as parties in the applicant's proceedings before the Tribunal.

4. I agree with the orders proposed by Fryberg J.

5. FRYBERG J:  Josiyas Zifanana Mbuzi, an unrepresented but nonetheless experienced^[2] litigant, filed an application for judicial review in the Trial Division of this Court on 12 June this year.  The first respondent was the referee of the Small Claims Tribunal who had refused Mr Mbuzi's claim in that Tribunal the previous day.  She subsequently abided the order of the Court and played no part in the proceedings.  The other respondents were Australian Associated Motor Insurers Ltd (“AAMI”) and four of its directors.  They promptly applied for summary dismissal of the application under s 48 of the Judicial Review Act 1991 (“JRA”).  On 9 July White J ordered that the application for judicial review against the directors be dismissed and that Mr Mbuzi pay most of their costs.  He now seeks leave to appeal against that order.^[3]

The proceedings at first instance

6. It is unfortunately necessary to describe a number of the procedural aspects of this case. The application for review began:

“Application to review the decision, without reasonableness, of Magistrate Elizabeth Hall not to disqualify herself from proceedings on grounds of apprehended bias and conflict of interest; also her refusal to allow me an adjournment to seek legal advice on documents given to me in the course of proceedings.”

It also sought directions for the future conduct of the matter.

7. Mr Mbuzi filed an affidavit of support with the application. In it he swore that on 11 June he had appeared before Ms Hall in relation to a Small Claims Tribunal claim for $3,276.00 to which the other respondents were parties. He swore that in the course of hearing his claim, “Ms Hall said she knew two of the respondents, one as a former school-mate whom she said was ‘a prominent lawyer’ and the other through her involvement with hospital boards”. As a result he had applied for her to disqualify herself, but she refused to do so.

8. The claim, which was exhibited to the affidavit, named AAMI as respondent. It then stated, “The following are sued in their representative capacity for the Respondent” and named the four directors. The particulars of claim disclosed that it was made pursuant to a certain insurance policy which allegedly “covered for loss as well as accidental damage”. It was alleged that AAMI had failed to pay a claim under the policy for accidental damage.

9. Mr Mbuzi had also filed an affidavit in the Tribunal and a copy of this was exhibited to his affidavit in support of his application for review. It exhibited a number of documents but they did not include the insurance policy or policy terms.

10. In his affidavit in support Mr Mbuzi deposed:

“6.Later she asked if I had been given any of the materials the respondents were relying upon in defence of the claim, and I replied that I had not been served with any material by the respondents despite the fact that had themselves been served with all my materials [sic].

7. As a result of 6 above, Ms Hall requested that I be given the materials in question, which was done.  I then applied for an adjournment to enable me to properly read the materials with the assistance of a legally qualified person, but Ms Hall refused my request saying words to the effect, ‘I am not going to adjourn the matter, this is just a small claims issue’.  This was despite the fact that the respondents had the benefit of considering my materials for about two months.

8. Ms Hall proceeded to hear the matter and disallowed my entire claim despite the fact that there was no proper and independent, or credible evidence to disapprove my claim.”

11. The respondents filed their application for summary dismissal of the judicial review proceedings on 23 June and in support of that application filed an affidavit by Ms Sinead Houston, a supervisor employed by AAMI. She exhibited a written submission in response to the claim, which she had filed in the Tribunal. She did not allege that a copy of that submission had been given to Mr Mbuzi before the Tribunal hearing. According to the submission Mr Mbuzi’s loss was not covered by the terms of the policy, which were quoted.

12. Ms Houston also exhibited the Tribunal's order. It was engrossed on a Tribunal form headed with Mr Mbuzi’s name as claimant and the names of AAMI and the four directors as respondent. It stated:

“Take notice that this claim was heard before the Small Claims Tribunal at BRISBANE on the 11th of June 2009, and the following order was made:

It is ordered that the Claim is Refused.”

13. The hearing below was conducted on the assumption that Mr Mbuzi’s claim that he was given a large quantity of material for the first time at the hearing of his claim before the Tribunal was correct. It was common ground that that material included what AAMI alleged were the terms of the policy (or possibly two policies) under which the claim was made. It was not disputed that he had sought and been refused an adjournment to consider the material, nor that Ms Hall had refused to disqualify herself.

14. Both sides handed up outlines of argument.^[4]  AAMI and the directors submitted that Mr Mbuzi’s application for review should be summarily dismissed because, regardless of any breach of the rules of natural justice, there was no prospect of a different result if the matter were remitted to the Tribunal.  Both claims were hopeless and doomed to fail.  The directors were not parties to the contract of insurance and no cause of action lay against them.  The claim against AAMI was not covered by the policy terms.

15. Mr Mbuzi's written submissions related to whether there had been a breach of the rules of natural justice. He criticised the failure to grant an adjournment to get legal advice about the documents provided during the proceedings and submitted that AAMI had not disputed that “prior to and at the time of entering the insurance contract I was never issued with any product disclosure statement”. He submitted orally that the directors were necessary parties to the application, having been parties in the Tribunal proceedings. He said:

“During the judicial review [sic; semble tribunal] hearing on the 11th of June, the respondents through their agent made exactly that same argument, which is, they say, that they wanted the other office holders removed.  They didn't succeed.  I presented my arguments based on the authorities in terms of the past cases where indeed office holders were included…”.

There was no evidence before White J that any such application had been made in the Tribunal, although, as it will appear, it was available.

16. At the outset of the hearing her Honour revealed that two of the directors were well known to her personally. She asked Mr Mbuzi if that was an issue for him and he responded, "No, your Honour, it's not an issue for me."

17. White J rejected AAMI's application and her decision has not been appealed. Consequently the matter must proceed to trial at least against AAMI. She accepted the submissions on behalf of the directors and ordered that the review proceedings against them be dismissed with costs.

The application in the Court of Appeal Division

18. On 6 August 2009 Mr Mbuzi filed an application for leave to appeal against that order. In that application he notified his intention to rely upon his own affidavit filed and sworn that day. In the affidavit he again made the point that the directors were sued in their representative capacities, not their personal capacities. In a draft notice of appeal exhibited to the affidavit he listed four grounds: lack of jurisdiction, apprehended bias, conflict of interest and otherwise contrary to law.

19. The application for leave to appeal was heard on 5 November. Mr Mbuzi again appeared unrepresented and AAMI and the directors appeared by counsel. Since filing his application Mr Mbuzi had (on 2 October) filed a further affidavit, a copy of which was included in the papers provided to us. Mr Mbuzi relied on that affidavit in addition to the one originally filed. It contained a considerable amount of additional evidence which ought to have been before White J. I will describe it in more detail below.

The submissions

20. There was also an abundance of outlines of argument. Mr Mbuzi had filed his initial outline on 27 August; AAMI and the directors had filed theirs on 23 September; Mr Mbuzi had filed a reply on 2 October, apparently at the same time as he filed his second affidavit; and a week later a response was filed on behalf of AAMI and the directors.  All of these were provided to the Court.

21. Mr Mbuzi submitted there were three issues:

“Issues:-Is there jurisdiction to reverse decision of Small Claims Tribunal without establishment of the tribunal’s breach of natural justice and lack of jurisdiction?

-Is it logical for an appellate court to exclude parties involved in original proceedings?

-Is it acceptable for a judge to decide a dispute involving parties with whom she has a personal relationship?”

He made no submissions about the first issue.  About the second he submitted:

“8.In the case, Mbuzi v. Guthridge & Ors (2009) whose final determination was by Justice Dutney, Justice Byrne had stated during an interlocutory hearing that there was ‘no logic’ in an argument for asking an appellate court to remove parties involved in proceedings in the court below.  Such an argument, he added, could only be valid during proceedings in the court below.  In any case, respondents two to six had argued for their exclusion during Small Claims Tribunal proceedings and failed as per paragraphs eight to ten of exhibit 2 to the affidavit of J. Mbuzi sworn 6 August 2009.”

As to the third he submitted that White J should have disqualified herself from sitting because of apprehended bias and conflict of interest.

22. AAMI and the directors submitted that the directors were not necessary parties to review proceedings in relation to the refusal of the claim against AAMI; and that insofar as the proceedings sought to challenge the refusal of the small claim against them, the challenge was futile. On the recusal point they submitted that her Honour had revealed before the commencement of argument that she knew two of the directors well. Mr Mbuzi did not ask her to withdraw but stated that it was not an issue for him, thereby waiving his right to object on the basis of apprehended bias.

23. Mr Mbuzi’s reply comprised mainly an offensive and rambling personal attack on the directors, White J and counsel for his opponents. It included the following (emphasis added):

“4.... She made that decision [to dismiss the review proceedings against the directors] despite the fact that the tribunal had already heard arguments from me and the respondents and refused to exclude them.  That decision refusing exclusion of directors in their representative capacity was made in the first half of the day on 11 June 2009 by referee Mr Dennis Beutel before he sent the matter to Ms Hall to determine the claim.

...

5. With the directors having failed in their bid to be excluded at the Small Claims Tribunal level, there is no jurisdiction to challenge that decision by any court except where evidence is produced that the decision of the tribunal to refuse their exclusion was done in breach of the principles of natural justice or that the tribunal lacked jurisdiction.  That legal limitation stands unchanged.

6. As per SC case 12755/08 (Mbuzi v. Guttridge; AND Commissioner of Police; AND Terrence Towell [Allianz Insurance Company Director]) there is no logic in an argument to exclude parties already deemed necessary at the tribunal’s level.”

The passages which I have emphasised reiterated the point made by Mr Mbuzi to White J.^[5]

24. That submission was founded on part of Mr Mbuzi’s affidavit filed on the same day as the reply:

“2.… on 11 June I appeared before Small Claims tribunal Referee Dennis Beutel in relation to my claim against the respondents and that respondents three to six applied through their representative to be excluded from the proceedings.  I objected to that application.

3. Mr Beutel adjourned the hearing to allow me and the respondents’ representative to gather evidence and authority in support of our respective positions; with the respondents on why they needed to be excluded, and in my case for the objection.  Respondents three to six were especially and specifically notified to attend under s.25 of the SCT Act of 1973 after they failed to attend a mediation session that had been arranged on 14 May 2009.

4. When we later resumed in the afternoon I had Supreme Court case number 12755/08 as my authority, while Ms Sinead Houston for the respondents stated that she had done a search at her office and was unable to find any authority to support exclusion of respondents three to six.  Ms Sinead also stated that she had equally failed to find any authority to support her other position that the claim could not be made in the small claims tribunal but the insurance industry ombudsman.

5. As a result of point 4 above, Mr Beutel ruled that the respondents were not going to be changed.  Further, that the claim was going to be determined by the tribunal.  Ms Sinead later conceded and said words to the effect that ‘it is up to the tribunal’.

6. Later in the afternoon on the same day, the claim came before referee Elizabeth Hall who initially sought a background to the matter.  The background given to her included that Ms Sinead had initially objected to the claim being heard by the tribunal and her other objection was inclusion of respondents three to six.

7. Ms Hall said she was going to proceed with the matter as it stood on record and in relation to the respondents, she said words to the effect that ‘in the end what matters is the total amount of money claimed’.”

25. The balance of the affidavit provided further details regarding the course of proceedings in the Tribunal and disclosed another ground for the claim of apprehended bias against White J: she is the Deputy Chancellor of the University of Queensland, the Chancellor of which, Mr J D Story, is also a director of AAMI.

26. Given that both parties asked the Court to deal with any appeal concurrently with the application, the affidavit was potentially problematic. In their response, AAMI and the directors submitted that the affidavit was irrelevant. It was not before White J and went only to the course of proceedings in the Tribunal which, it was submitted, were immaterial to the decision.

27. Orally, Mr Mbuzi submitted that her Honour preferred the barrister representing her mates and constantly shouted him (Mr Mbuzi) down. He related these submissions to his case of apprehended bias on the part of White J. He submitted that he had made only one claim, not multiple claims, in the Tribunal and that the directors were respondents to it in their representative capacity. He submitted that the judicial review application simply included those who were respondents in the Tribunal and that as such they were proper respondents. Apparently believing (wrongly) that White J's order affected the parties in the Tribunal proceedings he referred to s 19 of the Small Claims Tribunals Act 1973 (“SCTA”) and submitted that her Honour had no jurisdiction to alter the decision of the Tribunal refusing to remove them as parties.  He also made submissions regarding costs at first instance.  He attempted to meet the respondents’ waiver point by submitting that White J did not disclose her relationship with the Chancellor of the University of Queensland.

28. When counsel for AAMI and the directors addressed, the issue of the utility of the order made below was raised from the bench. That issue flowed directly from Mr Mbuzi's submission that, being parties in the Tribunal, the directors were proper parties to the judicial review application. On the face of things they had an interest in maintaining the refusal of the claim against them. Removing them from the review proceedings would not remove them from the Tribunal proceedings and arguably, if the review proceedings succeeded against AAMI, the only option for the judge hearing the matter would be to quash the order made by the Tribunal, thus reinstating the proceedings there. Potentially this raised complex issues about the nature of Tribunal proceedings and the severability of the order. The parties were given leave to file supplementary written submissions.

The supplementary submissions

29. AAMI and the directors submitted that the Tribunal's order refusing the claim was severable and that the court hearing the review application against AAMI could, if so minded, quash only so much of it as refused the claim against AAMI. They made submissions regarding alternative forms of relief and regarding the utility of an alleged issue estoppel which is unnecessary to set out in detail. Finally they sought leave to file and read an affidavit exhibiting the transcript of proceedings in the Tribunal and deposing to when their solicitor received it; and raised a new argument based on that transcript.

30. Mr Mbuzi objected strenuously in his written submissions to such leave being granted. With some justification he pointed out that the application was inconsistent with the respondents’ own submission that the course of proceedings before the Tribunal was immaterial to the decision of White J. He implied that they should have realised the need for the transcript months ago:

“The notion that five respondents, two company representatives, two solicitors with carriage of the matter and a barrister could be saying that they have only now realised what they should have argued over four months ago, and after closure of my submissions in the Court of Appeal, is laughable.”

31. The transcript of proceedings in the Tribunal records that after stating the appearances, the referee had the following dialogue with the parties:

“BENCH:  …  This matter is recorded at the request or insistence of Mr Mbuzi who has claimed demonstrated bias against him by another referee and, as I understand his claim, he wishes this matter to be recorded for his use later perhaps.  Is that so, Mr Mbuzi?  You’d like ---

CLAIMANT: If need be, yes, your Honour.

BENCH: Yes, if need be.  For the record, Mr Mbuzi appears on behalf – on his own behalf, and for AAMI Ms Sinead Houston -----

MS HOUSTON: Yes.

BENCH: ----- appears as authorised representatives of – of AAMI.  Ms Houston has made a submission to the Court that Clifford Rhode Chutter, Cheryl Hurst, Martin Douglas, Ebelaine Crewalt and Christopher Skilton should be ordered by this Court to be excluded from attending today and to be – to be – also excuse – deleted as -----

MS HOUSTON: Yes.

BENCH: ----- as respondents on the basis that they have no relationship with the applicant.  They are not part of AAMI’s decision-making process for the claim and have no direct liability.  The submission is that the Tribunal reduce the list of respondents to AAMI only because, as I said, there is no direct relationship between the listed respondents.  They are company officeholders, but they have nothing to do with AAMI’s decision-making process for the applicant’s claim.  It is said that the contract of insurance is between AAMI and the applicant, and it corrects no – creates no direct liability, contractual or otherwise, between the applicant Mr Mbuzi and the individual officeholders.

It is further said that the dispute is solely between AAMI and the applicant, and not the listed individuals.  Would you like to say anything about that, Mr Mbuzi?

CLAIMANT: Your Honour, I would not like to waste the Court’s time in terms of who attends, who doesn’t.  As a way of background, the Act requires me, if the trader – the trader is described as if himself or herself as persons provide goods and services, and if the trader is a company, under law I’m required to go and do search of that company to identify the names and addresses of people of that company, and that’s what I’ve done.  The people that I’ve included are named on that list as associated with that company.  The submissions given to me confirm that, that they are officeholders.  Now, if the law says it relates to slap – to somebody who holds himself or her – herself, which to me – and that is directly taken from the Act – relates to individuals, those individuals have to be identified.  I identified them.  However, I’m not one to dwell on this, because what I want is a claim against the company and I included the people because those are the people that who are identified here.

BENCH: All right then.  All right.  My view is, and my ruling is, that those individuals should be removed as respondents, the sole respondent be the Australian Associated Motor Insurance, or AAMI.  That is my ruling.  So your claim then is against AAMI, and that’s – Ms Houston is here – as the authorised representative of AAMI.”

32. AAMI and the directors submitted that the transcript was now relevant to assist in construing the order made by the Tribunal. By implication they submitted that it had not been relevant until the Court raised the issue the subject of the supplementary submissions. They submitted that if the Tribunal's order of refusal were quashed it would not impact upon the directors because they had been removed from the proceedings at the outset, and the order was not made against them. It operated only to refuse the claim against AAMI.

The admission of further evidence

33. The law relating to the admission of evidence on appeal when that evidence was available to the parties at first instance is well known.^[6]  It is unnecessary to elaborate on it in this case.  In my judgment evidence regarding the course of proceedings in the Tribunal was always relevant and should have been placed before the court at first instance.  Despite this, I would in the circumstances of the present case overrule the objection by AAMI and the directors to Mr Mbuzi’s affidavit filed on 2 October and grant him leave to read it. The first 13 paragraphs of the affidavit relate to the course of proceedings.  There are another three paragraphs dealing with the relationship between her Honour and Mr Story.^[7]  That can be admitted as genuinely fresh evidence; hardly surprisingly, it was not disclosed to Mr Mbuzi at the time of the hearing. 

34. I would also overrule Mr Mbuzi's objections to the affidavit of AAMI's solicitor and grant the respondents leave to read it. I do not accept their submissions as the basis for doing this. I find those submissions unconvincing: the transcript is not an aid to interpretation of the order which is simple and unambiguous. What it demonstrates is that at the time the decisions of which Mr Mbuzi complains were made and thereafter when the claim was refused, the directors had ceased to be parties to the proceedings in the Tribunal. They were unaffected by those decisions and the order. It would be ridiculous for this Court to proceed on a false assumption to the contrary. That remains true even though AAMI and the directors failed to demonstrate that they could not by the exercise of reasonable diligence have got the transcript by the time of the hearing before White J.

The merits of the proposed appeal

35. The first proposed ground of appeal is lack of jurisdiction. In Mr Mbuzi's submissions it was related to his claim that he had succeeded in the Tribunal in resisting an application for the directors to be excluded from the claim. He submitted that his success deprived White J of jurisdiction to change that ruling by reason of s 19 of the SCTA.  There are numerous deficiencies in the submission.  Two may be mentioned.  First, the transcript makes it plain that far from succeeding on this question in the Tribunal, Mr Mbuzi failed on it.  The directors were removed from the proceedings by order of the referee.^[8]  Second, her Honour did not purport to exercise jurisdiction in relation to parties in the Tribunal.  Her order related only to parties in the review proceedings.

36. There is not a shred of substance to the second and third proposed grounds. As to the second, Mr Mbuzi plainly waived any right which he might have had to require her Honour to recuse. The belated suggestion that her Honour's position as Deputy Chancellor of the University of Queensland could give rise to an apprehension of bias is ridiculous. As to the third, nothing in the evidence supports the existence of a conflict or, indeed, of any interest at all on her Honour's part.

37. The fourth ground, otherwise contrary to law was unparticularised. Mr Mbuzi’s submissions did not cast any light on it.

38. White J dismissed the review proceedings against the directors on the ground that, even if there had been a breach of the rules of natural justice, the directors were bound to succeed at any rehearing because there was simply no cause of action against them. It is now apparent that the directors should not have been respondents in the review proceedings because they had no interest in those proceedings. They were not parties to the proceedings in the Tribunal when it made the decisions of which Mr Mbuzi complains and were unaffected by them.^[9]  They were not proper parties to the review proceedings because they had no interest in upholding the subject matter of those proceedings.  Whether they should have been removed as parties to those proceedings or had the proceedings dismissed as against them is of no consequence.

39. It follows that a grant of leave to appeal to the Court of Appeal Division would be futile, since the appeal would fail. The application for leave should therefore be dismissed.

The further proceedings against AAMI

40. Although White J refused AAMI's application for summary dismissal of the proceedings against it, she did not give directions for the future conduct of the matter.^[10]  The question was not addressed by the parties to the application for leave to appeal and it is not appropriate to give directions now.  It is appropriate to call attention to the need for an early directions hearing in the Trial Division.  Two matters need to be addressed if the proceedings are not to run off the rails.

41. The first is the identification of all of the conduct on the part of the referee which is to be challenged in the proceedings. The ambit of the application is described above.^[11]  As presently framed it does not challenge the referee’s order refusing the claim against AAMI.  It is not immediately apparent how this Court could give any meaningful relief in relation to orders refusing to recuse and refusing to adjourn without at least quashing the order refusing the claim.  Consideration may need to be given to whether the power to amend is sufficient to enable the enlargement of the ambit of the application for that purpose.

42. Second, Mr Mbuzi's application does not identify the remedies which he seeks. The application purports to be in form 56 and invokes r 567 of the Uniform Civil Procedure Rules.  That covers applications under s 43 of the JRA.  The only orders available to Mr Mbuzi under that section would be one of the prerogative orders described in s 41 or an injunction or declaration.  It may be that the form requires the identification of any specific prerogative order sought.  Selection of the correct form of relief may also be a matter of some importance having regard to ss 19 and 29 of the SCTA.

43. Both matters will have to be considered in the light of the abolition of the Small Claims Tribunal and its replacement by the Queensland Civil and Administrative Tribunal.

44. Finally, it will no doubt be necessary to fix times for filing and serving affidavits. In doing so it may be necessary to take into account the time needed to obtain copies of the recording of proceedings in the Small Claims Tribunal. In support of his allegations of apprehended bias and conflict of interest against Ms Hall, Mr Mbuzi swore that she had made certain statements about her association with two of the directors.^[12]  His evidence is not supported by the transcript, but it appears from the transcript that some of what was said may not have been recorded.^[13]  Whether or not the recording is available, direct evidence of the nature of any association may be desirable.

Costs

45. The ordinary outcome would be that the costs of the application for leave to appeal follow the event. However the circumstances of this application are not ordinary. Until a very late stage in proceedings it seemed that the directors, as parties in the Tribunal, might well be proper respondents to the review proceedings. There were live issues as to the utility of the order made in the Trial Division should it transpire that the order refusing the claim in the Tribunal could not be severed as to parties. These difficulties arose from the parties’ failure to place before the court at first instance the fact that the directors had already been removed from the proceedings in the Tribunal.

46. That fact was known to both sides. Ms Houston had been present at the Tribunal; indeed it was on her application that the order for removal was made. Her affidavit in the proceedings made no mention of these matters. When Mr Mbuzi told White J that the directors had not succeeded in an attempt through her to have them removed, his statement was allowed to stand uncontradicted.  That statement was a most misleading half truth.  The facts on which it was based were subsequently set out in Mr Mbuzi's affidavit filed on 2 October.^[14]  Neither in his affidavit nor in his written or oral submissions did Mr Mbuzi reveal the removal order which had been made by Ms Hall.^[15]  I am prepared to give him the benefit of the doubt and assume that he was not attempting to mislead this Court deliberately; but he was certainly reckless with his words.

47. Both sides were at fault. The ordinary outcome is not displaced. Costs should follow the event. In the circumstances, the directors’ application for costs on the indemnity basis should be rejected.

Order

48. The order of the Court should be, application dismissed with costs to be assessed.

49. McMEEKIN J:  I have read the reasons of Fryberg J in draft. I am grateful to his Honour for his exposition of the relevant facts, the submissions of the parties, and his analysis of their rights.  I agree with the proposed disposition of the application for leave to appeal for the reasons given by Fryberg J but have a different view as to the appropriate costs order.

50. In my view Mr Mbuzi should be ordered to pay costs on the indemnity basis.

51. Here the application brought by Mr Mbuzi is a deliberate attempt to continue an unjust cause and a cause that I am confident that he has always known to be unjust.

52. The respondents are the directors of a corporation. Mr Mbuzi’s claims arise out of a contract of insurance between him and that corporation. His claim to be paid in respect of a claim under the policy has nothing to do with the directors in their personal capacity. This is trite law and well known throughout the community.

53. As the transcript shows the referee peremptorily dismissed the claims against the directors before embarking on a hearing of the merits of the claim against AAMI. The only reason that the directors are before the Supreme Court is because Mr Mbuzi again named them in the proceedings that he brought for judicial review. Again there was a summary dismissal of the proceedings as against the directors when the matter came on for hearing before White J.

54. Even at its best Mr Mbuzi’s argument is a deeply unattractive one. It is effectively this: because he chose to name the respondents in this review proceeding, even though they are strangers to the subject of the litigation, and even though they were rightly removed without any possibility of any denial of natural justice being remotely relevant, this court cannot, he argues, prevent him maintaining his unmeritorious suit against them. That is so because, he says, it is the record of the whole proceedings before the inferior court that is sought to be brought up and quashed and sent back for a re-hearing, not just that part that is attainted by the alleged denial of natural justice. The respondents have an interest in maintaining their position of success before the lower court and hence cannot be removed.

55. As Fryberg J has pointed out, once it is plain that there were two orders not one, this argument is irrelevant. While it is not necessary to decide it, given that fact, I would need a deal of persuading to come to the view that this Court does not have sufficient power over its own processes to protect strangers to a suit from being put to needless expense and the vexation of being exposed to an unjust cause. Questions of severability and the terms of the legislation governing the court’s jurisdiction would need to be considered.^[16] 

56. However the relevant point is that Mr Mbuzi knew that the respondents had been summarily dismissed from the proceedings by the referee. He has known throughout that there were two orders not one. To advance the argument at all he had to contend that there was but one order and to do that he swore an affidavit that asserted a half-truth and which, as a result, was quite misleading.^[17]

57. It has long been recognised that indemnity costs orders may be appropriate where proceedings are commenced or continued for some ulterior motive, or in wilful disregard of known facts, or clearly established law: Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 per Sheppard J.  In Rosniac v Government Insurance Office (1997) 41 NSWLR 608 the New South Wales Court of Appeal indicated that the court required some evidence of “unreasonable conduct”.

58. Chesterman J (as he then was) in Todrell Pty Ltd v Finch & Ors [2007] QSC 386 at [4] expressed his view of these authorities:

“The defendants in action 1308 of 2007... seek their costs of the trial which lasted four days on the indemnity basis.  They do so on reliance upon the authorities which establish that, other things being equal, commencing proceedings in wilful disregard of clear law will result in an order for costs on the indemnity basis.  The authorities include Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 and Di Carlo v Dubois [2002] QCA 225.  Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616 decided that it was not necessary for a party seeking indemnity costs to establish ethical or moral delinquency by its opponent.  It was enough that the opponent conducted itself unreasonably in some way.  In Emanuel Management Pty Ltd (In liquidation) v Fosters Brewing Group Ltd & Ors [2003] QSC 299 I pointed out that that test is inexact.  The test which I myself adopted in that case, and others, was whether there was something irresponsible about the conduct of the losing party which exposed its opponent to costs but should, in fairness, be ordered on the indemnity basis.  It is, of course, irresponsible to commence proceedings which cannot succeed because of a known legal impediment.”

59. Here Mr Mbuzi’s conduct is plainly irresponsible in the sense intended by Chesterman J and unreasonable. He commenced proceedings in wilful disregard of known law and he failed to put the true facts before this Court or before White J. I cannot conceive of any legitimate reason for bringing the suit against the directors. The effect of doing so would cause the directors inconvenience, cost and perhaps embarrassment at being named in a suit. His motivation in doing so cannot be seen to be anything but ulterior to his possibly legitimate claim against the corporation.

60. The persistence in this application, and in this way, despite what I perceive to be the common knowledge in our community of the true legal position, and despite being told of that true legal position by judicial officers on two occasions, marks this application out as one fully deserving of an order that costs be paid on the indemnity basis.

61. I do not see that the respondent’s failure to put the transcript of proceedings before this Court at an earlier time impacts significantly on this reasoning. Presumably the respondents assumed that the fact that they were complete strangers to the suit would be enough to persuade this Court to the justice of their case. It has not been shown that they were wrong in that view.

62. True it is, as Fryberg J points out, the respondents failed to correct Mr Mbuzi’s misleading half truth until supplementary material was filed in this court, presumably when counsel discovered the true situation. True it is that the advocate for the respondents below (a supervisor in the employ of AAMI) must have known of what transpired before the Referee and presumably appreciated that Mr Mbuzi’s statements had that misleading character. And the same may be said of Mr Mbuzi. Perhaps the true significance of Mr Mbuzi’s assertion was not apparent to that supervisor particularly in the context of what may have seemed an unassailable point in her employer’s favour.

63. I fully accept the importance of the parties’ ensuring that an accurate record of the proceedings below is placed before the higher courts on review applications. Both sides had the responsibility of doing so and, as Fryberg J points out, both sides are at fault in failing to do so, but in my view there is a difference.

64. One side put up the half truth and so misled. The failure to correct another’s sides misleading actions in circumstances where the need may not have been perceived as particularly relevant to the issues is in my view a lesser level of fault. I see the respondents’ neglect in this regard as no more than neutral on this question of costs, if even that, and greatly outweighed by Mr Mbuzi’s quite irresponsible pursuit of them.

65. I would refuse leave to appeal and order that the applicant pay the respondents’ costs on the indemnity basis.