Collins v Marinovich[2023] QSC 175

SUPREME COURT OF QUEENSLAND

1. [1]
   The applicant applies under rule 742 of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) for a review of a decision made by a costs assessor, Mr Graham Robinson, in a costs assessor’s certificate of assessment issued by him on 4 October 2022.
2. [2]
   Mr Robinson was appointed on 3 May 2022 pursuant to an order made by a Supreme Court Registrar (with the consent of the parties) to assess:^[1]

“[t]he costs of the Applicant of paragraph one of the Originating Application of 12 June 2019 pursuant to the Order of 27 July 2021...”

3. [3]
   The order underpinning the decision is the costs order dated 27 July 2021 made by Ryan J following the trial and her subsequent determination of the issues in the proceeding.^[2] The substantive issue in the proceeding being whether the applicant’s debt of some $1 million secured by a mortgage to her deceased aunt was forgiven on her aunt’s death in October 2016. The first respondents are the deceased aunt’s executors and the second respondent (who is also an executor and a named first respondent) is the beneficiary of the debt under the deceased’s will – and the person to whom the first respondents transferred the mortgage. The relief sought in the originating application filed 12 June 2019 (and in the subsequent pleadings that were directed to be filed) was a declaration that the debt the subject of the mortgage was forgiven. Ancillary orders to give effect to such a declaration were also sought.^[3] 
4. [4]
   The applicant successfully obtained the declaration and consequential orders. She was also successful in obtaining the following costs orders against the respondents:^[4]

“The Second Respondent is to pay the Applicant’s costs of the proceeding.  The First Respondent is to pay the Applicant’s costs of paragraph one of the Applicant’s originating application filed 12 June 2019.”

5. [5]
   It is not in issue that the relief sought in paragraph one of the originating application filed 12 June 2019 was the main issue in the proceeding,^[5] although there were other  issues raised in a counterclaim (that were later abandoned by the first respondents) and from the machinery provisions of the order.^[6]       
6. [6]
   In undertaking his decision, Mr Robinson determined that the fairest way to construe the costs order was to do three things:

   1. First: To assess the applicant’s costs of paragraph one of the originating application attributable to the first respondents only;
   2. Secondly: To assess the applicant’s costs of paragraph one of the originating application attributable to both respondents and then to apportion those costs 50 per cent to each respondent; and
   3. Thirdly: To effectively direct that the applicant deliver a costs statement for its costs of the proceeding with the applicant’s costs of paragraph one of the originating application (he had assessed as payable by the first respondent) carved out.
7. [7]
   The issue for my determination is whether Mr Robinson’s decision is manifestly wrong.
8. [8]
   With respect and for the reasons that follow, I find that it is.

Relevant Legal Principles

9. [9]
   The starting point is UCPR r 742, which relevantly states as follows:

“742  Review by court

5. On a review, unless the court directs otherwise—

1. the court may not receive further evidence; and

2. set aside or vary the decision of the costs assessor;

3. set aside or vary an order made under rule 740 (1);

10. [10]
    A review under this section is analogous to an appeal against an exercise of the costs assessor’s discretion. When a court is called to review a taxing officer’s discretion, the question is not whether it would have exercised the discretion in the same way but whether, in some way, the exercise of the discretion miscarried.^[7] 
11. [11]
    In  Schweppes Ltd v Archer (1934) 34 SR (NSW) 178, Jordan CJ made the following observations about the approach to be taken in such a case:^[8]

“In appeals as to costs, the principles to be applied are these.  The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed.  Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere.  It has undoubted jurisdiction to review the Taxing Officer’s decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances…but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case.”^[9].

[Emphasis added]

12. [12]
    The circumstances in which the Court will interfere with a costs assessor’s decision  are therefore confined to whether his discretion has not been exercised at all or has been exercised in a way that is manifestly wrong^[10] or has involved an obvious mistake.^[11] The expression “manifestly wrong” is not one “amenable to precise definition” but has been said to include “where a particular decision was not open to the costs assessor on the facts before them, or was not within the costs assessor’s lawful discretion.”^[12]
13. [13]
    It is useful at this point to briefly outline the relevant chronology leading up to Mr Robinson’s appointment as costs assessor and his subsequent decision. 

Mr Robinson’s Decision 

14. [14]
    On 10 November 2021, the applicant delivered a costs statement naming the first and second respondents as the parties liable for some 1,406 itemised costs (totalling $143,824.53), as the applicant’s costs of paragraph one of the originating application (pursuant to the costs order of 27 July 2021). The costs statement contained a notation that the applicant’s costs of the proceedings against the second respondent other than paragraph one is the subject of a separate costs statement.^[13] That costs statement has yet to be delivered.
15. [15]
    Both respondents delivered separate objections to the costs statement, the effect of which can be summarised as follows:

    1. The first respondents contended that there should be an apportionment of costs between the respondents because of the “limited role” they had in the  proceeding; and
    2. The second respondent adopted most of the first respondent’s objections but   disagreed with the notion of any apportionment of costs contending that to the extent costs were payable they were “joint costs” pursuant to the costs order.
16. [16]
    The parties were unable to resolve their dispute about costs and so, as set out in paragraph two above, on 3 May 2022 they consented to orders for an assessment of paragraph one of the originating application of 12 June 2019 (pursuant to the costs order) by Mr Robinson.
17. [17]
    On 13 June 2022, Mr Robinson wrote to the parties seeking clarification about the costs statement. In particular, he was concerned that there was no internal demarcation to show what portion of the costs of paragraph one of the originating application related solely to the second respondent and he requested that the applicant clarify whether all 1,406 items in the costs statement applied to both the first and second respondents.
18. [18]
    The applicant responded stating that all of the items applied to both respondents because the costs order created a joint and several liability in them for her costs of paragraph one of the originating application.  At this time the second respondent advised in writing that she agreed with this construction.
19. [19]
    On 5 August 2022, Mr Robinson wrote again to the parties stating relevantly as follows:^[14]

“It would be useful to the parties if I explain that I do not accept the submissions on behalf of the plaintiff that the costs order made by the trial judge should be construed as meaning that each of the defendant parties is jointly and severally liable.  I have approached the assessment on the basis that I am assessing the costs of the plaintiff as against the first defendants…”

[Emphasis added]

20. [20]
    On 4 October 2022, Mr Robinson delivered his costs certificate under UCPR r 737 assessing the costs payable by the first respondents at $69,095.66.^[15]  He made no assessment in respect of the costs payable by the second respondent.
21. [21]
    On 11 November 2022 (following a request by the applicant) Mr Robinson produced written reasons for his decision. These reasons firstly observed that a number of claims for costs related to the proceedings generally rather than being confined to paragraph one of the originating application; and that having “carefully” read the costs judgment it was clear that the first respondents had “played a fairly minor part in the overall litigation as it developed.”^[16]
22. [22]
    Mr Robinson then justified his reasoning as follows:^[17]

“[9] Having regard to the note at the heading of the Applicant’s costs statement to the effect that the Applicant intended to prepare a separate costs statement for her costs of the proceedings against the Second Respondents other than paragraph one, I decided to conduct the assessment on the basis of determining what costs (in relation to paragraph one of the Originating Application) were attributable to the First Respondent alone and where costs in relation to paragraph one were attributable to both Respondents to apportion them as to 50% each.

[10] To deal with the costs of paragraph one on the basis that the Respondents were jointly and severally liable for the costs of paragraph one would have had the effect that:

• The Applicant was left with a decision as to whom to pursue for its costs of paragraph one;
• If the Applicant chose to pursue either one of the Respondents for its full costs of paragraph one, then that Respondent would in turn have had to pursue the other Respondent for its proportionate contribution.

[11] The end result of assuming the method I have adopted is that:

• The Applicant would deliver a costs statement for its costs of the proceeding, save and except for the proportion of costs of paragraph one already assessed as costs payable by the First Respondent;
• The Applicant has certainty concerning the amount payable by each of the First and Second Respondents;
• There is no need for possible litigation between the Respondents.”

The respective positions of the parties

23. [23]
    The applicant and first respondents (who were legally represented before me) submitted that the costs order is not ambiguous but contended for different meanings.
24. [24]
    On the one hand, the applicant submitted that on a natural reading of the costs order, the first and second respondents are jointly and severally responsible for the costs of paragraph one of the originating application, and that any other costs in the proceeding [not attributable to paragraph one of the originating application] are to be paid by the second respondent only. 
25. [25]
    On the other hand, the first respondents made various (and somewhat conflicting submissions) about the natural meaning of the costs order including that:^[18]

    1. the costs of the proceeding do not include paragraph one of the originating application;
    2. the costs order creates a separate liability in respect of each respondent;
    3. the first order [against the second respondent] is a “general order” which covers the “general costs” of the proceeding and the second order is a “carve out”;
    4. the first respondents are responsible for the costs of paragraph one of the originating application – unless “they are also costs of the proceeding” in which case the costs are to be apportioned between the first and second respondents;
    5. the first respondents are to pay the costs of paragraph one of the originating application and the second respondent is to pay the balance of the proceeding; and
    6. the first respondents’ costs liability is limited to the costs of paragraph one of the originating application and the second respondent is to pay the costs of the proceedings “otherwise”.
26. [26]
    The second respondent appeared for herself in this hearing and agreed with the submissions of the first respondents.^[19]  Although she expressed her heartfelt concern that the estate assets had been dissipated into the “wrong hands” and contrary to the deceased’s wishes.^[20]

Constructions of court orders

27. [27]
    The crux of the applicant’s case is that Mr Robinson “misconstrued or misunderstood” the natural meaning of the costs order. The first and second respondents maintain that Mr Robinson’s construction is the correct one.
28. [28]
    The principles applicable to interpreting court orders are similar to those which apply to the construction of a contract and include the following two guiding principles:

    1. First: If the true meaning of an order is “immediately plain, the terms of the order will speak for themselves”; and
    2. Secondly: If that is not the case, the task of ascertaining meaning is to be approached having regard to the “ordinary rules of construction”^[21]. 
29. [29]
    The question of whether it is permissible to look at extrinsic material, including published reasons for the orders to ascertain their meaning “may” depend upon whether the terms of the order are ambiguous.  I use “may” because the authorities appear to leave open the question of whether it is necessary for orders to be ambiguous or susceptible to more than one meaning before resort can be had to extrinsic material, including reasons for judgment.^[22]
30. [30]
    Irrespective of whether there is need to show ambiguity, the initial task is to construe the objective meaning of the words used in the order. To that end, the following observations of the Court of Appeal of Victoria in Laming v Jennings [2018] VSCA are apposite:^[23]

“The meaning of a court order is to be derived from the language used, read fairly.  The exercise is objective and does not involve delving into the subjective thought processes of the judge who made the order.  At least in the case of ambiguity or where the language is susceptible of more than one meaning, it is open to have recourse to extrinsic material, including the reasons for judgment.  Of course, the exercise remains one of interpretation and not reconstruction, and where recourse to such material is permitted, it is not admissible to contradict the plain meaning of the order.” [Emphasis added]

Analysis

31. [31]
    There is, I accept, (and as all parties submitted) nothing on the face of the costs order that is ambiguous. On an ordinary and natural reading it makes two unqualified costs orders against two different parties; one against the second respondent for the applicant’s costs of the proceeding and one against the first respondents for the applicant’s costs of paragraph one of the originating application.
32. [32]
    The order distinguishes between the costs of “paragraph one of the originating application” and the costs of “the proceeding”.  There is no ambiguity about the meaning of these terms. Rule 679 of the UCPR provides (amongst other things) that “costs of the proceeding” means cost of all the issues in the proceeding.  As stated in paragraph five of these reasons, the parties agreed that paragraph one of the originating application costs were part (albeit the main part) of the costs of the proceeding but that there are other costs of the proceeding that are not costs of paragraph one of the originating application.
33. [33]
    As a general rule, where a court orders that costs be paid by two or more persons (whether defendants or plaintiffs or even third parties or non-parties) the costs liability is joint and several.^[24] As Rares J relevantly observed in Probiotec Ltd v University of Melbourne [2008] FCAFC 5 (with Finn J agreeing):^[25]

“…[it is] settled law that liability for payment of a costs order was ordinarily joint and several.  However, that principle does not condition the circumstances in which the order should be made.  Rather, joint and several liability is the consequence of an order once it is made in unqualified terms against more than one party.  It is not a principle affecting the exercise of the discretion to impose the order in the first place...”

[Emphasis added]

34. [34]
    There is nothing in terms of the costs order on its face which suggests that that liability was not intended to be joint and several.  It would, for example, have been open and relatively easy for the trial judge to have apportioned the costs payable in the proceeding (including the costs of paragraph one of the originating application) as between the two parties in the terms of order.^[26]  But no such words appear.
35. [35]
    In the absence of words in the costs order indicating that something else was contemplated, I find that the liability of the first and second respondents for the costs of paragraph one of the originating application must be treated as joint and several in this case.
36. [36]
    In my respectful view Mr Robinson’s decision, (or exercise of discretion or approach – however described) was not open to him, nor was it within his lawful discretion for the following seven reasons (some of which overlap).
37. [37]
    First, on the natural reading of the order, the costs order imposes joint and several liability on the first and second respondents for the applicant’s costs of paragraph one of the originating application. Mr Robinson fell into an error of principle because he refused to construe the cost order this way – this mistake infected his thinking and reasoning throughout the assessment.

38. [38]
    Secondly, Mr Robinson’s reasoning that it was better not to assess costs as being joint and several because it would avoid litigation between the respondents was entirely misplaced and plainly wrong. It overlooks two basic principles: first, that the applicant as the successful litigant is entitled to have her costs paid in terms of the costs order and secondly that she should not lose out if one of the respondents cannot or will not meet their share of the cost burden.^[27]  As was observed by the learned author of the Law of Costs, GE Dal Pont, ”[o]therwise, a basic principle of the law of costs, the costs indemnity rule, would be imperilled.”^[28]  Further, a consequence of joint and several liability for costs is that a person who discharges a costs liability can seek contribution from others who are jointly liable to meet that liability.  The issue of contribution – that of determining the relative responsibility for costs between those against whom the order is made – is a matter to be dealt with as between them, rather than one that rests in the party who was awarded costs.^[29]
39. [39]
    Thirdly, Mr Robinson’s view from the outset that he was “assessing the costs of the plaintiff as against the first defendants” was plainly wrong. That was not what he was tasked to do under either the costs order or for that matter the consent order.
40. [40]
    Fourthly, Mr Robinson’s ultimate decision to assess the costs of paragraph one of the originating application that “were attributable to the First Respondent alone” was plainly wrong.  It is contrary to the express wording and a natural reading of the costs order which provided that the first respondents are to pay the applicant’s costs of paragraph one of the applicant’s originating application filed 12 June 2019.  Those costs are not confined to the costs attributable to the first respondents only.  Under UCPR r 681(1) the court may declare what percentage of the costs of the proceeding is attributable to the question or part of the proceeding to which the order relates.^[30] It is a matter for the court and not for the cost assessor to make any apportionment of costs. 

41. [41]
    Fifthly, Mr Robinson’s decision to apportion and carve out costs payable by the second respondent in the proceeding was also contrary to the costs order that the second respondent pay the applicants’ costs of the proceeding and was therefore  plainly wrong.  There was no carve out. It was open for the trial judge to have apportioned costs but in the exercise of her discretion she chose not to. Mr Robinson had no lawful basis or power to go behind the costs order.
42. [42]
    Sixthly, the costs order was not appealed. The effect of the process or exercise of discretion undertaken by Mr Robinson in conducting his assessment was that he  stepped into the shoes of the trial judge and re-drafted the costs order in a way that he considered to be just in all the circumstances. This is apparent from his observations referred to in paragraph 21 above that the first respondents had “played a fairly minor part” in the overall litigation as it developed.  He had no lawful basis or power to confine the first respondent’s costs or refine the costs order in the way he did. 

43. [43]
    Finally, whilst it would have been prudent and consistent with the terms of the cost order for the applicant to have delivered separate costs statements: one to the first respondents with the applicant’s costs of paragraph one of the originating application; and one to the second respondent with the applicant’s costs of the proceeding – for unexplained reasons she did not do this.  However, given the nature of the objections by the second respondent, I am not satisfied that this would have avoided the current review.^[31]  Regardless, I am satisfied that Mr Robinson should have assessed the second respondent’s costs of paragraph one of the originating application. His refusal to do so overlooked that all of the parties consented to the order appointing him to undertake the assessment of paragraph one of the originating application. Under the costs order, the first and second respondents are jointly and severally responsible for these costs.  It follows that Mr Robinson should have assessed these costs as payable by the second respondent as well.  He made an error in principle in refusing to do so.
44. [44]
    Even if the order is considered to be ambiguous or it is thought necessary to have to resort to other extrinsic material such as the reasons contained in the costs judgment, I am satisfied that my finding that the decision is manifestly wrong is not inconsistent with this material.  For example:

    1. The cost order was made after Ryan J received detailed written submissions from the parties’ legal representatives about the appropriate orders for costs (which she discussed in her reasons) as follows:

1. the applicant sought costs against both respondents on the basis that they should be paid on the indemnity basis. In doing so, she was critical of the conduct of the first respondents on the basis that they had made the litigation particularly complicated;
2. the second respondent submitted that the costs of each party ought to be paid out of the estate on the indemnity basis; and
3. the second respondents submitted that the claim against them for a declaration ought to be dismissed and costs ought to follow that event; alternatively, if the declaration was made there should be no order as to costs; or alternatively that the first respondents pay the applicant’s costs of paragraph one of her originating application and not on the indemnity basis.

2. The main focus in the reasons as they concerned the second respondent is on whether the costs payable by her (and her costs) should be paid out of the estate on the indemnity basis.  Ryan J ultimately found that these costs should not and that there was no other reason as to why the usual rule [that costs follow the event] should not apply.  On that basis she ordered (without qualification) that the second respondent is to pay the applicant’s cost on the standard basis.^[32] 
3. In her reasons, Ryan J acknowledged that the position of the first respondents is “a little more complicated”^[33] observing that the first respondents had taken “…on the role of ‘contradictor’ when it came to the declaration sought against it and made forceful arguments as to why it ought not to be bound by it.”^[34] She also expressly recognised that the applicant’s focus on the hearing was on the second respondent and that she did not cross examine the first respondent’s witness or reply to the “recent, lengthy submissions of the first respondents” about the declaration. Ryan J ultimately then but went on to conclude that the third order contended for by the first respondents was appropriate as follows:^[35]

“Having regard to the executor’s position, as spelt out in their amended defence, and their written submissions, in the exercise of my discretion, and to ensure a just result, I will order that the executors pay the applicant’s costs of paragraph one only of the originating application.”

Conclusion

45. [45]
    It follows from my reasons that the decision must be set aside and a further assessment  of the applicant’s costs of paragraph one of the originating application (on the basis that the first and second respondents are jointly and severally liable for those costs) needs to be undertaken. 
46. [46]
    The more difficult question is whether that assessment ought to be undertaken by Mr Robinson or another costs assessor. The applicant submitted that whilst it might involve some additional costs, the assessment ought to be referred to another costs assessor because not only did Mr Robinson misconstrue the costs order – he also undertook the assessment based on what he considered to be a “fair thing” and in doing so overstepped his statutory function, creating a real risk of further error.  The first respondents maintained that the assessment ought to be remitted back to Mr Robinson who as a well-known and experienced costs assessor could undertake the assessment again with clarity and direction in light of my findings and that to do otherwise, would incur unnecessary costs and delay.
47. [47]
    This issue is finely balanced. There is some force to the applicant’s submission but on the other hand now that the construction issue has been resolved the assessment of the applicant’s costs of paragraph one of the originating application ought to be a relatively straightforward one.
48. [48]
    Overall I find that the interests of justice warrant the further costs assessment being remitted back to Mr Robinson to conduct the assessment in accordance with my findings.

Orders and directions

49. [49]
    I therefore order and direct as follows:

1. The application for review filed 25 November 2022 is allowed.
2. The decisions made by the costs assessor Mr Graham Robinson in the cost  assessor’s certificate of assessment issued by him on 4 October 2022 (Certificate) is set aside. 
3. The costs assessment to be undertaken pursuant to the consent order of the registrar dated 3 May 2022 is remitted back to Mr Robinson to be conducted on:
   1. the basis:
      1. that the first and second respondents are jointly and severally liable for the applicant’s costs of paragraph one of the originating application;
      2. of the reasons for judgment of Muir J dated 9 August 2023; and
   2. otherwise, the material which was before Mr Robinson when he made the decision contained in the Certificate.
4. The first respondents pay the applicant’s costs of obtaining Mr Robinsons’s reasons for the decision made by him in the Certificate.
5. The first respondents pay the applicant’s costs of the application filed 25 November 2022.