Case: Knight v FP Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178
Outcome: cited
The power of the Court to award costs under s 43 of the Federal Court Act is adequate to support orders against non-parties to the litigation. Knight v FP Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178 so held with respect to the like general discretion conferred upon the Supreme Court of Queensland by O 91 r 1 of its Rules. The power does not bring with it an unfettered discretion. It 'must be exercised judicially and in accordance with general legal principles pertaining to the law of costs' Knight at 192 (Mason CJ and Deane J, Gaudron J agreeing at 205) quoting Oasis Hotel Ltd v Zurich Insurance Co (1981) 124 DLR (3d) 455 at 462 (Lambert J). 10 The power to award costs against a non-party may be exercised against a legal practitioner acting for a party in the proceedings. There are authorities which indicate that the power to make such an order is an aspect of a power of the Court to discipline legal practitioners conducting proceedings before it. In a recent judgment in the New South Wales Court of Appeal, Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 ; (2005) 63 NSWLR 300, McColl JA cited, in support of that proposition, House of Lords and Privy Council authorities Myers v Elman [1940] AC 282 at 318; Medcalf v Mardell [2002] UKHL 27 ; [2003] 1 AC 120 at 143 and Harley v McDonald [2001] UKPC 18 ; [2001] 2 AC 678 at 703. Similar observations appear in the Victorian Court of Appeal in Etna v Arif [1999] VSCA 99 ; (1999) 2 VR 353 at 379 and in the Queensland Court of Appeal in Emanuel Management Pty Ltd (in liq) v Fosters Brewing Group Ltd [2004] 2 Qd R 11 at 16, cited with approval in Martinovic v Chief Executive Queensland Transport [2005] 1 Qd R 502 at 512. As her Honour also observed, however, Mason CJ and Deane J in Knight said it was artificial to attribute orders for costs against solicitors in the exercise of a court's inherent jurisdiction to an exercise of the disciplinary power rather than the power to award costs (188). In Lemoto, it may be noted, the Court was considering the application of Pt 11, Div 5C of the Legal Profession Act 1987 (NSW) introduced by the Civil Liability Act 2002 as part of a package of measures designed to reduce the costs of claims for damages (327). A practitioner is not to provide legal services on a claim or defence of a claim for damages unless he or she reasonably believes, on the basis of provable facts and a reasonably arguable view of the law, that the claim or defence has reasonable prospects of success (s 198J). Where that duty is breached, a costs order may be made against the solicitor or barrister personally (s 198M). In its statutory setting the power thus conferred on the Court might easily be seen as disciplinary. Even so it represents, as McColl JA observed, '... a departure from the historical basis upon which legal practitioners could be exposed to personal costs orders' (328). The Act imposes '... a standard that is more demanding than that applicable in cases where, by reference to general law principles, a costs order is sought against a party's lawyer' De Georgiou v Dunn (No 2) (2005) 62 NSWLR 285 at 292 (Barrett J).