Case: Knight v F.P. Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178
Outcome: referred to
decision was given about three weeks before the High Court's decision in Knight v F.P. Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178. In that case, the High Court was concerned with s 58 of the Supreme Court Act 1857 which provided, "The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise than by this section." Order 91 rule 1 of the Rules of Court of the Supreme Court of Queensland provided that costs should be in the discretion of the Court. The High Court held that the discretion to award costs was not confined to the parties to the proceeding but that the Rules conferred jurisdiction to make orders for costs against non-parties and, in that case, the receiver. The decision in Knight v F.P. Special Assets Ltd [1992] HCA 28 ; 174 CLR 178 and its application to s 43 of the Federal Court Act was considered by the Full Court of the Federal Court in Caboolture Park Shopping Centre Pty Ltd (in liquidation) v White Industries (Qld) Pty Ltd [1993] FCA 471 ; (1993) 45 FCR 224. The Full Court said at 229: There seems no reason to doubt that s 43 confers upon the court jurisdiction to award costs not only against persons who are parties but also against persons who are not. Clearly the section is no narrower than the provisions of O 91, r 1 of the Rules of the Supreme Court of Queensland considered by the High Court in Knight v FP Special Assets . The Federal Court Act and Rules recognise that the Court may make orders for costs against non-parties in accordance with the general rules relating to costs: Knight v F.P. Special Assets Ltd [1992] HCA 28 ; 174 CLR 178. That jurisdiction must carry with it the power to enforce any order that justice demands be made. If it be necessary to make an order that the non-party be made a party so that an order can be made that the non-party pay that party's costs then it must be assumed that the Court has jurisdiction to make the non-party a party to the proceeding. Order 6 rule 8 gives that power to the Court. Where it appears that a non-party ought to be held liable to pay a party's costs the Court can, in my opinion, utilise O 6 r 8(1)(b) to join that non-party to the proceeding. It follows therefore that if I am of the opinion that any of the non-parties should be ordered to pay the defendants' costs and contrary to my opinion s 1335(2) prevents any such order being made, I can make an order joining those non-parties as parties to the proceedings. Mason CJ and Deane J (with whom Gaudron J agreed) said in Knight v F.P. Special Assets Ltd [1992] HCA 28 ; 174 CLR 178 at 192-193: For our part, we consider it appropriate to recognize a general category of case in which an order for costs should be made against a non-party and which would encompass the case of a receiver of a company who is not a party to the litigation. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made. It cannot be thought, as some of the non-parties contended, that the High Court was intending to lay down the only category of case in which an order for costs may be made against a non-party. The discretion to award costs against a non-party is unfettered except that it must be exercised judicially. Having said that, the cases identify the principles upon which the exercise of the discretion might be exercised. The categories of costs in which a court may order a non-party to pay costs are not closed: Applicant NAGM of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 396 ; (2002) 125 FCR 488. In that case, at [62] the Court said: There are certain categories of cases in which the jurisdiction to award costs against a non-party has been exercised, if not frequently, then with some degree of regularity. One such category is where the non-party is considered to be the "real party" to the litigation: Knight v Special Assets at 188 per Mason CJ and Dean J. Another is where the non-party is a legal representative of a party to the proceedings. A costs order may be made, for example, against a solicitor in consequence of his or her conduct in the litigation: Caboolture Park at 231. While s 43 of the Federal Court Act empowers the Court to make a costs order against a legal representative of a party, a second source of jurisdiction is the "implied", "accrued" or "inherent" jurisdiction of the Court over its own officers: Caboolture Park at 231.