IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL DIVISION
GENERAL LIST	Revised
Not Restricted
Suitable for Publication	
Case No. CI-18-04868

MAYART PTY LTD & ORS
	Plaintiffs	
		
v		
		
PHILIPPA CHRISTINE KNIGHT & ORS	Defendants	

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JUDGE:	HIS HONOUR JUDGE COSGRAVE	
WHERE HELD:	Melbourne	
DATE OF HEARING:	On the papers	
DATE OF RULING:	13 August 2020	
CASE MAY BE CITED AS:	Mayart Pty Ltd & Ors v Knight & Ors	
MEDIUM NEUTRAL CITATION:	[2020] VCC 1211		

REASONS FOR RULING

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiffs	Dr M Wolff	Noble Lawyers Pty Ltd	
			
For the First Defendant	Mr M J Galvin, QC		
			
For the Third Defendant	The third defendant appeared in person		

HIS HONOUR:

1	On 14 July 2020, I heard two applications by the third defendant (“Mr Knight”):
(a)	to file and serve an amended defence;  
(b)	to prevent the plaintiffs from proceeding with an application for   summary judgment against Mr Knight (amongst other orders).
2	On 6 August 2020, I delivered my reasons for dismissing each application in separate rulings. In each ruling, I identified at the end of my ruling that subject to hearing further from the parties, I proposed to order that the application be dismissed and Mr Knight pay the plaintiffs’ costs of and incidental to the application, such costs to be taxed on a standard basis in default of agreement. In the covering email which accompanied the handing down of the rulings, I directed that the parties file any written submissions on the form of final order and costs by 4:30pm on Friday, 7 August 2020.
3	The plaintiffs filed submissions in which they argued that Mr Knight should pay costs on an indemnity basis. They submitted that the requirements of the Civil Procedure Act 2010 (Vic) (“CPA”) obliged a party to not make frivolous claims or claims which lacked a proper factual or legal basis. Here, the plaintiffs contended that Mr Knight had not acted honestly in advancing submissions to the court, had made claims which were frivolous, vexatious and lacked a proper basis, and commenced or continued with applications in wilful disregard of known facts or established law.
4	Mr Knight did not file any submissions within the time permitted by the court. On 7 August 2020, Mr Knight sent an email to my associates advising that, due to his responsibilities with his children and problems caused by the coronavirus pandemic, he expected to file his submissions by 4:00pm on Monday, 10 August 2020. Mr Knight failed to meet his own timetable and did not file any submissions by that time. The parties were advised by email at about 9:45am on 12 August 2020 that judgment would be handed down the following day. This elicited no response from Mr Knight. 
General principles
5	In relation to costs, there are some well accepted legal principles with respect to the court’s powers: 
(a)	the only immutable rule in relation to costs is that there are no immutable rules; 
(b)	the award of costs is within the discretion of the court; 
(c)	the discretion must be exercised judicially. It cannot be exercised arbitrarily or capriciously. Nor can it be exercised on grounds unconnected with the litigation or the circumstances leading up to the litigation; 
(d)	costs are compensatory in the sense they are awarded to indemnify the successful party against the expense to which it has been put by reason of the legal proceedings. The aim of a costs order is not to punish the unsuccessful party; 
(e)	as a general rule, costs should follow the event with the result that, in the absence of special circumstances, a successful party should obtain its costs of the proceeding even if it fails to establish all heads of claim.
6	The party seeking a special costs order must normally prove to a court that the exceptional circumstances of the particular case warrant the unusual exercise of the court’s discretion. This might involve showing that the other party engaged in improper conduct or sued for an ulterior motive or made false allegations of fraud or acted in wilful disregard of established facts and law. In Ugly Tribe Co Pty Ltd v Sikola,  Harper J said that the circumstances in which it had been held appropriate to order indemnity costs included the following:
•	the making of an allegation, known to be false, that the opposite party was guilty of fraud;
•	conduct which caused loss of time to the court and the other party;
•	the commencement or continuation of legal proceedings for an ulterior motive;
•	conduct which amounted to contempt of court;
•	the commencement or continuation of proceedings in wilful disregard of known facts or clearly established law.
Consideration
7	In the present case, the appropriate exercise of the discretion occurs in a context where Mr Knight is a self-represented litigant. On the one hand, arguably some allowance should be made for parties who are not familiar with the law and, as a result, raise points which are not reasonably arguable, thereby taking up the time of the court and the other party with unmeritorious arguments and forcing the other party to incur additional cost for no good reason. On the other hand, a legally represented litigant should not necessarily be penalised financially and in the time taken to resolve a case simply because the other party is a self-represented litigant. 
8	I note that Professor Dal Pont in Law of Costs, summarises factors relevant to whether a court could or should make an indemnity costs order against a self-represented litigant. He comments that such litigants have the capacity to inflict unnecessary expense and hardship on other parties to a proceeding. The court should not hold back where censure is properly called for. He refers to a decision of the Victorian Court of Appeal where Nettle and Osborn JJA said that a self-represented litigant cannot be allowed to forever stand behind the shield of his own ignorance. 
9	In the present case I found that Mr Knight presented to the court as intelligent, articulate and capable. He said that he had a law degree with first class honours. He had considerable experience in the finance world but had not worked as a lawyer. He displayed substantial familiarity with legal terms and concepts.
10	While I consider it appropriate to make some allowance for self-represented litigants and not hold them to as rigorous a standard as one would apply to a practising solicitor, the court is nonetheless obliged, in order to do justice between the parties, to observe and enforce the fundamentals of civil litigation.
11	I am not inclined to order indemnity costs in relation to the application to amend the defence. Although the application was late and failed to properly address matters which it should have, I do not regard it as so poor an application that it merits a special costs award. However, Mr Knight should note that if he sought again to amend his defence and his application contained flaws which again attracted adverse comments of the kind made in my ruling, another judge may well be inclined to adopt a different view.
12	In relation to Mr Knight’s application regarding alleged contraventions of the CPA, I regard that as substantially misconceived and containing submissions which appeared inconsistent with the known facts – see, for example, my comments in the ruling at paragraphs 10-13 and 19-24. The complaints about the further amended statement of claim, which the plaintiffs were allowed to file in August 2019, were, in my view, too late and should have been raised at the relevant hearing last year.
13	Further, Mr Knight made some serious allegations against the plaintiffs and/or their legal representatives: misleading or deceiving the court; acting dishonestly; committing perjury; failing to disclose the existence of relevant documents; and acting unlawfully. While the plaintiffs accept that it was an error in an affidavit about Mr Daley being a director of the first plaintiff, they deny the other allegations. I was not satisfied on the material that there was substance in the other allegations. 
14	I enumerated various reasons in my ruling for rejecting Mr Knight’s application. In my view, the application was seriously flawed. The material was not persuasive and, as noted, some was plainly inconsistent with other material which appeared to be objectively established as fact. In circumstances where the trial is scheduled for November this year, Mr Knight’s application involved the court and the plaintiffs spending time, energy, and money in dealing with affidavit material and submissions in respect of an application whose prospects of success were very limited. Mr Knight does not incur legal costs in the way the plaintiffs do. Given that Mr Knight had three separate interlocutory applications ready for hearing in July, one might wonder whether part of his aim was to force the plaintiffs to surrender and either abandon their case or settle on terms advantageous to Mr Knight. The fact that Mr Knight’s affidavit material did not dispute that the plaintiffs paid $625,000 for the apartments and he did not address the return of those funds to the plaintiffs serves to underline the issue.
Conclusion
15	Accordingly, in relation to the application to amend the defence, I order that the third defendant pay the plaintiffs’ costs of and incidental to the application, such costs to be taxed on a standard basis in default of agreement.
16	In relation to the application for contravention of the CPA, I order that the third defendant pay the plaintiffs’ costs of and incidental to the application, such costs to be taxed on an indemnity basis in default of agreement.