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Litigant in person

Litigant in person

Are self-represented litigants entitled to professional costs for work done by himself or herself and disbursements?

The general principle established by the High Court of Australia in Cachia v Hanes (1994) CLR 179 is that a litigant appearing in person is not entitled to recover professional remuneration or profit costs from the unsuccessful party.  The High Court’s comment at paragraph 21 summarises the importance of applying this general principle:

While Clarke JA had considerable sympathy for the financial position of the unrepresented litigant who is successful, his Honour was of the view “that if the law is to be changed then this must be done by the High Court or by Parliament” (Cachia v Hanes (1991) 23 NSWLR 304 [49]).

The unanimous comments of Justice Crispin, Justice Gray and Justice Connolly in Dp v The Law Society of the Australian Capital Territory [2006] ACTSC 61 is of importance:

It is common ground that costs are intended to compensate a successful litigant for expense incurred in conducting the proceedings and that, since unrepresented litigants will not have incurred legal fees, it would be inappropriate to make an order for costs that would effectively enable them to profit from the proceedings. On the other hand, whilst unrepresented litigants are not usually entitled to be paid for the time they have devoted to the proceedings, they may be entitled to an order for costs so that they may recover out of pocket expenses such as that incurred in photocopying.

Questions therefore arise as to what type of disbursements are recoverable by litigants in persons. The 2008 case of Arnoldus-Lewis v Murphy (2008) NSWSC 103 reveals that expenses of a litigant in person, such as for travel, cannot be awarded, although Court filing fees may be. In Wollongong Council v Smith [1999] NSWSC 473, the defendant litigant in person (Smith) was a consulting surveyor. Spaceline Engineering Pty Ltd (the client) was his client in relation to Development Applications made to the Plaintiff (Wollongong Council). The Development Applications were made in the name of the Defendant. The applications were approved subject to the imposition of a condition. The Defendant was instructed to act as an applicant/agent in the making of an application/appeal to the Land and Environment Court. The Defendant litigant in person sought costs for providing professional services as a surveyor to his client. Master Malpass commented that:

The litigant in person is entitled to be reimbursed only for costs paid out of his pocket. Costs recoverable under the order for party and party costs do not include profit costs incurred for the providing of professional services by a surveyor.

Therefore, while a litigant in person is not entitled to recover professional remuneration or profit costs, any payments made out of a self-represented litigant’s own pocket are likely to be claimable as disbursements. This might include costs of any experts engaged by the litigant in person. However, costs are not likely to be recovered if the litigant in person does work for himself or herself in the capacity of an expert.

Are self-represented solicitors entitled to professional costs for work done by himself or herself?

A litigant in person who is a solicitor is entitled to costs of acting as his or her own solicitor (McIlraith v Ilkin (Costs) [2007] NSWSC 1052; London Scottish Benefit Society v Chorley (1884) 13 QBD 872 (“Chorley”); Guss v Veenhuizun (No 2) (1976) 136 CLR 47). In the Chorley case, Brett MR said (at 875-6):

When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket. He has to pay the fees of the court, that is money paid out of pocket; but for loss of time the law will not indemnify him. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. There are things which a solicitor can do for himself, but also he can employ another solicitor to do them for him; and it would be unadvisable to lay down that he shall not be entitled to ordinary costs if he appears in person, because in that case he would always employ another solicitor. If a solicitor does by his clerk that which might be done by another solicitor, it is a loss of money, and not simply a loss of time, because it is work done by a person who is paid for doing it… The unsuccessful adversary of a solicitor appearing in person cannot be charged for what does not exist, he cannot be charged for the solicitor consulting himself, or instructing himself, or attending upon himself. The true rule seems to be that when a solicitor brings or defends an action in person, he is entitled to the same costs as an ordinary litigant appearing in person, subject to this restriction, that no costs which are really unnecessary can be recovered. Of this kind are the costs of instructions and attendances.

Justice Brereton analysed in McIlraith v Ilkin (Costs) [2007] NSWSC 1052 that:

It appears that the rationale of the Chorley exception [as conventionally called] involved two propositions:

 

  • that a solicitor litigant’s costs could be allowed because they were measurable by the court, whereas the costs of other litigants in person were not measurable by the court; and

 

  • that as a solicitor could always employ another solicitor to act and recover costs, there was no reason why the solicitor should not be entitled to recover costs of instead acting for himself or herself, which were likely to be less.

The Chorley exception, was considered by the High Court in Guss v Veenhuizun (No 2) (1976) 136 CLR 47. The Court was unanimous that Mr Guss, the self-represented solicitor, was entitled to recover his disbursements. However, Mason and Murphy JJ considered that Mr Guss could not recover profit costs. Gibbs ACJ, Jacobs and Aickin JJ, on the other hand, regarded the Chorley exception as a “well established rule of practice” with the result that Mr Guss was entitled to his professional costs, because those costs were able to be quantified by the court and its officers.

There have been instances where the Chorley exception has been questioned. In Cachia v Hanes, their Honours described the Chorley exception as “somewhat anomalous”, adding at 411-2 that:

“The justification given for the privileged position afforded to a solicitor acting for himself is somewhat dubious… If the explanations for allowing the costs of a solicitor acting for himself are unconvincing, the logical answer may be to abandon the exception in favour of the general principle rather than the other way round”.

The Supreme Court of Western Australia and the Supreme Court of South Australia chose to no longer apply the Chorley exception under that Court’s statutory jurisdiction.[1]

However, in New South Wales, Justice Brereton indicated in McIlraith v Ilkin (Costs) [2007] NSWSC 1052 that it is open for the Supreme Court of New South Wales to follow the Supreme Court of Western Australia, or to discard the Chorley exception. Yet Justice Brereton chose to accept the Chorley exception and explained his reason for doing so as follows:

  1.  Guss v Veenhuizun has decided the question, and has not been overruled by Cachia v Hanes.
  2.  In Atlas Corporation Pty Ltd v Kalyk [2001] NSWCA 10, the Court of Appeal held that, “despite DobreeGusswas an authoritative endorsement by the High Court of the Chorley exception, that the statements of the majority on that issue were not obiter dicta, and that it had not been overruled in Cachia, and so was binding”.
  3.  In Khera v Jones [2006] NSWCA 85, a Court of Appeal constituted by Mason P and Ipp JA  refused leave to appeal on the basis that there was little reason to think that the court would depart from its “firm and comparatively recent decision” in Atlas.

Justice Brereton concluded that:

“For this court, the decisions of the Court of Appeal in Atlas and in Khera are conclusive. The Chorley exception is the law in New South Wales. Subsequently, in the Federal Court of Australia, Dowsett J in A & D Douglas Pty Ltd v Lawyers Private Mortgages Pty Ltd [2006] FCA 690, has agreed (at [10]) that Guss and Cachia state the law in Australia, and that the Chorley exception applies”

Conclusion

  •  Costs cannot be claimed (whether in the tax invoice, bill of costs or any other means) for work undertaken by non-lawyers.
  •  The ordinary litigant in person is entitled to be reimbursed only for costs paid out of his or her pocket.
  •  Self-represented solicitors are entitled to professional costs for work done by himself or herself. However, self-represented solicitors cannot claim costs for the solicitor consulting himself or herself, or instructing himself or herself, or attending upon himself or herself.

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[1] Dobree v Hoffman (WASC, 11 December 1995, unreported, BC9502706)], and on appeal (WASC, 5 December 1995, Rowland, Steytler and Parker JJ, unreported, BC9606034]; Burford v Allan (1996-7) 68 SASR 217.