Bare v Small
[2013] VSCA 204
•9 August 2013
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2013 0045
| NASSIR BARE | Applicant |
| v | |
| RAI SMALL and INDEPENDENT BROAD-BASED ANTI-CORRUPTION COMMISSION and PAUL JEVTOVIC and VICTORIAN EQUAL OPPORTUNITY AND HUMAN RIGHTS COMMISSION and ATTORNEY-GENERAL FOR THE STATE OF VICTORIA | 1ST Respondent |
| 2ND Respondent 3rd Respondent 4th Respondent 5th Respondent |
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APPLICATION ON SUMMONS
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| JUDGES | HANSEN and TATE JJA | |
| WHERE HELD | MELBOURNE | |
| DATE OF HEARING | 2 August 2013 | |
DATE OF ORDERS: | 2 August 2013 | |
DATE OF PUBLICATION OF REASONS: | 9 August 2013 | |
MEDIUM NEUTRAL CITATION | [2013] VSCA 204 | 1st Revision: 27 May 2014 (n 17) |
JUDGMENT APPEALED FROM | [2013] VSC 129, 1st Revision: 28 March 2013, (Williams J) | |
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PRACTICE AND PROCEDURE – Whether Court has power to make Protective Costs Order – Discretionary power to fix or cap a parties’ liability for recoverable costs in advance of proceeding – Civil Procedure Act 2010, ss 7, 8, 9, 65C(2)(d), Supreme Court Act 1986, s 24 – R (Corner House Research) v Secretary for State and Industry [2005] 1 WLR 260; Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864; Aitken v State of Victoria [2013] VSCA 28, considered.
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| Appearances: | Counsel | Solicitors |
| For the Applicant | Mr J D Pizer with Mr E M Nekvapil and Ms F C Spencer | Maddocks |
| For the First, Second and Third Respondents | Mr P R D Gray SC with Ms K Evans | Victorian Government Solicitor’s Office |
| For the Fourth Respondent | Mr S P Donaghue SC | Victorian Equal Opportunity and Human Rights Commission |
| For the Fifth Respondent | Ms J M Davidson | Victorian Government Solicitor |
HANSEN JA
TATE JA:
By summons dated 17 May 2013, Mr Nassir Bare (‘the applicant’) applied for a Protective Costs Order (‘PCO’) to limit his liability to pay costs in the event that the appeal he has brought against the orders of Williams J[1] is unsuccessful. On 2 August we heard the summons and granted the application. The following are our reasons for making those orders.
[1]Bare v Small [2013] VSC 129 (‘Reasons’).
The judgment below
Williams J dismissed an application for judicial review brought by the applicant against a decision of a delegate of the Director of Police Integrity (‘the Director)’. The applicant had complained to the Director alleging that he had been assaulted by officers of Victoria Police. He claimed that on 16 February 2009, when he was 17, police stopped the car in which he was travelling. An officer then handcuffed him and kicked his legs, causing him to fall. As he lay on the ground, the officer pushed his head repeatedly into the gutter and four or five of his teeth were chipped in the process. His jaw was cut, with resultant scarring. The officer sprayed him in the face with ‘OC’ (capsicum) spray several times, forcibly raising his head to do so. This caused him difficulty in breathing. The applicant claimed that during the assault the officer said words to the effect: ‘you black people think you can come to this country and steal cars. We give you a second chance and you come and steal cars’. A second police officer kicked him in the ribs, while he was on the ground. Mr Bare suffered pain and humiliation as a result of this alleged serious assault.
On 3 February 2010 the applicant’s solicitor, Ms Davis of the Young People’s Legal Rights Centre (‘Youthlaw’) wrote to the Office of Police Integrity (‘OPI’) complaining about the assault. She argued that it would be in the public interest for the Director to investigate the applicant’s complaint.
The Director’s delegate, Ms Small, decided not to accept the matter for investigation by the OPI. Instead she advised the applicant that the complaint should be referred to the Ethical Standards Division of Victoria Police. A second delegate, Mr Jevtovic, reviewed the OPI file, and confirmed Ms Small’s conclusion that the matter not be investigated by the OPI but should be referred to Victoria Police. Ms Small and Mr Jevtovic are now named as the first and third respondents to the appeal, respectively. The OPI was abolished before Williams J delivered judgment and the Independent Broad-based Anti-corruption Commission (‘IBAC’), which has succeeded the OPI and has had vested in it all the rights and obligations of the OPI,[2] was substituted as the second defendant[3] and is the second respondent to the appeal.
[2]Pursuant to clause 4(a) and (b) to the IBAC Act 2011.
[3]Pursuant to clause 4(c) of the IBAC Act.
Before Williams J the applicant sought orders in the nature of certiorari and mandamus, as well as declarations that the delegates’ decisions were each unlawful and in contravention of the Charter of Human Rights and Responsibilities (‘the Charter’).[4] At the heart of the judicial review proceedings was the applicant’s claim that he had a right under s 10(b) of the Charter to have his complaint investigated by a body independently of Victoria Police.
[4]Section 1(1) of the Charter of Human Rights and Responsibilities provides: ‘This Act may be referred to as the Charter of Human Rights and Responsibilities and is so referred to in this Act’. The convention is to refer to an Act by its short title (as expressed in the Charter by s 1.1) and there is thus no need to refer to the Charter as the ‘Charter of Human Rights and Responsibilities Act’: see Interpretation of Legislation Act 1984, s 10(1)(e); Deming No 456 Pty Ltd v Brisbane United Development Corporation Pty Ltd (1983) 155 CLR 129, 162 (Wilson J).
Section 10(b) of the Charter provides:
A person must not be –
(b) treated or punished in a cruel, inhuman or degrading way.
The applicant argued that the right not to be treated or punished in a cruel, inhuman or degrading way generated a positive duty on behalf of the State to conduct effective independent investigations into complaints of such treatment. He argued that the decisions taken by the delegates were unlawful because they were taken in contravention of s 38 of the Charter which relevantly provides:
[I]t is unlawful for a public authority to act in a way that is incompatible with a human right or, in making a decision, to fail to give proper consideration to a relevant human right.
Williams J held that although acts or decisions of public authorities that are incompatible with human rights are unlawful, by reason of s 38 of the Charter, this did not mean that they involved jurisdictional error or were thereby invalid. This had the consequence that the decisions made by Ms Small and Mr Jevtovic, even if they were not Charter-compliant, did not fall outside the scope of the privative clause in s 109(1) of the Police Integrity Act 2008. Those decisions were thereby ousted from judicial review. Her Honour acknowledged that if the decisions had involved jurisdictional error they would have been reviewable, in accordance with the principle in Kirk v Industrial Court (NSW).[5] She held that s 109 of the Police Integrity Act prevented the Court from determining the claims for declarations of s 38 unlawfulness in respect of the delegates’ decisions.[6]
[5](2010) 239 CLR 531.
[6]Reasons, [57], [92], [93], [121].
Furthermore, her Honour held that, in any event, there was no implied procedural right under s 10(b) of the Charter to an effective independent investigation of a claim of a breach of that right.
The Notice of Appeal identifies seven grounds of appeal, including the claim that the judge erred in failing to find that the right under s 10(b) of the Charter included a right to an effective independent investigation of a credible claim of cruel, inhuman or degrading treatment. It also includes the claim that the judge erred in holding that a breach of s 38 of the Charter did not result in jurisdictional error.
The application for a PCO
The applicant sought a PCO to cap his potential liability to pay the respondents’ costs of and incidental to the appeal at a maximum of $5000 in total, in the event that the appeal is unsuccessful and the Court exercises its discretion to award costs in favour of all or any of the respondents.
The application raises three separate questions:
(1) Does the Court have power to make a PCO?
(2) Ought a PCO be made, on the merits?
(3) If a PCO is to be made, on what terms should it be made?
We will deal with each question in turn.
(1) Does the Court have power to make a PCO?
The applicant submitted that the Court’s power to make a PCO lies in s 65C(2)(d) of the Civil Procedure Act 2010 (the ‘CPA’); s 24 of the Supreme Court Act 1986 and r 64.24 of the Supreme Court (General Civil Procedure) Rules 2005 (‘Rules of Court’).
Section 65C of the CPA provides:
(1)In addition to any other power a court may have in relation to costs, a court may make any order as to costs it considers appropriate to further the overarching purpose.
(2) Without limiting subsection (1), the order may –
…
(d) fix or cap recoverable costs in advance.
The ‘overarching purpose’ referred to in s 65C is identified in s 7 of the CPA as follows:
(1)The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
The significance of the ‘overarching purpose’ of the CPA is reinforced by s 8 which provides that a court is to seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, whether the powers are part of the Supreme Court’s inherent, implied or statutory jurisdiction. Section 9 sets out a range of objects, attention to which may further the overarching purpose. These include ‘the just determination of the civil proceeding’[7]; ‘the efficient business of the court’;[8] and ‘the efficient use of judicial and administrative resources’[9] in relation to which the court may have regard to a number of factors including, inter alia, ‘the degree of promptness with which the parties have conducted the proceeding’[10] and ‘the public importance of the issues in dispute and the desirability of a judicial determination of those issues’.[11]
[7]Section 9(1)(a).
[8]Section 9(1)(c).
[9]Section 9(1)(d).
[10]Section 9(2)(c).
[11]Section 9(2)(g).
Section 24 of the Supreme Court Act confers a general discretionary power on the Court to award costs:
(1)Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the costs of administration of estate and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.
Rule 64.24 of the Rules of Court relevantly provides:
(1)The Court of Appeal may make such order for the whole or any part of the costs of an appeal as it thinks fit.
The first, second and third respondents concede that, as they submit, ‘a PCO is one form of order that can be made under s 65C: s 65C(2)(d)’,[12] and may be able to be made under the more general powers. The respondents emphasise, however, that all of the relevant powers are governed by the overarching purpose and the Court should not follow those authorities relied on by the applicant, for example, R (Corner House Research) v Secretary for State and Industry[13] where primacy is given to matters of public interest.
[12]First, Second and Third Respondents’ Outline of Submissions on Protective Costs Order.
[13][2005] 1 WLR 260 (‘Corner House’).
The Victorian Equal Opportunity and Human Rights Commission (‘the Commission’) intervened in the proceeding before Williams J and is now the fourth respondent. The Commission supported the applicant’s application for a PCO.
The Attorney-General, who also intervened in the proceeding before Williams J is the fifth respondent to the appeal. It opposed the grant of a PCO.
In Corner House the Court of Appeal of England and Wales described the general purpose of a PCO as being:[14]
to allow a claimant of limited means access to the court to advance his case without the fear of an order for substantial costs being made against him, a fear which would inhibit him from continuing with the case at all.
[14]Corner House [2005] 1 WLR 260, 2607 [6].
The Court held that it had the power to make a PCO under legislative provisions in similar terms to that of s 24 of the Supreme Court Act and r 64.24 of the Rules of Court, in the absence of any express power. However, the rules of court relied upon in Corner House prescribed their aim as being to enable ‘the court to deal with costs justly’. This included the provision, in r 1.1(2) of the rules governing civil procedure, that:[15]
Dealing with a case justly includes, so far as is practicable - (a) ensuring that the parties are on an equal footing.
[15]Emphasis added.
The Court stated that a PCO could be made providing that the Court is satisfied that:[16]
[16]Ibid 2625-6 [74]-[75].
(1) the issues raised are of general importance;
(2) the public interest requires that those issues should be resolved;
(3) the applicant has no private interest in the case;
(4) having regard to the financial resources of the applicant and the respondent(s), and to the amount of costs that are likely to be involved, it is fair and just to make the order;
(5) if the order is not made, the applicant will probably discontinue the proceeding and will be acting reasonably in doing so.
Furthermore, the Court recognised that the merits of an application for a PCO are likely to be enhanced if those acting for the applicant are acting pro bono and it was for the court, in its discretion, to decide whether it is fair and just to make a PCO in light of the above considerations.[17]
[17]As is apparent, the PCO regime in the United Kingdom is directed at public law litigation where there is no (or virtually no) private interest in the litigation. It appears that there is a separate power to made a costs capping order (a ‘CCO’) where, as described by Beazley JA in Delta Electricity v Blue Mountains Conservations Society Inc [2010] NSWCA 263, (‘Delta Electricity’), the order ‘limits the amount of costs recoverable by either party and thus prevents the costs liability from being inflated by the incurring of disproportionate costs’ (at [87]).
Some Australian courts have granted PCO’s and, in doing so, have applied somewhat similar guiding principles to those identified in Corner House.[18]
[18]See Beazley JA’s review of the authorities in Delta Electricity [2010] NSWCA 263.
In Corcoran v Virgin Blue Airlines Pty Ltd[19] Bennett J held that the Federal Court had power to make a PCO pursuant to Order 62A rule 1 of the Federal Court Rules. Order 62A rule 1 provided that the Court may specify the maximum costs that may be recovered on a party and party basis. Order 62A rule 2 provided, inter alia, that costs were excluded from that maximum amount where a party:
(d)has otherwise caused another party to incur costs that were not necessary for the economic and efficient:
(i) progress of the proceedings to trial; or
(ii) hearing of the action.
[19][2008] FCA 864 (‘Corcoran’).
The applicants’ complaint was that Virgin Airlines had discriminated against them, directly and indirectly, under the Disability Discrimination Act 1992 (Cth), by way of requiring them to travel on the aircraft with a carer if they were unable to carry out certain actions independently, for example, reaching out and pulling down an oxygen mask. Her Honour considered that amongst the factors to be considered in exercising the Court’s discretion to grant a PCO were the timing of the application; the complexity of the factual or legal issues raised; whether the applicant claimed damages or other form of financial compensation; whether the applicant’s claims were arguable and not frivolous or vexatious; the undesirability of forcing the applicant to abandon the proceedings; whether there was a public interest element to the case; the costs likely to be incurred by the parties; whether the party opposing the making of the order had been uncooperative and/or delayed the proceeding; and any other matters that could go towards establishing that there should be a departure from the usual rule that the costs follow the event.[20] In our view, these other matters would include at least the applicant’s ability to pay costs.[21] In addition, her Honour considered as relevant whether a significant number of members of the public may be affected and whether the basis of the challenge raises ‘significant issues’ as to the interpretation and application of statutory provisions.[22] Her Honour held, applying these principles, that in the circumstances of the case it was appropriate to make a PCO.[23]
[20]Ibid [6]-[7].
[21]Her Honour made reference to this factor: see Corcoran [2008] FCA 864, [36].
[22]Corcoran [2008] FCA 864, [10]. See also [11] where her Honour considered the factors in Corner House and the factors identified by the Canadian Supreme Court in British Columbia (Minister of Forests) v Okanagan Indian Band 2003 SCC 71, 313 N.R. 84, [40]-[41] and Little Sisters Book & Art Emporium v Canada 2007 SCC 2, J E 2007-211, [36]-[41].
[23]Ibid [57].
Order 26A rule 1 of the Federal Court Rules was replaced by Order 40 rule 51 which was cast in similar terms, including the exclusion of those costs where a party ‘has not conducted the proceeding in a manner to facilitate a just resolution as quickly, inexpensively and efficiently as possible, and another party has been caused to incur costs as a result’. Perram J, in King v Jetstar Airways Pty Ltd,[24] exercised the discretionary power under Order 40 rule 51 to direct, pending an appeal, that the parties’ recoverable costs be capped at $10,000. That complaint was also brought under the Disability Discrimination Act. The complaint had been dismissed after a five-day trial.[25] Perram J accepted the relevance of the considerations identified in Corcoran and concluded that those same principles were applicable in appellate proceedings saying:[26]
There is no reason to apprehend that different principles obtain in such proceedings, but the fact that a full trial has already taken place and its outcome is known are matters that are also relevant. The extent of their actual relevance will fluctuate from case to case, just as the nature of curial defeat also varies: not every loss is total and some victories are pyrrhic.[27]
[24][2012] FCA 413.
[25]King v Jetstar Airways Pty Ltd (No 2) [2012] FCA 8.
[26]King v Jetstar Airways Pty Ltd [2012] FCA 413, [8].
[27]This is consistent with the approach taken in the United Kingdom: Goodson v Coroner for Bedfordshire and Luton [2005] EWCA Civ 1172 [15]. It was there acknowledged, however, that ‘the fact that the issue arises at the appellate stage may affect the court’s view of one or more of the criteria and the desirability of exercising its discretion in favour of the applicant’ (at [15]).
He further considered that it was irrelevant, in the circumstances of the case, that the Act was not in the same form when the alleged discrimination occurred as it was at the time of the proceedings before him.[28]
[28]King v Jetstar Airways Pty Ltd [2012] FCA 413 [9].
He arrived at his conclusion that a PCO should be made after some hesitation. He observed:[29]
The existence of a cost-capping order could, in a vacuum, mean that wasteful behaviour in litigation could have a significant and unfair adverse effect on an opposing party. It is no doubt for that reason that r 40.51(2) … and before it O 62A r 2, have specifically excluded from the scope of a cost-capping order any amount of costs caused, generally speaking, by inefficient litigation conduct.
[29]Ibid [16].
In Delta Electricity[30] the New South Wales Court of Appeal dismissed an appeal from a decision of a single judge to grant a maximum costs order under r 42.4
of the Uniform Civil Procedure Rules[31] on the ground that no House v The King[32] error had been identified, as was required.[33] The allegation in the substantive proceedings was that waste waters from Delta Electricity’s power station were polluting the river into which they were discharged. It was held that the public interest of the proceedings was directly relevant to the grant of an order.[34]
[30][2010] NSWCA 263 (Beazley JA (in dissent), Basten and Macfarlan JJA) (‘Delta Electricity’).
[31]Rule 42.4 provides: ‘(1) The court may by order, of its own motion or on the application of a party, specify the maximum costs that may be recovered by one party from another. … (3) An order under subrule (1) may include such directions as the court considers necessary to effect the just, quick and cheap: (a) progress of the proceedings to trial or hearing, or (b) trial or hearing of the proceedings’.
[32](1936) 55 CLR 499.
[33]Delta Electricity [2010] NSWCA 263, [50].
[34]Ibid [204], [218]. See also, for example, the order made by Jones J in Alliance to Save Hinchinbrook Inc v Clive Cook [2005] QSC 355, pursuant to s 49(1)(e) of the Judicial Review Act 1991, for the applicant to bear only the applicant’s own costs of the applications for judicial review of the decision of the respondents, including the delegate of the Chief Executive, Environmental Protection Agency, regardless of the outcome of the proceedings.
The issue of whether this Court has power to order a PCO was considered in Aitken v State of Victoria.[35] An application for a PCO was made in the context of an application for leave to appeal from a decision of the Victorian Civil and Administrative Tribunal dismissing an allegation that the provision of Special Religious Instruction in State primary schools amounted to direct and indirect discrimination against the applicant’s children. The application for a PCO was made under the Court’s broad discretion as to costs and under s 65C of the CPA. Neave and Priest JJA held that, as they determined to refuse leave to appeal in the circumstances of the case, it was unnecessary to decide whether the Court’s general costs powers, or s 65C of the CPA, would permit a PCO to be made. In any event, they determined that, even assuming that the jurisdiction exists, they would decline to exercise the jurisdiction in favour of making a PCO as the public interest element in the case had largely been resolved by changes to departmental policy which had resulted in Special Religious Instruction now being offered on an opt-in policy.
[35][2013] VSCA 28.
In our view, the Court has a discretionary power to fix or cap a party’s liability for costs in advance of an appeal if it considers such an order is appropriate to further the overarching purpose identified in s 7 of the CPA, namely ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’. Such orders are a departure from the usual rule that costs follow the event but the power does not displace that rule. It would appear the power to fix or cap recoverable costs has its primary source in s 65C(2)(d) of the CPA, whether or not the other, wholly general, provisions would permit such a course. Whether a specific or general power is relied upon, the power must be exercised in furtherance of the overarching purpose,[36] either because of the express terms of s 65C(1) or because of the effect of s 8 of the CPA.[37]
[36]One of the efficiencies to be gained by PCO’s is that they should avoid or narrow the scope of a taxation on costs: see Explanatory Memorandum, Civil Procedure Amendment Bill 2012 (Vic) 2.
[37]However, see s 8(2) of the CPA which provides: ‘ Subsection (1) applies despite any other Act (other than the Charter of Human Rights and Responsibilities Act 2006) or law to the contrary.’ This would appear to be a recognition that in some instances the Court will have an obligation to give effect to human rights: see s 6(2)(b) of the Charter. The effect of s 8(2) of the CPA is that the obligation on a court to give effect to the overarching purpose, under s 8(1), is not to be treated as impliedly repealing s 6(2)(b). The rights to which the Court must give effect, pursuant to s 6(2)(b) of the Charter, have been held to include the right to a fair hearing by a competent, independent and impartial court (s 24(1)) : See Victoria Police Toll Enforcement v Taha [2013] VSCA 37, [246] –[248]. The issue does not directly arise here.
The first, second and third respondents, and the Attorney-General, accepted that the considerations identified in Corcoran may be relevant to an exercise of the power to grant a PCO.[38] They both contended that the principles in Corner House should be treated with caution, particularly in light of the different objectives of the rules governing civil procedure in the United Kingdom.
[38]First, Second and Third Respondents Submissions on a Protective Costs Order, [12]. Attorney-General Submissions, 1(c).
We have been content to consider the application in the light of the considerations identified in Corcoran in the context of determining whether a grant of a PCO would further the overarching purpose. It is clear that those considerations constitute a range of factors which guide the exercise of discretion and do not amount to a ‘test’. Nor do they purport to be exhaustive.
(2) Ought a PCO be made, on the merits?
The applicant gave evidence by affidavit that if his application for a PCO was to fail, he would discontinue his appeal. He is 21 years of age, unemployed and with very limited financial means. He has no savings and no assets exceeding a value of $200. He lives in a share house arrangement and after paying for expenses has about $40 at his disposal per fortnight. He has no spare income to cover debt repayments. If he were unsuccessful in the appeal and an adverse costs order was made against him it is likely he would become bankrupt.
The applicant also relied upon affidavit evidence from Ms Kate Oliver, a solicitor from Maddocks Lawyers, who represent the applicant in a pro bono capacity. Her evidence traced the unsuccessful attempts that had been made to reach agreement with the respondents not to seek costs in the event that the appeal was dismissed. An agreement had been reached for the purposes of the trial. Only the Commission agreed not to seek its costs of the appeal.
The applicant relied upon a third affidavit. This was from Ms Ariel Couchman, the Director of the Young People’s Legal Rights Centre, who deposed that the Centre was willing to make available $5000 in order to support the applicant’s appeal because of what the Centre perceived was the public importance of the proceeding, although the commitment of such a sum of money for an individual case is very unusual for the Centre.
The application was made in a timely and efficient fashion, at the first opportunity. The parties have not been forced to incur substantial costs by preparing for an appeal that may be abandoned.
The applicant is not seeking damages.
The appeal raises only questions of law, most particularly, the question of whether the right under s 10(b) of the Charter generates a duty of independent investigation and the issue of whether the unlawfulness that attaches to conduct or a decision of a public authority that is incompatible with human rights amounts to jurisdictional error. Although these issues are complex, the complexity of the questions is associated with the public importance of having those significant issues determined. In particular, the interpretation and application of s 38 of the Charter potentially affects a great number of members of the public as the obligation to act compatibly with human rights, and to take into account human rights in decision-making, is a core obligation imposed by the Charter on all public authorities. Determining the consequence of a breach of s 38 carries a clear public interest. It may be, as the first, second and third respondents submitted on the application, that not all of these issues will need to be determined on the appeal.
While the repeal of the Police Integrity Act may diminish to an extent the public importance of some of the issues arising concerning the interpretation of that Act, it is noteworthy that Williams J proceeded to construe that Act after its repeal and, as mentioned above, there are questions of law of public importance that remain to be decided.
The applicant’s claims are arguable and are not frivolous or vexatious. The scope of the right under s 10(b) is a significant issue, the determination of which may depend upon the relevance afforded to international human rights law. It is also clear that a variety of views are open as to the consequence of a breach of s 38. The first, second and third respondents concede that the issue is one on which reasonable minds might differ.[39]
[39]First, Second and Third Respondents Submissions on a Protective Costs Order, [33].
It was submitted that the more appropriate time for argument to be made that costs should not be ordered against an unsuccessful appellant in a case of this kind is at the conclusion of the appeal. It was submitted further that this would better advance the overarching purpose. To our mind this cannot be so when the most likely, if not inevitable, result of a refusal to grant a PCO would be that the appeal would be abandoned. Given the public importance of the questions raised, this is not only undesirable but it would fail to advance the purpose of ensuring that there is a just determination of the proceeding. Moreover, waiting until the conclusion of an appeal, which in all probability would not proceed, would not advance the efficient, timely and cost-effective resolution of the real issues in dispute. If the question of the recovery of costs expended remains uncertain, parties may incur a considerable amount of legal costs, somewhat unnecessarily, in anticipation of seeking to recover those costs in accordance with the usual rules. It is more conducive to the efficient business of the court for the parties to be aware that recoverable costs have been capped at the outset and, in the light of that limit, seek to reduce costs wherever practicable and appropriate.
(3) If a PCO is to be made, on what terms should it be made?
It was submitted by the first, second and third respondents at the hearing of the application that if a PCO was to be made, it should be made in reciprocal terms; that is to say, all the parties should be entitled to an order capping their liability for costs that could be recovered by reason of the appeal. The Attorney-General supported this submission. The PCO made in the Federal Court by Bennett J in Corcoran[40] was made in reciprocal terms, the power under Order 62A being construed in Sacks v Permanent Trustee Australia Ltd[41] and in Manchester Pty Ltd v Bickford[42] as not permitting the fixing of maximum costs recoverable by one party, should it succeed, but leaving it open to the other party to recover its full costs should it succeed.[43] The PCO made by Perram J in King v Jetstar Airways[44] was made in reciprocal terms and the PCO made at first instance by the Land and Environment
Court in Delta Airways[45] was also made in reciprocal terms. On the other hand, we note that the order made in Corner House was not reciprocal.[46] The submissions urged at the hearing of the application were directed at the fairness of an order in reciprocal terms.
[40]In Corcoran [2008] FCA 864, the orders sought were that the maximum costs that might be recovered by each party on a party/party basis was limited to $15,000 in each of two proceedings (at [2]). There was a dispute as to the appropriate maximum.
[41](1993) 45 FCR 509, 513 (Beazley J) (‘Sacks’).
[42]Unreported, Supreme Court of Queensland, 7 July 1993 (Drummond J).
[43]Hanisch v Strive Pty Ltd (1997) FCR 384, 390 (‘Hanisch’).
[44]In King v Jetstar Airways Pty Ltd [2012] FCA 413, Perram J ordered that the parties’ recoverable costs in the matter be capped at $10,000.
[45]At first instance Pain J had ordered that the maximum costs that may be recovered by a party to the proceedings was a sum of $20,000.
[46]See Corner House, [147].
The issue of reciprocity of any PCO does raise the question of whether a respondent, who does not share the straitened financial circumstances of the applicant, should be similarly entitled to the benefit of a costs cap. Putting aside whether or not the applicant’s legal representatives act on a pro bono basis, why should not a successful impecunious party be entitled to recover his or her entire party and party costs? In the end, it is a question of where the financial burden should lie in bringing litigation such as this. Arguably, the effect of granting the respondents a reciprocal order may be to expose a successful impecunious party - or his or her legal representatives - to the burden of shouldering the difference between the cap and the amount that could have been recovered a party and party basis. We have already noted in [24] above that the Victorian provisions are not concerned, as were the ones applicable in Corner House, with ensuring that the parties are on an equal footing. It could also be said that the power under s 65C(2)(d) of the CPA is not limited in the same way as that under O 62A of the Federal Court Rules, where the principal object was to enable the court to limit all parties’ costs exposure when the issues raised are less complex and the amounts to be recovered are moderate.[47] However, the question of whether a PCO made in this Court should invariably be made in reciprocal terms is a question that need not be answered on this occasion. It suffices to say that, as this proceeding has the quality of a ‘test case’ about it, fairness dictates here that the recoverable costs should be limited for all parties. The applicant should have the protection of knowing that the respondents collectively can recover from him a maximum of $5000 for their costs of the appeal, and the respondents, collectively, can know, likewise, that the applicant can recover from them a maximum of $5000 for his costs of the appeal.
[47]See Hanisch (1997) 74 FCR 384, 387 (Drummond J). See also Sacks (1993) 45 FCR 509, 512-3 where Beazley J cites this as being one of the reasons for the introduction of the rule in the Federal Court as raised in a letter from the Chief Justice of the Federal Court to the President of the Law Council.
For those reasons, on 2 August 2013 we made an order for a PCO in the following terms: ‘Pursuant to s 65C(2)(d) of the Civil Procedure Act 2010, s 24 of the Supreme Court Act 1986 and rule 64.24 of the Supreme Court Rules, the parties’ recoverable costs of the appeal be capped at $5,000’.
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