Bilaczenko v Financial Ombudsman Service Ltd (No.2) - [2013] FCCA 669

FEDERAL CIRCUIT COURT OF AUSTRALIA

BILACZENKO v FINANCIAL OMBUDSMAN SERVICE LTD (NO.2)

[2013] FCCA 669

Catchwords:
ADMINISTRATIVE LAW – Costs – Administrative Decisions (Judicial Review) Act 1997 action – FCC Rule 42.06 – Notice of Objection to Competency – whether respondent entitled to costs – quantum of costs.

Legislation:

Federal Circuit Court Rules 2001 (Cth), rr.21.02(c), 21.10, 42.06 and Part 1 of Schedule 1

Bilaczenko v Financial Ombudsman Services Ltd [2013] FCCA 420
Ruddock v Vadarlis (No.2) [2001] 115 FCR 229
Rhodes v Tower Australia Superannuation Limited as Trustee for Tower Superannuation Fund [2004] FCA 812

Applicant:

NICHOLAS BILACZENKO

Respondent:

FINANCIAL OMBUDSMAN SERVICE LTD

File Numbers:

ADG 128 of 2012

ADG 156 of 2012

Judgment of:

Judge Simpson

Hearing date:

6 June 2013

Date of Last Submission:

6 June 2013

Delivered at:

Adelaide

Delivered on:

2 July 2013

REPRESENTATION

The Applicant:

In person

Counsel for the Respondent:

Mr Wise

Solicitors for the Respondent:

Arslan Lawyers

ORDERS

In action number 128 of 2012, I order that the applicant forthwith pay the respondents its costs of the action fixed in the sum of SEVENTEEN THOUSAND, SEVENTY ONE DOLLARS AND FIFTY THREE CENTS ($17,071.53).
In action number 156 of 2012, I order that the applicant forthwith pay the respondents its costs of the action fixed in the sum of SIXTEEN THOUSAND, FIVE HUNDRED AND FIFTY TWO DOLLARS AND SEVENTY TWO CENTS ($16,552.72).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT ADELAIDE

ADG 128 of 2012 and

ADG 156 of 2012

NICHOLAS BILACZENKO

Applicant

And

FINANCIAL OMBUDSMAN SERVICE LTD

Respondent

REASONS FOR JUDGMENT

On 31 May 2013 I handed down my decision in relation to the respondent’s application for a dismissal of the applicant’s claims.[1] Applications for costs were then made on behalf of the respondent in each action.
[1] Bilaczenko v Financial Ombudsman Services Ltd [2013] FCCA 420
The applicant had failed to attend by telephone or at all on 31 May 2013. I considered it appropriate to adjourn the question of costs to allow the applicant the opportunity to be heard. The matter was adjourned to 6 June 2013.
On 6 June 2013, the applicant and counsel for the respondent in each action appeared by telephone. They both put submissions.
Counsel for the respondent in each action provided the Court with a written outline of submissions seeking orders in each action that its costs be paid by the applicant and that the Court either refer the costs for taxation under Part 4 of the Federal Court Rules pursuant to r.21.02(c) of the Federal Circuit Court Rules 2001 (Cth), or, alternatively, fix the costs with reference to the schedules attached to the written submission. The schedules indicated that the respondent sought costs in proceeding number 128 of 2012 in the sum of $17,071.53 and proceeding number 156 of 2012 costs in the sum of $16,552.72.
As the applicant was unrepresented (as he had been both prior to and during the conduct of the proceedings), I considered it appropriate to raise a concern that I had as a result of rule 42.06 of the Federal Circuit Court Rules. That rule came into force on 25 May 2012 and replaced rule 42.04. As both applications were commenced subsequent to 25 May 2012 it is clear that rule 42.06 applies.
Rule 42.06 states as follows:
“42.06 Notice of objection to competency
(1)A respondent who objects to the competency of an application must, within 14 days after being served with the application, file a notice of objection to competency:
(a) in accordance with the approved form; and
(b) that briefly, but specifically, states the grounds of the objection.
(2)The applicant carries the burden of establishing the competency of an application.
(3)A respondent may apply to the Court for the question of competency to be heard and determined before the hearing of the application.
(4)If a respondent has not filed a notice under subrule (1), and the application is dismissed by the Court as incompetent, the respondent is not entitled to any costs of the application.
(5)If the Court decides that an application is not competent, the application is dismissed.”
The Federal Circuit Court has not yet approved a form to be used in compliance with subrule 42.06(1)(a). In those circumstances, Federal Circuit Court Rule 2.04(2) provides that “(a) document prepared in the form prescribed for a similar purpose for the … Federal Court may be taken to substantially comply with the appropriate form for a proceeding.” Federal Court Form 68 is a “Notice of Objection to Competency” for matters such as the present.
Federal Circuit Court Rule 2.04(1) provides that strict compliance with forms is not required and substantial compliance is sufficient. A question arises in this case whether in the circumstances the respondent’s applications sufficiently complied with the forms and the rules generally.
In both action ADG 128 of 2012 and ADG 156 of 2012, the respondent filed Applications in a Case in the following terms:
“Orders sought
1.Pursuant to Rule 13.10 of the Federal Magistrates Court Rules the Applicant’s application be dismissed on the basis that:
(a)The Applicant has no reasonable prospect of successfully prosecuting the proceeding;
(b)The proceeding is frivolous or vexatious; or
(c)The proceeding is an abuse of process of the Court.
2.The Respondent’s costs to be paid by the Applicant.
3.Any other order that the Court deems appropriate.”
Rule 13.10 is concerned with applications for summary dismissal.
In the 128 action, the respondent filed its Application in a Case on 5 September 2012. It was the first document filed by the respondent. Similarly, in the 156 action, the respondent’s first document filed was Application in a Case filed on 9 August 2012. The applicant has not filed affidavits of service in relation to the Initiating Applications in each action. It is therefore not possible to determine whether the applicant was put on notice about the challenge to the competency of the Court to deal with the matter within the 14 days provided for in Federal Magistrate Court Rule 42.06(4).
The affidavits in support of the Applications in a Case in each action challenged the competency of the Court to deal with the matters. The deponent to both affidavits (Mr Crowhurst in both actions) stated, “I do not believe that the decision made by FOS is a decision to which the ADJR Act applies. As a result I do not believe this Court has jurisdiction to hear and determine this application.”
I have formed the view that, perhaps serendipitously, the respondent sufficiently complied with Federal Magistrate Court Rule 42.06 to avoid the adverse cost consequences provided for in Federal Circuit Magistrate Rule 42.06(4). If find that the respondent’s applications for dismissal sufficiently satisfy the requirement that a Notice of Objection to Competency Filed and executed. Each of the Applications in a Case filed by the respondent to the two actions identifies the fact that the respondent challenged the Court’s jurisdiction to deal with the applicant’s applications.
Not withstanding the above, I still have a discretion as to whether I should award costs. The nature of that discretion was discussed in the case of Ruddock v Vadarlis (No. 2) [2001] 115 FCR 229. Justice French, as he then was, cited Ruddock’s case in Rhodes v Tower Australia Superannuation Limited as Trustee for Tower Superannuation Fund [2004] FCA 812 and referred to the joint judgment of Black CJ and French J in Ruddock’s case when they said:
“The award of costs to a successful party is principally by way of perceived restorative justice. The general rule assumes that where an applicant succeeds it will have incurred costs because the respondent’s conduct made it necessary for the applicant to bring the proceedings. If the applicant fails, the respondent will have incurred costs defending an action which ought not to have been brought against it. The order made in such a case is compensatory …”
I consider it to be appropriate to make an order that the applicant pay the respondents their costs in each action.
I have examined the schedules of costs sought by the respondents in each action and consider them to be appropriate. The costs are calculated pursuant to r.21.10 and a Part 1 of Schedule 1 of the Federal Circuit Court Rules. I am satisfied that there has been no duplication of charges as a result of the two matters being dealt with concurrently in relation to the respondent’s applications for dismissal.
I make the orders to be found at the beginning of these reasons.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Judge Simpson

Associate:

Date: 2 July 2013