Burns v Media Options Group Pty Ltd and Ors (No.2)
[2013] FCCA 2016
•28 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BURNS v MEDIA OPTIONS GROUP PTY LTD & ORS (No.2) | [2013] FCCA 2016 |
| Catchwords: HUMAN RIGHTS – Costs – applicant successful ‑ applicant seeking indemnity costs ‑ whether justifying circumstances to make an indemnity costs order – order made. |
| Legislation: Federal Circuit Court Act 1999 (Cth) ss.3, 79 |
| Burns v Media Options Group Pty Ltd [2012] FCCA 79 Calderbank v Calderbank [1975] 3 All ER 333 Travers v New South Wales (2001) 163 FLR 9 Shiels v James [2000] FMCA 2 Wiggins v Department of Defence – Navy (No 3) [2006] FMCA 970 Johanson v Blackedge (2001) 163 FLR 58 Hughes v Car Buyers Pty Ltd [2004] FMCA 526 Colgate-Palmolive v Cussons (1993) 46 FCR 225 Wong v Su [2001] FMCA 108 CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Hazeldene’s Chicken Farm v Victorian Work Cover Authority (No 2) (2005) 13 VR 435 Clark v Commissioner of Taxation [2010] FCA 415 Re Veron: Ex Parte Law Society of New South Wales (1996) 84 WN (Pt 1) (NSW) Brenner v First Artist’s Management Pty Ltd (1993) 2 VR 221 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Minns v State of New South Wales (No.2) [2002] FMCA 197 Tate v Rafin [2000] FCA 1582 Creek v Cairns Post Pty Ltd [2001] FCA 1150 Paramasivam v Wheeler [2001] FCA 231 Jacomb v Australian Municipal Administrative Clerical and Services Union [2004] FMCA 359 Rispoli v Merck Sharpe and Dohme (Australia) Pty Ltd (No.2) [2003] FMCA 516 Hollingdale v North Coast Area Health Service (No.2) [2006] FMCA 585 Clack v Command Recruitment Group Pty Ltd and Anor (No.2) [2010] FMCA 198 Hughes v Western Australian CricketAssn (Inc) [1986] FCA 357; (1986) 19 FCR 10; [1986] ATPR 40-748 Ritter v Godfrey [1920] 2 KB 47 Innesv Rail Corporation of NSW (No.2) [2013] FMCA 36 Cooke v Plauen Holdings [2001] FMCA 91 Howe v Qantas Airways Ltd (No.2) [2004] FMCA 934 Ho v Regulator Australia Pty Ltd & Anor (No.2) [2004] FMCA 402 McBride v State of Victoria (No.2) [2003] FMCA 313 Ruddock & Ors v Vadarlis & Others (No 2) [2001] FCA 1865 Oshlack v Richmond River Council [1998] HCA 11 Latoudis v Casey [1999] HCA 59; (1990) 170 CLR 178 Probiotec Ltd v University of Melbourne [2008] FCAFC 5 Cummings v Lewis (1993) 113 ALR 285 Re Commonwealth; Ex parte Marks [2000] HCA 67 Australian Securities and Investments Commission v Hellicar [2012] FCA 17 LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90 Melbourne Steamship Limited v Moorhead (1912) 15 CLR 333 Fetherston v Peninsula Health [2004] FCA 485 Purvis v New South Wales [2003] HCA 62; (2003) 217 CLR 92 King v Jetstar Airways Pty Ltd [2012] FCAFC 115 Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17 Specsavers Pty Ltd v Luxottica Retail Australia Pty Limited (No 2) [2013] FCA 807 Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 De Alwis v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCAFC 77 |
| Applicant: | LES ALAN BURNS |
| First Respondent: | MEDIA OPTIONS GROUP PTY LTD |
| Second Respondent: | BHASKA DATTA |
| Third Respondent: | ANJILA DATTA |
| File Number: | SYG 2211 of 2010 |
| Judgment of: | Judge Nicholls |
| Date of Last Submission: | 22 August 2013 |
| Delivered at: | Sydney |
| Delivered on: | 28 November 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms K Edwards |
| Solicitors for the Applicant: | Adams & Partners Lawyers |
| Counsel for the Respondents: | Mr A Singh |
| Solicitors for the Respondents: | Rajesh Chand & Associates |
ORDERS
The respondents pay the applicant’s costs on an indemnity basis as assessed or agreed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2211 of 2010
| LES ALAN BURNS |
Applicant
And
| MEDIA OPTIONS GROUP PTY LTD |
First Respondent
| BHASKA DATTA |
Second Respondent
| ANJILA DATTA |
Third Respondent
REASONS FOR JUDGMENT
This is an application for costs following the handing down of judgment in the matter of Burns v Media Options Group Pty Ltd [2012] FCCA 79 (“Burns”) on 19 April 2013 in favour of the applicant. I have before me the initial submissions from the applicant, the respondents’ submissions and the applicant’s submissions in reply. [The applicant’s initial submissions also attach various affidavits which have not been formally read into evidence].
Section 79 of the Federal Circuit Court of Australia Act 1999 (Cth) (“the FCCA Act”) and r.21.02 of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”) apply in the determination of this matter. Section 79 of the FCCA Act is, relevantly, in the following terms:
“…
(2) The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit Court of Australia or Judge.”
Rule 21.02 of the FCC Rules is in the following terms:
“(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.”
Applicant’s Submissions
Nonetheless, the applicant submitted that it is otherwise open to the Court to order payment on any other basis including on a party and party, or indemnity, basis.
The applicant seeks orders that:
“[28] … The Respondents pay the Applicant’s costs as a lump sum of 90% of the Applicant’s costs as set out in the affidavit of Mr Scott Amos (filed at the same time as these submissions) either in whole, or in some other percentage. The Applicant does this in order to avoid further delay due to any contest as to the taxation of costs.
[29] In the alternative, the Applicant seeks orders for the payment of his costs on an indemnity basis, as agreed or assessed.”
The applicant outlined two bases for the award of costs on an indemnity basis. First, the applicant submitted that the respondents’ conduct alone justifies an order for indemnity costs. Second, in addition, or in the alternative, the applicant relied upon the respondents’ refusal of the applicant’s “Calderbank offer” (Calderbank v Calderbank [1975] 3 All ER 333 (“Calderbank”), as described in submissions – but see further below at [106]) made on 17 November 2011, that offered to settle for an amount inclusive of interest plus costs as agreed or assessed.
The Respondents’ Conduct
The applicant relied upon two matters regarding the respondents’ conduct that he claims are relevant to determining the exercise of discretion with regards to costs. First, where a successful party will lose the benefit of their victory because of the burden of their own legal costs (Travers v New South Wales (2001) 163 FLR 99 and Shiels v James [2000] FMCA 2 per Raphael FM (as he then was) (“Shiels”)). Second, whether “unmeritorious claims and conduct has unnecessarily prolonged proceedings” (see Wiggins v Department of Defence – Navy (No 3) [2006] FMCA 970 (“Wiggins”) at [35] per McInnes FM (as he then was)).
The applicant relied on the decision of Raphael FM (as he then was) in Shiels (cited with approval by Driver FM (as he then was) in Johanson v Blackedge (2001) 163 FLR 58), where his Honour stated that, in circumstances when exercising a discretion to award costs where the award of damages, and the likely recovery in terms of “Schedule costs”, may leave the applicant without benefit from the damages awarded (Shiels at [80]):
“… The amount of the award would be totally extinguished if no order for costs was made and in those circumstances costs should follow the event and the Applicant should have her costs payable by the First and Second Respondents and taxed on the Federal Court scale if not agreed…”
The applicant submitted that the Federal Court Rules 2011 (Cth) (“the FC Rules”) be applied, rather than Schedule 1 of the FCC Rules, where the respondents have engaged in unmeritorious conduct (see the applicant’s initial written submissions at [10]). Further, the applicant’s initial submissions contained a list of factors relevant to the exercise of the Court’s discretion with regards to costs, drawn from those provided by Walters FM (as he then was) in Hughes v Car Buyers Pty Ltd [2004] FMCA 526 at [92] (citing Sheppard J’s decision in Colgate-Palmolive v Cussons (1993) 46 FCR 225 (“Colgate-Palmolive”)):
“…
(c)…[T]he making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud … evidence of particular misconduct that causes loss of time to the Court and to other parties … the fact that the proceedings were commenced or continued for some ulterior motive … or in wilful disregard of known facts or clearly established law … , the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions … an imprudent refusal of an offer to compromise … and an award of costs on an indemnity basis against a contemnor….”
The applicant provided a number of examples of the respondents’ conduct, notably “the [r]espondents’ approach of objecting to documents or questions properly asked by the [a]pplicant in
cross-examination” during the hearing, that he submitted “was a primary factor in increasing the length of the hearing” (see the applicant’s initial written submissions at [12] – [13] and [16]). Further, the applicant relied on the following extract from Burns at [10] (see also [490] – [496] of the judgment) which dealt with the respondents’ conduct:
“… [N]ote must be made of the way the respondents chose to conduct their case before the Court. For example, as will be seen, constant and persistent interruptions to cross-examination based on various views of relevant law and practice was inimical to the efficient and appropriate conduct and disposition of these proceedings.”
The applicant also submitted that the Court should have regard to its findings that the respondents’ evidence was not to be believed, and the second respondent’s admissions that he knowingly submitted incorrect documents to the Australian Human Rights Commission (“AHRC”) as a basis for the award of indemnity costs (Wong v Su [2001] FMCA 108 at [19]) (“Wong”).
“Calderbank Offer”?
The applicant submitted that the offer, referred to above at [6], was a “Calderbank offer” (Calderbank). The applicant’s initial written submissions provided principles regarding a Calderbank offer in these circumstances that are well settled. Justices Moore, Finn and Jessup outlined these principles in CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 at [75]:
“…it is necessary for the party seeking indemnity costs to demonstrate that the other party’s refusal of the Calderbank letter was unreasonable (Black v Lipovac (1998) 217 ALR 386 at 432; Maniotis v JH Lever & Co Pty Ltd (No 2) [2006] FCAFC 28. It is not sufficient that the offer was a reasonable one: Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 128 [35]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2008] FCA 42, [11]. In considering this question in a particular case, the matter of unreasonableness will be judged by reference to the circumstances facing the offeree at the time of the offer…”
The applicant’s initial submissions also contained a list of factors provided by the Victorian Court of Appeal in Hazeldene’s Chicken Farm v Victorian Work Cover Authority (No 2) [2005] VSCA 298 (2005); 13 VR 435 (“Hazeldene’s”) (cited with approval in Clark v Commissioner of Taxation [2010] FCA 415 at [110]) that go to the determination of the reasonableness of an offer in circumstances such as these (Hazeldene’s at 442 per Warren CJ, Maxwell P and Harper AJA):
“It is neither possible nor desirable to give an exhaustive list of relevant circumstances. At the same time, a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f) whether the offer foreshadowed an application for an indemnity costs [order] in the event of the offeree’s rejecting it.”
The applicant’s initial submissions focused on two key factors. First, “the stage of the proceeding at which the offer was received”. Second, “the offeree’s prospects of success, assessed as at the date of the offer” (see the applicant’s initial written submissions at [24]). In relation to the stage of the proceeding, the applicant’s initial submissions note that the offer was made during the “last days of the hearing” (at [25]). In relation to the offeree’s prospects of success, the applicant refers to the Court’s findings that much of the respondents’ evidence was not to be believed. Further, the second respondent’s admissions that much of what was contained in the document sent to the AHRC in “defence” of the claim, and relied upon at hearing was “not correct” and that he was aware of that fact at the time it was sent. The applicant submitted that, as the respondents “knew their defence, in large part, to be untrue” they ought to have accepted the offer (see the applicant’s initial submissions at [26]).
Respondents’ Submissions
The orders sought by the respondents in their written submissions were unclear. At [79] ‑ [82] of the respondents’ written submissions they seek an order that their costs for 15 April 2011, 27 March 2012, 11 June 2013 and “costs relating to the evidence of Carol Ragen”, be paid by the applicants on an indemnity basis, despite being the unsuccessful party in this matter. However, at [84] of the respondents’ written submissions, they also submitted that each party should bear their own costs. Further, the respondents’ submit that the applicant was not wholly successful in the proceedings and that this should factor into any assessment of costs.
The respondents’ written submissions do not provide legal authority to refute the applicant’s arguments, nor the legal propositions that the applicant relies upon regarding the respondents’ conduct during the proceedings that resulted in increased time during the hearing. The respondents also do not provide legal authority for their submissions regarding the “Calderbank offer” of 17 November 2011.
The respondent submitted that the applicant had engaged in disentitling conduct. This included alleged delay in the commencement of proceedings, lack of compliance with Court orders regarding the filing and service of documents, and allegations about the Court’s treatment of the applicant’s witnesses. The respondents submitted this conduct as being relevant in the consideration of this costs matter, but provided no legal authority in support of these submissions.
Other aspects of the respondents’ submissions are dealt with below.
Applicant’s Submissions in Reply
The applicant responded to the respondents’ claim that the applicant was only partially successful in the substantive proceedings by noting that the applicant was awarded compensation by the Court and that the respondents’ claim now misrepresents the Court’s judgment (see [13] of the applicant’s final submissions).
The applicant rejects the submissions by the respondent of disentitling conduct on the behalf of the applicant, as he submits that these submissions were unsupported by evidence and established case law.
In response to the issue of delay in commencing the proceedings, the applicant submitted that this issue is irrelevant to the exercise of the discretion to award costs and contrary to the legislation which does not provide any time limit (at [6] of the applicant’s final written submissions). Further, that “lateness” in filing evidence and service of written documents was not unusual in litigation, and was an inappropriate matter to submit for consideration in the determination of costs in the current circumstances (at [7] of the applicant’s final written submissions.
Costs: What Is Sought?
Given the range of matters traversed in the submissions, it is important to note exactly what the applicant seeks and the bases on which he proceeds.
The applicant seeks orders in the alternative. First, he seeks costs set, or fixed, in a “lump sum” of 90% of his costs. No actual figure is proffered in the submissions. However, such a figure can be calculated by reference (as the applicant submits) to a document filed at the same time as the initial written submissions (the affidavit of Mr Scott Amos with attached copies of invoices) (see [28] of the applicant’s initial written submissions).
The respondents understand the applicant’s total “figure” of costs to be $238,715.00, as set out in the affidavits filed on 10 May 2013 (at [17] of the respondent’s written submissions). On this basis the applicant therefore can be said to be seeking 90% of $238,715.00, that is, $214,843.70
In his initial submissions, the applicant explains that he seeks such an order to “avoid further delay due to any contest as to the taxation of costs” (at [28] of the applicant’s initial submissions).
In the alternative, the applicant seeks an order for the payment of his costs on an indemnity basis, as agreed or assessed (at [29] of the applicant’s initial written submissions). Although, again, no actual figure is proffered, the former alternative seeks a “fixed” sum, the latter seeks assessment (or agreement by the parties) by an external assessor.
In their submissions, the respondents appear to understand the applicant’s position to be that he seeks “indemnity costs for the entire proceedings” and that such indemnity costs be ordered to be in quantum “as agreed, as assessed or as a lump sum of 90% of the applicant’s billed costs either in whole or in some other percentage” (see [1] of the applicant’s initial written submissions).
With this understanding, the respondents’ submit that, in the circumstances of this case, it is not appropriate for indemnity costs to be awarded to the applicant. Further, the respondents seek costs orders in their favour, and in part on an indemnity basis, in relation to certain events arising in the conduct of this case.
Consideration
The parties agree that the power to award costs in this matter derives from s.79 of the FCCA Act and r.21.02 of the FCC Rules (see above at [2] – [3]).
I understand the applicant’s application for costs to be a request that the Court proceed in the first instance pursuant to r.21.02(2)(a), and in the alternative pursuant to r.21.02(2)(c).
This understanding is reinforced by the applicant in his initial submissions where he draws a number of distinctions (at [5]). These are between the contents of Schedule 1 to the FCC Rules and the ability of the Court to order payment “on any other basis” (it is implicit that the Court must act reasonably). He submits that the latter includes an order on a party and party basis or indemnity basis.
The first question for the Court, therefore, is whether the discretion (whatever shape the order may ultimately take) to award costs should be exercised in favour of the applicant.
Given the respondents’ challenge to the basis of the applicant’s request for costs and given their implicit, if not explicit, argument that the respondents should be awarded costs, notwithstanding that they were not the successful party in the proceedings, it is important to note the following, albeit by now trite, general principles.
Costs orders, are generally made by courts against the unsuccessful party or parties (see, for example, Re Veron: Ex Parte Law Society of New South Wales (1996) 84 WN (Pt 1) (NSW) 136). Costs “follow the event”. That is, it is usually the case that the successful party to the litigation should have the benefit of a costs order as against the unsuccessful party or parties (See, for example, Brenner v First Artist’s Management Pty Ltd (1993) 2 VR 221).
The latter is qualified by the limiting proposition that it should not apply where “special circumstances” exist that support the contrary outcome (Hughes v Western Australian CricketAssn (Inc) [1986] FCA 357; (1986) 19 FCR 10; [1986] ATPR 40-748 at [48] (“Hughes”)).
Costs are, in the ordinary course, awarded on a party and party basis unless the circumstances presented justify an order for costs on an indemnity basis (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 (“Fountain”)).
Two matters, at least, make the question posed above (at [32]) a necessary and specific question, to be asked in this case. First, contrary to the established principle that costs follow the event, as the applicant submits, some doubt existed in the past as to whether that principle applied to matters such as the current case and whether it applied consequent to the exercise of the discrimination jurisdiction in this Court (see Minns v State of New South Wales (No.2) [2002] FMCA 197). (See also applicant’s initial written submissions at [9]).
However, I agree with the applicant that the principle can now be taken to apply to cases of the type under current consideration. (See for example, Tate v Rafin [2000] FCA 1582 at [71] (“Tate”), Creek v Cairns Post Pty Ltd [2001] FCA 1150 at [1], Paramasivam v Wheeler [2001] FCA 231 at [24] (Hill, Tamberlin and Car JJ), Jacomb v Australian Municipal Administrative Clerical and Services Union [2004] FMCA 359 [5], Rispoli v Merck Sharpe and Dohme (Australia) Pty Ltd (No.2) [2003] FMCA 516 at [11], Hollingdale v North Coast Area Health Service (No.2) [2006] FMCA 585 at [10] and Clack v Command Recruitment Group Pty Ltd and Anor (No.2) [2010] FMCA 198).
Second, following from this, the respondents have not made clear their position on this question. There is no express acknowledgement in their submissions, and therefore their submissions do not directly address, whether costs should follow the event. Nor, can it be said, from their submissions that they have assumed this to be the case.
It is important to note, as a preliminary observation, also the general approach taken by the respondents in their submissions. It is understandable that an unsuccessful party (or parties) to litigation would feel aggrieved with a judgment against them. Where such grievances may have some legal provenance they may be pursued in another place. Put simply, the current consideration as to costs, and the opportunity to make submissions in relation to costs, is not an opportunity to revisit any such grievances of whatever character, or the issues in the substantive application. In this regard, the applicant’s response to the respondents’ submission as describing the submissions, certainly, in part, as ‘cavilling with the judgment’ on the substantive matter, is well put.
The respondents assert, near the end of their submissions, that the basis for their submissions is “the assumption that the findings made in the principal judgment are correct” (at [83]). However, a large part of what precedes this statement is not consistent with that statement.
One of a number of examples is the complaint that the Court adopted a different approach to the applicant’s “lapses” of memory to that of the respondents’ witnesses (see at [36] of the respondents’ written submissions). Such complaints are not for this Court to address now.
For the current purposes, and in relation to the question as to whether an order for costs should be made in favour of the applicant, I note the respondents’ reference to Hughes and the reference there to Ritter v Godfrey [1920] 2 KB 47 ([30] of the respondents’ submissions):
“In Hughes v Western Cricket Assn (Inc) [1996]
ATPR 40-748, Toohey J summarised the principles where a party has been partially successful (at 48):
1.Ordinarily, costs follow the even and a successful litigant receives his costs in the absence of special circumstances justifying some other order: Ritter v Godfrey.
2.Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed: Foster v Farquhar.
3.A successful party who has failed on certain issues may not be openly deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, ‘issue’ does not mean a precise issue in the technical pleading sense but any disputed question of fact or law: Cretazzo v Lombardi.” (citations omitted).”
The respondents rely on this case to support their argument that the applicant was only partially successful in the current proceedings, that the applicant should be “deprived” of the costs related to the “issues” where he was unsuccessful, and further, that the respondents should be awarded costs in these circumstances. The respondents also submit, based on their “analysis” of the various “issues” in the judgment, that each party should bear their own costs (at [84] of the respondents’ submissions).
The respondents’ argument is dealt with below. In the meantime however, it is important, given the thrust of the respondents’ submissions, to note the following from the judgment in Hughes, that is otherwise relied upon by the respondents (Toohey J at [48]):
“Ordinarily costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.”
Whether there are “special circumstances justifying some other order” is also dealt with below.
The applicant referred the Court to Innesv Rail Corporation of NSW (No.2) [2013] FMCA 36 (“Innes”) (per Raphael FM (as he then was), at [164] – [166]). Two propositions emerge. The first is that “generally costs in these matters (discrimination cases) follow the event”.
As set out above, it is unclear, given the nature of their submissions, whether the respondents accept that costs follow the event (subject to qualification) or whether, as they in part assert, the Court should conduct some detailed examination of each of the findings made in the substantive judgment, and apportion costs according to which party was successful in each of the many points, or even “issues” decided in this case. If this is what the respondents seek then in one sense, it would be an argument for the matter of the question of costs to be referred for assessment or taxation.
I note however, as set out above, that Hughes, on which they rely, also stands for costs following the event (subject to qualification). In any event, in my view, the authorities are clear on this point and it applies to cases such as the current case.
Second, Raphael FM (as he then was) in Innes, observed the recent trend, which he described as a “distressing move by unsuccessful parties to what I have previously described as the ‘filleting’ of costs orders” (Innes at [165]).
In considering the matter of apportionment of costs, there is a
“general desirability of an award of costs in favour of a successful applicant in human rights proceedings, so as to avoid an award of damages being swallowed by the cost of litigation” (Shiels at [80] per Raphael FM (as he then was), and see Cooke v Plauen Holdings [2001] FMCA 91 at [44] per Driver FM (as he then was)).
Furthermore, it is open to the Court to refuse a request to apportion costs against a successful applicant, when an applicant has “incurred significant costs in dealing with very detailed and complex response” by a respondent and is subsequently “largely successful on the law” (Howe v Qantas Airways Ltd (No.2) [2004] FMCA 934 at [14] Driver FM (as he then was), see also Ho v Regulator Australia Pty Ltd & Anor (No.2) [2004] FMCA 402), as is the applicant’s position in this matter.
It is particularly useful to note the comments of McInnis FM (as he then was) at [8] and [9] in McBride v State of Victoria (No.2) [2003] FMCA 313:
“[8] The nature of a human rights claim very often includes complaints that arise out of what are considered to be a series of events in the course of employment, more often than not in circumstances of this kind where an applicant is aggrieved by what is perceived by the applicant to be conduct in breach of the relevant human rights legislation. Although analysed and presented as discrete events, there is an element of continuity, at least in the perception of the applicant, and it is somewhat artificial, in my view, to divide the issues exactly in the way proposed by the respondent, that is, to apportion costs on a six-seventh or one-seventh basis.
[9] Nevertheless, it is also relevant in the discretion of the court to look at the substantial outcome…”
[Emphasis Added]
I note also, the general authority that the discretion to award costs must be “exercised judicially and not against the successful party except for some reason connected with the case” (Ruddock & Ors v Vadarlis & Others (No 2) [2001] FCA 1865; (2001) 115 FCR 229 per Black CJ and French J at [9] (“Ruddock”), see also Oshlack v Richmond River Council [1998] HCA 11 at [66] per McHugh J (“Oshlack”)).
The respondents rely on a number of specific matters to argue that either the parties should bear their own costs, the applicant should not be able to recover costs in relation to certain “issues”, or that the respondents, as the unsuccessful parties should, nevertheless, be awarded costs.
First, the respondents seek to identify what they say are the “principal issues in the proceedings”, the “principal matters in the applicant’s points of claim”, and “claims” made by the applicant at the hearing, and then submit that the applicant was unsuccessful in some aspects, and partially successful in others (see at [4] ‑ [10], [58] of the respondents’ submissions).
It was not made clear by the respondents to what relevant proposition these submissions (at [56] above) were directed. At best, for the respondents, I take these submissions to be directed to the matter of possible disentitling conduct on the part of the applicant.
The difficulty in this regard for the respondent is found in part in what the High Court has said in Latoudis v Casey [1999] HCA 59; (1990) 170 CLR 178 (“Latoudis”), where Mason CJ at [13] stated:
“If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Cilli v. Abbott, at p 111. Most of the arguments which seek to counter an award of costs against an informant fail to recognize this principle and treat an order for costs against an informant as if it amounted to the imposition of a penalty or punishment. But these arguments only have force if costs are awarded by reason of misconduct or default on the part of the prosecutor. Once the principle is established that costs are generally awarded by way of indemnity to a successful defendant, the making of an order for costs against a prosecutor is no more a mark of disapproval of the prosecution than the dismissal of the proceedings.”
[Emphasis added.]
Further, McHugh J stated (Latoudis at [6]):
“In civil proceedings, the relevant statute or rule often provides that costs follow the event unless the court thinks that some other order should be made. But even when the discretion is uncontrolled, civil courts act on the basis that a successful party has a reasonable expectation of obtaining an order for costs and that the discretion to refuse to award costs should not be exercised against the successful party except for a reason connected with the case. Thus, if a plaintiff sues on two causes of action and succeeds on one, he or she will obtain the general costs of the action and the costs of the cause of action on which he or she succeeded, but the defendant will receive the costs of the cause of action on which he or she was successful.”
[Emphasis added.]
I note, however, McHugh J’s comments (although in dissent in the result) as to the relevant principle in Oshlack at [80], where his Honour noted the agreement of Mason CJ, Toohey J and his Honour in Latoudis, the latter part of which may explain the respondents’ approach (Oschlack at [80]):
“… [O]ne starts with the proposition that a successful party to litigation (the defendant in Latoudis) can usually expect to receive a costs award in its favour unless its own conduct disentitles it from the benefit of the discretion. It is the conduct of the successful party, and not the conduct or motives of the unsuccessful party, which is relevant to the exercise of the costs discretion.”
It is also important to note the observation of Gaudron and Gummow JJ at [40] of Oshlack that:
“… [t]here is no absolute rule with respect to the exercise of the power conferred by a provision such as s 69 of the Court Act that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party.”
Further, Black and French JJ observed in Ruddock at [15]:
“Usually the circumstances in which a successful party is denied all or part of its costs have to do with its conduct of the proceedings…Within the general discretion to award costs, costs may be refused where, for example, the applicant has made an exaggerated claim which has occupied a significant proportion of the proceedings and has succeeded only on a minor aspect of its original claim. Costs may be apportioned according to success or failure on particular distinct, or severable issues.: see for example Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 42 FLR 213 (at 220); Hughes v WA Cricket Association (Inc); Inn Leisure Industries Pty Ltd v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 201 (at 272). A trial judge may award only a proportion of the successful party’s costs if the conduct of that party at trial was such as to unreasonably prolong the proceedings: Latoudis v Casey (at 544); Cummings v Lewis (1993) 113 ALR 285 (Cooper J, Sheppard and Neaves JJ agreeing).”
The Full Court (Finn, Rares and Besanko JJ) in Probiotec Ltd v University of Melbourne [2008] FCAFC 5 also provided that in respect to the discretion to award costs:
“There is no absolute rule that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party with respect to the exercise of a power conferred by a provision such as s 43: Oshlack 193 CLR at 88 [40] per Gaudron and Gummow JJ. And, there is no absolute rule that the sole purpose of a costs order is to compensate one party at the expense of another under the Judicature Act system, such as is provided by s 43 of the Act: Oshlack 193 CLR at 89 [43]. The general power conferred by a provision like s 43 is not to be narrowly construed. On the other hand, where there has been some delinquency on the part of an unsuccessful party, the Court has power to order costs against that party, and sometimes on a scale greater than party/party costs: Oshlack 193 CLR at 89 [44] per Gaudron and Gummow JJ.”
If the respondents seek to argue that such disentitling conduct is evident on the part of the applicant because the proceedings were protracted and because he raised certain matters for the first time at the hearing, then two factors stand in answer.
First, this is an example, as the applicant submits, of the respondents’ approach in cavilling with the relevant findings made in the judgment at this stage. While the respondents’ submissions do not go into great detail, implicit in what is submitted, if not explicit, is the grievance with the various findings made by the Court in favour of the applicant.
Second, and of far greater importance, the respondents’ submissions here are focussed on the claims made by the applicant in his application and during the hearing in Burns. The relevant question here is the effect that those claims had on the time spent in this case (Cummings v Lewis (1993) 113 ALR 285).
But, it is important to note that the “issue in these proceedings”, that is the substantive proceedings before the Court, was whether the respondents conducted themselves in a discriminatory fashion towards the applicant (note here from judgment [4] and [1018]). The applicant was successful (wholly) on that “core” issue.
The respondents’ attempt to dissect this issue in the proceedings into its minute, and multitudinous, constituent parts, is, in the circumstances of this case, an example of what Raphael FM (as he then was) has described in Innes as the “filleting” of costs. I respectfully agree with his Honour’s approach in that case and see it as applicable to the current circumstances.
Further, that the Court found against the applicant in relation to certain matters or specific complaints does not mean there was no merit in those matters in the first place. The respondents have assumed, it must be said on a simplistic basis, that every finding made by this Court in favour of the respondents was as a result of the specific complaint lacking merit. Any plain reading of the judgment reveals that is not the case. I agree with the applicant’s submission that in relation to the substantive issue in these proceedings (as understood in light of the above) he was wholly successful (at [7] of the applicant’s final written submissions).
While the matter of delay in initiating proceedings may be relevant in certain circumstances or matters before the Court (for example, in seeking relief by way of the prerogative writs, see, Re Commonwealth; Ex parte Marks [2000] HCA 67), the respondents have not explained how it is relevant to the matter of costs in this case. This matter of delay was dealt with in the Burns judgment at [179] – [195]. To raise the matter again is another example of cavilling with these findings.
It is not clear how the applicant’s failure to comply with orders (made on 10 November 2010) for the filing and serving of his documents can be said to be “disentitling conduct” for the entire costs of these proceedings. Nor, in a similar vein, have the respondents explained how the matter relating to “Carol Regan” is disentitling conduct on the part of the applicant as that term is understood with reference to relevant authorities (see, for example, Colgate-Palmolive).
While the respondents have calculated the time taken by the applicant to cross-examine witnesses, such an analysis, on its own, and without reference to such elements as the nature and character of questions asked, and responses made, their own conduct during the hearing and the relevance of the evidence to the disposition of the matter (noting that this is not an exhaustive), is not helpful to resolve the dispute about costs.
Finally, in their written submissions, the respondents assert that the applicant “cannot be said to be a model litigant” (see at [31]). The applicant submits it is the Crown (or Ministers of the Crown) which is obliged to conduct itself as a model litigant (at [12] of the applicant’s final written submissions). No such obligation applies to the applicant. This argument by the respondents appears to be a diversion from the central issue of whether the applicant engaged in any disentitling conduct. The question of the model litigant is not relevant to the determination of costs in this matter. The applicant, as with all applicants in the human rights jurisdiction, is not required by common law, or relevant legislation, to be a model litigant, as he is not the Crown, or an agency of the Crown. (see for example, Australian Securities and Investments Commission v Hellicar [2012] FCA 17, LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90, Melbourne Steamship Limited v Moorhead (1912) 15 CLR 333 at 342 and Legal Services Directions 2005 (Cth)).
In all therefore, the applicant is entitled to his costs on a party and party basis. He was wholly successful in the substantive proceedings (as explained above) and the circumstances before the Court, including consideration of the applicant’s “conduct” in the proceedings, are not such as to warrant departure from a costs order in his favour in the usual way.
Having arrived at the conclusion that the applicant is entitled to his costs, the issue becomes one of whether such an order should be in accordance with r.21.10 (that is as set in Parts 1 and 2 of Schedule 1 to the FCC Rules and “disbursements properly incurred”), or otherwise.
Rule 21.10 if the FCC Rules, which is in the following terms:
“Costs and disbursements
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.”
I do not comprehend r.21.10 of the FCC Rules as attempting to “regulate” (in the sense of limiting or confining) the exercise of the Court’s discretion. The words “[u]nless the Court otherwise orders…” make that clear. The Court’s discretion in relation to costs, and the extent to which costs are to be paid, and by whom, as the applicant submits, “must be exercised, judicially” (Ruddock at [9]). I note that this has been applied in human rights matters (Fetherston v Peninsula Health [2004] FCA 485, Purvis v New South Wales [2003] HCA 62; (2003) 217 CLR 92, King v Jetstar Airways Pty Ltd [2012] FCAFC 115, Latoudis and Oshlack).
In this light, the applicant seeks costs, in accordance with the Schedule referred to in r 21.10 of the FCC Rules, but has invited the Court to consider an order as to costs on an indemnity basis.
In their submissions, the respondents make no reference to r.21.10 of the FCC Rules. It is unclear therefore whether they oppose any order for costs in favour of the applicant consistent with the relevant Schedule, should the Court reject their argument that the applicant should not be given his costs.
As stated above, the applicant proposes two alternate bases to support his claim for costs on an indemnity basis. These are the respondents’ conduct, and the applicant’s offer to the respondents to settle the matter made on the 17 November 2011.
It is convenient to note with some detail the applicant’s submissions already referred to above. The applicant proposes a number of factors as relevant to the consideration regarding the respondents’ conduct (at [75] of the applicant’s initial written submissions). These are (Wiggins at [35]):
“…
c. whether a successful party will lose the benefit of their victory because of the burden of their own legal costs;…
e. whether unmeritorious claims and conduct has unnecessarily prolonged proceedings (which should be discouraged); and…
f. whether the applicant was only partially successful.”
In relation to “c” the applicant submits that the total costs relevant to the proceedings are “significant”. He argues that the amount of damages, $81,213.46, is less than half of the legal costs incurred by the applicant (see [8] of the applicant’s initial written submissions). In this light, he urges the Court to heed the dicta in Shiels (per Raphael FM, as he then was) at [10] (see above at [6]).
In relation to “e”, the applicant argues that the respondents have engaged in unmeritorious conduct which has unnecessarily prolonged the proceedings. He submits that such conduct can occur before a hearing begins (Tate at [71]) and during the hearing (Hughes and Colgate-Palmolive at 231–234). The applicant lists factors that may warrant an indemnity costs order at [11] of his submissions:
“…
a.the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;
b.misconduct that causes loss of time to the court and to other parties;
c.the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law;
d.the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;
e.an imprudent refusal of an offer to compromise; and
f.where one party has been in contempt of court.”
The applicant also lists a number of examples to support his argument that a case listed initially for a three day hearing ultimately greatly exceeded this period (in all thirteen days), which had the consequence that the “legal bill” which the applicant is required to meet outstrip by far his recovery of damages, and continues to exceed the amount of such recovery with any award of costs under Schedule 1 of the FCC Rules. Further, this was a “primary factor”, or “driven largely”, by the respondents’ approach of objecting to the tender of documents and questions on cross-examination (see examples at [16] of the applicant’s initial written submissions).
Further, the applicant submits that this time was also increased by the respondents’ focus “on issues unrelated to the issues to be decided before the Court” and submissions referring to various claimed elements in the applicant’s evidence, and claimed non-compliance with the Court’s orders (at [16] of the applicant’s submissions).
The applicant further refers to Wong (per Driver FM, as he then was, at [10]):
“The applicant has been wholly unsuccessful in these proceedings. The application was pursued in a desultory way by the applicant and in the knowledge that the allegations made by her were untruthful. Accordingly, the application must be dismissed with costs. In addition, it is appropriate in the circumstances that the Court express its strong disapproval, both of the fact that the application was made at all and also the manner in which it was pursued. Applications of this nature, based upon untruthful evidence, are apt to bring anti-discrimination legislation into disrepute, and do a grave disservice to others wishing to pursue a genuine grievance. The respondents should not be out of pocket in having dealt with this application.”
[Emphasis Added]
The applicant asks the Court to note, in this regard, various findings in the substantive judgment that the evidence of the second respondent was not to be believed and the second respondent’s admissions that a document sent to the AHRC was “not correct”. The document was sent in “defence” of the claim made against the respondents and was relied upon in the hearing before the Court. This was in circumstances where the second respondent knew the contents of the documents were “not correct” in material matters as at the time of its sending, and that he admitted to this at the hearing (see [18] of the applicant’s initial written submissions).
It must be said that in their written submissions, the respondents continue the approach utilised in the conduct of their response during the hearing of the substantive application (see judgment at [17]). This was to seek to “answer” the applicant’s allegations with “counter allegations” against the applicant’s conduct during the hearing.
The difficulty however, is that no satisfactory attempt was made by the respondents to counter the actual relevant assertions made by the applicant in this regard (other than in one aspect dealt with below, see “objections”).
Importantly, the respondents’ submissions say nothing about the admissions made by the second respondent in relation to the document sent to the AHRC, (with the obvious reference to s 46PN of the Australian Human Rights Commission Act 1986 (Cth) (“the AHRC Act”)), and the conduct of relying on this document during the hearing when on his own evidence the second respondent also knew the document (relevantly) was “not correct”.
A number of matters raised by the respondents’ submissions are not helpful to the consideration of costs and in one sense, some are irrelevant.
It would appear that the reference to “the principal issue in the proceedings” ([4]–[6] of the respondents’ submissions) and subsequent points under the headings of “Principal matters in the [a]pplicant’s Points of Claim” (at [7] – [8]) and “Principal claims of the applicant” (at [9] ‑ [10]) are intended to assert the basis for an argument that the applicant unnecessarily extended the time of the hearing by proposing and pursuing matters “irrelevant” to his case.
The difficulty for the respondents is that despite the claim that their submissions were based on the assumption of the correctness of findings made in the judgment, they did not point to any findings in the judgment to support their own assertion now. The time to have argued, and pressed, for such findings passed with the handing down of the judgment. Further, as the applicant now submits, such an approach, again, seeks to cavil with the findings made by the Court.
Further, the respondents appear not to understand, as the applicant submits, that their approach during the hearing and their constant “objections” were inimical to the exercise of the human rights jurisdiction in this Court (see Burns at [11]).
Further, their approach ignores the statutory framework governing the creation and operation of this Court. The object of the FCCA Act (at s.3(2)(a)) is to “enable the Federal Circuit Court of Australia to operate as informally as possible in the exercise of judicial power”. This is emphasised with the statutory direction in s.42 to “proceed without undue formality and must endeavour to ensure that the proceedings are not protracted”.
This, plainly, does not mean that the rules of evidence can be, or are to be, ignored. Section 8(3) makes clear that this is a “court of record and is a court of law and equity”. However, if the respondents had wished or intended, to pursue the conduct of their response to the applicant in a fashion inimical to the method of operation in this Court (as they subsequently did), then that should have been made clear at the beginning of the hearing, or earlier. No application for transfer of these proceedings to the Federal Court was made by them.
I note the following matters. First, given the undue protraction of these proceedings (in terms of hearing days in particular) and given the other factors ultimately in favour of the applicant referred to immediately above, and bearing in mind that the amount of the applicant’s award of damages (as opposed to the costs actually incurred), then this is a case where that difference would mean the award would, in effect, be extinguished, then it argues against an order set or fixed in the amounts set in Schedule 1 (with reference to r.21.10 of the FCC Rules). These circumstances argue for the Court to “otherwise order” that the applicant should have his costs payable by the first, second and third respondents as agreed, or assessed.
A note here needs to be made of the respondents’ written submissions at [66] – [71]. I assume the respondents seek to question the basis on which the applicant’s legal representatives “have been representing him”. The assertion is that this was done “on a speculative basis” ([66]).
While these submissions were directed to the matter of indemnity costs (see further below) it is important to note for the sake of completeness that they do not assist the respondents in relation to the conclusion at [97] above.
As the applicant submits, the respondents’ submissions here are made without reference to evidence or any relevant case law (“assertions”, as at [14]g of the applicant’s final submissions). An assertion that there is “no evidence that the applicant has paid a single cent” to his legal representatives is, as the applicant submits, “made, in circumstances where there is no evidence before the Court about any of the matters asserted” (see the applicant’s submissions in reply at [14]). However, the applicant’s concern that the respondents’ submissions “appear to make allegations against the applicant’s legal representatives that amount to allegations of potential breach of the Legal Profession Act 2004 (NSW)” ([14]g of the applicant’s final written submissions), is not revealed on a careful reading of the respondents’ submissions. If any such implication can be read into these submissions then, in the circumstances, and in the absence of evidence to even suggest any such implication, the submissions would, if read that way, be improper.
In any event, the question now remains as to whether the applicant should have his costs, as agreed or assessed, on an indemnity basis.
“Calderbank offer”
The applicant relies on a letter given to the respondents on or about the last day of the hearing, 17 November 2011. In his submissions the applicant refers to this as a “Calderbank offer”. He makes clear that he wishes to distinguish this from an offer of compromise in accordance with the Federal Court Rules 2011 (Cth) (“the FC Rules”) otherwise applicable to this Court.
The material referred to in the applicant’s initial submissions (the affidavit of Mr S. Amos) reveals that the communication from the applicant submitted to the respondents’ legal representatives was described the as an “offer of compromise” (see page 24 of the affidavit, email of 6 May 2013).
First, I must make a note on the distinction between an “offer to compromise” and a Calderbank letter. The former allows an application for an order for costs pursuant to the FC Rules (see r.25.14) in circumstances where the party (in this case, the respondents) served with an offer, did not accept the offer, and the terms of the offer were less favourable to the offeror than the outcome in the judgment following litigation (see for example, Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17).
This can be distinguished from the latter, which relies on written communication between legal representatives where an offer of settlement is made, which is not subject to the formal time and notice requirements under Pt 25 of the FC Rules. Under r.25.14(3) an offer to compromise must:
“If an offer is made by an applicant and not accepted by a respondent, and the applicant obtains a judgment that is more favourable than the terms of the offer, the applicant is entitled to an order that the respondent pay the applicant’s costs:
(a) before 11.00 am on the second business day after the offer was served—on a party and party basis; and
(b) after the time mentioned in paragraph (a)—on an indemnity basis.”
Relevant to the circumstances in this case (if indeed the offer made on 17 November 2011, was a “Calderbank Offer”) is that the circumstances in Calderbank envisage an offer made prior to hearing or trial. Reliance on the letter is relevantly engaged when the matter then proceeds to trial.
It is important to determine the nature of the offer made on 17 November 2011. The offer does not constitute an “offer to compromise” under r.25.01, as there is no evidence before the Court that notice of this offer in accordance with the requirements of Pt 25 of the FC Rules was served upon the respondents. The applicant now submits that this offer to settle was a “Calderbank Offer”, in accordance with the common law principles derived from Calderbank (see [21] of the applicant’s initial written submissions). The respondents appear to acknowledge the nature of this offer as a “Calderbank offer” in their written submissions (see at [60]).
In Specsavers Pty Ltd v Luxottica Retail Australia Pty Limited (No 2) [2013] FCA 807 (“Specsavers”), Griffiths J set out the principles relevant to such offers (at [10]):
“The relevant principles may be summarised as follows:
o under s 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the Court has a power to award costs, which includes a power to award costs on an indemnity basis. The discretion to award costs must be exercised judicially;
o while various cases have identified various relevant factors, the presence or absence of which may be persuasive as to whether indemnity costs are appropriate, the exercise of the discretion in a particular case must depend on all relevant circumstances of that case (see MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 238 per Lindgren J);
o the unreasonable or imprudent rejection of a Calderbank offer may result in indemnity costs being awarded. The mere rejection of a Calderbank offer followed by a result which is more favourable to the offeror and less favourable to the offeree than that represented by the offer does not automatically lead to the making of an order for payment of costs on an indemnity basis (MGICA at 239; Black v Lipovac [1998] FCA 699; (1998) 217 ALR 386 at 432 );
o Part 25 of the Federal Court Rules 2011 establishes a regime which, if utilised, gives rise to a presumptive entitlement to indemnity costs (see MGICA at 240 and Specsavers Pty Ltd v The Optical Superstore Pty Ltd (2012) 208 FCR 78). But that regime was not employed here. It might also be noted that, under that regime, an offer to compromise has to be open to be accepted for a period of not less than 14 days after the offer is made (r 25.05);
o the offeror needs to show that the conduct of the offeree was unreasonable and that conduct is to be viewed in light of the circumstances which existed at the time the offer was rejected. The fact that the offeree ultimately fails to make good their case does not mean that they acted unreasonably in rejecting an offer (Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224; (2002) 190 ALR 121 at [28] per Weinberg J); and
o a helpful but non-exhaustive list of circumstances which may be relevant in determining whether the rejection of a Calderbank offer is reasonable or not is set out in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 at [25] and includes:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed; and
(f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejection of it.”
In that case Griffith J found that, in considering the stage of the proceeding at which the offer was made, ‘it was not reasonable of the respondent to delay until the day before the hearing to make the first of the Calderbank offer upon which it now relies” (Specsavers at [14]).
It is interesting to note that in the affidavit of Mr S. Amos, submitted with the applicant’s written submissions with respect to costs (which has not been formally admitted into evidence), there is an attachment containing an email dated 6 May 2013 entitled “[B]urns offers of compromise” that refers to three separate “offers of compromise” made by the applicant during these proceedings.
First, an “offer of compromise” dated 19 April 2011 was said to have been faxed to the respondents’ solicitors. Second, a further “offer of compromise” was said to have been made on the 19 August 2011 “in the sum of $100,000.00 inclusive of interest plus costs as agreed or accessed [sic]” and finally, the “offer of compromise” made on the final day of hearing, 17 November 2011, in the sum of $79,000.00 inclusive of interest plus costs as agreed or assessed. As the applicant made no reference to the “offers of compromise” of 19 April 2011 and 19 August 2011 in his written submissions with regards to costs, the Court will proceed on the basis that the applicant did not seek to rely on these offers with respect to seeking costs on an indemnity basis.
I was not persuaded that the applicant should have his costs on an indemnity basis as a result of this remaining offer. First, the offer cannot, in the circumstances, assist the applicant for the period prior to its communication to the respondent.
Second, the offer was said to have been made and received on, or about, the last day of the hearing (the thirteenth day). The applicant says that as this was “well into the hearing” it was reasonable for the respondents to accept the offer. The applicant relies in this submission, in essence, on the findings subsequently made by the Court, in relation to the rejection of a large part of the crux of the respondents’ evidence.
A difficulty for the respondents at that time in responding to the offer in the way the applicant now says, was that, other than for the admission by the second respondent in relation to the letter to the AHRC, it cannot be said that they knew or could accurately or properly speculate, as to the Court’s subsequent findings.
In any event, and importantly, it would appear that no record exists of the offer of 17 November 2011 (see the affidavit of Mr Amos of 10 May 2013 at annexure “E”, “no record (ie facsimile or email) exists”). It is, therefore, not possible to determine the clarity of the terms of the offer. Nor can it be said that it foreshadowed any application for an order for costs on an indemnity basis. This, therefore, does not assist the applicant in relation to indemnity costs.
The Respondents’ Conduct
The applicant also relies on what, he says, is the conduct on the part of the respondents during the course of the hearing. Such circumstances may include “misconduct” (Fountain) or, where there has been an unreasonable rejection of an offer of compromise that was not surpassed in the litigation (Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425).
A successful party should expect to receive costs unless its own conduct “disentitles” it from the exercise of the Court’s discretion (Oshlack, Latoudis and De Alwis v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCAFC 77 (“De Alwis”)). In that sense, it is, in the current case, the applicant’s and not the respondents conduct which is of relevance. I have set out above, that, in my view, the claimed “disentitling conduct” attributed to the applicant by the respondents is not made out. In terms of the respondents’ request for indemnity costs in their favour, either in whole or in part, this must also be rejected. The matters relied upon by the respondents in this regard either have no basis in the findings made by the Court in law, or whether some factual basis may be asserted (the applicant’s call for further directions in relation to written submissions on costs). The circumstances are such that the explained conduct by the applicant cannot be described as disentitling conduct (see applicant’s final written submissions at [91])
In relation to the respondents’ conduct, I comprehend the authorities referred to above, to be as follows. Costs are not to be awarded by way of punishment of the unsuccessful party (Latoudis). That is, in the context of indemnity costs, it is where there has been some “delinquency” on the part of an unsuccessful party, the Court “sometimes” has the power to order costs at a “scale greater than party and party costs” (Oshlack). The Court has the power to award costs on an indemnity basis “in appropriate cases in particular circumstances” (De Alwis and Colgate Palmolive).
The question here is, should costs be awarded on an indemnity basis? That is, has there been “delinquency” on the part of the respondents such that there are circumstances where this is such a case where costs should be awarded on that basis?
In the present case there are at least two matters that render the answer to that question in the affirmative. First, the second respondent admitted during the course of the hearing that he knew at the time of sending a letter to the AHRC in response to the applicant’ complaint that the contents of that letter were substantially not true (see judgment at [724] – [730]).
The significance of that conduct (the sending of the letter), in which the third respondent played some, albeit lesser, role (she, at the very least, knew of it, see [774] of the Burns judgment), and the second respondent acted on behalf the first respondent, appears to have escaped the understanding of the respondents.
The AHRC has been created by Parliament to address complaints of discrimination. Its functions include the duty “to inquire into, and attempt to conciliate, complaints of unlawful discrimination (s.11(1)(aa) of the AHRC Act). There is an expectation that parties deal honestly with the Commission. This expectation is statutorily reinforced by s.46PN of the AHRC Act.
In my view, persons in the community should be aware of the need to engage with such bodies as the AHRC in an honest fashion. But even if, for the sake of argument, it could be said that the respondents, prior to the initiation of these proceedings, did not understand this, or the significance and consequences of not doing so, they had the opportunity to do so at the commencement of these proceedings, when they engaged not only solicitors but also counsel to represent them. The opportunity presented itself at that time to understand the importance of what they had done.
In the substantive proceedings the respondents made a long list of allegations against the applicant. All had the effect, given the nature of their cross-examination of the applicant and their written submissions in the substantive proceedings, to seek to portray him in an adverse light. The matter of the credibility of both parties was critical in these proceedings (“The Contest of Credibility” see, for example, at [518] – [531] of the judgment).
The respondents’ response to the application and their conduct in pursuing their “defence” against the applicant by impugning his credibility was done against the background of the second respondent (with involvement of the third respondent and on behalf of the first respondent) having knowingly lied to the AHRC in matters subsequently central to these proceedings (see judgment at [724] – [730]).
Plainly, the awarding of indemnity costs against the respondents is not to punish them for these falsehoods to the AHRC. Consideration of that matter is properly for the AHRC.
But what does, relevantly, come within the description of “delinquent” conduct is the pursuit of this response, and the nature of that response, in circumstances where their own credibility was known or should have been known by them to have been diminished.
Second, the applicant also refers to the respondents’ conduct during the hearing in the constant objections to questions (and sometimes before questions were asked) put to their witnesses (see judgment at [11]).
It is the case that the proceedings were unduly delayed by this conduct. Significant here was the respondents’ failure to act consistently with the objectives of this Court to “operate as informally as possible in the exercise of judicial power” and used “streamlined procedures” (s.3(2)(a) and s.3(2)(b) of the FCCA Act).
Further, the practice that has developed in this Court in human rights matters, as the applicant submits, and consistent with the objectives of the Court, is to adopt an approach of leaving matters of the exposition and understanding of evidence for submissions rather than approaching cross-examination as a process of attrition. The respondents’ conduct in this regard led to a far lengthier hearing than otherwise necessary. This also is conduct justifying the award of indemnity costs.
I should note for the sake of completeness, that the extract from the transcript of the judgment relied on by the respondents (see at [59]) cannot be represented as a finding by the Court. In any event, although clumsily expressed by the Court, it is tolerably clear, if regard is had to the context of the transcript, that this was a question put to the applicant’s counsel. That counsel responded as she did does not represent a finding by the Court.
Conclusion
In all, therefore, the applicant is entitled to his costs on an indemnity basis and as assessed unless the parties can otherwise agree. I will make an order accordingly.
I certify that the preceding one hundred and thirty-two (132) paragraphs are a true copy of the reasons for judgment of Judge Nicholls
Associate:
Date: 28 November 2013
53
7