Christian Youth Camps Limited v Cobaw Community Health Services Limited (No. 2)

[2014] VSCA 112

SUPREME COURT OF VICTORIA
COURT OF APPEAL

S APCI 2010 0143
CHRISTIAN YOUTH CAMPS LTD (ACN 095 681 342)	First Appellant
and
MARK ROWE	Second Appellant
v
COBAW COMMUNITY HEALTH SERVICES LTD (ACN 136 366 722)	First Respondent
and
VICTORIAN EQUAL OPPORTUNITY AND HUMAN RIGHTS COMMISSION	Second Respondent
and
ATTORNEY–GENERAL FOR THE STATE OF VICTORIA (No 2)	Intervener

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JUDGES:	MAXWELL ACJ, NEAVE and REDLICH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	Decided on the papers
DATE OF JUDGMENT:	6 June 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 112
JUDGMENT APPEALED FROM:	Cobaw Community Health Services v Christian Youth Camps Ltd & Anor (Anti-Discrimination) [2010] VCAT 1613 (Judge Hampel)

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COSTS – Appeal – Appellants failed on all grounds raised in notice of appeal – Second appellant succeeded on point raised by Court – Whether second appellant entitled to costs – Written agreement between parties to limit costs exposure – Whether agreement should be enforced – First appellant ordered to pay first respondent’s costs up to agreed limit.

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APPEARANCES:	Counsel	Solicitors
No appearances by leave of the Court

MAXWELL ACJ
NEAVE JA
REDLICH JA:

1. On 16 April 2014, we published our reasons in the substantive appeal proceedings.[1]  In the result, the appeal of the first appellant, Christian Youth Camps Ltd (‘CYC’) was dismissed, while the appeal of the second appellant, Mark Rowe (‘Mr Rowe’), was allowed. 

   [1]Christian Youth Camps Limited v Cobaw Community Health Services Ltd [2014] VSCA 75.

1. At the invitation of the Court, the parties subsequently filed written submissions on the question of costs.  No further hearing was requested, nor has it been necessary.  For reasons which follow, we have concluded that CYC should pay the costs of the first respondent, Cobaw Community Health Services  Ltd (‘Cobaw’) up to a limit, as agreed between the parties, of $50 000.

Who should pay the costs?

1. The appellants accept that, since CYC failed entirely, in ‘the ordinary course’ CYC should pay Cobaw’s costs.  They submit, however, that there should be no order as to costs since:

(a)Mr Rowe having succeeded in his appeal, he is entitled to an order for costs against Cobaw;  and 

(b)the quantum of costs being limited to $50 000 by agreement between the parties (see paragraph 8 below), the amount to which Cobaw would be entitled as against CYC is cancelled out by the amount which Cobaw would be obliged to pay Mr Rowe.

1. This argument may be disposed of shortly. As the Cobaw submission correctly points out, Cobaw succeeded against both appellants on all of the questions of law which the appellants had raised in their grounds of appeal. Only Redlich JA concluded that the appellants’ conduct was covered by the exemption in s 77 of the Equal Opportunity Act 1995 (Vic) (‘EO Act’).

1. That Mr Rowe succeeded in his appeal reflected the conclusion of Maxwell P that the act of discrimination was committed by CYC itself, on whose behalf Mr Rowe was acting, and that he himself had no liability for the contravention of the EO Act.[2] The issue of whether Mr Rowe’s conduct should be attributed to CYC was not a point raised by the appellants at any stage of the proceeding, either at first instance or on the appeal.  (After the issue was raised by the Court, the appellants changed their position and submitted that, if there was any contravention, it was a contravention by CYC. [3]) 

   [2]Ibid [97]–[154].

   [3]Ibid [88]–[90].

1. In short, Mr Rowe’s appeal failed entirely on the merits.  It succeeded only because of the legal issue of attribution which the Court itself identified.

1. In the circumstances, Cobaw is properly to be viewed as having wholly succeeded in resisting the appellants’ challenge to the decision of the Tribunal.  CYC should be ordered to pay Cobaw’s costs of the appeal up to 31 March 2013 on a party/party basis and from 1 April 2013 on a standard basis.

Should the agreed costs limit be enforced?

1. In early February 2011 — more than two years before the hearing — the appellants and Cobaw (through their respective solicitors) entered into a written agreement regarding costs.  The relevant recitals to the agreement were in these terms:

E.The parties hereto acknowledge that each has limited financial resources and that the prosecution of the appeal will entail substantial expenditure upon costs for each of them.

F.They have determined to enter these Terms in order to limit their respective potential exposure to any order for costs with respect to the appeal proceeding.

1. The substantive agreement between the parties was in these terms:

1.  The Parties hereby agree that:

a)In the event that the Applicants are granted leave to appeal and/or are successful in their appeal and in either or both circumstances the Court of Appeal exercises its discretion to award costs in favour of one or both of the Applicants, the first Respondent’s liability to pay the Applicants’ costs of and incidental to the proceeding is limited to a maximum of $50 000 exclusive of the order for costs made by the Court of Appeal on 4 February 2011 in respect to paragraphs 1 and 2 of the First Respondent’s application.

b)In the event that the Applicants are not granted leave to appeal or are unsuccessful in their appeal and in either or both circumstances the Court of Appeal exercises its discretion to award costs in favour of the First Respondent, the Applicants’ liability to pay the First Respondent’s costs of and incidental to the proceeding is limited to a maximum of $50 000.

c)Both parties agree that they will not hereafter make any application in this proceeding of or in the nature of a protective costs order.

1. As a rule, agreements governing parties’ liability for costs will be given effect to — at least where they are ‘plainly and unambiguously expressed’[4] — unless there is some overriding discretionary consideration which would make enforcement of the agreement unjust.[5]  In the present case, in our view, the parties should be treated as bound by the terms of the agreement they made. 

   [4]Re Adelphi Hotel (Brighton) Ltd [1953] 2 All ER 498, 502. See also Kyabram Property Investments Pty Ltd v Murray (No 2) [2005] NSWCA 87, [12]–[13].

   [5]Chen v McNamara & Son Pty Ltd [2012] VSCA 229, [8], citing Re Adelphi Hotel (Brighton) Ltd [1953] 2 All ER 498 and Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 3) [2010] NSWSC 1139.

1. In substance, each party[6] promised the other that, if it were successful in the appeal proceeding, it would not seek to recover costs against the other party above the maximum of $50 000.  Everything done by the parties after the date of the agreement was done in full knowledge that the maximum recoverable as costs in the event of success — and the maximum payable in the event of failure — was $50 000. 

   [6]For this purpose, we treat the appellants as a single party.  They were represented throughout by a single legal team.

1. The submission for Cobaw is that the agreement is a private matter between the parties, which ‘cannot impact on the question of whether (and if so, how) the Court should exercise its discretion to award costs’.  The Court should exercise its discretion in the usual manner, it is said, without regard to the agreement, and the parties should be left to work out between themselves what flows from the terms of their agreement.

1. We do not agree.  From the outset, the terms of the agreement formed part of the record of the proceeding.  On 4 February 2011, Maxwell P and Buchanan JA ordered that the applications for leave to appeal be heard at the hearing of the appeals.  Under ‘Other Matters’, the Court’s authenticated order recited that the parties had entered into the agreement and that, under its terms, each party’s maximum liability for costs was $50 000.

1. There is, we think, a helpful analogy with the enforcement of an agreement entered into in settlement of a civil claim.  Strictly speaking, a settlement agreement is a ‘private agreement’ which should be enforced by a separate suit for specific performance.  It is well established, however, that in the event of default such an agreement may be enforced by application made in the proceeding which was settled.[7]  It is plainly advantageous to all concerned that this should be so.  For like reasons, it is just and convenient that the present costs agreement be enforced in the proceeding to which it relates.

   [7]Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd [1956] VLR 555.

1. The reasons for judgment of Maxwell P drew attention to the length and complexity of the proceedings, and set out the full procedural history. We are not persuaded that anything done, or omitted to be done, by the appellants in the period 2011–13 gives rise to any discretionary ground for declining to enforce the agreement on costs. We accept that the prosecution and presentation of the applications for leave to appeal was done in good faith and with reasonable expedition, and we are not persuaded that there was any breach of the overarching obligations in pt 2.3 of the Civil Procedure Act 2010 (Vic).