Clack v Command Recruitment Group Pty Ltd and Anor (No.2)
[2010] FMCA 198
•31 March 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CLACK v COMMAND RECRUITMENT GROUP PTY LTD & ANOR (No.2) | [2010] FMCA 198 |
| HUMAN RIGHTS – Disability discrimination – application dismissed – costs awarded to respondent by reference to Federal Court Rules. |
| Australian Human Rights Commission Act 1986 (Cth), s.46PO Federal Court Rules (Cth), O.23, rr.8(2), 11, O.62, rr.19, 22, 36(2), 43, 44 Federal Magistrates Act 1999 (Cth), ss.79, 104(2) Federal Magistrates Court Rules 2001 (Cth), rr.1.05(2), 21.02, 21.02(2), 21.02(2)(c), 21.14, 21.15, 21.16, Sch.1 |
| Clack v Command Recruitment Group Pty Ltd & Anor [2010] FMCA 42 Dubow v Fitness First Australia Pty Ltd [2010] FMCA 56 Skalkos v T & S Recoveries Pty Ltd (2004) 65 NSWLR 151 |
| Applicant: | DARREN CLACK |
| First Respondent: | COMMAND RECRUITMENT GROUP PTY LTD (ACN 054 275 919) |
| Second Respondent: | MICHAEL COLLINS |
| File Number: | SYG 3399 of 2008 |
| Judgment of: | Smith FM |
| Date of Last Submission: | 8 March 2010 |
| Delivered at: | Sydney |
| Delivered on: | 31 March 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Shoebridge |
| Solicitors for the Applicant: | Barwick Legal |
| Counsel for the Respondents: | Mr P Newall |
| Solicitors for the Respondents: | Parry Carroll Lawyers |
ORDERS
The applicant must pay the second respondent’s costs as agreed or taxed under Federal Court Rules O.62. Pursuant to Federal Magistrates Court Rules r.21.02(2)(c), refer those costs for taxation by a Registrar under O.62.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3399 of 2008
| DARREN CLACK |
Applicant
And
| COMMAND RECRUITMENT GROUP PTY LTD (ACN 054 275 919) |
First Respondent
| MICHAEL COLLINS |
Second Respondent
REASONS FOR JUDGMENT
I have published a judgment in this matter, explaining my reasons for dismissing Mr Clack’s application under s.46PO of the Australian Human Rights Commission Act 1986 (Cth) (see Clack v Command Recruitment Group Pty Ltd & Anor [2010] FMCA 42). I am now addressing issues of costs, which the parties agreed should be decided in Chambers upon written submissions.
An unsuccessful applicant in a proceeding under s.46PO of the Australian Human Rights Commission Act is not protected from adverse costs orders by any provision of legislation, nor by any rules of court or practice in the Federal Court or this Court. In a recent judgment, Dubow v Fitness First Australia Pty Ltd [2010] FMCA 56, I said:
I do not consider that costs applications in discrimination proceedings should be addressed in any manner different to those made in any other of this Court’s jurisdictions to which its general power to award costs applies, accepting that the power is discretionary and is to be exercised by reference to the circumstances of the case. If observations of Driver FM in Hinchliffe v University of Sydney (No.2) [2004] FMCA 640 at [10] imply otherwise, then I would respectfully disagree.
I suggested that the discretionary award of costs in such proceedings should usually follow the principle that:
… the usual order for costs should be made and quantified, “to indemnify the successful party” against its professional fees and out‑of‑pocket expenses at a level appropriate to a ‘party and party’ assessment of costs in civil litigation (cf. Cachia v Hanes (1994) 179 CLR 403 at 410‑416, Latoudis v Casey (1990) 170 CLR 534 at 543, 557, 563, and 566‑7, Oshlack v Richmond River Council (1998) 193 CLR 72 at [35], [40], [60]‑[70], [85], and [134.4]).
The Court has very broadly framed discretions in this respect. Section 79 of the Federal Magistrates Act 1999 (Cth) provides:
79Costs
(1)This section does not apply to family law or child support proceedings or proceedings in relation to a matter arising under the Fair Work Act 2009.
Note:See section 117 of the Family Law Act 1975 in relation to family law or child support proceedings. See section 570 of the Fair Work Act 2009 for proceedings in relation to matters arising under that Act.
(2)The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court (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 Magistrates Court or Federal Magistrate.
Federal Magistrates Court Rules r.21.02 provides:
21.02Order for costs
(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 Order 62 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.
I observed in Dubow (supra):
50.The Rules contain in Sch.1 an ‘event based costs scale’, apparently designed to assist lump‑sum costs awards in normal or routine proceedings in the Court. The scale applies ‘unless the Court otherwise orders’ in relation to costs for which a party is automatically entitled under the Rules (see r.21.10). However, its presence does not, in my opinion, carry any implication confining the breadth of discretion expressly conferred by r.21.02(2) in relation to alternative methods for quantifying or taxing costs when exercising the Court’s s.79 discretionary power.
51.Some of my colleagues have no difficulty detecting how Sch.1 should be applied in proceedings which have not followed a ‘normal’ path to a final order. Other federal magistrates, including myself, find difficulty applying its terms so as to arrive at a party and party costs award which would serve the normal purposes of such an award. The Federal Court registrars, upon whose services the Federal Magistrates must rely, disclaim any capacity to apply Sch.1 under their delegated powers, notwithstanding that they are expert taxing officers. I do not myself have expertise in the assessment of solicitor’s costs, since my professional life omitted experience in relation to the preparation and taxation of solicitor’s bills of costs on normal party and party principles. In this situation, it has been my own usual practice to fall back on the provisions of O.62 of the Federal Court Rules, sometimes with a 20% discounting of its scales of professional costs, where I have concluded that a taxation process by an experienced costs assessor would be warranted. At other times, I have determined a lump sum at a heavily discounted level, if I am confident it would not exceed the costs recoverable on taxation.
Notwithstanding that the scales of professional fees applied on a taxation under O.62 have been determined as appropriate for proceedings in the Federal Court, and not this Court, their rates are not obviously inappropriate to many matters in this Court. This includes their scales based on professional time. Moreover, a taxing officer conducting a taxation under O.62 pursuant to a reference by this Court would, in my opinion, be required to take into account the forum in which the proceedings were conducted, and the nature and importance of the proceedings. This context provides the foundation for the taxing officer’s assessment of what costs, charges and expenses will “appear to him to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party” under O.62 r.19. They will inform his or her assessment of discretionary items under O.62 r.22, which expressly refers to a consideration of “the nature and importance of the proceeding”. They will also assist his or her assessment whether any costs were “improperly, unreasonably or negligently incurred” under O.62 r.36(2).
I consider that the combined effect of the above rules of both Courts is that a party in this Court cannot expect to recover, even under a taxation under O.62, a level of party/party costs which appears disproportionate to the proceedings in which the award is made. The test of “necessary or proper” includes, in my opinion, a need to consider the over‑all outcome of the taxation, when considering the extent to which the claimed particular items of costs should be allowed on a party/party basis. As has been said in relation to the arguably more generous test of “reasonably and properly incurred” under the NSW scheme of costs assessment:
In my opinion, in determining whether costs have been reasonably and properly incurred, it is relevant to consider whether those costs bear a reasonable relationship to the value and importance of the subject matter in issue. …
(See Skalkos v T & S Recoveries Pty Ltd (2004) 65 NSWLR 151, per Ipp JA at [8], with whom Sheller JA and Grove J agreed).
These aspects of a taxation under O.62, when conducted in relation to an award of costs in this Court, suggest that it may normally not be necessary to give special directions to the taxing officer, nor to direct an across‑the‑board adjustment to the scales prescribed under O.62. Particularly, since a Registrar’s decisions in a taxation would be reviewable in this Court, under s.104(2) of the Federal Magistrates Act, in accordance with the procedures in O.62 rr.43 and 44 as applied by Federal Magistrates Court Rules r.1.05(2).
In the present case, Mr Collins has applied for an unqualified order for his costs as agreed or taxed on a party/party basis under O.62. Essentially, his written submissions argued that there is no reason in the circumstances of these proceedings, nor arising from my judgment, why the normal principle that costs should follow the event should be departed from. Mr Collins pointed out that he was entitled to defend the serious claims on which Mr Clack had the onus of proof, and that Mr Clack was unsuccessful in relation to all of his claims. Mr Collins acknowledged that the legal costs to both parties were significant, since the proceedings involved extensive preparation of affidavit evidence and written submissions, and an interrupted hearing extending over five days. Both parties were natural persons, who employed counsel and solicitors, and there was no obvious inequality of resources nor other circumstance making it unjust to award costs to a successful respondent. There was no general inflating of those costs by unreasonable conduct in the proceedings, and any particular objections could be dealt with in taxation. He submitted that the complexity and length of the proceedings justified a reference for taxation, rather than the application of the Sch.1 scale.
Mr Clack did not seek the benefit of any costs orders, but opposed Mr Collins’ application. His submissions accepted the principles which I have identified above, suggesting that costs would normally follow the event. However, he argued that Mr Collins’ conduct in the proceedings disentitled him from the benefit of an award, because it “significantly contributed to the time and expense incurred by all parties in relation to the claim”. Particular criticisms were made because:
i)Mr Collins did not attend a conciliation conference in relation to the complaint to the Australian Human Rights Commission, and this resulted in the termination of the complaint and “required the Applicant to continue the claim into the current proceedings”.
ii)Mr Collins failed to convey any offers of settlement after the proceedings were not compromised at the Court‑appointed mediation, and did not respond to Mr Clack’s offer of compromise made in accordance with O.23 of the Federal Court Rules. The contents of that offer are not shown to me (cf. O.23 rr.8(2) and 11), but it is reasonable to assume that it offered Mr Collins an outcome less favourable than dismissal of the application with costs.
iii)Mr Collins was responsible for some delays and amendments to the timetable for filing affidavits in accordance with the Court’s directions, thereby unreasonably adding to Mr Clack’s costs and reducing his capacity to reply to Mr Collins’ affidavits.
iv)Parts of Mr Collins’ tendered documents and affidavits were irrelevant, and were not admitted in evidence. Other parts made allegations about Mr Clack which I did not accept. Mr Clack submitted that:
The inclusion of this irrelevant material into evidence resulted in significant unnecessary time and cost in dealing with the matters at hearing, and furthermore, the Applicant should not bear the unreasonable and unnecessary burden of compensating the Respondents for the preparation and inclusion of such irrelevant material into evidence.
v)The failure of Mr Collins to produce his diary until a call was made for it during his cross‑examination “deprived the Applicant a right to review and formulate a response to the material”.
vi)My various criticisms of the affidavits filed in Mr Collins’ case, and the significant departures of his witnesses’ oral evidence from the contents of their affidavits, should be taken into account, and “the Applicant should not be burdened with the obligation to compensate the Respondents’ legal costs in preparation of” these affidavits.
vii)My criticisms of Mr Collins as a witness showed conduct which “resulted in substantially greater time in cross‑examination than should have been necessary. In the circumstances, such conduct ought to be contemplated as an exceptional circumstance in consideration for altering the presumptive order for costs”.
viii)The extensive written submissions of counsel for Mr Collins were not shown to Mr Clack’s counsel prior to the commencement of oral submissions, giving rise to the necessity for the preparation of written submissions in reply after the conclusion of the hearing. This “resulted in a substantial increase in legal costs” in the regime ordered by the Court.
Mr Clack submitted that no costs orders should be made, so that each party should pay its own costs. Alternatively, he submitted that “this is a compelling case for costs being limited to the Federal Magistrates Court Scale, and the Respondent receiving only a portion of the same in the range of 50% to 80% at the highest”.
In my opinion, Mr Collins has correctly identified the principles supporting his receiving a costs order in his favour. I am not persuaded by Mr Clack’s arguments to the contrary, nor that there is any reason for limiting a general costs order favouring Mr Collins.
In relation to Mr Clack’s particular arguments summarised above:
i)I am not persuaded that Mr Collins has ever shown an unreasonable refusal to compromise the claims made by Mr Clack. There is no evidence that at any time Mr Collins unreasonably declined an opportunity to achieve an outcome more favourable to him than my judgment. Although there are often sensible reasons, including the costs of fully contested litigation, why parties should negotiate compromise outcomes before and after the commencement of proceedings, and although this Court facilitates non‑judicial methods of dispute resolution, parties have the right to pursue their cases to an adjudicated outcome. At all times in a matter such as the present, the parties are aware, or should be aware, that an adjudication in favour of one party will normally carry an award of costs against the unsuccessful party. I therefore consider that the first two contentions made by Mr Clack against an unqualified costs order, are lacking in substance.
ii)Mr Clack has never applied for costs orders against Mr Collins in relation to any procedural dereliction, and I am not satisfied that he incurred any substantial additional costs arising from any non‑compliance by Mr Collins with my directions. The hearing commenced on a date accepted by both parties, and I am not persuaded that Mr Clack suffered any procedural disadvantages by reason of delays by Mr Collins which should cause me to refuse or limit a costs order against him. Since I propose to order a taxation of costs, Mr Clack will have the opportunity to take objection to any particular items of costs claimed by Mr Collins which should be disallowed under the taxation rules I have cited above.
iii)On balance, I do not consider that the defects in the written and oral evidence presented by Mr Collins should result in the denial of a costs award, nor any general limitation on an award. Mr Clack’s own case included factual assertions and evidence raising issues which were abandoned at the hearing or were found by me to be lacking in substance. For example, in relation to his claims in relation to underpayments of car allowance, sick leave entitlements, and remuneration. His own evidence was also found by me to be unreliable. I do not consider that the hearing was unreasonably protracted by the conduct of Mr Collins’ case, and I consider that counsel for both parties made sensible and appropriate concessions in the course of the hearing. After comparing the general conduct of the proceedings on both sides, I am not persuaded that I should identify any particular issues which were litigated, as requiring segregation in the framing of a costs order favouring Mr Collins. In this respect also, I should not be understood to be impeding the Registrar’s exercise of discretion in relation to particular items of costs.
iv)Mr Collins’ production of his diary in the course of cross‑examination provides no reason to refuse or limit an award of costs. The fact that it was produced on a call by counsel for Mr Clack, and was then found not to assist Mr Clack’s case, is irrelevant. It is not suggested that Mr Collins had earlier failed to produce these records when required to do so. There is no obligation on the maker of an affidavit to attach contemporaneous notes of conversations recounted in his affidavit.
v)I consider that the circumstances of the presentation of written submissions by Mr Collins’ counsel do not provide any reason to limit an award of costs. Although I encouraged both counsel to exchange any written submissions they intended to present, the taking of oral evidence was only completed late on 10 December 2009. It was understandable that Mr Clack’s counsel distributed his written outline only shortly before he commenced his oral presentation on 11 December 2009, and that counsel for Mr Collins then presented his written outline when he commenced his submissions in the late morning. His written submissions reasonably canvassed many issues of fact and law which time did not allow either counsel to cover in their oral submissions, and it was therefore inevitable that Mr Clack’s counsel should be given – and accept – the opportunity to reply in a supplementary written submission. The written submissions of both counsel were helpful to the Court, and I consider that the expense of the preparation of Mr Collins’ counsel’s submissions would reasonably be allowed to Mr Collins on a taxation.
Considering the options for the framing of a costs order given by r.21.02(2), I am not persuaded that it would be appropriate in this case to apply Sch.1. Neither party has presented a set of calculations showing how it might be applied in relation to the present proceedings, and I would not be prepared to embark on this exercise myself without such calculations and without submissions as to its interpretation and application. I accept Mr Collins’ submissions, with its citation of opinions expressed in this Court, that Sch.1 would probably not produce an award of costs properly recognising the objects of an indemnity in relation to party/party costs which the Court’s costs discretions are intended to allow.
I consider that the option of taxation under O.62 allowed under r.21.02(2)(c) provides the most just method for determining the costs which should be recoverable by Mr Collins from Mr Clack. That option will allow Mr Clack to scrutinise all of Mr Collins’ claims for costs, and to participate in a full taxation of those costs which will take into account the nature and relative importance of the proceedings. The present is not a case, in my opinion, where a more summary approach to the quantification of costs would either be reasonable for me to attempt or fair to the parties in its outcome.
Mr Collins’ submissions advert to Federal Magistrates Court Rules r.21.15, which allows the Court or a Registrar to certify that it was reasonable to employ an advocate to appear for a party. Such a certificate may be necessary to allow some items to be included in costs awarded under Sch.1 of the Federal Magistrates Court Rules (see rr.21.14 and 21.16), but it is unclear to me that it is necessary for the purposes of an O.62 taxation. However, I indicate my opinion that the engagement of counsel by Mr Collins was reasonable in the present proceedings. If, on taxation, a Registrar considers it necessary to issue a certificate, then he or she appears to have the power to do this.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Smith FM
Associate: Lilian Khaw
Date: 31 March 2010
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