Coady v Yachting Victoria Inc
[2023] FedCFamC2G 181
Federal Circuit and Family Court of Australia
(DIVISION 2)
Coady v Yachting Victoria Inc [2023] FedCFamC2G 181
File number(s): MLG 914 of 2016 Judgment of: DEPUTY CHIEF JUDGE MERCURI Date of judgment: 9 March 2023 Catchwords: HUMAN RIGHTS – COSTS – application for costs –court’s discretion to award costs – consideration of indemnity costs – consideration of party/party costs – where substantive proceedings raised novel issues of various provisions and exceptions in the Sex Discrimination Act 1984 (Cth) – where respondent was a minor when the substantive application was brought – application dismissed – no order as to costs. Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth), s 214(3)
Sex Discrimination Act 1984 (Cth), ss 4, 22, 42
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, rr 22.02, 22.09
Cases cited: Calderbank v Calderbank [1975] 3 All ER 333
Coady v Yachting Victoria Inc [2019] FCCA 2095
Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435
Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd (2010) 182 FCR
Kazar (Liquidator) v Kargarian; in the matter of Frontier Architects Pty Ltd (In Liq) (2011) 197 FCR 113
Re Kimberley John Hughes v Western Australian Cricket Association & Ors [1986] FCA 382
Ruddock v Vadarlis (No 2) (2001) 115 FCR 229
Slugget v Human Rights & Equal Opportunity Commission [2002] FCA 1060
Division: Division 2 General Federal Law Number of paragraphs: 46 Date of last submission/s: 12 August 2022 Date of hearing: 12 August 2022 Place: Melbourne Counsel for the Applicant: Mr C O’Neill Solicitor for the Applicant: M&K Group Lawyers Advocate for the Respondent: Mr P Coady ORDERS
MLG 914 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: YACHTING VICTORIA INC
Applicant
AND: STEPHANIE COADY
Respondent
order made by:
DEPUTY CHIEF JUDGE MERCURI
DATE OF ORDER:
9 March 2023
THE COURT ORDERS THAT:
1.The application in a case filed on 17 August 2019 be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
DEPUTY CHIEF JUDGE MERCURI:
Introduction
Before the court is an application in a case filed by the Yachting Victoria Inc (‘Yachting Victoria’) in which Yachting Victoria seeks an order for costs against Ms Stephanie Coady, the applicant in the substantive proceedings.
Background
On 2 August 2019, I handed down my reasons for judgment in the substantive proceedings brought by Ms Coady against Yachting Victoria and made orders dismissing the applicant’s application. In summary, in the substantive proceedings, Ms Coady claimed that Yachting Victoria had breached various provisions of the Sex Discrimination Act 1984 (Cth) (‘SDA’). These reasons are to be read in conjunction with those reasons for judgment.[1]
[1] Coady v Yachting Victoria Inc [2019] FCCA 2095.
As noted in the procedural history in those reasons for judgement, the claim was initially commenced by both the applicant and her father, Mr Paul Coady.[2] Ultimately, Mr Coady was removed as a party to the proceedings.
[2] Coady v Yachting Victoria Inc [2019] FCCA 2095 at [4].
Application for costs filed on 17 August 2019
On 17 August 2019, following delivery of my reasons for judgment, Yachting Victoria filed the Application in a Case seeking orders for costs. That application was supported by an affidavit of Anthony Graham Charles Gooch dated 17 September 2019.
By its application, Yachting Victoria sought that Ms Coady pay its costs, partly on a party/party basis and partly on an indemnity basis.
On 6 January 2020, Ms Coady’s solicitors filed a Notice of Withdrawal.
The matter was listed for directions hearing on 5 February 2020. There was no appearance on that occasion for Ms Coady and orders were made for the matter to be adjourned to 24 April 2020, and for Yachting Victoria to file any further material upon which it intended to rely by no later than seven days prior to the adjourned date.
The hearing date of 24 April 2020 was subsequently vacated due to the COVID-19 pandemic, to be relisted to a date to be fixed by the court. There was some delay in relisting the matter due to the ongoing limitations resulting from the COVID-19 pandemic. The matter was ultimately relisted on 1 March 2022.
Application for substituted service filed on 28 February 2022
Prior to that listing, on 28 February 2022, Yachting Victoria filed a further Application in a Proceeding, seeking an order pursuant to rule 6.14 of the Federal Circuit Court Rules 2001 (Cth) for substituted service of the Application in a Case. By this application, Yachting Victoria sought orders that the application be taken to have been served on Ms Coady upon the forwarding of the application for costs to her father, Mr Coady, at his email address.
When the matter came before me on 1 March 2022, Yachting Victoria pressed its application for substituted service. Ms Coady again did not attend on this occasion, either in person or by a representative. Yachting Victoria tendered two emails from Mr Coady sent to my chambers in late February 2022, which it said evidenced his awareness of the hearing date and the applicant’s application for substituted service.
Ultimately, I granted the application for substituted service and ordered that substituted service be effected by no later than 21 March 2022. I also made further orders listing the costs application for hearing on 12 August 2022, as well as other orders for the filing of trial material.
Hearing of costs application on 12 August 2022
When the matter came on for hearing before me on 12 August 2022, Mr Coady attended in person and sought leave to appear on behalf of the respondent, who he said was studying and presently residing in Adelaide. Ms Coady had also sent an email to my chambers in which she indicated that she had authorised her father to attend court on her behalf and make submissions.[3] In that correspondence, Ms Coady indicated, among other things, that:
(a)her father would be representing her in all legal matters concerning this case;
(b)no one has attempted to serve documents on her in Adelaide, where she has resided since 2017;
(c)she has just been made aware of the upcoming court hearing; and
(d)it was her understanding that her father was handling all legal matters and that her involvement was not necessary.
[3] Exhibit A.
On this basis, and in circumstances where there was no objection taken by Yachting Victoria, I granted leave for Mr Coady to appear on his daughter’s behalf.
Submissions
Submissions of the applicant
Yachting Victoria relies upon:
(a)its Application in a Case filed on 17 September 2019;
(b)two affidavits of Mr Anthony Graham Gooch sworn on 17 September 2019 and 15 July 2022; and
(c)its written submissions filed on 29 July 2022.
Yachting Victoria submits that the orders it seeks, including in part, indemnity costs, are permissible under the court’s broad discretion and appropriate when regard is had to the background to this litigation, and in particular, offers made and rejected by Ms Coady during the litigation.
Submissions of the respondent
No evidence or submissions were filed on behalf of Ms Coady, although it is clear from the oral submissions made that Ms Coady opposes any order for costs, and certainly any order for indemnity costs.
In his oral submissions on behalf of Ms Coady, Mr Coady said that indemnity costs would not be appropriate as they would simply punish Ms Coady. Mr Coady also submitted that:
(a)the application before the court was an abuse of process;
(b)the issue of the extent of operation of section 42 of the SDA was a matter of significant public interest not only in Australia but also in other parts of the world; and
(c)the proper operation of that provision ‘goes to the heart of a female athlete’s right to compete…’ and therefore this is a matter of significant public interest.[4]
[4] Court transcript at page 14.
Costs principles
The court has a broad discretion to award costs in matters of this kind.
Section 214(3) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘FCFCOA Act’) relevantly provides that:
(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 and Family Court of Australia (Division 2) or Judge.
Moreover, rule 22.02(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (‘the Rules’) provides that:
(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
(d)set a time for payment of the costs, which may be before the proceeding is concluded.
The default position is set out in rule 22.09 of the Rules, which relevantly provides that:
Unless the Court otherwise orders, a party entitled to costs in a general federal law proceeding (other than a proceeding to which the Bankruptcy Act 1966 applies) is entitled to:
(a) costs in accordance with Schedule 2; and
(b) disbursements properly incurred.
The court’s discretion in relation to costs is broad, but must be exercised judicially. As noted in Re Kimberley John Hughes v Western Australian Cricket Association & Ors [1986] FCA 382, per Toohey J, ‘ordinarily costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order’.[5] Both of these cases considered the issue of what costs ought be ordered in circumstances where neither party was wholly successful. Whilst they assist in setting out the general principles, those cases are of limited benefit in this instance.
[5] See also Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd (2010) 182 FCR 84 at [58] and [59].
Similarly, in Kazar (Liquidator) v Kargarian; in the matter of Frontier Architects Pty Ltd (In Liq) (2011) 197 FCR 113 (‘Kazar’), Greenwood and Rares JJ of the Federal Court noted the general principles which apply to the court’s exercise of the discretion to orders costs, saying at paragraphs [5] and [6]:
5.Although the discretion is said to be unconfined, absolute or unfettered, the public interest in the quelling of controversies and the administration of justice is secured by recognising that the discretion ought to be exercised according to settled principle. … Because settled principle merely guides the exercise of the discretion, there is no automatic or absolute rule controlling the exercise of the discretion to the effect that costs always follow the event. Nor is there an automatic or absolute rule that in the absence of disentitling conduct, a successful party is to be compensated by an unsuccessful party. …
6.Some of the important principles however which guide the exercise of the discretion are reflected in the unifying judgement of Gleeson CJ, Gummow, Hayne and Crennan JJ in Foots v Southern Cross Mine Mangement Pty Ltd … at [25] to [34]. Their Honours observe at [25] that the award of costs is ‘… discretionary but generally that discretion is exercised in favour of the successful party.’ [emphasis added]. Of course, there are no automatic or absolute rules atrophying the true underlying scope of the discretion.
It is against this background that in Kazar, their Honours went on to say at paragraph [9]:
9.The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognises the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party. …
As stated, these principles are not in dispute. The issue is how they are to be applied in relation to the facts of this case.
Consideration
Costs on an indemnity basis
For the following reasons, I do not accept that costs on an indemnity basis are appropriate in this case.
The issues in the substantive proceeding can be summarised as follows:
(a)whether Yachting Victoria provided a ‘service’ for the purposes of sections 4 and 22 of the SDA;
(b)whether Ms Coady is able to establish that she has been treated less favourably than a man in the same or similar circumstances; and
(c)whether Yachting Victoria is able to establish a defence to any less favourable treatment on the basis of section 42 of the SDA.
It is submitted for Yachting Victoria that although the court found that it did provide a service, it succeeded on the remaining two grounds and as such, it had overwhelming success in the substantive proceedings.[6] It is on this basis that it asserts that the court ought to exercise its discretion and award costs in its favour.
[6] Applicant’s Outline of Submissions filed on 29 July 2022 at paragraphs [14] and [15].
Moreover, Yachting Victoria submits that an order for indemnity costs is appropriate on the basis that the respondent unreasonably rejected its offers of 3 October 2018 and 18 October 2018.[7] Having regard to the offers made by Yachting Victoria, which it asserts were unreasonably refused by Ms Coady, Yachting Victoria says that it ought be awarded costs on an indemnity basis, either from the date of the expiry of its offer of 3 October 2018 or at the very least from the expiry of its offer made on 18 October 2018. It is submitted that had the latter offer been accepted, Ms Coady would have received $40,000 with no order as to costs as well as having a previous costs order made against her expunged. It is submitted that the outcome for Ms Coady after a final hearing was significantly less than either of those offers.
[7] Applicant’s Outline of Submissions filed on 29 July 2022 at paragraph [16].
It is not in dispute that where an offer to settle is made and unreasonably refused, the court may order costs on an indemnity basis.[8] In Hazeldene, at paragraphs [21] to [22], the court noted that the policy rationale for indemnity costs orders where offers of compromise (howsoever described) have been rejected is to encourage the saving of costs, both to the parties and to the legal system generally, that comes from early resolution of disputes. This, however, must be balanced against the need not to dissuade parties from bringing their claims to the court for determination. It is for this reason that such orders ought only be made in special circumstances.
[8] Calderbank v Calderbank [1975] 3 All ER 333; Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 (‘Hazeldene’).
At paragraph [23], the court in Hazeldene went on to say:
23.In our view, these competing considerations can be sufficiently accommodated by applying a test of (un)reasonableness. The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as ‘manifestly’ or ‘plainly’ unreasonable.
For the following reasons, I am not satisfied that the refusal by Ms Coady of either of these offers to settle her claim was unreasonable. The claim made did not simply seek damages by way of compensation for the loss and damage suffered as a result of the alleged discrimination. At its heart was a dispute about the interpretation of section 42 of the SDA and the impact of that section on the applicant’s ability to compete in a particular race designated as a men’s only race. If the interpretation contended for by the applicant had been accepted, a finding of unlawful discrimination would have followed. It is evident from the exchange of offers between the parties that this was the ultimate stumbling block to a resolution.
In those circumstances, Ms Coady determined that the only way for this dispute to be resolved, in the absence of a concession by Yachting Victoria that it had discriminated against her, was by a determination of the court. In those circumstances, the rejection of the offers made by Yachting Victoria were not, in my view, unreasonable so as to warrant the making of an indemnity costs order.
Costs on a party/party basis
This leaves the question as to whether the court ought to exercise its discretion to make an order for costs on a party/party basis.
Although the general rule is that a successful party is entitled to an order for costs on a party/party basis, there are special cases, including those brought in the public interest, which justify the departure from the ordinary principles regarding costs orders. As noted by his Honour, Drummond J in Slugget v Human Rights & Equal Opportunity Commission [2002] FCA 1060, in relation to the Federal Court’s costs jurisdiction in relation to claims under the Human Rights and Equal Opportunity Commission Act 1986 (Cth), there is no statutory restriction on the court’s ability to award costs in relation to such complaints. This is to be contrasted with, for example, the statutory limitation on the court’s general discretion to award costs in relation to claims brought under the Workplace Relations Act 1996 (Cth) (as it was then known) or the Native Title Act 1993 (Cth).
However, there are circumstances in which the nature of the issues brought to the court itself warrant the court exercising its discretion against making a costs order. In Ruddock v Vadarlis (No 2) (2001) 115 FCR 229, the Full Court of the Federal Court had before it an application for costs arising from proceedings initiated by the Victorian Council of Civil Liberties (‘VCCL’) and a Victorian solicitor, Mr Vardalis, seeking orders in the nature of habeas corpus and mandamus to compel the release and delivery into Australia of 433 non-citizens then detained on a Norwegian vessel that had been detained by the Commonwealth, MV Tampa. Ultimately, the VCCL and Mr Vardalis were not successful and the Commonwealth sought costs orders against each of them.
At paragraph [12], the plurality (Black CJ and French J) noted that:
12.The award of costs to a successful party is principally by way of perceived restorative justice. The general rule assumes that where an applicant succeeds it will have incurred costs because the respondent’s conduct made it necessary for the applicant to bring the proceedings. If the applicant fails, the respondent will have incurred costs defending an action which ought not to have been brought against it. The order made in such cases is compensatory …
At paragraph [13], the plurality went on to consider the rationale for awarding costs, and in this context said that whilst there is some attraction to the principle that a winner ought not suffer financially for having vindicated their rights:
13.… it does not necessarily follow that the obligation to compensate the winner should be imposed on the losing party. For the losing party may have had very good legal grounds for its position and have conducted itself in the litigation in an entirely reasonable way. Where the case is close or difficult and involves no obvious element of fault on the part of the loser the proposition that costs automatically follow the event may work unfairness. Moreover it may set up a significant barrier against parties of modest means even if the contemplated claim has substantial merit. …
In the context of appeals, the plurality also noted that whilst the same rules apply, where a novel question is raised on appeal, it may be that costs orders are not made in favour of the successful party. In this context, at paragraph [18], the plurality went on to say:
18.That a proceeding was brought otherwise than for the personal or financial gain of the applicant, and in that sense in the public interest, does not detract from the general proposition that ordinarily costs follow the event and that the primary factor in deciding on the award of costs is the outcome of the litigation. It does not follow that the nature and purpose of the proceedings is irrelevant nor is the history and purpose of the statute conferring the discretion to award costs. …
Of course, the mere fact that an unsuccessful party asserts that the proceedings were brought or maintained in the public interest, is not in and of itself determinative. Ultimately, the court’s discretion remains and it must consider all relevant matters in the proceeding before it.
In this case, there are a range of factors which weigh in favour of the making of a costs order:
(a)the respondent was successful in defending the claim made by the applicant;
(b)the respondent sought to avoid the need for ongoing litigation by attempts at a resolution of the issues in dispute; and
(c)the respondent has incurred costs in defending a claim which was ultimately did not succeed.
Having said that, there are also a number of factors which weigh against any order for costs in this matter. The proceedings, whilst involving an individual applicant, raised novel issues of various provisions and exceptions in the SDA. Whilst the applicant’s claim was an individual one, had she been successful, it would have impacted upon the interpretation of section 42 of the SDA and could have had broader implications.
It is also relevant in this case that the applicant was a minor when the application was brought. Whilst initially the applicant’s father was also a party to these proceedings, he ultimately withdrew and the applicant alone remained a party to the claim. Any costs order made would be made in relation to proceedings that were initiated on the applicant’s behalf when she was a minor.
Anti-discrimination legislation seeks to balance often competing considerations. The provisions which were the subject of this litigation are no different. The prohibition on discrimination in sport on the grounds of sex is tempered by the need to ensure that the integrity of competitive sports is not undermined. This tension was at the heart of the issues before the court in this case. Ultimately, the applicant’s case was not successful, however, the issues in the proceeding were novel and not without difficulty.
Moreover, whilst the applicant claimed financial damages, it is clear from the negotiations that Yachting Victoria relies upon in support of the claim for indemnity costs that the crux of the issue was one which related to whether or not the exemption in section 42 of the SDA applied in this instance.
Conclusion
Having regard to all of these factors, I am not satisfied that it is appropriate for any order for costs to be made in this matter. I therefore make the orders set out at the commencement of these reasons.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of Deputy Chief Judge Mercuri. Deputy Associate:
Dated: 9 March 2023
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