Dowling v KIRK and 3 Ors
[2008] FMCA 814
•26 June 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DOWLING v KIRK & 3 ORS | [2008] FMCA 814 |
| PRACTICE & PROCEDURE – Costs – indemnity costs – allegations made without real or proper basis – respondents should never have been required to meet the allegations made – bringing of proceedings so unreasonable it would be unjust for the respondents to be limited to party and party costs. |
| Federal Magistrates Act 1999, s.79 Federal Magistrates Court Rules 2001, r.21.02 Federal Court Rules, Order 62 |
| Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 Re Wilcox; Ex parte Venture Industries Pty Ltd (No. 2) (1996) 72 FCR 151 Hamod v State of New South Wales (2002) 188 ALR 659 Sony Computer Entertainment Australia Pty Ltd v Dannoun (No. 2) [2001] FCA 1530 Bhagat v Global Custodians Ltd [2002] FCA 223 Ogawa v The University of Melbourne (No. 2) [2004] FCA 1275 Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 |
| Applicant: | SHANE DOWLING |
| First Respondent: | DAVID KIRK |
| Second Respondent: | LINDA PRICE |
| Third Respondent: | CAROLYN BRADLEY |
| Fourth Respondent: | SHIVCHAND JHINKU |
| File Number: | SYG 2703 of 2007 |
| Judgment of: | Cameron FM |
| Hearing date: | 5 March 2008 |
| Date of Last Submission: | 5 March 2008 |
| Delivered at: | Sydney |
| Delivered on: | 26 June 2008 |
REPRESENTATION
The Applicant appeared in person
| Counsel for the Respondents: | Ms. K. Eastman |
| Solicitors for the Respondents: | Freehills |
ORDERS
The applicant pay the respondents’ costs of the proceedings on an indemnity basis except any costs unreasonably incurred or unreasonable in amount.
The matter be referred for taxation under Order 62 of the Federal Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2703 of 2007
| SHANE DOWLING |
Applicant
And
| DAVID KIRK |
First Respondent
| LINDA PRICE |
Second Respondent
| CAROLYN BRADLEY |
Third Respondent
| SHIVCHAND JHINKU |
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
On 20 December 2007 I ordered that these proceedings be dismissed as they had no reasonable prospects of success. I directed that the parties file and serve written submissions on the question of costs, argument in respect of which was stood over to 5 March 2008.
An application for leave to appeal from my decision of 20 December 2007 was dismissed by Rares J on 18 January 2008.
The respondents seek costs and an order that costs be assessed on an indemnity basis.
The proceedings were misconceived from the outset for the reasons I gave on 20 December 2007. Nothing subsequently put in submissions by Mr Dowling demonstrated that the Court should exercise its undoubted discretion to deprive the respondents of their costs either in whole or in part. His submissions were largely focussed on the merits of the claim which had already been dismissed and they failed to address the issues which were before the Court regarding the question of costs. As a result, there is no reason to depart from the ordinary rule that costs should follow the event.
Having determined that Mr Dowling should pay the respondents’ costs, the latters’ application for costs on an indemnity basis must be considered.
Section 79 of the Federal Magistrates Act 1999 provides:
(1) This section does not apply to family law or child support proceedings.
(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.
Rule 21.02(2) of the Federal Magistrates Court Rules 2001 provides:
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.
In their written submissions, the respondents summarised the issues raised in the proceedings as follows:
The Applicant’s arguments in relation to his contempt claim centred around two particular documents:
(a) a report dated 6 June 2007 (Report) which the Applicant alleged:
(i) was drafted with the intent of perverting the course of justice;
(ii) evidenced a conspiracy to pervert the course of justice; and
(iii) the Respondents knew would be used in court proceedings; and
(b) a notice of appearance lodged with the Australian Industrial Relations Commission (AIRC) on behalf of the Applicant’s former employer which the Applicant alleged:
(i) was a fraudulent document; and
(ii) the fourth Respondent, in signing document, did so fraudulently and committed perjury as a consequence.
The claim was found to be misconceived with no reasonable prospects of success.
The respondents submitted that the applicant knew or should have known that he had no chances of success, in that he:
a)failed to raise any issue of contempt of the power or authority of this Court;
b)failed to seek appropriate relief, as the relief sought was relief the Court had no power to grant;
c)made irrelevant and unfounded allegations of fraud; and
d)failed to lead appropriate evidence to establish a contempt.
The respondents submitted that the documents, evidence and submissions relied on by the applicant in support of his application were obviously insufficient to justify the orders sought and, had he been properly advised, he would have known that his claims in these proceedings were misconceived and had no reasonable prospects of success.
Sheppard J observed in Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 233 and 232, that it has been settled practice for centuries in England and a practice entrenched in Australia that the ordinary rule is that, where the court orders the costs of one party to be paid by another, the order is for payment of those costs on the party and party basis. His Honour also noted that before departing from that usual practice, the circumstances of the case must be such as to warrant the Court doing so. The categories of circumstances in which the discretion may be exercised are not closed but his Honour gave the following as examples of circumstances which had warranted the exercise of the discretion in earlier cases:
a)the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;
b)evidence of particular misconduct that causes loss of time for the Court and to other parties;
c)the fact that the proceedings were commenced or continued for some ulterior motive;
d)the proceedings were commenced or continued in wilful disregard of known facts or clearly established law; and
e)the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
In Re Wilcox; Ex parte Venture Industries Pty Ltd (No. 2) (1996) 72 FCR 151, Black CJ said:
The circumstances under which indemnity costs will be ordered have been discussed in many cases in this Court and it is well established that the starting point for any consideration of an application for indemnity costs is that in the ordinary case costs will follow the event and the Court will order the unsuccessful party to pay the costs of the successful party, on a party and party basis, a basis which will fall short of complete indemnity. Nevertheless the court has an absolute and unfettered jurisdiction in awarding costs, although that discretion must be exercised judicially. So, indemnity costs may properly be awarded where there is some special or unusual feature in the case justifying the Court exercising its discretion in that way. (at 152)
In Hamod v State of New South Wales (2002) 188 ALR 659 at 665 [20], Gray J said, Carr and Goldberg JJ agreeing:
Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.
Lindgren J said in Sony Computer Entertainment Australia Pty Ltd v Dannoun (No. 2) [2001] FCA 1530 at [4] that for a party to be entitled to indemnity costs the case must involve behaviour associated with the conduct of the proceedings which is so unreasonable as to make it unjust that the successful party should be limited to party and party costs.
As Rares J noted on 18 January 2008 when dismissing the applicant’s application for leave to appeal, these proceedings were an abuse of the process of the Court.
The fact that Mr Dowling was unrepresented does not necessarily mean that an order for indemnity costs is not appropriate: Bhagat v Global Custodians Ltd [2002] FCA 223 although, generally speaking, courts are more reluctant to make orders for indemnity costs against litigants in person than against represented litigants: Ogawa v The University of Melbourne (No. 2) [2004] FCA 1275; Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159.
In his submissions on the costs application, Mr Dowling did not make any submission concerning why his conduct was not unreasonable or did not justify the grant of indemnity costs. His submissions focussed on reiterating claims and allegations concerning the “fraudulent” document which were unsuccessful earlier in these proceedings. Even if such submissions be construed as submissions to the effect that the claim in relation to the “fraudulent” document was made in good faith, he made no submissions concerning the other unsuccessful allegations he had made, nor did he seek to justify the bringing of proceedings in respect of them.
Had Mr Dowling been represented and properly advised no difficulty would be presented in awarding indemnity costs against him. The fact that he was not represented and, it must be assumed, proceeded without the benefit of legal counsel and advice, does cause me to hesitate before making such an order. Nonetheless, the allegations which were made in these proceedings were serious indeed and yet were completely unsubstantiated by cogent evidence. The nature of the allegations, with the possibility of serious and adverse consequences for the reputations of the respondents which they might entail, clearly required that they have some real and proper basis before they were made. The allegations did not have such a proper basis and, in such circumstances, the respondents should never have been required to meet them.
Conclusion
As a result I am satisfied that Mr Dowling’s behaviour in bringing the proceedings and subsequently maintaining them was so unreasonable that it would be unjust for the respondents to be limited to party and party costs.
The respondents will be awarded their costs on an indemnity basis except any costs unreasonably incurred or unreasonable in amount. In this regard, I note that these proceedings were heard at the same time, and had directions hearings at the same time, as proceedings SYG 2671 of 2007 and proceedings SYG 2704 of 2007 on which occasions the same solicitors and counsel appeared for all respondents.
The matter will accordingly be referred for taxation under Order 62 of the Federal Court Rules.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Cameron FM
Associate:
Date: 26 June 2008
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