FJ v Commonwealth of Australia [No 2]
[2017] VSCA 99
•3 May 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2015 0102
| FJ | Appellant |
| V | |
| COMMONWEALTH OF AUSTRALIA [No 2] | Respondent |
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| JUDGES: | TATE, SANTAMARIA and BEACH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | On the papers |
| DATE OF JUDGMENT: | 3 May 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 99 |
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PRACTICE AND PROCEDURE – Costs – Costs of determination of preliminary issue – Costs of appeal – Unsatisfactory procedure adopted by the parties at first instance – No order as to costs at first instance – Basis for making competing orders as to costs of the appeal against each party – Counterbalancing of costs orders – No order as to costs of appeal.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr D E Curtain QC with Mr M J Hooper | Slater & Gordon |
| For the Respondent | Mr P J Hanks QC with Mr R Knowles | Moray & Agnew |
TATE JA
SANTAMARIA JA
BEACH JA:
On 28 August 2015, a judge sitting in the Trial Division dismissed the appellant’s claim on the basis that it was a claim in respect of a service injury and therefore barred by s 388 of the Military Rehabilitation & Compensation Act 2004 (Cth). On 12 April 2017, this Court allowed the appellant’s appeal, set aside the judgment obtained at first instance and, in lieu thereof, ordered that the questions answered by the primary judge be answered as follows:
Q:Is the plaintiff’s action for damages against the Commonwealth, constituted by this proceeding:
1.1an action for damages by a member of the Defence Force against the Commonwealth in respect of a service injury sustained, or a service disease contracted, by that member within s 388(1)(a) of the MRC Act; and
1.2therefore an action for damages that does not lie against the Commonwealth?
A:1.1 No.
1.2the plaintiff’s claim for damages is not barred by s 388(1)(a) of the MRC Act.
Following the delivery of this Court’s reasons for judgment,[1] the parties were given leave to file and serve submissions as to the appropriate orders for costs of the hearing at first instance and the proceeding in this Court. The parties have now filed and exchanged their submissions in support of the costs orders for which they contend.
[1]FJ v Commonwealth [2017] VSCA 84 (‘Primary Reasons’).
Costs of the hearing at first instance
The primary judge, having dismissed the appellant’s claim, ordered that the appellant pay the respondent’s costs of the proceeding. As the order dismissing the appellant’s proceeding has been set aside, the order that the appellant pay the costs of the proceeding must also be set aside.
As we noted in our primary reasons, the procedure adopted before the judge at first instance was at best confused, if not irregular.[2] It involved what was represented to be the trial of a preliminary question on facts that were said to be agreed between the parties. Moreover, while the document purporting to state the facts upon which the parties were agreed the hearing would proceed contained a number of facts, it also contained statements in the form of allegations, some of which allegations were said to be denied.[3]
[2]Primary Reasons [5], [37], [39], [140].
[3]Ibid [17].
The appellant submits that the costs of the hearing at first instance should be costs in the cause. In making that submission, the appellant accepted that disentitling conduct existed on her part in relation to the conduct of the application at first instance. However, the appellant noted that each party consented to the procedure adopted in the Trial Division and that the defects in the procedure and materials were caused equally by both parties.
The respondent submitted that it should have its costs of the proceeding at first instance. In making that submission, the respondent observed that the appellant did not seek to apply for leave to further amend her amended statement of claim at any time before the primary judge. In reply submissions, the respondent again submitted that the costs order at first instance should not be disturbed. The respondent also submitted that, in any event, there was no reason why the respondent should pay any costs to the appellant in respect of the proceeding at first instance.
While no application was formally made to further amend the appellant’s pleading before the judge at first instance to remove the claim based on physical and psychological injury, as we observed in our primary reasons, it was made plain at first instance that one of the bases upon which the appellant was seeking to proceed with her case was that her claim was a claim for pure economic loss.[4]
[4]Ibid [22]–[25], [38]–[41].
The appellant has now succeeded on the issue that she lost before the judge at first instance. While during the hearing at first instance she articulated the basis upon which she has now succeeded, the procedures adopted before the primary judge and the failure by the appellant to make a formal application to further amend her statement of claim undoubtedly impeded the ability of the primary judge in his attempt to resolve the issues that were in dispute between the parties. In the circumstances, we do not think that the appellant should have any of the costs of or incidental to the hearing at first instance. Equally, we are unable to see why the respondent (having participated in the less than satisfactory process adopted at first instance, and having now lost the issue in dispute between the parties) should have its costs of or incidental to the hearing at first instance. In the result, in lieu of the costs order made by the primary judge, we will order that there be no costs of or incidental to the appellant’s summons filed 30 April 2015 or of the hearing before the primary judge on 13 August 2015.
Costs of the appeal
The proceeding in this Court involved two stages: the first stage being up to and including the hearing on 29 April 2016 where the appellant sought to maintain her claim in its original form with a pleading that contained references to her suffering ‘injury’; and the second phase (29 April 2016 until the ultimate hearing of the appeal) where the appellant sought to pursue a claim on a pleading devoid of any reference to her suffering ‘injury’. Both phases of the proceeding in this Court involved a considerable amount of preparation and work by the parties.
The appellant seeks an order that the respondent pay her costs of the proceeding in this Court, including the application to further amend her statement of claim, but excluding the costs of the day on 29 April 2016. The respondent submits that the appellant should pay the respondent’s costs of the appeal up to and including the hearing on 29 April 2016.
There is force in both parties’ positions. The respondent was put to a considerable amount of work up to and including 29 April 2016 because the appellant sought to maintain (until that time) a claim that was significantly different from the claim ultimately pursued. There is much to be said for requiring the appellant to pay the costs of the first phase of the proceeding in this Court, and for the respondent to pay the costs of the second phase, but even then one might conclude that the respondent ought have any costs incurred after 29 April 2016 which are associated with the appellant’s amendment application.
The costs of each phase of the proceeding in this Court are no doubt significant. Doing the best we can, it seems likely that the costs of each phase should be very roughly of the same order of magnitude given that a great deal of preparation occurred before 29 April 2016 and the oral argument substantively took place after 29 April 2016. In the circumstances, rather than make competing orders for costs, we think the appropriate order is that there be no order as to the costs of the appeal.
Orders
In addition to the orders made on 12 April 2017, the Court will order:
1.In lieu of paragraph 2 of the orders made by the Honourable Justice Bongiorno on 28 August 2015, it is ordered that there be no order as to the costs of or incidental to the plaintiff’s summons filed 30 April 2015 and the trial of the preliminary issue heard on 13 August 2015.
2.There be no order as to the costs of and incidental to the appeal.
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