Hollingdale v North Coast Area Health Service (No.2)
[2006] FMCA 585
•24 April 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HOLLINGDALE v NORTH COAST AREA HEALTH SERVICE (No.2) | [2006] FMCA 585 |
| COSTS – HUMAN RIGHTS – Respondent successful – applicant asserting special considerations militating against a costs order against her – special considerations insufficient to displace the general principle that costs follow the event. |
| Disability Discrimination Act 1992 (Cth), s.42 Federal Magistrates Act 1999 (Cth), s.79 Federal Magistrates Court Rules 2001 (Cth) Human Rights and Equal Opportunity Commission Act 1986 (Cth), s.46PO |
| Ball v Morgan [2001] FMCA 127 Fetherson v Peninsula Health (No 2) [2004] FCA 594 Gluyas v Commonwealth of Australia (No 2) [2004] FMCA 359 Hollingdale v North Coast Area Health Service [2006] FMCA 5 Hollingdale v Northern Rivers Health Service [2004] FMCA 721 Howe v Qantas Airways Ltd (No 2) [2004] FMCA 934 National Mutual Life Association of Australia Ltd v Windsor (1991) 28 FCR 214 Oshlack v Richmond River Council (1998) 193 CLR 72 Ruddock v Vardalis (2001) 188 ALR 143 Tadawan v State of South Australia [2001] FMCA 25 Xiros v Fortis Life Assurance Ltd [2001] FMCA 15 |
| Applicant: | JULIE ANNE HOLLINGDALE |
| Respondent: | NORTH COAST AREA HEALTH SERVICE |
| File Number: | SYG2730 of 2004 |
| Judgment of: | Driver FM |
| Hearing date: | Decided on written submissions |
| Date of Last Submission: | 20 April 2006 |
| Delivered at: | Sydney |
| Delivered on: | 24 April 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr P King |
| Counsel for the Respondent: | Ms K Eastman |
| Solicitors for the Respondent: | Phillips Fox |
ORDERS
The applicant is to pay the costs of the respondent in accordance with schedule 1 to the Federal Magistrates Court Rules 2001 (Cth).
The Court certifies that it was reasonable for the respondent to employ an advocate to appear for it at each hearing conducted in the proceedings.
The parties have liberty to apply for further directions or orders in relation to the above orders on five days notice.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG2730 of 2004
| JULIE ANNE HOLLINGDALE |
Applicant
And
| NORTH COAST AREA HEALTH SERVICE |
Respondent
REASONS FOR JUDGMENT
Introduction and background
The North Coast Area Health Service (“the Area Health Service”) seeks an order for costs following my judgment in Hollingdale v North Coast Area Health Service [2006] FMCA 5. In my judgment I dismissed an application by Ms Hollingdale made under s.46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth). Ms Hollingdale had sought orders reinstating her employment, or alternatively, damages and interest, and costs.
The issue of costs was dealt with by way of written submissions. At the time I gave judgment in the principal proceedings on 20 January 2006 I made orders calling for submissions from the Area Health Service by 20 February 2006 and any submissions from Ms Hollingdale by 20 March 2006. The Area Health Service filed submissions on 20 February 2006 and Ms Hollingdale filed submissions on 30 March 2006. An issue then arose as to whether the Area Health Service should be permitted to make submissions in reply. I gave further directions on 31 March 2006, the effect of which was to require consultation through counsel, and in the absence of agreement, permitting the Area Health Service to make limited submissions in reply. Submissions in reply by the Area Health Service were filed on 20 April 2006.
The submissions
The Area Health Service seeks an order for costs for the following reasons:
a)the Court has a discretion to award costs[1] and a successful party should receive its costs in the absence of some special circumstance[2];
b)there is no good reason in this case to depart from the general principle that costs follow the event. In particular, there is no public interest element that would cause the Court to depart from the usual order[3];
c)there are no other discretionary matters that would cause the Court to depart from the usual order. In particular, the respondent at all times conducted the proceedings properly and its conduct has not unnecessarily increased costs;
d)the respondent sought to limit the scope of the proceedings which was the subject of an interlocutory judgment[4];
e)the Court permitted Ms Hollingdale to pursue her claims on a wider basis than her complaint to HREOC but she abandoned parts of her claims at the trial;
f)the hearing took longer than expected;
g)the respondent attempted to settle the matter and had made a settlement offer of $2,000, less tax, which was rejected;
h)although the respondent would have been entitled to ask for indemnity costs it sought an order for costs on a party party basis.
[1] Federal Magistrates Act 1999 (Cth), s.79 and rule 21.02(2) of the Federal Magistrates Court Rules 2001 (Cth); Howe v Qantas Airways Limited (No 2) [2004] FMCA 934
[2] Ball v Morgan [2001] FMCA 127 and Gluyas v Commonwealth of Australia (No 2) [2004] FMCA 359
[3] National Mutual Life Association of Australia Ltd v Windsor (1991) 28 FCR 214 at 229
[4] see Hollingdale v Northern Rivers Health Service [2004] FMCA 721
Ms Hollingdale had been represented by counsel and solicitors in the principal proceedings. The solicitors ceased to act for her in February 2006. Ms Hollingdale instructed Mr King on a direct access brief for the purposes of dealing with the issue of costs.
In his submissions, Mr King makes the following points:
a)the Area Health Service’s submissions on costs are vague;
b)Ms Hollingdale opposes any order for costs against her and submits that there should be no order as to costs;
c)while a successful party can generally expect an order for costs the Court has an absolute and unfettered discretion[5];
[5] see Ruddock v Vardalis (2001) 188 ALR 143
d)the principles were correctly stated by this Court in Xiros v Fortis Life Assurance Ltd [2001] FMCA 15;
e)human rights proceedings fall into a special category[6];
f)another circumstance where it is appropriate to depart from the general principle that costs follow the event is where there is a significant public interest element in a proceeding[7];
g)the present case raised issues of public importance given that they concerned the question of the human rights of an employee who suffers from a mental disability, namely bi-polar disorder;
h)the evidence and the Court’s principal judgment disclosed that Ms Hollingdale went through a traumatic employment experience and was treated poorly;
i)the Area Health Service is a public body with a “deep pocket” while Ms Hollingdale is a person of very limited means;
j)the conduct of the Area Health Service at an interlocutory stage of the proceedings in relation to the scope of the application is open to criticism;
k)the alleged offer of compromise of $2,000 was improperly raised and there is no evidence of it;
l)the evidence supports the contention that the Area Health Service left itself open to an accusation of victimisation contrary to s.42(1) of the Disability Discrimination Act 1992 (Cth); and
m)if the Court is minded to make a costs order it should be for a fixed amount and Ms Hollingdale would wish to be heard as to the amount.
[6] see Tadawan v State of South Australia [2001] FMCA 25
[7] see Oshlack v Richmond River Council (1998) 193 CLR 72
In her submissions in reply Ms Eastman takes issue with parts of Mr King’s submissions. In particular she:
a)confirms that costs are sought against Ms Hollingdale;
b)the Area Health Service seeks costs in accordance with the Federal Magistrates Court scale of costs;
c)on the state of the current authorities it should be accepted that human rights proceedings do not fall within a special category of case in relation to costs[8];
d)there was nothing unusual in the conduct of the matter before HREOC;
e)Mr King’s observations on the evidence and the proceedings are contestable;
f)the fact that the Area Health Service is a public body is irrelevant;
g)there is nothing in the conduct of the respondent which disentitles it to an order for costs and the reference to the offer of compromise was not improper;
h)there was no claim of victimisation and no basis to make one; and
i)there was no illegality on the part of the respondent.
[8] see in particular Fetherson v Peninsula Health (No 2) [2004] FCA 594 at [5]-[9]
Reasoning
The general principles in relation to orders for costs in this Court have been frequently stated, including by me[9] and I do not need to repeat them here. Suffice to say that the Court has a general discretion in relation to costs but the discretion must be exercised judicially. The general principle is that costs follow the event but it is open to the Court to depart from that general principle in particular cases if the circumstances warrant it.
[9] see for example Howe v Qantas Airways Ltd (No 2) [2004] FMCA 934
One relevant circumstance warranting departure from the general principle would be where the successful party had, by its conduct, disentitle itself to an order for costs. The conduct of the Area Health Service in these proceedings was unexceptionable. Ms Hollingdale’s claim was vigorously contested and thoroughly tested but the Area Health Service was entitled to contest the claim and test the evidence. The Area Health Service sought to limit the scope of the proceedings, partly in order to minimise costs, and was in part successful[10]. The trial of the matter was lengthy and longer than anticipated but that was not due to the fault of either party. The trial at Lismore was interrupted by flooding and, in order to be fair to Ms Hollingdale, I permitted her counsel to go over some of the evidence a second time when the hearing resumed. Ms Hollingdale’s claims were factually complex and the cross-examination on the evidence was necessarily lengthy.
[10] see Hollingdale v Northern Rivers Health Service
Another circumstance which might warrant departure from the general principles concerning costs is where an unsuccessful party has, by his or her conduct, put the successful party to unnecessary costs, meriting an award of costs on an indemnity basis. No such order is sought in this matter. Although the Area Health Service refers in its submissions to an offer of compromise, no evidence has been presented to verify such an offer and I pay no regard to the unverified assertion that an offer in some form was made at the time of the commencement of the trial of the matter.
I reject the submission that human rights proceedings fall into a special category. They do not. This is a costs jurisdiction, unlike proceedings before HREOC. I agree with, and adopt, with respect, the observations of Heerey J in Fetherson at [5]-[9].
It is true that I have previously said[11] that human rights proceedings necessarily contain a public interest element and that the public interest element may, in particular cases, be strong enough for an unsuccessful party to avoid an adverse costs order. However, I have also noted that generally in human rights proceedings an applicant is pursuing a personal action for damages and that frequently there will be an insufficient public interest component in the proceedings to merit a departure from the general principle that costs will follow the event. That is the case here. Any case involving allegations of disability discrimination are likely to raise important and potentially sensitive issues. While one may be sympathetic to a disabled litigant seeking to pursue what they see as their rights in litigation, they are making a personal choice to pursue an action in a jurisdiction where they are exposed to a costs order. Respondents are often put to considerable expense in dealing with such actions. A departure from the general principle that costs follow the event should be based upon recognised exceptions, rather than general considerations of sympathy for a disabled party.
[11] see Xiros v Fortis Life Assurance Ltd at [24]
I accept Ms Eastman’s submission that the status of the Area Health Service as a public authority should not disentitle it to an order for costs. Neither is the relative financial position of the parties relevant to the issue of whether a costs order should be made, although, as I have held previously, it may be relevant to consideration of the basis upon which a costs order is made. One of the reasons why the Court has an events based costs scale in human rights proceedings is so that there is clarity and certainty and a level playing field in such proceedings. If a party with access to substantial financial resources chooses to spend lavishly on proceedings, that should not lead to a departure from the Court’s established costs scale.
I also reject the submission that the evidence and my principal judgment indicate that Ms Hollingdale was treated so poorly that she should escape a costs order. The substance of my principal judgment was that Ms Hollingdale was not treated less favourably than a hypothetical comparator would have been in the same or similar circumstances. Ms Hollingdale was highly critical of the manner in which she had been treated by the Area Health Service but was unable to establish less favourable treatment. It does not follow from my principal judgment that I accepted Ms Hollingdale’s allegations of poor treatment. Neither do I accept that the conduct of the Area Health Service exposes it to a claim of victimisation. No such claim was made and it would be premature and improper to speculate on such a claim in this judgment.
I conclude that the Area Health Service should receive an order for costs in accordance with the Federal Magistrates Court scale of costs. The Area Health Service was properly represented by counsel and should receive an advocacy certificate pursuant to rule 21.15 of the Federal Magistrates Court Rules. It should be a simple matter for the parties to calculate arithmetically the costs payable pursuant to that scale. If there is some issue requiring resolution by the Court the matter can be relisted for that issue to be resolved.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 24 April 2006
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