Ingui v Ostara
[2003] FMCA 132
•3 June 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| INGUI v OSTARA & ANOR | [2003] FMCA 132 |
| HUMAN RIGHTS – PRACTICE AND PROCEDURE – Effect of discontinuing proceedings – application for costs. Federal Magistrates Act, ss.57, 79 Crayford v Coral Seatel 162 ALR 119 |
| Applicant: | TRACEY INGUI |
| 1st Respondent: | JOHN OSTARA |
| 2nd Respondent | INDO PACIFIC MARINE |
| File No: | DZ 07 of 2002 |
| Delivered on: | 3 June 2003 |
| Delivered at: | Darwin |
| Hearing date: | 19 March 2003 |
| Judgment of: | Brown FM |
REPRESENTATION
| Counsel for the Applicant: | Ms J Carrigan (by leave) |
| Counsel for the Respondent: | Mr G James |
| Solicitors for the Respondent: | Geoff James |
ORDERS
That the respondents’ solicitors provide to the applicant a list of the costs sought by them pursuant to Schedule 1 of the Federal Magistrates Court Rules within 28 days of today’s date.
The applicant to provide a response within a further 28 days after that, if she wishes.
Both the respondents’ list of costs sought and any response by the applicant to be filed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DZ 07 of 2002
| TRACEY INGUI |
Applicant
And
| JOHN OSTARA |
1st Respondent
| INDO PACIFIC MARINE |
2nd Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to an application for costs by Mr Ostara and Ms Pretty, following a Notice of Discontinuance that was filed on behalf of Ms Ingui on the 21st of January, 2003.
The background to the matter is as follows. On the 14th of June, 2002 Ms Ingui (the applicant) commenced proceedings in this Court seeking orders pursuant to Section 46PO of the Human Rights and Equal Opportunity Commission Act 1986. She alleged the Mr Ostara and Ms Pretty (the respondents) had unlawfully discriminated against her in contravention of the provisions of the Sex Discrimination Act1984. She sought orders that she receive monetary compensation from Mr Ostara and Ms Pretty and an apology.
Ms Ingui was employed by a firm known as Indo Pacific Marine in 2001. This firm is apparently operated by Ms Pretty and Mr Ostara was employed by it. The circumstances giving rise to Ms Ingui’s complaint occurred in September of 2001 in Bali, in Indonesia. Ms Ingui accompanied Mr Ostara on a business trip there. She claims that only one hotel room was booked there for the two of them. In the room there was only one bed. She believes that this occurred at the instigation of Mr Ostara and was a means of sexually harassing her. As a result of the incident she complained to Ms Pretty and thereafter she claims that her hours were subsequently reduced and ultimately her employment was terminated on the 4th of October, 2001. This was the basis for her complaint to the Human Rights and Equal Opportunity Commission and later her application in this Court.
Given that Ms Ingui’s application has been discontinued, it is not necessary to ascertain the truth or otherwise of Ms Ingui’s allegations. However, both Mr Ostara and Ms Pretty have consistently denied that either of them were either directly or vicariously guilty of any impropriety against Ms Ingui. They have said the hotel room with one bed in it was booked by mistake.
Ms Ingui also commenced proceedings in the Australian Industrial Relations Commission against Indo Pacific Marine. These proceedings were discontinued by Ms Ingui on the 13th of November, 2001.
Ms Ingui lodged a complaint with the Human Rights and Equal Opportunities Commission regarding her allegations of sexual discrimination. This complaint was terminated by the President of the Commission on the 20th of May, 2002. However, neither Ms Pretty nor Mr Ostara were prepared to attend a conciliation conference that was convened by the Human Rights and Equal Opportunity Commission and accordingly the President terminated the complaint because she did not believe that there was any reasonable prospect of the matter being settled by conciliation.
In the proceedings before the Australian Industrial Relations Commission, Ms Pretty indicated that the allegations made by Ms Ingui would be contested. Prior to the discontinuance of the proceedings in the Commission, Ms Pretty made application to dismiss Ms Ingui’s claim on the basis that the Commission did not have jurisdiction to hear it. In support of this application, Ms Pretty indicated that the applicant’s employment was terminated because of the collapse of Ansett Airlines and a resulting loss of business at Indo Pacific Marine, which is involved in the tourism industry.
Throughout the proceedings in this Court, both Mr Ostara and Ms Pretty have indicated through their counsel that they do not accept the truth of the allegations made against them by the applicant and intended to defend them. On the 2nd of July 2002 the respondents filed a response to Ms Ingui’s application. In the response, the respondent’s indicated they sought judgment against Ms Ingui with costs. In support of this response, both Mr Ostara and Ms Pretty swore brief affidavits in the same terms and said as follows:
“The substance of the allegations made in her (Ms Ingui) affidavit against the 1st respondent are false and can, and will be, refuted in their totality.
I seek the opportunity of an oral adversarial hearing in which the applicant and myself are examined and cross-examined on oath for the purpose of establishing the truth of the matters alleged in her affidavit.”
On the 3rd of July, 2002, at the request of the parties, orders were made for mutual discovery.
On the 28th of August 2002 and the 9th of September 2002, further affidavits were filed which had been deposed by Ms Pretty and Mr Ostara. These affidavits contained in detail the substance of the evidence on which they relied to refute the allegations made against them by Ms Ingui.
On the 24th of September, 2002 the parties were referred to mediation to be conducted by a Court appointed mediator. The mediation took place in November of 2002.
On the 18th of December, 2002, the matter was fixed for hearing for
5 days between 19 and 23 May, 2003 and orders were made for the filing of affidavit evidence by each of the parties. At that stage, it was apparent that the parties had failed to resolve the matter at mediation. At the directions hearing of the 18th of December, 2002, counsel for Mr Ostara and Ms Pretty indicated that his clients intended to call between 9 and 12 witnesses in support of their case. Accordingly, throughout the proceedings, until the matter was fixed for hearing in December, there is no doubt that both respondents indicated that they did not accept the truth of the allegations made against them and intended to rigorously defend the matter. This was not a case where there was any uncertainty about the application of the relevant legislation, in particular the Sex Discrimination Act to the subject matter to the application. Rather, the area in dispute between the parties was whether the incident gave rise to the claim had in fact occurred. The respondents wished to rely on several documents which they believed supported their version of events. The parties had exchanged lists of documents prior to the 18th of December, 2002 and inspection had taken place.
On the 21st of January 2003 the solicitors acting for Ms Ingui filed a Notice of Discontinuance. In the notice, the solicitors indicated that Ms Ingui wished to discontinue in respect of all the orders that she sought in her originating application.
The Notice of Discontinuance was served on the solicitors for the respondents by way of facsimile on the day it was filed. Thereafter, on the 27th of February 2003 the respondents filed an application seeking an order that Ms Ingui pay their costs in the proceedings.
In response to this application for costs, the applicant has filed a response in which she seeks orders that the application for costs be dismissed or in the alternative the Notice of Discontinuance that was filed on her behalf be stayed. These competing applications came on for hearing before me on the 19th of March 2003.
Applicable legislation
Pursuant to section 79(3) of the Federal Magistrates Act, the Court has a discretion in respect of the award of costs.
Rule 13.01 of the Federal Magistrates Court Rules provides as follows:
(1)A party may discontinue an application or response by filing a notice of discontinuance in accordance with the notice set out in Part 1 of Schedule 2.
(2)A notice of discontinuance may be filed:
(a)At least 14 days before the day fixed for the final hearing of the application; or
(b)With the leave of the Court or a Registrar, at a later time.
(3)However, a party may not file a notice of discontinuance without the leave of the Court or a Registrar if:
(a)In a proceeding under the Family Law Act:
(i) The proceedings relates to the property of a party; and
(ii) One of the parties dies before the proceeding is decided; or
(b)The proceeding is a creditor’s petition.
(4)A party filing a notice of discontinuance must, as soon as practicable, serve a copy of the notice on each other party in the proceeding.
Rule 13.02 deals with the question of costs on discontinuation and reads as follows:
(1)If a party discontinues an application, or part of an application, another party in the proceedings may apply for costs.
(2)Unless the Court or a Registrar directs otherwise, an application for costs must be made by a party within 28 days after service on the party of the notice of discontinuance.
(3)If an order for costs is made against a party and the party brings against the party to whom the costs are payable a further proceeding on the same or substantially the same matter, the Court may stay the further proceeding until the costs are paid.
There is no doubt that the notice of discontinuance was served on the respondent’s solicitor as soon as practicable. At any event, no issue is taken with the fact of service.
Throughout the proceedings, up until the notice of discontinuance was filed, the applicant was represented by a firm of solicitors. After the respondent’s filed their application for costs, this firm of solicitors filed a notice indicating that they no longer acted for Ms Ingui. However, the application for costs had earlier been served on this firm.
At the hearing before me on the 19th of March 2003, Ms Carrigan, an Industrial Officer employed by the Industrial Relations Information and Support Services sought leave to appear on behalf of the applicant. Ms Carrigan was previously employed as an articled clerk by the firm that had earlier acted for Ms Ingui and as a result, Ms Carrigan was familiar with the case. Ms Carrigan has now been admitted as a legal practitioner in the Northern Territory. However, she sought to appear in her capacity as an industrial officer. Counsel for the respondents did not object to Ms Carrigan appearing.
Ms Carrigan prepared and deposed an affidavit on behalf of Ms Ingui in opposition to the application for costs. In her affidavit, she set out three main grounds on which the application for costs should be dismissed. These grounds were as follows:
·The respondents had failed to comply with Rule 13.02(2) in that their application for costs had been filed more than 28 days after the notice of discontinuance had been filed. Therefore the application for costs should be dismissed.
·Failing this argument the notice of discontinuance filed by Ms Ingui be stayed and that she have the opportunity to have her application brought back on and heard in its entirety.
·Failing either of these applications that the Court exercise its discretion in favour of Ms Ingui and not make an order for costs.
a) Failure by the respondent to make the application for costs within the time prescribed by Rule 13.02
Ms Carrigan was not able to point to any specific authority to support her contention that the application for costs brought by the respondents should be dismissed because of their failure to comply with Rule 13.02. Pursuant to Rule 3.05, the Court may extend or shorten any time fixed by the Rules. Accordingly, the Court has a discretion as to whether or not to extend the time prescribed for any matter pursuant to the Rules.
Section 57 of the Federal Magistrates Act reads as follows:
57(1)Proceedings in the Federal Magistrates Court are not invalidated by a formal defect or an irregularity, unless the Federal Magistrates Court is of opinion that:
a)substantial injustice has been caused by the defect or irregularity; and
b)the injustice cannot be remedied by an order of the Federal Magistrates Court.
57(2)The Federal Magistrates Court or a Federal Magistrate may, on such conditions (if any) as the Federal Magistrates Court or Federal Magistrate thinks fit, make an order declaring that the proceeding is not invalid:
a)by reason of a defect that it or he or she considers to be formal; or
b)by reason of an irregularity.
This section is in similar form to section 51 of the Federal Court Act. In my view, the failure of the respondents to make the application for costs within the time prescribed is a formal defect and is not fatal to jurisdiction. Rather it is an irregularity that is capable of being remedied[1].
[1] See Crayford v Coral Seatel 162 ALR 119 at 125 In this case the Full Court of the Federal Court (Burchett, Ryan & Marshall JJ) referred to Emanuele v Australian Securities Commission (1997) 188 CLR 114 where at 147 Kirby J said: “A feature of the administration of justice in more recent times has been a general disfavour towards procedural rigidity and a preference for a somewhat more flexible appraoch for statutory preconditions where these are of a procedural character.”
The delay in this case was of some 10 days in excess of the time period stipulated by the Rules. In my view, the time is not a significant one and certainly is not one that is likely to have caused substantial prejudice to Ms Ingui in meeting the argument in respect of costs. It is clear from the content of Ms Carrigan’s affidavit and correspondence annexed thereto[2]; that Ms Ingui was aware that her discontinuance of the proceedings would leave her open to an application for costs by the respondents. In my view, it would result in an injustice to the respondents if I did not extend the time in which to allow them to bring their application for costs. This is a defect which can be remedied pursuant to section 57 of the Federal Magistrates Act and the application of Rule 3.05.
[2] See Ms Carrigan’s affidavit filed 18 March 2003 paragraph 44 – 47
b) The application to withdraw the notice of discontinuance
A discontinuance terminates a proceedings, but preserves the plaintiff’s right to commence another action based on the same complaint. Although the substantive rights of the parties concerned have not been determined and res judicata does not apply, a notice of discontinuance brings the proceedings to a close. The matter that is the subject of the discontinued proceedings can only be reactivated by the filing of a fresh application. This is clear by reason of Rule 13.02 that allows the Court to make an order to stay further proceedings if a subsequent application is made which relates to the same matter or substantially the same matter.
For this reason, it would be inappropriate, in my view, to allow the applicant to effectively withdraw her notice of discontinuance and so possibly compel the respondents to accept her proposal that the matter be resolved on the basis that both parties bear their own costs. Presumably the applicant was advised of the consequences of discontinuing these proceedings – that is they brought the proceedings to a close. The respondents are entitled to rely on the effect of that notice of discontinuance. Accordingly, this aspect of Ms Ingui’s application is dismissed.
c) The question of costs generally
In her submissions, Ms Carrigan argues that the Court should exercise its discretion granted pursuant to section 79(3) of the Federal Magistrates Act and not make an order for costs in this matter. It is clear to me that throughout these proceedings as a whole, the respondents have clearly indicated to the applicant that they would give her no quarter. This was apparent from their silence to Ms Ingui’s proposal that on her discontinuance each party should bear their own costs and their indication throughout the proceedings that they were not prepared to make any concessions in regards to the allegations made against them by Ms Ingui.
It is clear from Ms Carrigan’s affidavit[3] that following the directions hearing of the 18th of December, 2002, Ms Ingui’s counsel withdrew from the proceedings and, as a result, her solicitors were not in a position to continue acting in the matter. Given the number of witnesses the respondents had indicated they would call, and no doubt because of the vehemence with which the proceedings had been dealt with up to that stage, Ms Ingui elected to discontinue the proceedings. As has already been indicated, an offer to resolve the proceedings on the basis that each party bear their own costs up to that stage was rebuffed by the respondents.
[3] See Ms Carrigan’s affidavit paragraphs 9 & 10
Pursuant to Rule 13.02 there is no presumption that a discontinuing party is liable to pay the other parties’ costs. Pursuant to Rule 13.01, no leave is required from the Court for an applicant to discontinue proceedings.
Generally speaking, the respondents should not be prejudiced by the fact that the applicant has been placed in some difficulty because of the absence of legal representation and by the fact that they have intimated clearly to her that they do not accept the truth of her allegations against them. Although there is no presumption of costs, ordinarily costs would follow the event of such a discontinuance, if in all the circumstances, it was reasonable to make such an order.
The position may be somewhat different in proceedings which relate to Human Rights legislation. In Low v Australian Tax Office[4], Federal Magistrate Driver said as follows:
“In my view the Court should be slow to award costs at an early stage of Human Rights proceedings so that applicants have a reasonable opportunity to get their case in order, to take advise and assess their position. It would, in my view, be undesirable for costs to be awarded commonly at an early stage, as that would provide a deterrent to applicants taking action under what is remedial legislation in a jurisdiction where costs have historically not been an issue.
By disposing of the application now at this relatively early stage the respondent is able to avoid being put to the substantial expense of a full hearing and in those circumstances I do not think it necessary or appropriate to make any order as to costs.”
[4] [2000] FMC 6 at page 11
Federal Magistrate Driver took a contrary view in NAGY v Minister forImmigration and Multicultural and Indigenous Affairs[5]. This case concerned an application for review of a decision of the Migration Review Tribunal, where the applicant discontinued his application at a stage where the solicitors for the Minister had gone to the expense of preparing a case book for the hearing of the matter and the applicant himself had had the opportunity of obtaining legal advise through a scheme administered by the Department of Immigration. In those circumstances, Federal Magistrate Driver believed that it was appropriate to make an order for costs.
[5] [2002] FMCA 189
In both of these cases, the applicants concerned were self represented and the respondents were each essentially Commonwealth Departments. That is not the case here. Ms Ingui has been represented throughout the proceedings. The respondents are private individuals who are funding their own litigation. In my view, the evidence is clear that both respondents have indicated clearly throughout the proceedings that they contested the allegations made against them. The applicant was put on notice, at an early stage, that it was unlikely that the proceedings could be compromised. This was not a case where it is readily apparent that there is any matter of legal principle at stake in the outcome of the proceedings. By reason of the decision she took to discontinue her proceedings, Ms Ingui must be taken to have realised the perils of continuing such litigation.
In all the circumstances of this case, it appears to me to be reasonable that she should make some contribution to the costs incurred by the respondents in the proceedings to date. She was provided with detailed information regarding the respondent’s case by reason of the affidavits that were filed on their behalf in August and September of 2002. Although the respondents have been saved the possible expense of a contested hearing, they have still been put to some expense in the proceedings to date. As I have already indicated, they cannot be held responsible for the inability of Ms Ingui to retain legal representation.
The next issue concerns the exact order that should be made in respect of costs. Mr James, who appears for the respondents, has not made application for payment of any specific amount of costs. Pursuant to Rule 21.10 of the Federal Magistrates Court Rules:
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
a) costs in accordance with Schedule 1; and
b) disbursements properly incurred.”
The scale of costs set out in Schedule 1 of the Federal Magistrates Court Rules is a fixed event based scale. There is no provision for taxation of costs fixed by reference to the scale in Schedule 1. The only provision for taxation is in Rule 21.02(2)(c) of the Federal Court Rules. The Federal Court’s scale of costs applies in relation to any order for taxation in a General Federal Law proceedings[6].
[6] See Suew Fong Lin v Official Trustee in Bankruptcy (No.2) [2002] FMCA 1
Where there is a dispute about what costs are payable under the Federal Magistrates Court scale it is open to the Court to refer the issue to a Registrar pursuant to Part 18 of the Federal Magistrates Court Rules but the issue can only be finally resolved by a court order. Such a court order would usually be for costs to be paid in a specific amount or in the form of a declaration that the successful party was entitled to costs in a certain amount for the purposes of the previous cost orders.
In this particular case, the respondents have been saved a considerable sum by reason of the applicant discontinuing her claim. The respondents have been saved the costs of preparing the matter for final hearing.
In my view, it is appropriate that each party be given an opportunity to prepare brief written submissions as to the quantum of costs to be allowed pursuant to Schedule 1 of the rules and the various stages as set out thereunder.
For all these reasons, I order that the respondents’ solicitors provide to the applicant a list of the costs sought by them pursuant to Schedule 1 of the Federal Magistrates Court Rules within 28 days of today’s date. The applicant may provide a response within a further 28 days after that if she wishes. Both the respondent’s list of costs sought and any response by the applicant are to be filed. I will then make what I believe is the appropriate order for costs in the matter.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: Lynnette Chin
Date: 03 June 2003
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