Ingui v Ostara and Anor (No.2)
[2003] FMCA 531
•22 December 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| INGUI v OSTARA & ANOR (No.2) | [2003] FMCA 531 |
| HUMAN RIGHTS – PRACTICE AND PROCEDURE – COSTS – Calculation of costs following discontinuance of human rights proceedings by applicant – whether respondents behaved unreasonably or with improper purpose in these proceedings and other proceedings before Human Right and Equal Opportunity Commission and Industrial Relations Commission – whether Court should exercise discretion not to award costs. Human Right and Equal Opportunities Commission Act, ss.46PJ, 46PK Horman v Distribution Group Limited [2001] FMCA 52 |
| Applicant: | TRACEY INGUI |
| 1st Respondent: | JOHN OSTARA |
| 2nd Respondent: | INDO PACIFIC MARINE |
| File No: | DZ 07 of 2002 |
| Delivered on: | 22 December 2003 |
| Delivered at: | Darwin |
| Hearing dates: | Written submissions 27 June 2003, 8 August 2003, 2 & 10 September 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 applicant pay the 1st and 2nd named respondents costs fixed in the sum of THREE THOUSAND DOLLARS ($3,000.00).
| 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 reasons for judgment should be read in conjunction with the reasons for judgment in this matter released on 3 June 2003. On that day, I determined that the applicant in this matter should make some contribution towards the costs incurred by the 1st and 2nd respondent in these proceedings. As a result, on that date, I made the following orders:
1.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.
2.The applicant to provide a response within a further 28 days after that, if she wishes.
Notwithstanding the ruling that was made on the 3rd of June 2003, Ms Carrigan, who was given leave to appear on behalf of the applicant, has sought to make further submissions in respect of whether any order for costs should be made against the applicant. She has filed further lengthy written submissions on the 8th of August and 10th of September 2003. Mr James, the solicitor for the 1st and 2nd named respondents, does not object to these further submissions and has made lengthy written submissions of his own concerning the issue of costs. As a consequence, I determined that it was appropriate for Ms Carrigan to re-agitate the issue of costs.
In her submissions, Ms Carrigan rightly points out that the issue of costs is a discretionary matter for the Court, notwithstanding that Human Rights legislation is concerned. She reminds me that any case involving discrimination on the basis of sexual impropriety almost inevitably raises issues of enormous sensitivity to all parties concerned and has inherent complexity because of that.
In this case, Ms Carrigan argues that there are circumstances that justify there being no award of costs in the matter or that the costs awarded should be reduced. She asserts that neither respondent has behaved in a bona fide manner in the proceedings and as such, no costs should be awarded.
In particular, Ms Carrigan relied on a passage from a decision of Federal Magistrate Raphael in Horman v Distribution Group Limited[1], where His Honour said as follows:
[1] Horman v Distribution Group Limited [2001] FMCA 52
“The general rule for discretion in awarding an apportionment of costs is that:
“Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.” Toohey J in Hughes v Western Cricket Association (Inc) (1986) 8 ATPR 40 at 48 cited in Newcrest Mining (WA), BHP Minerals Limited v The Commonwealth of Australia, The Direction of National Parks and Wildlife (1993) FCA unreported, French J.
In Newcrest Mining French J cites Cooper J in Cummings v Lewis (1993) 113 ALR 285 at 327:
“It is within the discretion of a trial Judge to award only a proportion of a successful party’s costs if the conduct of that party in a trial was such as to unreasonably prolong the proceedings…”
In Colgate Palmolive v Cussons (1993) 118 ALR 248 at 257 Sheppard J notes some of the circumstances which would justify another order:
“I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud… Evidence of particular misconduct that causes of loss of time to the court and to other parties… The fact that the proceedings were commenced or continued for some ulterior motive… Or in wilful disregard of known facts or clearly established law… The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…
In Oshlack v Richmond River Council (1998) 193 CLR 72 at 97 McHugh J says :
“The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretions”.
In Anglo-Cyprian Trade Agencies Limited v Paphos Wine Industries Limited [1951] 1 ALL ER 873 at 874 Devlin J formulated the relevant principal as follows:
No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.
“Misconduct” in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purposes of increasing the costs recoverable; or obtains relief which the unsuccessful party has already offered in settlement of the dispute.””[2]
[2] See Horman v Distribution Group Limited (supra) at paragraph 72 - 74
In this case, Ms Carrigan asserts that there is evidence that the 1st and 2nd respondents are guilty of misconduct and should not have an award of costs in their favour. She details this misconduct under a number of separate headings. I will use her headings in these reasons for judgment to assess whether or not there has been any such misconduct.
a) Conduct of the 1st and 2nd respondents in the Australian Industrial Relations Commission
The applicant commenced proceedings against the respondents in the Australian Industrial Relations Commission.[3] Ms Carrigan asserts that the respondents alleged in their defence to these proceedings that the applicant had falsified her time book and had so committed a criminal offence. Ms Carrigan argues that this was a tactic adopted by the respondents to intimidate the applicant into withdrawing her complaint, which she ultimately did. She asserts that there was no evidence on which to base this serious assertion of fraud on Ms Ingui’s part and points to the fact that it was never reported to the Police by either respondent from which it can be inferred that the allegation had no basis in fact. Accordingly, she asserts that this demonstrates mala fides on the part of the respondents and so disqualifies them from an award of costs. I do not agree.
[3] See Ingui v Ostara & Anor (1) [2003] FMCA 132 at paragraph 5
Because the applicant withdrew her application in this Court, I have heard no evidence in respect of this issue from either party. Accordingly, I do not believe I am able to draw any conclusions as to whether the respondents acted in a malign way in the Australian Industrial Relations Commission proceedings. Accordingly, I do not believe that I can find that the respondents acted in a non bona fide manner in proceedings in another Court, which proceeding were, in any event, discontinued by the applicant before any inquiry was made.
b) The Human Rights and Equal Opportunity Commission complaint
Ms Carrigan asserts that the 1st respondent failed to act in good faith when the applicant’s complaint was being investigated by the Human Rights and Equal Opportunity Commission, in that he did not provide more evidence in support of his denial that any sexual impropriety had occurred on his part towards the applicant in Bali. In contrast, Ms Carrigan is critical of the 2nd named respondent for providing “voluminous” material to the Human Rights and Equal Opportunity Commission, which she asserts was designed “to cloud” the issue. Finally, Ms Carrigan is critical of both respondents refusal to attend a mediation process at the Human Rights and Equal Opportunity Commission, which she argues may have caused the applicant not to proceed further with the matter by means of an application in this Court. It is incontrovertible that the President of the Commission terminated the complaint on 20 May, 2002 because she did not believe there was any reasonable prospect of the matter being resolved by conciliation.
I do not believe that any of these actions amount to misconduct in the sense referred to by His Honour Justice McHugh in Oshack v Richmond River Council[4]. The proceedings in the Human Rights and Equal Opportunity Commission were not litigation in a formal sense. Although the President has power under section 46PJ of the Human Rights and Equal Opportunities Commission Act to direct a person to attend a compulsory conference and pursuant to section 46PK the power to compel production of a document, it seems those powers were not utilised in this case before the President determined to terminate the complaint. Accordingly, I cannot assess, whether, if either respondent had attended such a mediation or conciliation, it would have led the applicant not to bring these proceedings. It is not possible for me to ascertain whether the decision of either respondent not to attend a conciliation conference was as a result of any malign motive on their part. In addition, as the present matter did not proceed to hearing, due to the applicant discontinuing her application, I am not in a position to ascertain the bona fides of either respondent in these proceedings in particular and certainly not in respect of proceedings which the applicant commenced before another Tribunal. Accordingly, I do not believe that the conduct of either respondent in the Human Rights and Equal Opportunity Commission is such that they should be penalised in respect of the issue of costs in proceeding which the applicant instigated, of her own volition, in this Court.
[4] Oshack v Richmond River Council (1998) 193 CLR 72
c) The proceedings in the Federal Magistrates Court
There can be no doubt that throughout the proceedings in the Federal Magistrates Court, both respondents, through their counsel, asserted that they strenuously denied any direct or vicarious impropriety on either of their parts, which amounted to unlawful conduct for the purposes of the Sex Discrimination Act. The proceedings were carried on in a formal but vigorous manner before me. I have already indicated that the respondents, through their counsel, indicated that “no quarter would be given” and that the proceedings would be vigorously defended.
These were adversarial proceedings. The respondents were entitled to defend the proceedings with vigour, as they each saw fit. The proceedings were brought to a close, not by any action on their part, but rather by the action of the applicant in filing a Notice of Discontinuance. Such vigorous conduct of litigation may be intimidating to many, particularly to a person in the position of the applicant, who is not a person of means and who was asserting that her rights had been infringed in circumstances that would entail embarrassment to many. But as Ms Carrigan points out, complaints of the type brought by the applicant do inevitably provoke strong feelings. I do not believe that it can be reasonably said that the applicant can have been taken by surprise or put at significant disadvantage by reason of the denials of the respondents of any unlawful conduct on either of their parts. Such denials are part and parcel of adversarial litigation, which inevitably involve disputes of fact.
The applicant is critical of the respondents’ initial affidavits in response to her complaint and asserts that they breached the requirements of Order 41 rule 4 of the Federal Magistrates Court Rules. She is critical that these affidavits contained only a general denial of improper conduct on their part. However, in a formal sense, Ms Carrigan did not take exception to those affidavits. But, at a later stage, both respondents did file more extensive affidavit material. Ms Carrigan is also critical of these additional affidavits as, in her submission, they contained only general and hearsay evidence. However, once again, in a formal sense, she did not attempt to strike out these affidavits. She did however request the solicitor for the respondents to provide further and better particulars of their respective defences. This was independent of any direction made by the Court itself.
At the first directions hearing of the matter on the 3rd of July 2002, inquiries were made of the parties as to whether it was appropriate for the matter to be referred to a court based mediation. Because the 1st and 2nd named respondents indicated that they could see no benefit to be gained from such a process, no mediation was ordered at that stage. However, counsel for each of the parties sought that the other make discovery on oath and accordingly such an order was made.
Section 45 of the Federal Magistrates Act deals with the issue of interrogatories and discovery. It reads as follows:
“45(1)Interrogatories and discovery are not allowed in relation to proceedings in the Federal Magistrates Court unless the Federal Magistrates Court or a Federal Magistrate declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery.
45(2) In deciding whether to make a declaration under sub section (1), the Federal Magistrates Court or a Federal Magistrate must have regard to:
a)whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and
b)such other matters (if any) as the federal Magistrates Court or the Federal Magistrate considers relevant.”
Counsel for each of the parties indicated that discovery would narrow the issues between the parties. It was on that basis the order was made. Both parties sought discovery from the other and both consented to such an order being made in respect of them. It was on that basis that the order for discovery was made. The matter was then adjourned until 24 September 2002 for further directions and in order to fix a date for hearing and in addition to consider whether or not primary dispute resolution was appropriate following discovery.
Accordingly, although the respondents rejected the option of mediation at the first directions hearing, the door was kept open in this regard. On the next mention of the matter, the respondents indicated, through their counsel, that they had reconsidered their position and would be willing to attend such a mediation. Accordingly mediation was ordered, once again with the consent of all parties and the matter was further adjourned to the 30th of October 2002. Ms Carrigan asserts that this is yet another example of the duplicity of the respondents, as the mediation proved unsuccessful. She submits that the respondents had no intention of resolving the proceedings or attempting to resolve the proceedings. She asserts that it was another pretext by the respondents to delay the proceedings and put the applicant at a further disadvantage. I have no way of asserting the truth or otherwise of this assertion. I am not in a position to make any findings of fact about the conduct of any of the parties at the mediation, other than the parties were unable to reach a mutually satisfactory compromise with one another.
I do however note that the mediation process took longer than expected, due to the unavailability of a suitably qualified mediator. The matter next came before the court of the 18th of December 2002, when it was fixed for hearing for five days in April of 2003. The matter was fixed for hearing with the consent of all the parties concerned. Up to this stage it had come before the Court on three occasions. The next event of any significance was the filing of a Notice of Discontinuance by the applicant on the 21st of January 2003.
I do not believe that any of the conduct or tactics adopted by the respondents in this matter in these proceedings can be characterised as improper. Both parties attended mediation as a result of their mutual application. Orders for discovery were made because both parties requested discovery and indicated that this was a matter, which involved a significant number of documents and it was appropriate for such an order to be made. There were three brief directions hearing in respect of the matter, at the final of which the matter was fixed for hearing, with the consent of all parties.
Conclusions
It is the main thrust of the applicant’s case that she has been intimidated and harassed by the respondents out of pursuing her rightful claim. However, the fact remains that the Court has heard no evidence in this case and is therefore unable to make any findings as to whether any behaviour on the part of the 1st respondent amounted to sexual harassment within the terms of the Sexual Discrimination Act and therefore whether the 2nd respondent is vicariously liable for that conduct. Similarly no finding can be made as to whether the claims made by the applicant were baseless as the 1st respondent asserts. The proper forum for the resolution of these issues was the hearing of the matter, which had been allocated for the 21st of April 2003. Five days had been put aside for the resolution of these issues. That hearing was not required, as the applicant discontinued the proceedings. Because there has been no substantive hearing of the matter, I am not in a position to make findings as to the bona fides or otherwise of the respondents in respect of the positions they have taken either in the litigation in this Court or in the Human Rights and Equal Opportunity Commission and the Australian Industrial Relations Commission.
The matter in this Court had been fixed for hearing after three brief directions hearings. Discovery was ordered, at the mutual instigation of the parties. Mediation was ordered, again at the mutual instigation of the parties. The mediation was inconclusive. I am not privy to the reasons for the failure of the mediation and so can make no findings as to whether or not one or other of the parties was at fault. I do not believe that it can be said that either of the respondents were lax in the conduct of the matter or have unduly prolonged the proceedings for their own malign ends. Certainly, they have each indicated to the applicant throughout that they would strenuously defend the claim made against them. For all these reasons, I see no grounds to change the views I formed on the 3rd of June 2003 that the applicant should contribute towards the costs of the 1st and 2nd named respondents.
The award of costs
The respondent’s seek costs in the sum of fifteen thousand six hundred and eighty five dollars ninety ($15,685.90). This sum has been calculated by reference to Schedule 2 of Order 62 rule 12 of the Federal Court Rules, which deals with costs in the Federal Court. The respondent’s claim reimbursement of 70.7 hours of professional costs at 80% of the Federal Court rate of $231.00 per hour plus GST, together with the filing fee on the Notice of Motion seeking costs of $164.00; and counsel’s fees of $1,150.00 for the directions hearing on the 18th of December 2002, when the matter was fixed for hearing.
The Court has a wide discretion as to the calculation of costs. Pursuant to Order 21 rule 2(2):
In making an order for costs in a proceeding, the Court may:
a) set the amount in 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 order 38 of the Family Law Rules; or
d) set a time for payment of costs, which maybe before the proceeding is concluded.
However, pursuant to Order 21 rule 10:
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 to schedule 1; and
b) Disbursements properly incurred.
In section 3(2) of the Federal Magistrates Act, the legislature sets out the objects of the Federal Magistrates Court as follows:
(a)to enable the Federal Magistrates Court to operate as informally as possible in the exercise of judicial power; and
(b)to enable the Federal Magistrates Court to use streamlined procedures; and
(c)to encourage the use of a range of appropriate dispute resolution processes.
No doubt, the intention of the legislature in this regard was to reduce the cost of court proceedings pursuant to Federal legislation and provide litigants with a cheap and cost effective means of accessing justice within the Federal jurisdictional sphere. Order 21 rule 10 creates a scale of costs by reference to the occurrence of fixed events. In my view, the creation of such a scale was designed to help achieve these objects.
Applying that scale of costs to the present proceedings achieves the following results:
Initiating or opposing application up to completion of first court day
$ 1,820.00
PDR litigation intervention
$ 2,045.00
Hearing fee (short mention) 3 July 2002
$ 190.00
Daily hearing fee (short mention) 24 September 2002
$ 190.00
Daily hearing fee (short mention) 18 December 2002
$ 190.00
Plus advocacy loading of 50% for hearing on 18 December 2002
$ 95.00
TOTAL COSTS
$ 4,530.00
DISBURSEMENTS
Disbursements - Filing fee on notice of motion
$ 164.00
TOTAL
$ 4,694.00
I do not believe that counsel’s fees of $1,150.00, to attend at the directions hearing of the 18th of December 2002, when the matter was fixed for hearing, is a fee that has been reasonably incurred. Accordingly, I propose to deal with this by way of allowing a 50% advocacy loading for that particular hearing.
In addition, in my view, the sum of $4,694.00 is an excessive amount of costs, given the circumstances of this case, which was discontinued well before the matter was fixed for final hearing, saving the respondents from incurring a considerable amount of costs. There were no interim hearings in the matter. The primary dispute resolution intervention was abortive. The matter involved three short mentions before the court. Discovery was done at the instigation of the parties. Accordingly, I believe that an award of costs for both costs and disbursements in the sum of $3,000.00 inclusive, is the appropriate award of costs.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: L. Chin
Date: 22 December 2003
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