Jordan v North Coast Area Health Service (No 3)

[2005] NSWADT 296

CITATION:	Jordan v North Coast Area Health Service (No 3) [2005] NSWADT 296
DIVISION:	Equal Opportunity Division
PARTIES:	APPLICANT Kylie Jordan RESPONDENT North Coast Area Health Service
FILE NUMBER:	031083
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	12/06/2005
DATE OF DECISION:	12/16/2005
BEFORE:	Rice S - Judicial Member; Lowe A - Non Judicial Member; Weule B - Non Judicial Member
APPLICATION:	Costs
MATTER FOR DECISION:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977 Convention on the Elimiation of All Forms of Discrimination against Women
CASES CITED:	Borg v Commissioner, Department of Corrective Services & Anor [2003] NSWADT 35 Cleary Bros (Bombo) Pty Ltd -v- Cvetkovski (EOD) [2001] NSWADTAP 10 Duggan v Shore Inn Pty Limited (1993) EOC 92-483 Gallagher v New South Wales Police Service [1998] NSWEOT Holdaway v Qantas Airways Limited (1992) EOC 92-430 Squires v Qantas Airways Ltd (1985) EOC 92-135 Willis v State Rail Authority of New South Wales (No 3) (1992) EOC 92-456 Y v V & X (EOD) [2003] NSWADTAP 44
REPRESENTATION:	APPLICANT B Bourke, solicitor RESPONDENT L Clegg, barrister
ORDERS:	1. The respondent to pay three quarters (75%) of the applicant’s legal costs incurred in the period 5 March 2004 – 2 February 2005; 2. If the parties are unable to agree on the amount of those costs within 28 days, those costs are to be determined by a costs assessor in accordance with the Legal Profession Act 2004

Decision

1 For the reasons we give below we make an order for the part payment of Ms Jordan’s costs by the North Coast Area Health Service (NCAHS).

Background

2 Ms Jordan’s complaint of discrimination on the ground of sex (pregnancy) was substantiated, but her complaint of victimisation was dismissed: Jordan v North CoastArea Health Service(No 2) [2005] NSWADT 258.

3 Ms Jordan and NCAHS were invited to make submissions on the question of costs. A relatively short timetable for the filing of submissions was set, as we recognise that the question of costs is a relevant factor in a decision whether to appeal: Cleary Bros (Bombo) Pty Ltd -v- Cvetkovski (EOD) [2001] NSWADTAP 10 at [41]. We are grateful to the parties for having complied with that timetable, and regret that the decision was then unavoidably delayed for a short period.

The relevant provision

4 Each party to an inquiry is to pay his or her own costs, unless in the Tribunal’s opinion there are circumstances that justify making a costs order, as it thinks fit (s110 Anti-Discrimination Act1977 (‘ADA’)). The question we invited the parties to address was, effectively, whether in their view there are circumstances that justify making a costs order.

5 Although s88 of the Administrative Decisions Tribunal Act 1997 also makes provision for costs orders, the Appeal Panel has noted that s110 ADA is the relevant provision (Y v V & X (EOD) [2003] NSWADTAP 44 at [38]; Cleary Bros at [60]-[61]), and the ADA itself provides that while s110 applies in addition to s88 of the Administrative Decisions Tribunal Act 1997, it prevails to the extent of any inconsistency.

Costs application

6 In this matter NCAHS makes no application for costs. Ms Jordan does, and says that a costs order in her favour is justified by a number of circumstances.

The manner of conduct of the proceedings

7 The first matter Ms Jordan relies on is the manner in which, she says, NCAHS conducted the proceedings. Ms Jordan refers to five things done by NCAHS which, she says, together disadvantaged her and caused her unnecessary legal costs: delay in responding to an invitation to mediate, failure to comply with a timetable for filing evidence, making a ‘strike-out’ application, and “an attempt” to delay the hearing date due to the unavailability of legal representatives. For the following reasons, none of these is persuasive.

8 The failure of NCAHS to accept Ms Jordan’s offer of mediation did not cause delay. The offer was made outside the Tribunal’s own process. There is no indication that the matter would have settled at mediation had it occurred when Ms Jordan offered it, and the narrative description of work done, set out in the Tax Invoice of 5 March 2004 filed by Ms Jordan, indicates very little work – and thus cost to Ms Jordan – directly attributable to the failed attempts to involve NCAHS in mediation at that stage.

9 The failure to comply with a timetable for filing evidence does not, on the material filed or arguments made, appear to have resulted in additional cost to Ms Jordan. Nor, in the circumstances, did it cause undue delay. Delay in complying with a timetable is a cause for continuing frustration in the Tribunal, but whether it warrants a costs sanction depends on the circumstances. In this matter NCAHS’s failure to file evidence in reply to Ms Jordan’s evidence is explained by the fact that it filed, instead, a strike-out application.

10 The filing of the strike out application, and its dismissal, caused cost and delay that are properly within the scope of matters such as this. NCAHS was entitled to make the application, which was considered and dismissed on its merits. That the application resulted in vacating the listed hearing dates was an unfortunate but necessary consequence of the application’s having been made.

11 Finally, what Ms Jordan characterises as an attempt to delay the hearing date due to the unavailability of legal representatives was merely an application that was properly made and was unsuccessful. The hearing proceeded on the listed dates.

Public policy and public interest

12 A further matter which Ms Jordan says justifies a costs order in her favour is that the case raised important public policy and public interest considerations.

13 It is true that the decision is likely to affect the situation of people other than Ms Jordan, but that is not remarkable, and it is generally expected that a finding of discriminatory conduct against one person or entity will cause others in similar situations to review their conduct or systems.

14 The case was concerned principally with the question of reasonableness. Although a number of issues had to be explored in more detail than in previous cases (eg whether performance of the job itself can be a requirement), these were incidental to Ms Jordan’s establishing her complaint, were not directly the subject of her complaint, and were not argued for or contested by the respondent. A respondent should not have to meet the costs of those matters being dealt with.

Legal costs exceeding damages

15 Finally, Ms Jordan says a costs order in her favour is justified because her legal costs exceed the amount of the damages awarded to her. Ms Jordan has provided copies of tax invoices for legal services relating to these proceedings that amount to $14,413.41. The amount of compensation she was awarded for having been discriminated against was $7,500assessed by us in the context of there being an upper limit in the jurisdiction of $40,000.

16 It is evident that the legal costs are, as Ms Jordan submits, disproportionate to the amount awarded. Without an order for her costs Ms Jordan will have spent almost twice the amount of her compensation award on the legal services she engaged to obtain it.

17 NCAHS submits that this was a real risk that Ms Jordan, properly advised, should have been aware of, especially as the amount of damages, NCAHS says, was in the high range in the circumstances.

18 Implicit in NCAHS’s submission is the proposition that Ms Jordan was on notice that she would be out of pocket if she pursued her complaint, and so should not now be able to recover her costs. This is precisely the situation that we say, in more detail below, is problematic: that a person who has been discriminated against should have to choose between not resorting to the ADA, or making a complaint and being out of pocket even after being compensated for the discrimination.

19 The effect of the presumption against a costs order in s110 is necessarily that a successful complainant who has engaged private legal services will have spent money to establish their claim of discriminatory conduct. If they receive an award of compensation that amount will be, ultimately in their hand, net of the legal costs. That is unremarkable, and the clear intention of the ADA.

20 NCAHS’s submission is correct in that it identifies the ordinary consequence of the costs regime under the ADA: a complainant should not expect to recover the legal costs they incur in establishing that they were discriminated against. But that expectation was created by the ADA at a time when, we can say confidently, the legal costs ordinarily incurred in establishing a discrimination complaint were considerably smaller as a proportion of the jurisdictional limit than they are now. Over a period of 23 years one part of the equation has remained static while the other has increased substantially, distorting the framework within which the presumption against a costs order operates.

21 The jurisdictional limit of the ADA has increased only once, 23 years ago. When setting the limit in 1977 the then Premier Mr Wran said “the sum of $20,000 is the maximum amount within the jurisdiction of the District Court, and it appeared appropriate that the same sum should be set as the maximum for this tribunal” (NSW Parliament Hansard 18 November 1976 page 3345). In 1982 the limit was increased to $40,000, reflecting a change in the limit in the District Court; it has not been changed since, despite very substantial increases in the limit of the District Court’s jurisdiction. Some indication of the change is given by the fact that $1.00 in 1982 was worth $2.46 in 2003 (the latest figure available: Table 28.4 Retail Consumer Price Index Numbers, in Australia Bureau of Statistics, Year Book Australia 2005 at < The legal services that cost Ms Jordan over $14,000 in 2005 are likely to have cost her less than $6,000 in 1982.

22 The presumption in the ADA against a costs order for a successful complainant was not only created at a time when legal costs were lower in proportion to the damages limit, but was also complemented by a provision that legal representation would not be the norm, and would only be by leave. The experience of the jurisdiction is that the conceptual and evidentiary difficulties posed by the ADA – for complainants and respondents alike – are such that legal representation is almost invariably desirable, although often unattainable. It is unrealistic, even if often unavoidable, to expect a complainant to establish a claim of, say, indirect discrimination without legal representation. It was not NCAHS’s submission, but it should not be thought that a complainant has any real freedom to choose not to incur legal costs when pursuing a claim of unlawful discrimination.

23 It is increasingly the case that that the cost of proving a breach of the ADA is likely to exceed the amount of any recompense for the breach, and will continue to do so for as long as the market sets the rates for legal services while, at the same time, the ADA imposes a limit of $40,000 for an award of damages. The tension between the static damages limit on the jurisdiction, and the increasing cost of pursuing a remedy in the jurisdiction, was identified more than a decade ago ago, when the Tribunal was “particularly concerned that (complainants) will become increasingly alienated from the Tribunal’s jurisdiction because of the likelihood of not recovering their costs and, even worse, of being out of pocket” (Duggan v Shore Inn Pty Limited (1993) EOC 92-483 at p 79,492, and see to the same effect Holdaway v Qantas Airways Limited (1992) EOC 92-430 at p 79,054). The phenomenon was recognised by the NSW Law Reform Commission in its Report 92 (1999) Review of the Anti-Discrimination Act 1977 at [9.108; 9.114].

24 No legislative steps have been taken to address this concern, and it remains the case that “the Tribunal would be seriously concerned if a successful complainant’s legal costs were to use up the whole of the damages award and still leave the complainant indebted for the balance” (Gallagher v New South Wales Police Service [1998] NSWEOT at [29]).

25 Indeed this concern is greater now than it has ever been, and can only increase until and unless some proportionality is restored between the jurisdictional limit and the cost of legal services. It remains true that “when a complainant has an obligation to pay legal costs, the passing of time and the static limit on the jurisdiction have made it increasingly likely that damages will be lost to costs” (Gallagher at [42]). It is highly undesirable that people must decide whether they can afford even to be successful in seeking the protection of the ADA.

Circumstances justifying a costs order

26 There is no authority binding on the Tribunal as to when and on what terms it should make a costs order. There is however a longstanding approach that has been taken by the Tribunal, described in some detail in Cleary Bros, and in Borg v Commissioner, Department of Corrective Services & Anor [2003] NSWADT 35.

27 It is unclear from the history of costs decisions in the Tribunal why, as the Tribunal said in Borg, “as a general proposition a combination of circumstances is required in order to justify an award of costs” (at [21]). Certainly the observation has been made in many cases, most of which consistently refer to a collection of older decisions, such as Holdaway; Duggan; Gallagher; Squires v Qantas Airways Ltd (1985) EOC 92-135; Willis v State Rail Authority of New South Wales (No 3) (1992) EOC 92-456.

28 In Holdaway, when the Tribunal referred to a “combination of reasons ... sufficient to justify [costs]” (at 79,054-55), it was merely reflecting the fact that in that case there were indeed a number of relevant circumstances; it did not say that that a ‘combination’ of circumstances was necessary. Similarly in Duggan the Tribunal listed a number of considerations arising on the facts and said that one factor, “taken in combination with the other factors”, justified a costs order. In neither of these cases does the Tribunal say that a ‘combination’ of factors and circumstances is required in order to justify an award of costs.

29 In Willis the Tribunal said that “Squires, Kwa [a Western Australian case] and Holdaway demonstrate that it is a combination of factors which will generally justify an order for costs in favour of a complainant” (emphasis added). In Holdaway, while it was a combination of factors that did, in the circumstances, justify an order for costs, the Tribunal did not say that that was necessary or even desirable. In Squires the Tribunal listed a number of factors but did not say that such a combination was necessary. Indeed, the Tribunal focussed on a single reason when it said “It would in our opinion be unjust if [the complainant] were to have her damages award completely swallowed up and to be left considerably out-of-pocket as a result of bearing her own costs” (at p.76,341).

30 Where, in its report at Recommendation 143, the NSW Law Reform Commission set out factors that the Tribunal “should consider”, it did not say that any number or all of those factors need to be present for a cost order to be made.

31 It would seem that the Tribunal’s concern to “generally” be persuaded by a combination of circumstances, rather than by only one, derives from the deference that is appropriately shown to the presumption in the ADA against a costs order being made. The Tribunal has been concerned not to make costs orders in a manner that “would be tantamount to applying the rule (that costs) follow the event” (Willis at p 79,283). Even so, “it is increasingly difficult for to give effect to the intention of the legislature that, generally speaking, each party will pay their own costs, and at the same time to the intention that a successful complainant be compensated for loss and damage caused by unlawful discriminatory conduct” (Gallagher at [45]).

32 We do not agree that accepting a single factor as constituting circumstances that justify the making of a costs order in a particular case would be, effectively, applying the rule that costs follow the event. The presumption remains that each party will pay their own costs. A discretion to order otherwise must be properly exercised. It will be in many, if not most, matters that the discretion will not be exercised. In some matters it may be, and it will not be an improper exercise simply for the fact that it is based on only one factor.

33 We agree that the Tribunal’s “overall concern [is] that the substantial rights and protections conferred by the ADA should not be undermined by the cost of vindicating them” (Borg at [23]). The rights protected by the ADA are internationally recognised, fundamental human rights. The Long Title of the ADA explains that it is “[a]n Act to render unlawful racial, sex and other types of discrimination in certain circumstances and to promote equality of opportunity between all persons”. The Act reflects, in part, the United Nations’ Convention on the Elimination of All Forms of Discrimination against Women which commits signatories, such as Australia, to pursue by all appropriate means a policy of eliminating discrimination against women.

34 If, in a particular matter, seeking the ADA’s protection of a fundamental human right is undermined by the cost of doing so, then it must be so that that single circumstance could, in the circumstances, justify the making of a costs order.

35 In light of the above account of the Tribunal’s approach over the years, the public policy considerations in deterring victims of discrimination from seeking redress, and the injustice that would be done to a victim of discrimination who is vindicated but at a net cost to themselves, we are satisfied that there are cases when single factor will be enough alone to justify the making of a costs order. This is such a case. In our opinion there are circumstances that justify making a costs order: Ms Jordan’s legal costs considerably exceed the amount of compensation she has been awarded for having been the victim of unlawful discrimination in the circumstances we describe above.

Considerations limiting the amount of costs

36 There are two matters in this case that are relevant to the amount of Ms Jordan’s costs that should be paid by NCAHS.

37 The first is that Ms Jordan incurred costs to pursue two complaints, and she was successful in only one of them; she was unsuccessful in her victimisation complaint. NCAHS makes this point in its submissions, but says only that a “significant” amount of time was spent on the victimisation claim. In our estimation, approximately a quarter of the preparation and evidence was directed towards the victimisation claim. NCAHS should not meet the costs of successfully defending the victimisation complaint. We note NCAHS did not seek their costs, and in our view there are no circumstances that justify the making of a cost order in favour of NCAHS in relation to that complaint.

38 The second matter is the extent to which the costs Ms Jordan incurred were clearly related to her success in the discrimination complaint. We have had case management responsibility for the matter prior to hearing, have examined the Tribunal’s file, and have read the tax invoices provided by Ms Jordan. In our view the costs incurred by Ms Jordan until and including 5 March 2004 were irrelevant to the effective prosecution of her complaint. While this might be with the possible exception of taking initial instructions, we note that further instructions were later taken so that Ms Jordan could file a second and more detailed statement. The statements and the document titled ‘Points of Claim’ that were filed in October 2003 and March 2004 were substantially irrelevant and did nothing to advance Ms Jordan’s claim, NCAHS’s understanding of the case it had to meet, or the conduct of the case generally.

Decision and orders

39 We are satisfied that there are circumstances that justify making a costs order in favour of the applicant, having regard to factors that limit the extent of that order. Accordingly we order:

1. The respondent to pay three quarters (75%) of the applicant’s legal costs incurred in the period 5 March 2004 – 2 February 2005.

2. If the parties are unable to agree on the amount of those costs within 28 days, those costs are to be determined by a costs assessor in accordance with the Legal Profession Act 2004.