Kowalski v Domestic Violence Crisis Service Inc (No.2)
[2003] FMCA 210
•20 June 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KOWALSKI v DOMESTIC VIOLENCE CRISIS SERVICE INC (No.2) | [2003] FMCA 210 |
| COSTS – Whether the successful respondent should receive an order for costs, and if so, whether the respondent should receive costs on an indemnity basis. |
Federal Magistrates Act 1999 (Cth), s.79
Federal Magistrates Court Rules 2001 (Cth)
Human Rights and Equal Opportunity Commission Act 1986 (Cth)
Sex Discrimination Act 1984 (Cth), s.5
Andrews v Barnes (1887) 39 Ch D
Baltic Shipping Co v Dillon (1991) 22 NSWLR 1
Calderbank v Calderbank [1975] 3 All ER 333
Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225
Coshott v Learoyd [1999] FCA 276
K v Domestic Violence Crisis Service Inc [1999] FCA 794
Kowalski v Domestic Violence Crisis Service Inc [2001] FCA 1082
Lolomanaia v Roads and Traffic Authority [2000] NSWSC 780
Low v Australian Taxation Office [2000] FMCA 6
Qantas Airways Ltd v Dillington (unreported, Supreme Court, 14 May 1987)
Tuholi Pty Ltd v Caltex Australia Petroleum Pty Limited [2001] NSWIR Comm 7
Xiros v Fortis Life Assurance Limited [2001] FMCA 15
| Applicant: | STAN LECH KOWALSKI |
| Respondent: | DOMESTIC VIOLENCE CRISIS SERVICE INC |
| File No: | CZ2 of 2002 |
| Delivered on: | 20 June 2003 |
| Delivered at: | Sydney, via telephone link to Canberra |
| Hearing date: Date of final submissions: | Decided on written submissions 6 June 2003 |
| Judgment of: | Driver FM |
REPRESENTATION
Applicant appeared in person
| Solicitors for the Respondent: | Mr B Redpath Pamela Coward & Associates |
ORDERS
The applicant is to pay the respondent’s costs and disbursements of and incidental to the application.
For the purposes of rule 21.15 of the Federal Magistrates Court Rules 2001 (Cth) the Court certifies that it was reasonable for the respondent to employ an advocate for the hearing on 18 and 19 March 2003.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CZ 2 of 2002
| STAN LECH KOWALSKI |
Applicant
And
| DOMESTIC VIOLENCE CRISIS SERVICE INC |
Respondent
REASONS FOR JUDGMENT
On 22 May 2003 I gave judgment in the principal proceedings between the parties in this matter. I ordered that Mr Kowalski’s application for relief for alleged sex discrimination be dismissed. At that time I invited submissions in relation to costs. Mr Kowalski sought time to provide written submissions and I acceded to that request. Written submissions were filed by the respondent on 26 May 2003 and by Mr Kowalski on 6 June 2003.
The respondent seeks orders:
a)that the applicant pay the respondent’s costs of and incidental to the proceedings on a party/party basis up to 10 March 2003;
b)that the applicant pay the respondent’s costs of and incidental to the proceedings on an indemnity basis as from 10 March 2003;
c)that the applicant pay the said costs within 28 days.
The significance of the date of 10 March 2003 for the respondent is that on that day the respondent’s solicitors put a settlement proposal to the then solicitors for the applicant to the effect that if the applicant withdrew his application then the respondent would be content with an order that each side pay its own costs. The letter concluded with these words:
We advise that if this offer of settlement is not accepted by 3.00pm on Wednesday, 12 March 2003 then it is withdrawn and our client will rely on this letter to seek indemnity costs from your client in respect of these proceedings.
The applicant seeks an order that the parties pay their own costs of the proceedings.
Respondent’s submissions
Mr Redpath makes the following submissions on behalf of the respondent:
The Court has the power to award costs pursuant s.79 of the Federal Magistrates Act 1999 (Cth) (“the Federal Magistrates Act”).
Further, the Court may determine by whom and to what extent costs are to be paid. This includes an order for indemnity costs.
Whilst the authorities make it clear that applications orders for indemnity costs need to be considered carefully, orders can and should be made if the circumstances of the case warrant the Court departing from the usual course of party and party costs: Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 at 233 – 234; and where it is in the interests of justice: Andrews v Barnes (1887) 39 Ch D 133 at 141.
The categories of cases in which courts have exercised the discretion to award indemnity costs are not closed: Qantas Airways Ltd v Dillington (unreported, Supreme Court, 14 May 1987) and Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 33 – 35. The cases include where there has been improper or unmeritorious conduct by the unsuccessful party as, for example, in cases involving the maintenance of a vexatious claim or defence, the institution and/or maintenance of an action or defence which, while not vexatious or involving an ulterior or collateral purpose, may, on a rational basis, be described as untenable or doomed to failure and cases where a party has conducted its case in wilful disregard of known facts or clearly established law: Tuholi Pty Ltd v Caltex Australia Petroleum Pty Limited [2001] NSWIRComm 7 (1 February 2001).
In Lolomanaia v Roads and Traffic Authority [2000] NSWSC 780 at [22], James J held:
It is clear that costs on an indemnity basis have increasingly more frequently become available and that, although generally costs should not be seen as a punishment of an unsuccessful party, either when they are awarded or in the extent to which they [are] awarded, regard must be had to the principle that costs operate by way of compensation to the successful party for what has had to be incurred in successfully asserting that party's rights in court. It must be noted that indemnity costs are limited to those costs which are reasonably incurred in prosecuting the proceedings to a successful conclusion. Costs on an indemnity basis merely restore fully the successful party's position.
It is also clear that indemnity costs are available where offers of settlement have been made at an earlier stage of proceedings and the unsuccessful party has failed to achieve a result better than that expressed in the offer: Calderbank v Calderbank [1975] 3 All ER 333.
In Coshott v Learoyd [1999] FCA 276 it was held that the respondents were entitled to indemnity costs in circumstances where they had made an offer of compromise which had been rejected, and the applicants had been entirely unsuccessful in the proceeding. Wilcox J concluded that the applicants had been foolhardy in pressing on, and had acted unreasonably in inflicting further costs upon the respondents. His Honour held that such costs, however, were to be taxed, and were to exclude any amounts unreasonably incurred.
In this matter the applicant’s case in these proceedings was based upon the contention that the two DVCS workers who attended his house on 6 February 1990 had formed a view prior to entering the house that they would attend Dr Kowalski first because she was a woman (or because she was married). No evidence was called from the two police officers and the only new evidence tendered (being the AFP Incident Report Record: Exhibit A4) supported the proposition that the information provided to the respondent was that Dr Kowalski had requested assistance. Thus providing support for the respondent’s case that the workers were unaware that the applicant had also requested assistance.
The application was therefore wholly misconceived and as at 10 March 2003 when the respondent wrote to the applicant about the failure to call Constable Lamb, the application from that point was manifestly unfounded.
The offer of settlement, being that the applicant discontinue the proceedings and the respondent would agree to pay its own costs was improperly rejected.
The respondent is a not-for-profit charitable organization. It has been the subject of the allegations brought in these proceedings for over 13 years. There have been two hearings, various appeals and numerous directions and interlocutory hearings. As such, the respondent has incurred substantial legal costs.
The point has been reached where the respondent is entitled to the fullest measure of protection that the Court can give against Mr Kowalski’s persistence with this unmeritorious and at times, vexatious application.
It is submitted that in the circumstances of the matter and in the interests of justice warrant an award of costs in terms sought.
In respect of the Federal Court/Federal Magistrates Court proceedings the Respondent estimates its legal costs in the sum of $30,000.00 including GST.
Applicant’s submissions
Mr Kowalski is no longer legally represented. He submits as follows:
Subsection 79(2) and (3) of the Federal Magistrates Act reads:
(2) The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Magistrates Court or Federal Magistrate.
No other Act provides that costs in these proceedings must not be awarded.
Part 21 of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”) deals with the award of costs in proceedings before the Federal Magistrates Court. In particular, division 21.2 provides:
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs;
(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 the cots, which may be before the proceeding is concluded.
The discretion to award costs must be exercised judicially. The applicant concedes that the settled practice is that in the absence of special circumstances, successful litigants should have their costs.
The applicant submits that the Court has a discretion as to costs no matter how firmly entrenched the practice that costs go to the litigious victor. The proceedings which were commenced in this Court result from a series of proceedings which were commenced in 1994 and involve what can be described as public interest litigation. The matter was qualified as a test and in public interest case by the Federal Attorney General’s Legal Aid Office for this proceeding (test of s.5 of the Sex Discrimination Act 1984 (Cth) application and if the respondent had a gender bias in favour of women and against men). The applicant submits this constitutes special circumstances.
An award of costs should not be made as a punishment to the unsuccessful party.
There is nothing in the course of the proceedings that would suggest that applicant in any way delayed or hindered the proceedings which would ground an award of costs.
The respondent is not correct when it states at paragraph 2.8 of its submissions that “the applicant’s case in these proceedings was based upon the contention that the two DVCS workers who attended his house on 6 February 1990 had formed a view prior to entering the house…”. The central issue to these proceedings was what, if any, view the two DVCS workers had about who was the victim and who was the perpetrator at the time they arrived. As stated by Finn J in the Federal Court case, that was the issue that needed to be determined by HREOC and also that HREOC made an error in law by improper exercise of its power.
HREOC had failed in its duty to determine these points giving rise to a grievance by the applicant. The applicant was entitled to agitate this matter as provided in the legislation and the decision of Finn J who set aside HREOC’s decision for further consideration. Thus, the applicant’s application was not “improper”, “unmeritorious”, “vexatious”, “untenable” or “doomed to failure”.
The applicant submits that his application was not “unfounded” as submitted by the respondent from the time the applicant indicated he would not call Constable Lamb. Federal Magistrate Driver specifically determined that he would draw no adverse inference in relation to the failure of either party to call both police officers.
The applicant for much of the proceedings was self represented and is legally aided. There has been no misconduct on the part of the applicant in persisting with these proceedings.
The applicant submits that the Court is not able to make a finding, as alleged by the respondent, that these proceedings were vexatious.
The respondent’s estimate of costs is excessive and not sustainable.
Consideration and findings
The determination of costs is a matter for and within the discretion of the Court. The discretion must be exercised judicially. Ordinarily, a successful litigant has an expectation that costs will follow the event; that is that the unsuccessful litigant will be required to pay the costs of the successful litigant on a party/party basis. This is only a general principle and a successful litigant has no right or entitlement to an order for costs. An exception to the general principle that costs follow the event may need to be made where there is a significant public interest component in litigation: Xiros v Fortis Life Assurance Limited [2001] FMCA 15. An exception may also need to be made if the successful party has acted in such a way during the proceedings as to disentitle him or her to an order for costs. I have also in the past refused to make a costs order in human rights proceedings where the proceedings were resolved at an early stage in favour of a respondent at minimal cost to the respondent: Low v Australian Taxation Office [2000] FMCA 6. None of those exceptions has any application in this case. There is no significant public interest element in the litigation. The conduct of the respondent has at all times been proper. The proceedings were not resolved at an early stage and at minimal cost to the respondent. In the circumstances the general principle should apply and the respondent, having been wholly successful in the proceedings, should receive an order for costs.
I do not accept Mr Redpath’s submission that costs should be awarded on an indemnity basis in respect of any part of these proceedings. The application was not wholly misconceived. There was a serious issue to be tried. The outcome of the decision of the Federal Court in K v Domestic Violence Crisis Service Inc [1999] FCA 794 was that the earlier consideration of Mr Kowalski’s complaint by the Human Rights and Equal Opportunity Commission was found to have been inadequate. The decision of the Federal Court in Kowalski v Domestic Violence Crisis Service Inc [2001] FCA 1082 was that Mr Kowalski should be given the opportunity to bring his complaint of discrimination before a court having jurisdiction under the Human Rights and Equal Opportunity Commission Act 1986 (Cth). Mr Kowalski had, in effect, been denied the fruits of his victory in the first Federal Court proceedings and the outcome of the second Federal Court proceedings was that Mr Kowalski was adjudged to be entitled to have his claims dealt with in court. That has now occurred. The fact that Mr Kowalski was wholly unsuccessful does not mean that the proceedings should not have been instituted or continued.
Neither do I consider that the terms of the settlement offer warrant an award of costs on an indemnity basis for the period following the making of that offer. The settlement offer was an offer of nothing. Nothing is what the applicant ending up getting.
I will order that the applicant pay the respondent’s costs of and incidental to the application. In the absence of any other order, those costs must be assessed in accordance with the scale of costs set out in schedule 1 to the Federal Magistrates Court Rules. Pursuant to that schedule the respondent will be entitled to stage 1 costs, stage 5 costs for a two day matter and stage 7 costs for a two day matter, including an advocacy loading of 150 per cent of the daily hearing fee. The respondent will also be entitled to reasonably incurred disbursements, other than counsel’s fees.
Mr Kowalski has filed an appeal against my principal judgment. In the circumstances I will not impose a deadline for payment of costs.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 20 June 2003
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