Laws v Burns (EOD)

[2007] NSWADTAP 72

Appeal Panel - Internal

CITATION:	Laws v Burns (No. 2) [2007] NSWADTAP 72
PARTIES:	APPELLANT John Laws RESPONDENT Gary Burns
FILE NUMBER:	079047
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	29 November 2007
DATE OF DECISION:	14 December 2007
BEFORE:	O'Connor K - DCJ (President); Grotte E - Judicial Member; Nemeth de Bikal L - Non Judicial Member
CATCHWORDS:	Costs
MATTER FOR DECISION:	Costs
FILE NUMBER UNDER APPEAL:	051044
DATE OF DECISION UNDER APPEAL:	07/27/2007
LEGISLATION CITED:	Anti-Discrimination Act 1977 Administrative Decisions Tribunal Act 1997 Retail Leases Act 1994 Legal Profession Act 2004
CASES CITED:	Burns v Laws (No 3) [2007] NSWADT 164 Chi v Coles Supermarket [2006] NSWADTAP 3 Xu v Sydney West Area Health [2006] NSWADT 3 Burns v Laws [2005] NSWADT 229 Burns v Laws (No 2) [2007] NSWADT 47 Sunol v Collier [2006] NSWADTAP 51 Wentworth v Rogers [2002] NSWSC 709 House v The King (1936) 55 CLR 499 CSR Ltd v Eddy (2005) 226 CLR 1; [2005] HCA 64
REPRESENTATION:	J Robb, , solicitor, Banki Haddock Fiora D Rofe QC instructed by N Llewellyn, solicitor
ORDERS:	1. Appeal dismissed.

1 This appeal relates to an order of the Equal Opportunity Division of the Tribunal requiring the respondent to pay the applicant’s costs of an unsuccessful summary dismissal application. The formal order was as follows (see Burns v Laws (No 3) [2007] NSWADT 164 (27 July 2007):

‘1. The Respondent is to pay to the Applicant the costs of the Respondent’s application for summary dismissal of this complaint, as agreed or assessed on a party-party basis.

2. There will be no order as to the costs of this application by the Applicant.’

2 The right to appeal against orders made under the Anti-Discrimination Act 1977 (AD Act) is given by s 115. The appeal is to be made under Part 1 of Chapter 7 of the Administrative Decisions Tribunal Act 1997 (Tribunal Act). The respondent has appealed against Order 1. He will be referred to as ‘the appellant’ in these reasons. For clarity the respondent to the appeal will be referred to in these reasons as ‘the complainant’.

3 The order was made in proceedings for the summary dismissal of proceedings, and therefore involved an ‘interlocutory function’ of the Tribunal: see Tribunal Act, s 24A(1)(h). The appeal, consequently, is an appeal against an ‘interlocutory decision’ of the Tribunal. Leave must be obtained for it to proceed. That question may be determined by a presidential judicial member sitting alone (s 113 (2B)). As to the considerations that go to the grant of leave, see, for example Chi v Coles Supermarket [2006] NSWADTAP 3; see also Xu v Sydney West Area Health [2006] NSWADT 3. In this instance the President has determined that it would be preferable if leave was not refused, as the case relates to a form of final determination (a costs order), and raises an issue as to the extent to which the public interest is relevant to the exercise of that discretion. Accordingly, the full Appeal Panel has dealt with this appeal.

4 The appeal was lodged on 24 August 2007. The complainant lodged a notice in reply to the appeal on 14 September 2007. The appellant filed written submissions on 22 October 2007. The complainant filed written submissions in reply on 20 November 2007.

5 The parties have agreed to have the matter determined on the papers. The Appeal Panel is satisfied that the issues for determination can be adequately determined in the absence of the parties: Tribunal Act, s 76.

Background

6 The complaint put in issue comments made by the appellant in his national radio program on the morning after the 2004 Melbourne Cup, Wednesday 3 November 2004. The appellant referred to Seven Network’s national television coverage of Melbourne Cup day. The coverage had featured a visiting American performer, Carson Kressley.

7 Kressley plays himself in the television show ‘Queer Eye’. In ‘Queer Eye’ five homosexual men (‘the Fab Five’) seek to assist ‘straight men’ to improve their appearance in areas in which the Fab Five are skilled such as fashion, food and interior decoration. Kressley was featured at different times during the Melbourne Cup day coverage, and was one of the judges of the fashion competition for women racegoers held as part of the day’s festivities, Fashions on the Field.

8 The complainant considered that the comments made the next day by the appellant about the use of Kressley by the Seven Network and over the role Kressley played during the day’s festivities amounted to unlawful homosexual vilification. The complainant lodged his complaint, as is required, first with the Anti-Discrimination Board, on 17 November 2004. On 31 March 2005 the President of the Board referred the complaint to the Tribunal for inquiry. Directions for filing of points of claim, a defence and the like were made. After the filing of amended points of claim on 10 June 2005, the appellant moved on 16 June 2005 for the complaint to be summarily dismissed.

9 The appellant contended that the complainant’s predominant purpose in instituting and maintaining the proceedings was an improper or collateral purpose, namely, that of obtaining publicity for himself. The application was heard on 1 and 2 August 2005, and dismissed by decision delivered 10 October 2005: see Burns v Laws [2005] NSWADT 229.

10 The complaint then proceeded to a full hearing, and (by majority) it was dismissed by decision delivered 1 March 2007: see Burns v Laws (No 2) [2007] NSWADT 47. That decision is the subject of an appeal by the complainant, which has yet to be heard by the Appeal Panel.

11 This history explains why the Tribunal did not proceed to deal with the costs application in respect of the failed summary dismissal application until 27 July 2007.

Legislation

12 Section 110 of the AD Act governs the determination of costs in Equal Opportunity Division matters:

‘ 110 Costs

(1) Each party to an inquiry is to pay his or her own costs, except as provided by this section.

(2) If the Tribunal is of the opinion in a particular case that there are circumstances that justify it doing so, it may make such order as to costs and security for costs, whether by way of interim order or otherwise, as it thinks fit.’

13 It will be seen that the usual rule is that parties bear their own costs. A similar position applies in merits review proceedings in the Tribunal: see Tribunal Act, s 88; and the other major original jurisdiction of the Tribunal, retail leases: see Retail Leases Act 1994, s 77A.

Tribunal Decision

14 Before turning to the circumstances that it saw as justifying its order, the Tribunal first engaged in a review of statements of principle found in decisions in the equal opportunity jurisdiction going to the question of when an exceptional order for costs might be made: see paras [22] to [34]. It referred in that regard to the similarity in approach under s 110 of the AD Act and s 88 of the Tribunal Act. It saw the Tribunal’s Practice Note 12, which primarily addresses s 88, as containing relevant guidance.

15 The standard found in s 110(2) is clearly a broad, discretionary one. In this instance the Tribunal focussed on the following circumstances:

(i) The ‘public interest’ nature of the proceedings. The Tribunal referred to its comments in its principal decision ( Burns v Laws (No 2) ) where it expressed the view that the complainant had not only brought the proceedings to obtain redress (by way of damages) for the personal hurt he felt over the appellant’s comments, but also to obtain remedies which were of benefit to the general audience in improving their understanding of the stigmatising effect of public denunciation of persons because they are homosexuals, and were also provided a form of redress to those members who were homosexual (remedies such as a public apology). See generally [40]-[47] of the reasons.

(ii) The effect the summary dismissal application had on prolonging the proceedings. The principles governing the exercise of the power of summary dismissal are such that it is very difficult for a summary dismissal application to succeed. Consequently, the Tribunal noted that the appellant always faced great difficulty in succeeding in such an application. The Tribunal noted unfavourably that the appellant had not relied on submissions going to the absence of merit in the complaint. This is, of course, the usual focus of a summary dismissal application. Instead the application challenged the bona fides of the complainant. This meant, the Tribunal noted, that the complainant had to put on a fresh body of material (meeting the attack on his bona fides) rather than simply have the Tribunal assess the degree to which his complaint had any merit based on the papers he had filed in the ordinary course (in particular the amended statement of claim). See generally [48] to [51] of the reasons.

16 While the Tribunal conceded that the application for summary dismissal was not seen by it to wholly lack merit, it concluded:

‘52 … [T]he present case is unusual, by virtue particularly of the two matters that we have just described. On account of these factors, we are more inclined than we would normally be to view unfavourably the respondent’s decision to make the application. …

54 In summary, our reasons for finding that there are ‘circumstances that justify’ an order for costs within the meaning of s. 110(2) of the ADT Act, and for therefore departing from the ‘prima facie position’ set out in s. 110(1), are as follows.

55 The application by Mr Laws prolonged the proceedings significantly and rendered them more costly to the parties. It sought unsuccessfully to invoke a jurisdiction that is exercisable by the Tribunal only in ‘exceptional’ circumstances. Its aim was to bring to an immediate close, on grounds unrelated to the merits of the case against Mr Laws, proceedings based on a complaint alleging that he had engaged in unlawful conduct (vilification) causing harm to a substantial section of the public (homosexual men) and should therefore be made subject to remedies including an order designed to repair this harm, so far as was possible (i.e., the dissemination of apologies to the public). While the complaint itself was ultimately dismissed, it undoubtedly had merit (as is demonstrated simply by the fact that our decision to dismiss it was a majority decision). Another homosexual man, instead of Mr Burns, might well have brought before the Tribunal a complaint against Mr Laws which was in the same terms as the complaint lodged by Mr Burns and therefore contained the same public interest components. In such event, it is probable that there would have been no grounds whatsoever for an application such as Mr Laws made in this case and the Tribunal could have proceeded without delay to a determination of the merits of the complaint.’

17 Earlier in its reasons at [34] the Tribunal summarised the submissions of the complainant in support of a costs order. It divided them into five points the first of which was expressed as follows:

‘34 The arguments made in Mr Burns’ submissions were these: (1) that preparation for and attendance at the hearing of Mr Laws’ unsuccessful application for summary dismissal (for which Mr Laws had engaged senior counsel) exposed Mr Burns to liability for substantial legal fees, which he was not in a position to pay from his own funds; …’

18 This statement appeared to be at odds with the complainant’s submissions to the Tribunal. The relevant passage is at para 3(e) of those submissions, filed 27 March 2007:

‘(e) Mr Burns will receive no pecuniary or personal benefit from such a costs order [i.e. the costs order sought], but it is reasonable that his legal team should be paid appropriate fees where the Respondent [i.e. the appellant in these proceedings] is also represented by a Senior Counsel. The Applicant is in no financial position to pay the legal team from his own funds.’

19 As part of its appeal, the appellant obtained the issuance of a summons seeking access to any documents in the nature of costs agreements between the complainant and the complainant’s legal representatives. At the return of summons hearing before the President on 29 November 2007, the complainant moved to have the summons struck out. The complainant’s solicitor informed the President that the Tribunal’s version of the complainant’s costs exposure was inaccurate. The complainant had no costs exposure from his legal team. The team was acting on a conditional or contingency basis. The only fees it would receive were those resulting from any costs order. In these circumstances, it did not appear to be necessary to the resolution of the appeal to have any documentation going to this matter; and I struck out the summons. The importance of these events for present purposes is that the Appeal Panel will proceed to deal with the appeal on the basis that what the complainant says as to his costs exposure is the accurate position, and that the understanding found at [34] of the Tribunal’s reasons is to be treated as inaccurate.

Submissions

20 Appellant’s Submissions. The appellant refers to the two circumstances to which the Tribunal referred in deciding to make the order against it, and contends that each of them involves an ‘error of law’.

21 As to the public interest consideration, the submissions noted that the AD Act allowed for individual complaints and representative complaints. They suggested that representative complaints might properly be seen as having a ‘public interest’ dimension, but this could not be the case in the instance of an individual complaint. The complainant could have sued on behalf of a wider community of similarly affected people via the representative complaint, but had not done so.

22 The submissions drew attention to the following statement in [55] of the reasons:

‘Another homosexual man, instead of Mr Burns, might well have brought before the Tribunal a complaint against Mr Laws which was in the same terms as the complaint lodged by Mr Burns and therefore contained the same public interest components. In such event, it is probable that there would have been no grounds whatsoever for an application such as Mr Laws made in this case and the Tribunal could have proceeded without delay to a determination of the merits of the complaint.’

23 It is said that this reasoning is erroneous. The appellant contends that the Tribunal was required to consider the issue of costs on the basis of the case before it. The appellant argues that to conclude that in different proceedings, a different course of action might have been taken by Mr Laws proves nothing.

24 The submissions continue:

‘It is impossible for Mr Laws (or any applicant for interlocutory process) to rebut an argument that, in some hypothetical proceedings, he or she may have acted in a different way.’

25 As to the second consideration that influenced the Tribunal – unnecessary prolongation of proceedings – the appellant submitted first that the bringing of a summary dismissal application will inevitably cause some delay as against when the substantive hearing might otherwise have begun. The question, the appellant suggested therefore, is whether the application was unreasonable. In this instance the submissions noted that the Tribunal which heard the summary dismissal application (the Tribunal as constituted for decision No 1) in its reasons made no criticism of the appellant’s conduct, and, it is said, made at least one finding of fact in favour of the appellant (not specified in the appellant’s submissions). The Tribunal that made the decision under appeal had acknowledged that it was not totally without merit. (The second Tribunal was differently constituted as to one of the two non-judicial members.)

26 The appellant submits that the existence of a contingency agreement as between Mr Burns and his legal team is a ‘highly relevant’ matter to the exercise of the costs discretion; and that the Tribunal’s misunderstanding of this point at [34] of its reasons had influenced it to order costs against the appellant. In this regard the submissions referred to the opening sentence of para [55] of the Tribunal’s reasons: ‘The application by Mr Laws prolonged the proceedings significantly and rendered them more costly to the parties.’

27 The appellant submitted that there was no financial or time prejudice to Mr Burns by reason of the bringing of the summary dismissal application.

28 Submissions in Reply. They dealt with the three issues raised by the appellant – the relevance or otherwise of the complainant’s costs agreement; the relevance or otherwise of any public interest dimension to the complaint; and the relevance or otherwise of the delay factor.

29 As to the costs protection he enjoyed, the complainant’s submissions noted that contingency agreements of the kind into which he had entered were a common feature of plaintiff representation in Australia. The submissions referred to the observations of the Appeal Panel in Sunol v Collier [2006] NSWADTAP 51 at [55]-[59]. There a respondent to an application for costs had submitted that an adverse order was not warranted as the applicant had no exposure to costs by virtue of a contingency agreement. The Appeal Panel said:

‘56 Mr Sunol’s submissions . Mr Sunol submitted that the Tribunal had erred because the costs order was made without any consideration of the primary purpose of an order for costs which is to indemnify a successful party who has incurred costs for which he is liable. Mr Sunol said that Mr Collier would not be out of pocket if a costs order was not made because he was represented by public bodies, namely the Inner City Legal Centre and the Public Interest Advocacy Centre. He said Mr Collier’s legal fees would be publicly funded, so he is not liable for those expenses. Mr Sunol also submitted that costs should not have been awarded against him because he has cognitive defects and an obsessive compulsive disorder.

57 Mr Collier’s submissions. Mr Collier’s response to the first submission was to provide evidence that the costs agreement with both Inner City Legal Centre and the Public Interest Advocacy Centre were conditional costs agreements. The agreements provided that costs and disbursements, including counsel’s fees, would be sought in the event that Mr Collier was awarded costs in the Tribunal proceedings. The fact that both the Inner City Legal Centre and the Public Interest Advocacy Centre were acting on a “no-win/no-pay” basis does not prevent them from recovering their costs: Wentworth v Rogers [2002] NSWSC 709.

58 Appeal Panel’s conclusion. In our view, the fact that a party has entered into a conditional costs agreement with his or her lawyer is not a matter that is relevant to the exercise of the Tribunal’s discretion under s 110. If the parties do not agree on the amount of costs, then the Tribunal’s order states that costs are to be assessed pursuant to the Legal Profession Act 2004. When considering what is a “fair and reasonable” amount of legal costs, the costs assessor may have regard to any relevant costs agreement: Legal Profession Act 2004, s 386(2)(c). In relation to Mr Sunol’s submission that the Tribunal should not have awarded costs against him because of his disability, that was not a matter raised by Mr Sunol before the Tribunal. Nor did Mr Sunol submit to the Tribunal that the way either he or Mr Collier had conducted themselves in the proceedings was a relevant factor in determining whether to make a costs order. Consequently the Tribunal cannot have made an error of law by not having taken those matters into account.’

30 As to the public interest circumstance, the complainant submitted that it was open to the Tribunal to conclude that this was litigation with a public interest component. The submissions state:

‘Burns was an admitted homosexual male who clearly had a concern at the remarks made by Laws over a national syndicate of radio stations throughout Australia with an audience reach of a claimed 2 million listeners. This very piece of legislation (section 49ZT) is directed towards the public interest – to help to achieve the elimination or reduction in unlawful vilification.’

31 As to the delay circumstance, the complainant’s submissions noted that the basis upon which the appellant sought to have the complaint struck out was itself of an exceptional kind. It did not address the merits of the complaint. Instead it focused on the complainant’s motivation, and had manifestly failed in establishing that the complainant’s purpose was self-publicity.

Assessment

32 The appellant’s task is a difficult one in establishing an error of law on the part of the Tribunal in the way it exercised its discretion. The accepted test as to whether an exercise of discretion by a court or tribunal is so erroneous as to amount to an error of law is that of House v The King (1936) 55 CLR 499, 505-6:

‘The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.’

33 In the court environment the usual rule is that costs follow the event. The usual rule in the equal opportunity jurisdiction of this Tribunal, as in many tribunals, is to the opposite effect. But in both systems the usual rule may be reversed if there are exceptional circumstances justifying that course.

34 Courts applying the costs-follow-the-event rule have sometimes wholly or partly immunised unsuccessful parties from liability for costs by reference to public interest considerations or because of unnecessary prolongation or delay on the part of the successful party. Many examples to do with prolongation and delay are given in the practice guide, Ritchie’s Uniform Civil Procedure NSW at [42.1.20]. The most usual example of a public interest factor that has influenced courts to immunise an unsuccessful party from liability for costs is the ‘test case’. The successful party may derive a benefit from the outcome that goes well beyond the bounds of the immediate case. In these circumstances the court may be disposed to protect the losing party from an adverse costs order. A recent example is CSR Ltd v Eddy (2005) 226 CLR 1; [2005] HCA 64 (issues relating to principles for the assessment of damages for injury and death of workers who contracted mesothelioma after being exposed to asbestos).

35 Equally, we can see no difficulty in a Tribunal treating factors such as any relevant public interest, prolongation and delay as considerations that might justify an award of costs in favour of the successful party, by way of an exception to the usual no costs rule.

36 As to the public interest, equal opportunity and anti-discrimination laws represent major reforms of the law, and they belong only to the last 30 years, a very short time in the history of the common law. The laws have an obvious public interest dimension. The scheme of the laws is influenced by the approach taken in the civil rights initiatives of the United States Congress in the 1960s and in the international instruments dealing with civil, political and human rights that have been promulgated since 1948.

37 The early Australian reforms did not seek to restrain conduct that involved public vilification relating to race, religion or homosexuality. There were reservations expressed about the appropriateness of legislating in this area, mainly on free speech grounds: see generally, Human Rights and Equal Opportunity Commission, Report of the National Inquiry into Racist Violence (AGPS, 1991). From the late 1980s onwards, Parliaments in a number of Australian jurisdictions decided to move in the direction of regulating ‘hate speech’, for example in 1989 the New South Wales Parliament amended the AD Act, on a bipartisan basis, to outlaw racial vilification.

38 In New South Wales similar provisions in relation to homosexual vilification were passed in 1993. They commenced operation early in 1994. These amendments had their origin in a Private Member’s Bill which sought to adopt recommendations of the Anti-Discrimination Board. The Board had expressed concern over the contribution made by vilifying comment to conduct hostile to homosexuals, and referred in particular to the regular occurrence of assaults on homosexual men: see generally, Second Reading Speech, Legislative Assembly, Hansard, 11 March 1993.

39 While it may be said of any law that it has a public interest dimension, in our view the laws relating to equal opportunity and anti-discrimination (including now the vilification laws) have a public interest dimension of special importance.

40 We do not see any error in the Tribunal according a public interest dimension to litigation brought under s 49ZT by an individual complainant. The representative action is a mechanism for bringing proceedings on behalf of a wider group of similarly affected people. Representative proceedings may give rise to issues (in relation say to the giving of notices, and the calculation of damages) which will make them difficult to manage. A community effect of value may be able to be achieved by a piece of individual litigation. In this instance, the Tribunal formed the view that the complainant was seeking to obtain a community benefit, not just a personal benefit, in calling the appellant to account under s 49ZT for his statements. In our view, the Tribunal was entitled to give weight to such a circumstance in approaching the consideration of the complainant’s costs application.

41 The trial court or tribunal is in the best position to make assessments about unnecessary prolongation of proceedings. The Tribunal, in this instance, formed a view about the wastefulness of the appellant’s strategy in choosing to mount a strike-out application based on the motivation of the complainant. Plainly this is a most unusual basis for a summary dismissal application, and should not lightly be undertaken by an applicant or readily countenanced by a trial body. The usual focus of a summary dismissal application is the lack of substance of the claim, as the Tribunal noted in its reasons.

42 We are not satisfied that the Tribunal was influenced in any significant way by its erroneous understanding of the complainant’s exposure to his own legal team’s costs. The Tribunal’s main concern in relation to the issue of costs, as we see it, was the wastefulness of the applicant’s strategy. The Tribunal was concerned about the burden that strategy placed on the complainant and his legal team. Those burdens stand regardless of the protection that the complainant may have in respect of his legal team’s costs. It remains the case that his legal team had to spend time and resources attending hearings and makings submissions in reply.

43 The appellant’s preliminary application necessarily had the effect of pushing back the time when the substantive hearing might have been able to proceed. The complainant is entitled to expect expedition in the handling of a complaint, and not to be tied down by preliminary applications of the kind that might be made in Court proceedings. In Court proceedings there is at least the insurance that if the preliminary application is unsuccessful there will normally be the sanction of a costs order. This clearly operates as its own deterrent to speculative preliminary applications.

44 The Tribunal should, in our view, be active in using the discretion given by s 88 of the Tribunal Act or s 110 of the AD Act to protect respondent parties against unsuccessful preliminary applications. This kind of activity undermines the expectation which a party is entitled to hold that the Tribunal will deal with matters efficiently and expeditiously. The Tribunal is required by the governing legislation ‘to act as quickly as is practicable’ (s 73(5)(a)). Two of the objects of the ADT Act (s 3) speak to the same point, i.e.

‘The objects of this Act are as follows: …

(b) to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair,

(c) to enable proceedings before the Tribunal to be determined in an informal and expeditious manner, …’

45 In our view the Tribunal exercised its discretion in a manner which reveals no error sufficient to justify upholding this appeal.

Order

Appeal dismissed