Lee v Proctor and Gamble Australia Pty Ltd & Anor (No.2)
[2012] FMCA 1075
•16 November 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LEE v PROCTER & GAMBLE AUSTRALIA PTY LTD & ANOR (NO.2) | [2012] FMCA 1075 |
| HUMAN RIGHTS – Costs – Application for injunction under s.46PP of the Australian Human Rights Commission Act 1986 (Cth) – whether each party should pay own costs – whether respondent should recover actual costs – application of Schedule 1 to the Federal Magistrates Court Rules 2001 (Cth). |
| Australian Human Rights Commission Act 1986 (Cth), ss.11, 46PO, 46PP Federal Magistrates Court Rules 2001 (Cth), rr.4.01, 21.02, 21.10, 21.15, Schedule 1 |
| Bunnag v Minister for Immigration & Anor (No.2) [2008] FMCA 430 Cann v Commonwealth Bank of Australia (No.6) [2011] FMCA 912 Ruddock and Others v Vadarlis and Others (No 2) (2001) 115 FCR 229; [2001] FCA 1865 Setchell v Alkira Centre Box Hill Inc [2009] FMCA 288 |
| Applicant: | JENNIFER LEE |
| First Respondent: | PROCTER & GAMBLE AUSTRALIA PTY LTD |
| Second Respondent: | AMANDA IRWIN |
| File Number: | SYG 2041 of 2012 |
| Judgment of: | Barnes FM |
| Date of Last Submission: | 11 October 2012 |
| Delivered at: | Sydney |
| Delivered on: | 16 November 2012 |
REPRESENTATION
| Counsel for the Applicant: | Ms Ronalds SC and Ms Perigo |
| Solicitors for the Applicant: | Rohan Squirchuk & Associates Pty Ltd |
| Counsel for the Respondents: | Ms Doust |
| Solicitors for the Respondents: | Colin Biggers & Paisley |
ORDERS
It was reasonable for the respondents to employ an advocate to appear in these proceedings.
The applicant pay the respondents’ costs fixed in the sum of $10,552.60.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2041 of 2012
| JENNIFER LEE |
Applicant
And
| PROCTER & GAMBLE AUSTRALIA PTY LTD |
First Respondent
| AMANDA IRWIN |
Second Respondent
REASONS FOR JUDGMENT
(In Chambers)
On 27 September 2012 Ms Lee’s application for orders pursuant to s.46PP of the Australian Human Rights Commission Act 1986 (Cth) (AHRC Act) was dismissed (see Lee v Procter & Gamble Australia Pty Ltd & Anor [2012] FMCA 1000).
I made orders for the parties to file written submissions in relation to costs. It was agreed that orders would be made in chambers on the basis of the written submissions and supporting affidavits.
The respondents seek an order that the applicant pay the costs of the proceedings, either in the amount of their actual costs or calculated in accordance with Schedule 1 to the Federal Magistrates Court Rules 2001 (Cth). The applicant seeks an order that each party bear their own costs of the proceedings but that if an order is made against the applicant, it should be made in accordance with Schedule 1 to the Rules.
The Court’s power to award costs in proceedings of this nature arises by virtue of s.79 of the Federal Magistrates Act 1999 (Cth). Section 86 of the Act provides for the making of rules of court with respect to costs. Neither the Disability Discrimination Act 1992 (Cth) nor the Sex Discrimination Act 1984 (Cth) prohibits the making of a costs order in relation to matters which involve a complaint made in reliance on the provisions of those Acts. Nor is any such prohibition to be found in the AHRC Act under which these proceedings were brought. Subject to the Rules, an award of costs is in the discretion of the federal magistrate (see s.79(3) of the Federal Magistrates Act).
It is well-established that in the ordinary course, in the absence of any disentitling conduct on the part of the successful party, costs would follow the event (see Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 and Ruddock and Others v Vadarlis and Others (No 2) (2001) 115 FCR 229; [2001] FCA 1865 at [15]).
In this case, the applicant was wholly unsuccessful in the proceedings, however the applicant seeks each party pay their own costs.
As detailed in my judgment of 27 September 2012, the applicant’s application under s.46PP of the AHRC Act was made following the lodgement of a complaint with the AHRC on 14 September 2012 claiming breaches of the Sex Discrimination Act and the Disability Discrimination Act.
The applicant submitted that, as attested to in the affidavit of Rohan Squirchuk, the solicitor for the applicant, of 11 October 2012, the applicant had made efforts, both prior to the filing of proceedings in this Court and prior to the hearing date, to reach agreement on continuation of her employment. She did so in circumstances where, prior to her complaint to the AHRC, she had been informed by Procter & Gamble (P & G), her employer, that she was to be made redundant, effective 30 September 2012.
Ms Lee was informed of the proposed redundancy on 30 August 2012. She lodged a complaint with the AHRC on 14 September 2012. The respondents were provided with a copy of the complaint made to the AHRC on Friday 14 September 2012, together with a request that consideration to be given to revocation of the planned redundancy and provision of a suitable position to the applicant.
As attested to in the affidavit of Kristen Lopes, solicitor for the respondents, sworn on 5 October 2012, after obtaining instructions Ms Lopes wrote to the applicant’s solicitor on 18 September 2012 informing her that P & G did not propose to meet the applicant’s proposals to revoke her planned redundancy and advising that the termination of the applicant’s employment would proceed on 30 September 2012.
The proceedings in this Court were commenced on the afternoon of 19 September 2012 and were referred to me as duty federal magistrate. The applicant’s solicitor notified the respondents’ solicitor of the proceedings and of a listing for directions the next day. The legal representatives for the parties attended the directions hearing on 20 September 2012. The matter was listed for hearing at short notice on 26 September 2012, having regard to the proposed redundancy on 30 September 2012.
The applicant also relies on the fact that on 20 September 2012 a further letter was sent to the solicitor for the respondents requesting consideration of the provision of undertakings to the Court in accordance with the orders the applicant sought and advising that the applicant would rely on this correspondence in relation to any costs application.
By letter sent by email on 21 September 2012, the solicitors for P & G advised that while it was amenable to attending an expedited conciliation conference at AHRC, P & G was not prepared to provide the written undertakings sought by Ms Lee given that it had completed the steps required in its redundancy policy, that it did not have a role available to offer Ms Lee and that she was eligible to receive a substantial redundancy package on termination of her employment.
The applicant relies on the efforts made before and after the filing of proceedings in this Court and before the hearing date to reach agreement on the continuation of her employment on the basis that such efforts were made to reduce the costs that were to be incurred by both parties in participating in the proceedings.
Reliance was also placed on the fact that the substantive claims in the complaint to the Commission were made under legislation that was of both a protective and remedial nature. It was pointed out that these Acts protected broad human rights and should be given a broad and beneficial construction (IW v The City of Perth and Others (1997) 191 CLR 1; [1997] HCA 30 per Kirby J at [58] and Purvis v State of New South Wales (Department of Education and Training) and Another (2003) 217 CLR 92; [2003] HCA 62 per Gleeson CJ at [45]). It was also said to be relevant that the applicant brought the proceedings to allow her to preserve her employment. On this basis, the applicant submitted that each party should bear his or her own costs.
However the circumstances are not such as to warrant a departure from the usual order that the unsuccessful applicant should pay the costs of the first and second respondents. The AHRC Act, which confers jurisdiction on this court to hear s.46PP applications and substantive discrimination claims under s.46PO, does not impose any restriction on the court’s power to award costs (cf s.570 of the Fair Work Act 2009 (Cth) that limits costs orders).
The remarks of Black CJ and French J in Ruddock v Vadarlis while made in relation to costs orders under s.43 of the Federal Court of Australia Act 1976 (Cth), are in point. Their Honours stated (at [9] and [11]):
The point of departure in ascertaining the principles that govern costs awards in the Federal Court is s43 of the Federal Court of Australia Act 1976. It speaks of a judge having "jurisdiction" to award costs in all proceedings before the Court. No doubt this is to be regarded as a reference to power in aid of jurisdiction rather than a grant of jurisdiction in the sense in which that term is used in Chapter III of the Constitution. The power of the Court so conferred is not fettered by any stated legislative presumption about the manner of its exercise. That is consistent with the long standing authority of the House of Lords in Donald Campbell & Co Ltd v Pollak [1927] AC 732 that "the Court has an absolute and unfettered discretion to award or not to award [costs]": per Viscount Cave LC; Viscount Dunedin, Lord Phillimore and Lord Carson agreeing (at 811). Like all discretions however, it must be exercised judicially and not against the successful party except for some reason connected with the case.
…
Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:
• Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
• Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.
• A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.
See Hughes v Western Australian Cricket Association (Inc) & Ors (1986) ATPR 40-748 (at 48,136); approved by the Full Court in Queensland Wire Industries Pty Ltd v Broken Hill Co Ltd (1987) 17 FCR 211 (at 222).
I see no reason for departing from the general rule that costs follow the event. I have borne in mind that as stated in Latoudis v Casey at [3] per McHugh J, the rationale for such an order is that it is:
…just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory.
Furthermore, while human rights legislation is beneficial in nature and there may be a public interest element in some discrimination proceedings, it cannot be said that the prime motivation of the applicant in these proceedings was protection of the public interest (see Sluggett v Human Rights & Equal Opportunity Commission [2002] FCA 1060). The respondents have incurred quite substantial costs, notwithstanding the interim nature of these proceedings.
As I am not minded to order that each party pay their own costs, it is not necessary to invite further submissions in that respect from the first and second respondents. Rather, this is a case in which it is appropriate to order that the applicant pay the costs of the first and second respondents.
However, turning to the method of calculation of such costs and the measure of such costs, the respondents sought primarily that the applicant pay the first and second respondents’ actual costs and disbursements of the proceedings in the amount of $36,861.67 and sought certification pursuant to r.21.15 of the Federal Magistrates Court Rules that it was reasonable to employ an advocate to appear for the respondents in the proceedings. In the alternative, if the Court was disposed to make an order for costs in accordance with Schedule 1 to the Federal Magistrates Court Rules, the respondents sought an order for costs in the amount of $10,552.60 and certification pursuant to r.21.15 that it was reasonable to employ an advocate to appear for the respondents in the proceedings. The applicant submitted that if she was to pay costs the amount should be calculated in accordance with Schedule 1 in the sum of $6,780.60.
Rule 21.02(2) of the Federal Magistrates Court Rules provides that:
In making an order for costs in a proceeding, the Court may:
(a)set the amount of the costs; or
(b)set the method by which the costs are to be calculated; or
(c)refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d)set a time for payment of the costs, which may be before the proceeding is concluded.
Rule 21.10 is as follows:
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 Parts 1 and 2 of Schedule 1; and
(b)disbursements properly incurred.
Each of the parties seek that the Court should set the amount of the costs. In the particular circumstances of this case, where the proceedings were of an interim nature and hence not unduly protracted or complex in nature, I am of the view that it is appropriate for the Court to set the amount of the costs rather than, for example ordering taxation under the Federal Court Rules.
However, the respondents submit that the Court should make an order which reflects the respondents’ actual costs, notwithstanding that the usual order for costs would be on a party and party basis and in this court, unless the Court otherwise ordered, they would be entitled to costs in accordance with Part 1 of Schedule 1 to the Rules and disbursements properly incurred (r.21.10). There are said to be several factors which warrant ordering costs reflecting the respondents’ actual costs, rather than costs in accordance with Schedule 1 to the Rules.
The respondents submitted that, as attested to in the affidavit of Ms Lopes, all the legal work performed from the time of service of the complaint was work in connection with the proceedings and the application in a case and that the respondents had incurred costs substantially in excess of the Schedule amounts. It was submitted that such costs could not be said to have been incurred unreasonably, having regard to the nature of the application, the urgency of the matter and its complexity. It was also submitted that even if the quantum of costs alone was not sufficient to justify a departure from the Schedule, it was a necessary condition for the making of such an order and a factor which, together with other considerations, militated in favour of departing from the usual order for costs. Reference was made to the fact that the matter proceeded with a great deal of urgency, there having been a mere seven days between the commencement of the proceedings and the hearing of the application in a case. Such urgency was said to have arisen through no fault on the part of the respondents. It was submitted that in such circumstances the conduct of the proceedings was likely to increase the costs rather than to assist in limiting costs. The respondents also contended that the matter required considerably more work than was usual in matters of a similar nature. This was said to be apparent from the fact that the applicant had retained both senior and junior counsel to appear on her behalf from the earliest stage in the proceedings.
It was also said that one of the critical questions, the applicant’s superannuation entitlement, required examination of the superannuation fund trust deed and rules and had led to both parties making enquiries of the trustee company with a view to ascertaining the true position.
In addition, the applicant submitted that several other features of the conduct of the matter demonstrated its complexity and scope, including the fact that the hearing took longer than most interlocutory hearings of this nature, that both parties prepared detailed written submissions, read lengthy evidence in their cases and made reference to numerous authorities in written and oral submissions and the fact that the Court needed to reserve (overnight) to give full consideration to the matters raised on the interlocutory application.
These matters were said to be indicative of the matter being one where substantially more work was required to do justice between the parties than was required in most such matters in which interlocutory orders were sought. The relative complexity of a matter or the need to do an unusual amount of work were said to be factors the Court was justified in taking into account in making an order which departed from the ordinary course (see SZAQH v Minister for Immigration & Anor (No.2) [2008] FMCA 347).
It was also submitted that these reasons also made it appropriate for the respondents to engage counsel, such that an advocacy certificate pursuant to r.21.15 should be given.
The respondents’ application for the actual costs incurred in meeting the application can be seen as, in effect, an application for indemnity costs. I am not satisfied that the circumstances are such as to warrant an award of the actual costs incurred by the respondent. I note, in that respect that, as Lucev FM pointed out in Cann v Commonwealth Bank of Australia (No 6) [2011] FMCA 912 at [13]:
What is an appropriate costs or indemnity costs order depends on the circumstances of the case. The normal practice, not to be lightly departed from, is to provide for costs to be on a party-party basis. There are, however, certain issues to which the Court will consideration, and weigh, when determining whether to make an indemnity costs order, an extent of any such order. The issues must establish special or unusual circumstances warranting an indemnity costs order.
Insofar as the respondents rely on the fact that costs have been incurred substantially in excess of the schedule amounts, that is not of itself a basis for seeking actual costs (see Hinchcliffe v University of Sydney (No 2) [2004] FMCA 640 at [11]).
Moreover, having regard to the nature of the proceedings and the operation of s.46PP of the AHRC Act, the fact that the matter was heard urgently is not such as to warrant an order that the applicant pay the respondents’ actual costs. (See Hinchcliffe, Sheaves v AAPT Limited [2004] FMCA 225 and Setchell v Alkira Centre Box Hill Inc [2009] FMCA 288).
It is the case that there was some complexity in this matter. The hearing occupied most of a day and senior counsel was involved. However I am not satisfied that the level of complexity of these proceedings or the length of the hearing and the material before the Court taken together with all of the other circumstances warrant an award of the actual costs sought by the respondents (see Hinchcliffe at [10]-[12]). Insofar as reliance is placed on the work done in relation to the issue of superannuation, there is no evidence from the respondents as to the actual amount of time spent or the inquiries made regarding this matter. I am not satisfied that this issue added significantly to the complexity of the case.
It has not been established that there were special or unusual circumstances warranting an indemnity costs order or an order that the applicant pay the actual costs incurred by the respondents.
Such factors are relevant to a determination of whether the court should award costs in an amount that exceeds the amount provided for in a Schedule to the Rules (akin to the approach taken in Bunnag and in SZAQH albeit in those cases the amount in Part 3 of Schedule 1 was in the nature of a suggested amount (cf. r.21.10)). However the respondents seek either their actual costs or the application of Schedule 1.
While the applicant does not object to the grant of an advocacy certificate pursuant to r.21.15 of the Federal Magistrates Court Rules should a costs order be made in favour of the respondents, the parties disagree about the effect of the application of Part 1 of Schedule 1 to the Rules.
The respondents calculated their costs in accordance with the Schedule as follows:
Stage 1A
(to 20 September 2012 hearing): $3244
Daily hearing fee, plus advocacy loading $396
Stage 2:
Interim hearing on 26 September $1617
Daily hearing fee (solicitor) $1942
Daily hearing fee (counsel @ 150 %) $2913
Stage 6:
Taking judgment on 27 September, $396
plus advocacy loading
Disbursements $44.60
TOTAL $10,552.60
It was acknowledged that this calculation excluded counsel fees as a disbursement (Colan Products P/L v Luxon P/L & Anor (No 2) [2002] FMCA 90 at [13]).
In contrast, the applicant contended that no amount should be payable under Stage 1A and that there should not be an advocacy loading under Stage 6 for attendance of the solicitor at hearing to take judgment and explain costs. The applicant submitted that the proceedings before this Court were of an interim or summary nature, as contemplated by Stage 2 of Schedule 1, that the Application and Application in a Case sought the same interim orders, and that as there was no real application for final orders or substantive application there should be no amount awarded under Stage 1A. It was also submitted that it was a misunderstanding of Schedule 1 to seek an advocacy loading at Stage 6, and that a flat rate was set out for final hearing costs for a solicitor to attend at hearing to take judgment and explain the orders. According to the applicant the total costs under Schedule 1 should be $6,780.60.
The applicant also sought that the Court should stay the payment of costs until a successful conciliation or the final determination of the complaint, whether at the Commission or at Court (see Setchell, in which a stay on the payment of costs was granted until determination of the complaint, either at the Commission or at Court).
The costs scale in Part 1 of Schedule 1 to the Rules is an event-based scale under which a party receives a fixed sum in respect of specified events. Such fixed sum may be varied by the court in the exercise of its discretion (see s.79(3) and Hobson v BWL Pty Ltd and Others (No 3) (2012) 263 FLR 76; [2012] FMCA 439. It is open to the court to set the amount of the costs under r.21.02(2)(a) as well as to set a time for payment of costs (r.21.02(2)(a)).
While this matter involved an interim hearing as a discrete event, it is notable that Stage 2 in Part 1 does not include the Stage 1 or Stage 1A component intended to cover preparation and other work up to completion of the first court date. The s.46PO application was not brought as incidental to a substantive application (except insofar as an application was filed in an endeavour to comply with the Rules about initiating proceedings (see r.4.01). However it is clear that significant costs were incurred in relation to preparation and other work up to completion of the first court date.
Where an interim hearing occurs in the context of an ongoing substantive proceeding it may be appropriate to limit costs in relation to such interim hearing to Stage 2. However this is not such a case. As no substantive proceedings remain on foot after determination of the s.46PP issue, it is appropriate that an amount of costs be included under either Stage 1 or 1A. I have considered whether it is appropriate that the amount be as provided for in Stage 1. Such an approach was taken in Colan Products Pty Ltd v Luton Pty Ld & Anor (No 2) (at [8]) in relation to an application for pre-trial discovery. The costs in that matter were not confined to Stage 2 costs but included an amount under Stage 1. However, having regard to the particular nature of these proceedings and the complexity and urgency of the matter I am of the view that whether or not the matter is strictly speaking, to be seen as within Stage 1A of Part 1 of Schedule 1, additional costs of $3,244 (plus a daily hearing fee plus advocacy loading for 20 September 2012) should be included in the costs recoverable by the respondents.
The parties agree on the Stage 2 costs and daily hearing fees in accordance with Part 1 of Schedule 1.
In this case the hearing was adjourned from 26 September 2012 and an ex tempore judgment was delivered on 27 September 2012. There was no “final hearing” to which Stage 6 could apply. Rather a daily hearing fee calculated to reflect the length of the hearing on 27 September 2012 for the costs of the respondents’ solicitor should be payable in relation to 27 September 2012. In this respect the amount of $396 sought by the respondents is reasonable and appropriate.
No issue is taken by the applicant with the calculation of the disbursements of $44.60.
Hence the respondents’ costs and disbursements calculated in accordance with Part 1 of Schedule 1 amount to $10,552.60.
I am not persuaded that the Court should stay the payment of costs until final determination of the matter. The Australian Human Rights Commission does not determine “complaints” of unlawful discrimination (see s.11(1) of the AHRC Act) and there are no substantive proceedings on foot in this Court.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Barnes FM
Date: 19 November 2012
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