Li v LENG (No.2)
[2013] FCCA 2075
•6 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LI v LENG (No.2) | [2013] FCCA 2075 |
| Catchwords: PRACTICE AND PROCEDURE – COSTS – Respondent seeking indemnity costs in action filed under the Copyright Act 1968 (Cth) where unrepresented Applicant was wholly unsuccessful – circumstances in which an order for costs on an indemnity basis is appropriate – consideration of the fact that the Applicant was an unrepresented litigant – consideration and application of relevant legal principles – Respondent’s costs to be paid on a party and party basis. |
| Legislation: Copyright Act 1968 (Cth) |
| Bhagat v Global Custodians Ltd [2002] FCAFC 51 Hughes v Western Australian Cricket Association (Inc) and Ors (1986) J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers, Western Australian Branch and Anor (No 2) [1993] 46 IR 301 Johnson v Santa Teresa Housing Association and Anor (1992) 107 FLR 441 Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175 Travers v New South Wales (2001) 163 FLR 99 Unioil International Pty Ltd and Ors v Deloitte Touche Tohmatsu and Anor (No.2) (1997) 18 WAR 190 |
| Applicant: | DONGGUANG LI |
| Respondent: | JINSONG LENG |
| File Number: | PEG 88 of 2012 |
| Judgment of: | Judge Whelan |
| Hearing date: | By written submissions |
| Date of Last Submission: | 3 October 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 6 December 2013 |
REPRESENTATION
| Counsel for the Applicant: | Applicant in person |
| Counsel for the Respondent: | Mr G Provan |
| Solicitors for the Respondent: | Guy Provan |
ORDERS
The Applicant is to pay the Respondent’s costs in connection with these proceedings on a party and party basis, to be taxed if not agreed.
If, within 21 days of the making of this Order, the costs have not been agreed, the Respondent is at liberty to apply to have his costs taxed.
The costs, as agreed or as taxed, are to be paid within 21 days of the agreement or the date of the Certificate of Taxation.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
PEG 88 of 2012
| DONGGUANG LI |
Applicant
And
| JINSONG LENG |
Respondent
REASONS FOR JUDGMENT
Introduction
On 19 September 2013, judgment was handed down in this matter and the Amended Application of Mr DONGGUANG LI (“the Applicant”), filed on 20 August 2012, was dismissed.
On 19 September 2013, the Respondent, Mr JINSONG LENG (“the Respondent”), made an application for an order for costs and accordingly, orders were made for the filing of submissions in support of the application, and for the Applicant in the substantive matter to file submissions in reply.[1]
[1] Order made 19 September 2013.
Submissions by the Respondent were received on 3 October 2013.[2]
The Applicant has filed no submissions in reply. The Respondent seeks an order that the Applicant pay the Respondent’s costs on an indemnity basis.
[2] Respondent’s Outline of Submissions on Costs filed 3 October 2013.
The Respondent’s submissions
The Respondent submits that, pursuant to s.79(3) of the Federal Circuit Court of Australia Act1999 (Cth) (“the Act”), the Court has a discretion to award costs, the general rule being that costs follow the event, such that the successful party in an action is entitled to recover its costs from the other party.[3]
[3] Hughes v Western Australian Cricket Association (Inc) and Ors (1986) 19 FCR 10.
The award of costs is compensatory in nature and there is nothing to prevent a court from awarding costs against a litigant in person who is unsuccessful in his or her action.[4]
[4] Penhall-Jones v State of NSW (No 2) [2007] FCA 1225 at paras.2-3.
The Respondent seeks that costs be awarded on an indemnity basis. The Respondent referred the Court to the decision of French J
(as he was then) in J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers, Western Australian Branch and Anor
(No 2) [1993] 46 IR 301 where his Honour said:In substance such costs may be ordered whenever it appears that an action has been commenced in circumstances where the applicant properly advised should have known it had no chance of success: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397. Although there is said to be a presumption in such cases that the action was commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, it is not a necessary condition of the power to award such costs that a collateral purpose or some species of fraud be established.
It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.[5][5] [1993] 46 IR 301 at 303.
The Respondent also referred the Court to the judgment of Ipp J in Unioil International Pty Ltd and Ors v Deloitte Touche Tohmatsu and Anor (No 2) (1997) 18 WAR 190[6] and to the judgment of Sheppard J in Colgate-Palmolive Company and Anor v Cussons Pty Ltd (1993)
46 FCR 225[7] (“Colgate-Palmolive”), amongst other cases, in support of the general principles applying to the exercise of a discretion to grant indemnity costs.
[6] (1997) 18 WAR 190 at 191.
[7] (1993) 46 FCR 225 at 233.
The Respondent submits that the Applicant’s case was hopeless and had no chance of success. The Respondent refers to the following:
a. The Applicant’s case could only succeed if he established that he was an author of the book chapter but the Applicant was not able to produce any evidence in support of him being an author (see Judgment paragraphs 25 to 28).
b. There was an inherent contradiction in the Applicant’s case: to succeed he would need to establish that he was an author but if he was an author he was correctly named as such and therefore had no cause for complaint.
c. The only other basis on which the Applicant could have a case was that he was a joint author and the 3 other authors (Professors Lim, Li and Jain) were incorrectly named as joint authors. However, the Applicant produced no evidence that they were not authors and continued the action despite the cogent evidence of the Respondent that they were joint authors (see Judgment paragraphs 25 and 35).
d. The Court found against the Applicant and for the Respondent on each material issue of fact and law.
e. The Respondent’s evidence clearly established that the Applicant had been told that he was to be named as an author of the chapter but he persisted in denying the clear evidence of this (see Judgement paragraph 39).[8]
[8] Respondent’s Outline of Submissions on Costs filed 3 October 2013, pp.4-5 at para.8.
The Respondent further submits that the conduct of the case by the Applicant was improper. The Respondent refers to the following:
a. The Applicant’s case was confused, contradictory and lacking in any substance (see Judgment paragraph 19 and generally).
b. The Applicant persisted in the case despite lack of any evidence in support of him being an author (see Judgement paragraphs 25 to 28).
c. The Applicant clearly had no genuine belief that he was an author of the chapter but was motivated by his perceived position of power and influence over the Respondent while both were employed by Edith Cowan University (ECU)
(see Judgement paragraph 27).d. The Applicant made a number of scandalous allegations against the Respondent without any substantiation
(see Judgment at paragraph 19).e. The Applicant appeared to be willing to bring any case against the Respondent regardless of its merits or the evidence.
For example, when it was pointed out to the Applicant that he could not have a case if he was not an author, he claimed that he was an author and his complaint was against the 3 other joint authors being named as joint authors.f. At trial, the Applicant persisted with lengthy, irrelevant
cross-examination of witnesses and submissions.g. The Applicant’s motives in bringing the action are dubious in light of the various actions brought by the Applicant against ECU and individuals associated with ECU since his dismissal by ECU (see Judgement paragraph 18).
h. The Applicant commenced the action against the Respondent without notice to the Respondent and without complying with the requirements of the Civil Dispute Resolution Act 2011 (Cth). The Court is entitled to take this into account in exercising its discretion to award costs pursuant to section 12 of the Civil Dispute Resolution Act 2011 (Cth).
i. The Respondent was prepared to agree to an erratum being included in the book in which the chapter appeared and to remove the Applicant’s name as co-author from online versions of the chapter (see the Respondent’s submissions dated
17 September 2013 at a paragraph 43). The Applicant did not respond to this.[9][9] Respondent’s Outline of Submissions on Costs filed 3 October 2013, pp.5-6 at para.9.
Conclusions
Section 79 of the Act and Reg.21.02 of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”) apply to the determination of this application.
Section 79 of the Act provides:
Costs
(1)This section does not apply to family law or child support proceedings or proceedings in relation to a matter arising under the Fair Work Act 2009.
Note:See section 117 of the Family Law Act 1975 in relation to family law or child support proceedings. See section 570 of the Fair Work Act 2009 for proceedings in relation to matters arising under that Act.
(2)The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (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 Circuit Court of Australia or Judge.[10]
[10] Federal Circuit Court of Australia Act 1999 (Cth), s.79.
Regulation 21.02 of the Rules provides:
Order for costs
(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; 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.[11]
[11] Federal Circuit Court Rules 2001 (Cth), Reg.21.02.
There is nothing in the provisions of the Copyright Act 1968 (Cth) to suggest that the normal rule that a successful party should have the benefit of a costs order against the unsuccessful party is rebutted.
The fact that the Applicant chose to represent himself does not exempt him from exposure to an order for costs. In Bhagat v
Global Custodians Ltd [2002] FCAFC 51 (“Global Custodians”),
the Full Court referred to the observations made by Hodgson CJ in Eq in Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 with respect to unrepresented litigants:… I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they otherwise would be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstances that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event.[12]
[12] [2002] FCAFC 51 at para.56.
In considering that decision in Global Custodians, Young J came to the view that Hodgson CJ did not exclude the possibility of litigants in person being subject to an order for indemnity costs. It is clear that the discretion to make an order for indemnity costs is based on the particular circumstances of the case.
In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd and Ors (1988) 81 ALR 397 (“Fountain Selected Meats”), Woodward J said:
I believe that it is appropriate to consider awarding
“solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, property advised, should have known that he had no chance of success.[13]
[13] (1988) 81 ALR 397 at 401.
In Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175 (“Ragata”), Davies J considered that:
An award of costs on an indemnity basis may be made only in a special case, where the circumstances justify departure from the ordinary principle. The circumstances must be such as to justify an award indemnifying the successful party in respect of all of the costs incurred, save only as to those costs which are unreasonable in amount.[14]
[14] (1993) 217 ALR 175 at 176-177.
In Ragata, his Honour went on to refer to cases where unsuccessful proceedings have been brought not for the bona fide purpose of enforcing a legal right, but to achieve an ulterior or extraneous purpose, or, referring to Fountain Selected Meats, where there was
“wilful disregard of the known facts or the clearly established law”.[15]
[15] (1988) 81 ALR 397 at 401.
In Colgate-Palmolive, after referring to a number of cases, Sheppard J summarised the principles as follows:
It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:
1. The problem arises in adversary litigation, ie litigation as between parties at arm's length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, eg a government agency or statutory authority.
2. The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. In this Court the provisions of O 62,
rr 12 and 19, and the Second Schedule to the Rules will apply to the taxation. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate court of appeal or of the High Court would be required to alter it. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v British Transport Commission (supra) and Handley JA in Cachia v Hanes (supra) on the one hand and by Rogers J in Qantas on the other. The relevant passages from the respective judgments have been earlier referred to.
4. In consequence of the settled practice which exists,
the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in
Andrews v Barnes (supra) at 141 said the Court had a general and discretionary power to award costs as between solicitor and client "as and when the justice of the case might so require". Woodward J in
Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston (supra) at 637; namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at p 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at p 6) similar views in Ragata (supra).5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud
(both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo);
the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise
(eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Keng (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis.
The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order.
The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.[16]
[16] (1993) 46 FCR 225 at 232-234.
There are circumstances in this case which might warrant the award of indemnity costs:
·The Applicant’s claims were confused and contradictory;
·He failed to adduce any evidence which would support his claim of ‘authorship’ of the material without which, no moral right could be established; and
·The Applicant engaged in lengthy cross-examination on matters irrelevant to the issues at hand.
On the other hand, the issue of moral rights is a relatively new concept in Australian law and there have been few reported cases. While the Respondent suggests that the Applicant was motivated by some ulterior concern, it was not clear to the Court that the Applicant was pursuing the case for other than professional reasons, misguided as his action may have been.
The Court must take special care when asked to make an order for indemnity costs against an unrepresented litigant.[17] While I accept that there are facts and circumstances in this case capable of warranting the making of an order for payment of costs on an indemnity basis, I am not inclined to exercise my discretion to do so in the circumstances of this case. In reaching that view, I have taken into account the personal circumstances of the Applicant and, in particular, issues concerning his health which were raised with the Court during the course of the hearing. While it is not a reason for refusing to make the order,[18] I am also cognisant of the fact that the Respondent has been indemnified for his costs by Edith Cowan University and will not lose the benefit of his victory because of the burden of his own legal costs.[19]
[17] Penhall-Jones v State of NSW (No 2) [2007] FCA 1225 at para.3.
[18] Johnson v Santa Teresa Housing Association and Anor (1992) 107 FLR 441.
[19] Travers v New South Wales (2001) 163 FLR 99.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Whelan
Date: 6 December 2013
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