Maletic v Comcare

Case [2016] FCA 1111

FEDERAL COURT OF AUSTRALIA

Maletic v Comcare [2016] FCA 1111

Appeal from: Maletic v Comcare (Compensation) [2016] AATA 210
File number: QUD 285 of 2016
Judge: COLLIER J
Date of judgment: 9 September 2016
Catchwords: COSTS – Federal Court Rules 2011 (Cth) r 40.51 – applicant seeks order that maximum costs recoverable on a party to party basis be capped – factors relevant to Court’s discretion – Perrett v Commissioner for Superannuation (1991) 23 ALD 257 not relevant – applicant claimed likelihood of discontinuing proceeding if not costs not capped – negligible evidence regarding the applicant’s claim of financial hardship – no public interest claim – no issue of general importance raised by case – no novel point of law – low amount sought to be capped – application dismissed
Legislation:

Federal Court of Australia Act 1976 (Cth) s 43

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 5A, 5A(1), 14

Superannuation Act 1976 (Cth) ss 66(2), 67

Federal Court Rules 2011 (Cth) r 40.51

Federal Court Rules 1979 (Cth) O 62 r 1
Cases cited:

Commonwealth Bank of Australia v Reeve (2012) 199 FCR 463

Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864

Drenth v Comcare [2012] FCAFC 86

Haraksin v Murrays Australia Ltd [2010] FCA 1133

King v Jetstar Airways Pty Ltd [2012] FCA 413

King v Virgin Australia Airlines Pty Ltd [2014] FCA 36

Perrett v Commissioner for Superannuation (1991) 23 ALD 257

Shurat Hadin, Israel Law Centre v Lynch (No 2) [2014] FCA 413
Date of hearing: 8 September 2016
Registry: Queensland
Division: General Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 40
Counsel for the Applicant: Mr M Black
Solicitor for the Applicant: Slater & Gordon Lawyers
Counsel for the Respondent: Mr G Del Villar
Solicitor for the Respondent: Australian Government Solicitor

ORDERS

QUD 285 of 2016
BETWEEN:

TAMMY MALETIC

Applicant
AND:

COMCARE

Respondent

JUDGE:

COLLIER J

DATE OF ORDER:

9 SEPTEMBER 2016

THE COURT ORDERS THAT:

1.The interlocutory application filed on 3 May 2016 be dismissed.

2.The costs of and incidental to the interlocutory application filed on 3 May 2016 be costs in the cause.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

COLLIER J:

  1. Ms Maletic has applied to the Federal Court in its original jurisdiction to appeal the decision and reasons of the Administrative Appeals Tribunal (the Tribunal) in [2016] AATA 210. The application is listed to be heard by a Full Court of this Court in November. In the meantime, Ms Maletic has made an interlocutory application pursuant to r 40.51 of the Federal Court Rules 2011 (Cth) seeking an order that the maximum costs that may be recovered in this proceeding by one party against another on a party and party basis be capped at $5,000. She also seeks an order that each party bear its own costs of the interlocutory application. I heard this interlocutory application yesterday.

    Background

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AGLC
Maletic v Comcare [2016] FCA 1111
Case
[2016] FCA 1111
Decision Date

CaseChat Overview and Summary

In Maletic v Comcare, the Federal Circuit Court dealt with an application by the applicant, Ms Maletic, seeking an order that the maximum costs recoverable on a party to party basis be capped in her proceedings against Comcare. The primary legal issue before the Court was whether it should exercise its discretion under Federal Court Rules 2011 (Cth) r 40.51 to cap the costs recoverable. Factors influencing this discretion included the relevance of the decision in Perrett v Commissioner for Superannuation (1991) 23 ALD 257, Ms Maletic's likelihood of discontinuing the proceedings if costs were not capped, evidence of her financial hardship, and any public interest or novel points of law involved.

The Court found that Perrett was not relevant to the application of r 40.51 in this context. Furthermore, while Ms Maletic claimed that she would be forced to discontinue the proceedings if costs were not capped, the Court was not satisfied by the scant evidence of her financial hardship. There was no public interest claim or novel point of law that warranted an order capping costs. The Court also noted the relatively low amount Ms Maletic sought to cap. Given these findings, the Court dismissed Ms Maletic’s application, holding that the appropriate order was to refuse her request to cap costs.

Consequently, the Court ordered that the interlocutory application filed on 3 May 2016 be dismissed and that the costs of and incidental to the interlocutory application be costs in the cause. The Court also invited submissions from counsel regarding the costs of the interlocutory application, should any have been made. This decision underscores the stringent criteria required for a court to exercise its discretion to cap costs in litigation.

Orders

Orders of the court

1. The interlocutory application filed on 3 May 2016 be dismissed.

2. The costs of and incidental to the interlocutory application filed on 3 May 2016 be costs in the cause.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Finally, as Mr Del Villar properly submitted, evidence is scant supporting Ms Maletic’s claim in her affidavit of 22 May 2016 that she is in considerable debt and would be subjected to a devastating financial impact should she be required to pay Comcare’s costs of the appeal in full. It may be that she will be obliged to discontinue the proceedings should the Court refuse to make the order she has sought, however in light of the lack of evidence before me I cannot be satisfied that the effect of such a refusal would have the stifling effect on the litigation which Ms Maletic claims.Conclusion While Comcare has filed a notice of objection to the competency of the substantive application, in the context of the interlocutory application currently before the Court it did not contend that Ms Maletic’s claims were frivolous or vexatious. In my view this was a proper concession. Further, there is no suggestion of any delay by Ms Maletic in the filing of her interlocutory application. The interlocutory application was filed on the same day as the notice of appeal. However in circumstances where I am satisfied that there is no merit to Ms Maletic’s submissions concerning the Perrett case, no public interest element in her application, no novel point of law for decision, no relativity (intended or consequential) between the proposed capped amount and any amount potentially recoverable by Comcare, and negligible evidence supporting Ms Maletic’s claim of financial hardship, I consider the proper order is to dismiss Ms Maletic’s interlocutory application. Ms Maletic sought an order that each party bear its own costs of the interlocutory application. At the hearing yesterday no submissions were made as to such costs. It may be that this omission was an oversight, and I will invite submissions from Counsel in this respect.

Ratio Decidendi

Legal Principle Established

In turn Comcare argued:·Perrett v Commissioner for Superannuation (1991) 23 ALD 257 is not authority for the proposition argued by Ms Maletic;·the proceedings raise no point of general importance, much less one which would justify an order capping costs;·there are relatively recent Full Court authorities interpreting s 5A of the Act namely: Reeve and Drenth v Comcare [2012] FCAFC 86;·the primary motivation of Ms Maletic is to seek compensation on her own behalf;·Ms Maletic’s evidence of her financial circumstances is vague and unsatisfactory.Consideration In her affidavit affirmed 22 May 2016 Ms Maletic deposed that if the Court did not make a protective costs order pursuant to r 40.51 it would be “inconceivable” for her to proceed with the substantive application in this Court. The prospect that these proceedings may perforce be discontinued if the Court refuses Ms Maletic’s application is of serious concern. As a general proposition, Courts abhor circumstances which deprive applicants of the opportunity to prosecute their legitimate grievances. In this case, however, after weighing the arguments and consideration of the material before me, I consider the appropriate order is to refuse Ms Maletic’s interlocutory application. I have formed this view for the following reasons. First, Mr Black for Ms Maletic submitted Perrett supports the proposition that it is not an absolute rule that costs follow the event, and further that this principle is relevant in the present circumstances where under s 67 of the Act an employee in the Tribunal can recover costs but, conversely, cannot be ordered by the Tribunal to pay Comcare’s costs. I am not persuaded that the decision of the Full Court in Perrett supports that proposition. In Perrett the Full Court considered an application by way of appeal from a decision of the Tribunal affirming a decision of the Commissioner for Superannuation concerning the interpretation and operation of s 66(2) of the Superannuation Act 1976 (Cth) (the Superannuation Act) and the level of benefits to which the applicant in that case was entitled under that legislation. The proceedings were complicated by an earlier decision of Jenkinson J as well as the decision of the Tribunal the subject of the application. After determining that the appeal should be dismissed, their Honours continued at 268-269:When the previous appeal was determined by Jenkinson J apparently no order was made in respect of costs. We propose to make no costs order in the present case. The Tribunal has no power to make orders for costs in relation to cases of this nature and it seems to us to be undesirable that persons who unsuccessfully challenge a decision of the Tribunal should automatically be visited with a costs order in this court. The court should consider the matter of costs, bearing in mind the result of the appeal but also taking into account the reasonableness of the applicant in bringing that appeal and the general importance of the clarification of the law for such an authority as the respondent. We think that this appeal was reasonably brought. As is evident from the number of occasions upon which s 66(2)(c) has been considered by full courts, the paragraph presents difficulties of interpretation. In the present case, involving as it does two physical conditions about which much remains to be learned, it also presents difficulties of application.