Mohamed v Australian Islamic College of Sydney
[2024] FedCFamC2G 1023
•11 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Mohamed v Australian Islamic College of Sydney [2024] FedCFamC2G 1023
File number: SYG 540 of 2023 Judgment of: JUDGE D HUMPHREYS Date of judgment: 11 October 2024 Catchwords: HUMAN RIGHTS - alleged sex, racial, and pregnancy discrimination during employment – consideration of costs – costs set at fixed amount of $40,000.00. Legislation: Australian Human Rights Commission (Costs Protection) Act 2024 (Cth) ss 46PSA (5)-(6)
Racial Discrimination Act 1984 (Cth)
Sex Discrimination Act 1984 (Cth)
Federal Circuit Court and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 r 1.04(1), 22.03
Federal Court Rules 2011 r 40.51
Federal Circuit Court Rules 2001 r 21.03
Cases cited: Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864
Gehlert v Minister for Immigration and Multicultural Affairs [2024] FCAFC 129
Hudson v Australian Broadcasting Corporation [2016] FCCA 917
Perkis v State of NSW (Technical and Further Education Commission) [2016] FCCA 957
Division: Division 2 General Federal Law Number of paragraphs: 35 Date of hearing: 4 October 2024 Place: Parramatta Solicitor for the Applicant: Mr Aslanian (Connect Legal) Counsel for the Respondents: Ms Gall Solicitor for the Respondents: Mr Burke (Burke Mangan Lawyers) ORDERS
SYG 540 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: SHERIN MOHAMED
Applicant
AND: AUSTRALIAN ISLAMIC COLLEGE OF SYDNEY
First Respondent
AIJAZ KHAN
Second Respondent
DR. IMAM ALI (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE D HUMPHREYS
DATE OF ORDER:
11 OCTOBER 2024
THE COURT ORDERS THAT:
1. Pursuant to r 22.03 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), costs in this matter are set at a maximum of $40,000.00.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE D HUMPHREYS
INTRODUCTION
The applicant, Ms Sherin Mohamed, has commenced proceedings in this Court alleging breaches of the Sex Discrimination Act 1984 (Cth) and the Racial Discrimination Act 1984 (Cth), which allegedly arose during her employment with the first respondent.
The matter was referred to a mediation to be conducted by a Registrar of this Court. That mediation, conducted in January 2024, did not result in the matter settling.
On 18 April 2024, the applicant filed and served an Application in a Proceeding seeking a determination pursuant to rule 22.03 of the Federal Circuit Court and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (“the Rules”) or alternatively rule 40.51 of the Federal Court Rules 2011 (“Federal Court Rules”) that the maximum costs that may be recovered in the proceeding on a party-party basis be fixed in the sum to be calculated under Schedule 2 of the Rules.
THE LAW
Rule 22.03 reads as follows:
Determination of maximum costs.
(1)The Court may specify the maximum costs that may be recovered on a party and party basis:
(a) by order on the first Court date; and
(b) on its own initiative or on the application of a party.
(2) However, an amount specified must not include an amount that a party is ordered to pay because the party:
(a) has failed to comply with, or has sought an extension of time for complying with, an order or any of these Rules; or
(b) has sought leave to amend a document; or
(c) has otherwise caused the other party to incur costs that were not necessary for the economic and efficient progress of the proceeding or hearing of the proceeding.
(3) The Court may vary the maximum costs specified if, in the Court’s opinion, there are special reasons and it is in the interests of justice to do so.
Rule 22.03 in the Courrt’s view should be read in conjunction with Rule 1.04(1) which states:
(1)The overarching purpose of these Rules, as provided in section 190 of the Act (Federal Circuit and Family Court of Australia Act 2021), is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
While rule 22.03 has not been the subject of consideration by this Court, it is in all respects analogous to repealed rule 21.03 of the Federal Circuit Court Rules 2001. Further, rule 40.51 of the Federal Court Rules contains a similar provision but in much broader terms. It provides:
(1) A party may apply to the Court for an order specifying the maximum costs as between a party and party that may be recovered for the proceeding.
It was submitted that the primary purpose of the rule is to be beneficial and designed to enable the Court, in appropriate cases, to limit the parties’ exposure to a costs liability; (see: Perkis v State of NSW (Technical and Further Education Commission) [2016] FCCA 957 at [14]). The rule acknowledges that the cost of litigation presents, at times, a disincentive for an ordinary litigant to bring proceedings, which may be insurmountable.[1]
[1] Letter authored by Blacj CJ on 6 November 1991 and sent to the president of the Law Council of Australia before the Federal Court Rules were amended to introduce a maximum cost sort of rule.
The primary purpose of the rule and the objects were considered by Manousaridis J in Hudson v Australian Broadcasting Corporation [2016] FCCA 917 at [4] and [19]. In summary, the principles include:
(a)the rule enables the court, where possible, to assess on a party and party basis, the costs that parties ought to reasonably incur given the nature of the proceeding;
(b)the rule enables the parties conduct their case on a matter which would result in them incurring no more costs as assessed on a party and party basis;
(c)the purpose of the rule is not to deny the party or the parties against whom the order has been made the ability to recover on a party and party basis for the costs that the party properly incurs, its purpose is to enable the court in an appropriate case to estimate at the beginning of the proceedings what the party and party costs should be, given the amount or interests at stake and the issue is likely to arise;
(d)the rule minimises the disincentive that the prospects of an adverse costs order would pose to persons who desire to bring proceedings that advance the public interest; and
(e)the application of the rule does not impose on the court’s power to make cost orders under Part one of Schedule one of the rules, that is to say, the application of the rule is only on party and party costs if an order is made.
In Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864 (“Corcoran v Virgin Blue Airlines”) at [6] and [7] Bennett J set out a number of considerations with respect to making an order under the relevant Federal Court rules. These include (citations omitted):
(a) the timing of the application;
(b) the complexity of the factual or legal issues raised in the proceedings;
(c) the amount of damages that the applicant seeks to recover and extent of any other remedies sought;
(d) whether the applicant’s claims are arguable are not frivolous or vexatious;
(e) the undesirability of forcing the applicant to abandon the proceedings;
(f) whether there is a public interest element to the case.
The respondent in that matter, Virgin Blue, submitted the Court should take into account:
(a) costs likely to be incurred by the parties in the preparation for, and hearing of, the matter;
(b) whether the party opposing making the order has been uncooperative and/or has delayed the proceedings;
(c) any other matters which may go towards establishing that there should be a departure in advance of the usual rules as to the quantification of the amount of costs to be payable by the ultimately unsuccessful party.
At [9], Bennett J noted that criticisms concerning costs in public interest litigation did not justify a global modification of the usual rule that costs follow the event, but that the ability to exercise discretion is desirable. At [10] Bennett J noted that:
The fact that the proceedings are brought otherwise than for personal or financial gain of the applicant does not detract from the general proposition that ordinarily costs follow the event. The fact that litigation can be characterised as being “in the public interest” does not, of itself, mean that the usual order is not made. However, the nature and purpose of the proceedings are still relevant in the exercise of the discretion to award costs and the exercise of the discretion takes account of all the circumstances.
Very recently, there have a been a number of significant developments in the area. The first is the passing by the Commonwealth Parliament of the Australian Human Rights Commission (Costs Protection) Act 2024 (Cth) (“the Act”). While it is noted that the Act does not apply to these proceedings, as they commenced before the proclamation of the Act, the Court considers the provisions of the Act to be highly persuasive in my consideration of this matter.
In the Explanatory Memorandum that accompanied the Bill, as it was then, the following appears:
The National Inquiry that informed the Respect@Work Report heard that the current cost regime in the federal courts operates as a significant disincentive for applicants to pursuing sexual harassment matters under the Sex Discrimination Act. The current practice, in which costs generally follow the event (despite a broad judicial discretion to award costs in any manner seen fit under section 43 of the FC Act and section 214 of FCFCA Act), means that applicants may be liable for their own costs, as well as those of the other party, if they are unsuccessful. The risk of being ordered to pay the costs of other parties to the proceedings can deter victim-survivors of sexual harassment and other forms of discrimination from commencing legal proceedings. This creates access to justice concerns, particularly for vulnerable members of the community. In response, the Respect@Work Report recommended that a cost protection provision be inserted in the AHRC Act to provide greater certainty for applicants.
Ultimately, the Act in s 46PSA (5) and (6) significantly limits the liability of an applicant to pay the costs of the respondent unless the proceedings were vexatious, the applicant’s unreasonable act caused the respondent to incur costs, or all of the following apply; the respondent was successful in the proceedings, the respondent did not have a significant power advantage over the applicant and the respondent does not have significant financial advantage or resources relative to the applicant.
Further, on 4 October 2024, the Full Court of the Federal Court of Australia (Mortimer CJ, Colvin and Dowling JJ) delivered judgement on Gehlert v Minister for Immigration and Multicultural Affairs [2024] FCAFC 129. While that judgment deals with a matter in the Migration Division of this Court, it has applicability across the General Federal Law jurisdiction of the Court. At [66] – [67] the following appears:
[66] However, the presence of r 29.13, and the presence of Pt 2 of Sch 2 in the scheme for the award of costs by the FCFCOA in migration proceedings evinces an intention that any application for costs be measured or assessed in a context where the Court (or Judge) is conscious that a majority of the Judges of the Court have agreed to fix a scale of costs considered to be generally applicable to migration proceedings, and considered to provide an express benchmark for what may be seen as fair and just in a given case.
[67] The same is true of Pt 1 of Sch 2 in relation to GFL proceedings other than migration proceedings. However, the critical point is that both parts of Sch 2 are to operate as benchmarks or guidance, informed as they are by the external review processes to which the parties referred in argument, and consideration of what is likely to be incurred in conducting proceedings in the GFL jurisdiction. It remains up to an individual Judge, in the particular circumstances of the case before them, and being faithful to the broad discretion in s 214(3) of the FCFCOA Act, informed by r 22.02 of the GFL Rules, to decide if the scale costs are in fact fair and just in the circumstances of the particular costs application before the Court.
APPLICANT’S EVIDENCE AND SUBMISSIONS
In support of the application in this case, the applicant relies upon an affidavit of her solicitor, Mr Richard Aslanian, dated 15 April 2024. That affidavit deposes the context in which the proceedings were commenced. It outlines how the applicant is a female of Arab origin who, whilst working at an Australian primary and secondary education provider, was subject to sexist and racist comments. The first respondent, being the Australian Islamic College, is the relevant primary and secondary education provided. The comments were allegedly made by members of the board and fellow employees who subjected the applicant to sex, racial and pregnancy discrimination.
The narrative pleadings include, but are not limited to:
(a)the applicant should stay at home look after her children like women should do;
(b)the applicant was just another Arab on workers compensation;
(c)the applicant would never be hired as a deputy principal because it’s a man’s job;
(d)that it was good the applicant was pregnant, because that’s what women were made for;
(e)that the applicant was a stupid woman and her job could be taken from her at any moment;
(f)asking whether or not the applicant made her husband happy;
(g)when the applicant had an ovarian torsion, it was because she was female;
(h)females were not suited to the work, and this is what happens when women are allocated such work;
(i)statements that ridiculed the applicant when she was pregnant, to the effect that she was fat and looked very swollen;ans
(j)her offer of the position of Principal being revoked and ultimately her employment terminated.
The applicant has entered into a conditional costs agreement with her legal representatives. The timing of the application was bought at an early stage in the proceedings. The Court notes that the hearing of the application was deferred by the Court, to enable a mediation to take place between the parties in the hope that the matter might be resolved.
On the basis of the applicable scale, it is estimated that for a five-day hearing, costs would be payable in the sum of $39,771.50. In Corcoran v Virgin Blue Airlines, Manousaridis J had the following to say at [6] and [7];
[6] The parties agree on many of the factors to be taken to into account in the exercise of the Court’s discretion to make an order under r 1. As discussed in the authorities which consider O 62A, r 1 and the equipment provision in the Federal Magistrates Court Rules, the factors include (citations omitted):
•the timing of the application;
•the complexity of the factual or legal issues raised in the proceedings;
•the amount of damages if the applicant seeks to recover and the extent of any other remedies sought;
•whether the applicant’s claims are arguable not frivolous or vexatious;
•the undesirability of forcing the applicant to abandon the proceedings; and
•whether there is a public interest element in the case.
[7] Virgin contends that, in addition, the Court should take into account:
•the costs likely to be incurred by the parties in preparation for, and the hearing of, the matter
•whether the party opposing the making of the order has been uncooperative and/or has delayed the proceedings; and
•any other matters which may go towards establishing that there should be a departure in advance from usual rules as to the quantification of costs to be payable by the ultimately unsuccessful party.
The applicant submits that she would be completely unable to pay respondent’s costs, noting the estimates which appear below should she be unsuccessful, and costs be assessed on the usual basis. It is further submitted that there is a public interest element in the matter on the basis that the conduct described above should not be allowed to remain unaddressed.
RESPONDENT’S EVIDENCE AND SUBMISSIONS
The respondent opposes the application. In support of this position, they rely upon an affidavit of Mr Lyndon Burke, the solicitor who has carriage of the matter on behalf the respondents.
The respondents submit that the application has not been brought or properly pursued, proceedings are not public interest litigation and instead allows the applicant to pursue a private interest. It is further submitted that this is not a matter concerned with the recovery of modest amounts of money, that the applicant has a strong personal interest in bringing the litigation having regard to the nature of the relief she seeks. It is submitted that proceedings are likely to be lengthy and have a degree of complexity. The applicant’s evidence as to her financial capacity whether she would be forced to abandon the litigation is weak and does not support a maximum costs order.
In the respondent’s view, the costs they are likely to incur are considerable, in the order of $343,000.00, with some $65,000.00 of that already incurred. Counsel for the respondent indicated to the Court that Senior Counsel’s fees for an estimated six-day hearing would be $150,000.00.
CONSIDERATION
First, the Court is satisfied that it has the capacity to make the orders sought by the applicant. In so doing it is a discretionary manner, with the Court needing to be mindful of the various matters set out above that inform the manner in which the Court should exercise its jurisdiction.
It is to be noted, that even if the application is dismissed, there would be nothing to stop the Court reconsidering the basis upon which costs should ultimately be awarded, to the successful party. Even if the respondent were successful, it would be within the discretion of the Court to limit costs to those set out in the relevant scale.
Turning now to the various matters the Court is now required to consider. First, in relation to the timing of the application the Court considers it was made at an early point in time. Regrettably, the determination, of the application was delayed not through any fault of the applicant or the respondent but in the Court finding sufficient time to actually hear the matter. The Court is satisfied it was bought at the earliest opportunity or if it was not, the Court is satisfied it is in the interests of justice that it should dispense with the relevant Court rules insofar as they may have not been complied with.
Second, the Court is not satisfied that the matter involves a degree of legal complexity other than the fact that there are numerous allegations which will have to be addressed in the course of evidence. The matters in dispute are factually based and do not rely upon any novel or difficult matters of law. The outcome of the matter will turn mainly on the credibility of the various party’s evidence.
The Court rejects the respondent’s assertion that there is no public interest in the litigation. Parliament has made it clear by introducing the cross-protection provisions outlined above that it is necessary to adopt an equal access approach, the Explanatory Memorandum at [31] states
…. as the current cost regime can deter victimless survivors of sexual and other forms of discrimination from commencing legal proceedings. This creates an access to justice concern, particularly for vulnerable members of the community.
The Court notes that no figure for damages has been outlined in the applicant’s Statement of Claim. Further evidence would need to be provided should the applicant be successful in the proceedings in order for damages to be assessed.
The Court does not consider that, the applicant’s claims, at this preliminary stage, can be described as either frivolous or vexatious. The allegations are serious and involve multiple forms, if proven, of unlawful discrimination.
The Court is satisfied, noting the costs estimated by the respondents, if costs were to be awarded that either an assessed or agreed basis, that is a party-party basis, would most likely exceed $200,000.00. The Court is satisfied there was a clear disincentive to the applicant to continue the proceedings, if she were to be the subject of the potential adverse costs order. The Court rejects the assertion made by Counsel for the applicant that there was insufficient evidence to assume this would be a disincentive. There are very few individuals who would be able to meet adverse costs order in excess of $200,000.00. This is to be compared with the respondents, who appear to have few constraints on their capacity to afford legal representation, including retaining Senior Counsel at an estimated cost $150,000.00.
While noting the assertions of the respondent that the applicant has been uncooperative and there are various defects in the pleadings, the Court does not consider this to be of significant weight in determining whether or not to grant the orders sought with.
Noting that this is a discretionary matter and having weighed all the relevant factors but in particular, the clear intention of Parliament in relation to costs in this area in relation to future matters, the Court is satisfied it is appropriate to grant the orders sought.
The order of the Court is that pursuant to r 22.03 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 ( Cth), costs in this matter are set at a maximum of $40,000.00.
The Court notes that pursuant to r 22.03(3) this amount may be varied where there are special reasons, and it is in the interests of justice to do so.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of Judge D Humphreys. Associate:
Dated: 11 October 2024
SCHEDULE OF PARTIES
SYG 540 of 2023 Respondents
Fourth Respondent:
DR. SHUJUALLAH KIRMANI
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