Municipal Association of Victoria v VCAT (No 2)

[2004] VSC 154

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No.8048 of 2002

MUNICIPAL ASSOCIATION OF VICTORIA	Plaintiff
V
THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL AND ANOR	Defendants

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JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 APRIL 2004 AND WRITTEN SUBMISSIONS: 3 AND 5 MAY 2004
DATE OF JUDGMENT:	7 MAY 2004
CASE MAY BE CITED AS:	MUNICIPAL ASSOCIATION OF VICTORIA V THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL (No 2)
MEDIUM NEUTRAL CITATION:	[2004] VSC 154

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PRACTICE AND PROCEDURE – COSTS – Whether “special” or “unusual” circumstances warranting costs on a higher basis than party and party – Freedom of information application unilaterally “uplifted” from the Victorian Civil and Administrative Tribunal by unsuccessful plaintiff commencing proceeding seeking declaration – Matter in the nature of a “test case” for the plaintiff – Rules 63.28, 63.31 and 63.32 of the Supreme Court Rules

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr S. Ricketson	Middletons
For the First Defendant	No appearance	Victorian Government Solicitor
For the Second Defendant	Mr J.D. Pizer	A.J. Macken & Co

HIS HONOUR:

1. In this proceeding, following the handing down of my judgment dismissing the plaintiff's claim, the second defendant has sought an order that the plaintiff pay his costs on an indemnity basis, alternatively on a solicitor and client basis.  The plaintiff opposes any such order, but it has not advanced any argument against an order that the plaintiff pay the second defendant’s costs on a party and party basis.

1. It was common ground that, pursuant to s.24(1) of the Supreme Court Act 1986, the Court has a discretion concerning the making and content of orders for costs. It was also common ground that although the general rule is that the Court will order costs to be taxed and paid on a party and party basis (see r.63.28(a) and r.63.31 of the Supreme Court Rules), it has a discretion to order costs to be taxed and paid on a solicitor and client basis (see r.63.28(b) and r.63.32)[1], or on an indemnity basis (see r.63.28(c)) and that the discretion in respect of ordering costs on a solicitor and client basis was not limited to the particular circumstances described in r.63.32[2].  Further, the parties agreed that costs could be ordered to be taxed and paid on a higher basis if there were “special” or “unusual” aspects of the case which brought it out of the ordinary.[3]

   [1]Bass Coast Shire Council v King [1997] 2 VR 5 at 29 per Winneke P with whom Hayne and Charles JJA agreed; Spencer v Dowling [1997] 2 VR 127 at 147 per Winneke P.

   [2]Regal Life Insurance Ltd v Pacific Financial Resources Pty Ltd, unreported, Batt J, 16 November 1994, which was approved in King at 29.

   [3]PCRZ Investments Pty Ltd v National Golf Holdings Ltd [2002] VSCA 24 at [34] per Chernov JA with whom Callaway and Buchanan JJA agreed.

1. Mr Pizer of counsel, who appeared for the second defendant, submitted that there were two "special" or "unusual" circumstances in this case which compelled the conclusion that the plaintiff, the Municipal Association of Victoria ("MAV"), should be ordered to pay his costs on one of the higher bases.  They were that:

(a)MAV unilaterally "uplifted" the matter from the Victorian Civil and Administrative Tribunal ("VCAT");  and

(b)      this proceeding was in the nature of a "test case" for MAV.

1. In respect of the first “special” or “unusual” circumstance, Mr Pizer submitted that VCAT was the appropriate forum in which all of the issues in dispute, including the question of whether MAV was an "agency" for the purposes of the Freedom of Information Act 1982 (“the FOI Act”), could have been determined. Mr Pizer stated that his client would have appeared unrepresented at the VCAT hearing and he submitted that regardless of the outcome it was highly likely that there would have been no order as to the costs of that hearing. Instead, Mr Overington, who did not feel comfortable appearing in person in Court, had been forced to incur the cost of retaining lawyers to represent him. In an affidavit sworn on 5 May 2004, Mr Overington stated that regardless of the result at VCAT, he would have been content to leave the matter there because he would have obtained a decision from VCAT. It was submitted that, in these circumstances, Mr Overington should not be saddled with any liability for costs.

1. In my judgment, I referred to the submissions of the second defendant that the Court ought to decline to grant declaratory relief, even if the plaintiff were successful and that the plaintiff should pay the second defendant's costs, regardless of the outcome of the proceeding.  In that context I stated as follows:

"Mr Pizer submitted that VCAT was the appropriate forum, at least in the first instance, to determine the question of whether MAV was an agency for the purposes of the FOI Act and that the plaintiff should not have pre-empted the outcome of the VCAT application by commencing this proceeding in the Supreme Court. There is much to be said, in my opinion, for the submission that this matter should have been allowed to run its course in VCAT. It may have ended there, but if either party was not satisfied with the result, then it would have been open to them to have sought leave to appeal, on a question of law, to this Court pursuant to s.148(1) of the VCAT Act.  I understand that, because it has received a number of FOI requests, MAV viewed this proceeding as a test case to determine its status under the FOI Act.  It submitted that there was considerable public importance attached to the determination of the issues raised in this proceeding.  Nevertheless, I am not persuaded that it was appropriate for MAV to commence this proceeding.  However, in the result, it is unnecessary to consider this matter further."

1. Without in any way derogating from the tentative view I expressed in the above passage that it was not appropriate for MAV to have commenced this proceeding, I do not consider that its conduct in "uplifting" the matter from VCAT to this Court justifies an order for costs on an indemnity basis or a solicitor and client basis.  This is because I consider that MAV's view of the issue was such that even if Mr Overington had been successful in VCAT, MAV would have sought and obtained leave to appeal to this Court, so that the costs of arguing the matter before the Court would have been incurred in any event.

1. It seemed to me that Mr Pizer's submissions recognised the likelihood, if not the inevitability, of MAV seeking to appeal an unfavourable decision of VCAT.  That is why Mr Overington’s intention to abide whatever result he obtained at VCAT was not really relevant.  Mr Pizer referred to the different costs outcomes which would flow from the various results of an application by MAV for leave to appeal.  In answer to my specific question, he submitted that if MAV's application for leave to appeal were granted and the appeal then dismissed, there would be no ground to award costs on any basis other than party and party.  In my opinion, that answer was correct and it is fatal to the first ground of the second defendant's argument for costs on a higher basis.  I see no relevant distinction between that hypothetical example and what occurred in this case.  The hearing before VCAT was simply avoided.  In the circumstances, I do not consider that I should penalise MAV in terms of costs, even though it has followed a course which I considered to be wrong.

1. The second "special" or "unusual" circumstance relied on by the second defendant as justifying an order for costs on a higher basis was that the proceeding was in the nature of a "test case" for MAV.  Mr Pizer referred to Mr Spence's evidence about this.  However, this is not a case of a plaintiff commencing a proceeding not for his or her or its own personal interest but in the wider public interest,[4] because Mr Overington sought access to certain documents of MAV for his own personal reasons.  Nor is it a proceeding which has immediate and binding consequences for a large number of other pending claims, as was the case with the plaintiff in Baltic Shipping Co v Dillon[5] where “very substantial costs” were incurred by her in proof of the defendant’s negligent navigation of the cruise ship, which ultimately produced the admission of negligence which was able to be relied on by the one hundred and twenty-three other plaintiffs.  And although the decision in the proceeding may “have a wider effect than merely inter parties”, should other persons make an FOI application in respect of documents held by MAV, there has been no consequential  “additional and special work and responsibilities” undertaken by the second defendant.[6]

   [4]See for example, the discussion in Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 100 ALR at 571-572 per Morling J; Re Smith; Ex parte Rundle (No 2) (1991) 6 WAR 299 at 300-304 per Malcolm CJ with whom Pidgeon and Rowland JJ agreed; Australian Electoral Commission v Towney (No 2) 54 FCR 383 at 386-392 per Foster J; and Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 34-35 per Kirby P with whom Gleeson CJ agreed.

   [5](1991) 22 NSWLR 1 at 35 per Kirby P.

   [6]Australian Electoral Commission v Towney (No 2) 54 FCR 383 at 390-391 per Foster J citing Ragata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, Davies J, 5 March 1993).

1. As I have previously indicated, in my view, if MAV lost before VCAT, it was virtually inevitable that the matter would be argued in this Court because MAV did regard the matter as a "test case".  Therefore, the logical consequence of a successful application by Mr Overington under the FOI Act was that he would be involved in Supreme Court litigation.  But these circumstances do not warrant, in my opinion, an order for costs on a higher than normal basis.  It is not relevant, in my opinion, that MAV desired to have the issue of its status under the FOI Act authoritatively determined and that it chose Mr Overington's application as an appropriate vehicle to achieve that result.

1. In reaching this conclusion, I have disregarded the submission by Dr Ricketson of counsel, who appeared on behalf of the plaintiff, that this was not a proceeding in which Mr Overington was obliged to appear and be represented by counsel in the Court.  It was argued that if, as the second defendant had submitted, he had no special interest in the FOI status of the plaintiff, he did not have to appear in the proceeding but could have awaited the decision of the Court to see if the matter would come back to VCAT in the event that the plaintiff’s originating motion was unsuccessful.  Indeed, as was revealed by correspondence exhibited to the affidavit of MAV’s solicitor, Travis Robert Payne, sworn on 3 May 2004, this course was urged on the second defendant by the plaintiff’s solicitors at an early stage of the proceeding.  It also gained some support from the view expressed by Mr Overington in his affidavit as to his attitude towards an unfavourable decision from VCAT.  Nevertheless, I do not consider it to be a reasonable suggestion.  Mr Overington was entitled to participate in the proceeding to argue the contrary proposition being advanced by MAV, namely that it was subject to the FOI Act. In addition, there is the very real and practical consideration of the great assistance provided to the Court by the exploration of all aspects of this difficult issue in the course of hearing the opposing submissions advanced by counsel for both MAV and Mr Overington.  But as Dr Ricketson’s submission relates not to an application that Mr Overington be denied his costs but only to the application that he be awarded costs on a higher basis because this was a “test case”, which I have rejected, I need say nothing further about it.

1. Accordingly, I do not consider that there is any reason to order that the plaintiff pay the costs of the second defendant on an indemnity basis or on a solicitor and client basis.  The costs order will be on the normal party and party basis.