MURPHY v LOPER
[2002] FMCA 310
•19 November 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MURPHY v LOPER & ANOR | [2002] FMCA 310 |
| HUMAN RIGHTS – Summary and discrete argument – indemnity costs. |
Human Rights and Equal Opportunity Commission Act 1986, ss.46PE, 46PH, 46PH(2), 46PH(4), 46PO
Federal Magistrates Court Act 1999
Federal Magistrates Court Rules 2001, rule 21(2)(a)
Ball v Morgan and Anor [2001] FMCA127
Chau v Oreanda Pty Ltd and Ors [2001] FMCA 114
Miller v Wertheim & Anor [2001] FMCA 103
Colgate-Palmolive v Cussons [1993] 46 FCR 225
| Applicant: | SUSAN MURPHY |
| Respondent: | DAVID LOPER and ANOR |
| File No: | AZ 96 of 2002 |
| Delivered on: | 19 November 2002 |
| Delivered at: | Adelaide |
| Hearing date: | 14 November 2002 |
| Judgment of: | Mead FM |
REPRESENTATION
| Counsel for the Applicant: | Mr S Lieschke |
| Solicitors for the Applicant: | Lieschke & Weatherill |
| Counsel for the Respondent: | Mr P Moloney |
| Solicitors for the Respondent: | Moloney & Partners |
ORDERS
That the applicant pay the costs of the second respondent of and incidental to these proceedings.
That pursuant to Rule 21(2)(a) of the Federal Magistrates Court Rules, such costs to be fixed in the sum of ONE THOUSAND FOUR HUNDRED AND EIGHTY FIVE DOLLARS ($1485.00) being lump sum costs payable for a Stage 2 hearing under Schedule 1 of the Federal Magistrates Court Rules, together with the Court attendance fee fixed in the sum of THREE HUNDRED AND FIFTY DOLLARS ($350.00).
That the respondent file and serve a Response and Affidavit on or before 21st December 2002.
That the parties exchange mutual informal discovery on or before 24th January 2003 with any inspection to be completed on or before 7th February 2003.
That this matter be listed for trial at 10am on 7th April 2003 NOTING
2 days allowed.That the applicant file and serve affidavits of all evidence on which she intends to rely at trial on or before 21st February 2003.
That the respondent file and serve affidavits of all evidence on which he intends to rely at trial on or before 7th March 2003.
That the applicant file and serve any affidavits in response on or before 14th March 2003.
That a Summary of Argument and List of Authorities be provided to the Associate to the Federal Magistrate by 5pm on 21st March 2003.
Liberty to the solicitors for both parties to jointly request a mediation with the Registrar PROVIDED such request is made on or before 28th February 2003 with any mediation to be completed by 21st March 2003.
Liberty to either party to apply.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
AZ 96 of 2002
| SUSAN MURPHY |
Applicant
And
| DAVID LOPER and ANOR |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
The first part of the proceedings this afternoon relates to the argument as to costs of the second respondent.
On 25th October 2002, I dismissed the application in these Human Rights proceedings against the second respondent. The second respondent was not named in the termination of complaint from the Human Rights and Equal Opportunity Commission, but was named as the second respondent in these proceedings.
By way of history, the matter first came before me for directions on 11th June 2002, after it was transferred from the Federal Court to the Federal Magistrates Court. On that occasion it seemed that the solicitor for the first and second respondents had not been advised of the hearing and the matter was simply adjourned to 18th June 2002.
It was on that day, namely 18th June 2002 that Mr Moloney, solicitor for the first and second respondents at that stage, raised the objection in relation to the second respondent and the issue of whether or not the proceedings should be dismissed as against the second respondent. Accordingly, the applicant’s solicitor was on notice at least as of that date that the issue of the second respondent was in dispute.
On that day, the matter was in fact adjourned to 23rd July 2002 and there was an order that the applicant file and serve a further affidavit of evidence relating to various issues raised by the solicitor for the respondents in terms of particulars. The applicant’s solicitors were also to, on or before 16th July 2002, file and serve an affidavit as to the court’s jurisdiction in respect of the second-named respondent.
On 25th July 2002 the matter came back before me and was adjourned to 21st August 2002, as the applicant had not complied with paragraphs 1 and 2 of the order of 18th June 2002. The time for compliance was extended to 1st August and the respondent’s costs of that day were fixed in the sum of $200.
On 21st August 2002 there was still an issue as to further and better particulars sought by the respondent and there was an order that the respondent’s solicitor advise the applicant’s solicitor in writing within seven days of the further and better particulars sought, and the applicant was to file and serve a further affidavit setting out to the best of her ability the further and better particulars on or before 11th September 2002, with the matter being adjourned to 24th September 2002. On each and every one of these occasions the issue of whether or not the matter should proceed as regards the second respondent was a live issue.
On 24th September 2002 there was an order that the applicant file and serve any further affidavits on which she relied in relation to the issue of the court’s jurisdiction as regards the second-named respondent on or before 18th October 2002, and that the first respondent file and serve any application and supporting affidavit on which he intended to rely on the adjourned hearing as regards the subject matter of the current application on or before 18th October 2002, with the matter being adjourned to 25th October 2002.
On 25th October I dismissed, after hearing summary argument, the application as regards the second respondent. The second respondent was not required at any time, I might say at this preliminary point, to file any response in relation to the proceedings or any affidavit, and the matter was argued on a summary and discrete basis.
On 14th November 2002 the question of costs was argued, following upon my order of 25th October 2002, and the costs sought by the solicitor for the second respondent were costs on an indemnity basis.
I have read the authorities to which I was referred by each counsel.
I note as a preliminary point that there was a significant concession by the applicant: to use the words of counsel on that day, “We were trying to correct a mistake made by the Human Rights Commission”.
That of course relates to the basis of the argument by the applicant, both in relation to the question of whether the proceedings ought to be dismissed as against the second respondent and then subsequently, in relation to the question of indemnity costs. It was argued that the Human Rights and Equal Opportunity Commission had in fact incorrectly named Fasselton Pty Ltd as a respondent to those proceedings when, on the argument of the applicant, the commission should have named Bru Net Pty Ltd, which was the corporate entity that operated Ray White Real Estate Semaphore, the business which employed the applicant at the time of the matters to which she refers in her application.
I might at this preliminary point also mention the provisions of section 46PH(4) of the Human Rights and Equal Opportunity Commission Act 1986. Under Section 46PO, and of course this was the basis of my summary dismissal of the proceedings against the second respondent, if a complaint has been terminated by the president under section 46PE or 46PH and the respondent has given a notice to any person under section 46PH(2) in relation to the termination, any person who was an affected person in relation to the complaint may make an application to the Federal Court or the Federal Magistrates Court alleging unlawful discrimination by one or more of the respondents to the terminated complaint.
It was those words that were really the nub of this argument, with the solicitor for the second respondent submitting that Bru Net Pty Ltd was never a respondent to the terminated complaint.
The solicitor for the applicant conceded that point but submitted, inter alia that they were trying to remedy that mistake.
Earlier in these proceedings Mr Dolphin, for the applicant on that occasion, put to me an argument to the effect that there was no other way to remedy the matter. I draw counsel’s attention however to the provisions of sections 46PH and 46PH(4) of the Human Rights and Equal Opportunity Commission Act which states:-
Section 46PH
The President may terminate a complaint on any of the following grounds:-
(a)the President is satisfied that the alleged unlawful discrimination is not unlawful discrimination;
(b)the compliant was lodged more than 12 months after the alleged unlawful discrimination took place;
(c)the President is satisfied that the complaint was trivial, vexatious, misconceived or lacking in substance;
(d)in a case where some other remedy has been sought in relation to the subject matter of the complaint – the President is satisfied that the subject matter of the complaint has been adequately dealt with;
(e)the President is satisfied that some other more appropriate remedy in relation to the subject matter of the complaint is reasonably available to each affected person;
(f)in a case where the subject matter of the complaint has already been dealt with by the Commission or by another statutory authority – the President is satisfied that the subject matter of the complaint has been adequately dealt with;
(g)the President is satisfied that the subject matter of the complaint could be more effectively or conveniently dealt with by another statutory authority;
(h)the President is satisfied that the subject matter of the complaint involves an issue of public importance that should be considered by the Federal Court or the Federal Magistrates Court;
(i)the President is satisfied that there is no reasonable prospect of the matter being settled by conciliation.
Section 46PH (4)
The president may revoke the termination of a complaint, but not after an application is made to the Federal Court or the Federal Magistrates Court under section 46PO in relation to the complaint.
The question did not arise in this matter, but as a general rule the issue would arise as to whether the appropriate course of action is to go back to the Commission, lodge a fresh complaint and attempt to remedy the matter in that manner, rather than trying to remedy any such perceived error in proceedings such as this. It would of course have to be a fresh complaint and not an issue of requestion the Commission to issue a fresh determination notice as firstly, there is no power under the Act for the Commission to do so, and secondly, of course, the legislation is based upon the ability of parties to have their disputes mediated, to conciliate and the like, and if the complaint is filed against a person or an entity different to the entity in the first proceedings, then there is not the proper opportunity to conciliate. I raise that issue in passing.
For that reason, I must disagree with a later argument in relation to the costs issue, namely that filing the proceedings in this manner was the only way to rectify the perceived mistake. That, of course, however, is all past history. I have made the order terminating the proceedings as regards the second respondent so I turn now to the issue of costs.
The general principle in relation to costs is that costs should follow the event. I refer to a case of Ball v Morgan and Anor, decided by Federal Magistrate McInnis in the Federal Magistrates Court of Australia at Melbourne on 21st December 2001 [2001]FMCA 127. In paragraph 87 of that case His Honour said:
“In my view the general principle in relation to costs is that costs should follow the event. I see no reason for departing from that general principle in Human Rights applications, though I acknowledge the cases to which I have been referred by the applicant’s counsel provide at least some examples of circumstances where a court has been prepared to exercise its discretion in favour of unsuccessful applicants by not awarding costs.”
His Honour went on to say in paragraph 90:
“In my view, in the absence of any amendment to legislation which would seek to interfere with the ordinary discretion exercised by a court in the award of costs, it should be stated that in the normal course of events costs follow the event.”
None of this is groundbreaking law. It is simply following clearly established principles in relation to the issue of costs. His Honour went on to say in the same paragraph:
“I can see no legislative or legal basis which would support the proposition that there is any need in Human Rights matters to alter the law applicable to this court by adopting the practice of the state tribunal or indeed to have regard to the fact that the Commission does not have the power to award costs.”
His Honour in paragraph 92 referred to section 79 of the Federal Magistrates Act 1999, which provides:-
1) This section does not apply to family law or child support proceedings – and
2) The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court, including proceedings dismissed for want of jurisdiction, other than proceedings in respect of which any other act provides that costs must not be awarded – and
3) Except as provided by the Rules of Court or any other act, the award of costs is in the discretion of the Federal Magistrates Court or Federal Magistrate.
In paragraph 93 His Honour referred to the exception made in that section to family law and child support proceedings, and noted no similar exception in relation to Human Rights proceedings, and I adopt His Honour’s comments in relation to those matters.
The court does have a discretion, and there was reference to the exercise of that discretion in the case of Chau v Oreanda Pty Ltd and Ors [2001] FMCA 114 decided by Driver FM in Sydney on 16th November 2001. In paragraph 25 of that judgment His Honour referred to the general discretion under Part 21 of the Federal Magistrates Court Rules to order costs, the basis on which costs can be ordered, and aid in paragraph 26:
I have said in my view applicants in Human Rights proceedings before the court need some generous consideration where they are prepared to resolve the matter at an early stage in the proceedings so that the respondents are not put to the costs of a full hearing.
He went on to refer in paragraph 27 to:-
… an application in the Human Rights jurisdiction which raises a significant issue of public interest –
and the fact that in those circumstances it may be appropriate not to make a costs order.
It was conceded in this case by Mr Lieschke that these proceedings did not involve a matter of public interest. These proceedings did not resolve, but of course this issue was argued as a discrete issue. The application in respect to the second respondent was summarily dismissed and the respondent was therefore not put to the cost of a full proceeding.
In the case of Miller v Wertheim & Anor [2001] FMCA 103 His Honour said in paragraph 22:-
“The respondents have also been wholly successful in their application to summarily dismiss the principal application and so are prima facie entitled to an order for costs. The respondents have done nothing to disentitle themselves to an order for costs – “
And he went on to refer the fact that the respondents were successful, without having to undergo a full trial
In this case the respondents have done nothing to disentitle themselves to an order for costs, and in my view there is no doubt at all, taking into account all of the general principles and the lack of applicability of issues such as public interest, that an order for costs is appropriate.
We come then to the question of what order for costs is appropriate. The order sought by the solicitor for the second respondent is an order for indemnity costs. One of the cases to which I was referred by counsel for the second respondent was the case of Colgate-Palmolive v Cussons, [1993] 46 FCR 225 decision of a single judge of the Federal Court.
It is a very useful case. I might say that Mr Moloney referred me to several other cases as well, but in my view this was a case that neatly drew together many of the principles discussed in the other cases. In particular, at page 232 continuing over to page 233, His Honour set out what seemed to him to be a distillation of the authorities to which he had referred in relation to the issue of whether or not costs should be awarded on an indemnity basis, and he distilled the authorities in the following manner:-
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…
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).
In paragraph 5 His Honour went on to refer to some of the circumstances which have been thought to warrant the exercise of the discretion including the making of allegations of fraud, knowing them to be false, the making of irrelevant allegations of fraud, evidence of particular misconduct that causes loss of time to the Court and to other parties, the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions, an imprudent refusal of an offer to compromise and indemnity costs against a contemnor. After that list of examples His Honour remarks that other categories of cases are to be found in reports.
In paragraph 6 His Honour said:
“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…”
In these proceedings, the respondents’ counsel put to the Court that the application was always doomed as regards the second respondent, that is, it could never succeed. That indeed is the case, and it was the basis for my summary dismissal of the application as against the second respondent. The argument, however, was not put to the Court in my view by the applicant on either a malicious or a fraudulent basis.
In the case of Colgate-Palmolive v Cussons (supra) His Honour said at page 231:-
“French J dealt with the matter again in Jaycorp Pty Ltd v Australian Builders Labourers Federation Union of Workers. He referred to Fountain and his earlier decision in Tetijo, and in relation to Fountain he said ag page 303, “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 are collateral purpose or some species of fraud to 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 as a hopeless case.”
It was that particular citation that Mr Moloney relied on in support of his that a hopeless case, that is, a case that should never have been argued is a sufficient ground to enliven the award of indemnity costs.
In the case of Chau v Oreanda Pty Ltd & Ors (supra) Driver FM, in paragraph 29, drew a distinction between what he referred to as a sincere but wrong belief on the part of a litigant who in that case was advised, and a litigant who maliciously or for some ulterior motive commences proceedings and pursues them to the bitter end.
This was, in my view, an argument that was without merit and that was doomed to failure. It was, however, dealt with on a summary basis. The second respondent was not put to the costs of filing any documentation in respect to the matter. It was an argument that was discrete from the substantive claim. There were various adjournments but they did not always relate simply to the argument of jurisdiction as against the second respondent but also other procedural matters. For these reasons I am not persuaded that this is a matter in which I should exercise my discretion as to awarding indemnity costs.
I then turn to the costs that I will award and, in particular, to Rule 21.02(2) of the Federal Magistrates Court Rules which states, inter alia:-
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 Order 62 of the Federal Court Rules or set a time for payment of the costs which may be before the proceedings is concluded.
There is a schedule to the Federal Magistrates Court Rules as to costs, being Schedule 1, and Part 1 of that Schedule is headed “General”. What is referred to in that Schedule as a Stage 2 costs order relates to an interim or summary heading as a discrete event. This stage applies to an interim application or a summary proceeding of a type not otherwise addressed in this fee structure, and does not include the Stage 1 or 1A component.
I am of the view that that is the appropriate order that should be made for costs in these proceedings. This was an interim and summary hearing, it was a discrete event. As I have already said, it did not require the filing of any documentation on the part of the second respondent, and accordingly, I propose to order costs on that basis.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Mead FM
Associate:
Date:
2
0