O'Brien v Goodman Fielder Consumer Foods Pty Ltd
[2024] FedCFamC2G 117
•14 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
O’Brien v Goodman Fielder Consumer Foods Pty Ltd [2024] FedCFamC2G 117
File number(s): SYG 1694 of 2022 Judgment of: JUDGE D HUMPHREYS Date of judgment: 14 February 2024 Catchwords: HUMAN RIGHTS – Unlawful discrimination alleged– Application to limit the maximum amount of costs that may be recovered by parties – Application dismissed Legislation:
Australian Human Rights CommissionAct 1986 (Cth) ss 46PO, 46PH (2)
Fair Work Act 2009 (Cth)
Federal Circuit Court Rules 2001
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 r 21.03, 22.03(1), 20.03
Sex Discrimination Act 1984 (Cth)
Racial Discrimination Act 1975 (Cth)
Cases cited:
Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864
Hudson v Australian Broadcasting Commission [2016] FCCA 917
Minns v State of NSW (No 2) [2002] FMCA 197
Perkis v State of NSW (Technical and Further Education Commission) [2016] FCCA 957Division: Division 2 General Federal Law Number of paragraphs: 39 Date of last submission/s: 9 February 2024 Date of hearing: 9 February 2024 Place: Parramatta Counsel for the Applicant: Mr Delmonte Solicitor for the Applicant: Mr Aslanian ( Connect Legal ) Counsel for the Respondents: Mr Watts Solicitor for the Respondents: Ms Shields ( Norton Rose Fulbright ) ORDERS
SYG 1694 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CHRISTOPHER O'BRIEN
Applicant
AND: GOODMAN FIELDER CONSUMER FOODS PTY LTD
First Respondent
PETER HATZIS
Second Respondent
ORDER MADE BY:
JUDGE D HUMPHREYS
DATE OF ORDER:
14 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The application is dismissed.
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
Christopher O’Brien (the applicant) has commenced proceedings in the Human Rights jurisdiction of this Court, alleging unlawful discrimination under s 46PO of the Australian Human Rights CommissionAct 1986 (“the Act”).
The applicant alleges, inter alia, that he was the subject of derogatory comments, sexually explicit gestures, shown pornographic material, subject to comments about his genitalia, subject to comments about female and other employees of the first respondent. The applicant complains that an employee of the first respondent exposed his buttocks to the applicant on multiple occasions. Further, the applicant alleges he was subject to discrimination based on racial, cultural and disability issues. The applicant states that he complained about the behaviour to his employer, but his employment was terminated.
A complaint was initially made to the Australian Human Rights Commission. That complaint was terminated by the Commission under s 46PH(2) of the Act on the ground that the Commission was satisfied there was no reasonable prospect of the matter being settled.
The applicant then commenced proceedings in this Court. Various procedural orders were made in Chambers by consent, including that the matter be referred for mediation before a Registrar of this Court. The mediation was unsuccessful.
Following the unsuccessful mediation, the applicant made an application in a case for orders pursuant to rule 22.03(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (“the Rules”) to, inter alia, limit the maximum costs that may be recovered by one party against the other in the proceedings, on a party-party basis, to $30,000.00.
THE LAW
Rule 22.03 of the Rules 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 of the Rules in the Court’s view should be read in conjunction with r 1.04(1) of the Rules which states:
The overarching purpose of these Rules, as provided for 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 r 20.03 of the Rules has not been the subject of consideration by this Court, it is in all respects analogous to the repealed r 21.03 of the Federal Circuit Court Rules 2001. Further, r 40.51 of the Federal Court Rules2011 (Cth) contains a similar provision but in much broader terms. It provides:
Maximum costs in a proceeding
(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 party’s exposure to a costs liability: (see; Perkis v State of NSW (Technical and Further Education Commission) [2016] FCCA 957 (“Perkis”) 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 Commission [2016] FCCA 917 (“Hudson”) at [4] and [19]. In summary, the principles, include:
(1) 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;
(2) 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;
(3) 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;
(4) 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;
(5) 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”) 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):
(1) the timing of the application;
(2) the complexity of the factual or legal issues raised in the proceedings;
(3) the amount of damages that the applicant seeks to recover and extent of any other remedy sought;
(4) whether the applicants claims are arguable are not frivolous or vexatious;
(5) the undesirability of force in the applicant to abandon the proceedings;
(6) whether there is a public interest elements to the case.
The respondent in that matter, Virgin Blue Airlines, submitted that the Court should take into account:
(1) costs likely to be incurred by the parties in the preparation for, and hearing of, the matter;
(2) whether the party opposing making the order has been uncooperative and/or has delayed the proceedings;
(3) 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 the costs follow the event, but that the ability to exercise discretion is desirable. At [10] Bennett J noted that:
[10] 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 is still relevant to the exercise of discretion to award costs and the exercise of the discretion takes account of all the circumstances.
THE TIMING OF THE APPLICATION
In this case, the application has been brought following a number of procedural consent orders made in chambers, including an order that referred the matter to a mediation before a Registrar of the Court. That mediation was regrettably, unsuccessful.
Mediation is a very successful tool used in this Court for the swift and economic resolution of disputes between parties. The referral of matters for mediation has become an integral pre-trial procedure used by the Court. In the Court’s view, the timing of the application in this case, made immediately after the unsuccessful mediation, should not be a bar to the application being made pursuant to r 22.03 of the Rules. In the Court’s view, no substantive step along the way to preparing the matter for trial has taken place. The application is the first time the parties have actually appeared in Court and is the first Court date for the purposes of r 22.03 of the Rules. The Court would be of the same opinion even if the parties had appeared before it at a Directions Hearing for the purposes of having the matter referred to mediation.
Even if the Court is wrong in this regard, it notes that, pursuant to r 1.07 of the Rules, the Court may dispense, in the interests of justice, with compliance or full compliance with any of these rules at any time. In the current case, the Court is satisfied that it is in the interests of justice that this application be considered as if it was the first Court date.
FACTORS FOR CONSIDERATION
The complexity of the factual and legal issues and the length of the hearing
The applicant alleges that during the relevant period of employment, he was subject to treatment by the second respondent, Mr Hatzis, together with two other work colleagues which included the display of pornography, the grabbing of the applicants testicles and penis and asking questions about the applicant’s genitalia, referring to the applicant as a “fag, faggott, princess, gorgeous or sweetie”, the flashing by Mr Hatzis of his backside to the applicant, together with other commentary about the applicant’s sex life and other matters, including the applicant’s baldness.
The applicant alleges that the sexual conduct amounted to sexual harassment of the applicant and sex discrimination on the basis of his sex. The applicant alleges that he was also called a “Skippy poofter’ which constitutes racial discrimination and vilification.
The respondents filed a defence which, inter-alia, denies the relevant material facts. The first respondent also denies the applicant’s pleading that he, and to the best of his knowledge, other employees he worked with were provided with insufficient training regarding the Sex Discrimination Act 1984 (Cth) and the Racial Discrimination Act 1975 (Cth).
The respondent asserts that the Court’s ability to assess whether the applicant has a prima facie case is limited. The case is not proceeded beyond the pleadings. There was no evidence filed by either party that could allow the Court to meaningfully assess the strengths and weaknesses of each party’s case. It was further submitted that it appears the applicant intends at trial to call himself, his wife (not an employee of the first respondent), an expert and “at least one or two other witnesses are likely to be employees of the first respondent who may have witnessed some of the conduct”. It was submitted that it illustrates that the applicant cannot identify any potential witnesses to the alleged conduct. On the other hand, it was submitted that the respondent presently intends to call numerous witnesses, whose evidence is expected to be to the effect that the facts asserted by the applicant did not happen and indeed, it was the applicant who engaged in inappropriate workplace behaviour, which led to his dismissal.
The respondent concedes however, that the applicant’s case does not reach the high-water mark of being capable to be labelled frivolous or vexatious. It was submitted, however, that the applicant’s prospects are low, and this counts against the maximum costs order being made.
In terms of the complexity, the applicant contends that the case is not complex, as it involves rudimentary application of settled principles. This contention is difficult to reconcile with evidence and the Court will be required to make “novel findings” and that at least some of the applicant’s arguments in the substantive proceedings had not been the subject of previous judicial consideration.
The Court will be required to determine first, what conduct is being proven, and second, whether that conduct amounts to unlawful discrimination, sexual harassment or racial vilification as well as determining vicarious liability. The causal link between damages and any contravention will also need to be determined.
There was agreement between the parties that the matter could be heard in five hearing days. The Court notes that it has the power to limit cross examination and make other orders which will expedite the conduct of the hearing. Whilst the Court notes the assertion that the Court may well need to embark on consideration of whether or not conduct, if proven, constitutes unlawful discrimination, sexual harassment or racial vilification, that, no doubt is a matter that the Court will need to consider rather than the parties.
The Public interest
In the Court’s view, the conduct complained of, if proven, is of a very serious type which is absolutely inconsistent with modern Australian workplaces. The applicant submits that there is an inherent public interest in a judicial determination of the allegations in the matter because to the applicant’s knowledge, there is no case that deals with:
(a) Sexual harassment, between male employees, whereby regular and systemic statements and conduct are undertaken to the effect of the sexual treatment already set out above; and
(b) Sex discrimination between male employees and subject matter of baldness.
It is submitted that it is in the public interest that a finding in the applicant’s favour will provide a strong authority for employers to take more significant and serious steps in the workplace to prevent sexual harassment and sex discrimination between all employees as well as an acknowledgement that male employees can be the subject of sexual harassment irrespective of the sex of the victim in the harasser.
The respondent submitted that this is not a case where the applicant is for example alleging discrimination in the provision of services, such that it could be said that the proceedings are designed to bring an end to some discriminatory practice in the provision of services by the respondents in the future. The lack of public interest in the case is made manifest by the remedy sought by the applicant, this is not a case where the applicant is pursuing proceedings with altruistic motivation, pursuing relief that will assist others beyond himself. The applicant seeks an apology to be given to him in addition to an un-quantified sum of damages. In submissions, the applicant states that they will seek general damages of no less than $150,000.00. No evidence has been given which provides clarity as to the compensation being pursued.
It was submitted that in Minns v State of NSW (No 2) [2002] FMCA 197 (“Minns”), Raphael FM at [13] found that “once some exclusivity of personal benefit is sought the prospects of the proceedings having the necessary quality of public interest is much diminished”. His Honour went on to say that once the law was altered to bring these types of proceedings out of “no costs” Tribunals into this Court, the orthodox position became one whereby the unsuccessful litigant paid the successful litigant’s costs. It was submitted that there is no public interest in the proceedings.
Costs likely to be incurred
The applicant estimates that their costs will be up to $80,000.00 plus GST, together with an expert witness at a cost of $10,000.00 GST or $90,000.00 plus GST. If the applicant were to lose his case, even upon a no-win no fee agreement with the applicant’s solicitors, it is asserted that it would be ruinous to the applicant if he were liable for the respondent’s legal fees, even on a party-party basis.
The respondent estimates that their costs will be in the order of $150,000, given that they will be required to provide affidavit evidence from a significant number of witnesses and call them to give evidence.
The Court notes that the parties agreed that on the basis of a five-day hearing, with the relevant scale costs under the rules, would approximate $52,000.00. The Court notes that it has the discretion to order costs on a number of different basis, including a lump sum based on the relevant Court scale, costs as assessed, or on an indemnity basis. If for example, scale costs were awarded against the applicant, on the basis of a five-day hearing, these would amount to no more than $22,000.00 than the maximum amount sought in this application.
CONSIDERATION
In terms of the relevant matters to be considered under Hudson, the Court is of the view that the amount of $30,000.00 as sought in the application would be unrealistic. It would expose the respondents to a significant shortfall should they be successful even as compared to the relevant scale amount.
In terms of the complexity of the litigation, there will no doubt be some significant factual matters that will need to be determined, together with a number of legal concepts as to whether or not the conduct, if proven, falls within the relevant discrimination legislation. That said, the burden of those issues will tend to fall to the Court to determine, rather than the parties.
The Court is confident that the matter can be completed within five days given the powers of the Court to limit cross examination and otherwise expedite the hearing of the matter.
In terms of the public interest, the Court is of the view that there is significant public interest in the Court determining whether or not the conduct alleged falls within the relevant discrimination legislation. There is public interest in determining whether or not private employers have a duty to ensure that employees are relevantly educated in respect of conduct which is prohibited under the legislation and a duty to ensure that where such conduct occurs, appropriate management action is taken to ensure such conduct ceases and is not repeated. The alleged conduct in this matter is to the Court’s mind not in keeping with the reasonable expectations of modern Australian workplaces.
The Court does not consider that, the fact that the applicant seeks an award of damages in a significant amount is a matter that detracts from the public interest in the calling out of such conduct, if it occurred. Similar to breaches of the Fair Work Act 2009 (Cth), there is significant public interest in both specific and general deterrence, to ensure that conduct does not occur in the specific workplace in the future, and there is general deterrence to other employers to ensure that conduct of the like alleged, does not occur in their workplace.
The Court has noted the assertion that the applicant is unable to fund the proceedings were he to be exposed to the likelihood of costs assessed on a party party-basis. The Court does not accept the assertion of the respondent that insufficient financial information has been provided such that the limitation on any costs order should be made. There are very few people with the financial resources to be able to fund a five-day hearing without difficulty. Those who are with the means to, are generally not in the class of a working person such as the applicant.
Noting that the Court has the power to limit costs to those approved in the relevant scale under the Rules, the Court is of the view that to limit the costs to $30,000.00 sought would be inappropriate. The Court is of the view, subject to any further submissions, that to give a clear indication that the Court is likely to limit any costs payable by the unsuccessful party, to a lump sum calculated by reference to those set out in the relevant scale, in the circumstances of this case, will provide a clear indication as to the likely costs payable, will provide a budget to which the parties can work towards and will provide justice to the parties.
CONCLUSION
Accordingly, the application is dismissed.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of Judge D Humphreys. Associate:
Dated: 14 February 2024
0
4
6