Ondrich v Kookaburra Park Eco-Village (No.2)
[2009] FMCA 741
•5 August 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ONDRICH v KOOKABURRA PARK ECO-VILLAGE (No.2) | [2009] FMCA 741 |
| HUMAN RIGHTS – Costs – whether each party should bear their own costs – whether costs should be paid on an indemnity basis – the effect of a decision of the full Court delivered during these proceedings – effect of applicant’s legal representation being provided on a pro bono basis – rule against discouraging meritorious claims – effect of respondent’s conduct during the proceeding – effect of various offers to settle – further discretionary considerations – whether there was high-handed conduct by the applicant – whether the applicant had any prospect of success – whether the applicant’s conduct occasioned loss of time – time for payment. |
| Commonwealth of Australia Constitution Act, s.109 Federal Court Rules Human Rights and Equal Opportunity Commission Act 1986 (Cth) |
| Australian Guarantee Corporation Ltd v De Jager [1984] VR 483 Catholic Education Office v Clarke (2004) 138 FCR 121 Dr Martins Australia Pty Ltd v Figgins Holdings Pty Ltd (No.2) [2000] FCA 602 Forrest v Queensland Health [2007] FCA 936 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Fresh Express Australia Pty Ltd v Larridren Pty Ltd [2004] FCA 1640 Gladstone Park Shopping Centre Pty Ltd v Wills (1984) 6 FCR 496 Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10 Jacomb v Australian Municipal, Administrative, Clerical and Services Union [2004] FCA 1600 John S Hayes& Associates Pty Ltd v Kimberley- Clarke Australia Pty Ltd (1994) 52 FCR 201 MGICA (1992) Ltd (formerly MGICA Ltd) v Kenny & Good Pty Ltd and Another (1996) 140 ALR 313 Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 Oshlack v Richmond River Council (1998) 193 CLR 72 Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211 Ruddock v Vadarlis (No.2) (2001) 115 FCR 229 Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, Federal Court of Australia, Sheppard J, 7 February 1996) State of Queensland (Queensland Health) v Che Forest (2008) 168 FCR 532; [2008] FCAFC 96 Thiess v TCN Channel 9 Pty Ltd(No.5) [1994] 1 Qd R 156 United Salvage Pty Ltd v Louis Dreyfus Armateurs SNC [2006] FCA 1611 Wiggins v Department of Defence-Navy (No.3) [2006] FMCA 970 |
| Applicant: | LIBUSE ONDRICH |
| Respondent: | KOOKABURRA PARK ECO-VILLAGE |
| File Number: | BRG9 of 2006 |
| Judgment of: | Burnett FM |
| Hearing dates: | 26, 27, 28, 29 November 2007, 7 March 2008 & 23 July 2008 |
| Date of Last Submission: | 15 April 2009 |
| Delivered at: | Brisbane |
| Delivered on: | 5 August 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Shah |
| Solicitors for the Applicant: | Minter Ellison |
| Counsel for the Respondent: | Mr Fenton |
| Solicitors for the Respondent: | Hall Payne Lawyers |
ORDERS
That the applicant pay half the respondent’s costs of and incidental to the application to be assessed on an indemnity basis on and from 11 July 2007 but otherwise on the standard basis.
That the applicant pay the respondent’s costs as assessed within ninety days of the issue of certificate of taxation pursuant to Order 62 rule 45.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG9 of 2006
| LIBUSE ONDRICH |
Applicant
And
| KOOKABURRA PARK ECO-VILLAGE |
Respondent
REASONS FOR JUDGMENT
Background
On 1 April 2009 I delivered judgment in this application ordering that the application be dismissed and reserving costs subject to submissions made by the parties. In accordance with directions issued at that time the parties have now made written submissions concerning costs.
In summary the respondent contends it was successful and that the costs of the proceeding should follow the event. In addition it submits the applicant’s prosecution of her claim was so egregious that there ought be an order for indemnity costs.
The applicant submits that because of the particular factors identified in her submissions each party should bear its own costs. In the alternative she submits that if costs are to be awarded that they should be set on the event based scale provided for in the Rules and that such costs be subject to an order for time to pay.
Costs
The respondent’s submissions proceed on the premise that the applicant should pay its costs of the proceeding. Its written submissions principally address its claim for indemnity costs. Although not articulated in its submission the respondent’s approach proceeds upon the premise that the usual rule ought apply, that is that costs follow the event. See Oshlack v Richmond River Council (1998) 193 CLR 72; Thiess v TCN Channel 9 Pty Ltd(No.5) [1994] 1 Qd R 157. While the Court has power to make another order in the exercise of its discretion it would only do so for good reason; Gladstone Park Shopping Centre Pty Ltd v Wills (1984) 6 FCR 496. The discretion ought only be exercised after consideration of all the relevant considerations and in the exercise of the power the Court must act judicially; Ruddock v Vadarlis (No.2) (2001) 115 FCR 229 at 234 [9] and [10].
In response to that submission the applicant raises four bases in support of her contention that the court should in the exercise of its discretion order that each party should bear their own costs.
Full Court Decision in Forest v Queensland Health
The applicant says that but for her failure to adduce evidence of the comparator group she would have succeeded in her application. The need for this form of evidence first became apparent following the Full Court decision in State of Queensland (Queensland Health) v Che Forest (2008) 168 FCR 532; [2008] FCAFC 96. The single judge decision relied upon by the applicant had held there was no need to expressly adduce evidence of the comparator group. In my view that approach was reasonably open at the time of the trial, upon a fair reading of the authorities of the Federal Court at first instance in Forest v Queensland Health [2007] FCA 936 and Catholic Education Office v Clarke (2004) 138 FCR 121.
The applicant contends that the first time the respondent criticised the reasoning of Collier J (the judge at first instance in Forest v Queensland Health (supra)) was on 7 March 2008 being the date set for final submissions. At that time some debate occurred concerning the proceedings before the Full Court. It was apparent from submissions made by Counsel for the respondent that he had been briefed in respect of arguments placed before the Court on the appeal which was heard two weeks before 7 March. In my judgment of 1 April 2009 I did make reference to their being earlier discussion of the matter of Forest v Queensland Health (supra) being on appeal and the possible impact of a successful appeal to the conduct of the proceeding. The transcript does not reflect any such exchange prior to 7 March although the matter of the appeal (and by inference its perspective effect on the proceeding before me) was clearly known to myself and the parties prior to the commencement of proceedings on 7 March.[1]
[1] See transcript 7 March 2008 page 3 line 25 and applicant’s submissions on costs paragraph 26.
In the absence of any material directed to the applicant’s knowledge concerning prospective conduct in the event of a successful appeal I consider it is appropriate to proceed on the basis that her case was prosecuted at trial in the belief that the law was as reflected by the single judge decisions in both Forest v Queensland Health (supra) and Catholic Education Office v Clarke (supra). That is, that evidence concerning the section 6 requirement in respect of the comparator group was available to be drawn by inference rather than by direct evidence. In that respect I accept as relevant the submissions made by the applicant that the respondent did not either:
a)raise this matter in its defence;
b)raise this matter in correspondence preceding the trial; and/or
c)seek summary dismissal of the applicant’s claim at the outset in view of the applicant’s failure in compliance with the court’s directions issued preceding the trial to adduce evidence in support of that matter.
The applicant concedes by her Counsel in written submissions dated
6 May 2009 that the applicant proceeded to trial in the knowledge of the appeal. To that end her decision to proceed with the trial did reflect some assumption of risk. At least risk in respect of those matters the subject of appeal of which the comparator group evidence was an issue. In my view proceeding to trial in reliance upon an authority that was under appeal did constitute a significant assumption of risk on the part of the applicant. That risk could have been avoided or militated at least by an application for an adjournment. Such an application would most likely have been favourably considered particularly given the case, the nature of the application, the advanced state of the appeal in State of Queensland (Queensland Health) v Che Forest (supra), the unsettled state of the law and finally the absence of any evident prejudice. Overall I do not consider this basis to be particularly persuasive.
Pro Bono Counsel
The second basis advanced by the applicant’s Counsel against the usual order was that the applicant’s legal representation was provided on a pro bono basis. The applicant’s submissions relied principally on the decision of the Full Court in Ruddock v Vadarlis (No.2) (supra). Factually that was a very different case to the case now before me. That was a case where the respondent, the Victorian Council for Civil Liberties and a solicitor commenced proceedings seeking orders in the nature of habeas corpus and mandamus to compel the release and delivery into Australia of 433 non citizens then said to be detained by the Commonwealth on the Norwegian vessel The MV Tampa off the coast of Christmas island. None of the 433 non citizens were party to those proceedings and those proceedings could truly be described as public interest proceedings.
In my view the remarks of the court concerning the award of costs have to be read in light of the particular discretionary factors then before the court. They are significantly different to those in the proceeding before me which although strictly a public interest proceeding was also a proceeding prosecuted with a view to individual gain such as is demonstrated by the claim for compensation advanced in the application and which was subsequently assessed as having a quantum of $7,500. Although in Ruddockv Vadarlis (No.2) (supra) the Full Court noted the fact that the legal representation for the respondents were provided free of charge as a relevant discretionary consideration in determining the matter of costs it is apparent from the discussion particularly of the majority (Black CJ and French J as His Honour then was) that the focus of the judgment was upon the significance public interest proceedings may have upon the discretion applied to the usual principles governing the award of costs. It follows this factor of itself was not determinative although it is a matter which I accept should be weighed in the overall mix of matters relevant to be considered in the exercise of the discretion.
Rule against discouraging meritorious claims
The third point raised by the applicant was that applicants (such as her) should not be discouraged from bringing meritorious claims for fear of adverse costs orders. In particular the applicant relied upon the observations of McInnes FM in Wiggins v Department of Defence-Navy (No.3) [2006] FMCA 970 where His Honour observed:
“[55]. Some caution needs to be exercised by the court in analysing the nature of the claim after the judgment has been delivered. Clearly with hindsight, and perhaps even at the end of the hearing, the applicant and/or her advisers reviewed their assessment of the likelihood of success of the SDA claim;… That does not however mean that the court should automatically presume that at all material times the SDA claim was unmeritorious. Ultimately the SDA claim has simply failed, and failed as a result of the court's assessment of the relevant evidence based upon the appropriate standard of proof.”
While His Honour’s observations reflect an approach that would follow a determination on the merits that is not the case here. In this instance the applicant failed to adduce any evidence directed to an essential element of her claim which she was required to establish in order to succeed. Her claim did not fail as a result of the Court’s assessment of competing evidence. But for that matter she could have made out her claim under section 6. Likewise the section 9 claim failed because of inadequacy of evidence. The section 9 claim failed because I was not satisfied the evidence demonstrated any relationship between the training and the skills acquired from the training and the alleviation of the effect of the applicant’s disability, a matter required to be demonstrated by evidence in order for an action to succeed under section 9. This claim also failed because of gaps in the evidence not because of any assessment of competing evidence.
In my view it follows that this case does not present as one such as was before His Honour in Wiggins v Department of Defence-Navy (No 3) (supra) where the substantive determination fell to be decided on the merits of competing facts. This case largely fell to be determined by the applicant’s omission to call necessary evidence to fill the evidentiary gaps in her case. Her claim may well have been meritorious but because of those gaps that matter could never be resolved. In my view the award of costs in this case would not be seen to discourage the prosecution of a meritorious claim. This is particularly so in circumstances where the applicant was afforded an opportunity to apply to reopen.
Respondent’s conduct in the proceeding
Next the applicant contended that the costs of the proceeding were increased because of the need to determine issues upon which the respondent failed and because the respondent’s conduct unnecessarily prolonged the proceedings.
It is well settled that:
“*Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.
*A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties’ costs of them. In this sense “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.”[2]
[2] Ruddock v Vadarlis (No.2) (supra) at 235 – para [11] following Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48, 136; approved by the Full Court in Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211 at 222.
The applicant says the respondent did not succeed in respect of the following issues which she contends constituted the principal issues in the proceeding they being:
a)The application made to stay the proceedings pending determination of whether or not there was a conflict pursuant to section 109 of the Commonwealth Constitution Act;
b)Whether or not the applicant suffered the disability of aspergers syndrome;
c)Whether or not there was indirect discrimination in that the requirement was reasonable having regard to the circumstances of her case and whether or not the applicant could or was unable to comply with the requirement;
d)Whether or not the respondent would suffer unreasonable hardship;
e)Whether or not the respondent’s conduct related to good, services and facilities.
Of the four hearing days approximately two were consumed in aggregate in the disposal of these issues. Of those two days at least one and a quarter were exhausted in the determination of the legal issues relevant to the preliminary point. Each of the remaining matters, save for goods and services, were matters determined upon questions of fact and law. The applicant succeeded in the prosecution of that part of her claim relevant to each of those issues. Of those issues only the preliminary point was a discrete issue capable of being examined severally in the proceeding and the applicant’s success in respect of that matter ought be considered in the overall question of costs. Although the applicant may have succeeded on the remaining issues they fell within the ambit of the claim.
Consistent with that approach the applicant also sought a concession in respect of delay caused by unsuccessful attempts by the respondent to admit evidence of previous body corporate disputes made to and adjudicated by the applicant’s husband. Although that matter may fall within the definition of issue as referred to by their Honours in Ruddock v Vadarlis (No.2) (supra) in the overall context of the application it occupied only a small part of a day which otherwise was consumed in the addressing of relevant evidence. Given that purported waste occurred on the last of the four consecutive days of hearing it could not be contended that the respondent’s loss on that point either added to or detracted from the costs of that day. That matter did not add to the costs incurred in the applicant’s prosecution of the application because proceedings concluded on the fourth day subject to submissions which neither party wished to advance on that occasion.
Offer to settle
In its submissions the respondent contended that in the context of an application for orders for indemnity costs that exchanges of offers to settle be considered. Although I will address this matter in consideration of that issue the matter of offers is also relevant to the usual order. This Court’s rules make no provision for offers. Accordingly given the insufficiency of the Federal Magistrates Court Rules I consider it appropriate to apply the Federal Court Rules – FMCR 1.05(2).
Relevantly Federal Court Rules Order 23 rule 11(6) provides:
“(6) If:
(a) an offer is made by a respondent and not accepted by the applicant; and
(b) the respondent obtains an order or judgment on the claim to which the offer relates as favourable to the respondent, or more favourable to the respondent, than the terms of the offer;
then, unless the Court otherwise orders:
(c) the respondent is entitled to an order that the applicant pay the respondent’s costs in respect of the claim incurred up to 11 am on the day after the day the offer was made, taxed on a party and party basis; and
(d) the respondent is entitled to an order that the applicant pay the respondent’s costs in respect of the claim incurred after that time, taxed on an indemnity basis.”
As is noted in the general commentary of CCH, Australian High Court and Federal Court Practice, Volume 2, at 24-720, r.11 reflects the principles laid down in the Calderbank line of cases and also puts into place a specific procedure for litigants to follow in order to attract the possible cost benefits flowing from Order 23 after the making of settlement offers.
Given the Rules impact on the general rule it is appropriate to consider the offers in the context of the respondent’s claim for costs and before considering application for indemnity costs.
The parties each exchanged offers at various points through the course of the proceedings. No offer made by the applicant could be assessed as having been bettered by the final orders made in the proceeding. Her offers do not advance her position with respect to costs. The respondent made three offers. The first efficacious offer was made on 27 June 2007 which principally constituted an offer by the respondent to purchase the applicant’s property. In the present context the offer is non-compliant with Order 23 in that the offer was oppressive. Implied in the offer was a solution which required the applicant together with her husband to agree to sell their principal place of residence for a fixed sum. The offer consisted of an “ultimate” solution in the absence of consideration as to whether other less drastic measures could resolve the applicant’s difficulties if she could not prove her case. Indeed given the ill will that clearly existed between the applicant’s husband and the Body Corporate it is open to infer the offer may have been motivated by an ulterior object. Finally the offer involved consideration of the price offered for the house. No satisfactory valuation evidence was placed before the Court to give the offer any meaning. I do not consider it was an efficacious offer: United Salvage Pty Ltd v Louis Dreyfus Armateurs SNC [2006] FCA 1611 (23 November 2006).
On 27 June 2007 the respondent made a second offer. Materially it provided:
“We confirm that we have been instructed to make the following without prejudice, save as to costs, offer to resolve the application:
1. That the applicant be permitted to keep her dog, Punta (the dog) within the boundaries of Lot 73, within the Kookaburra Park Eco-Village; and
2. The dog not be permitted on the common property of Kookaburra Park; and
3. The dog be transported through Kookaburra Park in the motor vehicle of the applicant; and
4. The applicant discontinue her proceedings pursuant to the Disability Discrimination Act 1992 (the DDA) against Kookaburra Park; and
5. Kookaburra Park will discontinue all proceedings in relation to the applicants keeping of a dog at Kookaburra Park; and
6. Each party bear their own costs.”
However the offer did not comply with the formal requirements provided for by Rule 3. The offer took the form of a Calderbank offer (given its notation as a letter without prejudice save as to costs). In my view that factor ought not diminish its significance and it ought to be considered in the exercise of the court’s discretion on costs as though it were an offer made in accordance with the Rules consistent with the view expressed by Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425. I note that that decision has been rejected by others – see MGICA (1992) Ltd v Kenny & Good Pty Ltd (No 4) (1996) 140 ALR 313 and John S Hayes& Associates Pty Ltd v Kimberley- Clarke Australia Pty Ltd (1994) 52 FCR 201.
Lindgren J in MGICA (1992) Ltd v Kenny & Good Pty Ltd (No.4) (supra) did not accept Rolfe J’s view expressed in Multicon Engineering Pty Ltd v Federal Airports Corporation (supra) that the unreasonableness in refusing to accept an offer was the failure by the offeree to accept the offer, which unreasonableness was demonstrated, prima facie, by the ultimate result. Lindgren J preferred the views expressed by Courts in John S Hayes & Associates Pty Ltd v Kimberley- Clarke Australia Pty Ltd (supra) and Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, Federal Court of Australia, Sheppard J, 7 February 1996).
In John S Hayes & Associates Pty Ltd v Kimberley- Clarke Australia Pty Ltd (supra) there was a significant factual contest. In that context Lindgren J did not consider it was unreasonable to prosecute the action to trial even though the plaintiff was unsuccessful. Likewise in Sanko Steamship Co Ltd v Sumitomo Australia Ltd (supra) the proceeding was one involving complex issues of fact and law. Ultimately one point proceeded to the High Court for determination. In respect of that decision Lindgren J agreed that it was not appropriate to apply Rolfe J’s “prima facie presumption approach”.
I do not accept that in this case at the time of the second offer the applicant’s claim was hopeless. It was only rendered hopeless following the decision on appeal in State of Queensland (Queensland Health) v Che Forest (supra) and the applicant’s conduct following that decision. Only after June 2008 could the applicant have been aware of and made decisions flowing from the Full Court’s judgment. That was well after the trial.
Before then there were significant factual issues alive between the parties. While I expect the parties ought to have been aware of the first instance decision of Forrest v Queensland Health (supra) at the time of the offer I do not expect that they would have had any knowledge of the appeal. On the strength of the law at the time of the offer the applicant was not unreasonable in prosecuting the application for, as events transpired, she could have succeeded, at least in respect of the indirect disability claim, but for the Full Court’s view on comparative group evidence.
It follows in my view that this case too is distinguishable from the “prima facie presumption” approach suggested by Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (supra).
Notwithstanding that the respondent’s offer of 13 August 2007 proposed some limited relief to the applicant and the proposal appeared as a genuine compromise especially given the broad discretionary powers available to the Court in respect of relief under Human Rights and Equal Opportunity Commission Act 1986 (Cth) section 46PO(4).
The respondent’s outcome of the proceeding on the claim to which the offer related was clearly more favourable to the respondent than its offer. That is, the application was dismissed. Accordingly the respondent was within its rights in excluding the dog from the Scheme property (including the applicant’s home). In that context the offer constituted a significant concession. From the decision it now follows that the respondent is not required to afford the applicant any indulgences as contemplated in its offer of 13 August 2007. It follows that “unless the Court otherwise orders” (r.11(1)) the usual regime provided for in r.11(c) ought prevail.
Discretionary considerations relevant to the usual costs orders in the present case
It follows there are a number of considerations relevant to the question of whether costs should be awarded against the unsuccessful applicant. Considerations particular to the exercise of the discretion are:
a)The respondent was successful in defending the applicant’s application;
b)Substantial costs have been incurred in the conduct of the proceedings. Proceedings extended over six days. For four of the six days the proceedings were conducted at Bundaberg involving the additional expense of travel and accommodation for the respondent’s Solicitor and Counsel;
c)The applicant proceeded with her application in full knowledge that a principal authority being relied upon was subject to appeal;
d)The applicant proceeded to trial despite the respondent’s offer to settle on terms that were more favourable to the applicant than the result.
The preceding factors were in favour of an order in accordance with the “usual rule”. There are however particular features in this case that together point to partial militation of the usual orders. The applicant succeeded in:
a)Resisting an application brought by the respondent that if it were to prosecute the points of claim the application would be dismissed or alternatively the application ought be adjourned because it was alleged the applicant’s claim involved an impairment of a law of the State of Queensland by a law of the Commonwealth, the hearing in disposition of that application took approximately a day and a half in hearing time;
b)The applicant was put to proof in respect of various elements of its claim in respect of which it was wholly successful, those parts being particularly that she had a disability being aspergers syndrome; she suffered indirect discrimination in that the s.6(b) requirement was reasonable having regard to the circumstances of the case and that pursuant to s.6(c) it was a requirement which she was unable to comply with.
c)The respondent could not demonstrate unreasonable hardship.
Those matters collectively required between them approximately two days of hearing. Of that one and a quarter days were allocated to determination of the preliminary point.
It follows in my view that the usual order ought be abrogated in this instance. I consider that having regard to the above considerations I consider the respondent ought have its costs but that those costs be limited to one half of the costs it incurred in the proceedings.
In reaching that view I am mindful that:
a)A s.109 application was brought by the respondent on the first day of trial. The respondent’s Counsel informed the Court that he had only considered the matter the day before and the applicant’s Counsel was only advised of the proposed interlocutory application a short time prior to trial. This is a matter that could have been attended to discretely prior to trial.
b)The respondent denied that the applicant suffered from aspergers syndrome and did not admit that at any time she had suffered from severe depression. It did concede that the applicant suffered from a generalised anxiety disorder and a panic disorder with agoraphobia which condition it admitted as a disability as that term was defined in section 4 of the Act. There was a reasonable basis for the respondent’s attitude to the applicant’s allegations concerning those matters and because of the report of Dr Warlow. Although the respondent was unsuccessful in the result I do not consider its attitude to those allegations nor it putting the applicant to proof on those matters was unreasonable.
c)Likewise the question of whether or not the requirement was reasonable having regard to the circumstances of the case was largely a matter of fact. The applicant bore the onus of proof although she was successful on this issue in the result the respondent’s conduct in putting the applicant to proof was not unreasonable. Insofar as the requirement for the applicant to demonstrate that pursuant to 6(c) she was unable to comply, this matter of itself did not consume any significant time in the proceeding and the respondent’s requirement to put the applicant to proof was in my view not unreasonable.
d)The question of unjustifiable hardship also was a matter to be determined upon the facts. I do not consider the respondent’s conduct in asserting that the condition did impose an unreasonable hardship was of itself unreasonable notwithstanding it failed on this issue in the hearing.
e)The matter of goods, services and facilities was one in the nature of legal argument and did not of itself unduly extend or prolong the proceeding. The matter was open to be debated on the facts notwithstanding that in the result the respondent was unsuccessful. I do not consider the respondent’s approach to this point to have been unreasonable.
Indemnity Costs
The respondent contends it ought to be awarded its costs on an indemnity basis. Whilst I have already determined there ought to be a departure from the usual order insofar as it concerns the award of costs, if they be limited to standard costs a further issue arises as to whether they ought to be indemnity costs.
The principal factors relied upon by the respondent to demonstrate special or unusual circumstances warranting an order for indemnity costs are:
a)Imprudently refusing an offer to settle;
b)Acting in a high-handed manner;
c)Proceeding in circumstances where the applicant ought to have known she had poor prospects of success; and/or
d)When the parties’ conduct caused loss of time for the Court.
The respondent contended further that the discretionary categories are not closed and other elements of litigious misconduct may be relevant.
Offer
I have earlier addressed the offer to settle. The respondent’s offer was clearly reasonable. This was particularly so given the applicant ought to have appreciated the risk to her case by a successful appeal in the Forest decision, as proved to be the case. The applicant had actual and constructive knowledge of the body corporate by-laws and its views concerning domestic animals. Given the respondent’s hardened attitude toward her keeping of the dog Punta on her premises she ought to have appreciated the concessions afforded by the offer. In my view her rejection of it was wholly unreasonable.
High-handed Conduct
The respondent contends another discretionary factor is where a party acts in a high-handed manner; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401; Australian Guarantee Corporation Ltd v De Jager [1984] VR 483 at 502.
It is apparent from those authorities that the conduct referred to was the conduct of the losing party in the matter of litigation. In this case I do not accept that the applicant’s pursuit of her claim in the proceeding could be described as having been conducted in a “high-handed manner”. While there may be some basis for criticism of the applicant in that she proceeded to ignore the body corporate by-laws whilst pursuing her rights that was not a factor that bore upon her pursuit of the litigation. It is the pursuit of the litigation in a high-handed manner as was illustrated in each of those authorities that enlivens that discretionary factor in that context.
No prospects of success
The respondent contends that the applicant had no prospects of success. There is some merit in this argument. The application was in two parts. The applicant sought declarations in respect of indirect disability, section 6, and also in respect of direct disability (assistance animals), section 9. The application in respect of indirect disability failed for want of evidence. That deficiency formally arose following the Full Court’s decision in State of Queensland (Queensland Health) v Che Forest (supra). That occurred after the trial. I do not accept that the indirect disability claim had no reasonable prospects. Save for the omission of evidence concerning the comparator group, the application appeared to be well founded. However that part of the application concerning direct disability (assistance animal) clearly had no prospects. That part of the application failed in limine because of the applicant’s failure to adduce evidence to demonstrate that the dog had been “trained to assist” the applicant “to alleviate the effect of (her) disability”. Evidence was adduced in respect of that matter. However it ought to have been apparent to the applicant that the evidence for that purpose was inadequate and to that end the application was doomed to fail. The proceeding proceeded to trial on that issue and it was ultimately unsuccessful. I consider that that matter is relevant to the exercise of the discretion.
Conduct causing loss of time
The respondent contends that the applicant’s conduct occasioned loss of time. Respectfully I do not agree. Matters advanced by the application during the course of the trial were properly open to it to be agitated. In my view the applicant did not improperly prolong the proceedings by her conduct.
In addition the respondent advances as a further discretionary ground an allegation that the applicant is a vexatious litigant who litigated against the respondent on two previous occasions and that the applicant and her husband have a vendetta against the respondent and that proceedings constituted a continuation of that vendetta.
As I have earlier indicated I have considered the overall merits of the proceeding and the issues within it on the question of costs. I do not consider the evidence of the applicant’s attitude to the respondent in respect of other matters is helpful in this instance.
In submissions made on behalf of the applicant it was contended not only must the offer to settle be genuine but there must be some element of unreasonableness in the offeree’s refusal to accept the offer.[3]
[3] Jacomb v Australian Municipal, Administrative, Clerical and Services Union [2004] FCA 1600; Fresh Express Australia Pty Ltd v Larridren Pty Ltd [2004] FCA 1640; Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602.
For reasons I have addressed earlier I do not regard the offer made on 27 June 2007 as an appropriate form of offer. That offer was proceeded by an offer of compromise of 22 January 2006 was an informed offer. It was not one that complied with O.23. Additionally it was not in the form of a Calderbank offer. Whilst its refusal constitutes some evidence of unreasonableness I do not think its refusal should attract the same strictness as an offer made in circumstances where the offeree is comprehensively informed of the risk faced by its unreasonable rejection.
However the offer of 13 August 2007 was clearly a reasonable and efficacious offer. The applicant contends it was not reasonable because it did not permit the applicant to take her dog on any part of common property of the respondent. It follows that the applicant would have been denied the opportunity to use the respondent’s services and facilities. For instance the applicant had been unable to attend the post box or noticeboard or attend body corporate committee meetings whilst she was accompanied by the dog.
Whilst that may have been the case it ignores the fact that the applicant lived on an acreage style allotment in a semi rural environment. It was apparent from a view that there were significant grounds included within the curtilage of her residence for the purpose of exercising. There was no evidence to suggest that she could not be accompanied by others including her children or spouse for the purpose of accessing common property including attending the post box and body corporate committee meetings if she chose to do so.
In my view on balance, the applicant should pay the respondent’s costs on an indemnity basis from 27 June 2007.
Event based scale of costs
I have determined that in this case it is appropriate that the applicant pay half the respondent’s costs of and incidental to the proceeding, including reserved costs and that such costs be paid on an indemnity basis. The applicant submits that if costs are to be awarded then they ought be awarded on the event based scale of costs. The event based scale of costs is not apposite to an award of indemnity costs. It follows in my view that an award on that basis cannot be made.
Time for payment of costs
Rule 21.02(2)(d) of the FMC Rules allows the Court to set a time for payment of costs.
The award of costs in this proceeding will not be insignificant. It is obvious having regard to the financial circumstances of each of the applicant and her husband that they do not have the means to pay such costs except by recourse to their principal asset being their interest in the house property in Kookaburra Park. In the circumstances it would be appropriate to allow the applicants a reasonable time following the assessment of costs to enable them to realise the property to discharge that liability. Having regard to the timeframe that may be involved in marketing and achieving completion of a contract of sale a period of ninety days as requested by the applicant appears reasonable.
Orders
That the applicant pay half the respondent’s costs of and incidental to the application to be assessed on an indemnity basis on and from 11 July 2007 but otherwise on the standard basis.
That the applicant pay the respondent’s costs as assessed within ninety days of the issue of certificate of taxation pursuant to Order 62 rule 45.
I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: B. Schmidt
Date: 5 August 2009
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