Piper v Choice Property Group Pty Ltd - [2005] FMCA 87

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PIPER v CHOICE PROPERTY GROUP PTY LTD

[2005] FMCA 87

PRACTICE AND PROCEDURE – Costs – human rights application – summary dismissal – wrong company named as Respondent/Employer – indemnity/solicitor client costs ordered – preference to fix costs rather than method of fixing costs – certificate granted pursuant to the Federal Proceedings (Costs) Act 1981.

Federal Proceedings (Costs) Act 1981, s.10

Ball v Morgan& Anor [2001] FMCA 127
Matherson v Peninsula Health (No2) 2004 FCA 594 (11 May 2004)
Murphy v Loper & Anor [2002] FMCA 310
Bru Net Pty Ltd v Murphy (2003) FCA 244 (11 March 2003)

Applicant:

KRISTINA PIPER

Respondent:

CHOICE PROPERTY GROUP PTY LTD

File No:

ADG 228 of 2002

Delivered on:

18 January 2005

Delivered at:

Adelaide

Hearing Date:

18 January 2005

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr A. Weinmann

Solicitors for the Applicant:

Lieschke & Weatherill

Counsel for the Respondent:

Mr I. Milsom

Solicitors for the Respondent:

Moloney & Partners

ORDERS

The Applicant pay the Respondent's costs fixed in the sum of $3500.
A certificate be granted pursuant to s.10 of the Federal Court Proceedings (Costs) Act 1981 to both parties of the costs of and incidental to the rehearing.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
ADELAIDE

ADG 228 of 2002

KRISTINA PIPER

Applicant

and

CHOICE PROPERTY GROUP PTY LTD

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is an application which had been filed by Kristina Piper (the Applicant) on 10 September 2002 against Choice Property Group Pty Ltd (the Respondent). When the application was originally filed, it was due to be heard by the court on 21 October 2002. As a result of the illness of the presiding Federal Magistrate who ultimately made orders in this matter and reserved a question of costs, the Chief Federal Magistrate has directed that I rehear the matter.
In the course of arranging a rehearing, parties have been notified that they may attend this day and provide further submissions over and above those submissions which were already presented to the court on the issue of costs, to which I shall refer presently. Both parties have appeared this day represented and have provided some further material in relation to the issue of costs. It is perhaps relevant to note that when the matter came before the court on 21 October 2002, certain orders were made by the court in relation to the filing and serving of a response and affidavits which the respondent intended to rely upon. The matter was then further listed for hearing on 22 November 2002.
It is appropriate to note that in brief terms the application before this court was an application arising out of a notice of termination issued by the Human Rights and Equal Opportunity Commission (the Commission) on 13 August 2002. That termination notice arose from a complaint by the applicant which in brief terms was a complaint that the applicant had been dismissed from employment as a result of her pregnancy. The termination notice simply indicates that the complaint was terminated as there was no reasonable prospect of the matter being settled through conciliation.
I note attachment A to the termination notice refers to the Commission being satisfied that there was no prospect of the matter being settled but further notes that the respondent advised the Commission that they would not attend a conciliation conference to resolve the complaint. In any event, after termination of the complaint the matter was then the subject of the application to which I have already referred. After it was dealt with by the court on 21 October 2002, as I indicated earlier the matter was then listed before the court on 22 November 2002.
It is relevant to note that correspondence tendered this day from the respondent's solicitors to the applicant's solicitors, dated 17 October 2002, which I accept was received by facsimile transmission by the applicant's solicitors late on the afternoon of 18 October 2002, refers to instructions that the respondent does not trade as ‘Choice Residential Management’ and refers to an exhibit of the applicant's affidavit material filed in the court, that is, the applicant's affidavit relied upon in these proceedings.
It is not necessary for me to refer in detail to the material, save and except that it is clear from the attachment to the affidavit, that is, KP5 - that the assertion would appear to be valid. In any event, the letter goes on to state:
“We are instructed to put your client on notice that, unless the proceedings are discontinued forthwith, an application for costs will be made against your client.”
It is clear that that letter, having been received late on 18 October 2002, whilst before those advising the applicant prior to the hearing which took place on 21 October 2002 had not been received in time for it to be given due and proper consideration. Nevertheless, the matter then proceeded as listed on 22 November 2002 and an application then before the court by the respondent was that the matter be dismissed. Indeed, it is noted in the response the respondent sought then that there be orders made on an indemnity basis in relation to costs.
At what can only be described as the eleventh hour of the application it would appear that when the matter came before her Honour Mead FM on 22 November 2002 the application filed 10 September was summarily dismissed. Although it does not appear from the order, it would appear that that order at least was an order made by way of a concession by the Applicant and indeed may properly be regarded as effectively a consent order as there did not appear to be any substantive issue then agitated but rather a concession made, sensibly in the circumstances, by the applicant to not resist an order that the application be summarily dismissed.
On 22 November 2002 the argument as to costs was adjourned to 13 December 2002, with other orders made in relation to the exchange of lists of authorities.
The matter came back before the court on 13 December 2002. Both parties were represented and the issue of costs agitated in full. Both parties referred to a series of authorities to which I do not need to refer in this judgment; but essentially, at that time there was some issue as to whether costs would follow the event in Federal Magistrates Court proceedings relating to human rights claims.
I should mention in passing that that issue no longer appears to be an issue in this court, following the decision of this court in Ball v Morgan& Anor [2001] FMCA 127 applied by the Federal Court of Australia in Matherson v Peninsula Health (No2) 2004 FCA 594 (11 May 2004) Heerey J.
What is in issue, however, is whether or not this court should make an order for indemnity or party-party costs. At the commencement of this rehearing today, I invited the parties to consider the option of the court simply fixing the costs rather than making a general order for indemnity costs should the respondent's submission succeed. I brought this matter to the attention of the parties deliberately so that some assessment could be made of the practical reality of the costs difference sought by the respondent, having regard to the fact that these proceedings, which came to an end effectively by orders of the court on 22 November 2002, did not appear to involve a great deal of expense in terms of the documents filed. It is noted both parties have filed their respective application and response, the applicant filing an information sheet and an affidavit in support and likewise the respondent filing an affidavit in support of the response.
I was advised that the amount sought for indemnity costs by the respondent totalled $3500. I note in passing that if the court were to apply the party-party scale of costs in schedule 1 of the Federal Magistrates Court Rules, then the approximate total of costs for a stage 2 event that is, an interim or summary hearing as a discrete event would total $2377, hence the difference in the costs is an amount of approximately $1200.
In the circumstances it seemed to me that one option might be to exercise a discretion the court undoubtedly has under rule 21.02(2)(a) of the Federal Magistrates Court Rules - that is, to set the amount of costs rather than to exercise a discretion the court has to set the method by which the costs are to be calculated which, in this case, is indemnity costs method proposed by the respondent.
The difficulty with setting the method of assessment of the costs is that it may very well lead to a taxation of costs which, under rule 21.11 of the Rules may result in the matter being referred to a registrar for taxation with the scale of costs to be applied being the Federal Court Rules scale of costs. It seemed to me that with a difference of the amount that I have referred to, it would be preferable and in the interests of the parties that if I were minded to do so to fix costs either on a party-party basis or on what might be described as an indemnity basis.
For all practical purposes in matters that come before this court where a party asks for an indemnity costs order, it is my view that the court should at least consider the desirability of fixing costs which take into account the underlying principles which are established in relation to the award of indemnity costs. In simple terms, the award of indemnity costs in matters of this kind is designed to achieve an outcome whereby an unmeritorious claim which is dismissed and/or discontinued by an applicant against a respondent leaves the respondent in the position where the respondent is not out of pocket for expenses incurred which could properly be expenses regarded as those of and incidental to the proceedings. That objective, whether it be called an indemnity costs order or whether it be the result of fixing costs remains an objective which can only be achieved if, in the exercise of the court's discretion, it is considered desirable and appropriate that an order be made over and above an order for party-party costs.
Essentially in this application the respondent's position has remained unaltered. It has claimed throughout, both in correspondence and in submissions on the issue of costs before the court differently constituted on 13 December 2002, that the applicant's application was always misconceived as it had named incorrectly the respondent as her employer.
The applicant for her part has argued that the position was not always that clear, that there had been a change in the identity of her employer during the course of employment and that otherwise the pursuit of the application, at least up to 22 November 2002, was not a matter which could be claimed, in the circumstances, to have been pursued for ulterior motives or indeed for a malicious purpose or in circumstances where the proceeding could be properly regarded as an abuse of process. It may, it is submitted as I understand it, be more properly regarded perhaps as an error, although an error that was understandable having regard to the history and chronology of events.
In my view, having considered the material, it is clear to me that at all material times the respondent could not be the appropriate party for the applicant to pursue in this court. The decision about whether or not to pursue the respondent in this court is one which perhaps could and should have been made prior to the commencement of the application though I accept that in the circumstances there may have been a degree of doubt and uncertainty in the minds of the applicant and those advising her.
Nevertheless, the respondent is the one which has now been drawn into proceedings which ultimately were the subject of summary dismissal virtually by consent on 22 November 2002 and it is the respondent which has been incorrectly named though at no stage was it the employer of the applicant.
In the exercise of the court's discretion on costs, it is clear to me that, although costs follow the event where there is an unsuccessful claim, the court has the further discretion to consider in the circumstances of this case whether or not it is appropriate to award costs greater than the party‑party costs which are argued for the applicant in the case to be appropriate compensation to the respondent.
In my view, there is a clear error in this case and there is an error of a kind which renders fatal the application against the respondent. It is an error made without there being any fault on the part of the respondent. In the circumstances, in the exercise of the court's discretion, it is my view that the respondent is accordingly entitled to costs of an amount higher than the party-party costs which would otherwise be awarded following an unsuccessful claim.
As to the amount of those costs, it is my view in this case that the court's exercise of discretion should include reference to the amount now claimed of $3500 as an appropriate amount to fix costs which it is claimed are effectively the costs which would result in an outcome that the respondent should not be out of pocket for the costs and expenses incurred in this application. I am prepared to accept that the sum of $3500 should be fixed in relation to costs for the reasons given.
Whilst the absence of the respondent from the conciliation process, or at least the unwillingness of the respondent to participate, may otherwise have been a factor in matters of this kind, I do not regard it as a relevant factor in this application. Likewise it seems to me that where a respondent has prepared a response and affidavit and albeit forwarded correspondence in this case on 18 October 2002, just a short time prior to the hearing date, it seems to me that, nevertheless this respondent has incurred costs over and above the costs which might otherwise have been incurred had the matter been the subject of either a notice of discontinuance or consent orders dismissing the application at an earlier stage. It would be wrong in those circumstances to take into account in favour of the applicant the fact that the proceedings have been terminated at an early stage.
I note reference was made by both parties to the decision of the Federal Magistrates Court in the matter of Murphy v Loper & Anor [2002] FMCA 310, which was the subject of an appeal in the matter of Bru Net Pty Ltd v Murphy (2003) FCA 244 (11 March 2003). I note further that one of the reasons advanced for this decision on indemnity costs being reserved here was the outcome of that appeal. Having considered the appeal and the decision of his Honour Selway J in the Federal Court of Australia in that matter of Bru Net Pty Ltd, it is clear to me that his Honour in dismissing the appeal has found that there was no error of principle in the court referring to the matter of saving some expense, when the matter was terminated at an early stage.
I do accept, however, that in the present case it would be wrong to characterise the current application as an abuse of process, but there was clearly an error, a fundamental error, leading to a fatal flaw in the application and that fatal flaw and error was an error entirely within the control and ambit of the applicant. The proceedings were commenced at the behest of the applicant through no fault of the respondent.
In those circumstances it is clear to me that in this case the proceedings from the outset were destined to fail. For those reasons, it is appropriate that I make an order that the applicant pay the respondent's costs fixed in the sum of $3,500.
I shall further indicate that as a result of the illness of the presiding Federal Magistrate, I am satisfied that the reconvening of the hearing this day has necessarily resulted in both parties incurring additional costs of an incidental to the rehearing. Those costs of and incidental to the rehearing in my view should properly be regarded as costs and expenses which, in the exercise of my discretion I am prepared to certify as being appropriate to be paid pursuant to s.10 of the Federal Proceedings (Costs) Act 1981. I shall provide a certificate accordingly and note the certificate should cover the costs of and incidental to the rehearing, given that both parties in the application sensibly and appropriate have adopted the earlier submissions which had been made to the court on 13 December 2002 and were prepared to permit me to rely upon those submissions as transcribed and to otherwise rely upon the material previously filed. In the circumstances the certificate, in my view, should cover the additional costs incurred by both parties as a result of the rehearing and I shall grant a certificate accordingly.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 18 January 2005