Qantas Airways Ltd v Lustig (No 2)

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FEDERAL COURT OF AUSTRALIA

Qantas Airways Limited v Lustig (No 2) [2015] FCA 782

Citation: Qantas Airways Limited v Lustig (No 2) [2015] FCA 782
Parties: QANTAS AIRWAYS LIMITED (ACN 009 661 901) v PETER LUSTIG, GIUSEPPE DE SIMONE and VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
File number: NSD 1542 of 2013
Judge: PERRY J
Date of judgment: 31 July 2015
Catchwords: COSTS – where applicant succeeded in challenge to jurisdiction of state tribunal – general principle that successful litigant is awarded costs in their favour applies – relevance of monetary limit on jurisdiction in state tribunal to costs in Federal Court proceeding – whether applicant discharged obligations to take genuine steps to resolve the dispute under the Civil Dispute Resolution Act 2011 (Cth)
Legislation: Civil Aviation (Carriers’ Liability) Act 1959 (Cth)
Civil Dispute Resolution Act 2011 (Cth) ss 4, 6, 7, 11, 12, 15
Civil Procedure Act 2010 (Vic) s 4(3)
Federal Court of Australia Act 1976 (Cth) ss 37M, 37N
Judiciary Act 1903 (Cth) s 78B
Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 77, 83, 84, 88, 89, cl 4I(1) of Sch 1
Cases cited: Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107
Gray v Richards (No 2) [2014] HCA 47; (2014) 89 ALJR 113
Qantas Airways Limited v Lustig [2015] FCA 253; (2015) 228 FCR 148
Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229
Scott v Secretary, Department of Social Security (No 2) [2000] FCA 1450
Date of hearing: Decided on the papers
Date of last submissions: 30 June 2015
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 27
Counsel for the Applicant: Mr T Brennan
Solicitor for the Applicant: Norton White
Counsel for the First Respondent: The First Respondent appeared in person
Counsel for the Second Respondent: The Second Respondent appeared in person
Counsel for the Third Respondent: The Third Respondent entered a submitting appearance, save as to costs
Counsel for the Intervener: Mr S McLeish SC with Mr G Hill
Solicitor for the Intervener: Victorian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1542 of 2013
BETWEEN:

QANTAS AIRWAYS LIMITED (ACN 009 661 901)
Applicant
AND:

PETER LUSTIG
First Respondent

GIUSEPPE DE SIMONE
Second Respondent

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
Third Respondent

JUDGE:

PERRY J

DATE OF ORDER:

31 JULY 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The first and second respondents are to pay the applicant’s costs as agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1542 of 2013
BETWEEN:

QANTAS AIRWAYS LIMITED (ACN 009 661 901)
Applicant
AND:

PETER LUSTIG
First Respondent

GIUSEPPE DE SIMONE
Second Respondent

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
Third Respondent

JUDGE:

PERRY J

DATE:

31 JULY 2015

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1.               INTRODUCTION

  1. These reasons consider the…

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Details
Case
[2015] FCA 782
Decision Date

CaseChat Overview and Summary

In Qantas Airways Ltd v Lustig (No 2), the Federal Court considered the costs of proceedings brought by Qantas against Peter Lustig and Giuseppe De Simone, who had instituted proceedings against Qantas in the Victorian Civil and Administrative Tribunal (VCAT). Qantas sought a declaration that VCAT lacked jurisdiction over the proceedings, which the Court granted in a prior decision, Lustig (No 1). The Court reserved the question of costs at that time, which it subsequently determined in this decision. The central legal issue was whether Qantas was entitled to its costs as the successful party in the proceedings, considering the unsuccessful arguments made by Lustig and De Simone.

The Court noted that while the question of costs is within its discretion, the general rule is that a successful party is entitled to its costs. Qantas had succeeded in having VCAT's jurisdiction challenged, except for the injunctive relief against Lustig and De Simone, which the Court deemed unnecessary. The Court also considered whether Qantas had taken genuine steps to resolve the dispute, as required by the Civil Dispute Resolution Act 2011 (Cth). The Court found that Qantas had made genuine attempts to negotiate a resolution before seeking the Court's determination of the jurisdictional issue.

The Court concluded that the ordinary rule that the successful party is entitled to its costs should apply. It rejected the arguments by Lustig and De Simone that no order for costs should be made or that Qantas should receive a discounted award of costs. The Court ordered that the first and second respondents, Lustig and De Simone, are to pay Qantas' costs as agreed or assessed.

Orders

Orders of the court

1. The first and second respondents are to pay the applicant’s costs as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons given below, I consider that the ordinary rule that the successful party is entitled to its costs should apply and therefore that the first and second respondents, Peter Lustig and Giuseppe De Simone, should pay Qantas’ costs of the proceeding. I reject the submissions of Messrs Lustig and De Simone that there should be no order as to costs or that Qantas should receive a discounted award of costs. 2. BACKGROUND Messrs Lustig and De Simone appeared unrepresented throughout the proceedings. In Lustig (No 1), I upheld the application by Qantas Airways Limited (Qantas) for a declaration that the Victorian Civil and Administrative Tribunal (VCAT) lacked jurisdiction to entertain proceedings instituted by Messrs Lustig and De Simone. In so holding, I accepted Qantas’ submission that VCAT lacked jurisdiction because Qantas had raised a federal defence to all of the claims which was not colourable, being relevantly a defence under the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (Carriers’ Liability Act). In this regard, my conclusion departed from that reached by VCAT when it dismissed Qantas’ applications for summary dismissal on jurisdictional grounds of the claims by Messrs Lustig and De Simone. Further, contrary to the submissions by Messrs Lustig and De Simone and the Attorney General of Victoria (intervening), I held that VCAT has no power to transfer the proceedings to a court under s 77 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act). I therefore considered it appropriate to issue a writ of prohibition as sought by Qantas directing that VCAT take no further step in the proceedings other than making orders for dismissal of the proceedings. I reserved, however, the question of costs. Submissions on costs were subsequently filed and served by Mr Lustig and Qantas substantially in accordance with the orders made when judgment was delivered. Those orders were varied on 28 April 2015 and again on 12 June 2015 without objection in order to extend the time within which Mr De Simone was to file and serve any submissions on costs, together with any affidavit evidence in support, due to illness and other personal circumstances albeit that no evidence as to those circumstances was filed by Mr De Simone. Ultimately, while Mr De Simone did not file submissions or any affidavit evidence, he sent emails to the Court on 11 and 22 June 2015 explaining his position on costs and setting out his arguments. In those circumstances, the parties were agreeable to the Court treating the emails as Mr De Simone’s submissions on costs. The documents attached to the email dated 22 June 2015 were not however, annexed to any affidavit. As such, no evidence was filed by Mr De Simone in accordance with the orders and I have not had regard to the documents annexed to the email in determining the question of costs, aside from an email from Mr De Simone to the solicitors for Qantas on 22 September 2012 which was in evidence in the substantive proceedings. In that email, among other things, Mr De Simone denied any federal law was involved in the claim, claimed Qantas was estopped from denying that Frequent Flyer points have no monetary value and alleged in the alternative that the VCAT claim was limited to a claim for compensation below $10,000. 3. CONSIDERATION3.1 The discretion to award costs

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

That being so, Qantas advised of the issues that may be in dispute before any proceeding was instituted and these were further developed in the course of the VCAT proceedings. Offers were made by both the first and second respondents after instituting the VCAT proceedings and there is nothing to suggest that they were not given genuine consideration by Qantas. Qantas also made a counter offer to Mr De Simone. Those attempts to resolve the dispute underlying the VCAT proceedings by negotiation having been unsuccessful, no criticism can be made in my view of Qantas then seeking an authoritative determination in the courts of the question of whether VCAT had jurisdiction in the first instance. It must also be borne in mind that if jurisdiction had existed, then the issue of resolving the substantive dispute would have arisen more acutely and the processes enacted by the VCAT Act to facilitate alternative dispute resolution would have been available: see in particular, ss 83-84 (power to require parties to attend a compulsory conference) and ss 88-89 (power to refer a matter to mediation).4. CONCLUSION For these reasons, I consider that the ordinary rule that Qantas should be awarded its costs should apply. I note, however, that whether Qantas ultimately enforces its entitlement to costs against the first and second respondents is a matter for it to determine.

Ratio Decidendi

Legal Principle Established

I reserved, however, the question of costs. Submissions on costs were subsequently filed and served by Mr Lustig and Qantas substantially in accordance with the orders made when judgment was delivered. Those orders were varied on 28 April 2015 and again on 12 June 2015 without objection in order to extend the time within which Mr De Simone was to file and serve any submissions on costs, together with any affidavit evidence in support, due to illness and other personal circumstances albeit that no evidence as to those circumstances was filed by Mr De Simone. Ultimately, while Mr De Simone did not file submissions or any affidavit evidence, he sent emails to the Court on 11 and 22 June 2015 explaining his position on costs and setting out his arguments. In those circumstances, the parties were agreeable to the Court treating the emails as Mr De Simone’s submissions on costs. The documents attached to the email dated 22 June 2015 were not however, annexed to any affidavit. As such, no evidence was filed by Mr De Simone in accordance with the orders and I have not had regard to the documents annexed to the email in determining the question of costs, aside from an email from Mr De Simone to the solicitors for Qantas on 22 September 2012 which was in evidence in the substantive proceedings. In that email, among other things, Mr De Simone denied any federal law was involved in the claim, claimed Qantas was estopped from denying that Frequent Flyer points have no monetary value and alleged in the alternative that the VCAT claim was limited to a claim for compensation below $10,000. 3. CONSIDERATION3.1 The discretion to award costs While the question of costs is a matter for the Court’s discretion, no issue was rightly taken with the general rule that a successful party is entitled to its costs: Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at 234-235 [11] (Black CJ and French J); Scott v Secretary, Department of Social Security (No 2) [2000] FCA 1450 at [2] (Beaumont and French JJ). As the High Court held in Gray v Richards (No 2) [2014] HCA 47; (2014) 89 ALJR 113 at 113-114 [2]; The disposition of costs is within the general discretion of the Court. Ordinarily, that discretion will be exercised so that costs are awarded to the successful party, but other factors may have a significant claim on the discretion of the Court. The disposition which is ultimately to be made in any case where there are competing considerations will reflect a broad evaluative judgment of what justice requires.3.2 The extent to which Qantas was successful Qantas was successful on all grounds save for the injunctive relief sought against Messrs Lustig and De Simone which I considered unnecessary in view of the writ of prohibition issued against VCAT. That was not an issue that occupied much time in written or oral argument and concerned the relief to be granted, rather than the substantive issues. As such, I do not consider that it suggests any need to apportion costs: cf e.g. Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [5]-[6] (Finkelstein and Gordon JJ). 3.3 Matters raised by the first and second respondents