Ryan v Australian College of Mental Health Nurses Incorporated (No 2)
[2019] ACTSC 318
•18 November 2019
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Ryan v Australian College of Mental Health Nurses Incorporated (No 2) |
Citation: | [2019] ACTSC 318 |
Hearing Date: | 24 September 2019 |
DecisionDate: | 18 November 2019 |
Submissions dates: | 17 October 2019 & 24 October 2019 |
Before: | Crowe AJ |
Decision: | See [17] |
Catchwords: | COSTS – Plaintiff seeks alternative costs order – pre-litigation conduct of the defendant in issue – where plaintiff sought an injunction to prevent termination of employment – where application to continue injunction unsuccessful – conduct of the defendant encouraged the plaintiff to pursue her unsuccessful claim – costs of the application be the defendant’s costs in the cause |
Legislation Cited: | Court Procedure Rules 2006 (ACT) r 1721 |
Cases Cited: | Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 Northern Territory v Sangare [2019] HCA 25; 93 ALJR 959 Ryan v Australian College of Mental Health Nurses Incorporated [2019] ACTSC 268 |
Parties: | Kim Ryan (Plaintiff) Australian College of Mental Health Incorporated (Defendant) |
Representation: | Counsel R J Arthur (Plaintiff) M Murphy (Defendant) |
| Solicitors Badgery & Rafferty Lawyers (Plaintiff) Lynch Meyer Lawyers (Defendant) | |
File Number: | SC 429 of 2019 |
Crowe AJ:
On 1 October 2019, I delivered judgment in this matter in the plaintiff’s application for a continuation of the interlocutory injunction restraining the termination of her employment: Ryan v Australian College of Mental Health Nurses Incorporated [2019] ACTSC 268 (Ryan). I dismissed her Amended Application in Proceeding and discharged the ex parte injunction ordered by this Court on 29 August 2019. I reserved the question of costs.
The matter was listed before me for directions on 10 October 2019. I ordered that the defendant file and serve its submissions as to costs by 17 October 2019 and the plaintiff file and serve any submissions in response by 24 October 2019. Both parties have filed submissions pursuant to those directions.
Submissions of the Defendant
The defendant argues that there is no reason why the general rule in relation to costs should not apply. As the successful party, they should be able to recover their costs. The defendant also submits that the costs should be made assessable and payable immediately. It argues that the circumstances do not justify an order that recovery of the costs be delayed until the completion of the matter.
Submissions of the Plaintiff
The plaintiff says that the circumstances leading to the commencement of the litigation are pertinent to the costs issue. Although she had some notice of concerns about aspects of her performance, she was not informed that her position was at risk. Indeed, she had engaged in the performance review process under her contract and sought a response from the plaintiff in relation to that process. The defendant made no substantive response. Rather, on 20 August 2019, without any notice to the plaintiff, the Board of the defendant met and resolved to terminate the plaintiff’s employment.
On 27 August 2019, the defendant’s President wrote to the plaintiff directing her to attend a meeting on 30 August 2019 to discuss her employment.
The following day the plaintiff served on the defendant a Notice of Dispute under cl 21 of the employment contract.
On 29 August 2019, the plaintiff received an email suggesting that the termination of her employment was imminent. It appears that the email was sent to the plaintiff in error. That same day, her solicitor wrote to the defendant urgently seeking confirmation that no action would be taken to terminate the plaintiff’s employment. The letter advised that in the absence of that confirmation the plaintiff would approach the Court for assistance.
It was in those circumstances that the ex parte injunction was sought on
29 August 2019. It was not until a few days before the hearing of the application to continue the injunction (which was on 24 September 2019) that the defendant disclosed the 20 August 2019 Board resolution to the plaintiff.
The plaintiff submits that she acted in the belief that a Board decision was required to terminate her employment. It was reasonable for her to seek, and seek to maintain, interlocutory injunctive relief having regard to the failure of the defendant to inform her of the 20 August 2019 resolution. She argues that the defendant acted unreasonably in not disclosing the resolution sooner.
Having regard to the above, the plaintiff says that the appropriate order is that each party should bear her/its own costs. Her fall-back position is that the costs of the Amended Application in Proceeding, dated 4 September 2019, should be the defendant’s costs in the cause.
Consideration
There is no doubt that the discretion of the Court on the question of costs is a wide one (see r 1721 of the Court Procedure Rules 2006 (ACT)). In Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 the Court (Penfold, Burns and Rangiah JJ) said at [8] – [9]:
As Refshauge J noted in Lewis v Chief Executive, Department of Justice and Community Safety (ACT) and Ors (No 2) [2014] ACTSC 196 (Lewis) at [13], the discretion must be exercised judicially, and the result should be fair, having regard to the particular facts and circumstances of the proceeding: see also Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 [9], per Black CJ and French J.
Ordinarily, costs follow the event: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (McHugh J) and [120]-[122] (Kirby J). However, the Rules themselves recognise that the circumstances of the case may make it appropriate to depart from the usual rule…
Their Honours then went on to deal with the particular circumstances of that case which involved an appeal where the appellant had been successful on only one of six substantive grounds. The Court concluded that the circumstances justified an order that each party bear its own costs of the appeal. The circumstances and associated analysis in that case does not apply here. The issue here relates to the defendant’s conduct leading up to the hearing, rather than the running of unsuccessful points at the hearing.
More recently in Northern Territory v Sangare [2019] HCA 25; 93 ALJR 959 the Court (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ) said (footnotes omitted) at [24] – [25]:
It is well established that the power to award costs is a discretionary power, but that it is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. While the width of the discretion "cannot be narrowed by a legal rule devised by the court to control its exercise", the formulation of principles according to which the discretion should be exercised does not "constitute a fetter upon the discretion not intended by the legislature". Rather, the formulation of principles to guide the exercise of the discretion avoids arbitrariness and serves the need for consistency that is an essential aspect of the exercise of judicial power.
A guiding principle by reference to which the discretion is to be exercised – indeed, "one of the most, if not the most, important" principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. For example, a successful defendant may be refused its costs on the ground that its conduct induced the plaintiff to believe that he or she had a good cause of action.
[Emphasis added.]
It seems to me that there is force in the submission of the plaintiff that the defendant’s conduct in failing to respond to her correspondence and its secrecy in relation to the Board resolution of 20 August 2019 was capable of misleading her as to the strength of her case for interlocutory relief. The fact that the Board had lost confidence in the plaintiff as the CEO of the defendant was an important consideration for my ultimate decision in Ryan (see [38]). That situation was made clear by the unanimous resolution of those participating in the Board meeting on 20 August 2019.
I am not able to conclude, as a matter of fact, that the plaintiff would not have pursued injunctive relief had she been informed of the Board’s decision. However, it does seem to me that the conduct of the defendant contributed to the plaintiff’s perception that she was being treated unjustly and that there was some real prospect of maintaining her position as CEO. It seems likely that this encouraged her to pursue the ultimately unsuccessful application for interlocutory relief.
I do not see the conduct of the defendant as enough to completely disentitle it to its costs of the Amended Application in Proceeding. However, I do see it as justifying an order that the defendant’s costs should be its costs in the cause.
Order of the Court
Accordingly, the order of the Court is as follows:
(1)The costs of the Amended Application in Proceeding, dated 4 September 2019, are to be the defendant’s costs in the cause.
| I certify that the preceding seventeen [17] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Crowe. Associate: Date: 18 November 2019 |
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