Wiggins v Department of Defence - Navy (No.3)
[2006] FMCA 970
•5 July 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WIGGINS v DEPARTMENT OF DEFENCE – NAVY (No.3) | [2006] FMCA 970 |
| HUMAN RIGHTS – Costs – whether Respondent pay Applicant’s costs on indemnity basis – whether Applicant should receive 10% of costs and pay 90% of Respondent’s costs – Applicant successful in Disability Discrimination claim – unsuccessful in Sex Discrimination claim – relevant factors to take into account in human rights claims. |
| Sex Discrimination Act 1984 Disability Discrimination Act 1992 |
| Wiggins v Department of Defence - Navy [2006] FMCA 800 Ball v Morgan [2001] FMCA 127 Physical Disability Council of New South Wales v Sydney City Council [1999] FCA 815 Jacomb v Australian Municipal, Administrative, Clerical Services Union [2004] FCA 1600 Paramasivam v Wheeler [2000] FCA 1559 Ruddock & ors v Vadarlis & Ors (No 2) (2001) 115 FCR 229 Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 Bruch v Commonwealth of Australia [2002] FMCA 29 Colgate–Palmolive Company & Anor v Cussons Pty Limited (1993) 46 FCR 225 |
| Applicant: | KELLIE LOUISE WIGGINS |
| Respondent: | DEPARTMENT OF DEFENCE – NAVY |
| File number: | PEG 170 of 2004 |
| Judgment of: | McInnis FM |
| Hearing date: | 20 June 2006 |
| Delivered at: | Melbourne |
| Delivered on: | 5 July 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr D.B. Clough |
| Solicitors for the Applicant: | Christopher Bunnett |
| Counsel for the Respondent: | Mr M. Bromberg SC |
| Solicitors for the Respondent: | Phillips Fox |
ORDERS
Pursuant to s.46PO(4)(d) of the Human Rights and Equal Opportunity Commission Act 1986 the Respondent pay to the Applicant within 21 days of the making of this order damages in the sum of $25,000.
The Respondent pay 50 per cent of the Applicant's costs in accordance with Schedule 1 of the Federal Magistrates Court Rules 2001 not including the costs reserved on 7 October 2005.
Pursuant to Rule 21.15 of the Federal Magistrates Court Rules 2001 the Court certifies that it was reasonable for the applicant to employ two advocates to appear in these proceedings.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
PEG 170 of 2004
| KELLIE LOUISE WIGGINS |
Applicant
And
| DEPARTMENT OF DEFENCE - NAVY |
Respondent
REASONS FOR JUDGMENT
In this application the court has already delivered a judgment in relation to claims by the Applicant of unlawful discrimination pursuant to the Sex Discrimination Act 1984 ("the SDA claim") and the Disability Discrimination Act 1992 ("the DDA claim") (see Wiggins v Department of Defence - Navy [2006] FMCA 800).
In the course of the judgment delivered it was indicated to the parties that the court would hear further submissions in relation to the orders to be made arising out of the judgment. At that time the court had indicated that it would make an appropriate declaration and an order for damages together with costs after hearing submissions from counsel.
The suggestion that the court would make "an appropriate declaration" was meant to indicate no more than the court would make an appropriate declaration, if any. As it happens, neither side has sought a declaration and the issues remaining for the court are the orders to be made in relation to costs. The parties agree that the court should make with appropriate modification an order in relation to the damages which were assessed by the court in its primary judgment, namely that the respondent should pay the applicant an amount of $25,000.
It is appropriate, in my view, for that order to be expressed in the following terms and I note that a period of 21 days is agreed by the parties to be inserted as the date upon which the payment should be made. The order should read as follows:
“Within 21 days of the date of making this order and pursuant to section 46PO(4)(d) of the Human Rights and Equal Opportunity Commission Act (Cth) 1986 the respondent pay to the applicant damages in the sum of $25,000.”
The remaining issue concerns costs. The parties are clearly unable to reach agreement on the question of costs and indeed it is evident that they are pursuing claims which are quite different both in form and significance. The applicant seeks an order that the respondent pay the applicant's costs of the proceedings on an indemnity basis. It is assumed that the applicant seeks those costs including reserved costs.
The respondent seeks an order that the Respondent pay 10 per cent of the applicant's costs in accordance with Schedule 1 of the Federal Magistrates Court Rules 2001 (the Rules) and that the Applicant pay 90 per cent of the Respondent's costs in accordance with Schedule 1 of the Rules. Both sides agree that the court should provide a certificate for Counsel pursuant to Rule 21.15 of the Rules.
Applicant’s submissions
In support of the application that the Respondent pay the Applicant's costs on an indemnity basis it was submitted on behalf of the Applicant that in this case the court should take into account the outcome of the decision and in doing so should consider whether there are special circumstances which would justify the award of indemnity costs. Further it is submitted as I understand it that in any event the Respondent should pay all of the Applicant's costs of and incidental to the application including reserved costs.
It was submitted that the proceedings involved significant claims made on behalf of the applicant and were claims that required the court to consider evidence of a number of witnesses which related to the issues before the court. It should be noted at the outset that it is common ground that the Applicant failed on the SDA claim but succeeded on the DDA claim.
Nevertheless, counsel for the Applicant submitted that in the circumstances the court should take into account the nature of the Applicant's disability, the circumstances of her transfer out of `Port Services referred to in the substantive judgment and the discussions which occurred between her relevant officers, namely Commander Sadleir and Mr Jager.
As I understood the submissions made for and on behalf of the applicant, the court should take into account that at the end of the hearing in written submissions the Applicant focused on the DDA claim rather than the SDA claim and that ultimately the applicant has succeeded on that claim which was the subject of more significant focus, at least in the final written submissions filed for and on behalf of the applicant.
In support of the claim for indemnity costs counsel submitted that the court should make reference to certain correspondence between the parties which apparently arose prior to the commencement of the hearing. The correspondence which became Exhibit A24 (costs) included a letter dated 2 September 2005 from the Respondent's solicitors to the Applicant's solicitors which in part stated the following,
“In relation to the proposed mediation for 9 September 2005, I have instructions that there would be no purpose in attending that conciliation at this point in time. We understand there is a further mediation date scheduled in October but our client is probably unlikely to participate in that mediation unless your client reconsiders her position in this matter.”
The reference to the applicant's position seems to arise in circumstances where it is common ground that some discussions occurred between the parties that were not fruitful. After the date of that letter it appears to be common ground that an offer was made by the respondent to the applicant to pay $20,000 on a without prejudice basis. As I understood it, that offer was made on or about 6 September 2005. It is not clear to the court whether that offer made on a without prejudice basis inclusive of costs, but for present purposes I take it to be the case.
It was submitted on behalf of the applicant that the correspondence dated 2 September 2005 from the respondent's solicitors indicated an attitude by the respondent, who should be regarded as a model litigant, which could properly be described as an example of uncooperative conduct or an unwillingness to enter into meaningful negotiations at a mediation ordered by the court.
Reference was made to other correspondence passing between the solicitors. In particular the applicant's counsel referred to a letter dated 11 December 2005 from the respondent's solicitors to the applicant's solicitors. In that letter the following appears:
“… I also understand that notice was given that, in the absence of withdrawal of the new claims, our client will seek to have those paragraphs struck out of your client's submissions and will (again) seek costs in relation to the time spent addressing those issues. I understand that it was further conveyed that the Respondent would be seeking instructions as to whether such costs orders should be pursued against Ms Wiggins legal representatives.”
That passage in the letter from the respondent's solicitors was the subject of a reply by the applicant's solicitors dated 12 December 2005 where in part the solicitors state:
“… you threaten to applying (sic) for costs against the Applicant's legal representatives. As you are well aware, in this proceeding the Applicant has the full force of the Commonwealth government brought to bear upon her. To attack her legal counsel personally is an act of bullying that amounts to an egregious abuse of process, particularly in a human rights case and particularly by a supposedly model litigant.”
In the same letter the applicant's solicitors invited the respondents to withdraw what it described as "this threat" before it "becomes a major issue either before the court or elsewhere as may be appropriate". In response to the applicant's solicitors' letter dated 12 December 2005 the solicitors for the respondent in a further letter dated 13 December 2005 state:
“… My letter of 11 December 2005 was neither a threat, an attack on your client's legal counsel, an act of bullying or an egregious abuse of process as your inflammatory response suggests. As no threat was made, it is not withdrawn and your invitation to do so is rejected.”
It is perhaps clear from that exchange of correspondence that significant issues arose between the solicitors concerning negotiations between the parties and other concerns raised in relation to the formulation of the claim. The applicant's counsel submitted in that context that the correspondence does demonstrate a clear example of bullying by the respondent, who it was submitted as a model litigant should not conduct itself in that manner.
It was further submitted that in this instance the letter dated 11 December 2005 from the respondent's solicitors to the applicant's solicitors was also forwarded to the court and in doing so the respondent's solicitors have conducted themselves in a manner which was self‑serving and inappropriate. I note at this point that the letter dated 11 December 2005 appeared to have been forwarded to the Court inadvertently.
During the course of submissions made by the applicant some attempt was made to provide details of the conciliation which occurred at a compulsory conference before the Human Rights and Equal Opportunity Commission ("the Commission"). I expressed the view then that those conferences as a result of the operation of s.46PK of the Human Rights and Equal Opportunity Commission Act 1986 ("the HREOC Act") were to be held in private and my understanding is that the mere commencement of proceedings before this court at any stage would not necessarily relieve the parties of complying with the privacy requirements of that conference.
I was reluctant to permit the Applicant to embark upon an analysis of negotiations which occurred before the commission and indeed reluctant to entertain in detail the issues which may have arisen from discussions which allegedly occurred between counsel in an attempt to resolve this matter. Those discussions, it seems to me, were the subject of legal professional privilege constituting, as they did, discussions solely for the purpose of settling the application between counsel.
I could not see any useful purpose in analysing those discussions, as to do so, apart from breaching legal professional privilege, would otherwise lead to further costs and expense, which ultimately, in my view, would not be helpful to the court in determining the issue of the costs.
In any event it was further submitted for and on behalf of the Applicant that a further issue in support of the application for indemnity costs arose as a result of what is described as inadequate discovery by the Respondent of certain documents and in particular the medical documents held by the Central Records Office of the Respondent.
As I understood the submission in support of the application for costs generally by the Applicant, it was sought to be argued that the applicant has essentially succeeded with the award of damages significantly greater than the amount of damages which had previously been offered by the Respondent and that the normal rule in relation to costs following the event should apply so that the Applicant is not denied the fruits of the judgment. I have already indicated the matters raised by the Applicant in support of the further claim, that the costs should be awarded on an indemnity basis.
Respondent’s submissions
The Respondent submitted that the court should carefully analyse the outcome of the decision and note that the SDA claim failed and that effectively only one aspect of the DDA claim succeeded. In detailed written submissions dated 20 June 2006 the Respondent after referring to relevant authorities, to which reference will be made later in this judgment, undertook a detailed analysis of the SDA claim and the time devoted to that claim, both in terms of the witnesses and the duration of court time. This was compared to the duration of court time devoted to considering the DDA claim.
The analysis in some detail referred to specific witnesses who were required to give evidence in relation to the DDA claim and those witnesses who were required to give evidence either solely for the SDA claim or primarily in relation to that claim and in part also in relation to the DDA claim. It was argued that the Applicant ultimately had succeeded in only one out of the 16 claims which had effectively been raised before the court.
It was submitted that of the four substantive applications namely sex discrimination, sexual harassment, indirect disability discrimination and disability discrimination the Applicant was entirely unsuccessful in relation to three applications and was only successful in relation to one of the three claims made in the fourth application - that is, the claim of disability discrimination. It was submitted that, conversely, the respondent succeeded in relation to 15 of the 16 claims and only failed in part as to one distinct and readily identifiable claim which was described as being of "short compass".
It was specifically submitted that the issue upon which the Applicant was successful, namely disability discrimination arising from the applicant's transfer from Port Services office at HMAS Stirling to the Command Centre was the subject of minimal pleadings, evidence and submissions. It was further noted that of the extensive written submissions provided by both parties only a small portion related to disability discrimination and this particular claim.
Reference was made to the five main witnesses who gave evidence for the respondent and it was submitted that only Mr Jager's evidence and a small portion of Commander Sadleir's evidence and the Applicant's evidence was directly relevant to the circumstances in which the Applicant came to be posted from Port Services. It was further submitted that the factual issues relating to the Applicant's transfer from Port Services office to the Command Centre were largely uncontested. The only real contest was whether that new position could be regarded as a demotion.
A further analysis was then undertaken of the duration of the evidence of each witness in relation to the time devoted to the question of the Applicant's transfer from Port Services. It was estimated that the applicant's entire disability discrimination claim including opening and closing submissions could have been conducted in a single day, yet the trial took 10 days.
It was further submitted that the issues upon which the Respondent was successful took up the bulk of the hearing, at least five days of it, with the other three days relating to preliminary issues and closing submissions. It was noted that a further period of half a day was caused by adjournments sought by the Applicant and a further half day could be attributed to evidence on the Applicant's failed claims for economic loss.
It was further submitted that in the exercise of the court's discretion a court should have regard to the conduct of the parties; and specifically that conduct, it was submitted by the respondent, should include the following:
·Costs were incurred by both parties as a result of the applicant's attempt to expand her claim beyond the complaint determined by HREOC. As a result, it was submitted in the interlocutory decision of the court dated 17 August 2005 certain aspects of the applicant's claim were not permitted to proceed. It was noted the respondent received a costs order in its favour at that time and it should not be required to pay any costs incurred by the applicant in relation to that directions hearing or the amendment of the applicant's application and further affidavits.
·Additional costs were thrown away by the applicant and unnecessarily incurred by the respondent as a result of the applicant's failure to comply with the court's orders. It was submitted the applicant failed, without explanation, to comply with orders made by the court on 3 June 2005, resulting in the directions hearing on 17 August 2005, and that the applicant failed, without explanation, to comply with the orders of 17 August 2005, resulting in a further directions hearing on 7 October 2005.
·The bulk of the first two hearing days, it was submitted, was taken up with the argument over the scope of the applicant's claim. On 14 December 2005 the court heard argument as to whether the applicant could continue to rely on the "Dietrich letter" in her affidavit when the associated claim for victimisation had been struck out. It was noted the court ruled the applicant could rely on the material by way of background but ordered removal of the reference to victimisation from the affidavit. The respondent submitted that it should not be liable for any costs in respect of that hearing date as it was partially successful in its argument and that the issue arose in any event as a result of the applicant's failure to comply with an agreement reached between the parties' counsel on 17 August 2005.
·On 15 November 2005 the court heard argument as to whether the applicant could rely on her posting to Port Services to support her claim for disability discrimination and the court ruled in the respondent's favour. The court was also required to issue a second ruling on 15 November 2005 declining to adjourn the matter so that the applicant could appeal the court's decision to the Federal Court. It was submitted that the applicant should pay the respondent's costs of 15 November 2005.
·The applicant filed a supplementary affidavit on the third day of the hearing, namely 16 November 2005 which significantly elaborated on an allegation made in an earlier affidavit. Her main witnesses did the same thing in their oral evidence. It was submitted this required preparation of a detailed supplementary affidavit from Commander Sadleir and significant additional evidence to be led by another witness, Captain Di Pietro. The respondent submitted it should be entitled to any costs incurred in addressing the supplementary affidavit and oral evidence.
·It was submitted the applicant impermissibly raised a number of entirely new claims in her closing submissions which needed to be addressed by the respondent and were the subject of further argument and submissions on the last day of hearing. The new claims, which were rejected by the court, included a wide range of other allegations (see Wiggins v Department of Defence - Navy [2006] FMCA 800 at [44]).
·It was noted that in its judgment, whilst not accepting concerns the respondent raised about the applicant's closing submissions, the court did make the comment that the respondent faced difficulty unravelling the grounds relied upon in the application in light of the applicant's delay in providing details of the statutory revisions she was relying upon. Notwithstanding that the court had requested them on the first day of the hearing, they were not provided until the applicant's closing submissions (see paragraph 38 of the court's judgment).
·It was submitted that conduct significantly and unnecessarily increased both the applicant's and respondent's costs in the proceedings. During the course of submissions counsel for the respondent submitted that effectively the orders sought by the respondent reflected the success of the applicant and costs to be awarded to the applicant for what could properly be regarded as 10 per cent of the total costs. It was not immediately apparent as to whether that calculation further took into account the specific days which were sought to be challenged where the respondent submitted the applicant should pay all of the applicant's costs.
I took the apportionment of costs, that is, that the applicant pay 90 per cent of the respondent's costs and the respondent pay 10 per cent of the applicant's costs, to be a broad approach taking into account the concession that ought be made to the respondent in the respondent's favour arising out of those matters concerning the preliminary issues on the first two days of the hearing and also the consequences of the court's ruling on 14 December 2005 and that no costs should be payable to the applicant arising out of the events of 17 August 2005 and the directions hearing on 7 October 2005.
Further I assume the proposed order takes into account the submission that the respondent should receive the costs from the applicant of 15 November 2005 and additional costs incurred as a result of supplementary material filed by the applicant.
Reasoning
Counsel for the respondent referred the court to what I regard as some relevant authorities in determining the question of costs. This court in the matter of Ball v Morgan [2001] FMCA 127 stated at [93] the following:
“ … The suggestion that human rights matters are normally to be considered as “no costs matters” is therefore in my view misconceived and cannot be regarded as an appropriate legal principle to be applied in human rights applications.”
That decision of this court was applied in the Federal Court by Heerey J in Fetherston v Peninsula Health (No. 2) (2004) FCA 594. In that decision His Honour relevantly stated:-
“8 The general rule is that a wholly successful defendant should receive his or her costs unless good reason is shown to the contrary: Milne v Attorney-General (Tas) (1956) 95 CLR 460 at 477. As Dawson J said in Latudis v Casey (1990) 170 CLR 534 at 557, the discretion as to costs remains absolute and unfettered but it is to be exercised judicially, that is to say
"... not by reference to irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation."
9 While the Disability Discrimination Act is without doubt beneficial legislation, its characterisation as such does not mean that this Court is to apply any different approach as to costs. In conferring jurisdiction under a particular statute Parliament may conclude that policy considerations warrant a special provision as to costs, for example that there be no order as to costs or that costs only be awarded in certain circumstances, such as, for example, where a proceeding has been instituted vexatiously or without reasonable cause: Workplace Relations Act 1996 (Cth) s 347. The absence of any such provision applicable to the present case confirms that the usual principles as to costs are to apply.”
In Fetherston the court considered other issues including what might be described as public interest issues. I accept for present purposes that when considering the exercise of the court's discretion in relation to costs arising from a claim of unlawful discrimination the authorities reveal a number of relevant factors to be considered by the court, which I note have been conveniently and, in my view, accurately set out in the report of the commission entitled "Federal Discrimination Law of 2005" at page 312‑313 as follows:
·where there is a public interest element to the complaint;
·where the applicant is unrepresented and not in a position to assess the risk of litigation;
·that the unsuccessful party should not lose the benefit of their victory because of the burden of their own legal costs;
·that litigants should not be discouraged from bringing meritorious and courts should be slow to award costs at an early stage; and
·that unmeritorious claims and conduct which unnecessarily prolong proceedings should be discouraged.
It will be evidence in the present case that in this instance the applicant throughout the proceedings before this court has in fact been represented. However, it is relevant for the court to consider the issues of public interest; that the successful party should not lose the benefit of her victory because of the burden of her own legal costs; that litigants, including the applicant, should not be discouraged from bringing meritorious claims; and that unmeritorious claims and conduct which unnecessarily prolongs proceedings should be discouraged.
The public interest
In considering the public interest, I note that a number of authorities have discussed the concept of public interest. I accept that most human rights claims will involve an element of public interest. It is in the nature of the legislation that inevitably public interest issues will arise, given what should be described properly as the nature of the claims arising in human rights legislation. I note and apply the decision of Madgwick J in Physical Disability Council of New South Wales v Sydney City Council [1999] FCA 815 at [9] where in that case the court stated:-
“… These are indeed interesting and important issues and in the main, the position of the applicant in relation to them was arguable. Nevertheless, it seems to me that the overall prospects of success in relation to the proceedings in this court, ought to have been assessed as little better than speculative. The applicant should therefore have known that it was proceeding, albeit in relation to important and urgent matters, at risk of a costs order. The decision in Oshlack does not say and, in my opinion, it is not the law that in every case of public interest litigation, where there are significant issues involved, a party who brings proceedings as to a matter of public interest may do so with impunity as to costs, if there is an arguable case. It seems to me that the reasonably perceived strength of the applicant's case, the time of institution of the proceedings and the manner in which the matter proceeds must also be considered.”
I further note and apply the following extract from the decision of Crennan J in Jacomb v Australian Municipal, Administrative, Clerical Services Union [2004] FCA 1600 where the court stated at paragraph [10]:
“10 There is no set formula for determining whether a case is brought in the public interest. The decision made in the present proceedings may act as a useful guide for other unions, whose rules are affected by the operation of s 7 of the Sex Discrimination Act and, to this extent, there is a degree of public interest in having the dispute judicially determined. However, the applicant stood to benefit personally from the decision and, in this regard, I could not be satisfied that the applicant brought the proceeding entirely in the public interest. The public interest was subservient to, although coincided with, his own interests. However, it is important to note in this context, that in the absence of any judicial determination of the question of statutory construction, to which the facts gave rise, the applicant was not acting unreasonably in seeking a determination. While it remains undisturbed, the determination is one which will have the effect of governing the position of persons who find themselves in a similar position to the applicant. In that sense the case can be genuinely described as a test case with some element of public interest. It may be of assistance to the respondent in respect of future rules and may be of assistance to similar bodies in similar circumstances.”
In this case it is clear from the judgment of the court that the applicant, although raising an issue of personal concern and benefit to her, namely disability discrimination, has brought to the attention of the court an issue which I regard as one of general public interest, namely the treatment of employees in the armed forces suffering from depressive illness. The public interest issue is further highlighted by the classification of the applicant as effectively fit for shore duties.
A further general public interest issue is the manner in which the armed forces, and in this case the Navy, makes provision for the communication to relevant supervising officers of the details and nature of the condition suffered by an officer leading to the classification of being fit for shore duties. If a system was in place to properly communicate those details, albeit with the consent of the officer concerned, then the unlawful discrimination found by the court may have been avoided.
Putting in place protocols to deal with the issues would assist both the officer suffering from the depressive illness and those who are responsible for her supervision. There is a general public interest in ensuring that serving personnel of the armed forces are provided with the opportunity of rehabilitation and advancement in their career and should not as a result of unlawful discrimination be subjected to conduct which results in, as I have found in this case, effectively demotion and the potential to undermine rehabilitation efforts.
In my view, those factors are sufficient to constitute a significant degree of public interest above and beyond the benefit which the applicant obtains personally from the decision of the court. In that sense, although the public interest element in this case coincides with the personal interest of the applicant, it is still a public interest element of significance which I regard as relevant to take into account in the exercise of my discretion concerning costs.
Whether the Applicant should lose the benefit of her victory
In general the starting point in considering costs, in my view, is that the successful party should generally be awarded costs in unlawful discrimination matters. As with other litigants, applicants in unlawful discrimination claims ought get the benefit or the fruits of the decision. In this case it is clear that the applicant will have the benefit of the damages award of $25,000. The hearing took place over a 10‑day period with both parties represented by senior counsel and junior counsel. Instructing solicitors attended throughout, and it is clear that considerable costs have been incurred by both parties.
I note and apply the decision of Moore J in Paramasivam v Wheeler [2000] FCA 1559 where at [9] the court relevantly states:-
“9 An application has been made for an order that the applicant pay the costs of the respondent in each of the proceedings. I am conscious of the fact that the applicant represented herself and, as I indicated a moment ago, holds a genuine belief about the conduct of the people against whom these proceedings have been brought. In the ordinary course successful respondents are entitled to their costs, though in this area of the Court's jurisdiction special considerations may arise in some cases that might warrant some departure from the normal rule.
In this case, although I accept the analysis of the respondent that a substantial period of time was undertaken by the applicant pursuing the SDA claim which ultimately failed and a significant period of time was occupied by the court dealing with matters raised at a late stage by those representing the applicant which could and should have been determined earlier, it is my view that those matters can be taken into account in the exercise of the court's discretion in a way which would reduce the total amount of costs payable by the respondent to the applicant but on the other hand have regard to the balance which should be struck, in my view, between a simple arithmetic process when dealing with costs and denying the applicant the fruits of the judgment.
I note and apply the decision of the Full Court of the Federal Court in Ruddock & Ors v Vadarlis & Ors (No. 2) (2001) 115 FCR 229 where the court relevantly states at 234 the following:
“Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:
• Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
• 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.”
It is noted in that case that the Full Court clearly indicated that a court has a discretion which amongst other things may involve the award of costs against the applicant in favour of the respondent for those expenses incurred by the respondent when addressing those matters where the applicant has failed.
In this case that discretion clearly arises in relation to the SDA claim. Further, I note that in general terms the court is entitled to take into account the conduct of the applicant which was the subject of criticism by the respondent in the submissions referred to earlier in this judgment. I do not doubt that in balancing the relevant issues it is accepted as a principle of law that where a particular party has failed in the pursuit of a claim which has occupied a considerable part of the trial then the court may in the proper exercise of its discretion reduce the costs allowed to that party (see Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271).
A number of the authorities referred to by the respondent were not authorities which related specifically to human rights applications where, in my view, for reasons which will become apparent, apart from the public interest issue, there is also the further issue of not seeking to discourage applicants from bringing meritorious claims, balanced of course with the need to discourage those seeking to make unmeritorious claims which unnecessarily prolong proceedings. I shall deal with those other matters later in this judgment.
This court in another decision considering costs arising out of human rights legislation, namely McBride v State of Victoria (No. 2) [2003] FMCA 313, relevantly stated the following, which I adopt and apply for the present purposes:
“8.The nature of a human rights claim very often includes complaints that arise out of what are considered to be a series of events in the course of employment, more often than not in circumstances of this kind where an applicant is aggrieved by what is perceived by the applicant to be conduct in breach of the relevant human rights legislation. Although analysed and presented as discrete events, there is an element of continuity, at least in the perception of the applicant, and it is somewhat artificial, in my view, to divide the issues exactly in the way proposed by the respondent, that is, to apportion costs on a six-seventh or one-seventh basis.
9.Nevertheless, it is also relevant in the discretion of the court to look at the substantial outcome, and I accept that ultimately the applicant, though successful, has not been successful in all aspects of the claim, in particular has not succeeded in establishing that her current condition is attributable to the alleged contraventions of the Disability Discrimination Act.
10.In the circumstances, taking into account the reasons for judgment and the fact that a considerable period of time, at least on the first day, was taken with jurisdiction issues and other issues in relation to the respondent's defence of this claim, it is my view that it would be fair and just in the circumstances to make an order that the respondent pay 50 per cent of the applicant's costs of and incidental to the application, including reserved costs, if any.”
In my view, when considering the question of whether a party should not lose the benefit of a victory, it is clear that if the court accedes to the submission made for and on behalf of the respondent, given the duration of the hearing, the applicant would lose entirely any monetary benefit of the victory, and in my view that is a significant factor which weighs heavily against accepting the submissions made for and on behalf of the respondent.
Whether the Applicant should be discouraged from bringing a meritorious claim
This is a factor which the court can take into account in the exercise of its discretion; so much is clear from the extract from this court's decision in McBride v State of Victoria referred to earlier in this judgment. This is not a case however in my view where the detailed analysis by the respondent should be accepted as the only basis upon which the court should exercise its discretion on the question of costs.
Whilst I accept that a considerable part of the proceedings was occupied by evidence and submissions arising out of the SDA claim, it is equally clear that a number of witnesses, at least indirectly, in passing had to deal with the DDA claim and that the applicant herself in medical evidence specifically addressed that claim. Also it was clear that questions were asked of respondent's witnesses in relation to what ultimately was a successful DDA claim.
Whilst I have little doubt that the majority of the court time was devoted to pursuing the SDA claims, the mere fact that the court has rejected those claims, applying what it regarded as the appropriate standard of proof that is, the Briginshaw test, does not of itself lead to a conclusion that the claims that were made were extravagant or exaggerated. To that extent, the circumstances in this case may be distinguished from other cases where the court has found that it may be relevant to take into account the fact that an applicant had made an extravagant claim (See Bruch v Commonwealth of Australia [2002] FMCA 29.
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; so much might be inferred by the fact that the written final submissions focused, as indicated by the applicant's submissions on costs, on the DDA 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.
In my view in unlawful discrimination cases, persons claiming unlawful discrimination should not be unduly discouraged from making claims. On the other hand, significant claims, particularly of sex discrimination and/or sexual harassment, are claims which should not be made lightly; they involve claims that may, if found proven, have a significant and detrimental effect upon the careers of others in the workplace.
Nevertheless, that does not mean that courts should make decisions which effectively discourage those claims from being raised in courts or elsewhere. Hence in the present case I am satisfied that the court should not be seen to be discouraging claims, albeit of a serious nature, of a kind similar to the SDA claim.
Doing the best I can on the material before me and having regard to the factors that I consider relevant and the reasoning already set out in this judgment in relation to each of those factors, it is my view that an appropriate and fair order in this case would be that the Applicant should not be required to pay the Respondent's costs. I reject the submission made on behalf of the Respondent that the Applicant should be ordered to pay 90 per cent of the Respondent's costs.
In my view, a more appropriate outcome would be that the Respondent pay 50 per cent of the Applicant's costs, pursuant to Schedule 1 of the Federal Magistrates Court Rules 2001. In making that decision I have made an allowance for those costs which were properly costs that were awarded to the Respondent in relation to matters arising from the hearing on 17 August 2005 and the directions hearing on 7 October 2005 together with the costs which arose on the first two days of the court hearing plus those costs specifically which were incurred as a result of the delay following the ruling on 15 November 2005.
I have also made due allowance for the costs incurred by the Respondent in the preparation of additional material as a direct consequence of the respondent having been required to file and serve supplementary affidavits and adduce further evidence from Captain Di Pietro and Commander Sadleir. I have further taken into account in my assessment of costs the attempt by the Applicant to raise what I have found to be largely new claims at a very late stage in the proceedings.
By reducing the amount of costs awarded against the Respondent by 50 per cent, it is my considered view that that will achieve an outcome consistent with the factors that I am entitled to take into account, and specifically taking into account those concerns raised properly by the Respondent in the submissions. I reject any claim that throughout the negotiations the respondent has acted in a way which could be described as bullying or has otherwise conducted itself in a manner inappropriate for a model litigant.
The court's attention was drawn to publicity purportedly generated by the Applicant in relation to a without prejudice offer made by the respondent to the Applicant. The Applicant herself should accept a degree of responsibility for the failure of this matter to resolve through negotiations by her own conduct in seeking and attracting publicity in relation to that without prejudice offer. It is not appropriate for the court to refer to specific details of the publications, other than to note that the publication was drawn to the court's attention appropriately by counsel for the Respondent in an affidavit sworn by the solicitor for the Applicant on 20 June 2006.
Indemnity costs
It would be clear from the costs findings that, at least in relation to the alleged conduct by the Respondent, the court does not regard that as a factor justifying the award of indemnity costs as sought by the Applicant. The award of indemnity costs is a significant departure from the usual order that costs are awarded on a party/party basis. In this case it is my view that it would not be appropriate for the court to make an award of indemnity costs. The general principles of indemnity costs may apply in matters of this kind if the court was satisfied that there had been conduct on the part of the Respondent of a kind which warranted the award of indemnity costs.
Mere failure by the Respondent in this instance to respond favourably to a reference to mediation does not ultimately form a proper basis upon which the court can award indemnity costs, given that the court record reveals that in any event mediation occurred. That fact combined with the existence of an offer which was not too far removed from the damages ultimately awarded leads me to conclude that the conduct of the Respondent has not been conduct of a kind which would attract an order for indemnity costs. I accept that the principles are set out in some detail in the decision of the Federal Court in Colgate–Palmolive Company & Anor v Cussons Pty Limited (1993) 46 FCR 225 at 231-234. I am satisfied in the present case that none of those factors apply in this application.
Although the allegations made in support of the SDA claim were significant allegations requiring an answer, I am not prepared to find in this case that the allegations were made by the Applicant knowing them to be false or that they were made wilfully or indeed ought never have been made. Ultimately the court made its decision according to law on the available evidence. That decision does not lead to a conclusion that the allegations giving rise to the SDA claim should not have been made by the Applicant.
In this case it is my concluded view that for those reasons it would not be appropriate that the court order in relation to costs should be made on an indemnity basis.
Conclusion
For the reasons given it is appropriate that the Court makes the following orders:-
(1)Pursuant to s.46PO(4)(d) of the Human Rights and Equal Opportunity Commission Act 1986 the Respondent pay to the Applicant within 21 days of the making of this order damages in the sum of $25,000.
(2)The Respondent pay 50 per cent of the Applicant's costs in accordance with Schedule 1 of the Federal Magistrates Court Rules 2001 not including the costs reserved on 7 October 2005.
(3)Pursuant to Rule 21.15 of the Federal Magistrates Court Rules 2001 the Court certifies that it was reasonable for the applicant to employ two advocates to appear in these proceedings.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 5 July 2006
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