//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2005] FCA 1510
Federal Court of Australia
1987-05-14
Rogers J, Nicholson J
Original judgment source is linked above.
REASONS FOR JUDGMENT 1 The second respondent brings a notice of motion dated and filed on 8 July 2005 in which he seeks the Court to make the following orders: 1. an order in accordance with O 6 r 9(a) of the Federal Court Rules ('FCR') removing him from the present proceedings on the grounds of improper joinder; 2. an order against the applicant for contempt on the grounds set out in the second respondent's statement of charge dated and filed on 8 July 2005; and 3. an order striking out the applicant's bill of costs. 2 The second respondent's notice of motion must be considered in the context of matters dealt with in reasons previously delivered. These are as follows: Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd [2001] FCA 258; Australian Competition and Consumer Commission v INFO4PC.com (2002) 121 FCR 24; Australian Competition and Consumer Commission v Info4PC.com Pty Ltd [2002] FCA 1017; Australian Competition and Consumer Commission v INFO4PC.com [2003] FCA 290; Australian Competition and Consumer Commission v INFO4PC.com [2003] FCA 641 with corrigendum 3 The second respondent admitted into evidence in support his notice of motion an affidavit of Karen Joanne Rae sworn on 7 July 2005. The applicant supported its motion by an affidavit of a solicitor from the Australian Government Solicitor sworn on 3 August 2005.
improper joinder 4 The application by the second respondent to be removed as a party is one which is required to satisfy the requirements of FCR O 6 r 9 under which it is brought. That rule reads: 'If a person: (a) has been improperly or unnecessarily joined as a party to a proceeding; or (b) has ceased to be a proper or necessary party to a proceeding; the Court may order that the person cease to be a party and make orders for the further conduct of the proceeding.' 5 This proceeding was initiated by the issue of process in respect of the first respondent alone. That occurred on 23 January 2001 in the South Australian Registry. On 24 January 2001, von Doussa J ordered that the proceeding be transferred to the Western Australian Registry. On 13 February 2001 the Court ordered that the applicant file and serve any motion to amend its application and statement of claim forthwith. On 14 February 2001 the applicant filed a notice of motion seeking leave to amend its application in terms of a minute filed and an order that such minute stand as the amended application. On 15 February 2001 the Court granted leave to amend the application in the terms of the minute thereby adding the second respondent as a party. 6 In the minute of proposed amended application it was stated that the applicant sought orders and declarations, including the following: '4. A declaration that the second respondent has been directly or indirectly, knowingly concerned in, or party to, the contraventions of the [Trade Practices Act 1974 (Cth)] by the first respondent set out in paragraphs 1 to 3 above.' 7 On 15 February 2001, the applicant filed an amended statement of claim pursuant to its entitlement to do so under FCR O 13 r 3(1). That amended statement of claim showed the addition of the second respondent as a party and it pleaded: '3. The second respondent is and was at all material times a director of the first respondent.' Additionally under the heading 'Liability of second respondent' it was further pleaded: '17. The second respondent was directly or indirectly knowingly concerned in, or party to, the contraventions alleged in paragraphs 8 to 16.' The particulars were said to be ones which would be provided after discovery and interrogatories. 8 The second respondent has sought and obtained a copy of the transcript of the proceedings on 15 February 2001. He says that certain circumstances pertaining then show that he ought not to have been joined as a party and that in particular, he was improperly or unnecessarily joined as a party to the proceeding: FCR O 6 r 9(a). His first complaint is that the joinder was one which should have taken place with regard to FCR O 6 r 8(1). That reads: 'Where a person who is not a party: (a) ought to have been joined as a party; or (b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon; the Court may order that the person be added as a party and make orders for the further conduct of the proceeding.' The second respondent's submission is that the applicant failed to indicate which part of O 6 r 8 was being relied upon. His submission is that this had the inherent danger that the Court may have thought that a party could be joined when it is 'just and convenient to do so', when the law is to the contrary: All Fasteners (WA) v Grant Caple Pty Ltd [2003] FMCA 430 at [24]; Australian Competition and Consumer Commission v News Corporation Ltd & Ors (1997) 79 FCR 116 per Hill J; Vandervell Trustees Ltd v White [1971] AC 912 at 936. 9 Given the content of the amended application and of the amended statement of claim it is quite impossible to see how any of the considerations required by the rule can establish that the second respondent was improperly or unnecessarily joined. The application sought orders against him as a person 'knowingly concerned'. There was a necessary link between the issues raised against him and the issues raised against the first respondent. It was therefore appropriate that orders were made that such issues be effectually and completely determined and adjudicated upon on one occasion. Reference to the previously reported reasons in this proceeding substantiate that such proved to be the case. 10 The second respondent also complains that the joinder occurred ex parte. That was necessarily so because he was not then a party to the proceeding. His solicitor had not appeared and although the Court was apparently told that he would be attending subsequently, there was no reason in the context of the amended application and the amended statement of claim to not make the orders for joinder. In any event, when the solicitor did appear for the second respondent, he took no steps to recommit the order of joinder. 11 At the heart of the second respondent's submissions in this respect is a reliance by him on the statement in the amended statement of claim alleging that he was a director of the first respondent, a matter subsequently not pursued against him. He seems to assume that the issue of joinder must therefore have been improper because the allegation of directorship was not made out. Such is not the case. The amended application made its allegation against the second respondent of being 'knowingly concerned' without reference to any directorship in the first respondent. Likewise, the claims in the amended statement of claim were not hinged in their terms on him being such a director. 12 The second respondent also relies on FCR O 6 r 9(b) by contending that even if it was proper and necessary to join him as a party (perhaps when it was alleged he was a director of the first respondent) it has now ceased to be proper or necessary for him to be a party to the proceeding. This is because he says that the proceedings against him whereby he may assume the liability of the first respondent for extensive monetary payments is a fruitless exercise causing undue stress upon him and his family and therefore is frivolous and an abuse of the court process. Reference, however, to the prior published reasons will exemplify the fact that the second respondent has not ceased to be a proper or necessary party to the proceedings. 13 Whether reliance is placed by the second respondent on par (a) or par (b) of FCR O 6 r 9, the fact remains that since his joinder as a party on 15 February 2001 he has continued to participate as a party in this litigation. He has acquiesced in being a party. It is only now, when a bill of costs is pending against him as a party jointly liable with the first respondent, that he seeks to disassociate himself from the litigation. He claims that this is because he has only just obtained access to the transcript of the proceedings on 15 February 2001. However, as I have set out above, I do not see anything in those proceedings which brings into operation the provisions of FCR O 6 r 9. The fact is that the second respondent has acquiesced in the proceedings and has never contested the appropriateness of his joinder until this notice of motion. In those circumstances it is simply not open to the Court in the exercise of its discretion under FCR O 6 r 9 to accede to an order that the second respondent cease to be a party.
contempt of court 14 The basis for the order sought that the applicant be punished for contempt relates to the inclusion of items in the applicant's bill of costs which the second respondent submits should not have been included. 15 The applicant lodged the relevant bill of costs on 30 August 2004 for its indemnity costs in relation to a judgment dated 31 July 2002 dealing with the applicant's notice of motion regarding contempt of court dated 31 January 2001 and subsequent orders dated 7 May 2004. On 29 October 2004, a Deputy District Registrar issued an estimate of the total bill and advised that, in the absence of objections, a Certificate of Costs would be issued on the basis of the estimate. The estimate amount was significantly lower than the amount submitted by the applicant and apportioned the costs between the first and second respondents. On 15 November 2004 the applicant lodged an objection to the estimate. The basis for this objection was that the estimate apportioned the costs between the first and second respondents rather than making the liability for costs joint and several. 16 On 3 February 2005, the applicant then advised the Registrar that: 1. the applicant intended to withdraw its objection to the estimate of the bill of costs; and 2. some items were included in the bill of costs that did not relate to the contempt motion dated 31 January 2001 and it proposed to withdraw the bill of costs to remove references to those irrelevant items and file a revised bill of costs. 17 On 10 February 2005, a Deputy District Registrar advised by telephone that the bill of costs could not be withdrawn once the estimate has been issued. The Registrar also noted that some costs had been 'taxed off' in the estimating process. 18 The applicant subsequently withdrew its objection. 19 The main purpose behind civil contempt is to force a party to obey the orders and procedures of the court: Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 per Gibbs CJ, Mason, Wilson and Deane JJ at 106-107. The key concept is that contempt must involve some breach of a court order or procedure. 20 Conduct will generally be considered civil contempt of court where a party: 1. refuses or neglects to do an act required by a judgment or order of a court within the time specified in the judgment or order; 2. disobeys a judgment or order requiring a person (including a body corporate) to abstain from doing a specified act; or 3. acts in breach of an undertaking given to the court by a person, on the faith of which the court sanctions a particular course of action or inaction. 21 The matters alleged in the statement of charge by the second respondent against the applicant are matters which would normally be dealt with on the taxation of the bill of costs. The second respondent did not exercise any rights to have the bill taxed in that way. That however, does not mean that the matters alleged in the statement of charge can form any proper basis for a contempt of court. The matters there alleged do not fall within the established categories of contempt. Those categories include contempt for breach of orders for an injunction, payment of money (such as a fine, for damages or for compensation), interrogatories, prerogative writs or production of documents for discovery. There is no evidence of any wilfulness on the part of the applicant in including the matters in relation to which the second respondent seeks redress. Indeed, the applicant mooted the erroneous inclusion of items in the bill of costs which did not relate to the contempt motion and advised the Deputy District Registrar of the Federal Court of the same. 22 There is a further consideration advanced by the applicant which may be relevant. That is, that the applicant is an agency of the Crown in the right of the Commonwealth and therefore not subject to the contempt jurisdiction of courts. As the second respondent is self-represented and has not been able to address issues relating to Crown indemnity, I do not propose to decide this aspect of the motion on that submission by the applicant. 23 It is sufficient to say that the circumstances relied upon by the second respondent fail to establish any contempt on the part of the applicant. It is therefore also not necessary to consider whether the distinction between civil and criminal contempt is still recognised and relevant here.
striking out the applicant's bill of costs 24 There is no provision in the FCR for a bill of costs to be struck out. 25 In the present matter, as the Deputy District Registrar has issued an estimate of the likely costs pursuant to FCR O 62 r 46(3)(a), if the second respondent disagreed with that estimate he should have lodged an objection pursuant to O 62 r 46(3)(c) of the FCR, which requires any objections to be lodged within fourteen days of the estimate of likely costs being issued. 26 Furthermore, there is no foundation for an order such as that sought. Prior published reasons disclose why that is the case and why the costs order was made.
costs 27 The applicant seeks indemnity costs on the notice of motion. 28 Costs may be awarded on an indemnity basis where special circumstances exist. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, Woodward J stated: '… it is appropriate to consider awarding … 'Indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare.' See also: Qantas Airways Ltd v Dillingham Corporation (unreported, Supreme Court of New South Wales, Rogers J, No 16537/84, 14 May 1987); Singleton v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103. 29 In Qantas Rogers J stated: 'It is intolerable that persons, whatever their means may be, should be exposed to legal costs in resisting claims the subject of an unending stream of amendments and which are found to be totally lacking in foundation either in law or in fact.' 30 The applicant submits the necessity for indemnity costs, in contrast with costs on a party and party basis, was recognised by Rogers J in Qantas (at 4), who stated that there is 'a yawning gap between costs recovered by a successful party from the other party on a party and party taxation of costs and the costs payable by the successful party to its own solicitors'. 31 The Court may award costs on an indemnity basis except to the extent that those costs are an unreasonable amount or unreasonably incurred: Australian Competition and Consumer Commission v Info4PC.com Pty Ltd & Anor (2002) 121 FCR 24. 32 The applicant submits that the orders sought by the second respondent by his notice of motion have no foundation in law or fact and accordingly the applicant should be completely indemnified for its costs, except to the extent that those costs are of an unreasonable amount or unreasonably incurred, in defending the notice of motion. 33 The applicant also submits that as it is a Commonwealth agency funded by public money, it is not appropriate that public money is expended in defending claims which have no merit. 34 The applicant argues that while the second respondent is unrepresented, it is incumbent on him to ensure that any allegations he makes, particularly allegations of the nature contained in the notice of motion, have foundations in law before bringing those allegations before the Court. The applicant submits the second respondent cannot rely on the fact that he is unrepresented to avoid an order for indemnity costs. 35 In Ogawa v University of Melbourne (No 2) [2004] FCA 1275, Kenny J said: '[42] Generally speaking, courts are more reluctant to make orders for indemnity costs against litigants in person than against legally represented litigants, although, in an appropriate case, they will make such an order. In Bhagat v Royal and Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13] Hodgson CJ in Eq observed: … I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they would otherwise be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstance that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event. As a Full Court of this Court (constituted by O'Loughlin, Whitlam and Marshall JJ) observed in Bhagat v Global Custodians Ltd [2002] FCA 223 at [57], the Chief Judge did not say that litigants in person always escape the consequence of indemnity costs. Indeed, the Full Court in that case declined (at [60]) to interfere with the decision of the trial Judge to order indemnity costs against the unrepresented litigant.' 36 In Ogawa, Kenny J ordered that the applicant (an unrepresented litigant) pay the respondent's costs on one of the motions of the applicant on an indemnity basis. That was in circumstances where the respondent University had given the unrepresented applicant clear notice that it challenged the competency of any appeal from a Federal Magistrate's decision and that it intended to seek indemnity costs. That was therefore a position where the unrepresented applicant was found to have been in the position where she should have understood that the appeal did not lie but she nevertheless persevered and refused to accept the position. 37 Turning to the words of Woodward J in Fountain Selected Meats cited above, I am not satisfied that in the circumstances here pertaining to the second respondent he 'should have known that he had no chance of success'. This is not an instance of an unrepresented litigant seeking to make a claim at law which he or she has been told is not open. There is no basis for the presumption to arise here of wilful disregard of known facts or clearly established law. 38 Accordingly, I do not consider that the costs should be ordered on an indemnity basis. Costs, however, should follow the event and the second respondent should be ordered to pay the costs on the usual basis. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson.
Counsel for the Applicant: JA Thomson
Solicitor for the Applicant: Australian Government Solicitor
Date of Hearing: 18 October 2005
Date of Judgment: 26 October 2005
Australian Competition and Consumer Commission
INFO4PC.com Pty Ltd
[2003] FMCA 430
[2002] FCA 223
(1986) 161 CLR 98
(2002) 121 FCR 24
(1997) 79 FCR 116
(1988) 81 ALR 397
(1991) 24 NSWLR 103