Australian Society of Otolaryngology Head and Neck Surgery Limited v Australian Health Practitioner Regulation Agency

BACKGROUND: THE APPLICATION FOR LEAVE TO INTERVENE AND LEAD EVIDENCE

1. By an interlocutory application filed on 20 December 2023, ASAPS and Dr Edwards applied for leave to intervene in the proceedings and to lead evidence pursuant to r 9.12 of the Federal Court Rules 2011 (Cth) (FCR). Rule 9.12 provides that: (1) A person may apply to the Court for leave to intervene in a proceeding with such rights, privileges and liabilities (including liabilities for costs) as may be determined by the Court. (2) The Court may have regard to: (a) whether the intervener's contribution will be useful and different from the contribution of the parties to the proceeding; and (b) whether the intervention might unreasonably interfere with the ability of the parties to conduct the proceeding as the parties wish; and (c) any other matter that the Court considers relevant. (3) When giving leave, the Court may specify the form of assistance to be given by the intervener and the manner of participation of the intervener, including: (a) the matters that the intervener may raise; and (b) whether the intervener's submissions are to be oral, in writing, or both. Note 1: The Court may give leave subject to conditions-see rule 1.33. Note 2: The Court may appoint an amicus curiae. (Emphasis added.)
2. It is clear from the terms of r 9.12 that it is not intended to be prescriptive as to the factors to which the Court may have regard in determining whether to grant leave to intervene, but confers a broad discretion. Further, contrary to the interveners' submissions on costs at [13], r 9.12 does not require that an intervener establish that "their interests were 'sufficiently distinct'", as opposed to their "contribution" being "useful and different".
3. The interveners relevantly sought interlocutory orders in the following terms:
4. The Applicant be granted leave pursuant to rule 9.12 of the Federal Court Rules 2011 (Cth) to intervene in the proceeding, subject to the limitations in order 2.
5. The grant of leave referred to in order 1 is limited to: a. Leave to file written submissions consistent with the outline of submissions comprising page 306 of Exhibit TE-1 of the affidavit of Dr Timothy John Cameron Edwards affirmed on 20 December 2023; b. Leave to tender those parts of the affidavit of Dr Timothy John Cameron Edwards affirmed on 20 December 2023 necessary to make the submissions referred to in (2)(a), above; c. Leave to make oral submissions at the hearing of the proceeding.
6. As I explained in the Judgment at [21]: In seeking the Court's leave to intervene in the proceedings, the proposed interveners submitted that their contribution would be useful and different from the parties (Federal Court Rules 2011 (Cth) r 9.12(2)(a) (FCR)), because their submissions: (1) are provided from a different perspective, being that of (specialist) plastic surgeons, which is the title that the applicants seek to use; (2) address issues relevant to construction which were not addressed by the parties, including recent amendments to the National Law; and (3) raise factual issues relevant to the construction of the National Law not raised by the parties, being objective data about public perception of the use of the expression "plastic surgeon".
7. In support of their submissions, the interveners sought to tender evidence relevant to:
8. the public understanding of the term "surgeon" (as evidenced by a survey); and
9. the educational differences between plastic surgeons and otolaryngologists.
10. The applicants did not oppose the application for leave to intervene to make submissions on the substantive issues. Nor did they object to the evidence in question insofar as it was relied upon in support of the application for leave to intervene. However, the applicants opposed a grant of leave to the interveners to adduce evidence on the substantive issues, on the grounds that the evidence was irrelevant and they would be prejudiced if the evidence were received. In support of their submissions as to prejudice, the applicants relied upon the affidavit of Mr Wen-Ts'ai Lim sworn on 25 January 2024.
11. At the start of the hearing on 31 January 2024, I granted ASAPS and Dr Edwards leave to intervene in the proceedings pursuant to r 9.12 of the FCR. The intervention was limited to written submissions in terms of the proposed outline of submissions exhibited to the affidavit of Dr Edwards affirmed on 20 December 2023, and brief oral submissions. However, I refused leave for the interveners to adduce evidence because I considered that the prejudice which the applicants would suffer if the evidence were admitted on the substantive issues was "determinative", given that the lateness of that evidence deprived the applicants of a sufficient opportunity to file evidence in response: transcript 31 January 2024 at p. 8.8 and 8.18; see also the Judgment at [22]. As a consequence, I disregarded the interveners' outline of submissions on the substantive issues to the extent to which they relied upon that evidence. However, I also raised serious concerns at the hearing about the relevance of the evidence of factual matters which the applicants wished to lead to the question of statutory construction, given that questions of statutory construction are questions of law, as did the applicants in their submissions.

RELEVANT PRINCIPLES: COSTS

1. Section 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) confers a wide discretion on the Court with respect to the award of costs. This discretion must be exercised judicially, consistently with the purpose of the power and with regard to all relevant facts and circumstances: e.g. Kazar (Liquidator) v Kargarian; In the matter of Frontier Architects Pty Ltd (in liq) [2011] FCAFC 136; (2011) 197 FCR 113 at [4] (Greenwood and Rares JJ); AOU21 v Minister for Home Affairs (No 2) [2021] FCAFC 212 at [7] (Griffiths, Mortimer and Perry JJ).
2. This discretion extends to awarding costs in favour of interveners who "are commonly said to have the benefits and the burdens of parties", although there is no "usual practice" of awarding successful interveners their costs: Johnston v Cameron [2002] FCAFC 301 at [19] (Branson J); Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at [53] (Beaumont J); Liverpool City Council v Weir (1984) 58 ALJR 213 at 216 (the Court). It also extends to awarding costs against an intervener, as is evident from the terms of r 9.12(1) itself.
3. As the interveners submit, the ordinary rule that the successful party should be awarded their costs does not necessarily apply such that a successful intervener is generally entitled to their costs as against the unsuccessful party or that a successful party is generally entitled to an order for costs against an unsuccessful intervener. Rather, Debelle J in City of Burnside v Attorney-General of South Australia [1994] SASC 5136; (1994) 63 SASR 65 at 67-68 explained that: generally speaking, a successful intervener will recover costs only if the intervention was necessary to protect his interest. A successful intervener is unlikely to recover his costs even if the intervention was well intentioned and proved to be of assistance to the court: Liverpool City Council v Weir (1984) 58 ALJR 213 at 216. There appears to be no reason why as a matter of general principle an unsuccessful intervener should not be subject to the general rule that costs follow the event. However, it is not appropriate to apply that general rule without qualification. If a successful intervener is not entitled to his costs where his interests are adequately protected by an existing party to the action, it would be inequitable for an unsuccessful intervener to be liable to costs in like circumstances. However, an unsuccessful intervener might be liable for costs if his intervention has substantially extended the hearing or put the successful party to unnecessary cost. In such circumstances, the intervener might be liable to pay a portion of the successful party's costs, that portion being determined by the extent to which the hearing has been lengthened by the intervention. Such a rule is consistent with the principle that, generally speaking, an intervener must take the action as he finds it. In determining whether the intervener should be liable for costs, the court should adopt a broad axe approach. If the hearing was slightly longer than it would have been but for the intervention, it might not be appropriate to order the intervener to pay costs. It will be a question of fact and degree in every case whether the intervener's participation has resulted in the trial being substantially longer than it would have been but for the intervention. In determining whether the intervener should be liable, it would be appropriate to have regard also to such factors as whether the interest which the intervener sought to protect was adequately protected by an existing party. Depending on the nature of the issues in the action, it might be a relevant factor that the intervener has assisted the parties and the court in identifying or elucidating the issues. It is not unrealistic to suppose that, although the intervention has prolonged the trial, the intervener's participation has been of substantial assistance. In such a case, it might be inequitable to order the intervener to contribute to the costs of the successful party. (Emphasis added.)
4. Applying these principles, Debelle J held that the plaintiff was entitled to be compensated for its costs to the extent that the second intervener's intervention prolonged the hearing of the trial, given that the intervention had substantially prolonged the hearing and the submissions made by the intervener were very similar to those by the defendant.
5. While Debelle J in Burnside was ultimately concerned with the question under the rules of the Supreme Court of South Australia, the interveners submitted that his analysis is also helpful by analogy when considering costs vis a vis an intervener in the exercise of discretion under s 43 of the FCA Act.
6. Consistently with the approach explained by Debelle J, broadly speaking the award of costs should "reflect the justice of the situation": O'Keeffe Nominees Pty Ltd v BP Australia Ltd (No 2) [1995] FCA 109; (1995) 55 FCR 591 at 598 (Spender J). It is for this reason, as Spender J also explained in O'Keeffe at 598, that costs on many interlocutory questions are reserved pending a determination of the substantive merits of the claim when they become absorbed into the usual order for costs in favour of the successful party in the litigation. Thus, as his Honour further observed: This circumstance reinforces the not uncommon position that in respect of the payment of costs of an interlocutory application, it is not necessarily just that the costs of an interlocutory application should follow the result of that interlocutory application but rather should be determined by the result of the principal litigation of which the interlocutory application forms but a part. (Emphasis added.)

The applicants' application for costs should be granted

1. The interveners oppose an order awarding the applicants costs against them on a number of grounds.
2. First, the interveners submit that they must be considered as "successful both in their application to intervene, and in their intervention because they were granted leave to intervene and were on the winning side of the principal proceedings" (emphasis in original). However, the grant of leave to intervene was made by consent. Furthermore, the issues of statutory construction on which the interveners wished to be heard were not reached because the Court upheld the respondent's submissions as to jurisdiction, the discretion to grant relief, and the inappropriateness of the Court addressing the issues of construction in view of its conclusions on these issues. As such, the proposition that the interveners "were on the winning side of the principal proceedings" because the substantive application was dismissed is subject to the caveat that they did not succeed on the issues in respect of which they applied to intervene because those issues were not reached.
3. While the circumstances were different, O'Keefe is another example of a case in which the question of whether the intervener could be regarded as relevantly successful was not straightforward. In that case, in determining that the appropriate order was that there be no order as to the intervener's costs, Spender J took into account the absence of any final determination by the Court of the issues in the principal litigation because the parties had settled the case (at 599). As a consequence, his Honour found at 599 that "[i]n that sense, there has been no determination of which party would ultimately succeed and there has not been 'the event' which, absent any specific order, reserved costs would follow". Thus, Spender J held that this was not a case where the application by the intervener for its costs could be granted "by the mere invocation of the mantra that costs follow the event": ibid.
4. Secondly, the interveners submit that, if they had been joined instead as respondents, they would have been entitled to their costs because they "were on the winning side of the costs 'event'" and the applicant's application for costs would be understood as an application for a special costs order seeking apportionment of their costs by way of an offset against costs in the interveners' favour. So understood, the interveners contend that the applicants' application for costs rises no higher than that they should have their costs of successfully resisting the interveners' application for leave to adduce evidence which is not sufficient. Rather, the interveners submit that the applicants "must, but have failed to, show that the Court's refusal of prayer 2(b) [of the interveners' interlocutory application] was inevitable", citing Dal Pont, GE, Law of Costs (4th Ed, LexisNexis, 2018) at [16.55]. However, the passage relied upon from Dal Pont is concerned with special orders for indemnity costs where a party persists with a hopeless case and is therefore not relevant here where no order for indemnity costs is sought.
5. That said, while, in an appropriate case, costs may be apportioned having regard to the parties' relative success or failure on particular issues, a court will exercise caution against acceding too readily to apportionment: see e.g. New South Wales Lotteries Corporation Pty Ltd v Kuzmanovski (No 2) [2011] FCAFC 152 at [12]-[15] (the Court); Save Our Strathbogie Forest Inc v Secretary to the Department of Energy, Environment and Climate Action (No 2) [2024] FCA 430 at [8] (Horan J). That does not, however, mean that the applicants must show that it was "inevitable" that the Court would refuse to grant leave for the interveners to adduce the evidence in question. Ultimately, the question for the Court is where the interests of justice lie, as Spender J explained in O'Keefe: see above at [18].
6. Thirdly, the interveners contend that "[n]either the evidence, nor prayer 2(b), were clearly irrelevant or hopeless from the outset." Rather, in their submission the evidence and prayer 2(b) of the interlocutory application "were necessary, at the point that the interlocutory application was made, to protect the interests of ASAPS' members". As such, the interveners contend that an award of costs against them with respect to their application to lead evidence in the substantive proceeding is not warranted because the evidence would have been necessary in any event to support their application for intervention.
7. However, there are a number of difficulties with this argument. The interveners pressed the application to lead evidence despite being advised that the applicants were prepared to consent to their intervention and despite the fact that it should have been apparent that the applicants would have no real opportunity to respond to the evidence in question: see further at [32] below. Furthermore, the interveners did not seek leave to intervene on the basis that their intervention was necessary to protect their interests but rather on the ground that they would make a useful and different contribution (see above at [9]). As such, the premise of the argument is not established.
8. Given these matters and the following considerations, in my view it is in the interests of justice that the interveners pay the applicants' costs of opposing the interveners' application for leave to adduce evidence and thrown away.
9. First, the interveners' application for leave to adduce evidence in support of the questions of construction was unsuccessful. It is also an oversimplification for the reasons earlier explained to say that the interveners should be regarded as "on the winning side of the principal proceedings", as well as successful on their application to intervene.
10. Secondly, the fact that the interveners' submissions were described by me as "helpful" in the course of ruling on the intervener's interlocutory application, and that I would take them into account save for the evidence which was not admitted, does not mean that the evidence which was not admitted on the substantive application would have been helpful. To the contrary, with respect, while I held that the prejudice to the applicants was determinative in refusing leave to the interveners to adduce evidence, it is difficult to understand how the evidence sought to be led by the interveners, being evidence as to the public perception of the use of the expression "surgeon" and educational differences between plastic surgeons and otolaryngologists, could have had any bearing on the questions of statutory construction. Indeed, counsel for the interveners properly agreed with my observations in arguendo that the interveners' evidence was not directly relevant to the substantive questions of construction at the heart of the proceedings and with respect to which the interveners sought to be heard.
11. Thirdly, in my view this is a case where the intervention put the successful party to unnecessary cost: Burnside at 67-68. Specifically, the late application for leave to adduce evidence on the substantive issues put the applicants to unnecessary and wasted costs being:
12. the expense of establishing the prejudice which they would suffer if leave to adduce the evidence was granted; and
13. preparation to meet and challenge the evidence sought to be led by the interveners in the event that their application to adduce the evidence was allowed, including:
    1. preparation of a schedule of objections to the interveners' evidence which was served on the interveners; and
    2. preparation for cross-examination of Dr Edwards in respect of which notice had been given in the event that the interveners successfully pressed his evidence.
14. Further, in an email from Ashurst, the applicants' solicitors, to Hamilton Locke, the interveners' solicitors, Ashurst estimated that the unnecessary and wasted costs incurred by the applicants were in the order of $40,000.00: affidavit of Benjamin Alexander Wilson Fisher, solicitor for the interveners, affirmed 27 September 2024 at [3] and "BAF-1". While I make no finding as to the appropriateness of that figure, it does establish in my view that the work undertaken by Ashurst in response to the late application and provision of evidence by the interveners was not insignificant. That is also consistent with the evidence of Mr Wen-Ts'ai Lim in his affidavit sworn on 25 January 2024.
15. With respect to the lateness of the application and consequential prejudice to the applicants, the interveners contend that the timing of disclosure was not within their control. In the interveners' submissions, they were reliant upon the parties to disclose their evidence and submissions before the interveners could demonstrate that their contribution would be distinct from, and not duplicate, the parties' submissions. In this regard, the interveners accepted that the applicants "readily disclosed their evidence and submissions to the Intervenors." The applicants were fully cooperative in this respect, making the material sought available to the (then proposed) interveners shortly after receiving a letter from their legal representatives on 19 September 2023 requesting that material. However, the respondent voluntarily disclosed its submissions to the interveners only on 30 November 2023, having initially declined to do so. Thus, the interveners contend that "[i]t is not the case that the Intervenors willfully [sic] withheld evidence from the parties, attempted to surprise them or otherwise conducted themselves in a manner that might justify costs orders being made against it".
16. I accept that the interveners did not wilfully withhold the evidence or attempt to surprise the parties. Nonetheless, it was the interveners' decision to press their application for leave to lead evidence on the substantive issues notwithstanding that it should have been apparent that the applicants would have no real opportunity to respond to their evidence. This is because, as the applicants contend, the proposed evidence was served shortly before the Christmas break and supplemented on 16 January 2024 by the report underlying the survey evidence, notwithstanding that the trial was listed for the first week of the 2024 law term. Furthermore, the applicants wrote to the interveners on 25 January 2024 advising that they would consent to the grant of leave to intervene but oppose leave to permit the interveners to tender the proposed evidence in the course of the substantive hearing given the prejudice to the applicants by reason of the late provision of the evidence.

1. As earlier mentioned, in the event that I awarded costs against the interveners in respect of prayer 2(b) of their interlocutory application, the interveners submit that the Court should also award costs in their favour in respect of the intervention. In support of this submission, the interveners contend that: First, the intervention was necessary to protect the Interveners' interests, which were not otherwise protected by the other parties, and did not significantly extend the time of the hearing or put any party to unnecessary cost. The Intervener might, in those circumstances, seek its costs, pursuant to Burnside. Second, if the Court does not agree that the Interveners fall within Burnside, North West Pilots is authority for the proposition that an intervener with a distinct interest in the proceedings (whether or not the intervention was necessary to protect its private interests) may be awarded costs. The Interveners submit that if the "justice of the situation", viewed not from the perspective merely of the interlocutory application but of the proceedings as a whole, warrants any costs order at all, that would not be a one-sided costs order against the Interveners but orders balancing the interests of the Interveners against those of the Applicant, awarding the Applicant costs in respect of prayer 2(b) and the Interveners their costs of intervening.
2. I do not consider that it would be in the interests of justice for an order in the terms sought by the interveners to be made.
3. First, while an intervener may recover their costs where their intervention was necessary to protect their interests (as explained in Burnside), the interveners here did not seek leave on this ground. Rather, leave was sought on the basis that they would make a useful and different contribution (see above at [9]). Furthermore, the fact that the outcome on the substantive question of statutory construction, if reached, may have affected the interests of ASAPS' members and Dr Edwards would not, without more, have established that it was necessary for them to intervene in order to protect their interests.
4. Secondly, for the reasons earlier explained, the proposition that the interveners were successful is subject to the caveat that the issues on which they intervened were not reached.
5. Thirdly, the applicants consented to the application for intervention. However, their attitude to the intervention may have been different if they had been forewarned that the intervener may seek an order for costs against them in the event that the applicants were unsuccessful in the litigation, given that such an order would be unusual in circumstances where the intervener did not seek to intervene on the basis that it was necessary to protect their interests.
6. Finally, the fact that I have awarded the applicants their costs with respect to prayer 2(b) of the interlocutory application because the applicants were put to unnecessary costs does not suggest that, as a matter of fairness, the applicants should pay the interveners' costs of their intervention. There is, with respect, no obvious logical connection between the two propositions.

CONCLUSION

1. It follows for these reasons that the applicants' application for costs against the interveners should be granted and the interveners' application for costs against the applicants should be refused. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perry.