Avetmiss Easy Pty Ltd v Australia Skills Qualification Authority

REASONS FOR JUDGMENT 1 The applicant ("Avetmiss") was dissatisfied with a decision of the Administrative Appeals Tribunal ("the Tribunal") in an appeal which it had brought against determinations made by the present respondent. It purported to appeal to this Court under s 44 of the Administrative Appeals Tribunal 1975 (Cth) ("the AAT Act"). The respondent ("the Authority") objected to the competency of this appeal. This objection was upheld by Mortimer J: see Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 314. An application for leave to appeal from her Honour's decision was dismissed by Pagone J: see Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 507. 2 At the time Mortimer J handed down her decision upholding the competency objection and dismissing the proceeding she gave directions that the parties file and serve written submissions relating to costs. The authority sought an order in its favour for a lump sum award of $15,000. Avetmiss did not file any submissions in opposition. An affidavit was, however, filed by Mr Simon Smith, the sole director of Avetmiss. The affidavit contained argumentative material which her Honour treated as submissions on the question of costs. That material did not deal with the Authority's application for a lump sum costs order or with the calculation of the quantum of that order. Mr Smith asserted an entitlement on the part of Avetmiss to an award of costs in its favour. He sought to traverse Mortimer J's reasons for upholding the Authority's objection to competency. Avetmiss also sought damages for losses said to be occasioned by it by reason of its participation in proceedings before the Tribunal and the Court. Punitive damages for pain and suffering were also claimed. The affidavit and the annexure to it made reference to certain correspondence which had passed between Avetmiss and the Authority after Avetmiss's appeal had been filed in the Court but before the Court had heard submissions relating to the competency of the appeal. Avetmiss had offered to settle the appeal on the basis that the Authority pay it "half my (sic) costs" and agree to the "real decision" being remitted to the Tribunal. In his affidavit Mr Smith relied on this offer in support of Avetmiss's claimed entitlement to costs. He said that: "I provided a much much more favourable solution under the Calderbank vs Calderbank law submitted in Annexure CVC and denied for no reason but to abuse the process of the court, when no money could have been spent on their behalf whatsoever." 3 Having considered the parties' submissions, Mortimer J determined that it was appropriate to order that a lump sum costs order be made and fixed the amount at $20,000. This figure represented about 58% of the estimated taxable costs incurred by the Authority in defending the purported appeal. Her Honour's order was made on 7 May 2014. 4 On 29 May 2014 Avetmiss filed an application for a extension of time within which to apply for leave to appeal from her Honour's costs order and for leave to appeal. 5 Four grounds were relied on in support of each application. They were: "1. Identical to grounds for leave to appeal in previous form. 2. The Calderbank v Calderbank offer I reiterate was not recognised. The other party had the choice to be in the same position without spending 1c on legal expenses (given in evidence but ignored). 3. The basis of the Federal Court Jurisdiction being invoked is due to factual error which was not and does not look like it will be considered, yet is so important in the nature as to why costs were incurred. 4. Every piece of evidence, submission, Affidavit or letter I have sent in to avoid an unfair decision." It is not clear to me what is meant by the "previous form" in the first ground. 6 Avetmiss sought to have its applications dealt with without an oral hearing. The Authority did not oppose this course and, on 30 May 2014, I ordered that the applications be heard on the papers. 7 The Authority filed written submissions opposing both applications. No submissions were filed on behalf of Avetmiss but Mr Smith again adopted the course of filing an argumentative affidavit. I have treated those arguments (insofar as I have found them to be comprehensible) as submissions in support of Avetmiss's applications. A number of these submissions do not appear to have been raised before Mortimer J. These include arguments that, because self-represented litigants are not entitled to recover costs, no costs order should be made against that party's opponent and that, in some way, Mortimer J was obliged, but had failed, to apply a "but for" test in resolving the costs dispute. 8 On 13 June 2014 Mr Smith sent an email to the Court. Its contents suggest that he was seeking to respond, on behalf of Avetmiss, to the submissions which had been filed by the Authority. The contents of the email are very difficult to understand. To the extent that they may be understood to deal with issues arising on these applications, they seem to suggest that Mortimer J was "not allowed" to award costs and that to do so was an "error of law". No attempt to develop these plainly incorrect assertions was made. The other parts of the email do not bear on relevant issues. They contain a series of scandalous allegations regarding "illegal activity", "corruption" and "government lies". 9 The principal submission made related to the second ground, that is, the one relating to the so-called Calderbank offer. 10 The applications were not accompanied by a draft notice of appeal: see Rule 35.14(3) of the Federal Court Rules 2011 (Cth). 11 There was no dispute that the leave of the Court was required in respect of both applications either by reason of the application being out of time or because of the interlocutory nature of the proceeding before Mortimer J. 12 The Court has a broad discretion in dealing with applications for enlargement of time and leave to appeal. One of the considerations which, in appropriate cases, will weigh heavily in the exercise of these discretions is whether the proposed appeal enjoys any real prospect of success. If a proposed appeal lacks substance nothing will be gained and unnecessary costs will be incurred if the leave sought is granted. This is such a case. 13 Avetmiss advanced arguments based on the decision in Calderbank v Calderbank [1976] Fam 93 before Mortimer J. Her Honour considered and rejected them. Her Honour said (at [25]) that: "Mr Smith appears to consider that his making of an offer he considered to attract the principles in Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333 should now affect the Court's exercise of its discretion on costs, notwithstanding that his arguments, on behalf of the applicant, were not accepted and the other party was successful. The approach taken by Mr Smith on behalf of the applicant is misconceived and Calderbank principles cannot assist an unsuccessful party in circumstances such as those in the present case. The underlying premise for the operation of those principles is absent: namely, that a party who is ultimately successful and who had sought to persuade the opposing party of the validity of its case or cause of action at an earlier point in time, so as to bring the proceeding to an earlier end with a saving of costs and resources on both sides, had such an offer unreasonably rejected and so incurred additional, and unnecessary, costs. That is not the situation of the applicant. Indeed, it is the reverse of the applicant's situation: as I set out below, it is Mr Smith, on behalf of the applicant, who unreasonably refused a timely and reasonable offer of settlement of the proceeding by the respondent." 14 In my respectful opinion her Honour was plainly correct in so ruling. The decision in Calderbank gave effect to the policy that parties to litigation should seriously consider, and not lightly reject, offers made by another party with a view to compromising the dispute and avoiding a trial or the continuation of a trial: see Alpine Hardwood (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 125. Under the Calderbank principle a party (even an unsuccessful party) may be entitled to a favourable costs order if the settlement offer was unreasonably refused. A first step in determining whether rejection of a Calderbank offer is unreasonable requires a comparison between the offer made and the outcome obtained by the offeree at trial with a view to determining whether the offer, had it been accepted, would have placed the offeree in a more advantageous position than that which was secured by Court order: see Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [24]. 15 The offer on which Avetmiss relies would have seen the Authority pay half of its costs and led to the Court making a consent order remitting the proceeding to the Tribunal for further consideration. The outcome of the proceeding (the dismissal of the proceeding for want of competency) was plainly less favourable to Avetmiss than orders giving effect to its offer. More fundamentally, Mortimer J's decision upheld the Authority's objection to competency on the ground that the Court lacked jurisdiction to entertain the purported appeal. In the absence of such jurisdiction it was not possible for the Court to proceed further and certainly not to make an order remitting the proceeding for further hearing and determination by the Tribunal. 16 Avetmiss did not seek to contend that any error of principle attended the exercise of her Honour's discretions to award costs to the Authority, to fix a lump sum and to do so in the amount of $20,000. 17 Both applications must be refused with costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.