Clifford Hallam Healthcare Pty Ltd v Price (Anti-Discrimination) [2010] VCAT 1117

1. On 11 May 2010 for reasons which I then gave I made an order pursuant to Section 109 of the Equal Opportunity Act 1995 in favour of the applicant, Clifford Hallam Healthcare Pty Ltd striking out a complaint made against it to the Human Rights and Equal Opportunity Commission of Victoria by the respondent, Andrea Price.
2. As a result of that substantive disposition Clifford Hallam has sought an order that Ms Price and her solicitor should pay its costs on a full indemnity basis or alternatively to be taxed in accordance with County Court Scale 'C' including the costs of counsel appearing upon the application.
3. Before proceeding further with the arguments as to costs it is necessary to say something as to the institutional arrangements for the consideration and determination of complaints under the Equal Opportunity Act. I note however that legislation has already been passed by the Victorian Parliament which will dismantle the existing arrangement leaving matters to be brought by complainants directly to the Tribunal in the same way as someone with a grievance under the general law simply files an application in the appropriate form in a court of competent jurisdiction. The old arrangements however governed the disposition of Ms Price's complaint.
4. Section 105 of the Equal Opportunity Act provides for complaints under the Act by aggrieved persons to be lodged with the Victorian Equal Opportunity and Human Rights Commission. Section 106 obliges the Commission to assist a complainant in formulating his or her complaint. The Commission may decline to entertain a complaint (Section 108) or refer the matter to conciliation. If the matter either does not resolve at conciliation at the Commission or the Commission declines to entertain the complaint then at the request of the complainant the Commission must refer the complaint to the Tribunal. See Sections 108, 113 and 117. Section 131 of the Act authorises the Tribunal to grant interim relief while a complaint is pending before the Commission.
5. It follows therefore that the orthodox progress of the complaint procedure is that the matter goes first to the Commission which ideally conciliates it to resolution. Putting to one side situations where the Tribunal is asked to grant interim relief, the matters reach the Tribunal only when they are conciliated out or the Commission has determined not to entertain them but the complainant wants to press on to a hearing and determination.
6. Section 109 of the Equal Opportunity Act provides a further avenue for disposition which it is fair to say is relatively rarely resorted to. This section allows a respondent to apply to the Tribunal after a complaint has been lodged with the Tribunal on the basis that it is frivolous, vexatious, misconceived or lacking in substance. The effect of resort to this procedure if successful is to abort a complaint not only before it reaches the Tribunal by the more orthodox means but before the processes at the Commission are completed.
7. In the present instance Clifford Hallam in resorting to the Section 109 procedure has in effect successfully mounted a pre-emptive strike against Ms Price's complaint.
8. In making the order of strike out pursuant to Section 109 I reserved Clifford Hallam's right to seek a costs order which was done by written submission.

1. In its written submissions Clifford Hallam rehearsed the history of the proceeding including the fact that on 9 September 2010 and 15 September 2010 Clifford Hallam's lawyer proposed to Ms Price's legal adviser that Ms Price should consent to a strike out of her complaint pursuant to Section 109 of the Equal Opportunity Act with each party bearing that party's own costs. The submission also observed that at a directions hearing on 29 March 2010 the solicitor for Ms Price attended an hour late with the solicitors for Clifford Hallam appearing by telephone.
2. The submission next rehearsed Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 which is headed 'The Tribunal's power to award costs'. Referring to sub-section (3) of that section and a number of the considerations under that sub-section which may enliven a discretion to award costs, Clifford Hallam contended that Ms Price has conducted the proceeding in a way that unnecessarily disadvantaged Clifford Hallam by vexatiously conducting the proceeding (Section 109(3)(a)(vi)). It said that a consideration of the relative strengths of the claims made by the parties showed that Ms Price's claim had no tenable basis in fact or law (Section 109(3)(c)). Finally, Clifford Hallam contended that it is fair for the Tribunal to make an order in its favour against Ms Price because of her failure to accept the offers of settlement and the conduct of her solicitor in causing an hour's delay to the directions hearing on 29 March 2010. Clifford Hallam referred to Section 109(3)(e) which invokes consideration of 'any other matter the Tribunal considers relevant'. These matters said Clifford Hallam should displace the presumption under Section 109(1) that costs lie where they fall.
3. As to the contention that the proceeding had been vexatiously conducted by Ms Price, they noted that the complaint had been struck out as frivolous, vexatious, misconceived or lacking in substance. They referred to the standard authorities to the effect that a summary disposition under such provision (an analogue of Order 23 of the Rules of the Supreme Court) would occur only in the very clearest of cases and where a claim was absolutely hopeless or had no prospects of success. Clifford Hallam says that filing the complaint was in itself vexatious and Ms Price's failure to withdraw or consent to its strike out amounted to vexatious conduct. According to Clifford Hallam:

That vexatious conduct caused [it] material disadvantage by having to incur further unnecessary costs to have its application heard and determined.

1. Clifford Hallam said there was no tenable basis in fact or law for Ms Price's claims as testified by their summary disposition. They noted that numerous paragraphs in the complaint could not conceivably have formed the basis for an effective complaint against Clifford Hallam because in one case they related to a different employer, in another case they raised matters which as a matter of law could not give rise to an entitlement to relief under the Equal Opportunity Act. They noted that Ms Price's solicitor ultimately conceded these matters at the hearing of the Section 109 strike out application.
2. Clifford Hallam noted that by virtue of Section 109(3) of the Victorian Civil and Administrative Tribunal Act 1998 the Tribunal could only make a costs order against Ms Price if satisfied that it was fair to do so. Clifford Hallam contended it was fair to do so. Ms Price was not 'useful, unrepresented or unsophisticated', she was represented by a law firm. They referred to a number of Tribunal determinations indicating that there was no principle that it was unfair to award costs against a person who made a complaint under the Equal Opportunity Act.
3. Clifford Hallam said that the failure of Ms Price to accept either of the settlement orders created the presumption pursuant to Section 112 of the Victorian Civil and Administrative Tribunal Act that it should have an award of all costs incurred by it after 9 March 2010.
4. Clifford Hallam contended that an order should be made against Ms Price's law firm, McDonald Murholme. It submitted that a costs order could be made against a solicitor where his conduct amounted to 'gross incompetence such as to amount to a serious dereliction of duty'. It referred to White Industries (QLD) Pty Ltd v Flower and Hart [1998] FCA 806; (1998) 156 ALR 169 per Goldberg J. It referred also to Buckland Products Pty Ltd v Deputy Commissioner of Taxation of the Commonwealth of Australia [2003] VSCA 86; Johnston v Johnston [2006] QSC 31 and Re The Black Stump Enterprises Pty Ltd and Associated Companies (No. 2) [2006] NSWCA 60.
5. Clifford Hallam said there was a question whether Ms Price's persistence with her seriously flawed complaint indicated that she had failed to heed prudent advice or whether she had received 'bad advise'. The costs order should be made jointly and severally Clifford Hallam submitted against Ms Price and Mr McDonald of McDonald Murholme.
6. Clifford Hallam invited the Tribunal to award indemnity costs in accordance with the principles enunciated by Colgate Palmolive Co and Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248 and Kuek v Devflan Pty Ltd [2006] VSCA 186. Alternatively on County Court Scale 'C' including counsels' fee.

1. It was submitted on behalf of Ms Price that no costs order should be made, rather the principle to be found in Section 109(1) of the Victorian Civil and Administrative Tribunal Act that costs should lie where they fall should be observed.
2. Next it was submitted that the Tribunal's power to award costs under Section 109 of the Victorian Civil and Administrative Tribunal Act extended only to orders in a proceeding. It was contended:

The definition of "proceeding" provided by Section 3 of the Victorian Civil and Administrative Tribunal Act does not include an investigation by the Victorian Equal Opportunity and Human Rights Commission. As the investigation had not yet progressed to the Tribunal it cannot be the subject of any costs order.

1. It was submitted that I declined to deal with the strike out application under Section 75 of the Victorian Civil and Administrative Tribunal Act.
2. Even if these contentions were wrong Ms Price's solicitor submits no costs order should be made.
3. Mr McDonald submitted that merely lodging the complaint with the Commission could not constitute vexatious conduct. He referred to Kasempa Pty Ltd v Surfcoast Shire Council [2007] VCAT 163. According to Mr McDonald the consideration raised in Section 109(3)(a)(vi) directed attention to the mode of conduct of a proceeding not to its substance. He said:

At the application hearing it was found that the complaint was misconceived, but not that it was vexatious.

1. Mr McDonald denied that Ms Price's complaint had no tenable basis in fact or law. He noted for a start that the Tribunal had rejected a contention that relief should be granted against Ms Price based on Section 75 of the Victorian Civil and Administrative Tribunal Act 1998. Mr McDonald noted that counsel's fee was sought as part of the costs order because of the complexity of the matter. Accordingly he said this indicated that there must have been some basis of fact or law to investigate.
2. As to whether it was fair to make a costs order against Ms Price, Mr McDonald said that Clifford Hallam did not deny that Ms Price's impairment was 'caused by the environment created by [Clifford Hallam]'. He observed that Clifford Hallam had:

Chosen to bypass the informal and low cost jurisdiction of the [Commission], and escalated the matter by bringing the application. The application involves detailed legal arguments and has caused the applicant [Clifford Hallam] to incur the costs of engaging counsel.

1. The Commission had the power to dismiss the application or decline to entertain it and for Clifford Hallam to have invoked that power 'would have achieved the same result but with a reduced cost to both parties'.
2. Next he said that employment disputes were weighted in favour of employers because of their superior resources and experience. To make a costs award in these circumstances would be a threat to access to justice.
3. As to the settlement offers and Section 112 of the Victorian Civil and Administrative Tribunal Act Mr McDonald submitted that it could not be said the result given by the Tribunal was not more favoured than the settlement offer. In effect the result in the settlement offer were the same.
4. Mr McDonald resisted the making of any order against him. He said:

This is a serious matter and the complainant [Ms Price] submits that the applicant [Clifford Hallam's] submissions failed to describe any justification for such an order.

1. He submitted that the White Industries, Buckland Product and Black Stump Enterprises cases together with Johnston v Johnston were all distinguishable. Mr McDonald referred to a report by Dr Timothy J. Entwisle which indicated he said that Dr Entwisle was of the view that Ms Price 'was genuine'. He observed that Clifford Hallam had used a private detective to carry out surveillance of Ms Price which turned up no useful material.
2. He submitted to make the orders sought would be a threat to access to justice.

1. Section 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 creates a presumption that in proceedings in the Tribunal costs lie where they fall. Sub-section (2) authorises the Tribunal to make costs orders in a proceeding of the whole or part of the costs of the one party against another party where it is fair to do so. Section 109(3) sets out a series of considerations which may enliven that discretion. The last of those matters at paragraph (e) is 'any other matter the Tribunal considers relevant'. The discretion is a very broad one indeed.
2. I turn first to the contention that Section 109 of the Victorian Civil and Administrative Tribunal Act does not apply at all because this is not a proceeding. Proceeding is defined in Section 3 of the Victorian Civil and Administrative Tribunal Act as follows:

proceeding means a proceeding in the Tribunal, including -

(a) an inquiry conducted by the Tribunal, including an inquiry under section 159 of the Equal Opportunity Act 1995;

(d) a rehearing or reassessment under Part 6 of the Guardianship and Administration Act 1986 -

but, for the avoidance of doubt, not including a referral by the Tribunal to the Victorian Equal Opportunity and Human Rights Commission under section 156(1) of the Equal Opportunity Act 1995

1. The referral power under Section 156 of the Equal Opportunity Act 1995 which is specifically excluded is as follows:

(1) If the Tribunal becomes aware of circumstances where a contravention of Part 3, 5 or 6 of this Act or Part 2 of the Racial and Religious Tolerance Act 2001 may have occurred (other than an alleged contravention that is the subject of proceedings before the Tribunal), the Tribunal may refer the matter to the Commission for investigation.

1. It will be seen that this exclusion is irrelevant to the present dispute. Section 109 of the Equal Opportunity Act 1995 specifically authorises the Tribunal to entertain the proceeding which Clifford Hallam has successfully brought to strike out Ms Price's complaint at the Commission stage. Section 134 of the Equal Opportunity Act which appears in Division 7 of Part 7 and is headed 'Jurisdiction of the Tribunal' includes in sub-section (2) a statement that the Tribunal 'has the jurisdiction conferred by Sections 109 ...'. Where the Tribunal's jurisdiction under an enabling enactment is invoked by a party what results is a proceeding. I am making this adjudication as part of something which is to be found in a proceeding file and which has been assigned a proceeding number. The contention that this is to be described as anything other than a proceeding cannot be sustained.
2. I accept the contention by Mr McDonald on behalf of Ms Price that Section 109(3)(a)(vi) when it speaks of a party vexatiously conducting a proceeding focuses upon the manner in which the proceeding is conducted rather than upon the substance of the party's case. Clifford Hallam alleges vexatious conduct in two respects, first of having a hopeless case Ms Price would not give up and secondly that Mr McDonald her solicitor was an hour late at the directions hearing on 29 March 2010. Since I did not preside on that occasion I know nothing of the circumstances which obtained on 29 March 2010; however had the presiding member Senior Member Davis believed that Ms Price and her legal adviser ought to be sanctioned for vexatious conduct he would have made a costs order reflecting that on the day. As it was the order was the usual order made at a directions hearing, namely that the costs be reserved. Moreover given that Clifford Hallam's solicitor attended by telephone it is not obvious what if any costs have been thrown away as a result of lateness on Mr McDonald's part. I put this issue to one side. It may be that pressing on with a hopeless case could be separately regarded for the purposes of a costs application as vexatiously conducting a proceeding. In the present case however this is a proceeding which was brought in the Tribunal by Clifford Hallam and not by Ms Price. Ms Price has simply refused to give in. In my view that in itself cannot amount to vexatious conduct.
3. Given that I acceded to the application that Ms Price's complaint be struck out I was necessarily satisfied to the very high degree necessary that the complaint was doomed to fail. A consideration therefore of the relative strength of the claims by each party for the purposes of Section 109(3)(c) of the Victorian Civil and Administrative Tribunal Act will lead to a conclusion that Clifford Hallam's case was very strong and Ms Price's was very weak and I must necessarily accept that her complaint had no tenable basis. To make that finding however does not in itself create an entitlement to a costs order. Section 109(3) is introduced by the word 'may'. This is apt to bestow a discretion Section 45 Interpretation of Legislation Act 1984. Moreover sub-section (3) requires the Tribunal to have regard to all of the matters referred to in its paragraphs and sub-paragraphs including paragraph (d) 'the nature and complexity of the proceeding' and paragraph (e) 'any other matter the Tribunal considers relevant'. These provisions entitle or perhaps oblige me to consider the access to justice issues which were raised by Mr McDonald. It was a convenient course for Clifford Hallam to take to mount the successful pre-emptive strike which it has done rather than go through conciliation processes at the Commission. Is it entitled however to achieve that favourable result requiring Ms Price to pay its legal costs in doing so? Whatever arguments there might be for requiring Ms Price to pay costs had she sought and achieved a referral of her dispute from the Commission to this Tribunal requiring an unsuccessful complainant to pay costs at the Section 109 stage is in my view a threat to access to justice for complainants under the Equal Opportunity Act who at that stage had sought no more than the conciliation service of the Commission. These considerations are properly referrable to the nature of the proceeding in question and other matters which may be regarded as relevant.
4. For these reasons I am not persuaded that Section 109 of the Victorian Civil and Administrative Tribunal Act justifies my awarding costs against Ms Price.
5. What of Section 112 and the following provisions of Sections 113 to 114? Without quoting them in full they are broadly similar to the offer of compromise provisions to be found in Order 26 of the Rules of the Supreme Court. It is perhaps significant to note however that the word 'compromise' is not to be found in these provisions. They operate if what is described as an offer of settlement is proposed. See Transport Accident Commission v Coyle (2001) 3 VR 598. Where they operate require the party not accepting the offer to pay all costs incurred by the other party after the making of the offer but only 'unless the Tribunal otherwise orders'. According to Pizer Victorian Administrative Law [VCAT.112.100]:

The VCAT has an unfettered discretion to order that the consequences set out in s.112(2) do not apply. It must look at the particular circumstances of the case before deciding whether to exercise that discretion.

1. Here whilst the offer is an offer to settle it is not an offer of compromise at all, it is a peremptory demand to surrender. If a defendant in a court proceeding were to say:

I offer to settle this proceeding on the basis that you the plaintiff discontinue your proceeding or consent to its dismissal with no order as to costs.

this would be an offer of compromise. If the plaintiff went on and lost in accordance with the rule that costs follow the event, the plaintiff would have to pay the defendant's costs. Similarly if in circumstances where the offer was not accepted and was no longer open, the plaintiff discontinued his proceeding he would be liable to pay the defendant's costs. In those circumstances the offer that each party bear their own costs is a genuine compromise. In the Tribunal the presumption in accordance with Section 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 is that the costs lie where they fall. An offer along those lines is in accordance with Coyle's case an offer of settlement even if there is no compromise in it at all; but considering all relevant circumstances to determine whether I should allow Section 112's presumption to operate, the fact that there was no compromise at all offered by Clifford Hallam is relevant. It is also relevant to consider the nature of the proceeding in which this offer was made. It was as I have previously observed an attempted and ultimately successful pre-emptive strike which had the effect of excusing Clifford Hallam from participating in conciliation proceedings at the Commission. This raises again the access to justice issue which I have regarded as a contra-indication in the context of Section 109 of the Victorian Civil and Administrative Tribunal Act against the award of costs in favour of Clifford Hallam. Putting these two matters together the lack of comprise in the offer and the threat which allowing it to operate in the way that Clifford Hallam desires would pose to access to justice by way of preliminary conciliation, I believe Section 112 should not be allowed to operate as sought by Clifford Hallam.

1. This brings me finally to the issue as to the claim for costs against Mr McDonald personally. Given that I have not been persuaded that it is just to make a costs award against Ms Price, it would seem to follow that the application against Mr McDonald should be unsuccessful for the same reason. There may be circumstances, indeed Section 109(4) of the Victorian Civil and Administrative Tribunal Act 1998 specifically contemplates them where it would be thought unjust to award costs against a party but just to award them against the legal adviser. Such an occasion may arise in the case of 'bad advice'. It is not possible at this stage to know what advice Ms Price received or did not receive from Mr McDonald. Accordingly it is impossible to make a finding which would blame Mr McDonald but exonerate Ms Price. Moreover it must be noted that from Mr McDonald's standpoint it would have been reasonable for him to advise Ms Price that the threshold to success by Clifford Hallam in an application for a strike out summarily terminating her complaint was very high and even a strong application to this effect may prove unsuccessful leaving it open to her to perhaps achieve something at conciliation at the Commission even if the expectation were that the matter would not go beyond that conciliation stage. Precisely what strategic considerations along these lines may have guided Ms Price and Mr McDonald we do not know and in the circumstances it would be wrong to speculate.
2. The costs applications are dismissed.
3. I should also note that a document styled 'Submissions on costs in reply' and dated 3 June 2010 was filed on behalf of Clifford Hallam. Mr McDonald noted that there was no leave granted for the filing by Clifford Hallam of submissions in reply. In those circumstances I have ignored those unauthorised submissions Rumpf v Mornington Peninsula Shire Council [2000] VSC 311; (2000) 2 VR 69, 91-94 [61] - [78].