Feathersone v Peninsula Health (No.2) [2004] FCA 594

Ryan v Presbytery of Wide Bay Sunshine Coast [2001] FMCA 12

Tadawan v State of South Australia [2001] FMCA 25

Xiros v Fortis Life Insurance Ltd [2001] FMCA 15

Low v Australian Tax Office [2000] FMCA 6

(1) That the applicant pay the respondent's costs to be agreed, and if not agreed, to be taxed in accordance with schedule 1 of the Federal Magistrates Court Rules using the procedure contained in order 62 of the Federal Court Rules.

(2) Liberty to apply be granted in respect of the order for costs.

1. On the 22 April 2000, I gave judgment dismissing the applicant's claim alleging disability discrimination in employment. The respondent applied for costs. The applicant sought time to deliver submissions on the question of costs. I ordered that the applicant file and serve any written submissions in relation to costs within 14 days. This has been done. I reserved the question of the need for any reply by the respondent on the question of costs. Given the decision I have come to, there is no need for the respondent to reply.

2. The power to award costs is contained in s.79(2) and (3) of the Federal Magistrates Act 1999. They provide:

(2) The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.

(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Magistrates Court or Federal Magistrate.

3. The applicant referred to extracts from decisions made in the Federal Magistrates Court on the question of costs, particularly in relation to human rights matters. These are:

a) Ryan v Presbytery of Wide Bay Sunshine Coast [2001] FMCA 12, at [20]:

Whilst I have the power to award costs, the nature and intent of anti-discrimination legislation could be thwarted if citizens were unreasonably inhibited from prosecuting bona fide, even ultimately unsuccessful claims.

b) Tadawan v State of South Australia [2001] FMCA 25 at [62-63 ]:

62. The Court has accepted that these matters were normally considered to be "no costs" matters, as evidenced by the practice of state tribunals and the fact that there was no power in HREOC to award costs. The Court has recognised that where proceedings are brought a successful party should not have the benefit of his or her victory lost in costs. The Court is also anxious not to discourage litigants from bringing claims which may well have merit because of the fear of an adverse costs order in the event that the applicant is unsuccessful. On the other hand, the Court can use its powers in relation to costs to discourage unmeritorious claims.

63 Although the applicant has not succeeded in this case the Court is of the view that her claim was justifiable. It was brought against the background of poor communication, which I have attempted to discuss in some detail. I believe that this is a case where the court should acknowledge the "no cost" nature of the jurisdiction and make no order.

c) Xiros v Fortis Life Insurance Ltd [2001] FMCA 15;

20. As to the issue of costs, the respondent has sought an order for costs should it be successful. Mr Xiros told me that he would not resist an order for costs should he be unsuccessful. After due consideration however, I think that that concession was too readily made. Ordinarily, in this jurisdiction as in others, costs follow the event. But there is no absolute rule to that effect. There is a general principle that, in civil non jury trials, in the absence of special circumstances, a successful party has a reasonable expectation of obtaining an order for costs in its favour unless, for some reason connected with the case, a different order is specifically warranted: Donald Campbell & Co v Pollack [1927] AC 732 at 812, cited by McHugh J in Latoudis v Casey [1990] HCA 59; (1990) 170 CL R 534 at 569. A departure from that general principle cannot be arbitrary or idiosyncratic, but there is no right to an order for costs, notwithstanding success in litigation: Donald Campbell & Co v Pollack op cit at 811.

21. Costs orders are, in general, compensatory, not punitive. Again, however, the compensatory principle is not absolute. The general discretion conferred on the Court should not be shackled or confined: Donald Campbell & Co v Pollack at 811-812.

22. One circumstance that might disentitle a successful litigant to an order for costs can be the behaviour of the litigant during the course of the proceedings, for example, by taking unnecessary technical points or otherwise inappropriately prolonging the proceedings. That is certainly not the case here. On the contrary, the respondent, through its legal representatives, has behaved impeccably.

23. Another circumstance that may warrant a departure from the general principle is where the unsuccessful party is unrepresented and was not in a position to make a proper assessment of the strength or weakness of his case, and, hence, the risk associated with the litigation. Mr Xiros had the benefit of legal assistance for his complaint to HREOC but he was unrepresented in these proceedings. The issue to be resolved was a technical one: whether there was a sufficient actuarial basis for the exclusion from benefits in the insurance policy of HIV/AIDS derived conditions, an issue on which the respondent bore the onus of proof. That issue could only be resolved by the pursuit of the present application to this Court, and Mr Xiros was not in a position to make a reliable assessment of his prospects of success.

24. A further circumstance that may warrant a departure from the general principle is where the proceedings contain a significant public interest element: Oshlack v Richmond River Council [1998] HCA 11; (1998) 152 ALR 83. All human rights proceedings contain some element of public interest in that the legislation is remedial in character, addressing the public mischief of discrimination. But the legislation confers private rights of action for damages. There will be many human rights proceedings where no sufficient public interest element can be shown: Physical Disability Council of NSW v Sydney City Council [1999] FCA 815.

d) Low v Australian Tax Office [2000] FMCA 6;

I conclude that Ms Low's application does not disclose an arguable case. In the circumstances I think that the appropriate course for the Court to take is to decline to grant an extension of time to bring the application and in consequence to dismiss the application.

The alternative course would be to grant an extension of time to enable Ms Low to have her day in court to give her the opportunity to present her case in further detail. However, it is apparent from the directions hearings in this matter in the Federal Court and in this Court that that course would be most unlikely to be productive and would put the respondent, ATO, to significant expense. Were that to occur, and were the Court to ultimately dismiss the application, which appears in the circumstances inevitable, then the Court may well feel constrained to make an order for costs in favour of the respondent.

Mr Markus has submitted that costs should be awarded now. In my view the Court should be slow to award costs at an early stage of human rights proceedings so that applicants have a reasonable opportunity to get their case in order, to take advice and to assess their position. It would, in my view, be undesirable for costs to be awarded commonly at an early stage, as that would provide a deterrent to applicants taking action under what is remedial legislation in a jurisdiction where costs have historically not been an issue.

By disposing of the application now at this relatively early stage the respondent is able to avoid being put to the substantial expense of a full hearing and in those circumstances I do not think it necessary or appropriate to make any order as to costs. Therefore the orders I make are to refuse the application for an extension of time, and to dismiss the principal application for relief. I make no order as to costs.

4. The approach to be taken to costs in human rights matters as described in Tadawan has been rejected by the Federal Court of Australia. In Feathersone v Peninsula Health (No.2) [2004] FCA 594, Heery J. said at [5-9]:

5. Counsel relied on a decision of Raphael FM in Tadawan v State of South Australia [2001] FMCA 25 where it was said at [62]:

"The [Federal Magistrates] Court has accepted that these matters were normally considered to be `no cost matters' as evidenced by the practice of State Tribunals and the fact that there was no power in HREOC to award costs. The Court has recognised that where proceedings are brought a successful party should not have the benefit of his or her victory lost in costs. The Court is also anxious not to discourage litigants from bringing claims which may well have merit because of the fear of an adverse costs order in the event that the applicant is unsuccessful. On the other hand the Court can use its powers in relation to costs and discourage unmeritorious claims".

6. That view has been firmly rejected within the Federal Magistrates Court itself. In Ball v Morgan [2001] FMCA 127 McInnis FM said at [83]:

"The suggestion that human rights matters are normally to be considered as `no costs' matters is therefore in my opinion misconceived and cannot be regarded as an appropriate legal principle to be applied in human rights applications".

7. Single judges of the Federal Court have proceeded to deal with costs on a basis which plainly recognises that the Court has power to award costs and, generally speaking, they should be ordered in favour of the successful party, although discretionary factors may lead to a different result: Physical Disability Council of New South Wales v Sydney City Council [1999] FCA 815, Tate v Rafin [2000] FCAE 1582 at [71].

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] HCA 48; (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.

5. Therefore, in the Federal Magistrates Court in human rights matters, the usual principles as to costs apply. The general rule is that a wholly successful respondent should receive his or her costs unless good reason is shown to the contrary.

6. The applicant refers to a number of matters. He alleges there has been poor communication applicable to the applicant's case. He is referring not to the manner in which the case was conducted but the events which he alleged gave rise to his claim of discrimination. In the circumstances of this case, where there has been summary disposal, even if there was evidence of the events which gave rise to the applicant's claim for discrimination, it is not a basis for exercising discretion in relation to costs.

7. The applicant referred to the fact that he was unrepresented and so at a disadvantage in assessing the prospects of success of his case. Again, I do not consider that this is a matter relevant to the exercise of discretion as to costs in this case.

8. The applicant submitted that there was a public interest element in this case, namely the difficulty people suffering from Asperger's syndrome have in engaging in employment. There could only be a public interest element if there was some evidence that the applicant was discriminated against in employment because of his disability. I have found that it is impossible to see how the applicant, if the application had gone to trial, could have put a case of discrimination. There is therefore no public interest element. The applicant referred to the nature of his disability. For the same reason, that can have no influence on the exercise of the discretion as to costs.

9. The applicant has referred to his financial position and his inability to pay costs. The inability to pay costs is not a special circumstance to replace the normal principle that a successful party recovers costs.

10. There is no reason in this case why the ordinary rule as to costs should not apply. The respondent is entitled to an award of costs.

11. The applicant expressed concern at the amount of costs claimed. I will order that costs be in accordance with schedule 1 of the Federal Magistrates Rules 1999 which will control the amount of costs recovered by the respondent.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Phipps FM