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[2015] FCA 1225
Federal Court of Australia
2015-11-16
Mr J, Katzmann J
Original judgment source is linked above.
The applicant's submissions 25 Mr Grabovsky's submissions were largely irrelevant. They were also inflammatory. Notwithstanding that I had decided that his proposed appeal was doomed to fail and he had not applied for special leave to appeal it, he complained that the judgment of the primary judge was "a travesty of justice". He submitted that the Department recklessly wasted tens of thousands of taxpayer dollars and that this is one of the reasons he insists on "the full itemised invoice". He also made wild, unsubstantiated allegations of wrongdoing on the part of the AGS and the Department (with respect to this proceeding and unrelated proceedings involving his wife). In the submissions he revived the argument he had put to the primary judge and on the substantive application that the Secretary is not a proper party to the proceeding - an argument I held the primary judge had correctly rejected - and appears to attribute bad faith to the Secretary and his legal advisors merely because they, too, considered that the Secretary should be named as a party. He claimed that the Department was trying to harm him.
The applicant's application 26 Mr Grabovsky concluded his submissions with a request that the orders I made in March this year be set aside because of the Department's misconduct and, in the alternative, a stay, although he stated he had no intention of making an application to the High Court for an extension of time to appeal. In addition, he asked the Court to disallow the whole of the costs as between the AGS and the Department pursuant to rr 40.07(1)(a) and 40.07(2)(b)(i) of the Federal Court Rules "due to misconduct of the Australian Government Solicitors". It is convenient to deal with that application at this point. 27 Rule 40.07 relevantly states: (1) A party who has reasonable cause to believe that additional costs have been incurred because of the party's lawyers' misconduct, may apply to the Court for an order: (a) that the whole or part of the costs as between the lawyer and the party be disallowed; … (2) For this rule, a lawyer has engaged in misconduct if: … (b) the lawyer: (i) incurs costs improperly or without reasonable cause; … 28 Mr Grabovsky did not file an interlocutory application seeking the orders he asked for in his written submissions, nor did he ask for an order that the rules which require such an application to be filed be dispensed with. On that basis alone his application should be dismissed. 29 In any event, the application should be dismissed for the following reasons. 30 First, Mr Grabovsky did not identify the Departmental officer or the lawyer in question. While two lawyers were named in the draft notice of appeal filed with Mr Grabovsky's application for an extension of time to appeal, Mr Grabovsky has never filed any evidence to suggest misconduct on the part of either of them. 31 Secondly, the fact that the AGS did not file a certificate under Div 10 of the Legal Profession Act (which I note, for completeness, has since been repealed and replaced by the Legal Profession Uniform Law Application Act 2014 (Cth)) does not amount to misconduct. As I explained in Grabovsky No 1 at [50]-[52], these provisions only applied to actions for damages and appeals in such actions. Neither the appeal from the AAT nor the substantive application is an action for damages or an appeal in such an action. To the extent that Mr Grabovsky is reviving the allegations that he made against the Secretary in the principal proceeding, I disposed of them in Grabovsky No 1 at [37]-[56]. 32 Thirdly, the letters from Mr Edwards made clear that the AGS was writing to Mr Grabovsky on behalf of the Secretary. The AGS is the Secretary's agent in the litigation. There is no reason to conclude that it did not have the Secretary's authority to write to Mr Grabovsky or to doubt that at all relevant times it was acting on the Secretary's instructions. 33 Fourthly, the proposition that the only proper respondent was the AAT is (and always has been) baseless. As the primary judge observed at [26] of his reasons, because the Secretary was the original decision-maker, he was the proper party to defend the proceeding. As I pointed out in Grabovsky No 1 at [61], for the reasons given by the High Court in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35-36, it is generally inappropriate for the AAT to appear in court to defend its own decisions. Furthermore, Mr Grabovsky was seeking orders against the Secretary. In these circumstances, the Secretary was not only a proper party, he was a necessary party. 34 Fifthly, the submission that the AGS failed to reveal a valid defence also seeks to revive arguments I dismissed in Grabovsky No 1 and to re-agitate the substantive application; 35 Sixthly, there is no conflict of interest in the representation of the Secretary by the AGS and no prejudice to Mr Grabovsky. The Attorney-General did not appear in these proceedings and there is no evidence that the Attorney-General ever engaged the AGS to represent him in the proceedings. Ground 6 appears to be based on a misunderstanding of Mr Edwards' evidence. 36 Finally, there is no evidence that costs have been improperly, unreasonably or negligently incurred and no basis to set aside judgment on the substantive application.
Should the Court make an order under r 40.02(b)? 37 Rule 40.02(b) of the Federal Court Rules states that a party or person who is entitled to costs may apply to the Court for an order that costs awarded in their favour be awarded in a lump sum, instead of, or in addition to, any taxed costs. 38 Section 37M(3) of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") relevantly provides that the civil procedure provisions of the Act and Rules must be interpreted and applied, and any power conferred by them exercised, in the way that best promotes their overarching purpose. That purpose is set out in s 37M(1), which states that: The overarching purpose of the civil practice and procedure provisions [defined in subs (4) to include the Act and Rules] is to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, inexpensively and efficiently as possible. 39 The overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. See s 31M(2). 40 Without doubt, and perhaps with the benefit of hindsight, the best way to have promoted the overarching purpose of the civil procedure provisions of the Act and Rules would have been for the Secretary to have sought a lump sum costs order at the time judgment was handed down. Had the Secretary foreshadowed in his written submissions or in oral argument that, if he were successful, he would seek an order of this kind, the application could have been dealt with at the time of judgment and saved the parties and the Court the time and effort involved in dealing with the present application. Nevertheless, Mr Grabovsky did not complain about the delay and, based on all the evidence before me, I am satisfied that it would unnecessarily prolong the costs dispute and it would be inefficient and productive of unnecessary expense to require the Secretary to prepare an itemised bill for taxation. Having regard to the information in the table contained in the letter from the AGS to Mr Grabovsky dated 7 May 2015, extracted above at [10], which is consistent with the way the AGS presented its case, I am satisfied that, if costs were to be taxed the Secretary's bill would be likely to exceed the amount claimed. 41 As Mr Edwards submitted in his affidavit, the Secretary is seeking to recover only party and party costs and only a portion of those. The fact, for example, that Mr Grabovsky raised constitutional issues in the substantive application meant that the Secretary incurred additional costs in consulting with lawyers from the Constitutional Litigation Unit of the AGS but those additional costs have not been included in the lump sum sought. Nor does that sum include the costs associated with the futile attempts to reach agreement with Mr Grabovsky in relation to costs. What is more, the Secretary has not asked that Mr Grabovsky pay the costs of this application. 42 In all the circumstances, not only would it promote the overarching purpose of the civil procedure provisions of the Federal Court Act and Rules to make the order the Secretary seeks, it is in Mr Grabovsky's interests that the order be made. It seems to me to be highly likely, if not inevitable, that if I were not to make the order the Secretary seeks the costs that Mr Grabovsky would have to pay would exceed by a not insignificant margin the $8,500 the Secretary asks for.
Conclusion 43 For the foregoing reasons, the order sought in the Secretary's interlocutory application should be made. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.
Grabovsky
Secretary, Department of Social Services
REASONS FOR JUDGMENT 1 This is an application for a lump sum costs order. 2 Igor Grabovsky was an applicant for a disability support pension. After his application was refused by Centrelink (on behalf of the Secretary of the Department of Social Services), he unsuccessfully sought internal review, then external review, applying first to the Social Security Appeals Tribunal ("SSAT"). The SSAT affirmed the decision of the internal reviewer. Mr Grabovsky then applied to the Administrative Appeals Tribunal ("AAT" or "Tribunal") for a review of the SSAT decision. This time he was successful. The AAT set aside the decision of the SSAT and remitted the matter to the Secretary with a direction that Mr Grabovsky's eczema be assessed under Table 14 of the Impairment Tables. These are Tables contained in the Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 (Cth). Their significance is that one of the conditions of eligibility for a disability pension is that the applicant has an impairment which carries a rating of 20 points of more under the Impairment Tables: Social Security Act 1991 (Cth) s 94(1)(b). 3 Despite his success before the AAT, Mr Grabovsky was unhappy with the Tribunal's decision to remit his application to the Secretary and appealed to this Court, complaining, amongst other things, that the hearing was lacking in procedural fairness, the Tribunal applied an irrelevant statute, and that the decision was reached "without due consideration of the merits". Appeals from the AAT to the Court are confined to appeals on a question of law: Administrative Appeals Tribunal Act 1975 (Cth) s 44(1). Mr Grabovsky was unable to persuade the primary judge that the Tribunal had erred in law and his appeal was dismissed: Grabovsky v Secretary, Department of Social Services (No 2) [2014] FCA 1130. He then applied for an extension of time to appeal from the primary judge's decision ("the substantive application"), but, on 20 March 2015 I dismissed his application, largely because I considered it was doomed to fail: Grabovsky v Secretary, Department of Social Services [2015] FCA 244 ("Grabovsky No 1"). I considered that costs should follow the event and, accordingly, ordered Mr Grabovsky to pay the Secretary's costs. 4 There then ensued a prolonged dispute between the Secretary and Mr Grabovsky over payment of the Secretary's costs, culminating in the filing of the present interlocutory application.
(1980) 144 CLR 13