Julien v Secretary, Department of Employment and Workplace Relations

REASONS FOR JUDGMENT 1 On 18 September 2009, I dismissed the appeal by Archie Julien from a judgment of Federal Magistrate Burnett who had dismissed an appeal from a decision of the Administrative Appeals Tribunal. That decision concerned the entitlement of the Secretary, Department of Employment and Workplace Relations to recover from the appellant as a debt due to the Commonwealth, an amount that had been overpaid to the appellant in relation to his Newstart Allowance. 2 I made orders for the filing of submissions on costs as follows: 1. The respondent to file and serve submissions on costs within 14 days. 2. The appellant to file and serve any submissions in response within a further 14 days. 3. The Court will then consider the question of costs on the papers. 3 The respondent's costs submissions were filed on 2 October 2009, together with an affidavit deposing to the amount of the respondent's legal costs. 4 Nothing has been filed by the appellant. The 14 day period for him to make those submissions has now expired. 5 I am now concerned then with the question of costs, which is to be determined on the papers. 6 The power to award costs, in the circumstances of this case, is provided by s 43(2) of the Federal Court of Australia Act 1976 (Cth) which provides, relevantly: … the award of costs is in the discretion of the Court or Judge. 7 Order 62 r 4 of the Federal Court Rules relevantly provides: (1) Subject to this Order, where by or under these Rules or any order of the Court costs are to be paid to any person, that person shall be entitled to his taxed costs. (2) Where the Court orders that costs be paid to any person, the Court may further order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that person shall be entitled to: … (c) a gross sum specified in the order; or (d) a sum in respect of costs to be ascertained in such a manner as the Court may direct. 8 Ordinarily, an order for costs follows the event, ie, a successful party is entitled to an order that its costs be paid by the unsuccessful party. 9 The purpose of an order such as O 62 r 4 is to avoid the expense, delay and aggravation involved in litigation arising out of the taxation process: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120; Leary v Leary [1987] 1 WLR 72. The power to order gross sum of costs is one which has to be exercised judicially, and after giving the parties adequate opportunity to make submissions on the matter: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; Ualesi (t/a Australian Empire Imports) v Expeditors International Pty Ltd [2006] FCA 26. 10 One factor which I regard as significant in exercising the discretion to make an order for gross sum of costs, in the circumstances of the present case, is that, having regard to the financial capacity of the appellant, the additional cost for taxation is likely to impose a significant burden on the respondent, without real prospects of recovering those additional costs: Sparnon v Apand Pty Ltd [1998] FCA 164; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788. 11 I am satisfied that this is an appropriate case for an order for gross sum of costs. 12 In my view, not only it is likely that the additional costs of taxation would impose a significant burden on the respondent without any real prospects of recovering those additional costs, but also the expense, taxation and delay occasion to the respondent is likely to be disproportionate to the amount of the costs recoverable: Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916, at [28]. 13 The evidence in the affidavit of Kathryn Elizabeth Finlayson sworn and filed 2 October 2009 establishes that the charges for professional costs, calculated according to the rate for a solicitor in force at the relevant times under item 31 of the Second Schedule of the Federal Court Rules, amount to $12,672.00, and disbursements amount to $160.75. 14 The actual costs incurred by the respondent, including disbursements, total $15,813.06. 15 The estimate of the professional costs pursuant to the Second Schedule of the Federal Court Rules, together with disbursements, thus represents approximately 81% of the respondent's actual costs of the matter. 16 In my view, the fixing of a gross sum for costs in the sum of $12,832.75 is "logical, fair and reasonable": see Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd (2008) 249 ALR 871, at [25]. 17 The order of the Court is that in respect of proceedings QUD 359 of 2008, the appellant pay the costs of the respondent of and incidental to the appeal, which I fix in the amount of $12,832.75. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.