Kassam v Hazzard; Henry v Hazzard

The Plaintiffs' Means

As noted, the State parties contended that one matter tending against the Court otherwise ordering is that the Henry plaintiffs had raised funds for the litigation. Some of the authorities that have considered whether to otherwise order in relation to so‑called public interest litigation have treated the capacity of the relevant plaintiff to meet a costs order or pay their own costs or at least whether they did so as a factor to be considered. Hence, in Jurecek v Director, Transport Safety Victoria (No 2) [2016] VSC 695 at [16] ("Jurecek"), Bell J observed that "[m]aking the usual order for costs may represent an unreasonable impediment to individuals of modest means wanting to commence future appeals that have substantial merit and are in the public interest". Jurecek was an unsuccessful appeal from the Victorian Civil and Administrative Tribunal concerning the rejection of a complaint of a breach of "Privacy Principles" set out in the Information Privacy Act 2000 (Vic). The usual outcome in the tribunal appealed from was that each party bears their own costs (at [15]). In making no order as to costs in Ruddock v Vadarlis (2001) 115 FCR 229; [2001] FCA 1865 at [28], Black CJ, Beaumont and French JJ had regard to the fact that the (unsuccessful) respondent to the appeal had been represented free of charge.
This brings to the fore the rationale underlying the Court sometimes making no order as to costs in unsuccessful proceedings that can be characterised as brought in the public interest. The cases do not suggest any single rationale which is not surprising given the different statutory contexts in which the various decisions have arisen and the fact that different unsuccessful cases may warrant the Court otherwise ordering for different reasons. However two related rationales, amongst others, that are discussed in the cases have already been adverted to namely the promotion of the rule of law in not inhibiting litigants with reasonable cases concerning important rights, interests or issues from approaching the Courts (Caroona at [27] to [36]) and avoiding the relative unfairness of a single litigant or group of litigants bearing the expense or burden of a case that is brought for the wider benefit of the public as a whole or at least a class or section of the public (Oshlack v Richmond City Council (1998) 193 CLR 72; [1998] HCA 11 at [136] per Kirby J).
The latter if not both of these rationales are reflected in the submissions of both sets of plaintiffs in this case. Hence, the Kassam plaintiffs' submissions on costs submitted that each of the plaintiffs were "workers" and "they are plainly not persons of large means". [9] The Henry plaintiffs concluded their submissions as follows: [10] "In these circumstances, it would be unfair and unjust for the Plaintiffs personally to bear the burden of the costs associated with this litigation. The public has gained at some benefit from the Court's adjudication in understanding their rights within the context of the COVID-19 emergency measures that have been applied against them by the State government in these unique times. In this regard, it is submitted that the public as a whole should bear the costs burden. Sensibly, this would mean that the costs of the proceedings should be absorbed by the State of New South Wales which, for practical purposes, is the Defendant in this proceeding." (emphasis added)
These submissions and the authorities noted above mean that in considering whether to otherwise order in this case the Court can and should consider the effect of the burden that an adverse costs order would impose on the two sets of plaintiffs.
As noted above, when the Court dismissed the proceedings on 15 October 2021, it made provision for the exchange of submissions on the appropriate order as to costs. The State defendants filed and served an affidavit of John McDonnell sworn 29 October 2021 which annexed material showing that the solicitor for the Henry plaintiffs raised funds from the public for their case via the website "GoFundMe" (a form of fundraising that will be described as "crowdfunding"). Both sets of plaintiffs objected to the Court considering that affidavit on the basis that, inter alia, the service of affidavits was not contemplated by the orders made on 15 October 2021.
To avoid disputes about evidence being resolved on the papers and to consider the relevance of any crowdfunding that may have taken place to the debate over costs, I listed the costs application for further hearing on 2 December 2021. I also gave each of the Kassam plaintiffs and the Henry plaintiffs leave to file on or before 5.00pm on 19 November 2021 "any affidavit they wish to addressing the plaintiffs' means, any funds that were raised to meet their legal costs or defray their costs exposure, and the basis on which any funds were raised."
In response to this opportunity, the solicitor for the Kassam plaintiffs filed two affidavits. However, he did not address the topics raised by the Court. He stated that he did not reply to Mr McDonnell's affidavit on the basis that the material annexed to his affidavit concerning crowdfunding only concerned fundraising by the solicitor for the Henry plaintiffs. That is true but it overlooks that his clients' submissions concerning why they should not pay costs asserts "[t]hey are plainly not persons of large means". It also overlooks that his clients' counter‑offer to the State defendants requested the payment of $500,000.00 in costs; a large sum incurred in a short term and a sum that on the Kassam plaintiffs' submissions they seem unlikely to be able to pay themselves.
During oral submissions on 3 December 2021, Counsel for the Kassam plaintiffs referred to the description of their personal circumstances in the Principal Judgment (at [95] to [98]) as suggestive of their not having the means to satisfy any costs. I accept that the evidence suggests, with the possible exception of Mr Nohra who appears to be running a successful construction business, that those persons are likely to incur significant hardship from having to meet a substantial costs order made against them from their own resources, if that is what will occur if such an order is made. However, given the terms of their submission, that they seek the Court otherwise order under UCPR 42.1 and that the Kassam plaintiffs were specifically given the opportunity to provide evidence demonstrating their lack of capacity to meet such an order and chose not to, then I am not satisfied that they do not have the means to make any substantial contribution to the State defendant's costs. Instead, that matter is left neutral. Consistent with the observations above (at [12] to [16]), they will be ordered to pay the Commonwealth's costs and 60% of the State defendant's costs to reflect those aspects of their case that were so lacking in merit that they do not warrant the court otherwise ordering.
Like the Kassam plaintiffs, the Henry plaintiffs did not take up the Court's invitation to file an affidavit concerning the plaintiffs' means, any funds that were raised to meet their legal costs or defray their costs exposure, and the basis on which any funds were raised. On those topics, the only evidence is the material attached to Mr McDonnell's affidavit of 29 October 2021 and a further affidavit sworn by him dated 1 December 2021. That material reveals as follows.
At some point in 2020 there was created a go fund me page entitled "No jab, no job, no COVID-19 vaccination, NO WAY". The website stated that "Nathan Buckley is organising this fundraiser". Mr Buckley of G & B Lawyers is the former solicitor for the plaintiff. He had the carriage of the matter throughout the hearing and was the solicitor on the record until 30 November 2021 when another solicitor from his firm filed a notice of appearance.
On 20 May 2020, Mr Buckley issued the following post on the GoFundMe page for "No jab, no job, no COVID-19 vaccination, NO WAY": "Hello supporters, Thank you for your donations and support to date. The $40,000 mark is getting very close. We have been getting asked a lot of questions about the $10 million target. So here it is. The intention of the $10 million target is to cover the risk of an adverse costs order in the event that we are unsuccessful. That is, if we lose. If there are 6 States, 2 Territories and the Commonwealth all challenging the application, each having their own teams of lawyers, junior and senior counsel (barristers who do the advocacy and stand up and present arguments to the Court), their costs will blow out into the millions of dollars. If we lose, we have to pay their legal costs. It's as simple as that. So 9 respondents at roughly $1 million each is $9 million. Then we have to fund our own legal team with at least 1 junior counsel and 1 senior counsel. When you do the math, our firm doesn't get much out of the pie for a challenge of this size and nature. In light of the above, the reality is that if the donations do not start to accelerate at the speed of light, then we will not be able to challenge the validity of the no jab no job laws at the High Court. In that case, you should expect to have your donations refunded in full. Notwithstanding this, we are acting for many individuals on a case by case basis separately who are being fired from their jobs for not having a flu vaccination. These matters are being commenced in the Fair Work Commission in the form of general protections applications. Thank you again for your support and we trust that you will continue to get behind the campaign and support your fellow Australians who are losing their jobs for exercising their rights." (emphasis added)
A further update was issued on 7 July 2020 which referred to obtaining advice from a barrister to a challenge to the validity of a public health order. Even if it related to an order under the Public Health Act 2010, it could not have been one of the orders the subject of challenge in the Principal Judgment as they were not made until 2021.
On 25 August 2021, an update was posted to the GoFundMe page as follows: "25 August 2021 by Nathan Buckley, Organiser Looking for the following plaintiffs in NSW. Aged care workers, disability workers, childcare workers, nurses, other healthcare workers and construction workers. Must have nothing to lose. Risk of losing is a costs order against you. Apply to [email redacted].au"
This call for plaintiffs clearly related to the public health orders the subject of challenge in the Henry proceedings.
On 27 August 2021, Mr Buckley posted that "We have a plaintiff. Now let's get some more." Accompanying that post is what appears to be a picture of the signature page of a document which in context would appear to be some form of retainer agreement. On 31 August 2021, Mr Buckley posted that the initiating process was being drafted and that "I could still add a childcare worker, a disability worker and a construction worker into the mix" and that "Now is the last opportunity to come forward to be a Plaintiff."
From that time, Mr Buckley posted various updates about the course of the proceedings at first instance and on appeal. The updates also made reference to the possible commencement of other proceedings specifically an appeal to the Full Bench of the Fair Work Commission and then to the Federal Court and a "national class action" to be filed in the Federal Court "pushing back against mandatory vaccinations, lockdowns, restrictions on businesses, discrimination and the removal of your rights and freedoms".
On 7 October 2021, being the day after I reserved judgment, Mr Buckley provided an update stating that to that time costs and disbursements incurred in these proceedings had reached "just under a total of $420,000" and that "in order to fund a similar challenge to the Victorian mandatory COVID-19 jab directions the costs and disbursements will likely be similar."
As at 1 December 2021, the GoFundMe page had raised $580,012.00. An appeal from the Principal Judgment was heard on 29 and 30 November 2021 and dismissed on 8 December 2021 (Kassam v Hazzard; Henry v Hazzard [2021] NSWCA 299).
In considering what findings should be made and inferences drawn from this material, two matters should be noted. First, this is all being considered in the context of the submission by the Henry plaintiffs that the Court should otherwise order because "it would be unfair and unjust for the Plaintiffs personally bear the burden of the costs associated with this litigation". Second, notwithstanding that the legal, evidential and practical onus were all on the plaintiffs to demonstrate unfairness, the Henry plaintiffs and their solicitors chose not to respond to the opportunity that was offered to them to provide evidence as to their means and the crowdfunding that was undertaken. During oral argument on 3 December 2021, counsel for the Henry plaintiffs, Dr Harkess, invited the Court to draw various inferences about his clients' position. Given that they bear the onus, and no evidence was adduced, I decline to do so (Shalhoub v Buchanan [2004] NSWSC 99 at [71] per Campbell J).
As best I can ascertain, the material tendered by the State about crowdfunding in the Henry proceedings suggests that the one GoFundMe page was used to raise funds for a range of actual and potential legal challenges to COVID-19 measures. Beyond that, a number of matters are left unclear about the purpose of the fundraising and terms on which funds were raised which are, or at least could be, relevant to an assessment of the Henry plaintiffs' submission that "it would be unfair and unjust for the plaintiffs personally bear the burden from the Court's adjudication" in the Principal Judgment. One matter that is unclear, is whether the funds were raised to meet any adverse costs order. The posting on 7 May 2020 suggests that funds were raised for that purpose. However, the posting seeking plaintiffs on 25 August 2020 warns of a risk of an adverse costs order. It does not state whether the funds raised would be available to meet such an order if it was made. A related question is whether the funds were simply a donation which was never to be returned to the donors under any circumstances or held under some form of Quistclose trust (Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567). If it was the former and the funds were to be applied to meet the plaintiffs' costs and disbursements, then had they been successful then it is doubtful that costs could have been recovered against the defendants (see Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145). A further issue that arises is, in the event that the funds were not raised to meet or defray the Henry plaintiffs' costs exposure, how is that outcome consistent with the Henry plaintiffs' solicitor's fiduciary duty to their clients?
In the absence of evidence from those who know the answer to these questions, the Court must approach the matter on the basis that either the funds raised are available to meet or defray the Henry plaintiffs' costs exposure or they are not. If they are available to meet or defray the Henry plaintiffs' costs exposure then their submission about how unfair and unjust it would be for them to bear the burden of any costs order falls away or is at least diminished. If they are not available then that situation could, or at least should, only have come about after they received proper (and independent) advice about the financial risk of becoming a plaintiff and how their solicitors were preferring their own interests to their clients in apparently applying the funds to meet their own costs and disbursements and leaving them exposed to a costs order (see Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 435; Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574; [2003] QCA 469 at [57] per McMurdo P and at [62] per Williams J). If the Henry plaintiffs received that advice and decided to be plaintiffs regardless, then it is difficult to see how it is unfair and unjust for them to wear at least some form of costs order. If they did not receive that advice then the plaintiffs' solicitors (and potentially their insurer) may have to ultimately carry their cost exposure. In any event, when no evidence is provided on these topics, I would not assume the Henry plaintiffs' solicitors breached their obligations to their clients. The end result is the same, namely that the contention that unfairness and unjustness will be occasioned to the Henry plaintiffs if they incur at least some form of costs order has not been made out.
Two further matters should be noted. First, this judgment does not address all the circumstances in which litigation may be crowdfunded. The right, duties and consequences that might flow from such funding for litigation will differ depending on, inter alia, who undertakes the fundraising (ie, the solicitor, the client or someone else), whether it is undertaken for a plaintiff, defendant or another party and the terms on which the funds are raised. In this case, the use of crowdfunding only become relevant once the Henry plaintiffs contended that they should not have to bear a costs order because of the public interest nature of the litigation and that it was "unfair and unjust" for them "personally to bear the burden of the costs associated with this litigation".
Second, in similar circumstances it is to be expected that if a submission to the effect that it is "unfair and unjust" for a party to personally bear the burden of a costs order is made to the Court and crowdfunding has been undertaken, then that party will provide evidence to the Court explaining the extent and terms of the fundraising, especially when they are given the express opportunity to do so. Had that been undertaken in this case and had the explanation revealed that, for example, a reasonable portion of the funds set raised was set aside to meet or defray the Henry plaintiffs' costs exposure then the Court could have considered whether to make an order limiting the costs recoverable from the plaintiffs to that amount or something similar (UCPR, 42.4(1)). However, in view of the way in which the costs application was conducted such an approach could not be considered.
In the end result, the position of the Henry plaintiffs is no different to that of the Kassam plaintiffs save that the Commonwealth of Australia was not a party to the Henry proceedings. Given the observations noted above, the Henry plaintiffs will also be ordered to pay 60% of the defendant's costs of the proceedings.

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Judgment (9 paragraphs)

Legislation Cited (3)

Cases Cited (15)

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