Ogawa v Australian Information Commissioner

REASONS FOR JUDGMENT 1 On 4 March 2015, the Court gave judgment in these proceedings and made orders setting aside the following decisions of the Australian Information Commissioner (the "Commissioner"): the decision dated 18 February 2011 declining to investigate Dr Ogawa's complaint of a breach of privacy against Dr Michele Calvird under s 41(1) of the Privacy Act 1988 (Cth); and the decision dated 8 April 2011 affirming the decision of 18 February 2011. The Court otherwise ordered that the application is dismissed and directed the parties to file written submissions as to costs within 14 days of 4 March 2015. 2 On 18 March 2015, the Commissioner filed written submissions on the question of costs. 3 Dr Ogawa has not filed any written submissions on the question of costs. The Court communicated in writing with Dr Ogawa pointing out that no submissions had been filed. 4 These proceedings are concerned with the disposition of the costs of the principal proceeding. 5 As to the principles governing the exercise of the broad discretion on costs conferred under s 43(2) of the Federal Court of Australia Act 1976 (Cth), I made the following observations together with Rares J in a joint judgment in the matter of Kazar v Kargarian (2011) 197 FCR 113 at [3] to [9]. In that judgment, we said this: 3 Section 43(2) of the Federal Court Act reflects one modern embodiment of the post Judicature Act (Supreme Court of Judicature Act 1873 (UK) and Rules of Procedure) conferral of power, by a broad unconfined discretion, to determine whether an order awarding costs of and incidental to a proceeding ought to be made and, if so, the content and burden of the order. 4 Although the discretion to award costs is unconfined or "absolute and unfettered" (Latoudis v Casey (1990) 170 CLR 534 per Dawson J at 557) the discretion must be exercised judicially, that is, according to relevant considerations, and take account of the contextual features and facts of the litigation. Although the discretion is unconfined or unfettered, the exposed reasoning explaining the factors informing the exercise of the discretion might reveal factors taken into account extraneous to the objects adopted by the legislature in conferring the statutory power and in that respect, plainly enough, the discretion is not "at large" (Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505 per Dixon J). 5 Although the discretion is said to be unconfined, absolute and unfettered, the public interest in the quelling of controversies and the administration of justice is secured by recognising that the discretion ought to be exercised according to settled principle. Settled principle guides the exercise of the discretion and recognises that the modern embodiment of the post Judicature Act discretion as to costs has escaped "arterial hardening" (Oshlack v Richmond River Council (1998) 193 CLR 72 per Gaudron and Gummow JJ at [38]) and has avoided elevating guiding principles into narrow legal rules controlling the exercise of the discretion (Norbis v Norbis (1986) 161 CLR 513 at 537 per Brennan J; Wilson and Dawson JJ at 533). Because settled principle merely guides the exercise of the discretion, there is no automatic or absolute rule controlling the exercise of the discretion to the effect that costs always follow the event. Nor is there an automatic or absolute rule that in the absence of disentitling conduct, a successful party is to be compensated by an unsuccessful party. Moreover, the jurisdiction conferred by s 43(1), exercised by reference to the broad discretion conferred by s 43(2), is not constrained by any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party (Oshlack per Gaudron and Gummow JJ at [40] and [41]). As their Honours observe at [41] in Oshlack, there is nothing surprising or remarkable about the absence of hard arterial propositions in construing the scope of the discretion as the discretion must take account of the "myriad circumstances presenting themselves in the institution and conduct of litigation, and to the very nature of litigation" within the scope of the Court's jurisdiction. See also Probiotic Ltd v University of Melbourne; (2008) 160 FCR 30 per Finn J at [1]; Rares J at [45] - [52] and Besanko J at [82] subject to the observations at [83] - [92]. 6 Some of the important principles however which guide the exercise of the discretion are reflected in the unifying judgment of Gleeson CJ, Gummow, Hayne and Crennan JJ in Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [25] - [34]. Their Honours observe at [25] that the award of costs is "discretionary but generally that discretion is exercised in favour of the successful party" (emphasis added). Of course, there are no automatic or absolute rules atrophying the true underlying scope of the discretion. 7 The operation of the pre-judicature system with respect to costs infuses the approach to the flexibility of the discretion in the post Judicature Act environment and particularly in the modern treatment of costs applications operating under rules which are the genetic descendents of the Judicature Act provisions (such as s 43 of the Federal Court Act). In reflecting upon the practice of the High Court of Chancery (as described in Daniell's Practice of the High Court of Chancery, (5th Ed 1871), Vol 2, p 1239) and the discretionary nature of the award of costs in that Court, Gleeson CJ, Gummow, Hayne and Crennan JJ observe at [34] in Foots that the discretion historically was not inflexibly constrained by the rule of awarding the costs of the suit to the successful party but that the Court would, in exercising the discretion to award costs, take into consideration the circumstances of the particular case before it or the situation or conduct of the parties. 8 The practice guiding the exercise of the discretion was that the Court of Chancery did not regard the awarding of costs as a penalty or punishment but merely a necessary consequence of a party having created litigation in which the party had failed. Daniell's Practice also recognised that the Court was "generally, governed by certain fixed principles which it [had] adopted upon the subject of costs, and [did] not, as was frequently supposed, act upon the mere caprice of the Judge before whom the [controversy happened] to be tried" (Foots at [34]). In other words, without subsuming the discretion within inflexible rules, the discretion would be exercised according to broad settled principle as described. Having observed these matters about the practice of the Chancery Court, their Honours concluded those remarks by observing at [34] that "[t]he similarity with the modern treatment of costs applications will be readily apparent". 9 The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognises the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party. As to the importance the community attaches to legal costs incurred of and incidental to the resolution of controversies before courts, see Clark v Commissioner of Taxation [2010] FCA 415 at [90]; Uniline Australia Ltd v SBriggs Pty Ltd (No. 2); (2009) 82 IPR 56 at [38]; and, Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [130] - [132]. 6 I apply those principles to the determination of the question of costs in this proceeding. 7 The respondent observes that the proceedings concerned issues relating to four decisions of the Commissioner. A review of all four decisions was conducted concurrently. The hearing of the substantive matters was conducted on the papers with the agreement of the parties. Two of the four decisions were set aside. However, those two decisions were concerned with the same question. The decision of 8 April 2011 which was set aside was an internal review of a decision of 18 February 2011. Each decision was set aside for the same reason. Thus, the Commissioner submits that there were in substance three matters before the Court and the Commissioner was successful on two of these matters and unsuccessful in one matter. Moreover, the Commissioner says that on an analysis of the issues, the Commissioner was successful on all issues but one which influenced the outcome in relation to the decisions of 18 February 2011 and 8 April 2011. 8 The respondent also says that Dr Ogawa's conduct of the proceedings resulted in unnecessary increased costs and delay. The conduct included, it is said, failing to appear with limited explanation; failing to properly particularise her grounds of review; failing to initially file and serve an affidavit in support of her originating application; failing to make an application for an extension of time within the timeframes required by the Rules and the extended timeframes allowed by the Court; failing to file other material in accordance with the Rules; filing of extensive material some of which was unnecessary including 12 affidavits and various sets of submissions; and filing interlocutory applications including an attempt to restrain the Commissioner. 9 The respondent says that having regard to all of the circumstances described at [8] of these reasons and, in particular, to Dr Ogawa's limited success in the application, the appropriate exercise of the discretion is to make an order that Dr Ogawa pay to the Commissioner 66⅔% of the Commissioner's costs. Such an order, it is said, would take account of the circumstance that Dr Ogawa was unsuccessful on two of the three substantive matters before the Court. 10 In the principal proceeding, Dr Ogawa was successful in relation to two of the decisions under challenge. It is true that both of those decisions engaged the same subject matter. Each decision was set aside for the same reason. Dr Ogawa was unsuccessful in relation to all other challenges to the decisions of the Commissioner. The matters about which Dr Ogawa was unsuccessful were the substantial matters occupying the bulk of the proceeding. In addition, there is force in the criticisms the Commissioner makes as described at [8] of these reasons with the exception of the criticism that there was limited explanation for Dr Ogawa's failure to appear to conduct the proceeding in person. The willingness of the parties to have the matters addressed on the papers saved significant Court time which would have been consumed in conducting an oral hearing of all of the matters in issue. 11 Having regard to all of these considerations, it seems to me that the appropriate order to be made is that the Commissioner pay 33⅓% of Dr Ogawa's costs of and incidental to the proceeding (if any) and that Dr Ogawa pay 66⅔% of the Commissioner's costs of and incidental to the proceeding. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.