Salfinger v Niugini Mining

REASONS FOR JUDGMENT 1 On 8 October 2007 I ordered that the separate question to be determined be answered in the negative with judgment for the respondents with costs: Salfinger v Niugini Mining (Australia) Pty Ltd (No 3) [2007] FCA 1532. I found that the applicant's claim was entirely without merit and fraudulent. I gave the applicant leave to file written submissions within seven days to show cause why costs should not be on an indemnity basis. 2 The applicant filed three submissions, each bearing the date 16 October, although they were in fact filed later. 3 Essentially the applicant's arguments against indemnity costs were based on his status as an unrepresented litigant who was not legally qualified. He made various complaints about the substantive merits of my decision and alleged procedural injustices, but I do not see that as relevant for present purposes. 4 Section 43(2) of the Federal Court of Australia Act 1976 (Cth) gives the Court a wide discretion to award costs in a proceeding. Traditionally costs only depart from the ordinary party-party basis where there is a particular or special circumstance: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, at 232-233 per Shepphard J and Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 per Black CJ and French J. An order for indemnity costs aims to compensate a party fully for costs incurred when the Court takes the view that it has been innocently and unreasonably subjected to the expenditure of costs: Hamod v New South Wales (2002) 188 ALR 659 at 665 (Gray J, with whom Carr and Goldberg JJ agreed). 5 In Colgate-Palmolive Shepphard J (at 232-235) summarised some of the special circumstances which have led to an award of indemnity costs, including the making of allegations of fraud knowing them to be false, making of irrelevant allegations of fraud, commencing proceedings in wilful disregard of known facts, the making of allegations which ought never to have been made and the undue prolongation of a case by groundless contentions. In these circumstances a party's behaviour in the conduct of the proceeding means it is so unreasonable as to be unjust that the innocent party is limited in its recovery to party and party costs: Sony Computer Entertainment Australia Pty Ltd v Dannoun (No 2) [2001] FCA 1350 at [4]. 6 The first and second respondents submitted that the indemnity costs were appropriate because the applicant's conduct went beyond unreasonable and was found to be fraudulent. They submitted that full compensation of costs as innocent respondents was appropriate where an action has been commenced or continued where "an applicant, properly advised, should have know that he had no chance of success… and must be presumed to have been commenced or continued for some ulterior motive": Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401. 7 In Spalla v St George Motor Finance Ltd [2006] FCA 1537 Kenny J at [26] recently noted that courts have from time to time overcome a reluctance to order indemnity costs against self-represented litigants: Bhagat v Global Custodians [2002] FCAFC 51 and Ogawa v The University of Melbourne (No 2) [2004] FCA 1275. Kenny J considered the competing interests in determining whether to make an award of indemnity costs against a self-represented litigant. A lack of knowledge of the law, unfamiliarity with court practice and a lack of objectivity are common traits of unrepresented litigants. A person's ability to get redress should not depend on lawyerly skills or an ability to pay for legal representation. However, the Court owes a duty to all parties to ensure that the trial is conducted in a fair and timely fashion (at [28]) and without significant difficulties and unnecessary expense for the parties against whom an unrepresented litigant proceeds. see Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13] per Hodgson CJ. In this instance the expense, delay and difficulties caused by the applicant's fraudulent and unreasonable behaviour overshadow any limitations that arose from his status as self-represented. 8 The applicant applied for a stay in respect of costs because he intended to appeal. I decline to order a stay. In my view an appeal would have no reasonable prospects of success. No good reason has been shown to deprive the respondents of the benefits of their costs order. 9 The applicant also sought a stay of my direction that the matter be referred to the Director of Public Prosecutions. However this referral has already occurred. 10 I order that the applicant pay the costs of the respondents, including reserved costs, on an indemnity basis. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.