Secretary, Department of Health and Ageing v Marnotta Pty Ltd

REASONS FOR JUDGMENT 1 This is an application by the respondent, Marnotta Pty Ltd (Receivers and Managers Appointed) (Marnotta), for the variation of a costs order made on 29 September 2005 in Secretary, Department of Health and Ageing v Marnotta Pty Ltd (Receivers and Managers Appointed) [2005] FCA 1395. 2 The order was made in an appeal brought by the appellant, Secretary, Department of Health and Ageing, (the Secretary) under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) from a decision of the Administrative Appeals Tribunal (the Tribunal). The appeal was allowed and Marnotta was ordered to pay the Secretary's costs. As the parties had not argued the question of costs at the hearing of the appeal, liberty was given to Marnotta to apply for a variation of the costs order. On 4 November 2005, pursuant to the leave granted, Marnotta filed an application for variation of the costs order and written submissions in support of the application. On 11 November 2005 the Secretary filed written submissions in response. 3 Section 43 (1) and (2) of the Federal Court of Australia Act 1976 (Cth) empowers the Court to make orders for costs. Whilst the power is discretionary and the discretion is unfettered, it must be exercised judicially. Generally, in the absence of special circumstances, costs follow the event: Hughes v Western Australian Cricket Association (Inc) & Ors (1986) ATPR 40-748 at 48,136; Ritter v Godfrey (1920) 2 KB 47; Dowdell v Knispel Fruit Juices Pty Ltd (2003) FCA 1276. 4 Marnotta argued that the parties should bear their own costs. The Secretary submitted that the usual order as to costs should apply, and that the application for variation should be refused. 5 Marnotta submitted that there were two special circumstances which justified the variation of the costs order. Firstly, Marnotta argued that the Secretary should have taken steps to challenge the decision of Forgie DP before the merits hearing was conducted and determined. The Secretary could have, so it was submitted, brought judicial review proceedings or could have asked for a question of law to be stated for the Court to determine. Marnotta contended that there was nothing more that it could have done. 6 Secondly, Marnotta argued that it was successful on the merits before the Tribunal, and that the conduct of the Commonwealth was called into question by the Tribunal. 7 Even if the factual foundation for these arguments was made out, it would not justify the variation sought. The arguments, in substance, make complaint about the costs incurred in the merits hearing. But the costs of the merits hearing are not an issue on this application. The application is concerned solely with the costs of the appeal. On the issues argued on the appeal, Marnotta failed. Even if the arguments had been considered earlier, Marnotta would have failed. There would have then been no basis upon which to argue that costs should not follow the event. The fact that the merits hearing intervened does not change the situation. The application for variation of the order for costs should be refused. 8 Marnotta then argued that, if the application for variation was refused, the Court should grant a costs certificate under s 6 of the Federal Proceedings (Costs) Act 1981. For this purpose, it is not sufficient for Marnotta to show that the appeal succeeded on a question of law. It must satisfy the Court that it is appropriate in all the circumstances for a certificate to be granted: Bullock and Others v Federated Furnishing Trades Society of Australasia and Others (No.2) (1985) 5 FCR 476;(1985) 58 ALR 373 at 374. Marnotta relied on the same circumstances to justify both the variation order and the grant of a certificate. For the reasons expressed above, no sufficient circumstances have been demonstrated to justify the grant of a certificate. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.